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Don’t look now, but corporate profit margins — earnings as a percent of sales — are back to where they were before the Great Recession began three years ago. A major reason is that companies are not hiring, thereby holding down their costs. Thus, unemployment stays high and consumer anxiety worsens. In the second quarter of this year, profits rose 8.9 percent for 500 of the largest companies but revenues went up only 5.8 percent.

Do you see what’s wrong with this picture? For the past 25 years, American corporations’ obsession with profits — focusing on the reduction of payrolls in any way possible — has succeeded in drying up those corporations’ very own markets. After all, the American consumer represents more than 70 percent of the economy, and personal income has been weak except among the richest.

As Howard Silverblatt of Standard & Poor’s told the New York Times, “The same thing that caused the profit gains is squeezing now. It’s the lack of jobs.”

In short, American companies have fouled their own nest by letting their greed lower the purchasing power of their customers. Today’s industrialists have forgotten that in 1914, Henry Ford more than doubled his employees’ wages to $5 a day (equivalent to $111 a day now), so they could afford to buy the cars that rolled off their company’s production line. Ford was also able to attract and retain the best employees.

Frankly, profits of American corporations are too high to sustain economic and societal stability in the current environment. The mentality that the shareholder is the only significant constituency of the board of directors is ruining capitalism, which is the only workable system ever devised, although it’s desperately in need of reform.

Thus, I am disappointed to see companies plunking money into two profit-bloating initiatives on the November 2 California ballot, using disingenuous employment claims to promote their position. The big money is pushing Proposition 23, which would suspend, if not kill, California’s Global Warming Solutions Act of 2006, or AB 32, which requires the state to reduce greenhouse gas emissions back to 1990 levels by the year 2020. If the initiative passes, oil companies’ profits would zoom while antipollution efforts would go in reverse.

Proposition 23 is deceptive. It decrees that AB 32 would not go into effect until the state unemployment rate stays at 5.5 percent or lower for four consecutive quarters. Backers claim that this has happened 20 times since 1988. Opponents, using different figures, say it has happened only 8 times in that period. But there is no point arguing the statistics: economists agree that California’s unemployment rate will not see 5.5 percent for several years at the earliest. It’s now above 12 percent.

Passage of Proposition 23 would be a huge windfall for an industry that already reaps tax subsidies galore. A 2005 study by the Congressional Budget Office indicated that oil-industry capital investments such as drilling equipment are taxed at an effective rate of 9 percent versus an average 25 percent for other industries. Oil’s 9 percent is the lowest of any industry.

Transocean, the company that owns the oil-drilling platform where the British Petroleum leak occurred, moved its headquarters from Houston to Switzerland in 2008 to avoid paying American taxes. It has 1300 employees in Houston and 12 in Switzerland. It had moved to the Cayman Islands, another tax haven, in 1999. In leasing the platform, British Petroleum got a tax break that adds up to $82 million a year.

Thus far, companies have raised $6.2 million to promote Proposition 23. Two Texas companies, Valero Energy and Tesoro, account for three-fourths of that total, according to opponents of the measure. Oil-related companies account for 96 percent of contributions. Many donors are from California — Bakersfield, Sacramento, Long Beach, Auburn, Los Angeles, Glendale, San Jose, Modesto, Upland, Pacific Palisades, Menlo Park, Folsom, Orange, Torrance, and South Gate.

Physicist Roger W. Cohen of La Jolla, retired manager of strategic planning and programs of Exxon Mobil, gave $1000 this year in support of Proposition 23.

Business lobbying interests are trying to defeat the second initiative, Proposition 24, which would block tax breaks that hand corporations $1.3 billion a year. The tax subsidies were part of 2008 budget agreements.

The proposition would eliminate three breaks in particular. One is the “single sales factor,” which allows multistate companies to choose whether they will be taxed on property, payroll, or sales. (Do you get to select which taxes you will pay and which you won’t?) The second is loss carrybacks, which allow companies losing money in California to get refunds for taxes paid up to two years previously. The third allows companies that have more tax credits than they can use to distribute those credits to affiliates.

The California Teachers Association is the main backer of Proposition 24. It argues that 26,000 teachers face layoffs as school budgets have been slashed by $17 billion. There is no reason to dole out corporate tax breaks when education is suffering, say the teachers.

Opponents of Proposition 24 have raised more than $1.3 million this year. San Diego companies and institutions are giving heavily to the opposition: Qualcomm has given $100,000 to fight it. Biotechs Gen-Probe and Life Technologies have plunked in $10,000 each. BioMed Realty, which provides real estate to life sciences companies, is a backer. Other San Diego institutions backing it are BIOCOM, the regional life sciences association; CONNECT, the group trying to accelerate technical innovation; the Escondido Chamber of Commerce; the San Diego Regional Economic Development Corporation; and the San Diego Regional Chamber of Commerce.

And what arguments do the companies use to tout Proposition 23 and to oppose Proposition 24? They haul out that old political bait and switch: jobs. Yes, jobs, jobs, jobs. Backers say that Proposition 23 is the “California Jobs Initiative.”

Those opposed to Proposition 24 shout, “Stop the Jobs Tax!” Proposition 24 would tax new job creation, send jobs out of California, tax small businesses and their employees out of existence, and stifle job growth in promising industries such as high tech, biotech, and clean energy, insist the backers of this measure to permit more profit-friendly accounting.

Under capitalist theory, high profits should lead to job creation. But now, rising profits are leading to job destruction. Indeed, job destruction is a major reason for higher profits.

By obsessing over profits, American companies live to please Wall Street. It’s time they lived to please Main Street. For their own sake.

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EarlRichards Sept. 1, 2010 @ 1:55 p.m.

The California Jobs Initiative (CJI) is an oil corporation farce and fraud. There is no connection, whatsoever, between greenhouse gas emission reduction and the loss of jobs. This notion is an insult to the intelligence of the people of California. In fact, there is job growth in the clean, renewable energy industry. Chevron employs 65,000 worldwide and CJI is not going to change this. The only jobs created by the oil industry are clean-up jobs after oil spills and deep water, blow-outs and pump-handler jobs. CJI will make fantastic profits for the oil industry, increase air pollution, especially in communities around their refineries, and there will not be lower gas prices. Both Valero and Tesoro are super Enrons. Since when did the oil companies start to show a concern for the unemployed and their families?


