PBurns 5/24 fears that I appear not to realize that
> the cost of paying stockholders large dividends, chief executives large
salaries and bonuses, and so forth [is high]. Investor and managerial
income is a very big cost in the USA and elsewhere, but always seems to
be sacrosanct when it comes to discussion of 'cost-cutting'.
Shall we go through the WSJ together to see which companies have
recently announced cuts in dividends, and observe the traditional plummet
in stock prices immediately following (affecting not only option-holding
executives but pension funds and small investors, as well as the ability
of the companies to raise money for such things as better equipment for
its workers to work with)? Shall we calculate the net receipts of, say,
each AT&T worker if the president of the company simply split up his
income among them, rather than downsize (if I recall, it was something
under $5 a month)? Shall we consider the possibility that it is not easy
to actually run a very large corporation, and that there is no particular
reason for a very good executive to donate his services (when he could
either go elsewhere or voluntarily under-employ himself through sustained
x-inefficiency)?
That Old Monster Henry Ford made it a matter of pride to make a car his
workers could afford, and pay them enough so they could buy the cars they
made. Of course, he was not brought up in a world which expected the
Welfare State to make everything comfy -- he just thought it was right.
Is there a "shortfall in effective demand?" (I think that's Keynes-talk
for "ain't got the bread") I don't know. How many people need to buy a
new Plymouth?
Is there such a thing as involuntary unemployment? Indeed there is --
even the tenured may find their job or department eliminated.
Maintaining a welfare state -- cost unspecified -- could, at least in
apparent ways, reduce the attendant inconvenience as he suggests. One
may suspect, however -- again, I confess to my own experience also --
that some "involuntary" employment _becomes_ voluntary unemployment,
thanks to such welfare-state measures as the dole. And that being on the
dole is bad for you, for your spirit, your morals, and your morale.
Back when I was a criminal defense lawyer, I regularly gave the advice
to my clients, who believed themselves to be unemployed through the fault
only of others, that one strategy would be to regard looking-for-a-job as
a job -- start at 8, work hard until lunch, work hard until 5.
I don't know of any who did that. Some combination of sponging,
welfare, and crime got them through the day. I stopped doing criminal
defense work.
Michael Etchison
[opinions mine, not the PUCT's]
