Monday, October 19, 2015

Bernie's got some 'splainin to do

This ought to be good:
Presidential hopeful Bernie Sanders said Sunday that he is preparing to give a “major speech” on democratic socialism, the political philosophy that is guiding him and his upstart campaign for the Democratic presidential nomination.

“I think we have some explaining and work to do,” the Vermont senator told an audience at a house party here in the nation’s first caucus state, acknowledging that the term “democratic socialism” makes some people “very, very nervous.”
While he's offering his vision, perhaps he could explain this development:
Wal-Mart's second profit warning in two months should be a wake-up call for the political left. If America's largest private employer is struggling with its own pay increases, how will other businesses cope with even larger minimum-wage hikes?

The stunning hit to profitability for the nation's biggest retailer raises serious questions about the Democrats' economic agenda to raise the minimum wage to $12 or $15 an hour, while asking low-wage employers to provide their workers with health insurance and paid sick leave.

Taken together with August's announcement of a 7% to 13% drop in earnings per share in the current fiscal year, Wal-Mart's latest warning of a further 6% to 12% EPS decline next year — even as it plans to cut share count with a new $20 billion stock buyback — points to a dramatic drop in profitability.
Or maybe this:
With city leaders scrapping a controversial workplace scheduling proposal, Minneapolis workers and business owners are shifting their attention to the topic still before the City Council: Universal paid sick leave.

Workers’ groups demonstrated at City Hall on Thursday, expressing frustration over Mayor Betsy Hodges’ decision to back off her push for regulations requiring predictable work schedules — and urging council members to support the remaining pieces of Hodges’ Working Families Agenda. Meanwhile, a coalition of business owners and association leaders, concerned about some elements of the sick-leave proposal, rallied their ranks for their own City Hall gathering on Friday.

At issue is a proposal that would require all employers to provide paid sick time to employees, earned at a rate of one hour per 30 hours worked. Employees at businesses with at least 21 employees could earn up to 72 hours, while those at smaller companies could earn 40 hours of sick leave. Only workers covered by collective bargaining agreements that specifically waive the law would be exempt.
I'm sure Bernie can pay for all these things, or at least make sure someone else does. It should be a heck of a speech.

7 comments:

Bike Bubba said...

Since when have socialists let facts interfere with their rhetoric? It should be a barnstormer that takes in almost all of his supporters.

Anonymous said...

Collectively, the Waltons own over 50% of the company, and are worth a combined total of $147 billion - wiki

For the fiscal year ended January 31, 2015, Walmart increased net sales by 1.9% to $482.2 billion - walmart

The wage scale and other improvement in work conditions will cost the company about $1 billion in this fiscal year. - cnn

Are you complaining that walmart can't afford to pay people who stock their shelves with cheap crap, sweep their floors in the dead of night, and shorten their spines collecting their filthy lucre, all while wearing a ridiculous vest and dirty chinos, a lousy ten dollars an hour?... really. I think the republican party of the rich, buy the rich and for the rich should run on that idea in the general election next year. What Americans want to hear over and over and over again is how really really really hard and a struggle it is for the walton family to make ends meet in this over-burdensome government controlled nanny state of america. If we could just unleash the power of the market to do its heaven inspired magic then one day every american might one day roll out of bed and be just as free as sam walton's great great great great great grandson will be, living on the beach in malibu working on a really deep tan and a case of cristal.

How anyone cannot see that that future is exactly the world paul ryan & co. want to do everything in their power to secure is a mystery to me. And it's a mystery to me why anyone without even the wildest possibility outside hitting the powerball of ever sharing in the kind of unimaginable wealth that old man walton's heirs many generations down the line will enjoy will wake up one day and stroll down to the polls and with conviction vote for the party of concentrated wealth and power is way beyond me. Unless you are one, how can you carry water for the oligarchs?

First Ringer said...

Since no one's responded to you, Anon, allow me to carry my cup of water for the oligarchs, since you're obviously doing some light lifting for the Mensheviks.

Setting aside, for the moment, the incredible fallacy that you can craft policy to target select individuals and not income brackets, since apparently you want the Waltons in particular to pay for your utopia, let's talk about that Walton wealth. The Walton's wealth comes from the valuation of the company - largely the valuation of the stock. And yes, the top five holders of stock in Walmart are (shocker!), the Waltons themselves. Yet 62% of the company's stock holdings come from institutional and mutual fund holders. That's $1.987 billion shares - or $116,778,550,000 based on the close of yesterday's stock price.

Why am I mentioning this? Because that 62% represents millions of people who own, either in outright shares or as a fraction of shares as part of a particular fund, a part of Walmart. Do you participate in a 401(k), Anon? Because you probably own - or have owned at some point in your life - a share in Walmart. Most blue-chip mutual funds, or ETFs, have some minor share in Walmart. So, you can craft policy to target the Walmart's of the nation, but who are you really hurting in the process?

Walmart's valuation is based in large part on it's sales figures. Of course, how much of Walmart's sales result in a profit? Do you know? It's $130.02 billion for last year - about 27% of gross sales. If you drop the profit margin, the stock valuation drops, and 62% of the company's share holders lose money. And since again we can't craft policy just to target one company - any policy hitting Walmart is likely hitting similar companies across the board. Target made a $21.7 billion profit. Costco made $15.39 billion. How much are they "suppose" to make? How much more do you want?

