Monday, January 28, 2008

Money From Helicopters

The title of the post of course refers to Fred Thompson's quip that the government sending checks out to taxpayers was about as effective as dumping money out of a helicopter. The whole thing reminds of how a medieval potentate might go through the city dumping out coins from the back of his carriage in order to increase his appeal with the rubes (from whom he had taken the coins from to begin with).

Anyway, on to stories of hilarious economic ineptitude!

From the 'be careful what you wish for' file:
IBM in recent months has been hit with lawsuits filed on behalf of thousands of U.S. employees who claim the company illegally classified them as exempt from federal and state overtime statutes in order to avoid paying them extra whenever they worked more than 40 hours per week.
The good news for those workers is that IBM now plans to grant them so-called "non-exempt" status so they can collect overtime pay. The bad news: IBM will cut their base salaries by 15% to make up the difference, InformationWeek has learned.
A while ago I worked for a consulting firm and they would occasionally have 'off-hours' work, the type of which you knew the firm was charging an astronomical one and a half times our already high per hour consulting fee (which we rarely, if ever, knew). They would ask us if we wanted to come in and work on a Saturday or something to which we would ask "Payin' us overtime?". At this point our illustrious employer would say "you're exempt so we don't have to pay you overtime". And of course it was at this point we plainly stated "then we're not showing up, good luck gouging your customer with no employees".

I guess IBM's previous solution was to pay a premium for their consultants, consultants who apparently forgot that, excepting law firms, there's hardly a less ethical business than a technical consulting firm.

Meanwhile on ABC's newscast Thursday night a reporterette lamented the lack of extended unemployment benefits in the economic stimulus package because 'economists' said that every dollar sent out for unemployment benefits generates $1.70 in economic activity. The obvious solution then is to have us all be unemployed! Idiots like this are a walking case study as to why American colleges are completely worthless in turning out educated Americans.

More points on the stimulus pacakge from here:
But critics say rebates didn't fix the last eight recessions.

"Giving money to people in exchange for doing nothing, the rebate issue, is the worst part of the plan," said Bill Niskanen Chairman of CATO Institute. "They provide no incentive for increased output, work savings, productivity."
During the ABC newscast I mentioned above, Mrs. Sandmich said quipped that it might be worth shoving that cash into a CD, at which point the newscaster said that you'd be letting your country down if you didn't blow that money on needless frivolity; nice*.

Another part of the stimulus package is bogus tax cuts to businesses to encourage them to purchase equipment. My boss said that the main motivation is probably to have factories order manufacturing machines, and we all had a good laugh at that since only Germany and Japan have the mad skillz to turn that type of equipment out. Then I figured that businesses would just purchase machines that reduce their human headcount, eliminating one more idiot who will injure themselves so that they can go on disability for life. However, the big boss pointed out that a big reason for the tax break is so that businesses will buy equipment now that they planned on buying a year or two down the road anyway; thus punting the issue to a different congress.

Elsewhere Bill Gates, previous president of the world's largest technical consulting firm, was making an idiot of himself:
Mr. Gates isn't abandoning his belief in capitalism as the best economic system. But in an interview with the Journal last week at his Microsoft office in Redmond, Wash., Mr. Gates said that he has grown impatient with the shortcomings of capitalism. He said he has seen those failings first-hand on trips for Microsoft to places like the South African slum of Soweto, and discussed them with dozens of experts on disease and poverty.
This grates me all the more since Mr. Gates has personally improved the worth of untold millions of people, myself included, with his capitalistic abilities. If he's really looking to improve the lot of the worlds poor, they need more of what works and less of what doesn't; and it would seem that what he's pitching "doesn't", like Vista...

More here:
Adam Smith, the father of modern capitalism, figured this out more than 200 years ago when he wrote: "By pursuing his own interest, (a businessman) frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good."

*I own a disk of an anime that depicted a dystopian future where the leaders stress consumerism above all else and people walking home were subjected to frequent appeals to purchase something, or anything.

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