My Personal Credit Crisis

[ucodegen]

I track my finances through online banking just about every night. And sometimes I am surprised when I see a lower balance than expected – then I talk to my wife and find out that she had to use the debit card on XYZ expense.

I still think it is a bit made up.
1) He is writes for finance publications.
2) The overdraft was repetitive… not just once.

I bet that if you get hit with an overdraft.. you will make changes to make sure it doesn’t repeat. It almost looks like he didn’t look at the balance for a while and then whoops!!

Management and union salaries are too high. And who let all of this happen? The board of directors. And who votes for the board of directors? The shareholders. Ultimately, the auto companies are a great example of shareholders allowing the board, management and employees to unwittingly work together in destroying their enterprise.

Yes and no.. remember that shareholder votes are not binding – a dirty ugly secret that is not openly discussed. Effectively, the owners of the company, the common shareholders, can’t make binding decisions on the directors/CEO.

Average “lazy” worker productivity has constantly increased over the years

In part due to increased capital expenditures for equipment (better, newer mills, presses etc). Someone bought the equipment.. and expects a return on their investment.
NOTE: I am not disagreeing with the point that CEO pay is ridiculous. CEOs also don’t have any real investment in what they run. To get the pay they do, it should be based upon returns from stock they purchased in the company they are running. This way the pay is tied to the health of the company. NOTE: You would also need a mandatory hold period on this stock to prevent shifting income forward-backwards per quarter or year.

[CA renter]

[quote=afx114]Average “lazy” worker productivity has constantly increased over the years:

Meanwhile, median family income compared to GDP has gone down steadily over time:

Meanwhile, the ratio of CEO to average worker pay has risen to levels not seen since before the Great Depression. I’d love to see this graph extend to 2009:

So to summarize: while workers have increased their productivity, their pay has stagnated — or even declined if you factor inflation. Meanwhile, management pay has skyrocketed. Has management’s pay increases been consistent with their productivity? It’s hard to tell — how do you measure CEO productivity? EPS?[/quote]

Once again, very well stated, afx114.

[CA renter]

[quote=afx114]Average “lazy” worker productivity has constantly increased over the years:

Meanwhile, median family income compared to GDP has gone down steadily over time:

Meanwhile, the ratio of CEO to average worker pay has risen to levels not seen since before the Great Depression. I’d love to see this graph extend to 2009:

So to summarize: while workers have increased their productivity, their pay has stagnated — or even declined if you factor inflation. Meanwhile, management pay has skyrocketed. Has management’s pay increases been consistent with their productivity? It’s hard to tell — how do you measure CEO productivity? EPS?[/quote]

Once again, very well stated, afx114.

[CA renter]

[quote=afx114]Average “lazy” worker productivity has constantly increased over the years:

Meanwhile, median family income compared to GDP has gone down steadily over time:

Meanwhile, the ratio of CEO to average worker pay has risen to levels not seen since before the Great Depression. I’d love to see this graph extend to 2009:

So to summarize: while workers have increased their productivity, their pay has stagnated — or even declined if you factor inflation. Meanwhile, management pay has skyrocketed. Has management’s pay increases been consistent with their productivity? It’s hard to tell — how do you measure CEO productivity? EPS?[/quote]

Once again, very well stated, afx114.

[CA renter]

[quote=afx114]Average “lazy” worker productivity has constantly increased over the years:

Meanwhile, median family income compared to GDP has gone down steadily over time:

Meanwhile, the ratio of CEO to average worker pay has risen to levels not seen since before the Great Depression. I’d love to see this graph extend to 2009:

So to summarize: while workers have increased their productivity, their pay has stagnated — or even declined if you factor inflation. Meanwhile, management pay has skyrocketed. Has management’s pay increases been consistent with their productivity? It’s hard to tell — how do you measure CEO productivity? EPS?[/quote]

Once again, very well stated, afx114.

[CA renter]

[quote=afx114]Average “lazy” worker productivity has constantly increased over the years:

Meanwhile, median family income compared to GDP has gone down steadily over time:

Meanwhile, the ratio of CEO to average worker pay has risen to levels not seen since before the Great Depression. I’d love to see this graph extend to 2009:

So to summarize: while workers have increased their productivity, their pay has stagnated — or even declined if you factor inflation. Meanwhile, management pay has skyrocketed. Has management’s pay increases been consistent with their productivity? It’s hard to tell — how do you measure CEO productivity? EPS?[/quote]

Once again, very well stated, afx114.

