Political Roundtable - Part V

[popper]

popper: Your link goes to an article about Ben Affleck.

Yeah, Half my post was about Affleck's attack on Maher and Harris (and therefore the link I provided). Maybe my roundabout way of presenting the larger point (ending dialog via accusations of racism or, in the President's case, trying to deny the relationship between ISIL and Islam) was awkwardly worded and confusing.

Have you read/heard what the president actually said? I mean, all of it, not just a few words pulled out of context? From the transcript of the speech, it seems clear that the president's point was that ISIL/ISIS isn't "religious" or "Islamic" because of their practice of killing innocents -- something no religion condones. That seems clear because it's literally the next sentence of his remarks.

Obama was saying that ISIL is a terrorist group and that it's caliphate "vision" is mainly a pretext for brutality.

None of what I'm posting here should be understood as an endorsement of Obama's foreign policy in general or his strategy against ISIL in particular. I know little about foreign relations and less about how to deal with a terrorist group with statehood ambitions.

Maybe you are right Nivek. Maybe he actually believes what he said. The sarcasm that follows is not directed at you Nivek but at him and anyone that believes a word he says.

Maybe Obama knows more about who is, and who isn't a true Muslim than did Osama Bin Laden. Maybe the Arabs that brought down the World Trade Center and killed thousands of innocents were not true Muslims. Maybe the many thousands of Imams around the world that preach Jihad and death to America aren't really Muslim. Maybe the martyrs they inspire to kill innocents do so not out of their religious faith but for some other reason that only Obama can explain. Maybe the Supreme Leader of Iran who ordered the execution, torture and imprisonment of peaceful Iranian students for protesting against electoral corruption is only pretending to be a Muslim. Maybe the Texas father that murdered his two beautiful daughters (who wanted to wear western clothes and talk to boys) wasn't practicing true Islam.

History is replete with violent Islam and its subjugation and murder of innocent people. Is Obama unaware of the way they treat women?

Either Obama was lying again (did you see the front page of the Post today, they caught him in another whopper) or he is totally ignorant of history and current events.

Edit - Obama should read up on the the centuries long Arab slave trade and the millions of innocent lives they destroyed in the name of Islam.

[Induveca]

The real issue is they are ZERO skill jobs. These are jobs typically done by teenagers or the elderly for supplemental income during retirement. They aren't worthy of a "living wage". They are temporary jobs filled by those attempting to build a real career, or a part time job.

WalMart and many companies were doing a great service offering "catastrophic" insurance policies at a low price via companies such as Aetna to part-timers. Most companies have never done that.

The ACA made their bulk insurance pricing (which they negotiated) suddenly go up 500-800 percent depending on which report is correct. Do you really think these previously insured citizens will run into the arms of another monthly bill via ACA? Previously 25 bucks a paycheck was likely deducted. Now they'll be hit with an estimate of 250 a month and a load of paperwork to be declared publicly "poor" and receive subsidies. It's a complicated, degrading mess.

[nate33]

What? For creating the most efficient retailing business in the history of civilization and thereby providing the U.S. consumer with the greatest selection of goods at the lowest prices anywhere in the world? Man, what horrible people.

Efficiency at what price? Not paying your employees a living wage and encouraging them to get on public assistance strikes me as both inefficient and immoral.

In a sense, by restricting hours, limiting pay and encouraging its workers to get on public assistance, Walmart (and companies like it) has shifted a portion of its employee compensation onto taxpayers. A report (I think in Forbes) earlier this year said Walmart workers were getting something like $5-6 billion per year in public assistance. I also read a critique of the claim, which tried to argue that the $6 billion was mostly cost to Walmart, but was profoundly unconvinced by the attempted argument.

Walmart's not alone in this. Many companies do the same thing. It's not illegal, of course, It's just a reflection of a) minimum (or near-minimum) wage jobs not paying enough for people to actually live on, and b) the reality that they can pay less than they otherwise might because public assistance can be obtained to bridge some of the gap between wages earned and living costs.

Then problem is our tax policy, not Walmart. Walmart is merely running a business very well, maximizing profits while offering competitive wages and low prices. People like to focus on issues like this because they're something that is easily understood emotionally, but people fail to notice the hundreds or thousands of dollars saved by millions of consumers everywhere thanks to Walmart. Where else can you go at 11:30 at night to pick up a hammer, or a bottle of ketchup, or a big screen TV, all for the lowest prices around? It's a marvel.

