Obama’s Socialist Proclamation: Corporate Profits "Have To Be Shared By American Workers"

Obama’s Socialist Proclamation: Corporate Profits "Have To Be Shared By American Workers"

Abstract: President Obama sets out goals to reform the tax code and increase exports with the caveat that any such profits must be shared with employees. His mandate is that such new business should lift standards of living for workers. His approach to dealing with business is abrupt, antagonistic, overbearing and lacking in basic economics. Obama and his leftists have spent the last two years attacking business and finding any and all ways to increase taxes and punish businesses on all levels. He and his California allies have created the most hostile place on the planet to conduct business with a 35% corporate tax rate. He has hiked the national debt to beyond $14.1 trillion dollars and now wants debt limits to be raised so he can spend more. The business community has not trusted Obama up to this point and there is no reason to trust him now including anything he might say or promise. His phony drilling embargo drama in the Gulf was based on leftist politics and is but a soggy sop to rabid environmentalists and ignores the history of oil spills and environmental damage. He is a True Believer in the phony Global Warming Follies. He and his czars have little but contempt for business and outwardly display this view in the media and across the world. When he demands that US corporations hire US employees he is threatening to force obvious business loses upon any business who attempt this. The bottom line is that our US wages are too high [and he wants them higher!] and we cannot compete with the rest of the world in any market where our labor costs are much above the competition product for product. That gives us few options. Bankruptcy or default is probably next.

Marxism, socialism and a few more isims are based on coerced wealth transfers of various sorts from the ‘rich’ to the ‘poor’ and always focus despairingly on the ‘rich’ while rarely ever mentioning the size, scope or spending of government. In the USSR experiment, an exercise that exacted much speculation and political thrills, the Soviet government was never faulted by the left for their atrocities even after steering 99% of the accumulated wealth of Russia into the hands of only 4% of the population [Communist party members, of course] and then their government and economy went bust in 1989 and the citizen’s ‘savings’ inflated some 1500 fold and were worthless. We saw more of this in the Soviet Bloc countries such as Poland, Czechlosvakia and Hungary where hyperinflation wiped out the economy and more recently in Thailand and Iceland. It is difficult to believe in government comments and policies when we think that the government leaders are out for all the loot they can carry away. This is an ideological battle where the liberal Democrats want to show that ‘capitalism has failed’ and put in some totalitarian system.

[I offer extensive quotes in this blog so that the reader can view the exact language and can be confident that nothing was taken out of context or that nobody was misquoted. The easiest way to take in the salient points is to read the emphatic points in the quotes and then peruse my comments. Comments on my comments are always welcome: ryckki@gmail.com.] [Emphasis is mine in all quotes.]

We can begin by inspecting this comment by Obama:

“If we're fighting to reform the tax code and increase exports, the benefits cannot just translate into greater profits and bonuses for those at the top. They have to be shared by American workers, who need to know that opening markets will lift their standard of living as well as your bottom line," President Obama told the Chamber of Commerce on Monday morning.”[1]-Obama’s Socialist Proclamation Feb 7, 2011

This opening statement is stuffed to the gunnels with strange predictions and oblique actions that are not being implemented at this time. Ultimata are hurled at the business community from some wraithlike throne. The only substantial and material element that plows through the rhetoric is the expectation that wealth must transferred away from the business leaders. This is stale liberalism of the most pedestrian sort and burned out in the lost Fabian days of Bernard Shaw. The noted planned reformation of the tax code is nowhere to be found in the Democratic sectors of the Legislative Branch as the options to change this maniacal mechanism of grubbing monies would lower the government’s share of the GDP. So, this cannot be true and the comment is only so much political fluff.

