The Taxcuts Are Working - REALLY!!!!!

In India and China!

The company announced it would cut 10,000 more white-collar positions in addition to offering buyout and early retirement packages to all of its 75,000 hourly employees. It also suspended its dividend.

Wall Street seemed unimpressed. Ford's shares slumped nearly 12 percent amid disappointment that the automaker didn't do more to address rising health and pension costs, falling market share and intense competition from Asian manufacturers whose models have enthralled buyers looking for gas-sipping cars and trucks. Read Story:

As President Bush would say: "The economy is strong and getting stronger".


Cato said...

People loosing their jobs is not necessarily bad for the economy. In the case of Ford, here we have people who are overpaid who put out a lackluster product. Of course, it's fine if someone puts out substandard cars. Someone has to fill that niche, might as well be Ford. But they do not have to be overpaying their employees. Clearly those jobs were not needed by Ford and keeping them around would be bad news for Ford.

When the telephone replaced all those telegraphers -- who at one point were the most sought after 'professionals' -- did the economy suffer?

No. Thousands lost their jobs and the economy and life got better. Progress is great.

666 said...

Jobs come and go and people need to understand that they get no guarantee. See the above post of Michiganers moving to Wyoming. If you work for Ford and haven't noticed the writing on the wall for the past couple of decades, you better start reading. Likewise, there maybe a long distance moving van in your future.

Maybe Hollywood is remaking the Grapes of Wrath...the Gripes of Latte.

AndyRand said...

You two must have really secure jobs!

CATO to say that the economy will not suffer because of the loss of 73,000 jobs is simply silly. Those wages are recirculated through local enonomies multiple times. The ripple effect of these layoffs is going to mean less profit by companies these employees did business with prior to the layoffs and a decrease in demand from 73,000 customers.

These workers are not the ones responsible for producing an inferior product. Look to the policy makers at Ford who bet on selling gas guzzling trucks while Toyota was looking to the future developing hybrid technology. Their short sightedness and the constant eye to please Wall Street's next quarter expectations is where the blame belongs.

666 said...


We are talking about businesses here. Suppose a restraunt opens in town. Waitrons and dishwashers are hired. The owners of the restraunt don't know squat about running a restraunt and in a year the restraunt closes. The dishwashers and waitrons lose their jobs. Maybe the lose their jobs, even though they are the best waiters and waitrons in the universe. They lose their jobs because of bad management.

Likewise, say the freeway comes by a different part of town and diverts all the traffic away from the restraunt and the business volume drops to a level where even the best manager in the universe can't make a go of it.

The reality is you get not guarantees with you job. This is a basic reality that businesses face. Who do you know that's a telephone operator today? Back in the 60s looks of girls graduated and went to work as operators. Those jobs are go. Technology changed.

do you think Ford should keep these workers employed sweeping the idle factory floors till they are eligible to retire?

AndyRand said...


I think the point of the post is that Bush sold the taxcuts to the middle and lower classes because with all that capital available for investment all these new jobs were going to be created. Where was that capital invested, China and India where the cost of labor is a fraction of that in America. So now with those revenues gone we have record deficits to finance a war in Iraq. Add to that, the same people who got the hugh tax cuts lining up at the trough to get a "cut" of the action to build things like a cell phone network for a country that doesn't even have electricity 24/hrs/day.

Back to taxcuts "stimulating" the economy. 73,000 job losses don't stimulate anything. The Borrow and spend supply side economics of this administration is an abismal failure
there is no other way to describe it. The Mom and Pop restarurant analogies just don't cut it when you're comparing it to huge corporations.
Why are companies like Northwest and Ford all of a sudden loosing billions/year? The only thing I can imagine is oil prices coupled with an administration that is extremely favorable to union busting.

666 said...


When did the airtraffic controllers loss their job? Under Reagan.

The buyout at Ford was engineered with the help of the union. If I recall correctly, Ford was making big SUV's while Clinton was in office. Since Ford has been losing its assets for a number of years, I'm not sure that Bush tax cuts are a major factor, i.e., when sales are less thean expenses you have an outgo not income. Ford's problem has been mounting for three decades.

Back to the restraunt analogy. Would you want the government to prop up the restraunt just to keep people emplyed? Why do that, we new restraunts are being built are the new interstate exchange? The waitrons and dishwashers can move to the new location.

My immigrant ancestors move to this country because there were no jobs in Ireland or farm land in Sweden. I supposed they could have stay over there and starved to death.

What should Ford do? Government bailout? Buy more brooms?

AndyRand said...

Gov. buyout, seem to work for Chrysler didn't it?

