WP: U.S. economy grows nearly twice as fast in 3rd quarter

[Wrong Direction]

They care about an educated workforce, they want their workers to be healthy, they want the necessary infrastructure built so their company can grow, but they want those things so the company will have a better chance at making money, not because they actually care whether their employee has a job or not.

Sort of off topic, but I think the hatred for corporations is very often - though certainly not always - misplaced. My neighbor is a driver for Office Max. They're not doing well at all. They could fire many of their drivers and just give people like my neighbor (who's very productive) more routes and pay a little OT. That's not what they're doing. Instead of purely focusing only on the bottom line, they're cutting everyone's hours so they don't have to fire a lot of people. I guarantee you that many corporations and small businesses are in the exact same place today. They do understand the plight of the jobless and they're trying not to make it worse.

We shouldn't be looking at corporations as some kind of fountain for jobs. Kissing their ass and giving them tax breaks is not going to magically create jobs. Corporations use the promise of jobs to bribe us into giving them free stuff, like the AT&T commercials that keep promising us jobs in return for approving their merger with T-Mobile. But there isn't really a direct correlation between giving corporations free stuff and corporations creating jobs.

But this is just wrong. I'm no fan of crony capitalism (I hate it), but are we to suggest that bailouts of car companies and 0% tax rates for GE didn't save jobs? Economically, I think both were bad policies because they prop up failed models which in the long run makes the problems worse, but that's beside the point. "Free stuff" does contribute to jobs, even if it does so in incredibly inefficient (costly) and unproductive ways.

On the other hand, it is certainly worth studying macroeconomic corporate tax policy to see if changes in that policy will 1) stop some types of jobs from going overseas or 2) bring some jobs back from overseas or 3) keep more companies in business or 4) repatriate corporate money. This is fundamental to governance. The problem is when you start picking winners and losers in an economy based on political friends and enemies.

What if, instead of giving corporations our tax money directly, we gave them our tax money in the form of more productive workers? Maybe it would make more sense for us to invest in ourselves, to make ourselves more worthy of being hired. Instead of giving tax breaks to corporations, would our tax money be better spent on job training and education? If we invested in labor, and labor became more valuable, wouldn't the free market push corporations to hire that labor and profit from it?

How many trillions go to education today? I guess we should just double down? Unfortunately, a good idea is hard to execute in a cost-effective manner when handed over to the government. We give out educational grants to tons of kids these days who fail to make it even through 2 years of college, much less the full four years. The biggest problem with your idea to focus on job training is that only a small % of people will make good use of that investment, while a large number will not even sign up or will not see it through. The inconvenient truth is that the most industrious people will find a way to get an education or training on their own whether or not we start yet another government program, and the least industrious people will once again not be helped by more government largess. I'd say a more efficient way to do this would be to funnel the money through private employers who in-turn promise to hire people for x time, but that also creates a mess of a program that would be almost impossible to oversee.

[Prosperity]

We need to stop acting like corporations hire people out of the goodness of their hearts just so Americans have jobs and make money.

They hire people only if they think the person they hire will make the company more money than they pay to the worker.

If the demand is not there for the product/service a corporation is selling, they will not hire. They will layoff people until the number of workers matches the level of demand. If a corporation thinks outsourcing jobs to other countries with people willing to work for slave-like wages will make the company more money in the long wrong, they will do so.

They care about an educated workforce, they want their workers to be healthy, they want the necessary infrastructure built so their company can grow, but they want those things so the company will have a better chance at making money, not because they actually care whether their employee has a job or not.

We need to stop thinking that if we shower them with benefits and less regulations and taxpayer money and kind words, that these corporations will suddenly start creating jobs, because they are not -- not without consumer demand. Yeah, you may be able to get them to move from one state to another, but you aren't creating any new jobs in this country. And this comes from someone who thinks, just to create a level playing field and for efficiency purposes, that we should lower the corporate tax rate and clean out many of the corporate tax loopholes.

