Give Oil Company profits to the people

[Gary Allan]

Well, the simple matter is that there is no workable formula for true retirement security. Let's say everyone in the nation did the sensible thing and invested whole hog in IRA's when they became available. That would sensibly lead to a whole generation of millionaires retiring.

What would sensibly occur assuming that this "investment" really gained anything? You would have $85 Big Mac's ..that's what ..etc..etc.

So, since you have to do something with your retired people anyway, you might as well assure that the money that they have contributed has a tether attached to it in the form of a guarantee.

Pensions used to be fully funded ..overly funded. Companies stashed profits in them. Then they were deemed assets and taxable. That caused companies to under fund their pension funds. Then when the company goes belly up, the golden parachutes plume and the pension insurance corp bills us for some of the short fall.

It's all very well orchestrated to shake the holders of pensions down ..at the cost of the average citizen in tax burden. The funds were stolen by the stockholders and the company reneg'd on its pension obligations. Thieves and liars. Criminals.

When defined benefit programs were proving too inconvenient for companies, the 401k came into vogue in full force. The DOT.COM bubble sucked much of that dry.

In the future, with everyone's pension or person version of "retirement security" out there for the market to scavenge, it's going to be a social disaster. It's ONLY with the tether of getting this funded to some minimal standard that the society will be able to care for its aged.

 

[oilyriser]

The other option is to rebalance the population pyramid with immigration, or by conquering other lands that have the necessary young, poor population to be our serfs.

 

[Gary Allan]

We've already got that plan in progress. We let them think that they're really invading us ..when what we really have is undocumented (falsely documented) workers paying into the system that they can never collect from.


The problem is a combination of demographics and extended benefits. Our shepherds wanted to disperse this revenue through new doors and added SSI...disability..blah..blah..blah. Then demographics swings into play.

By 2040 it should all be over if they can contain the costs. The babyboomer's should be dead by then. That's unless you listen to the demographers that think that we need more people to fill the empty houses, classroom, and cars that won't be needed if you allow your population to implode. I see no reason not to want it to implode.

 

[Tempest]

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We let them think that they're really invading us ..when what we really have is undocumented (falsely documented) workers paying into the system that they can never collect from.

Take a look and see how well this is working for California...

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Then they were deemed assets and taxable.

There is that government income tax causing more problems as I stated.
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Well, the simple matter is that there is no workable formula for true retirement security.

Including government run systems which have decades long track records of doing very poorly. Compare the long term return of SS vs. the stock market and the 2 aren't even close.
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The funds were stolen by the stockholders and the company reneg'd on its pension obligations.

All the better to give control of people's money...to them.
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that the society will be able to care for its aged.

Is retirement planing a class in high school? I don't think so. SS is the golden egg to lean on...or so we are taught. It's Gov's job to fix everything and make life better for everyone and be cool again. All you have to do is watch current TV commercials.

 

[Gary Allan]

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We let them think that they're really invading us ..when what we really have is undocumented (falsely documented) workers paying into the system that they can never collect from.

Take a look and see how well this is working for California...


This is a market driven solution with alleged ancillary benefits for the government. I never said it was a "good thing". It's more along the lines of contemporary socialized costs (paid mostly by little people in taxes and jobs) with longer term benefits. I would think that you would be the first to allow "open competition" for employment, Tempest. If the government enterprise is a co-beneficiary, which their lack of inhibiting it would indicate, what's your beef??

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Then they were deemed assets and taxable.

There is that government income tax causing more problems as I stated.


It was first, I'm sure, put there to eliminate the tax shelter of pension funds. It then evolved, with our own form of corruption (nudge-nudge -you know "The League of Distinguished Gentlemen") to a mathematically predictable grab and run leaving, once again, the little people holding the bag. I would expect you to see this shrewd coup for what it is. Who benefited? Who was left paying?

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Well, the simple matter is that there is no workable formula for true retirement security.

Including government run systems which have decades long track records of doing very poorly. Compare the long term return of SS vs. the stock market and the 2 aren't even close.


You can't say that. The market itself benefited from lower taxation in avoided costs of government. That is, it's a very hard thing to prove because you can't "take out" the money that was added to the GDP in avoided costs. So it's merely your assertion/allegation that this is true and very hard to "prove".