And as Induveca points out, this is just another (not really all that) unforeseen consequence of Obamacare. Did they really believe that companies would just absorb the additional costs of healthcare willingly? Obama wanted the credit for "providing health care" for everyone, but expected private companies to pick up the tab. Well, he should have thought things through a little better. Private companies aren't in the business of giving away something for nothing.

Heck, Obama and liberals knew all this was coming anyhow. This was why they had to provide so many waivers during the first two years of Obamacare. Companies never were going to pay for this so Obama kicked the can down the road to get through another election. (He did so illegally, by the way. There was no provision for him to alter and delay the implementation date without consent from Congress.) Now people have the nerve to act surprised and wish eternal damnation on the corporations.

[dckingsfan]

It is the tax policy - just like the high corporate taxes are causing inversions and manufacturing to move overseas. The original root of the healthcare debacle was the tax deduction for healthcare.

[Nivek]

nate: I don't have much quibble with your post -- it's a valid perspective. Except the line about "Private companies aren't in the business of giving away something for nothing." In this case, health insurance was payment for service to the employees of Walmart. And the same is true of other retailers who have made the same move. Rather than paying the cost of providing the minimum health insurance required by ACA -- as part of compensating the people doing work necessary for the company to operate -- they opted to place the full cost back on the workers themselves. And onto us, as taxpayers.

I'm not surprised to see this, though I am disappointed. The people making these decisions have it within their power to make different ones that didn't involve putting yet more burdens on folks who already don't have many resources. But hey, gotta maximize profits to get a fat bonus and a fat raise.

The net result of companies axing health insurance is probably to push the boulder of a single payer system a little further up the hill.

[fishercob]

Efficiency at what price? Not paying your employees a living wage and encouraging them to get on public assistance strikes me as both inefficient and immoral.

In a sense, by restricting hours, limiting pay and encouraging its workers to get on public assistance, Walmart (and companies like it) has shifted a portion of its employee compensation onto taxpayers. A report (I think in Forbes) earlier this year said Walmart workers were getting something like $5-6 billion per year in public assistance. I also read a critique of the claim, which tried to argue that the $6 billion was mostly cost to Walmart, but was profoundly unconvinced by the attempted argument.

Walmart's not alone in this. Many companies do the same thing. It's not illegal, of course, It's just a reflection of a) minimum (or near-minimum) wage jobs not paying enough for people to actually live on, and b) the reality that they can pay less than they otherwise might because public assistance can be obtained to bridge some of the gap between wages earned and living costs.

Then problem is our tax policy, not Walmart. Walmart is merely running a business very well, maximizing profits while offering competitive wages and low prices. People like to focus on issues like this because they're something that is easily understood emotionally, but people fail to notice the hundreds or thousands of dollars saved by millions of consumers everywhere thanks to Walmart. Where else can you go at 11:30 at night to pick up a hammer, or a bottle of ketchup, or a big screen TV, all for the lowest prices around? It's a marvel.

The tax code is completely effed up, no doubt, and it's designed for the rich and powerful to game the system.

No one is disputing that Walmart has succeeded at providing a variety of low cost goods to consumers; they're the largest grocer in the US now.

As to the bolded passage, someone could easily say "Economists like to focus on issues like this because they're something that is easily defended intellectually, but people fail to notice the human cost of Walmart's business practices."

It all makes sense on paper. But there is nothing like speaking with a law-abiding, tax paying working poor person whose jobs do not allow them to support themselves and their small family and to live a life of some dignity. It's hard to look that person in the eye and say "well, just find a way to better yourself and the marketplace will reward you," when they are already exhausted and overextended from just trying to get by. I'm a capitalist. I have an MBA. I have a more than decent understanding of economics and finance. But I think that screwing human beings over in the name of profit is immoral. The income inequality epidemic that Walmart has come to represent is going to cause major problems in this country.

