A thoughtful conversation by Bob Herbert with Joseph Stiglitz at the NY Historical Society on March 1st. Part of my series on current events, bringing the latest news and thinking on Economics as it affects US.
“Well the good news is we’re better off then Europe, whose Economy has reached depression levels. We’ve got almost 20 million without jobs in the USA. Those between the ages of 50-60 are no longer employable. There are no jobs for them! While kids growing up in poor neighborhoods remain unemployed and uncounted. ” Listen to the news and none of this is apparent. Only the “good” news gets through, “unemployment” is less then before? Sure it is,” no one is counting the Millions falling into debt, poverty, homelessness on a daily basis”. It’s our “dirty little secret”. Earned Income credits don’t help those in need as much as cash and a job. Instead, we are hiring “kids” as unpaid interns, is that our future?
As States vie for jobs, skill sets that were formed in one part of the Country have shifted the burden to other states. It’s like 3 card Monty, nothing has changed, except the players. So, the engineers in the East, need to migrate to new jobs in the South and West. This is not a Win Win for anybody. Taxpayer dollars are paying for this “job” shift, where do you think the revenue comes from to “lure” a Corporation from one state to another”?
Worse, the Corporations are so dependent on Corporate Welfare, at our expense, they no longer spend money on training or R & D. In the “old days”, 1970’s, Corporations spent money on R & D, they hired “kids” directly from College, gave them a “good paying” job and an Education. No strings attached. Grant money was also, available for graduate Education from NIH and National Science Foundation, enough to cover the cost of your education plus a stipend. I know, I received grants at the Masters and PhD levels.
Gone, but not forgotten. When a Corporation wanted you to relocate, in the 70’s and 80’s , they paid all relocation expenses. It was expected. So where is it written, we give “big ” tax incentives to Corporations to relocate, but they in turn, keep their profits and don’t extend a hand to a new hire? Something is rotten in this Country and it’s not the “tomatoes”. It’s the total lack of business responsibility and accountability to a Public that provides them with tax breaks and asks no questions. A win win for them, zero for US.
When I worked for Ford Motor Co. , Ford elected to close the Mahwah Plant, many reasons were given, but I can attest, “the people and level of quality control” led to a non profitable Plant. However, though Ford thought it was in the right, the Country came down hard on Ford Motor Co. Laws were changed to provide safeguards to a “fragile and cared for” workforce. Never again, could a plant layoff 1000’s of workers without notice.
After Ford, I went to Pfizer in charge of their Diagnostics division. It was my job to make a quality product that was profitable. I had P &L responsibility. Pfizer’s intent was to sell this division to Warner Lambert in the Mid West. 6 months prior to the transfer, I was told to set up counseling for my workforce . First calm their fears about job loss. Next Pfizer offered a relocation package or the ability to be absorbed in to another operation within the Brooklyn Plant. Did we lose profits because of this humane decision? No way. At one point I traded 1000’s of shares of stock and made money for years. It was a win win for the company and a win win for the employees.
If our Corporations were so progressive, it would be a pity to tamper with their role model and I wouldn’t be writing these columns. Instead we have stagnation, fewer firms competing and little product development. It’s time, past time, to shake up the Giant’s slumber. Instead of offering tax incentives to stay the same, offer tax incentives when the Corporation behaves in an ethical manner and guarantees jobs to thousands instead of obliterating those jobs. Stop giving in to Corporate Blackmail. No one likes a “Putin” bully, why should we tolerate this behavior in large Corporations. They have maximized their profits and offer remuneration for their upper echelons at the expense of ordinary Americans . ” Stiglitz , stated, ” the pay extreme has gone from 30:1, to 250:1, not counting retention pay, bonus’ and other perks, independent of the “health and profitability of the Corporation”. As Corporate Profits soar, the Cost to Public Health and education will be equally enormous, as the results of unemployment and poverty ripple through our system for years. Where’s the proportionality?
Corporate welfare has created a Countrywide welfare system at great cost to our Nation. 6 years into this recession and we’re still tinkering with proposals as Millions fall into poverty and the Middle Class remains devastated.
- We have choices to make as Politics affects US.
- What kind of Leaders do we want?
Financial Times, We do not have to live with the scourge of inequality -- By Jonathan Ostry -- Making the tax system "more progressive, leads to higher growth" Read the full article at: http://on.ft.com/1jMl4Dq