The basic concept that appears beyond you grasp is that we're in a fishbowl. You can erase all the lines between privately spent money and publically spent money. They all end up in consumption on the open market. The US soldier, the Senator, the GSA clerical, the veteran, ..and the welfare recipient. You somehow think that this basic number changes by moving one line to a more narrow strip of land on the same turf. It doesn't.

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The funds were stolen by the stockholders and the company reneg'd on its pension obligations.

All the better to give control of people's money...to them.


So the free market can steal it from them instead? These are the same people who you deem too stupid to do anything anyway? It's an invitation to bring the lambs to slaughter in a more efficient manner.
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that the society will be able to care for its aged.

Is retirement planing a class in high school?


Do you petition to see that occur? Do you have a website that offers it? A firm that teaches it? Or would you rather the uniformed just let the market teach them with the pitfalls of ignorance (my personal vision of your modality of choice)???

 

[PandaBear]

Originally Posted By: Tempest
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We let them think that they're really invading us ..when what we really have is undocumented (falsely documented) workers paying into the system that they can never collect from.

Take a look and see how well this is working for California...


Quite well. There is no way anyone can afford to hire anyone without illegals around. Recently there were some raids in the state and all of a sudden everything becomes so expensive.

 

[Steve S]

Originally Posted By: PandaBear
Originally Posted By: Tempest
Quote:
We let them think that they're really invading us ..when what we really have is undocumented (falsely documented) workers paying into the system that they can never collect from.

Take a look and see how well this is working for California...


Quite well. There is no way anyone can afford to hire anyone without illegals around. Recently there were some raids in the state and all of a sudden everything becomes so expensive.
That is not why the prices are going up.

 

[Gary Allan]

Prices are going up due to energy costs ..but wages in general aren't really that much of a factor in costs. Costs of doing business ..that's another story. It's typically competing ROI that "entitles" the heralded entrepreneur to commit crimes against the law and against his fellow American for his own anti-social delinquent selfish gain.

OTOH, a less wealthy person can actually afford to hire cheap labor when their wallet is thin.

I think that I could afford to import a domestic.

 

[bruno]

'but wages in general aren't really that much of a factor in costs.'

Depends very much on the business you are in .
There are Capital intensive businesses as well as Labor intensive ones .
Oil refining is one of the first while automobile manufacturing is one of the second .

 

[Gary Allan]

The cost of "doing business" is usually several magnitudes above direct labor. In manufacturing, it's typically well down on the list of expenses. Well below material, energy, and other costs (waste treatment, etc.). Naturally there are exceptions.

I think that direct labor for an automobile would be rather low. I would wager that for every direct laborer, there is one or two indirect wage earners on the payroll too (everyone from engineers to administrative assistants). This is naturally outside of the idle wage drawing workers who have no cars to build. In the dye business, when there was one domestically, the management outnumbered direct labor 3:1 in engineers, chemists, lab techs, etc.

 

[PandaBear]

Originally Posted By: Gary Allan
The cost of "doing business" is usually several magnitudes above direct labor. In manufacturing, it's typically well down on the list of expenses. Well below material, energy, and other costs (waste treatment, etc.). Naturally there are exceptions.

I think that direct labor for an automobile would be rather low. I would wager that for every direct laborer, there is one or two indirect wage earners on the payroll too (everyone from engineers to administrative assistants). This is naturally outside of the idle wage drawing workers who have no cars to build. In the dye business, when there was one domestically, the management outnumbered direct labor 3:1 in engineers, chemists, lab techs, etc.


If you are from California, that is completely different. Labor cost is so high with all these workers comp and taxes, it eats up a lot of the costs. You may not see if if you your margin is low (i.e., you buy from vendor or outsource your labor to another company within the state), but that doesn't means the labor cost is a small fraction of cost of business.

 

[Gary Allan]

My objection to the term "labor" meaning direct labor. Naturally it depends on the industry/sector, but direct labor us usually well down on the list. When people hear "labor" they think union assemblers on a mostly automated line, when there's just as many and probably more "indirect" wage earners attached to the product. They aren't considered "labor" ..but may be very cost intensive. Accounting, clerical, customer service ..engineering ..all not considered "labor".