Founder Sept. 1, 2010 @ 2:36 p.m.


Reply to Don This is a CON

These "companies have fouled their own nest" And now they just want to FOUL the rest!

No 23 and Yes 24 Will HELP to shut, BIG CORP's door!

California Jobs Initiative will bleed our State's money like a sieve

Instead of these, Companies, "doing" Business They are all now, just giving US, the Business

They all may think, that this is just fine But I think, they have NOW, crossed the "Line"...


Don Bauder Sept. 1, 2010 @ 3 p.m.

Response to post #1: Good points. Claiming that Prop. 23 will create jobs, or Prop. 24 will destroy jobs, is basically dishonest. Best, Don Bauder


Don Bauder Sept. 1, 2010 @ 3:03 p.m.

Response to post #2: Companies are spending a lot of money to promote 23 and to defeat 24. This is just more social irresponsibility, and short term thinking. Companies should think about long term profitability. Instead, they focus on the next quarter to please Wall Street. They are destroying themselves. You might check my blog today on chief executive pay in 2009. It's more of the same. Best, Don Bauder


Founder Sept. 1, 2010 @ 3:10 p.m.

reply #4 RE: "Companies are ... destroying themselves."

That may very well be BUT They are also destroying the US Middle Class and that should be illegal...especially when they are using "our" money to do it!

Thanks, I'll check your other Blog; too bad the Reader will not let you "join" your excellent Blogs as many of them are interrelated...

BEST 2 U 2


Don Bauder Sept. 1, 2010 @ 9:33 p.m.

Response to post #5: Which came first: companies destroying the middle class or companies destroying themselves? One leads to the other. Best, Don Bauder


OttoB Sept. 2, 2010 @ 6 p.m.

Don Bauder, once again, hits it square on the head. Your honesty is always refreshing. And while claiming no credit for its originality, for too many years now I've been saying the same thing you mentioned above:

"...The mentality that the shareholder is the only significant constituency of the board of directors is ruining capitalism..."

It sure is.


Don Bauder Sept. 2, 2010 @ 8:35 p.m.

Response to post #7: Corporate boards believe that mentality is cemented into law by interpretations of the Delaware courts. (Corporations are overwhelmingly incorporated in fraud-friendly Delaware; that's one of the reasons.) However, this is still a gray area of the law. Best, Don Bauder


Twister Sept. 7, 2010 @ 4:59 p.m.

Why does this sound familiar?

It’s like a game of chicken (plucking?). Nobody will “reform” first. That ensures that it’s a crap-shoot on steroids—every CEO/MBA is sure he or she will come out on top as long as she or he holds out long enough.

In the short term (and all terms are getting shorter and shorter), “make-work” jobs can “get the economy moving again,” but in the long term, only efficiency and limits to growth will have a prayer of avoiding the whipsawing of booms and busts, which, with further delays in confronting reality and accepting actual and predictable consequences, will only get more pronounced on the downside.

Virtually no model predicts a major offsetting “recovery” (to what?) within the foreseeable future. That leaves crushing depression or outraging inflation—it doesn’t matter which for the Big Picture. It means that if you’re holding cash it will be stolen, or if you’re heavily invested in stocks or bonds you will play hell liquidating them; even if you can, you will have to push your wheelbarrow to the nonexistent or bare-shelved market for a loaf of bread. Six to twelve months should be enough to make a fool out of me.

Overheard at the CEO/MBA shooting range: “READY, FIRE, AIM!” Doesn't matter. They all have blunder-busses.


Don Bauder Sept. 7, 2010 @ 5:44 p.m.

Response to post #9: Good points, but let's discuss so-called "make-work" jobs. The nation has a crying need for infrastructure. So the federal government could create jobs, as it did in the Great Depression, without them really being "make work," because the end result would be societally desirable. Similarly, as corporations reduce employment, they also reduce options for customers. Note, for example, the airline industry offering fewer trips, fewer departure times, etc. Manufacturers of all kinds, as they reduce employment, also reduce the variety of products they offer. This gives the economy some wiggle room for more so-called "make work" jobs. Best, Don Bauder


David Dodd Sept. 7, 2010 @ 8:02 p.m.

"The nation has a crying need for infrastructure."

I'm interested in how you mean this. Highways are funded from the last stimulus and ground hasn't even broken on those projects yet. Rail is a dying mode of transport for most commodities. Cities have libraries and services, where the State doesn't steal the money and spend it on other stuff.

I understand how money was thrown at projects during the Great Depression, but I am unconvinced that WWII wasn't more responsible for pulling the U.S. out of that. In Japan in the late '90's, they threw all kinds of money at infrastructure, and neo-Keynesians have yet to explain why that didn't work out in Japan. Thoughts?


Burwell Sept. 7, 2010 @ 9:36 p.m.

There are many things the President could do to quickly spur employment and manufacturing output. For one, the President could issue an Executive Order requiring all agencies in the Federal Government, and state and local governments who accept federal funding, to spend at least 80% of their office supplies budget on U.S. made products. This would force importers in the office supply industry like Swingline and Avery among others, to start manufacturing products in the US again, or risk losing market share to competitors who would rise up to grab the government's business.


Burwell Sept. 7, 2010 @ 9:44 p.m.

Mayor Sanders and the City Council could also take actions that would create jobs for San Diegans. For example, the City Council could require the mandatory installation of fire sprinklers in all apartment buildings and commercial properties that lack protection. The City Council could also ban cigarette smoking in apartments, and force apartment owners to remove and replace all the drywall in their rental units in order to protect renters against the carcinogens that have leached into the walls.


Burwell Sept. 7, 2010 @ 9:59 p.m.

In Japan in the late '90's, they threw all kinds of money at infrastructure, and neo-Keynesians have yet to explain why that didn't work out in Japan. Thoughts?