I guess we could all move to China and India that's where the jobs are. Do you speak Chinese?

666 said...


Was it a government buyout or bailout? It seemed to work for awile. Who owns Chrysler now? Isn't that the VW guy on the commercials?

Would a gov't bailout keep jobs from going to China? Most Ford's are "assembled in America" today. Are you seeing we bailout Ford to prolong it's life or to enable it to be more competitive in the future?

Lets say you be the CEO for Ford in 1974, 1981, 2004-6 when gas prices skyrocketed and they were left standing there with only gasguzzlers and a limp dick excuss for mismanagement. Wouldn't you have been thinking small cars and fuel economy? Or would you blame it on the Chinese? Ford is in a tough spot and the medicine isn't going to be easy to swallow. Those Ford people that need to find jobs with find them and that for them individually isn't going to be easy to swallow.

I'm not sticking up for corporate mismanagement or trying to put down the unions. Hindsight and $3.50 will get you a latte at Starbucks. The writing has been on the wall for a long time.

Cato said...

I agree with 666; this has been a slow train coming for Ford. They are now a niche market. "American made" cars are not "better" but I can see why certain people want them (the factor that comes into my mind is getting parts, but that's about it).

Want an American made car? Buy a Toyota. Japan outsourced to America.

You do not own your job. Once people realize that it's a lot easier. Your employer owns your job and you are there to do work for him. If your employer is being run into the ground keeping you and 72,999 fellow workers around, then he can get rid of your job. As unfortunate as it is for you (you will be gettting unemployement and I'm sure all sorts of deals from Ford for years to come as Ford it seems feels bad for these workers and actually cares) you can get another job. Maybe you won't be making huge sums of money as you did at Ford but I know hard working Americans who lost their jobs can find work in a virtually full employment economy (it's under 5 isn't it?).

jpn said...


You and 666 have out lined the reason why the majority of Americans prefer a mixed economic model where there is more security for the working people. That's why the Bush push to revamp social security failed. A vast majority of Americans might be asleep at the wheel, but they at least have the instincts to jerk the wheel away from the likes of Bush and his incompetants.

Maybe these sleepers will actually wake up and realize the power of the ballot box. The more they sleep, the more they lose. You don't like a progressive tax structure, but I do. The more you make, the greater your ability to tweak the system to your fanancial advantage. You can see that in the Bush tax cuts. They don't benefit the lower brackets.

Cato said...


Bush's revamp of SS failed because people love the word "Security". But the fact of the matter is it secures no one and merely takes money and puts it to the equivalent of in a matress, which is then taken to pay off all sorts of other debts.

Yes, you are right. Most people would rather be secure than free.

However, this is completely irrelevant to the conversation as to whether or not "job security" is good or bad for the economy. Also irrelevant are your citicisms of the Bush tax cuts -- which cut taxes on those who pay the most and continue to do just that (how much blood do you leeches want?) as we march ever nearer a society where less than half of the country pays taxes (then all is lost, IMO). You can't very well give tax cuts to people who don't pay taxes (although, amazingly enough -- BUSH did; "tax returns" for them = redistribution from the top who pay most all of the taxes).

jpn said...


The reason that SS stuffs money in the proverbial mattress is because politicians are not responsible for the long run. They are concerned with the short run. It's just like underfunded petition plans. You should be talking actual dollars in the bank not mixed in smoke-n-mirrored haze of politcal-corporate copulation going on in front of the ingnorant masses who think they know which shell their security is under -- but hey don't bother them Survival is on.

The issue of telephone jobs certainly struck the fear of insecurity of tens of thousands of families. Was it there fault that shit happens? Was it Paris Hilton's fault she was born Paris Hilton? Should Paris Hilton pay a hire rate of tax than Pete the dishwasher? I think so. Progressive taxes help redistribute the wealth to the lower levels and helps put the air of hope into the future of the disadvantaged.

Progress is great, but not at the expense of raping the the environment and threating the lower rungs on the economical ladder as boot scrappers for the rich, powerful and lucky.

Cato said...

I see -- so JPN, I assume you favor outlawing the tractor to keep everyone employed, correct? Rolling back the telephone to the telegraph, so we have more jobs?

Yes, it was not their fault that someone else invented the telephone. You're right. It wasn't. But why is that my concern? Any reason?

Also, as stated before, this does not really factor in to the discussion as to whether or not loosing or keeping jobs helps the economy. Everyone having a job (as we all would if we would only outlaw the tractor) is NOT necessarily good for the economy and, many if not most times it is not (as with the tractor example).

jpn said...