Let's consider our national debt as a comparison against these kind of profits. Right now, with our current obligations, our national debt is over $18 trillion. The collective net worth of the Forbes 400 list for 2015 is $2.34 trillion. Our yearly deficit is $426 billion. Do you serious believe you can possibly tax your way out of the current situation alone? Plus add the estimated $10 trillion that Bernie's new programs would add?

The fallacy that "the other guy" will pay for everything isn't supported by financial reality. It's the equivalent of me doing your budget based off of your stated salary and not your actual paycheck, or factoring in expenses. Taxes and the cost of living (or in Walmart's case, the cost of doing business) are always substantial. I'm sorry, but the money isn't there.

Anonymous said...

Where in that post is any kind of "Utopia" mentioned?! Unless you're saying that the walton heir, many generations removed from the labor that created his inherited fortune, is part of a bolshevik plot for a utopian future, which, if I'm reading my Marx right, is not exactly how the proletarian rise to power in the post industrial revolution future. Or is that now, not sure. Anyway. And your jot and tittle reading of some heaven sent economic law fails to persuade why a nation cannot ask more from those that have been, and will continue to be, richly rewarded for hard work and good luck. Also ask those winners of the sperm lottery to go out and get a job! Taxing the dead is the best time to do it, because they're not gonna mind.

Obviously, Mr. Ringer, you're a wiz-bang with numbers and know how to command C and command V through a website and have mastered the jargon of money, so from your great hight the minimum wage is probably just another vector on a spread sheet's bottom line. But some of us see people with kids and rent and child care needs and sick parents and busted cars, and not just another filthy bugger with his goddamned hand out. I suggest you drive around one of the less desirable areas of an urban center you probably don't live by and have never visited at six o'clock in the morning and see all the people who fold the sheets and clean the floors waiting outside in the cold for the bus to take them to one of those swank gigs that your spread sheet demands pay as little as humanly possible and then ask them whether they think the walton family should pony up a little more to fix the stinkin' pot holes their damn trucks leave in their greasy wakes. Pull out your spread sheet and convince them that their lives are better off because the walton fortune is in good hands. That's the election as it'll be presented next year as I see it. I'm a betting man and my money's on the Ds again this time around.

Mr. D said...

I suggest you drive around one of the less desirable areas of an urban center you probably don't live by and have never visited at six o'clock in the morning and see all the people who fold the sheets and clean the floors waiting outside in the cold for the bus to take them to one of those swank gigs that your spread sheet demands pay as little as humanly possible and then ask them whether they think the walton family should pony up a little more to fix the stinkin' pot holes their damn trucks leave in their greasy wakes.

Just to give you a little perspective -- if you confiscated every penny of the personal fortunes of the Walton family, it would fund the federal government for about 10 days. You're gonna need more kulaks.

First Ringer said...

Anon,

Reading this back-and-forth, I'm reminded of several old research articles that suggest humans don't debate to communicate or share ideas, but as a form of dominance.

Given that, I won't waste your time or mine with an overly length response except to say this - I think you're confusing your desired policies with your desired outcomes. I would agree that you'll probably never go completely politically broke saying that you'll raise the minimum wage to $12-15 and make John Walton pay for it. Of course, John Walton would pay for his little share of that - really just in the drop of his net worth with the drop in value of Walmart as a company, as an example. The brunt of such policy is born by thousands (millions, really) of unintended actors; the small restaurants that don't make tremendous sums of money, or the small employees of larger companies who cut jobs in response to their lower wage employees needing to be paid more.

Both the Left and the Right have gotten way too comfortable with the demagoguery easy fix. Pick an issue, we've all claimed there's some "comprehensive" solution that's just waiting to be found. You really want to help the families you mentioned? Start with solutions the federal govt can actually implement (at least a little easier) - increase the child tax credit, or the number and kind of deductions they can claim. Heck, give them a tax cut. The problem with all of those solutions is that they can/probably/will be used by people from whom the benefits aren't intended. But that's the nature of any policy since we can't just literally say we're going to take something from Group A and deliver it directly to Group B. And that's a good thing, since you don't want to empower the government - any government - to do that sort of thing. Because you may not like what they take from whom in the future.

Bike Bubba said...

OK, let's assume that the Communists--oops, Democrats--win and you get what you want. $15/hour minimum wage, double social spending, the whole kit and caboodle.

Now, we are looking at the Waltons, the Gates family, and the like to contribute their part--defined by Thomas Sowell as "more than they're paying now". Will we get it?

Well, what happens when you add $6/hour to their labor price for 1.4 billion hours worked in the U.S.? Since stock valuations and dividends are predicated on profitability, good luck helping yourself to the Waltons' wealth. A lot of it will be gone, since it's mostly in Wal-Mart stock. The same thing goes for....ahem...the retirement savings for millions who are invested in companies like Wal-Mart.

Like First Ringer said, you are confusing desires with methods, and you're neglecting to consider the likely consequences of an action. Read Bastiat and pay careful attention to "that which is not seen."