[CA renter]

[quote=davelj]
In addition to what Allan said…

I have no problem with unions whatsoever, although I’ve never been in one, but…

If a union is trying to protect jobs that can be shipped to another country (where there are lower wages), by definition most of the gains will be short-term in nature. Because once the disparity between domestic wages (and benefits) and foreign wages gets large enough (and adjusted for differences in productivity), the jobs will start moving and the jig is up.

Look at the US auto industry. Absent an organized, effective global union, almost any job that can be shipped to another country where the task can be performed for less money, and adjusted for productivity and quality, that job will eventually move. That is reality. And if the jobs DON’T move… then the companies that continue to pay the higher-than-market wages will eventually go bust. Again, see the US auto industry. The UAW is reaping what it’s sowed over the last few decades. (File under: Be careful what you wish for.)

That’s the really disturbing part regarding the auto companies. Even if the unions agree to sharp cuts in wages and benefits, the auto companies will still barely survive. And the Japanese auto makers aren’t making any money either. The business is just brutally competitive.

And who’s to blame for that? Consumers are. We are. We want the best car we can buy at the best price. And there’s no room for any wage inflation in that game when you’re dealing with a global market.

So, yes, unions will fight for fairness – as they should – and they’ll get it for a while. Until they price themselves out of the labor market altogether.
[/quote]

But you’re assuming that they’re adjusting for quality and productivity, which they’re not, IMHO. We’ve discussed here before that we are NOT getting a higher-quality product, and when one considers the obsolescence built into today’s products, it’s easy to see we are not being less resource intensive, either.

For instance, which is better:

-a well-built product that is three times as expensive, but last five times as long

OR

-a cheaply-made piece of plastic garbage that is one-third of the price, but has to be entirely replaced five times as often?

While it’s certainly more profitable for the corporations to use wage slaves in third-world countries and accelerate turnover/obsolescence, our environment suffers because we pollute more and use more resources to manufacture these products (vs. the lifespan of a high-quality product), and we pollute more on the disposal side, too (not to mention the energy resources used to recycle/dump the trash).

Additionally, we lose the middle class that has held up all these companies, because it’s the middle class in the U.S. that has been the world’s greatest consumer — and that’s entirely due to the fact that we’ve made more money than the workers in developing nations, and we have historically had a much healthier middle class.

Free trade should exist when another country can grow or manufacture a product which we cannot produce ourselves (due to lack of natural resources, geography, climate, etc.), or where they use far fewer resources than we would for the same outcome — same quality, lifespan, etc.

I support fair trade where we trade with countries who share the same environmental and labor protections that we have, and where labor and consumers actually benefit from the trade.

If we allow the middle class to implode, then who is expected to buy from all of those corporations that have excess supply capacity, but no demand? Do they honestly expect the third-world slaves who earn $500/year to take our place? We need to bring them UP to our standards, not bring ourselves down to theirs.

The credit bubble has masked our declining purchasing power for a long time, and this credit crisis was a very obvious outcome of what’s transpired over the past few decades when corporations were allowed to take total control of our government and financial system.

[CA renter]

[quote=davelj]
In addition to what Allan said…

I have no problem with unions whatsoever, although I’ve never been in one, but…

If a union is trying to protect jobs that can be shipped to another country (where there are lower wages), by definition most of the gains will be short-term in nature. Because once the disparity between domestic wages (and benefits) and foreign wages gets large enough (and adjusted for differences in productivity), the jobs will start moving and the jig is up.

Look at the US auto industry. Absent an organized, effective global union, almost any job that can be shipped to another country where the task can be performed for less money, and adjusted for productivity and quality, that job will eventually move. That is reality. And if the jobs DON’T move… then the companies that continue to pay the higher-than-market wages will eventually go bust. Again, see the US auto industry. The UAW is reaping what it’s sowed over the last few decades. (File under: Be careful what you wish for.)

That’s the really disturbing part regarding the auto companies. Even if the unions agree to sharp cuts in wages and benefits, the auto companies will still barely survive. And the Japanese auto makers aren’t making any money either. The business is just brutally competitive.

And who’s to blame for that? Consumers are. We are. We want the best car we can buy at the best price. And there’s no room for any wage inflation in that game when you’re dealing with a global market.

