Wednesday, June 8, 2011

Revelations Regarding Haiti Pending

Thanks to Wikileaks a series of articles detailing Washington's actions towards Haiti is pending. This is via The Nation. One interesting nugget is that when Haiti passed a minimum wage increase, going from 26 cents an hour to 61 cents an hour, contractors for American corporations Hanes and Levi-Strauss were furious. The Obama administration responded aggressively and successfully. You get 5 cents and no more. So now it's 31 cents an hour.

The legislation would have cost Hanes a whole $1.6 million/year. That's just too much. They'd have to close up shop. So I suppose Obama's efforts are about being merciful. Meanwhile the CEO of Hanes, Richard Noll, made $10 million last year.


HispanicPundit said...

I'm curious Jon: do you agree with the economic claim that more corporations operating in Haiti, the better?

Jon said...

It can be better or worse depending on a lot of conditions.

HispanicPundit said...

I'm not trying to be sly here, I just want to know your fundamentals.

When lefties talk to righties the assumption usually tends to be (I think, dont know for sure, since I'm not a lefty) that righties are ideologues. People who put ideology over facts. Basically religiously in favor of free markets, no matter what the circumstances. Am I right?

When righties talk to lefties, the assumption is different. It's usually that lefties are economically ignorant. Lefties don't know the economic facts. Idealists with no grounding in reality. Economics and the path towards prosperity, is not intuitive. It takes training. So if you come at it from a non-trained eye, your conclusions, moral revulsions, etc will tend to be counter to what would move a society out of poverty.

In fact, pioneering research by one of my favorite economists has shown that the instincts of the non-trained person is in fact counter to economics, fundamentally so, and you would have to work against that instinct (see here for a great overview) to properly arrive at beneficial policies.

So this point in Paul Krugman's article in defense of sweatshops needs to be heeded, before you start making moral pronouncements:

Such moral outrage is common among the opponents of globalization--of the transfer of technology and capital from high-wage to low-wage countries and the resulting growth of labor-intensive Third World exports. These critics take it as a given that anyone with a good word for this process is naive or corrupt and, in either case, a de facto agent of global capital in its oppression of workers here and abroad.

But matters are not that simple, and the moral lines are not that clear. In fact, let me make a counter-accusation: The lofty moral tone of the opponents of globalization is possible only because they have chosen not to think their position through. While fat-cat capitalists might benefit from globalization, the biggest beneficiaries are, yes, Third World workers.

So let me ask you this Jon: Do you agree with the premises in Paul Krugmans article? Do you agree that under the right circumstances, more corporations leads to greater prosperity? I'm just trying to make sure you understand some fundamentals here before we move on.

Chad said...

I just find the whole arguement laughable. While Jon and all his Progressive buddies continue to try and push all of their bad policies on everyone the rich just keep getting richer and the seperation from those who have to have not continue to grow.

Jon you realize of course that you and all the progressives are getting played - if you really cared about the poor, really wanted to end poverty or unemployment you would want the minimum wage to be abolished, you would want to lift all of the crazy regulations, you would want to pray at the alter of free market and capatilism.

You've tried - unsuccessfully I might add - to tell us why the rich continue to get richer and how they hate the poor and so on and so on, but what is odd is that you can't see that the Democrats/Progressives are helping them to do that - when you add regulations, when you add costs to labor, when you take money that is not yours - you simply make it that much harder for competition. Yes you heard me right - if you truly want to take from the rich then make it easier for new businesses to compete.

Just like this argument here, so the minimum wage goes up which makes you happy because it supports your thinking, but lets break it down. The affect here will go like this - Levi isn't going to give away $1.2 Million bucks - period. So they probably already had a meeting to fire X number of employees or to move parts of their fabrication to a lower cost solution, maybe they will cut benifits for their workforce, maybe the decide that they are not buying company cars for another 2 years for their sales staff or they simply make each pair of jeans cost $.50 more.

All the affects caused by people like you artificially inflated labor or creating regulations or taxing or stealing or mandating.

It is mind blowing that the Democrats/Progressive can't take real inventory on what they are doing to the people they believe they are helping. Your got your $.05/hr raise in a place that 99% of Americans care nothing about at the cost of American Jobs and money - good job.

The rich understand the game and although they hate the democrates/progressives publicly behind closed doors they are laughing because every move your group is making just helps them to strengthen their market position.

You won't admit it, but the progressive movement is completely backwards and your policies and ideas destroy competition giving the rich, established 1% a bigger piece of the pie every year.

Sheldon said...

I wanted to make a comment of my own, on this topic, but have no time.
Hispanic Pundit and Chad see neo-liberal economics almost as a religious dogma, and nobody should question the authority of the capitalist market. For some good reads against the thinking I would suggest the work of Michael Perelman. Railroading Economics is an earlier title of his, I just received this title which also is excellent:

You can hear interviews with him linked at his blog also. (although he doesn't interview well in my opinion)

HispanicPundit said...

Sheldon confirms my earlier point. :-)