The notion of ‘increasing exports’ is a fact, of sorts, in that many companies are looking for ways to increase such trade although our government is not exactly behind them. Look at the oil markets and note that Obama has curtailed off shore drilling even after a judge ordered the process halted and the Democrats instantly issued another order. Rather, our government is more distressed with taxation, directly or indirectly, of everyone they can find in the current panic over debt and unemployment. The drilling embargo proceeds even though Cuba is starting up major oil operations with Spain.[2] The Democrats fear our drilling will create more spills but are silent on the Cuban and Chinese operations in the same waters off Florida. Then, there is Mexico, the source of the biggest spill in the Gulf in history. The Exxon Valdez spilled 10 million gallons on Mar 24, 1989 but twice that amount was spilled by an Iranian Kharg-5 supertanker in the Canary Islands in Dec of that same year. In April 11, 1991 the Haven spilled 42 million gallons of oil in the port of Genoa, Italy. This reference[3] gives us a list of major spills for decades but we hear only about the Exxon Valdez and the BP blowout. They spilled very little oil compared to the volume count from this extensive list. Obama said he had ‘no problem” with gas at $4 a gallon. He doesn’t care how high electricity costs go with windmills and solar panels. Such an uninformed and infantile attitude is not good for business in America.

From an Obama interview from last year:

“During our hour together, Obama told me he had no regrets about the broad direction of his presidency. But he did identify what he called “tactical lessons.” He let himself look too much like “the same old tax-and-spend liberal Democrat.” He realized too late that “there’s no such thing as shovel-ready projects” when it comes to public works. Perhaps he should not have proposed tax breaks as part of his stimulus and instead “let the Republicans insist on the tax cuts” so it could be seen as a bipartisan compromise.”[4]-- Education of a President in the New York Times Magazine By Peter Baker Published: October 12, 2010 [Emphasis is mine in all quotes.]

Well, …

The comments from the interview by Baker ring of conspiratorial politics where schemes and designs are contrived and hidden from the public so as to achieve some goal, like, as always, more taxes and bigger government in the usual liberal cases [Wilson, FDR, LBJ, JEC, WJC and now BHO]. They tend to outline strategies that can get around opposition elements with fabricated policy views, the contrived certification of their notions by ‘experts’[5] and outright lies. Here, the truth must ‘be repositioned” in order to be convincing. [6] As in these: “He kept us out of war!” or “"No American boy is going to fight a war on foreign soil." - F.D. Roosevelt made this promise during the 1940 campaign, specifically referring to the wars breaking out in Europe. Two years later American boys were in Europe fighting a country that never attacked the US.” Let us not forget about the Lame Duck Session that hiked taxes some 900 bln as far as we know while only rolling back oppressive taxes from a decade ago. The largest spill was on June 3, 1979 in the Gulf of Mexico when an exploratory oil well Ixtoc 1 blew out and “spilled an estimated 140 million gallons of crude oil into the open sea.” Although it is one of the largest known oil spills, it had a low environmental impact.” Nature cleaned this up right smartly.

The point here is that American businesses are being blamed and cut out of oil business opportunities by left-liberal bureaucrats and others who ignore the big spills to concentrate only on US operations that caused spills. We can extend the scope of this mentality to cover many other US business ventures and come to the conclusion that the Democrats are anti-business except in cases where there is a big union work force as in General Motors. Then, the government must rescue a failed company that should have been sold off as pieces at a bankruptcy proceeding. Oh, and then the Democrats take the opportunity to cut away principal from the secured bond holders as well and give their share to the unions.[7]

The economy faltered and our government hiked spending so that we now run a 33% deficit each year and add on some $1.4 trillion dollars to our bloated debt of $14.1 trillion dollars—soon to be raised to accommodate even more spending.

Some 2009 ‘stimulus’ numbers are exotic but not persuading and show us a trend:

The US debt is crushing our society. Since there are only 65 million workers to handle $14.1 trillion dollars in National Debt and only half of them pay taxes above the median of $32,000 then this works out to a $192,000 [calculated as of 7 April 2009] tax liability for each for these workers and that ignores Social Security, Medicare, Medicaid and state debts.[8][9] But, there is no signal to stop spending. The current level is something past $208,000 each. Adding in projected costs for Social Security, Medicare and such boosts the debt liability to $1.6 million dollars for each person in the upper half of the work force. We are completely broke.

