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I read through the article, and I read through the comments here, and I did some online searching for other writings by the same author as the opinion essay kin

I read through the article, and I read through the comments here, and I did some online searching for other writings by the same author as the opinion essay kindly submitted here. The author describes himself as an "entrepreneur," but I haven't yet found some detailed sources about how his business ventures were formed or funded. I have found some strong criticism of his basic understanding of economics. As for the law on the topic, the author may be correct that the President acting alone can use executive authority under established law to let the income threshold for mandatory overtime pay rise. I haven't checked whether or not that is entirely in the hands of the President under current United States law. If so, then the only politics around the issue would be the politics of what an incumbent President already in the second half of his second term (a "lame duck" President) thinks is an appropriate response to this issue among all the other issues he is dealing with. What I don't know here for sure is how much any of this would matter economically to most people. Neither my wife nor I are employees of anyone (we both work as sole-proprietor business owners). We can work as many hours as we can stay awake without gaining overtime pay. What I hear about more often in the United States economy than employed wage-earners not being paid overtime is employed wage-earners not being offered even full-time hours, because shorter hours remove a requirement to provide employee health insurance benefits for many employers. I'm not at all sure what the author advocates here would have a big beneficial effect for the economy in general or for workers now working overtime in particular. Demand for labor working under any particular schedule is elastic, and maybe the proposal here will just result in fewer working hours being offered per employee.

sergiosgc 12y ago
> I'm not at all sure what the author advocates here would have a big beneficial effect for the economy in general or for workers now working overtime in particular. The author does a poor job explaining the macro-economic effects. You get a glimpse of the reasoning in the last few lines, where he states that the ratio of corporate profits over GDP doubled, from 6% to 12% of GDP from pre-80s to nowadays. We[1] have a problem with wealth distribution. I don't draw this problem in terms of fairness, because the concept of fairness is different from an individual to the next. We have a problem of income distribution that goes beyond the notion of fairness, becoming serious enough to be a menace to the stability of capitalism. A balanced economy has a thriving consumption component, which creates demand, and a thriving investment component, which drives supply. These go hand in hand. If there is too much demand, and investment falters, you get high inflation economies. However, if you get too much investment and demand falters, you suddenly have no investment opportunities and you get a slew of ill effects as capital is trying to find out where it can get returns. The most visible such effect is the appearance of investment bubbles and the crashes when these burst. People easily recognize the problems of investment-starved economies. The common citizen does not recognize the problems of demand-starved economies, because these are new. Here, we can witness first hand how young economic science is. Inflationary effects on supply starved economies were the norm in the XX century, so these are very well studied. Demand starved economies? Not so much. The US and the EU are the first ones (possibly, in a slightly different fashion, preceded by Japan). The causes for this do not lay squarely on politicians. It's easy to take a passionate view and find a target to blame. That is not the case, however. The current demand starved economy is caused by a big mix of factors. I've never ran the numbers, so take my opinion with a grain of salt: I'd wager the two biggest factors are: 1. Technological evolution, which increases demand while causing a deflation of costs (and consequently, on the circulation speed of money) 2. Globalization. We have moved a great deal of added value to developing countries, namely in the East. If Japan can be used as an example of what to expect, it will take two generations for demand to occur there. The globalization question is specially problematic. Not because there aren't enough resources for everyone. It is problematic because China is huge. The delay in consumption increase, coupled with huge inertia, can destroy western economies. The technological question is important, but it has been with us ever since the industrial revolution. We have been able to cope with it, and the same methods should apply. [1] I'm European. We are, however, in the same boat as North Americans in this problem, with slightly worse politicians. Europe is politically led by Germany. Historically, Germany is prone to fear investment starved economies so they are profoundly erring on identifying the issues and correctly acting).
- alexhill 12y ago
  > The author does a poor job explaining the macro-economic effects. You get a glimpse of the reasoning in the last few lines, where he states that the ratio of corporate profits over GDP doubled, from 6% to 12% of GDP from pre-80s to nowadays. That's the last few lines of the first of three pages. I made the same mistake at first.
  - sergiosgc 12y ago
    Oops. Thanks for the heads up.
raarts 12y ago
There are many things that we cannot be sure about. But I do share his concerns. If wealth inequality keeps growing, this will inevitably lead to social unrest. And shrinking wealth for the middle and lower classes will deprive many companies of their customers. Or will the top 1% only sell their stuff to each other?
- intended 12y ago
  Well it's quite possible the top 1% are already selling to each other at huge scales through the firms they own. What really helps is being able to capture new efficiencies uncovered by innovation.
- maerF0x0 12y ago
  The 1% will trade our labor back and forth to their gain in a cycle. Eg: a rich person will trade $100 for house cleaning service (basically costs lower/middle class time) for some other service (Casino black jack dealer?). In this way they can both experience the services produced by the lower/middle classes w/o degrading their total holdings. Plus, if they own the things the lower and middle class spend their income on then any money that does trickle down will eventually end up as revenues on the books of an asset they own (walmart or a utility for example). IMO the best ways to break these cycles is to try and buy things from people poorer than you and to try and own as much of the economy as you can. The middle class could buy up much of the economy with little effort-- If 100m people spent ~$3k each they could buy walmart instead of outfitting a home theatre with 60" tv, ps4, accessories and a couch. There'd be some amazing change in america if this kind of thing started to happen. Of course its like all changes though, its hard to get the masses to do anything in unison.
wyldfire 12y ago
> I have found some strong criticism of his basic understanding of economics. Does anyone know what proponents of stock buybacks would say in response to his arguments? Given the downsides, why is it appropriate/fair/legitimate?
thirdtruck 12y ago
> What I hear about more often in the United States economy than employed wage-earners not being paid overtime is employed wage-earners not being offered even full-time hours, because shorter hours remove a requirement to provide employee health insurance benefits for many employers. As someone in the States, that arbitrary cut-off drives me nuts. I would much rather have scaled benefits, all derived from formulas.