This makes sense, when the economic conditions are as they are and businesses don't need to expand to meet expanding demand, then giving them more money doesn't mean they will expand, it means they will put that money away out of fear of the uncertain climate. In this sort of situation tax breaks and other subsidies won't create jobs, they will just add cash to the vaults of the corporations. Why would a corporation use the new found money to hire more people if there is no more demand? It doesn't make sense at all. Corporations don't hire and fire people because they like to give money to people, they do it because workers are productive. Period. You can reduce the tax burden of corporations tomorrow to 0% and it probably wouldn't have a positive effect on unemployment because they still don't need to hire, because there is still not enough demand. Though I'm sure the executives who control the money would give themselves fat bonuses... but that is the limit of their charity. Giving even more tax breaks to corporation will do nothing more than take money out of consumers (who could stimulate demand) and into the sofas/mattresses/bank accounts of corporations.

Sort of off topic, but I think the hatred for corporations is very often - though certainly not always - misplaced. My neighbor is a driver for Office Max. They're not doing well at all. They could fire many of their drivers and just give people like my neighbor (who's very productive) more routes and pay a little OT. That's not what they're doing. Instead of purely focusing only on the bottom line, they're cutting everyone's hours so they don't have to fire a lot of people. I guarantee you that many corporations and small businesses are in the exact same place today. They do understand the plight of the jobless and they're trying not to make it worse.

you're last sentence is just wrong.

More likely reason is that they have invested in their workforce, and they don't want to cut a bunch of human capital only to have to re-invest it when the market picks back up. That would be inefficient in the long term.

Now, I can certainly imagine crisis situations where a corporation has so underestimated economic climate that it is forced to cut valuable human capital or go bankrupt. In that situation they'll probably cut down on their human capital unless they are "bailed out" BUT they will NOT hire NEW workers to train and invest in w/o increase in demand. Doing so would make 0 economic sense what so ever.

There's a big difference between $$ that helps a corporation not have to make a lose-lose situation that I outlined above), and $$ that goes into a stable corporation w/o room to expand, because there is a big difference between current trained workers, and new workers that require some investment/training. Basically, subsidies can help save jobs when companies have invested in their workers, but they can't create jobs when there is no room to expand.

[PleaseBlitz]

We shouldn't be looking at corporations as some kind of fountain for jobs. Kissing their ass and giving them tax breaks is not going to magically create jobs. Corporations use the promise of jobs to bribe us into giving them free stuff, like the AT&T commercials that keep promising us jobs in return for approving their merger with T-Mobile. But there isn't really a direct correlation between giving corporations free stuff and corporations creating jobs.

What if, instead of giving corporations our tax money directly, we gave them our tax money in the form of more productive workers? Maybe it would make more sense for us to invest in ourselves, to make ourselves more worthy of being hired. Instead of giving tax breaks to corporations, would our tax money be better spent on job training and education? If we invested in labor, and labor became more valuable, wouldn't the free market push corporations to hire that labor and profit from it?

Or healthcare for their workers, or roads, or any number of things. Point is, coporations that need tax breaks to survive....probably shouldnt.

Holy ****, i think I just made capitalism and Occupy Wall Street mesh. /mind blown.

[DjTj]

Sort of off topic, but I think the hatred for corporations is very often - though certainly not always - misplaced. My neighbor is a driver for Office Max. They're not doing well at all. They could fire many of their drivers and just give people like my neighbor (who's very productive) more routes and pay a little OT. That's not what they're doing. Instead of purely focusing only on the bottom line, they're cutting everyone's hours so they don't have to fire a lot of people. I guarantee you that many corporations and small businesses are in the exact same place today. They do understand the plight of the jobless and they're trying not to make it worse.

The CEO of Starbucks has talked about similar things:

He described Starbucks's own growth and hiring plans—a net of several thousand new jobs—and announced a $5 million donation by the Starbucks Foundation to a group that helps finance local businesses. Starbucks will also encourage customers and employees to donate. He's calling the program "Create Jobs for USA." Occupy Wall Street would like this.

