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trickle down?

I will state it from the start: I am not a communist or a socialist. I do however have a sense of social justice and try to follow the teachings of Jesus; help the least among you, love those who hurt you, etc. I said I try but of course I don't always succeed.

N and I live a relatively modest existence. We don't own fancy homes or cars but we are educated and work in professional environments. Since I began my career in the late 80's, I have witnessed a steady increase in homelessness and disenfranchised people asking for money in the street. Back then it would happen maybe once during the course of my day and today it happens several. There have been days when it has threatened to go into double digits.

Meanwhile we have seen the top earners in North America increase their net worth by several multiples. It doesn't take a genius to figure out that trickle down economics only works when those who are amassing wealth are genuinely interested in the welfare of their employees, but the sad truth is that by moving your operations offshore while paying meager wages won't be a winning formula for social improvement.

As an example, the textile industry in the United States and Canada is virtually dead and our clothes are now made in China, Bangladesh and India. Often these workers manufacture these items under dangerous and crowded conditions.

Even my technical field is seeing outsourcing to India so I am not out if the woods either. All of this of course is being done because we want things cheaper and cheaper.

If we are to remedy what ails North America we might be better served by adopting models where employees are not only fairly compensated but also feel like they are an important contributing element in the success of the company. One such model is Costco but there are others; unfortunately they are the exception rather than the rule.

If we adopt models where skill sets are shipped abroad, we will find ourselves with a large unskilled population that cannot support itself in the long run which is a recipe for social implosion.

I wonder what New Deal Roosevelt would think of all this.




Comments

  1. In some ways the Canadians have realized that there is truth to what Margaret Thatcher said about socialism being fine until you run out of spending other people's money. One of my sons went to school near the Canadian border so during his college years and thereafer we made several trips across the border to your wonderful country. When he started college the Canadian Dollar was only worth about 80 cents US. Now I believe the exchange rate has reversed. The current US administration thinks that you can redistribute wealth by government program and by tax increases. The Federal rate is now close to 40% and in NY we add another 10% from the state plus city income taxes pluse property taxes and 8+% sales tax.
    I am changing phone plans and the tax coctail on the phone plan is choking.
    Corporate taxes are now back up to 35%. Corporations have duties to their shareholders not to waste corporate assets. It is no wonder that corporate assets are moved away from the tax grabbers. The change that US voters sanctioned 6 years ago has been terrible in many ways and I am not sure where to go to recover from the damage.
    Pat

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  2. Pat americans pay some of the lowest tax rates in the G20. The problem isn't about taxes it has more to do with American individualism and not giving a hoot about your neighbour. Eventually there will be no skill set left in either of our countries because its all being outsourced. All I'm saying is that it can't ALL be about making profit. Making money is fine but you can do that more responsibly instead of having the top 1% owning the lion share. America used to have a strong middle class and the taxes they paid built the infrastructure of your beautiful country

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  3. I do not dispute what you have to say but we now have 109 million households receiving some form of welfare with a total of 150 million receiving government checks.
    When I studied economics these were called transfer payments. That concept has morphed into entitlements.
    47% of Americans pay no Fed. income tax. The policies of the government have been divisive and have been very hard on the middle class. Both my children have college degrees and both work very hard but I am not sure that they will ever find the type of middle class lifestyle that past generations have enjoyed, especially when it comes time to address the massive government incurred debt.
    We have to address the unfairness of the tax system so that people who can walk (fly or sail) to lower tax places can make their economic investments at home.
    Pat

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  4. I think that the world has caught up to us and we will need to face reality. But that neans morphing our politics to suit that new condition.

    for the record I pay the highest taxes in North America but that also means that when I hsd my stroke, my medical bill was zero because of our medicare system. I don't know where American taxes are going but I would like to think that some of them go towards some sort of safety net.

    peace...

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