 

[Tempest]

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The basic concept that appears beyond you grasp is that we're in a fishbowl.

Not even close. Back to your static economy model which I have blown out of the water on numerous occasions and you have not put any info to support your case.
What you spend money on DOES matter. Investing in things that expand the job base vs. flushing it down the toilet in entitlements makes a big difference. Again, California is a perfect example. Some of the highest taxes in the union, yet they are 15 billion short with an economy in the tank.
If it didn't matter where the money was spent, California should be golden...they are not.
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These are the same people who you deem too stupid to do anything anyway?

What people have I called stupid?
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The cost of "doing business" is usually several magnitudes above direct labor.

NO...not even close. Labor, and it's associated costs, is probably the driving factor behind a company's success. If this was not the case, factories would not be moving to China and elsewhere.

 

[PandaBear]

Originally Posted By: Tempest

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The cost of "doing business" is usually several magnitudes above direct labor.

NO...not even close. Labor, and it's associated costs, is probably the driving factor behind a company's success. If this was not the case, factories would not be moving to China and elsewhere.


Finally something that I agree with you.

As far as why is California in such a problem, I can only put in my own opinion, but not sure if this make sense to you.

1) Lawsuits and liability on everything. People get sued, insurance is raised, cost went higher, and eventually everyone but the lawyers loses. Don't believe me? We have the highest percentage of lawyers in the nations and therefore it cost something.

2) Regulation, not payout. The amount of regulation is so high (in all kinds of things, not just pollution) that it raises the cost to get things done right. Transfat ban? Push to use hybrid in buses when we don't have money for it? Clean energy mandates all add cost to businesses and therefore to the consumers. You can hardly rebuild an old neighborhood to increase supply of housing (San Francisco is crazy about affordable housing, aka slum, especially those radical supervisors).

3) As much as I hate to say, illegal aliens. Sure you get cheap labor but you pay it back by uninsured motorists, uninsured patients, low income neighborhood, over attended school districts, etc. Cheap labor is not cheap when you add all those in, the rich gets them for cheap but the middle class and lower class have to pay for it via local service expenses.

4) Low tax, I know, our tax is too low to support basic services like school, roads, and etc. The problem? Labor cost is high because housing cost is high. The problem? Housing cost is high because we have too many people wanting to buy houses but we are not allowing redevelopment of old neighborhood fast enough.

 

[Tempest]

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Finally something that I agree with you.

There had to be something.

I was born in SoCal and lived there until I was 20 so I am very familiar with Cal politics. I still stream a talk radio channel from there so I hear a lot of what is going on currently.

IMHO, Cal's main problem is the tax death spiral as I have spelled out before, but your points are also very valid.

 

[Steve S]

the oil companies need a bailout.

 

[Tempest]

Originally Posted By: Steve S
the oil companies need a bailout.

Just wait for the wind fall profit taxes to kick in...

 

[Gary Allan]

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Not even close. Back to your static economy model which I have blown out of the water on numerous occasions and you have not put any info to support your case.
What you spend money on DOES matter. Investing in things that expand the job base vs. flushing it down the toilet in entitlements makes a big difference. Again, California is a perfect example. Some of the highest taxes in the union, yet they are 15 billion short with an economy in the tank.
If it didn't matter where the money was spent, California should be golden...they are not.


There you've got a dilution factor ..nothing more. All costs are paid by producers. Even you can't argue with that. You become the #1 haven for illegals ..and producers are going to pick up the tab. Close the borders with shoot on sight orders from our military if need by. Hunt them down and execute them if need be. Problem solved. No low wage non-tax paying free loaders in a high ratio to producers.

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The cost of "doing business" is usually several magnitudes above direct labor.

NO...not even close. Labor, and it's associated costs, is probably the driving factor behind a company's success. If this was not the case, factories would not be moving to China and elsewhere.


What industry are you associated with? I've seen lots. In our union labor dye industry, direct and indirect labor were well below material costs. Our waste treatment was $20k/day for 180 employees of "labor". The average batch of dye was $50k out the door. It took about 24 man hours in direct labor.