So, yes, unions will fight for fairness – as they should – and they’ll get it for a while. Until they price themselves out of the labor market altogether.
[/quote]

But you’re assuming that they’re adjusting for quality and productivity, which they’re not, IMHO. We’ve discussed here before that we are NOT getting a higher-quality product, and when one considers the obsolescence built into today’s products, it’s easy to see we are not being less resource intensive, either.

For instance, which is better:

-a well-built product that is three times as expensive, but last five times as long

OR

-a cheaply-made piece of plastic garbage that is one-third of the price, but has to be entirely replaced five times as often?

While it’s certainly more profitable for the corporations to use wage slaves in third-world countries and accelerate turnover/obsolescence, our environment suffers because we pollute more and use more resources to manufacture these products (vs. the lifespan of a high-quality product), and we pollute more on the disposal side, too (not to mention the energy resources used to recycle/dump the trash).

Additionally, we lose the middle class that has held up all these companies, because it’s the middle class in the U.S. that has been the world’s greatest consumer — and that’s entirely due to the fact that we’ve made more money than the workers in developing nations, and we have historically had a much healthier middle class.

Free trade should exist when another country can grow or manufacture a product which we cannot produce ourselves (due to lack of natural resources, geography, climate, etc.), or where they use far fewer resources than we would for the same outcome — same quality, lifespan, etc.

I support fair trade where we trade with countries who share the same environmental and labor protections that we have, and where labor and consumers actually benefit from the trade.

If we allow the middle class to implode, then who is expected to buy from all of those corporations that have excess supply capacity, but no demand? Do they honestly expect the third-world slaves who earn $500/year to take our place? We need to bring them UP to our standards, not bring ourselves down to theirs.

The credit bubble has masked our declining purchasing power for a long time, and this credit crisis was a very obvious outcome of what’s transpired over the past few decades when corporations were allowed to take total control of our government and financial system.

[CA renter]

[quote=davelj]
In addition to what Allan said…

I have no problem with unions whatsoever, although I’ve never been in one, but…

If a union is trying to protect jobs that can be shipped to another country (where there are lower wages), by definition most of the gains will be short-term in nature. Because once the disparity between domestic wages (and benefits) and foreign wages gets large enough (and adjusted for differences in productivity), the jobs will start moving and the jig is up.

Look at the US auto industry. Absent an organized, effective global union, almost any job that can be shipped to another country where the task can be performed for less money, and adjusted for productivity and quality, that job will eventually move. That is reality. And if the jobs DON’T move… then the companies that continue to pay the higher-than-market wages will eventually go bust. Again, see the US auto industry. The UAW is reaping what it’s sowed over the last few decades. (File under: Be careful what you wish for.)

That’s the really disturbing part regarding the auto companies. Even if the unions agree to sharp cuts in wages and benefits, the auto companies will still barely survive. And the Japanese auto makers aren’t making any money either. The business is just brutally competitive.

And who’s to blame for that? Consumers are. We are. We want the best car we can buy at the best price. And there’s no room for any wage inflation in that game when you’re dealing with a global market.

So, yes, unions will fight for fairness – as they should – and they’ll get it for a while. Until they price themselves out of the labor market altogether.
[/quote]

But you’re assuming that they’re adjusting for quality and productivity, which they’re not, IMHO. We’ve discussed here before that we are NOT getting a higher-quality product, and when one considers the obsolescence built into today’s products, it’s easy to see we are not being less resource intensive, either.

For instance, which is better:

-a well-built product that is three times as expensive, but last five times as long

OR

-a cheaply-made piece of plastic garbage that is one-third of the price, but has to be entirely replaced five times as often?

While it’s certainly more profitable for the corporations to use wage slaves in third-world countries and accelerate turnover/obsolescence, our environment suffers because we pollute more and use more resources to manufacture these products (vs. the lifespan of a high-quality product), and we pollute more on the disposal side, too (not to mention the energy resources used to recycle/dump the trash).

Additionally, we lose the middle class that has held up all these companies, because it’s the middle class in the U.S. that has been the world’s greatest consumer — and that’s entirely due to the fact that we’ve made more money than the workers in developing nations, and we have historically had a much healthier middle class.

Free trade should exist when another country can grow or manufacture a product which we cannot produce ourselves (due to lack of natural resources, geography, climate, etc.), or where they use far fewer resources than we would for the same outcome — same quality, lifespan, etc.

