On Sep 9, 2010, at 1:44 PM, Francis Drouillard wrote:
> But the basic observation holds -- if you reduce the cost of something,
> demand for it will increase.
Only if the money supply is held constant, you fucking innumerate moron.
If the money supply is reduced ("Sorry honey, we can't buy a new widget this
year, I got 20% pay cut!"), reducing the price is simply deflationary...and if
you think inflation is bad, hoo boy you DON'T want to get stuck in a
deflationary spiral.
Companies don't hire people because they're cheap to hire...they hire them
because they need their work output.
If a company isn't selling whatever they're making, they don't need to hire
anyone, regardless of how cheaply they work. Low wages only work as a profit
increasing strategy if you're selling your prioduct to a more affluent society.
This is why paying people 50 cents an hour to make $120 sneakers is good
business for Nike; but if the target market is the same people making the 50
cents an hour Nike's fucked.
Globalization ONLY WORKS so long as there is a great imbalance in labor cots.
Racing to the bottom only makes everyone poor.
This doesn't bother the 1%'ers at the top, they got theirs, jack, fuck off.
If your business is selling to consumers (which, ultimately, is what the entire
US economy is pretty much based upon) reducing the amount of wages going to
consumers can never increase demand for goods.
This is like ardent free marketeers proclaiming that "it wasn't government
spending that got us out of the Depression, it was WWII" without ever quite
coming to the grips with the fact that WWII WAS ALL GOVERNMENT SPENDING!
Sadly it's the same people who thought we could finance two wars with tax cuts.
If you cannot look at the completely inane argument that Hassett is making
regarding North Dakota and Nevada, where he tells us, smugly, that our silly
culture of unemployment insurance, and owning our own homes has lead us
peasants to be unable to become migratory workers like we should be.
What the fuck is this BUT class warfare, by the rich upon the poor???
--
Bruce Johnson
University of Arizona
College of Pharmacy
Information Technology Group
Institutions do not have opinions, merely customs
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