sergiosgc 12y ago

> I'm not at all sure what the author advocates here would have a big beneficial effect for the economy in general or for workers now working overtime in particular. The author does a poor job explaining the macro-economic effects. You get a glimpse of the reasoning in the last few lines, where he states that the ratio of corporate profits over GDP doubled, from 6% to 12% of GDP from pre-80s to nowadays. We[1] have a problem with wealth distribution. I don't draw this problem in terms of fairness, because the concept of fairness is different from an individual to the next. We have a problem of income distribution that goes beyond the notion of fairness, becoming serious enough to be a menace to the stability of capitalism. A balanced economy has a thriving consumption component, which creates demand, and a thriving investment component, which drives supply. These go hand in hand. If there is too much demand, and investment falters, you get high inflation economies. However, if you get too much investment and demand falters, you suddenly have no investment opportunities and you get a slew of ill effects as capital is trying to find out where it can get returns. The most visible such effect is the appearance of investment bubbles and the crashes when these burst. People easily recognize the problems of investment-starved economies. The common citizen does not recognize the problems of demand-starved economies, because these are new. Here, we can witness first hand how young economic science is. Inflationary effects on supply starved economies were the norm in the XX century, so these are very well studied. Demand starved economies? Not so much. The US and the EU are the first ones (possibly, in a slightly different fashion, preceded by Japan). The causes for this do not lay squarely on politicians. It's easy to take a passionate view and find a target to blame. That is not the case, however. The current demand starved economy is caused by a big mix of factors. I've never ran the numbers, so take my opinion with a grain of salt: I'd wager the two biggest factors are: 1. Technological evolution, which increases demand while causing a deflation of costs (and consequently, on the circulation speed of money) 2. Globalization. We have moved a great deal of added value to developing countries, namely in the East. If Japan can be used as an example of what to expect, it will take two generations for demand to occur there. The globalization question is specially problematic. Not because there aren't enough resources for everyone. It is problematic because China is huge. The delay in consumption increase, coupled with huge inertia, can destroy western economies. The technological question is important, but it has been with us ever since the industrial revolution. We have been able to cope with it, and the same methods should apply. [1] I'm European. We are, however, in the same boat as North Americans in this problem, with slightly worse politicians. Europe is politically led by Germany. Historically, Germany is prone to fear investment starved economies so they are profoundly erring on identifying the issues and correctly acting).

alexhill 12y ago
> The author does a poor job explaining the macro-economic effects. You get a glimpse of the reasoning in the last few lines, where he states that the ratio of corporate profits over GDP doubled, from 6% to 12% of GDP from pre-80s to nowadays. That's the last few lines of the first of three pages. I made the same mistake at first.
- sergiosgc 12y ago
  Oops. Thanks for the heads up.

raarts 12y ago

There are many things that we cannot be sure about. But I do share his concerns. If wealth inequality keeps growing, this will inevitably lead to social unrest. And shrinking wealth for the middle and lower classes will deprive many companies of their customers. Or will the top 1% only sell their stuff to each other?

intended 12y ago
Well it's quite possible the top 1% are already selling to each other at huge scales through the firms they own. What really helps is being able to capture new efficiencies uncovered by innovation.
maerF0x0 12y ago
The 1% will trade our labor back and forth to their gain in a cycle. Eg: a rich person will trade $100 for house cleaning service (basically costs lower/middle class time) for some other service (Casino black jack dealer?). In this way they can both experience the services produced by the lower/middle classes w/o degrading their total holdings. Plus, if they own the things the lower and middle class spend their income on then any money that does trickle down will eventually end up as revenues on the books of an asset they own (walmart or a utility for example). IMO the best ways to break these cycles is to try and buy things from people poorer than you and to try and own as much of the economy as you can. The middle class could buy up much of the economy with little effort-- If 100m people spent ~$3k each they could buy walmart instead of outfitting a home theatre with 60" tv, ps4, accessories and a couch. There'd be some amazing change in america if this kind of thing started to happen. Of course its like all changes though, its hard to get the masses to do anything in unison.

wyldfire 12y ago

> I have found some strong criticism of his basic understanding of economics. Does anyone know what proponents of stock buybacks would say in response to his arguments? Given the downsides, why is it appropriate/fair/legitimate?

thirdtruck 12y ago

> What I hear about more often in the United States economy than employed wage-earners not being paid overtime is employed wage-earners not being offered even full-time hours, because shorter hours remove a requirement to provide employee health insurance benefits for many employers. As someone in the States, that arbitrary cut-off drives me nuts. I would much rather have scaled benefits, all derived from formulas.