US politics circa 2011

[Rudyard K]

Originally Posted by TexTushHog

As for jobs, I hire when I need more employees. I has nothing to do with the economy or my tax rate. We sign up some big corporate case (and I do some corporate litigation), I add a file clerk just to handle that one case. I don't have that case, I don't hire another hand. I have more legal issues than usual, I hire another lawyer. I don't call my accountant and ask, what's the tax law this week. And frankly, that's a pretty good model for the larger economy. Tax policy doesn't drive hiring, aggregate demand does.

Interesting. Mr Nobleness is clever in how he says things. If he has a case, he adds a file clerk to handle thta case. If he doesn't have one...he doesn't hire another hand. Saying it that way sounds so much more noble than saying he will fire that clerks ass because he no longer has the case and he wants to keep making the same money for himself. Don't get me wrong, I'd do the same thing. But I won't try to blow smoke up your ass about my gentile democratic wonderfulness.

[pjorourke]

Originally Posted by TexTushHog

Ironically, I suspect I'm actually better off with Republicans in office.

That is interesting. I do better under Dems.

[pjorourke]

Originally Posted by Rudyard K

But I won't try to blow smoke up your ass about my gentile democratic wonderfulness.

You have some?

[charlestudor2005]

Originally Posted by Rudyard K

Interesting. Mr Nobleness is clever in how he says things. If he has a case, he adds a file clerk to handle thta case. If he doesn't have one...he doesn't hire another hand. Saying it that way sounds so much more noble than saying he will fire that clerks ass because he no longer has the case and he wants to keep making the same money for himself. Don't get me wrong, I'd do the same thing. But I won't try to blow smoke up your ass about my gentile democratic wonderfulness.

OK, RK, you know better than to put it in this light. It would be my guess that TTH's practice supports a certain number of employees. The number of cases tends to go up and down as time goes one, but when one case is closed, another one is opened. And the level of business remains basically the same over time.

Now, I think what TTH was saying is if he get a new BIG case, he hires the personnel he needs to support that case. And new BIG cases tend to be long term projects. So, when you hire people, it isn't for the short term as you suggest. Still, at the end of the project, you have to assess your employee needs. And, you may have to reduce some staff.

No different than Ford or GM doing a RIF--except for the scale.

[charlestudor2005]

Originally Posted by Rudyard K

But I won't try to blow smoke up your ass about my gentile democratic wonderfulness.

I assume this is a typological error and not a declaration of belief.

[gnadfly]

Originally Posted by atlcomedy

FWIW, though, I don't criticize how another man spends HIS money. I'm only critical of someone spending MY money. The so called tax cuts weren't a gift from government, but simply letting TTH keep some of HIS money.

While watching the J.G. Wentworth commericials, WTF and TTH yell out "ITS NOT YOUR MONEY".

[atlcomedy]

Originally Posted by Rudyard K

Interesting. Mr Nobleness is clever in how he says things. If he has a case, he adds a file clerk to handle thta case. If he doesn't have one...he doesn't hire another hand. Saying it that way sounds so much more noble than saying he will fire that clerks ass because he no longer has the case and he wants to keep making the same money for himself. Don't get me wrong, I'd do the same thing. But I won't try to blow smoke up your ass about my gentile democratic wonderfulness.

Maybe he has a second career in politics:d ir_bye1:

&...I would do the same thing too...I think most of us would. It is the rational capitalist behavior to match resources including labor to demand. Afterall, that's how we got the unemployment level he currently have. More demand & we'd have more jobs.

What I have a problem with is the converse (although no one has done it yet in this thread) is when some small businessman, with a bunch of bluster, gets up and says"We'll if you raise my taxes I'll have to fire x people so I can still make $y!" I call BS. Either your employees are adding value at least equal to their total cost (wages, benefits, travel, office overhead) or they aren't regardless of your tax rate. If they aren't you should eliminate the position in good times or bad. Now changes in demand as a result of changes in tax rates (or other gov't action) are a different story. But eliminating those positions isn't so business owner can make his profit target.