During the late 1990s the Japanese electronics industry collapsed as most electronic production was transferred to China and Mexico. Economists never even mention the collapse of Japanese manufacturing when they attempt to explain why the Japanese economy has never fully recovered. They do not mention this because the Japanese situation suggests that the US economy will not recover without trade restrictions to revive U.S. manufacturing. Economists are stupid and economics is not a science. Economists waste their time trying to build complex mathematical models to make economic predictions that are never accurate. Economists are nostrum salesmen, con artists, and flakes.


Don Bauder Sept. 8, 2010 @ 7:50 a.m.

Response to post #11: There is no doubt that World War II ended the Great Depression. Economists can agree on that. It involved massive federal deficits and spending. People finally went to work. So it comforted Keynesians. Roosevelt's CCC work provided some employment and relief, but certainly didn't end the Depression. And you are correct: infrastructural spending advances slowly. It is not a quick fix. But that's our trouble. Because of our political exigencies, we are always looking for a quick fix so things can look better prior to the next election. We're on a two-year emergency repair cycle, trying to hype consumer spending before an election. We have to think longer term. That gets back to what we've been discussing: short term thinking caused by greed. Best, Don Bauder


Don Bauder Sept. 8, 2010 @ 7:59 a.m.

Response to post #12: Definitely someting to consider. Such an order would help, but economists would warn that it could touch off a trade war. And trade wars exacerbate recessions and depressions. Many if not most economists think Smoot-Hawley was a major cause of the Great Depression. It is amazing to me, though, that so many economists insist that the 1920s bubble and 1929 crash were not major contributors. The Great Depression was accompanied by FINANCIAL disasters, just as the current Great Recession is. In the recessions in between the two, financial collapses weren't big factors. Best, Don Bauder


Don Bauder Sept. 8, 2010 @ 8:02 a.m.

Response to post #13: Those would be excellent steps. Such reforms are necessary. The one argument against such moves would be that the City is already insolvent --and it is. How would it pay? Best, Don Bauder


Don Bauder Sept. 8, 2010 @ 8:10 a.m.

Response to post #14: The tech changes you cite definitely contributed to Japan's woes, which are continuing. There is another factor that is often glossed over: Japan prior to 1989 was a colossal bubble. Remember when the value of the grounds of the Imperial Palace exceeded the value of all California real estate? People collateralized overpriced stocks to buy overpriced real estate and vice versa. Eventually, people could no longer afford to live in Tokyo. So the central bank had to prick the bubble. It did and the country still hasn't recovered. The process had stark similarities to the U.S. in the 1930s, in my opinion. And, unfortunately, similarities to what is going on in the U.S. and much of the world today. Best, Don Bauder


David Dodd Sept. 8, 2010 @ 10:51 a.m.

Re #12 - #18: First, I disagree that economists are up to no good and that economics isn't a science. Real, true economists don't do much predicting. They observe and often calculate based on known data. Whether or not this proves useful in any sort of speculation is left to investors and banks and Federal Reserves. Economists are a combination of historians and scientists, in a way. Good economists are very careful not to draw quick and easy conclusions.

Regarding Japan, I'm not certain that Japan's off-loading of their electronics manufacturing had as much to do with their economic collapse as did their own housing bubble (as Don points out) and their own - often times more volatile than that of the U.S. - market strategies, where you had more money shorting the market to profit from a majority of investors who were invested long-term. The proof in the pudding might be that when Japan created their stimulus in response to the deflationary spiral they found themselves in, the money was specifically kept out of the market. In other words, they didn't simply increase the money supply, they sought to halt short-selling by keeping the money from investment and threw it directly at infrastructure.

It didn't work. This isn't to say that it wasn't a sound idea, to keep the money away from the markets. However, empirically, I think it's easy to see that when what were once considered to be sound investments collapse under pressure from big money hedging against such investments, government involvement might be doomed in any case. Prop up the market, and you're inviting even more mischief from the upper 1% of wealth; keep the money out of the market, and the money may have no effect at all other than to (at some point) spark inflation.


Don Bauder Sept. 8, 2010 @ 12:17 p.m.

Response to post #19: I don't think economists are charlatans. Yes, they are often wrong. (Have you followed how many times Bernanke was dead wrong?) Yes, their models are often wacky. (Remember econometrics?) But they do their best. Their flaw is that they are so timid that they huddle around a tight little consensus. Not many break outside that circle of safety. Now, is economics a science? Hell, no. Best, Don Bauder


David Dodd Sept. 8, 2010 @ 12:35 p.m.

@ #20: Heh. Well, at its best, economics certainly is a science, I have to respectfully disagree with you. I am obviously leaving politics and ideology out of the discussion, because were that the case, then I think you would be right. And many economists certainly do include ideology in their work, so I can't blame you for your conclusion, but strictly studied and reported, economics is nothing more than a filtered study of data concerning commerce and trade and so on.

When you draft economists into the government, then it's something that resembles prostitution, a different ballgame. Bernanke has been dead wrong every since he's been working in the public sector, undoubtedly influenced by the cabinet of the administration in power. The issue is that the public looks to economists for an answer when the economy is down, and the administration in power counts on that in order to maintain confidence. That's the wrong place to look. It's sort of like looking at a historian to predict the future when the present isn't going so swell. They don't necessarily have the answer either.


Don Bauder Sept. 8, 2010 @ 3:40 p.m.

Response to post #21: Science is concerned with the establishment of verifiable laws by induction or hypotheses. Scientists can set up experiments to test a thesis and measure it against a control group. Science involves exactitude. Economics is no more a science than sociology or anthropology. This is not to denigrate economics; this is simply to state its limitations. Best, Don Bauder


Twister Sept. 8, 2010 @ 8:56 p.m.

Re: 10.

"Make work" is defined as work that doesn't produce any results or produces results that make "things" worse. There's plenty of productive work that can be done, and "modern management" should be capable of getting a reasonably good handle on priorities, effectiveness, and spin-off effects, such that the money is invested in the common good rather than siphoned off into the pockets of favored contractors and other mega-pickpockets. Remember that Giant Sucking Sound?