In a blog post last week, Mr. Schultz elbowed aside Mr. Friedman's triumph of profit: "Companies that hold on to the old-school, singular view of limiting their responsibilities to making a profit will not only discover it is a shallow goal but an unsustainable one," the post on the Harvard Business Review website read. "Values increasingly drive consumer and employee loyalties. Money and talent will follow those companies whose values are compatible."

http://online.wsj.com/article/SB10001424052970204505304577001930473006096.html?mod=WSJ_hp_LEFTTopStories

But it's interesting that he talks about it in the context of labor supply. The way to make corporations treat workers better is for the best workers to choose corporations that treat workers better. Workers shouldn't be sucking up to corporations; if we demand more, we will get more.

But this is just wrong. I'm no fan of crony capitalism (I hate it), but are we to suggest that bailouts of car companies and 0% tax rates for GE didn't save jobs? Economically, I think both were bad policies because they prop up failed models which in the long run makes the problems worse, but that's beside the point. "Free stuff" does contribute to jobs, even if it does so in incredibly inefficient (costly) and unproductive ways.

Did those actions really contribute to jobs in the long term? If we let Toyota build five more factories instead of bailing out GM, would American workers have been better off? Certainly there are individual bailouts and freebies that save jobs in the short term, but do they really create jobs in the long term? I'm not so sure.

Or healthcare for their workers, or roads, or any number of things. Point is, coporations that need tax breaks to survive....probably shouldnt.

Holy ****, i think I just made capitalism and Occupy Wall Street mesh. /mind blown.

I think this is totally right. Tax money can be used for things that help the general public, and this will trickle up to corporations. Health, transportation, education, safety ... these are public goods that are within the legitimate province of government and will likely create a lot more jobs in the long run than licking the boots of big corporations.

[PeterMP]

Did those actions really contribute to jobs in the long term? If we let Toyota build five more factories instead of bailing out GM, would American workers have been better off? Certainly there are individual bailouts and freebies that save jobs in the short term, but do they really create jobs in the long term? I'm not so sure.

But in addition, at least the auto bailouts (which I really didn't support), are very specific. Giving corporations freebies in some VERY specific cases likely do product long term jobs. That doesn't mean it is generally a good policy.

Saying we are going to do something for these two companies, at this particular time is VERY DIFFERENT than saying we're going to decrease the corporate tax rate by 5% across the board.

One MIGHT long term create jobs. That doesn't mean the other is.

[Wrong Direction]

This makes sense, when the economic conditions are as they are and businesses don't need to expand to meet expanding demand, then giving them more money doesn't mean they will expand, it means they will put that money away out of fear of the uncertain climate. In this sort of situation tax breaks and other subsidies won't create jobs, they will just add cash to the vaults of the corporations. Why would a corporation use the new found money to hire more people if there is no more demand? It doesn't make sense at all. Corporations don't hire and fire people because they like to give money to people, they do it because workers are productive. Period. You can reduce the tax burden of corporations tomorrow to 0% and it probably wouldn't have a positive effect on unemployment because they still don't need to hire, because there is still not enough demand. Though I'm sure the executives who control the money would give themselves fat bonuses... but that is the limit of their charity. Giving even more tax breaks to corporation will do nothing more than take money out of consumers (who could stimulate demand) and into the sofas/mattresses/bank accounts of corporations.

you're last sentence is just wrong.

More likely reason is that they have invested in their workforce, and they don't want to cut a bunch of human capital only to have to re-invest it when the market picks back up. That would be inefficient in the long term.

Now, I can certainly imagine crisis situations where a corporation has so underestimated economic climate that it is forced to cut valuable human capital or go bankrupt. In that situation they'll probably cut down on their human capital unless they are "bailed out" BUT they will NOT hire NEW workers to train and invest in w/o increase in demand. Doing so would make 0 economic sense what so ever.

There's a big difference between $$ that helps a corporation not have to make a lose-lose situation that I outlined above), and $$ that goes into a stable corporation w/o room to expand, because there is a big difference between current trained workers, and new workers that require some investment/training. Basically, subsidies can help save jobs when companies have invested in their workers, but they can't create jobs when there is no room to expand.