Now if you're talking "wages" and related costs ..heck then any office with a steno pool (or its equivalent) is up there ..but manufacturing? The machinery does all the work. The humans are just the cheaper robot.

Perhaps you just saying that human wages are "expensive" ..sure they are. That doesn't mean that they necessarily amount to a high percentage of total costs of a product. My last tally was 4-7% of the product cost.

Now it makes a little more sense (your perspective) the typical cost of labor is about par with the profit margins of Big B ..that's a no brainer to figure if you can devaluate one ..you increase the other. Naturally you can leave the other things alone ...since they're out of your control.

 

[Tempest]

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No low wage non-tax paying free loaders in a high ratio to producers.

That shoots your entire "social justice" stance completely out of the water...

and is exactly what I have been saying since I have been on this board. I just don't limit it to illegals. Free loaders are free loaders.
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What industry are you associated with?

Mill work currently, but there are others. The type of industry one is in does determine direct % of labor costs. Compare landscaping to computer chip making for example.
But this is only one factor. Material costs, machinery and other overhead tend to have the same costs within the same industry and location. If my company purchases machine X, then another company in my local will pay about the same for machine X as well. Same goes for buildings, power, insurance, etc..etc..
This is very different with labor and unions. If all of your other overhead is about equal, labor is the deciding factor. This is why union shops are disappearing and companies are moving overseas. Outrageous demands by unions that price the company out of the market, which then goes broke so everyone looses.
I have seen this first hand. We are a union shop, but the only reason we can exist that way is because the casinos are union. There is no way we can compete on price with non-union shops on jobs that don't require union companies. Not even close.

Union demands continue to drastically go up every contract. There is only so much the casinos will take before they tell the unions to go take a flying leap. In some ways, they already have and it costs us business. But to be honest, I can't blame them.

 

[Gary Allan]

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No low wage non-tax paying free loaders in a high ratio to producers.

That shoots your entire "social justice" stance completely out of the water... and is exactly what I have been saying since I have been on this board. I just don't limit it to illegals. Free loaders are free loaders.


Not at all. Those illegals are providing services that are below market rate ..yet extracting the most expensive tax supported public services while contributing nothing to the public coffers.

Very simple. You under fund and overly burden the public services. Producers pay the tab either way. In essence, California's budget shortfall is collecting gains of the skating people who employ the illegals. It's been allowed to go on for so long that it's too integrated into the economy to be separated. There's no real loss except for workers who need to compete with illegal labor.

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Mill work currently, but there are others. The type of industry one is in does determine direct % of labor costs. Compare landscaping to computer chip making for example.
But this is only one factor. Material costs, machinery and other overhead tend to have the same costs within the same industry and location. If my company purchases machine X, then another company in my local will pay about the same for machine X as well. Same goes for buildings, power, insurance, etc..etc..
This is very different with labor and unions. If all of your other overhead is about equal, labor is the deciding factor. This is why union shops are disappearing and companies are moving overseas. Outrageous demands by unions that price the company out of the market, which then goes broke so everyone looses.
I have seen this first hand. We are a union shop, but the only reason we can exist that way is because the casinos are union. There is no way we can compete on price with non-union shops on jobs that don't require union companies. Not even close.


Naturally the wages should contour to a given "cost of living" quotient. The notion of "what the market will bear" isn't always wise as we see in California. Much depends on your desired standard of living for your community.

Your standard of living would be much lower without the tinkerings of union labor. While it's en vogue to bash them (much of it with just cause) there is no way Daddywarbucks would have shared that bounty without it. No office worker would be given a living wage if it wasn't due to having to compete with what the slobs could get slugging it out in the steel mill.

I would say that most collective bargaining is attempting to work with management in keeping things running and holding on to what they have. Every company that's ever asked for concessions from labor is already dead. The concessions were merely to line the parachutes.

I'm not one for trumpeting some union line ..but there's an equally selfish mirror image that's on the other side of the equation. They chose to view labor as the unfortunate necessary evil to gain ...while they cannot view labor as an essential part of their gain.