Where can we find a list of the various job-creating stimulus money allocations and the analysis that went into them? Specifics, specifics, SPECIFICS!

(San Diego County government would be a start. How many millions have been/will be received and how have they/will they be/been spent? Has anyone other than county staff had a chance to evaluate the allocations ("projects") or review them? Has anyone suggested that any of the projects might accomplish nothing or even backfire?)


Twister Sept. 8, 2010 @ 9:10 p.m.

Re: 22

Yes, that's largely what "science" is, but "disciplines" are related at root, and that root is honesty--honored, in both cases, more in the breach than in the observance, and subject to the slings and errors of outrageous egocentrism. The hierarchical priesthood of academia legitimizes both honest enquiry and brazen deception through its "system" of "degrees," which is nothing short of a cloak of elitism used to keep the unanointed from contaminating its pretenses.

The hidden painting grows more and more grotesque while the Dorians parade through the halls of power. Taking the questioning of the guilded paradigms seriously is one sure way of being excluded from the halls of glory and fortune, but luckily there is a minority of those who resist that absurdity and toil in the fields for the sheer pleasure of "finding things out." These poor fools value failure and discovered error as much as validation.


Twister Sept. 8, 2010 @ 9:36 p.m.

Re: 22

Oops! Upon re-reading, whilst yanking what I thought be the curtain-pull, discovered that it was really the elephant's tail.

"Exactitude," if it isn't THE elephant, is at least MY elephant--another of my lost essays "The Uses of Imprecision" made the claim that relevance and adequacy, the PROVISIONAL establishment of a "conclusion" that the hypothesis, the product of induction (even intuition) need only be more true than untrue to advance understanding (not "knowledge," which implies a certain certainty, a certain turf that must be "defended," a certain pit of arrogance and the temptation to lie one's way out of it) of a proposition or phenomenon, is all that is required. After all, we stand upon the shoulders of dwarfs and giants, fleas that we be.

Nature is (probably) chaos, and the (probable) certainty of physical laws may have met the boundary of the human intellect, the stringing of us, the unanointed, along into marginal suppositions beyond space and time in the fame-name of "science" notwithstanding.

The presumptions of precision, especially concerning "economics," leads us to buy soap that floats until it vanishes before our eyes without curing our pimples. Remember the medicine shows, Don? They've acquired new raiments.


Don Bauder Sept. 9, 2010 @ 7:29 a.m.

Response to post #23: There is the story about the guy hired in a "make work" project during the Great Depression. All he did, all day, was move a load of lumber, board by board, to another pile, and then move it back to the original pile. One day a guy shows up and sits on the hill watching him. Day after day, as the first guy just moves the lumber from one spot to another and back again, the guy on the hill sits there and observes. Finally the first guy goes to him and confesses, "You've caught me. I am accomplishing nothing, just moving this pile from one place to another. Report me. Send me to jail." Says the observer on the hill, "Don't worry. I was hired to help you." As to the specifics you desire, that's a big order, although there are federal numbers on how the stimulus numbers have been spent - how many projects are still in the pipeline, etc. I'm not sure how credible they are. Best, Don Bauder


Don Bauder Sept. 9, 2010 @ 7:37 a.m.

Response to post #24: What you are describing is the method by which higher education's primary objective now is to bring in research money. Faculty members achieve or are denied tenure based greatly on how much research money they bring in. Teaching is no longer the highest priority. You used an apt analogy: Dorian Gray, Oscar Wilde's character, who was a dissolute who continued to look young, but a ghastly picture of him in the attic revealed that he was actually getting incredibly ugly because of his increasing degeneracy. It's happening at universities. Upon leaving office, President Eisenhower warned about this possibility in the same speech in which he warned of the military-industrial state. Best, Don Bauder


Don Bauder Sept. 9, 2010 @ 7:41 a.m.

Response to post #25: Have physical laws met the boundary of human intelligence? I doubt it. We have more mysteries than we have certainties. And even certainties, such as evolution, are now challenged by more than half our population. Best, Don Bauder


Twister Sept. 9, 2010 @ noon

Re 26:

Good story, with a ring of truth, if not factual. "Sometimes," Bagheot once said, "to illustrate a point, one must exaggerate much, and omit much," or something to that effect. It doesn't fit the "scientific" model, but it fits the "honest art" model.

Nothing less but said specifics, organized in logical sequence, should be expected from our bureaucrats. The county of San Diego, to cite just one example, is spending $7.2 million of federal "stimulus" money on "brush control," in places where it will have minimal effect on the immediate fire hazard threat and make matters much worse when it grows back--more, not less flammable and dangerous than ever, thus requiring even more expenditures down the road (3-5 years, maximum) to re-clear the resulting weeds. This is to "protect" us from brushfires, a "Motherhood" issue if there ever was one. This is just the tip of the "make-work-and-then-some" model iceberg--a result of the shot-from-the-emotional-hip mode of belief rather than the scientific or disciplined approach to analysis, policy, and action.


Twister Sept. 9, 2010 @ 12:12 p.m.

Re 27:

You got dat right!

I wouldn't object as much to the emphasis on grant-getting if it weren't for the "make-work" nature of so much of the "science" getting the money. What we need is another allocation diagram for this, which might show how the institutions get the most, the already-tenured professors supplementing their salaries, and the students being the slaves, pushing their supposed "betters" up the pyramid, "Another day older and deeper in debt."

This sleight-of-hand "science" makes it all the harder on those who are trying to do real science or actually help people in the learning process.


Twister Sept. 9, 2010 @ 12:38 p.m.

Re 28:

I suspect we agree, but semantics . . .

Certainly uncertainty is all that is certain. There may be physical laws that remain undiscovered, but I am not so confident that they will necessarily actually BE discovered by humans. That is, I do not share the belief in science and technology as our savior.

As to evolution, there remain a considerable population of authoritative adherents who "believe in" evolution as an "absolute truth" rather than a provisional conclusion that has yet to be proven false. There are those who persist in the illusion that other forms of life are "more primitive," and that humans are "the most advanced" species on earth. They have both misread Darwin, and missed what he missed.