I support fair trade where we trade with countries who share the same environmental and labor protections that we have, and where labor and consumers actually benefit from the trade.

If we allow the middle class to implode, then who is expected to buy from all of those corporations that have excess supply capacity, but no demand? Do they honestly expect the third-world slaves who earn $500/year to take our place? We need to bring them UP to our standards, not bring ourselves down to theirs.

The credit bubble has masked our declining purchasing power for a long time, and this credit crisis was a very obvious outcome of what’s transpired over the past few decades when corporations were allowed to take total control of our government and financial system.

[CA renter]

[quote=davelj]
In addition to what Allan said…

I have no problem with unions whatsoever, although I’ve never been in one, but…

If a union is trying to protect jobs that can be shipped to another country (where there are lower wages), by definition most of the gains will be short-term in nature. Because once the disparity between domestic wages (and benefits) and foreign wages gets large enough (and adjusted for differences in productivity), the jobs will start moving and the jig is up.

Look at the US auto industry. Absent an organized, effective global union, almost any job that can be shipped to another country where the task can be performed for less money, and adjusted for productivity and quality, that job will eventually move. That is reality. And if the jobs DON’T move… then the companies that continue to pay the higher-than-market wages will eventually go bust. Again, see the US auto industry. The UAW is reaping what it’s sowed over the last few decades. (File under: Be careful what you wish for.)

That’s the really disturbing part regarding the auto companies. Even if the unions agree to sharp cuts in wages and benefits, the auto companies will still barely survive. And the Japanese auto makers aren’t making any money either. The business is just brutally competitive.

And who’s to blame for that? Consumers are. We are. We want the best car we can buy at the best price. And there’s no room for any wage inflation in that game when you’re dealing with a global market.

So, yes, unions will fight for fairness – as they should – and they’ll get it for a while. Until they price themselves out of the labor market altogether.
[/quote]

But you’re assuming that they’re adjusting for quality and productivity, which they’re not, IMHO. We’ve discussed here before that we are NOT getting a higher-quality product, and when one considers the obsolescence built into today’s products, it’s easy to see we are not being less resource intensive, either.

For instance, which is better:

-a well-built product that is three times as expensive, but last five times as long

OR

-a cheaply-made piece of plastic garbage that is one-third of the price, but has to be entirely replaced five times as often?

While it’s certainly more profitable for the corporations to use wage slaves in third-world countries and accelerate turnover/obsolescence, our environment suffers because we pollute more and use more resources to manufacture these products (vs. the lifespan of a high-quality product), and we pollute more on the disposal side, too (not to mention the energy resources used to recycle/dump the trash).

Additionally, we lose the middle class that has held up all these companies, because it’s the middle class in the U.S. that has been the world’s greatest consumer — and that’s entirely due to the fact that we’ve made more money than the workers in developing nations, and we have historically had a much healthier middle class.

Free trade should exist when another country can grow or manufacture a product which we cannot produce ourselves (due to lack of natural resources, geography, climate, etc.), or where they use far fewer resources than we would for the same outcome — same quality, lifespan, etc.

I support fair trade where we trade with countries who share the same environmental and labor protections that we have, and where labor and consumers actually benefit from the trade.

If we allow the middle class to implode, then who is expected to buy from all of those corporations that have excess supply capacity, but no demand? Do they honestly expect the third-world slaves who earn $500/year to take our place? We need to bring them UP to our standards, not bring ourselves down to theirs.

The credit bubble has masked our declining purchasing power for a long time, and this credit crisis was a very obvious outcome of what’s transpired over the past few decades when corporations were allowed to take total control of our government and financial system.

[CA renter]

[quote=davelj]
In addition to what Allan said…

I have no problem with unions whatsoever, although I’ve never been in one, but…

If a union is trying to protect jobs that can be shipped to another country (where there are lower wages), by definition most of the gains will be short-term in nature. Because once the disparity between domestic wages (and benefits) and foreign wages gets large enough (and adjusted for differences in productivity), the jobs will start moving and the jig is up.

Look at the US auto industry. Absent an organized, effective global union, almost any job that can be shipped to another country where the task can be performed for less money, and adjusted for productivity and quality, that job will eventually move. That is reality. And if the jobs DON’T move… then the companies that continue to pay the higher-than-market wages will eventually go bust. Again, see the US auto industry. The UAW is reaping what it’s sowed over the last few decades. (File under: Be careful what you wish for.)