I'd certainly be more willing to buy this line of reasoning if I weren't talking about able-bodied people with a CDL. It's not exactly a huge investment to get them up to speed.

BTW, I'm certainly not saying that businesses don't hire and fire based on the needs of their company, often in a heartless manner. I'm just pointing out that it's definitely not always the case, and that a good many companies definitely don't operate that way. We don't hear enough about those companies.

---------- Post added October-28th-2011 at 04:18 PM ----------

Did those actions really contribute to jobs in the long term? If we let Toyota build five more factories instead of bailing out GM, would American workers have been better off? Certainly there are individual bailouts and freebies that save jobs in the short term, but do they really create jobs in the long term? I'm not so sure.

Right...that's the question and the answer isn't simple. How many car jobs would still be in and around Detroit if wages/benefits were more flexible? The unintended consequences of spending/political favors will never end, which is why I think a ton of people on the left and the right, who generally hate each other politically, actually agree about things like simplifying the tax code and eliminating earmarks.

The Austrians are the most consistent in this regard. Government throwing itself into all of these millions of situations creates inefficiencies, bubbles, dependence and ultimately (and most importantly) a corrupt political environment. No American not directly benefitting from this situation is supportive.

---------- Post added October-28th-2011 at 04:20 PM ----------

But in addition, at least the auto bailouts (which I really didn't support), are very specific. Giving corporations freebies in some VERY specific cases likely do product long term jobs. That doesn't mean it is generally a good policy.

Saying we are going to do something for these two companies, at this particular time is VERY DIFFERENT than saying we're going to decrease the corporate tax rate by 5% across the board.

One MIGHT long term create jobs. That doesn't mean the other is.

But this is the issue with moral hazard. If it's accepted that you're very specific cases are worthy, than others will make the case for their very specific cases. Then the few very specific cases become institutionalized, others say why them and why not me, and eventually you have whole spending bills built around very specific cases. It's the slippery slope argument, and the cost is NOT limited to the cost of earmarks. The cost to our economy of this public/private partnership (kickback) in housing and healthcare is immense.

[PeterMP]

I'd certainly be more willing to buy this line of reasoning if I weren't talking about able-bodied people with a CDL. It's not exactly a huge investment to get them up to speed.

BTW, I'm certainly not saying that businesses don't hire and fire based on the needs of their company, often in a heartless manner. I'm just pointing out that it's definitely not always the case, and that a good many companies definitely don't operate that way. We don't hear enough about those companies.

I'm not Prosperity's right, but I don't understand your argument.

Cutting everbody's hours for hourly employees doesn't cost the company anything.

Firing a bunch of people and paying people a "little OT" is going to cost the company.

This is certainly consistent with a company acting in a manner that is as immediately economically advantageous as possible. I worked in restaruants for a lot of years. One of the things I learned is that they HATE paying out over time. You have to a LOT better than your co-workers if you want to work over time, and you pretty much have to demand it (I threatened to quit more than one time because I wasn't working enough (enough being 50+ hours/week).).

[Prosperity]

I'm not Prosperity's right, but I don't understand your argument.

Cutting everbody's hours for hourly employees doesn't cost the company anything.

Firing a bunch of people and paying people a "little OT" is going to cost the company.

This is certainly consistent with a company acting in a manner that is as immediately economically advantageous as possible. I worked in restaruants for a lot of years. One of the things I learned is that they HATE paying out over time. You have to a LOT better than your co-workers if you want to work over time, and you pretty much have to demand it (I threatened to quit more than one time because I wasn't working enough (enough being 50+ hours/week).).

Well, I don't know how much a company really invests in its drivers but you're argument makes more sense in this context. Perhaps the company has figured out that the mantra "do more with less" is actually just BS. You don't do more with less... you do less with less. Pressuring drivers to work more than they previously have had to work may lead to more productivity but it may also lead to more risks (like accidents). (in addition to the OT $ argument)

[Wrong Direction]

I'm not Prosperity's right, but I don't understand your argument.

Cutting everbody's hours for hourly employees doesn't cost the company anything.