A prime example of this unproved presumption is exemplified in the Time-Life Series' famous (should be infamous) drawing depicting the supposed "advance" of humans from a series of "lesser" apes. Even though even some celebrity-scientists (who cannot be questioned--and will not be questioned) don't get it ALL right, they get enough of it right to still be more trustworthy than the pickpocket charlatans hawking quasi-scientific hokum and outright myths. The quest for confirmation is a cancer on the brain of science.

Yes, humans have an infinite amount to learn, but their record is mixed--as is the most reasoned guess about their future. Flaw-filled and awe-filled, but an insufficient amount of the latter, leading to the ascent into assent.


Don Bauder Sept. 9, 2010 @ 4:31 p.m.

Response to post #29: A hunter who started a fire in the backcountry in 2003, I believe, was criminally prosecuted. A division of the Public Utilities Commission determined that SDG&E's negligence was responsible for huge 2007 fires. The company got a wrist slap. That's government. Best, Don Bauder


Don Bauder Sept. 9, 2010 @ 4:33 p.m.

Response to post #30: Yes, a study about how this research money is handed out promiscuously is overdue. Best, Don Bauder


Don Bauder Sept. 9, 2010 @ 4:40 p.m.

Response to post #31: I think the case for evolution has been made, and made thoroughly. It is no longer the theory of evolution. It is fact, although changes are being made constantly as new evidence surfaces. In economics, there are the Keynesians, monetarists, supply siders, rational expectationists, Austrian and University of Chicago schools, etc. etc. They are all theories. Best, Don Bauder


Founder Sept. 9, 2010 @ 6:11 p.m.

Don If you ran a Big Company, which would you rather do, pay taxes or spend that money on Politicians that might make things easier for you to make a profit?


What do you think the long term effect of these Big Companies not paying taxes will be on Social Security; seems to me that the amount of money being paid into Social Security will begin to plummet this Fall (no pun intended)?


  • Ballot Box Rhyme -

Remember this Rhyme , please do, Don't let anyone confuse you

No 23 and Yes 24 Will HELP to shut, BIG CORP's door!


Don Bauder Sept. 10, 2010 @ 7:26 a.m.

Response to post #35: You have to look at the mentality that reigns in American public companies. Managements believe that the law mandates the maximization of profits -- that the board's only important (and perhaps only) constituency is the shareholder. So companies feel they MUST minimize their taxes legally, so profits will go up. However, one encouraging trend is that only a few companies relocate their headquarters to offshore tax havens each year. So obviously they feel they can face shareholders and say they are trying to maximize profits, even when those profits would rise sharply if the companies were based offshore. But you can see the justification: suppose JP Morgan Chase, an integral part of New York City for more than a century, said it was moving headquarters to the Cayman Islands. It would set off a storm, even though companies based in tax havens usually have only a dozen people or so at the haven location. Best, Don Bauder


Visduh Sept. 10, 2010 @ 8:44 a.m.

Response to post 32:

Yes, there was a "hunter" who started the Cedar Fire of 2003, and he was criminally prosecuted. BUT, he wasn't charged with a count of manslaughter for each of the persons killed in or as a result of the fire. He got off very lightly in, I think, federal court, and did no jail time.

That was always a puzzler to me. This guy who had absolutely no business trying to hunt was in some sort of mild distress and started a bonfire to "signal" for help. Those of us who know a little about the backcountry have pretty well determined that the response from the forest service was woefully inadequate, and that was going to be unmasked if he went to trial. As a result, the fix was on, and neither Bahnee D nor the U S Atty at the time wanted to deal with a can of worms. So the guy, who was very directly responsible for the loss of many lives and destruction of billions in property, got a pass.

I'd say that SDG&E got comparable treatment.


Don Bauder Sept. 10, 2010 @ 1:06 p.m.

Response to post #37: One advantage the DA would have had in the hunter trial is that even though the dirt of incompetence would have come out in court, the mainstream media probably wouldn't have reported it. As I recall, the mainstream media did little with the SDGE evidence. I know the Reader covered it. Best, Don Bauder


Twister Sept. 10, 2010 @ 4:39 p.m.

Re 34:

There is plenty of evidence that organisms adapt to different and changing environments. There is zero evidence that evolution produces "more modern" forms from "more primitive" forms in a linear process of "improvement" with humans at the top. Yes, evolution as an explanation of a phenomenon which is the result of the interplay of physical laws, some recognized, some perhaps still unknown, some which may never be known, has held up against all logical challenges (not to mention illogical ones), but "believing in" anything freezes up the intellect and hammers it into dogma or ideology.

The Time-Life drawing of the “ascent” of Man from "primitive" apes to “advanced” humans is a glaring example of an institutionalized misinterpretation of evolution that fosters not just a simplistic interpretation of evolution, but does not help those who believe in “intelligent design” or other non-scientific mythology to understand it. While evolution is itself not a physical law, it is a sound explanation for a complex natural phenomenon. Closing of minds around a belief is inconsistent with the questioning nature of science and intellectual integrity.

Economics would do well to pay attention to natural processes, at least as theoretical models for phenomena like markets. Booms and busts occur in natural populations of organisms, for example, and the energy- and resource-flows through and of ecosystems are not unlike those of economic systems.


Don Bauder Sept. 10, 2010 @ 4:53 p.m.

Response to post #39: Economists have a lot to be humble about. I'm sure some have studied natural processes. They are now looking more closely at human behavior. Why not organisms? Best, Don Bauder


Twister Sept. 10, 2010 @ 5:04 p.m.

Re 38 et al:

Flawed as it is, the judicial system sometimes works better than lynch mobs.

The biggest crime is the total indifference of politicians, bureaucrats, and "experts," not to mention the Fourth Estate, who persist in their indifference to the scientific aspects of the whole fire phenomenon. If they did not ignore the science, if they did not ignore some pretty simple logic, the loss of life and property damage from fire, especially fires related to wildlands, would be minimized, even though wildland fires are inevitable, despite the money thrown at them. That wasted money could be much more wisely applied to real solutions rather than simplistic, political, traditional presumptions.

