I can agree with most of that. There are three things you don't realize though.
First off, job losses are the direct result of increased productivity and the big winners taking their gains out of the economy. Reducing regulation doesn't change that, in fact it makes it worse, because it means businesses can keep more gains while increasing efficiency, putting even more people out of work.
By the same token, entitlement programs don't cost jobs - they create jobs - because taxation is, at least in theory, progressive (meaning the rich pay a higher percentage of their income in taxes) and all entitlement spending gets pumped directly back into the economy. Entitlement spending results in money going back into the economy at a higher rate than letting the rich keep their gains because the savings rate on entitlement spending is basically zero (because those people live hand-to-mouth) and the rich by and large just sit on their holdings, or plow them into unproductive speculation.
So "regulation" - raising taxes and paying them back out in the form of make-work - would take some money from the very wealthy and trigger economic growth across all brackets, as the money would re-enter the economy and go into the hands of those selling products and services - not the fat cats.
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Second off, loosening environmental regulations won't create jobs, because (productivity * available workforce) > demand. What that means is, productivity is so high, industrial capacity equal to only a fraction the available workforce is sufficient to meet the world's industrial needs.
So, what that means is, businesses will simply move where they can pay the least, and pollute the most. And because global labor supply grossly exceeds demand, the only way businesses would move here would be $1/hr labor and "freedom" to dump toxins into the environment.
The only way out of this bind is...regulation. Make it illegal to sell products produced in violation of US law (no matter where) and mandate harsh environmental restrictions.
So what would that accomplish, employment wise? Well, simply put, it would mean China would lose its competitive advantage. They would no longer be able to undercut the US on labor or environment. It would also dramatically increase employment because of the Trinity of Economics.
The Trinity of Economics is: LAND - LABOR - CAPITAL
All production is a product of those three factors. When one factor becomes more scarce and therefore expensive, the other two factors become more competitive.
So say we implement harsh environmental and labor laws. Land - pollution - is now more expensive, so businesses have to invest more on labor and capital to eke out the same level of productivity. And labor is more expensive now, too - so capital becomes the most attractive option.
Capital, in this context, refers to things like clean power, recycling, and RnD. All of which require...employment. So increasing regulation, you see, actually would bring employment up.
Let me give you a hypothetical model: Consider the economic inputs for a hypothetical coal-fired power plant. LAND - Coal mines ($10/mine) (productivity/unit: 10) (units: 10) LABOR - Coal miners and plant workers ($10/worker) (productivity/unit: 10) (units: 10) CAPITAL - Rent and maintenance on coal-fired power plant ($10/plant) (productivity/unit: 10) (units: 10) Total cost: $300/mWh Total productivity / mWh: 100*100*100 = 1m/mWh
Now, consider that same coal-fired power plant, under the burden of onerous government regulation: LAND - Coal mines ($10/mWh) + environmental regulations ($10/mWh) (productivity/unit: 10) (units: 10) LABOR - Coal miners and plant workers ($10/mWh) + health and safety regulations, wage laws ($10/mWh) (productivity/unit: 10) (units: 10) CAPITAL - Rent and maintenance on coal-fired power plant ($10/mWh) (productivity/unit: 10) (units: 10)
So the businessman running the plant now has a choice. He can continue with the previous cost structure, hiring 10 workers at each of his plants, running 10 mines, and running 10 plants, or he can double his spending on infrastructure, fire half his workforce and halve his mining activities, so he can eke out the same amount of power production and profit with way more expensive land and labor.
Let us assume that national energy demand is 1000mW. Previously, 1000mW had a cost of $300,000, with inputs for land, labor and capital amounting to $10,000 each. But now land and labor are twice as expensive.
So the new optimal cost structure is: LAND - Carefully managed coal mines ($20/mWh) (productivity/unit: 10) (units: 5) LABOR - Unionized and pensioned coal workers ($20/mWh) (productivity/unit: 10) (units: 5) CAPITAL - Scrubber plant with steam taps ($10/mWh) (productivity/unit: 10) (units: 40) Total cost: $600/mWh Total productivity / mWh: 50*50*400 = 1m/mWh
So what about those workers who got fired? Well, like I said, the businessman is spending more on capital now. The plant manufacturer previously had demand for $10,000 of coal plants a year. But now suddenly demand for new plants equipment - scrubbers and steam taps - has quadrupled, to $40,000 a year. So what's he going to do? Hire more workers to build the scrubbers and steam taps...and to build factories for building scrubbers and steam taps...increasing demand for labor and bringing wages up. That extra $300/mWh simply re-enters the economy.
Thus: More employment is the inevitable result of environmental and labor protection.
The figures are hypothetical but the overall model is not. Go read any macroeconomics textbook. The first thing any textbook will describe is the Trinity of Economics and how they relate.
The point is that you see environmental regulation as opposed to job growth when in reality the truth is the opposite.
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The third thing you don't realize is that the interest thing is simply a scam. The interest rate is an arbitrary number on a page. All that raising that number means is that they've decided the government should pay more for its loans.
What if the govt doesn't want to, find another bank? Well, all the banks are "unionized" and none will operate independently of their umbrella organizations (the interest rate review firms they are all members of). Funny enough the same banks that oppose unionization of labor don't seem to oppose unionization of capital. And the only way to break them up would be...regulation.
So you see, all these anti-regulation arguments are bullshit by wealthy interests that want to profit at the expense of workers, government, and the environment.
Make sense now?
Aestu of Bleeding Hollow... Nihilism is a copout.
Last edited by Aestu on Wed Aug 01, 2012 3:51 pm, edited 1 time in total.
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