Overspending, to bribe voters to keep socialists in power as we see in California[10][11][12][13] [Our National Leper[14][15]], New York, Illinois and other states, is testing the bond markets. California now hopes for a miracle in revenues and will ‘wait.’ The federal stimuli had a very short and shallow effect on the US economy but did send money to the states. They spent that and now want to spend and borrow much more. Attempts to provide federal “stimuli” lead to disasters like the previous ‘jobs’ program that spent $92,000 per job![16] And, then, we spent $24,000 per car on the Clunker Follies and a mere $43,000 per house on the housing scam. [17][18]This is a farce. [19]

So, what is business to do? Can they trust Obama? I don’t think so. Business leaders have gone into M&As [mergers and acquisitions] to expand business and reduce cost and boost efficiency and that has worked in spite of the anti-business mentality of the Democrats. But, expansion of the job levels is not being planned for good reasons.

Democrats rely on ‘theory’ and such from people like this:

“Austerity is self-defeating: when everyone tries to pay down debt at the same time, the result is depression and deflation, and debt problems grow even worse. And conversely, it is possible — indeed, necessary — for the nation as a whole to spend its way out of debt: a temporary surge of deficit spending, on a sufficient scale, can cure problems brought on by past excesses.”[20]--1938 in 2010 By Paul Krugman

Ignore the debt—just spend.

In the US, UK and EU cases it is Nanny State Socialism and the importation of poverty to stuff ballot boxes that has produced this huge debt. Europe is not successful in accommodating their immigrants into their societies. The Germans call this Multikulti[21]effort a failure. The US is heading down toward bankruptcy at a rate of 10% per year based on [this year] a 94% debt-to-GDP ratio. The EU crashes as a rate of some 8.5% so far at 74% debt-to-GDP ratio. The US, UK and EU cannot recover from this debt level--we have passed Gladwell's Tipping point[22] and can only helplessly print money until hyperinflation hits and that is the end. The Smart Money moved to Asia. Business is holding on.

Some theory on production costs and salaries:

Theory: If the modern methods of manufacturing are taken into consideration, using such things as CAD/CAM and a wide variety of source for raw materials and such, and are available to manufacturers around the world then the ability to meet a global competitive price depends only on the time needed per unit to make it and the wage costs—all else being equal.

If you postulate that 10 countries with varying wages that go in the series [$/hr]: 3, 5, 10, 20, 30, 40, 100 and are in competition then there is an inflection point where a particular product or service cannot be made or performed for any profit as the differential wage costs will raise the manufacturing costs above the market price. Take autos, for instance: If all things are equal then the US with its $73/hr wage costs [all burdened with legacy costs and such....fine] cannot compete in a market where the labor costs are anywhere between 3 to $40. This is reality. Politicians do not agree with this. They think our businesses should hire people anyway. What for—they do not care.

Now, if there are wage earners in the range $3, 5, 10, 20, … that want to buy products with high costs [$2000 TV or $400 phone or $40,000 autos] then many on the low wage end of this series will not be able to afford these items.

Thus there is a gradient where numerous commodities and items hit break points where the labor costs force the item to exceed the market prices. These are the zero profit points. These products and services will not be offered at an obvious loss. Obviously, these break points force manufacturers in various countries like the US to ‘outsource’ their manufacturing to sites where the labor cost is cheaper. This is not rocket science. Even China has had to outsource some of its manufacturing to Viet Nam and Indonesia to meet competitive prices in certain markets.

Thus, the Obama argument that jobs must be created in the US with high wages is impossible for all products except those that are proprietary or have low labor costs compared to their prices. We can sell computer chips and cut diamonds, sophisticated aircraft and weapons and certain art pieces at high enough prices to ensure profits. Most other things we cannot make and sell at a profit. What our government had done in the auto cases is to subsidize the labor costs by socializing the debt and propelling it into the future and by cheating bond holders with disgusting haircuts.