[Rudyard K]

Originally Posted by charlestudor2005

OK, RK, you know better than to put it in this light. It would be my guess that TTH's practice supports a certain number of employees. The number of cases tends to go up and down as time goes one, but when one case is closed, another one is opened. And the level of business remains basically the same over time.

Now, I think what TTH was saying is if he get a new BIG case, he hires the personnel he needs to support that case. And new BIG cases tend to be long term projects. So, when you hire people, it isn't for the short term as you suggest. Still, at the end of the project, you have to assess your employee needs. And, you may have to reduce some staff.

No different than Ford or GM doing a RIF--except for the scale.

I don't disagree...and if you read, I said as much. But you don't get to do what is in your own best interest on the one hand, and climb up on a soap box when other's do the same on the other hand.

Originally Posted by charlestudor2005

I assume this is a typological error and not a declaration of belief.

Thanks for imparting your linquistic skills to me.

[Tiny]

Originally Posted by TexTushHog

As for jobs, I hire when I need more employees. I has nothing to do with the economy or my tax rate. We sign up some big corporate case (and I do some corporate litigation), I add a file clerk just to handle that one case. I don't have that case, I don't hire another hand. I have more legal issues than usual, I hire another lawyer. I don't call my accountant and ask, what's the tax law this week. And frankly, that's a pretty good model for the larger economy. Tax policy doesn't drive hiring, aggregate demand does.

If you have the business for more employees, hire them regardless of what the tax law is. If you don't have the business, you wouldn't hire them even if your marginal tax rate was 0%.

My guess is that 85% to 90% of the after tax profits of American business are either reinvested in business or placed into savings such that it serves as a source of capital for other businesses. See my footnote below for the basis for this. It's this investment that leads to expansion of the economy and additional jobs in the private sector. Most of after tax profits aren't being used for vacations in Europe, luxury homes, meals in fancy restaurants, etc. They're being re-invested.

I don't think this number, 85% to 90%, is going to change significantly based on tax policy. In other words, when taxes are increased on business and investment and savings, I believe there's a reduction in business investment equal to the incremental amount taken by the government.

Footnote:
Business on average re-invests 65% to 70% of after-tax profits and distributes the remaining 30% to 35% to owners. I'm basing this number on the average dividend payout ratio of U.S. corporations, and assuming the ratio is similar for Sub S corporations and LLC's. While that's probably not a good assumption for smaller private businesses, I believe this number is reasonably good for U.S. business as a whole. Of the 30% distributed to owners, the majority, is re-invested in other businesses, or placed into savings such that it serves as a source of capital for business investment. My wild guess is that about 1/3rd of this 30% is spent on private consumption and the remaining 2/3rds re-invested or placed into savings.

[atlcomedy]

Originally Posted by Tiny

Most of after tax profits aren't being used for vacations in Europe, luxury homes, meals in fancy restaurants, etc. They're being re-invested.

.

Let's ignore that he was in Europe and for the sake of discussion assume he was vacationing somewhere in the U.S., tourism has a very immediate, direct multiplier effect. This spending is very good for the economy. Much better that putting that money in the bank or paying down debt.

[I B Hankering]

I know that this is something akin to “bear-baiting”; but, I haven’t figured out which one of us is the bear. LOL

Originally Posted by WTF

Well it was for them...just as it is for any country that needs resources. Why do you think countries go to war if not for resources? What do you think we went into Iraq for.? Their camels?

This sounds very Machiavellian—“The ends justify the means”—which seems to undermine your previous, “moralistic” platitudes.

Originally Posted by WTF

No you are not, but what you really are is an apologist for an unlimited Defense Budget.

I never said that. BTW, 4.3% of the GDP is not “unlimited.”

Originally Posted by WTF

Yea according to IB's history class that damn near had us surrendering!

No, I was just pointing out to you that our borders are not as inviolable as you proclaim.

Originally Posted by WTF

No country will ever invade us unless you count Mexico

Here you are admitting it’s possible.

Originally Posted by WTF

Defense contractors make a killing

Cute double entendre. If hiring U.S. contractors, who employ American labor and encourage U.S. technological development helps the U.S. government meet its constitutional obligation to defend its citizens, then I do not have a problem with it.

