Sunday, September 05, 2004

From the The So-Called "Austin Mayor" Blog:
"Barack Obama spoke to some of the sixteen hundred workers in Galesburg who will soon lose their jobs when Maytag shuts down their Galesburg plant and moves production to another country.
'How do I make sure a situation like what's happening in Galesburg does not happen again? How can I make sure ordinary folks get a decent shot at life?? says U.S. Senate Candidate Barack Obama to hundreds of cheering Galesburg residents.


?Because it took us 20 years to get in this hole, it's taking 20 years to get out, but its starts right here, it starts right now, and it starts with us,? says Obama."

-- Ok as it see it you have three options.

1 -- Raise tarrifs on imported products so that it is no longer cost effective for them to be purchased in the US. Odds are those counties will raise prices on US imports as well. Hello trade war

2 -- Increase taxes on companies that make products outside the US for sale within US markets, that would most likely lead to companies that can just leaving the US completely.

3 -- Promote truly militant style (see Germany) union activity within the US so that any plant closing is met by a huge labor response.

But wait you say Obama has a plan I saw it on his webiste

Reward companies that create quality jobs in America. Obama’s “REAL USA” Corporations Plan (Responsible, Accountable, Loyal USA Corporations) will reward companies that create quality jobs in America with tax incentives. Companies will be required to 1) locate in the United States 90% of its production and employment for the sales of goods and services that are consumed here; 2) invest at least 50% of its R&D budget here in the U.S; 3) make sure their workers have access to affordable health care by providing a standardized and portable health insurance plan and pay at least 70% of the cost; 4) make sure their workers have retirement security by contributing at least 5% of payroll to a portable, multi-employer pension fund and operating a profit-sharing plan for all full time employees; and 5) limit management compensation to 50 times the lowest-paid full-time worker.

Lets take a look at the 5 points.

1) When you say 90% of the production you seem to mean 90% of the labor force needed for that production. What if I outsouce my production, am I liable for my contractors labor pratcices? Lets say I make 100,000 widgets a year and employ 100 people 20 in the US and 80 in the UK, If I sell 50,000 units in the US and 50,000 in the UK do I have to have 90% of the labor force that makes the 50K for US consumption or 45 people in the US. How do I count my HQ people who support both locations?

2)If you are doing R&D for nothing but a tax break anyway you have problems. To maximize R&D results that money is going to be spent where it is the most effective and a tax break may or may not help that much.

3) Is that my full time people only? What about my part timers? Do I get to pick the plan or does the government? What do you mean by 'portable'

4) 5% to a pension plan? Does anyone really have traditional pension plans anymore? Do you mean a 401K type plan. So congratulations you just increased my labor costs 5% and more likely 6% when you take the costs of managing the plan into account? So by increasing the cost of labor in the US is going to make the US more competative with the parts of the world with lower health costs. Profit sharing, what business of government is it if I have profit sharing, do you specifiy how much I need to share? On what accounting basis do I base my 'profit' off of?

5) Your joking, right. The government is going to get into the executive pay business.

The five point are great, if you live in Canada. There is something called the free market system senator. I suggested you read up on it.


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