Firing a bunch of people and paying people a "little OT" is going to cost the company.

This is certainly consistent with a company acting in a manner that is as immediately economically advantageous as possible. I worked in restaruants for a lot of years. One of the things I learned is that they HATE paying out over time. You have to a LOT better than your co-workers if you want to work over time, and you pretty much have to demand it (I threatened to quit more than one time because I wasn't working enough (enough being 50+ hours/week).).

There are a couple of considerations here. The first is the cost to get the job done. The second is the cost to fire someone in things like unemployment and COBRA. I'm not expert on the latter numbers, so in that regard I could agree that the company may want to keep people based on a cost consideration.

However, on the first cost (to do the job), based on what my neighbor tells me, they're keeping a lot of people on the payroll, and paying them for 32 hours even though they only have a small fraction of that much work to do. This is anecdotal, but my neighbor says he could easily do the work of 3-4 people right now. This is a company that has taken to hiring fed ex to do a lot of their deliveries because the orders are so small. People are regularly done their routes before noon, and they don't have to work hard to do it. He directly told me that the reason they haven't fired people is because they don't want to fire people.

I suspect we're talking about small amounts of money in comparison to the dollars going through a huge corporation, but I also know this to be true with small businesses. When you get to know people on a personal level, the last thing you want to do is fire them. Human nature makes that very difficult to do.

Alternatively, I have no anecdotes of companies hiring people just to help the economy. Companies generally hire when there's a need, and not until then.

[Prosperity]

I suspect we're talking about small amounts of money in comparison to the dollars going through a huge corporation, but I also know this to be true with small businesses. When you get to know people on a personal level, the last thing you want to do is fire them. Human nature makes that very difficult to do.

that's what consultants are for

[PeterMP]

I suspect we're talking about small amounts of money in comparison to the dollars going through a huge corporation, but I also know this to be true with small businesses. When you get to know people on a personal level, the last thing you want to do is fire them. Human nature makes that very difficult to do.

Alternatively, I have no anecdotes of companies hiring people just to help the economy. Companies generally hire when there's a need, and not until then.

Sure. I can believe that even at large corps, but it isn't really the corp. that's making the decisions, but some local guy that knows the drivers. The people further up the ladder likely don't know the real numbers.

And I KNOW small business people do it. My dad owned a small business. The last 2 years or more on paper he was pulling in $60,000 (which means he was paying income taxes on that), but in reality, $40,000 was going back into his business. But he didn't cut the pay, vacation, etc. of his workers (mostly uneducated lower class people) until last Jan 2011. And even then, it wasn't enough to offset what he was losing.

Realistically, he should have shut the doors and walked away. He had the means to do it, but he didn't.

[Wrong Direction]

Sure. I can believe that even at large corps, but it isn't really the corp. that's making the decisions, but some local guy that knows the drivers. The people further up the ladder likely don't know the real numbers.

And I KNOW small business people do it. My dad owned a small business. The last 2 years or more on paper he was pulling in $60,000 (which means he was paying income taxes on that), but in reality, $40,000 was going back into his business. But he didn't cut the pay, vacation, etc. of his workers (mostly uneducated lower class people) until last Jan 2010. And even then, it wasn't enough to offset what he was losing.

Realistically, he should have shut the doors and walked away. He had the means to do it, but he didn't.

Agree fully. The only thing I want to add is that sometimes I think folks forget that people work for corporations at all levels, not just the lowest levels.

[PeterMP]

Agree fully. The only thing I want to add is that sometimes I think folks forget that people work for corporations at all levels, not just the lowest levels.

Yeah, but the people at the highest levels don't know the people at the lowest levels. I fully believe the same principle works all the way up the chain. Look at the Disney mess a couple of years ago with Eisner and Ovitz. That was almost certainly partly the result of personal relationships.

Nobody is claiming that corporate CEOs, board members and the like are heartless machines. Just that the people that most benefit from their humanity are also well to do people that they have the most interactions with and are other corporate CEOs, board members, and the like, and not the average hourly truck driver.