Thus, there is no reason to believe Obama or trust him or even attempt to create new markets here when the anti-business atmosphere is heated to the boiling point. Corporations sit on cash because they fear another financial crisis and refuse to hire because they cannot predict the future. Small businesses, which create nearly 70% of all new jobs, cannot construct a coherent 1, 2 or 5 year business plan because of the new healthcare taxes and a myriad of other unknown costs. President Obama has acted like some lounge lizard who sits in the university student union and complains about every thing and then gets advancded degrees by sharing these complaints with professors who have the same attitude and were spawned from the same source.

rycK [a 5^th generation Californian in exile]

Comments to: ryckki@gmail.com

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[1] Obama: Corporate Profits "Have To Be Shared By American Workers" http://www.realclearpolitics.com/video/2011/02/07/obama_corporate_profits_have_to_be_shared_by_american_workers.html

[2] http://www.reefrelieffounders.com/drilling/2010/09/30/new-york-times-drilling-plans-off-cuba-stir-fears-of-impact-on-gulf/

[3] Oil Spills and Disasters The following list includes major oil spills since 1967. The circumstances surrounding the spill, amount of oil spilled, and the attendant environmental damage is also given.

http://www.infoplease.com/ipa/A0001451.html

[4] Education of a President New York Times Magazine By PETER BAKER Published: October 12, 2010 http://www.nytimes.com/2010/10/17/magazine/17obama-t.html

[5] Citing Paul Krugman here.:

Another Leftist Bondage Scheme for the Bond Gods. Krugman Speaks of the Evils of the Austerians

http://ryckki.blogspot.com/2010/08/another-leftist-bondage-scheme-for-bond.html

Krugman Ignores the Fact that Obama has Trashed the US economy and “Defines Prosperity Down”

http://ryckki.blogspot.com/2010/08/krugman-ignores-fact-that-obama-has.html

US Economics Sink into Oblivion but Mystagogues like Krugman Recite the Same Old Runes.

http://www.facebook.com/l.php?u=http%3A%2F%2Fryckki.blogspot.com%2F2010%2F07%2Fus-economics-sink-into-oblivion-but.html%3Fspref%3Dfb&h=5dd4a

Krugman Traps Himself in his Trappy Claptrap over EU Funny Money

http://rycksrationalizations.blogtownhall.com/2010/05/01/krugman_traps_himself_in_his_trappy_claptrap_over_eu_funny_money.thtml

Krugman Takes on China. We Must Blame Them for the Collapse of our Economy.

http://rycksrationalizations.blogtownhall.com/2010/03/17/krugman_takes_on_china_we_must_blame_them_for_the_collapse_of_our_economy.thtml

[6] A stratagem used by sales people to present glittering but unsound business proposals to upper management in major chemical companies in the 80s.

[7] Potentially the Biggest Stock Scam of the Century: The General Motors IPO II [Revised]. http://ryckki.blogspot.com/2010/09/potentially-biggest-stock-scam-of.html

[8] The Fed Thinks of Ways to Claw Back Some of the Stimulus Money: This Will be A Disaster as Congress Will Continue to Spend and Spend.

http://rycksrationalizations.blogtownhall.com/2010/01/03/the_fed_thinks_of_ways_to_claw_back_some_of_the_stimulus_money_this_will_be_a_disaster_as_congress_will_continue_to_spend_and_spend.thtml

[9] The Fed Thinks of Ways to Claw Back Some of the Stimulus Money: This Will be A Disaster as Congress Will Continue to Spend and Spend.

http://rycksrationalizations.blogtownhall.com/2010/01/03/the_fed_thinks_of_ways_to_claw_back_some_of_the_stimulus_money_this_will_be_a_disaster_as_congress_will_continue_to_spend_and_spend.thtml

[10] California Deserves the Greek Prize for Debt. Start Cutting and Cease Spending or Suffer.

http://rycksrationalizations.blogtownhall.com/2010/02/08/california_deserves_the_greek_prize_for_debt_start_cutting_and_cease_spending_or_suffer.thtml

[11] The Road to Social Success, Peace and Justice: California has NO Vision!