[mhd]

I haven't stepped foot in a Walmart in about 10+ years. I refuse to do so out of principal. Call me an "elitist", but I shop at Whole Foods, who at least try to provide as much locally sourced goods as possible. Just yesterday, I found a fantastic bottle of Ice Tea from a local vendor that was better than any national brand. I'd rather spend the extra 5% on my bill, if it means me shopping at a nicer store, and buying locally grown food.

[nate33]

I haven't stepped foot in a Walmart in about 10+ years. I refuse to do so out of principal. Call me an "elitist", but I shop at Whole Foods, who at least try to provide as much locally sourced goods as possible. Just yesterday, I found a fantastic bottle of Ice Tea from a local vendor that was better than any national brand. I'd rather spend the extra 5% on my bill, if it means me shopping at a nicer store, and buying locally grown food.

The Walmart in my town actually does procure lots of locally-grown produce. I shop there often. It's actually a really nice place.

I get meat and frozen goods from Costco; milk, eggs and bread from Aldi (which is crazy cheap and really convenient); and everything else from Walmart.

[nate33]

The tax code is completely effed up, no doubt, and it's designed for the rich and powerful to game the system.

No one is disputing that Walmart has succeeded at providing a variety of low cost goods to consumers; they're the largest grocer in the US now.

As to the bolded passage, someone could easily say "Economists like to focus on issues like this because they're something that is easily defended intellectually, but people fail to notice the human cost of Walmart's business practices."

It all makes sense on paper. But there is nothing like speaking with a law-abiding, tax paying working poor person whose jobs do not allow them to support themselves and their small family and to live a life of some dignity. It's hard to look that person in the eye and say "well, just find a way to better yourself and the marketplace will reward you," when they are already exhausted and overextended from just trying to get by. I'm a capitalist. I have an MBA. I have a more than decent understanding of economics and finance. But I think that screwing human beings over in the name of profit is immoral. The income inequality epidemic that Walmart has come to represent is going to cause major problems in this country.

Walmart pays people a competitive wage. There's nothing, NOTHING, wrong with that. I'll just never understand the mindset that businesses have some moral obligation to pay people more than market value. You try running a business that caters to low-income regions and paying a bunch of unskilled workers more than the competition and see how well that works.

Walmart has done more for poor people than any charity or other do-gooder operation on the planet. It saves poor people literally hundreds or thousands of dollars a year with low prices and convenience.

[Nivek]

This is simplistic and could well be wrong, but...

Last year, Walmart distributed $12 billion to its shareholders. I'm going to use that as the minimum level of its profits.

Now, what's the extra cost for healthcare insurance that ACA would impose? If we assume an additional $10,000 per employee, that would mean an additional $300 million in additional expense, which would mean reducing the payout to shareholders to $11.7 billion (a 2.5% reduction).

I see that Walmart is estimating their additional costs at about $500 million. If that's accurate, then shareholders would get $11.5 billion.

Would investors avoid Walmart (or its competitors, several of which have already taken similar measures) for that kind of reduction in profit? I don't know the answer to that.

[dckingsfan]

Yep, something that I have wrestled with for some time. Given the tax codes in place, we encourage multi-nationals to behave the way the behave. So, we either fix the issues in the tax code or we need to create some kind of framework for those that work full-time to receive benefits that give them a base they can live off.

The current framework of providing benefits is very clunky and very expensive. I would rather a comprehensive package for those earning under a certain level. Yes, it would be paid for by the tax payer - but it would still be less expensive than how we do it today.

Guess that is my liberal leanings coming out. But anyway you look at it - the current tax code/allocation of benefits is now beyond repair. It needs to be removed with a new framework. I don't see either party stepping up to do that - they are just piling on the crumbling infrastructure.

[dckingsfan]

This is simplistic and could well be wrong, but...

Last year, Walmart distributed $12 billion to its shareholders. I'm going to use that as the minimum level of its profits.

Now, what's the extra cost for healthcare insurance that ACA would impose? If we assume an additional $10,000 per employee, that would mean an additional $300 million in additional expense, which would mean reducing the payout to shareholders to $11.7 billion (a 2.5% reduction).

I see that Walmart is estimating their additional costs at about $500 million. If that's accurate, then shareholders would get $11.5 billion.

Would investors avoid Walmart (or its competitors, several of which have already taken similar measures) for that kind of reduction in profit? I don't know the answer to that.

