Fearmongering about the end of the world can cut both ways, but it usually cuts in the direction you were already leaning.
(1) Actually, the "stimulus"-caused inflationary death spiral has been seen before. However, I'm not going to argue that this will or will not happen as a result of the currently proposed stimulus. Fact is, I have no idea.
The average auto worker is not producing 100k worth of value and the average banker is not producing 500k of value on wall street. But don't try and tell them that.
EX: The jobs bank program is not a big deal if you run the numbers assuming constant growth forever.
They also all focus on how American workers at Japanese owned plants make so much less. They never mention that American-auto company executives make orders of magnitude more than their Japanese counterparts.
Completely agree on the executive compensation. Maybe the union should be abolished and management and employees should be given enough dividend producing equity to care about the actual profitability of the company. If management and the union drive these companies out of business, I'm paying their stupid pension.
[1] http://www.evolvingexcellence.com/blog/2008/12/its-work-rule...
PS: The Japanese Yen just increased 25% so a lot of these US vs Japan comparisons are not as unbalanced as you might think.
Indeed. It is the fault of the United States for legalizing (through exception in the RICO Act) corrupt organization of labor. http://en.wikipedia.org/wiki/Trade_union#Criticism
unions are regarded as a form of legalized conspiracy and extortion. American racketeering statutes still include an exemption for union activity.
That's because the total amount of money for executive compensation at US auto manufacturers is in the noise.
BTW - GM could probably handle the wages and pension if it got Toyota's work rules AND could concentrate on building the cars that it can sell at a profit and stop selling the ones on which it barely makes any money. The UAW won't accept Toyota's work rules at "American" auto makers and Congress insists on CAFE.
The folks who want an economy car prefer Toyota, Honda, etc. They'll only buy GM at a significantly lower price, which means that GM has to make money elsewhere. (And, thanks to the rule that says that GM's imports don't count toward CAFE, it gets to make them under UAW's GM rules.)
It's not clear that there is "the correct amount". There's probably a correct amount in a given line of work at any moment in time, but that's not actionable.
The problem with trying to guide the economy is that the guiders always have an agenda.
Remember "he meant well" is an insult.
My point is simply that a light hand is probably better, but avoiding acting when things are getting really bad is a horrible idea.
Govt doesn't do "light hand". Moreover, doing the wrong thing is worse than doing nothing. The US govt is still trying to protect textile jobs in the Carolinas. (It would be mean to point out the mess that is govt efforts wrt the auto industry.)
When proposing/supporting regulation, it's poor form to assume that it will be done "correctly" by "the right people". Instead, you should assume what we actually observe - that it will be done badly, if not maliciously, by incompetents.
If you want to assume "correctly by the right people", make an existing govt system IN THE US work that way.
You're assuming (1) "a light hand" is a stable situation and (2) that the folks doing the acting will do
Example of the government using a "light hand" the borders. Food safety inspections. Most pollution controls.
There are plenty of areas where the government's approach is to wait for problems and then step in. The millions of illegal immigrants in the US is not really a hard problem to stop from an enforcement standpoint, but in this case the government seems to focus on the appearance of doing stuff vs actually doing stuff.
Would this be the borders where they seize laptops and randomly harass people? Or, the borders that are completely uncontrolled?
I don't think that "light" means "a random mix of hard and none".
> Food safety inspections.
I'd put that under incompetent, not light.
> Most pollution controls.
You're joking, right?
> but in this case the government seems to focus on the appearance of doing stuff vs actually doing stuff.
"in this case" suggests that focusing on appearance is the exception, not the rule. It may not be the majority, but ....