http://rycksrationalizations.blogtownhall.com/2008/06/26/the_road_to_social_success,_peace_and_justice_california_has_no_vision!.thtml

[12] As Predicted: California Heads for the Financial Latrines.

http://rycksrationalizations.blogtownhall.com/2009/06/11/as_predicted_california_heads_for_the_financial_latrines.thtml

[13] Copulating with Coprolites: The Unveiled Mechanism of Governance by Progressive Liberalism in California

http://rycksrationalizations.blogtownhall.com/2009/06/23/copulating_with_coprolites_the_unveiled_mechanism_of_governance_by_progressive_liberalism_in_california.thtml

[14] The Proud March of the Financial Lepers: Greece Leads the Way Down for California and Other Beggars.

http://rycksrationalizations.blogtownhall.com/2010/02/14/the_proud_march_of_the_financial_lepers_greece_leads_the_way_down_for_california_and_other_beggars.thtml

[15] California Becomes the National Leper like Greece is for the EU. They Need All our Money and More.

http://rycksrationalizations.blogtownhall.com/2010/02/10/california_becomes_the_national_leper_like_greece_is_for_the_eu_they_need_all_our_money_and_more.thtml

[16] 650,000 Strawdogs Bark at the Moon. The Obama ‘Recovery’ is a Numerical Monkey Circus

http://rycksrationalizations.blogtownhall.com/2009/10/31/650,000_strawdogs_bark_at_the_moon_the_obama_%E2%80%98recovery%E2%80%99_is_a_numerical_monkey_circus.thtml

[17] Belligerent Ignorance, Phony Economics and the Clunker Crusaders: Washington Wastes our Money Again.

http://rycksrationalizations.blogtownhall.com/2009/10/29/belligerent_ignorance,_phony_economics_and_the_clunker_crusaders_washington_wastes_our_money_again.thtml

[18] The US Heads for High Inflation and Probably Default. Spending Must be Cut.

http://rycksrationalizations.blogtownhall.com/2010/03/27/the_us_heads_for_high_inflation_and_probably_default_spending_must_be_cut.thtml

[19] The Quest for Financial Solvency and Fiscal Prudence in the US, UK and EU and the Probable Outcomes.

http://ryckki.blogspot.com/2010/10/quest-for-financial-solvency-and-fiscal.html

[20] 1938 in 2010 By Paul Krugman [Emphasis is mine in all quotes.] Published: September 5, 2010

http://www.nytimes.com/2010/09/06/opinion/06krugman.html?src=me&ref=general

Krugman Offers Us Canned Circular Revisionism: We Can Repeat the War Time Successes of FDR.

http://ryckki.blogspot.com/2010/09/krugman-offers-us-canned-circular.html

[21] Mangled Messages from Germany over "multikulti" and the Failure of Muslims to Assimilate

http://ryckki.blogspot.com/2010/10/mangled-messages-from-germany-over.html

Abstract: Chancellor Angela Merkel has injected some snarled political concepts in a maneuver to defuse the corrosive situation in Germany where Muslims cannot seem to fit into an expected multicultural society community or "multikulti” as they call it. The politics then becomes the supreme guiding factor for analyzing the reasons for this, but crime statistics and welfare slot counts are off limits. The process then degenerates into a squabble over what can not be said rather than address the problem in any other way. Thus, the political ‘solution’ is not to address the problem. Such processes in the US tend to open up slots in schools and universities for those with inadequate skills for college. IQ testing is outlawed in the US because it “discriminates” against minorities as if we cannot see how IQ testing sorts out people by those cognitive skills. Many of our political leaders are loathsome beings with a contempt and fury for not only capitalism but those with superior mental skills. These politicians have placed us in terminal debt, have opened as many borders as the can, falsified credentials and have attempted to force ‘equality’ upon us when it is impossible to do this. It is time to call liberalism or egalitarianism a total failure and vote these so-called leaders out of office.

[22] http://www.gladwell.com/tippingpoint/index.html