[Larry]

But in addition, at least the auto bailouts (which I really didn't support), are very specific. Giving corporations freebies in some VERY specific cases likely do product long term jobs. That doesn't mean it is generally a good policy.

Saying we are going to do something for these two companies, at this particular time is VERY DIFFERENT than saying we're going to decrease the corporate tax rate by 5% across the board.

One MIGHT long term create jobs. That doesn't mean the other is.

Was going to try to say this, but he said it better.

---------- Post added October-28th-2011 at 04:59 PM ----------

I worked in restaruants for a lot of years. One of the things I learned is that they HATE paying out over time. You have to a LOT better than your co-workers if you want to work over time, and you pretty much have to demand it (I threatened to quit more than one time because I wasn't working enough (enough being 50+ hours/week).).

I've dome vastly more than my share of restaurant work, too, and that's my experience.

One of the rules in restaurant work is that you always want to have more employees than you have work for, for several reasons.

One is because you have constant turnover. You'll have somebody call in well (as in "Well, I'm not coming in today, cause I don't feel like it"), or they'll quit (usually without notice), or whatever.

My impression is that a lot of restaurants lose 2 employees a week.

Well, when that happens, it really helps if the restaurant has 10 employees who want 40 hours a week, but they're only getting 30.

[Wrong Direction]

I love this quote, by the way. I best most here do.

Rather than raise taxes on individuals, we should "lower the amount of government spending the wealthy now receive." The "true sources of inequity in this country," he continued, are "corporate welfare that enriches the powerful, and empty promises that betray the powerless." The real class warfare that threatens us is "a class of bureaucrats and connected crony capitalists trying to rise above the rest of us, call the shots, rig the rules, and preserve their place atop society."

[NoVaO]

Sort of off topic, but I think the hatred for corporations is very often - though certainly not always - misplaced. My neighbor is a driver for Office Max. They're not doing well at all. They could fire many of their drivers and just give people like my neighbor (who's very productive) more routes and pay a little OT. That's not what they're doing. Instead of purely focusing only on the bottom line, they're cutting everyone's hours so they don't have to fire a lot of people. I guarantee you that many corporations and small businesses are in the exact same place today. They do understand the plight of the jobless and they're trying not to make it worse.

I actually agree, and I forgot to put in my comment that there are some that actually do take some pride in hiring American workers and treating them well.

I don't actually begrudge corporations that take advantage of cheap labor elsewhere. They are supposed to do what's best for business, not what is best for their workers. The fix is to not give companies incentive to move operations overseas. Stop giving them tax breaks to spend in foreign markets. Stop rewarding them for outsourcing their workforce.

I'm still not sure how American workers can compete with the cheap labor overseas. I do know a race to the bottom is not the answer.

What does piss me off is when the CEO gets a salary increase in the millions, all paid for by laying off thousands of workers. I don't like seeing CEOs run their companies into the ground and being rewarded for it with a golden parachute. I don't like seeing CEOs pack the corporate board that sets their pay rate with friends. I also don't like the criteria set for CEO pay that says all CEOs should be paid more than what 75% of their peers make. How can all CEOs be paid at an above average rate?

[Redskins Diehard]

We're getting off topic. (And I probably started it.)

The assertion was that the vast majority of Americans are employed by corporations. (And, I suspect, attempting to imply that, therefore, we should all be grateful for corporations generously saving us from starvation.)

My (admittedly snarky and sarcastic) observation was to question whether the vast majority of Americans were employed, at all.

Not to make some conclusion as to what percentage of people are employed, as a percentage of people that we think ought to be employed.

It was a joke, and a diversion.

It was probably just a diversion from the diversion. "Economy Grows" thread turns into a discussion of the relative goodness of "Corporations".

[Larry]

It was probably just a diversion from the diversion. "Economy Grows" thread turns into a discussion of the relative goodness of "Corporations".

Well, this IS Tailgate.

[Thiebear]

Everything i read and heard said we were 100% recession.

And we squeak by with Europe making us look stable.. I'll take good luck anyday.