Although I've read up on them, I've never been a fan of the Luddites. I don't think you can every really put the tecnical/ecnomical genie back in the bottle. When ever I heard somebody say "It ain't like it used to be." My response is "Is that good or bad." Nobody really has an quantified answer. The past is a know commodity where familiarity aloows for a certain comfort level. The future is unknown and that where the stress from heading into uncharted waters slashes of the bow of our comfort zone.

On the other hand, I root for a rather extensive social safety net that stretches aways over the abyss. I don't like the idea of working America to be walking into the fog with a the cliff of uncertainty looming ahead. But then again, people need to take responsibility for their future.

Is it better to provide government retraining money before you lose your job or after? Do we provide a safety net that slopes at a downward incline from the edge of the cliff? If so, how steep is the incline?

You can call this "socialism" and it doesn't bother me a bit. However, it's not Communism. If it's ok to have jobs curning from within the ecnomy, it thinks it's necessary to have wealth recycling with in the economy. That recycle would tend to go from the top to the bottom and that requires progressive taxation and social programs.

AndyRand said...

CATO said:

"Also irrelevant are your citicisms of the Bush tax cuts -- which cut taxes on those who pay the most and continue to do just that (how much blood do you leeches want?) as we march ever nearer a society where less than half of the country pays taxes (then all is lost, IMO). You can't very well give tax cuts to people who don't pay taxes (although, amazingly enough -- BUSH did; "tax returns" for them = redistribution from the top who pay most all of the taxes)."

Irrelavent? why? Did you read the title of this post? Again these tax cuts were sold as a vehicle to create jobs, THEY HAVE NOT (shouting for emphasis only).

As far as buying an "American " car, there is no such thing. The parts for these cars have been made all over the world for decades. That's on reason I don't feel guilty driving a Japanese car. They actually run and have twice the life of "American Cars", and it's not because a chump on the Toyota assembly line did a better job than one on the Ford line. It's because or the superior R&D and engineering.

As for "redistribution from the top who pay most all of the taxes". You've got to be kidding? These are the people who can afford to find investments that loose money in order to save on taxes. These same people can afford Tax attourneys who know every loophole available, and the same people who buy Congressmen to right the loopholes for them.
Give me a break CATO, none of thes top money makers are bleeding to death, they barely have a paper cut.
It's the middle class whose throat is being slashed.

Cato said...

Andy -- what do you mean "they have not"? I don't care how tax cuts were "sold" to be frank, but even then, the unemployment in this country is where it should be. Until the 1990s, 5% unemployment was viewed as "full employment" (it was changed to 4.5% I believe) and what we have now is a little under 5. So what if Ford cut jobs -- it's only one company.

As for the rich, their welfare does indeed trickle down. The rich are rich because they are movers of the world and to remove their riches and give them to people who do nothing but drag the world down is a terrible idea.

You are right -- the rich are the most mobile class. Lowering taxes by a small amount increases tax returns because of the rich who stop shielding wealth from the government. They run a quick cost benefit analysis and with lower tax brackets they are more inclined to not run the risk of being imprisoned and their lives taken away from them. But if you demand more and more out of them they will shrug you off and leave for freer shores. This is a reason I am in favor of an inrterim flat tax which everyone pays, from the minumum wage earner to Bill Gates, the same percent of thier wealth. There is no loopholes. Nothing for charitable giving. Nothing for having kids. Just a (low) flat tax that everyone pays the same percent. The tax cose is so complex most people do need accountants to take care of it. But taxes already employ enough people at the IRS accountants should get other jobs and taxes should be simple and barely noticable.

AndyRand said...


You are sooooo brainwashed!

I don't believe you really buy the trickle down theory.

As for wealthy "taxpayers". The should fear not.

"The federal government is moving to eliminate the jobs of nearly half of the lawyers at the Internal Revenue Service who audit tax returns of some of the wealthiest Americans, specifically those who are subject to gift and estate taxes when they transfer parts of their fortunes to their children and others, The New York Times reported Sunday."


With the Bush admin's wolves in the henhouse tax cheats are having a fielday.

As far a flat taxes. How are small business owners going to deduct for legitimate business expenses?

70,000 high paying jobs lost is significant, especially for one company.
Nothing to be Thankful For:
Tax Cuts and the Deteriorating U.S. Job Market


linked from

“Tax cuts create jobs” is a great sound bite that unfortunately does not
hold true in the real world economy. Tax cuts disproportionately giving
public dollars back to the rich foster economic disparity. And overly
exuberant tax cutting often creates government defi cits sizeable enough
to create an undue burden on the next generations. Except for those on
the very highest rungs of the economic ladder, if anything is trickling
out of today’s tax cut policies, it’s increased economic insecurity.