People who start fires with their brush-clearing equipment are ironic idiots, but prosecuting them for manslaughter etc. would only serve to feed into the revenge pattern while ignoring the fact that we seen the enemy in the mirror every morning. Those of us who, for example, allow our property to be potential ignition sites for fires must share the responsibility for the resulting tragic deaths and property damage when we find ourselves unlucky enough to have overlooked something we could have done better in retrospect.


Twister Sept. 10, 2010 @ 5:07 p.m.

Re 40:

I'd like the names and some references of those who have studied ecological systems and evolution in the light of economics.


David Dodd Sept. 10, 2010 @ 7:09 p.m.

"I'd like the names and some references of those who have studied ecological systems and evolution in the light of economics."

Visit Cafe Hayek, just google it, you'll find the link. Somewhere on that page is also a link to Russ Roberts' site where every week he does a podcast interviewing someone - at times economists and at other times different people. Those podcasts are often enlightening. And yes, Roberts is a Smith/Hayek professor at George Mason, but he isn't particular about who he interviews; some of his best stuff is with neo-Keynesians. Which reminds me of my new favorite joke:

Q: How many neo-Keynesians does it take to change a lightbulb?

A: Print more money.

And you may borrow my joke at no interest, just give me credit ;)


Don Bauder Sept. 10, 2010 @ 9:49 p.m.

Response to post #41: Indifference is certainly one of the major blocks to progress in any number of areas. Best, Don Bauder


Don Bauder Sept. 10, 2010 @ 9:53 p.m.

Response to post #41: Farmers look at ecological systems (not natural ones) from an economic standpoint. That's a lot of what agricultural economics is all about. Best, Don Bauder


Don Bauder Sept. 10, 2010 @ 9:59 p.m.

Response to post #43: Those who study evolution can't help but bring in economics. For example, the animals that became today's dogs attached themselves to human encampments for economic reasons, and humans then put the dogs to work for their own economic purposes. It was symbiosis. If Hayek's acolytes look into such things, good. Best, Don Bauder


Founder Sept. 11, 2010 @ 7:22 a.m.

Reply to #36 in reply to #35 Let's get back to the subject: These are a GREEDY dupe to the average voter! I'd also like to get Don's feed back about this from above:

What do you think the long term effect of these Big Companies not paying taxes will be on Social Security; seems to me that the amount of money being paid into Social Security will begin to plummet this Fall (no pun intended)?

How will this donation vs. paying taxes affect SS taxes?

Remember at

Ballot Box Time the Ballot Box Rhyme

Remember this Rhyme , please do, Don't let anyone confuse you

No 23 and Yes 24 Will HELP to shut, BIG CORP's door!


Twister Sept. 11, 2010 @ 5:05 p.m.

Re 45 and 46:

“Agricultural economics” is just one more fraud compounded by “agro-ecosystems,” an even more egregious pseudo-intellectual flim-flam.

Agriculture always has been about stealing, robbing Peter to pay Paul. It not only has nothing to do with ecosystems, it is about as close to the opposite of an ecosystem as you can get and still be dealing with life-forms.

But it isn’t just about stealing, it’s about stupidity.

The Great Plains, for example, were full of healthy, free protein in, if not mismanaged too badly, essentially “inexhaustible” supply. Energy and nutrients cycled through the ecosystem (a system that requires no external inputs or subsidies) in a continuous loop. Largely because of food prejudice, this free system was replaced by a maladapted species, the cow, which required external subsidy to extract the energy FROM the system, which declined from unnecessary overloading from concentrating large cattle populations into areas rather than mimicking the seasonal migrations of the bison. As if this weren’t hare-brained enough, sodbusting pioneers turned the area into a dustbowl, further and permanently reducing its productive capacity, requiring an increasing spiral of subsidy to pay for a decreasing productivity, quantitatively and qualitatively.

Now we have an increasingly money-subsidized agribusiness-welfare system that produces primarily simple carbohydrates mixes with ground mad-cow-meat literally on steroids (pesticides, hormones, antibiotics and other Rx and chemical atrocities) imported from tens of thousands of miles away at huge expense or from more “local” feedlots where cattle are lucky to have a mountain of their own excrement to stand on for a view beyond the crowded pens in the hopes they don’t stumble lest they be chained to a tractor and dragged to an early, unmerciful slaughter.

All this from well-trained experts who know better than the rest of us, especially us lazy savages. Economics? Ecology? Even without definitions we can rely on a handful of facts to get a hint of the level of bull-hockey that poses for authority in this nuthouse culture we are increasingly threatened and seduced with.

But let’s not worry our little pet paradigms with such heresy, eh?


Don Bauder Sept. 11, 2010 @ 5:22 p.m.

Response to post #47: Corporations are massively avoiding taxes, but I doubt if they are avoiding the amount they are obligated to contribute to Social Security. Best, Don Bauder


Twister Sept. 11, 2010 @ 6:02 p.m.

Re 43:

I couldn't locate a link to Roberts, nor could I find any studies where economists had used ecosystems/evolution in economics. Can you supply a specific link or title?

I did find an interesting article by Roberts, however: http://cafehayek.com/2007/10/the-backlash.html


Twister Sept. 11, 2010 @ 6:17 p.m.

Re 46:

I quite agree that evolutionary biologists "can't help but bring in economics," but my question is about economists bringing in evolution and ecology. I don't know of any cases where that has been done in any serious way.

You, Don, if you don't mind the appellation "economist," are exceptional. Any economist who can reach back beyond 10,000 years is a good one in my book, and cannot, by definition, be dog-matic. In a paper I did for an economics and a comparative government class several decades ago, I discussed grains, and the transition from gathering to hoarding to growing as the origin of greed and capitalism. I agree about the dog-human symbiosis (how many economists know that word?), but that predated the actual enslavement of animals (including humans) and plants, otherwise known as capitalism/culture/cultivation.


David Dodd Sept. 11, 2010 @ 6:37 p.m.