Remember though, it is a publicly traded company. News like that would surely drop the stock price, no? News that they were doing this has jumped - WMT - nearly $3 per share.

[nate33]

Yep, something that I have wrestled with for some time. Given the tax codes in place, we encourage multi-nationals to behave the way the behave. So, we either fix the issues in the tax code or we need to create some kind of framework for those that work full-time to receive benefits that give them a base they can live off.

The current framework of providing benefits is very clunky and very expensive. I would rather a comprehensive package for those earning under a certain level. Yes, it would be paid for by the tax payer - but it would still be less expensive than how we do it today.

Guess that is my liberal leanings coming out. But anyway you look at it - the current tax code/allocation of benefits is now beyond repair. It needs to be removed with a new framework. I don't see either party stepping up to do that - they are just piling on the crumbling infrastructure.

The problem is that we have health insurance tied to your job. It makes absolutely no sense whatsoever. Insurance is insurance. Wages are wages. They're entirely different things. My work doesn't pay my car insurance. Why should it pay my health insurance?

If insurance was it's own market and not conflated with employment, we could actually have a conversation on how best to provide a minimum level of health insurance for everyone while having a handle on the costs involved. Instead, we do crazy stuff like mandate employers pay X amount for employee's insurance, and thereby force employers to cut worker hours, reduce wages, or impose other unforeseen costs.

[nate33]

This is simplistic and could well be wrong, but...

Last year, Walmart distributed $12 billion to its shareholders. I'm going to use that as the minimum level of its profits.

Now, what's the extra cost for healthcare insurance that ACA would impose? If we assume an additional $10,000 per employee, that would mean an additional $300 million in additional expense, which would mean reducing the payout to shareholders to $11.7 billion (a 2.5% reduction).

I see that Walmart is estimating their additional costs at about $500 million. If that's accurate, then shareholders would get $11.5 billion.

Would investors avoid Walmart (or its competitors, several of which have already taken similar measures) for that kind of reduction in profit? I don't know the answer to that.

Walmart had a profit margin of 3.3% in 2013. Throw in a 2.5% dividend yield and it's investors are effectively making a 5.8% profit on their investment. That's an extremely small number for a business. You're saying that's too much and they should be rewarded even less for their hard work, vision, managerial prowess, and investment risk?

[dckingsfan]

Yep, something that I have wrestled with for some time. Given the tax codes in place, we encourage multi-nationals to behave the way the behave. So, we either fix the issues in the tax code or we need to create some kind of framework for those that work full-time to receive benefits that give them a base they can live off.

The current framework of providing benefits is very clunky and very expensive. I would rather a comprehensive package for those earning under a certain level. Yes, it would be paid for by the tax payer - but it would still be less expensive than how we do it today.

Guess that is my liberal leanings coming out. But anyway you look at it - the current tax code/allocation of benefits is now beyond repair. It needs to be removed with a new framework. I don't see either party stepping up to do that - they are just piling on the crumbling infrastructure.

The problem is that we have health insurance tied to your job. It makes absolutely no sense whatsoever. Insurance is insurance. Wages are wages. They're entirely different things. My work doesn't pay my car insurance. Why should it pay my health insurance?

If insurance was it's own market and not conflated with employment, we could actually have a conversation on how best to provide a minimum level of health insurance for everyone while having a handle on the costs involved. Instead, we do crazy stuff like mandate employers pay X amount for employee's insurance, and thereby force employers to cut worker hours, reduce wages, or impose other unforeseen costs.

Exactly - violent agreement. If you want to really help, create a law where employers CAN NOT pay for their employees healthcare. Then take away any tax deduction for healthcare. And make having catastrophic healthcare mandatory. Define catastrophic as some % of the individuals wages.

This is another example of where government meddling created a problem that needed to be fixed and each incremental fix made it worse.

[dckingsfan]

I will add one more thing to that... cut off retirement programs for government workers - just pay them wages - and you would solve the mess that state and local governments are in today.

[Nivek]

This is simplistic and could well be wrong, but...

Last year, Walmart distributed $12 billion to its shareholders. I'm going to use that as the minimum level of its profits.