BTW, those planes you frequently use to conduct business (I’ve read your posts in other threads) are a byproduct of military technology. And, if you think Eisenhower built the U.S. Interstate system so you could cruise easily in and around Houston or Dallas, think again.

Originally Posted by WTF

You do realize that you have a 100x bigger chance of getting killed in a car accident than a terrorist attack.

Given the “strategic importance” of where I now live and conduct business, my chance of being physically hurt or killed in a terrorist attack is next to nil. However, it really bothers me to see it happen to my fellow citizens.

Originally Posted by atlcomedy

Al Gore, John Kerry.

+1
I can count on two fingers how many times I have actually voted for somebody.

[TexTushHog]

Tiny, what are you going to reinvest in if there is no aggregate demand. In a liquidity trap, there isn't enough demand to meet the existing capacity of the economy, much less to expand. Companies fear, justifiably, that business won't come back for some time even to occupy current capacity. Under those circumstances, they cut spending, thus further leading to low demand. Hence the viscous circular nature of a liquidity trap without stimulus spending.

And yes, when I have a commercial case sufficiently large to add an employee or two, it's usually for a couple of years.

And RK, I don't recall that I've criticized firms for making appropriate adjustments to their labor force (or even inappropriate ones). It's their business and they can run it any way they want in terms of staffing levels. I do object to businesses not providing, and the law not requiring employers to provide, their employees health insurance. I do that not for economic reasons, but for moral reasons.

[Randy4Candy]

Originally Posted by pjorourke

That is interesting. I do better under Dems.

Not that interesting, crooks and the screwed need lawyers.....

[Tiny]

Originally Posted by TexTushHog

Tiny, what are you going to reinvest in if there is no aggregate demand. In a liquidity trap, there isn't enough demand to meet the existing capacity of the economy, much less to expand. Companies fear, justifiably, that business won't come back for some time even to occupy current capacity. Under those circumstances, they cut spending, thus further leading to low demand. Hence the viscous circular nature of a liquidity trap without stimulus spending.

AtlComedy made a similar point. One or two years ago I think what you're saying made sense. And there are people who know a lot more about the economy than I do (e.g. Geithner and Bernanke) who appear to believe it still makes sense. At this point in time, I don't think they're right, although I don't know.

My question, if you're right, then wouldn't you want to continue stimulus spending AND keep taxes low, and have the government continue to borrow massive amounts of money, until the private sector starts spending again?

In years to come, we're going to be dealing with perennial current account deficits, an abysmally low personal savings rate, and too much personal and government debt. The cure is higher savings and investment relative to consumption. I'm fearful that the current emphasis on demand is going to put us right back where we were -- a nation of profligate, indebted spenders that relies on China et al to fund our investment, only next time with high inflation to boot.

[WTF]

Originally Posted by I B Hankering

Cute double entendre. If hiring U.S. contractors, who employ American labor and encourage U.S. technological development helps the U.S. government meet its constitutional obligation to defend its citizens, then I do not have a problem with it.

Thank you. I'll let you two (tiny) duke it out. I'm tired but this massive war debt must be paid for at some point, if you think building tanks is the way to go, so be it it but don't hide from the fact that only a small % profit from that overbuilding.

Originally Posted by Tiny

My question, if you're right, then wouldn't you want to continue stimulus spending AND keep taxes low, and have the government continue to borrow massive amounts of money, until the private sector starts spending again?

In years to come, we're going to be dealing with perennial current account deficits, an abysmally low personal savings rate, and too much personal and government debt. The cure is higher savings and investment relative to consumption. I'm fearful that the current emphasis on demand is going to put us right back where we were -- a nation of profligate, indebted spenders that relies on China et al to fund our investment, only next time with high inflation to boot.

Originally Posted by I B Hankering

BTW, those planes you frequently use to conduct business (I’ve read your posts in other threads) are a byproduct of military technology. And, if you think Eisenhower built the U.S. Interstate system so you could cruise easily in and around Houston or Dallas, think again.