Certainly. I'm reluctant to pimp websites here in the Reader, but we'll give this a shot and hope that the powers at be here understand that it's educational.


I would normally rather read an interview than to listen to one, but you know, people seem to like this format. If you scroll down to the August 9th interview with Nobel Prize winning physicist Robert Laughlin, you'll find some enlightning references to energy and waste versus cost and other economic factors.

This site is absolutely free and not for profit. You will find a few interviews with Nassim Taleb (author of The Black Swan), an interesting and controversial fellow. The best discussion in my opinion is from 1-12-09 with Steve Fazzari involving Keynesian theory and Roberts attempting to contrast it with Hayekian thoughts on economics. Way back in 2006 there are even a couple of podcasts interviewing Milton Friedman. Archives are here:




Don Bauder Sept. 11, 2010 @ 6:41 p.m.

Response to post #48: In so-called primitive societies, people were wanderers. They pursued animals and would gobble up crops and move on when they were gone. It was the domestication and husbandry of certain animals, along with sophisticated planting and rotation of crops, that allowed people to settle in a spot and live there. Civilization advanced. It was a major step for mankind, and economic factors determined it. Don't blame the ag economists. They showed up many centuries after these patterns were in place. Best, Don Bauder


Don Bauder Sept. 11, 2010 @ 6:45 p.m.

Response to post #50: It's interesting that Hayek is making a comeback at the same time Keynes is making one. They were enemies. Best, Don Bauder


Don Bauder Sept. 11, 2010 @ 6:49 p.m.

Response to post #51 My guess is that the hunter/gatherers were as greedy as any civilization that came along subsequently. Greed is as much a part of the human essence as procreation. Best, Don Bauder


Don Bauder Sept. 11, 2010 @ 6:52 p.m.

Response to post #52: There is nothing wrong with links to other websites. That's what this website is for. I look forward to Hayek acolyte vs. Keynes acolyte. Best, Don Bauder


Fred Williams Sept. 12, 2010 @ 1:19 a.m.

Refried and Don,

For video lectures and interviews on economics, politics, world history, science, and other interesting topics, I like:




Founder Sept. 12, 2010 @ 7:03 a.m.

So getting back to the subject:

"Corporate America Keeps Profits Strong, Jobs Weak"

What can we do in SD to promote CHANGE, especially at the ballot box?

Ballot Box Time the Ballot Box Rhyme

Remember this Rhyme , please do, Don't let anyone confuse you

No 23 and Yes 24 Will HELP to shut, BIG CORP's door!


Don Bauder Sept. 12, 2010 @ 7:09 a.m.

Response to post #58: Marketwatch.com covers daily news, but also has columnists of varying views hitting long term questions. Robert Reich has a good website. There are numerous others worth going to. Best, Don Bauder


Don Bauder Sept. 12, 2010 @ 7:13 a.m.

Response to post #58: The basic problem is that corporations only think short term. Their goal is to make sure earnings per share please Wall Street each quarter. Half a century ago, most large companies DID think long term. But then greed took over. Best, Don Bauder


Founder Sept. 12, 2010 @ 8:05 a.m.

Reply #60 about #35

"What do you think the long term effect of these Big Companies (not paying taxes) will be on Social Security; seems to me that the amount of money being paid into Social Security will begin to plummet this Fall (no pun intended)?"

As more Companies donate to Political (now tax deductible) campaigns instead of "just" paying taxes, what will happen to Social Security?

I think SS own "income" will drop dramatically and that will be the reason for "overhauling" SS, as now proposed by some Rep.'s... Because SS funds were not allowed to be self managed not too long ago, they were not art of the financial disaster that occurred and now many are eager to get their hands on those funds also!


Don Bauder Sept. 12, 2010 @ 1:37 p.m.

Response to post #61: Corporations will use any trick in the book to reduce their taxes, but they will pay what they owe the SS fund. Best, Don Baudeer


Founder Sept. 12, 2010 @ 4:28 p.m.

Reply #62 about #61

My question to you is this: Since Corp.'s or other Business's can now donate to Political candidates and write it off will they pay less taxes than say a year ago before the SCOTUS ruling and if so will Social Security take a big hit? Thanks Best


Don Bauder Sept. 12, 2010 @ 10:41 p.m.

Response to post #63: The misguided SCOTUS decision giving Constitutional rights to corporations will lead to far more corporate donations to politicians. This, in turn, will lead to more tax breaks for corporations, which already pay very little in taxes. But the companies will pay their Social Security taxes. They won't get out of that. Incidentally, the argument that the SCOTUS decision is a balanced one, because labor unions also get the same free speech rights, is fraudulent. Labor unions are pathetically weak these days, with the exception of unions representing government employees. Their lobbying will destabilize the economy, too, because their pensions are breaking states and municipalities. I can't think of anything worse than greatly increased lobbying by corporations and public sector unions. Best, Don Bauder


Founder Sept. 13, 2010 @ 8:11 a.m.

Reply #64 I agree with you 100%.

I think history will show that the SCOTUS decision you mentioned caused a "tipping point" in our Country Political process that will lead to the end of the Middle Class as you and I know it today.

By the Government loaning to the Big Banks at almost zero interest and at the same time restricting credit to consumers, the Government has in effect turned the American Dream into a Nightmare for all those now looking to support their families, send their kids to College and or just get ahead! Even if credit was "loosened" today it would take many years to recover what folks have lost and there is sadly no such "end" in sight...

Now America will become much more like a third World Country where the Ultra Wealthy (and their Political "friends") will influence everything and everyone like:

..Who gets jobs - Without an "in" forget about getting a good paying job; for each opening their will be huge numbers of folks applying, even at reduced pay/benefits!

..Who gets credit - Most folks will have little if any "worth" especially as Seniors divide their wealth among their adult children and all their grandchildren. One generation from now, average folks will have much less personal wealth!

..Who gets educated - Advanced Public education will become much more expensive and therefore will limit who get educated, as huge numbers of students all apply for smaller numbers of scholarships.