That’s the really disturbing part regarding the auto companies. Even if the unions agree to sharp cuts in wages and benefits, the auto companies will still barely survive. And the Japanese auto makers aren’t making any money either. The business is just brutally competitive.

And who’s to blame for that? Consumers are. We are. We want the best car we can buy at the best price. And there’s no room for any wage inflation in that game when you’re dealing with a global market.

So, yes, unions will fight for fairness – as they should – and they’ll get it for a while. Until they price themselves out of the labor market altogether.
[/quote]

But you’re assuming that they’re adjusting for quality and productivity, which they’re not, IMHO. We’ve discussed here before that we are NOT getting a higher-quality product, and when one considers the obsolescence built into today’s products, it’s easy to see we are not being less resource intensive, either.

For instance, which is better:

-a well-built product that is three times as expensive, but last five times as long

OR

-a cheaply-made piece of plastic garbage that is one-third of the price, but has to be entirely replaced five times as often?

While it’s certainly more profitable for the corporations to use wage slaves in third-world countries and accelerate turnover/obsolescence, our environment suffers because we pollute more and use more resources to manufacture these products (vs. the lifespan of a high-quality product), and we pollute more on the disposal side, too (not to mention the energy resources used to recycle/dump the trash).

Additionally, we lose the middle class that has held up all these companies, because it’s the middle class in the U.S. that has been the world’s greatest consumer — and that’s entirely due to the fact that we’ve made more money than the workers in developing nations, and we have historically had a much healthier middle class.

Free trade should exist when another country can grow or manufacture a product which we cannot produce ourselves (due to lack of natural resources, geography, climate, etc.), or where they use far fewer resources than we would for the same outcome — same quality, lifespan, etc.

I support fair trade where we trade with countries who share the same environmental and labor protections that we have, and where labor and consumers actually benefit from the trade.

If we allow the middle class to implode, then who is expected to buy from all of those corporations that have excess supply capacity, but no demand? Do they honestly expect the third-world slaves who earn $500/year to take our place? We need to bring them UP to our standards, not bring ourselves down to theirs.

The credit bubble has masked our declining purchasing power for a long time, and this credit crisis was a very obvious outcome of what’s transpired over the past few decades when corporations were allowed to take total control of our government and financial system.

[sdrealtor]

[quote=CA renter]
For instance, which is better:

-a well-built product that is three times as expensive, but last five times as long

OR

-a cheaply-made piece of plastic garbage that is one-third of the price, but has to be entirely replaced five times as often?
[/quote]

When its the toys my kids play with and lose interest in after a few months, the clothes they quickly grow out of, the electronics that become functionally obsolute in a couple years I’ll take the later everytime. When its the car I purchase and own for 10+ years, the applainces for my home or the furniture in my house I’d be more likely to go with the former.

[sdrealtor]

[quote=CA renter]
For instance, which is better:

-a well-built product that is three times as expensive, but last five times as long

OR

-a cheaply-made piece of plastic garbage that is one-third of the price, but has to be entirely replaced five times as often?
[/quote]

When its the toys my kids play with and lose interest in after a few months, the clothes they quickly grow out of, the electronics that become functionally obsolute in a couple years I’ll take the later everytime. When its the car I purchase and own for 10+ years, the applainces for my home or the furniture in my house I’d be more likely to go with the former.

[sdrealtor]

[quote=CA renter]
For instance, which is better:

-a well-built product that is three times as expensive, but last five times as long

OR

-a cheaply-made piece of plastic garbage that is one-third of the price, but has to be entirely replaced five times as often?
[/quote]

When its the toys my kids play with and lose interest in after a few months, the clothes they quickly grow out of, the electronics that become functionally obsolute in a couple years I’ll take the later everytime. When its the car I purchase and own for 10+ years, the applainces for my home or the furniture in my house I’d be more likely to go with the former.

[sdrealtor]

[quote=CA renter]
For instance, which is better:

-a well-built product that is three times as expensive, but last five times as long

OR

-a cheaply-made piece of plastic garbage that is one-third of the price, but has to be entirely replaced five times as often?
[/quote]

When its the toys my kids play with and lose interest in after a few months, the clothes they quickly grow out of, the electronics that become functionally obsolute in a couple years I’ll take the later everytime. When its the car I purchase and own for 10+ years, the applainces for my home or the furniture in my house I’d be more likely to go with the former.

[Author]

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