Now, what's the extra cost for healthcare insurance that ACA would impose? If we assume an additional $10,000 per employee, that would mean an additional $300 million in additional expense, which would mean reducing the payout to shareholders to $11.7 billion (a 2.5% reduction).

I see that Walmart is estimating their additional costs at about $500 million. If that's accurate, then shareholders would get $11.5 billion.

Would investors avoid Walmart (or its competitors, several of which have already taken similar measures) for that kind of reduction in profit? I don't know the answer to that.

Walmart had a profit margin of 3.3% in 2013. Throw in a 2.5% dividend yield and it's investors are effectively making a 5.8% profit on their investment. That's an extremely small number for a business. You're saying that's too much and they should be rewarded even less for their hard work, vision, managerial prowess, and investment risk?

No, I'm saying the company should maybe consider compensating its workers fairly.

And, while we're talking about Walmart, I'm not trying to single them out. Other businesses are doing the same thing.

[dckingsfan]

But the point is that those are big margins.

[fishercob]

The tax code is completely effed up, no doubt, and it's designed for the rich and powerful to game the system.

No one is disputing that Walmart has succeeded at providing a variety of low cost goods to consumers; they're the largest grocer in the US now.

As to the bolded passage, someone could easily say "Economists like to focus on issues like this because they're something that is easily defended intellectually, but people fail to notice the human cost of Walmart's business practices."

It all makes sense on paper. But there is nothing like speaking with a law-abiding, tax paying working poor person whose jobs do not allow them to support themselves and their small family and to live a life of some dignity. It's hard to look that person in the eye and say "well, just find a way to better yourself and the marketplace will reward you," when they are already exhausted and overextended from just trying to get by. I'm a capitalist. I have an MBA. I have a more than decent understanding of economics and finance. But I think that screwing human beings over in the name of profit is immoral. The income inequality epidemic that Walmart has come to represent is going to cause major problems in this country.

Walmart pays people a competitive wage. There's nothing, NOTHING, wrong with that.

In the abstract, I agree; they follow the law. In reality, they lobby the government to suppress wages as much as possible, so they're not just passive actors who can shrug and say "we'd pay more if we had to, but oh shucks, we're just trying to keep up with our competitors down the street.

I'll just never understand the mindset that businesses have some moral obligation to pay people more than market value. You try running a business that caters to low-income regions and paying a bunch of unskilled workers more than the competition and see how well that works.

Again, in strict economic terms, I see your point. But I think it's bad public policy to view human problems in strict economic terms. And in practicality, WM isn't just paying people "market value," they're also siphoning off of taxpayers to do so, as Kevin pointed out. As to your second point, it seems to work pretty well for Costco.

Walmart has done more for poor people than any charity or other do-gooder operation on the planet. It saves poor people literally hundreds or thousands of dollars a year with low prices and convenience.

Walmart offers consumers low prices and wide selection. While the money they save individual consumers and their families is obviously material, they're not a charity and aren't focused on helping people -- and why should they, since they're a business, right? Their business acumen has resulted in a family fortune of $140,000,000,000. Maybe if they make it up to $150B, they could pay their workers more of give some more of their personal wealth to charity.

Report: Walmart's Billionaire Waltons Give Almost None Of Own Cash To Foundation

[Induveca]

This is simplistic and could well be wrong, but...

Last year, Walmart distributed $12 billion to its shareholders. I'm going to use that as the minimum level of its profits.

Now, what's the extra cost for healthcare insurance that ACA would impose? If we assume an additional $10,000 per employee, that would mean an additional $300 million in additional expense, which would mean reducing the payout to shareholders to $11.7 billion (a 2.5% reduction).

I see that Walmart is estimating their additional costs at about $500 million. If that's accurate, then shareholders would get $11.5 billion.

Would investors avoid Walmart (or its competitors, several of which have already taken similar measures) for that kind of reduction in profit? I don't know the answer to that.

Expecting businesses to support a 500% markup in benefit costs, along with a "living wage" for zero-skill workers is a utopian fantasy.

It is easy to plug those numbers into an equation for WalMart/Apple/Google and find a happy outcome for the unskilled part-time worker. However, the same equation when applied to 99.9% of other businesses completely freezes hiring/growth, causes immediate layoffs and/or puts them out of business.