..Who gets healthcare - The cost of medical insurance will continue to increase as Doctors become one of the last groups to accept reduced pay and benefits. Those will money will continue to access advanced medical care while the rest of Society will wallow in HMO peer review red tape for even basic procedures and treatment.

..Where people live - Just like the "Brain Drain" after WW2, when huge numbers of educated European folks relocated to the US, I expect to see huge numbers of Americans relocate outside the Continental US, as Seniors and those with some remaining wealth seek a better quality of life in another Country and or one with a lower cost of living.

I hope I'm very wrong about this but my "gut" says I'm right...


Don Bauder Sept. 13, 2010 @ 10:25 a.m.

Response to post #65: You are absolutely right and these things are already happening. Just keep in mind: the SCOTUS decision gives two groups even more power: corporations and labor unions representing government workers. The end result will be the worsening of the gap between superrich and everybody else, and a worsening of the gap between public sector pay and private sector pay and pensions (already widely in favor of public sector employees.) This means we will become much more like third world nations: a handful of superrich at the top, government employees fat and sassy, middle/top management of corporations doing well, and most others doing poorly. Best, Don Bauder


Founder Sept. 13, 2010 @ 11:56 a.m.

Reply #66 Very scary for what's left of the Middle Class!

No wonder the President is starting to talk about how Congress is holding the Middle Class Hostage, while the Wealthy smile and wink to each other; time is on their side, as is the SCOTUS!

The "bean counters" have taken over and this statement has nothing to do with any racial slur, but refers to those that look only at the bottom line...


Don Bauder Sept. 14, 2010 @ 1:48 a.m.

Response to post #66: The fact that Boehner backed down on the tax cuts indicates the Democrats have an issue. They can hammer away about Republicans being in Wall Street's pockets, neglecting Main Street. Obama should have been hitting for months on that theme. Best, Don Bauder


Founder Sept. 14, 2010 @ 7:02 a.m.

Reply #68 RE: "Obama should have been hitting for months on that theme." How about from Day 1...

To me that was his greatest blunder!

He should have insisted on equal amounts of recovery $ to BOTH Wall Street & Mainstreet


SurfPuppy619 Sept. 14, 2010 @ 7:59 a.m.

The fact that Boehner backed down on the tax cuts indicates the Democrats have an issue.

Bonehead Boehner is nothing but a shill for Big Business, always has been, always will be.

His daughter works for the scamming Sallie Mae........whom he goes to bat for on all issues that threaten to lower their profits even if it would help the country.


Don Bauder Sept. 14, 2010 @ 8:21 a.m.

Reply to post #69: Main Street should have been his first priority. Best, Don Bauder


Don Bauder Sept. 14, 2010 @ 8:23 a.m.

Response to post #70: A lot of Republicans -- and some Democrats, too -- are nothing but shills for big business and big banks. Best, Don Bauder


kimberlyshae Sept. 14, 2010 @ 11:02 a.m.

If you love your job... if you even like having a job vote YES


Don Bauder Sept. 14, 2010 @ 12:26 p.m.

Response to post #73: Vote YES for what? Best, Don Bauder


Founder Sept. 14, 2010 @ 1:07 p.m.

When id doubt, remember: - the Ballot Box Rhyme -

Remember this Rhyme , please do, Don't let anyone confuse you

No 23 and Yes 24 Will HELP to shut, BIG CORP's door!


Don Bauder Sept. 14, 2010 @ 5:24 p.m.

Response to post #75: Just don't wear campaign buttons taking those positions if you work at a big corporation. Best, Don Bauder


Founder Sept. 15, 2010 @ 7:53 a.m.

Reply #76 IF you are lucky enough to be Working, then you probably won't be concerned with the above issue!

Once the unemployed get to the polls, then I think we will see some real change!


Don Bauder Sept. 16, 2010 @ 1:50 p.m.

Response to post #77: But just try getting the unemployed to the polls. Best, Don Bauder


Twister Oct. 2, 2010 @ 9:24 p.m.

Re: 55

Hunter-gatherers had to cooperate or their greedy genes would be kicked out of the pool. That's my guess.

As Ken Boulding once said, "We have only two choices, really; we can have either an 'I beat you down, you beat me down, I beat you down' society, or we can have an 'I lift you up, you lift me up, I lift you up' society."


David Dodd Oct. 2, 2010 @ 10:35 p.m.

@ #79:

I think we need a 'if you don't know what you're doing, then please get the hell out of my way' society. Some will follow. I realize this is very Libertarian of me, but like Popeye once said, "I yam whats I yam."


Founder Oct. 3, 2010 @ 7:57 a.m.

Reply #79 & #80 Not many "Hunter-gatherers" in San Diego Twister... and lifting "UP" is had to do when you are looking for work and there are NO JOBS...

RFG Right ON, Congressional "Foot Dragging" is now a National Disgrace...

  • at the risk of being repetitive:

No 23 and Yes 24 Will HELP to shut, BIG CORP's door!


Don Bauder Oct. 6, 2010 @ 11:34 a.m.

Response to post #79: I don't think our greed genes have been booted out of our bodies as the result of millions of years of evolution. Maybe hunter-gatherers weren't as cooperative with each other as you suspect. And certainly they weren't friendly with other bands of hunter-gatherers. Beste, Don Bauder


Don Bauder Oct. 6, 2010 @ 11:38 a.m.

Response to post #80: We already have such a society. And it is not as pleasant as you seem to think. Best, Don Bauder


Don Bauder Oct. 6, 2010 @ 11:41 a.m.

Response to post #81: Congressional foot-dragging is a disgrace, yes, but Congressional pockets-stuffing is the national norm. Best, Don Bauder


Founder Oct. 6, 2010 @ 1:05 p.m.

Reply #84 I think the Congressional "pockets-stuffing" of yesteryear (prior to 1970) was replaced with their "Offshore account stuffing" a number of years ago!

That way they never have to actually touch the money (or take a chance of being caught with it)...


Don Bauder Oct. 6, 2010 @ 1:56 p.m.

Response to post #85: They don't touch it until they are out of office. Then they start spending it. Best, Don Bauder


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