Out-of-state welfare money being used around Orlando attractions

Lord Gonchar said:

I'm a very 'leave the economy do its thing' kind of guy. :)

So you're one of 'em 'lazy fairy' types I keep hearin' about. ;)

Nice.

I just read this story and figured it was relevant to the conversation here. Looks like some outstanding capitalists figured out how to get the government to supply them with free labor and $500,000 a year.

CP Chris said:
I just read this story

Ok, I have to. I wasn't going to, but I gotta.

Quotes from the article:

The federal government requires Macy and the 214,000 other Ohioans who receive cash assistance to work at least 30 hours a week, even if it is doing work like bagging cotton swabs.

Oh, the horror!

(wording like that invalidates any credibility the article may have had)

"(The) job skill classes are a joke because you don't get nothing out of them," said Macy. "I felt like it was a waste of time."

Yeah. Why do I have a feeling this says more about the participant than the program?

The representatives did confirm these companies are receiving workers for "free," but the organizations have to maintain requirements for that help.

This is buried at the end...after paragraphs full of allegations and innuendo.

Are we really complaining that a company is offering work-for-welfare, but not the work/training that people want? I suppose no welfare is always an option.

Yeah, that's what I thought. Get back to the Q-tips, Macy.

I just think it's interesting that, under the guise of "job skill classes" they're able to obtain free workers on the taxpayer dime, and then be paid for their "services" on top of it, also on the taxpayer time, then turn around and sell the product they just got paid to produce. If you're going to be opposed to the people getting the assistance, shouldn't you be opposed to the company taking advantage of it as well?

I have no problem with the people being made to work for their money as long as they are able-bodied. But doing it under the false pretense of "teaching them necessary job skills" is a bit of a sham, and in the case of this story, seems to just be a way to take advantage of people and the government. Put them to work learning a trade, or learning how to use a computer, or something else that's actually useful in the modern workplace. Not as assembly line workers when our manufacturing industry has already disappeared.

CP Chris said:
If you're going to be opposed to the people getting the assistance, shouldn't you be opposed to the company taking advantage of it as well?

Yes, but I don't believe they are in this case. The last little afterthought paragraph of the article covers that:

"The representatives did confirm these companies are receiving workers for "free," but the organizations have to maintain requirements for that help."

If they're meeting requirements set forth, then the problem is with the system. (and I do believe the system is broken for lots of reasons)

But doing it under the false pretense of "teaching them necessary job skills" is a bit of a sham, and in the case of this story, seems to just be a way to take advantage of people and the government.

Key words: "in the case of this story"

Is the lack of job skills because of what is going on (or rather what's not going on) or is it presented that way by two people they talked to who feel like they haven't learned anything? In this case, I have a gut feeling it's the latter.

Put them to work learning a trade, or learning how to use a computer, or something else that's actually useful in the modern workplace. Not as assembly line workers when our manufacturing industry has already disappeared.

This is just more complaining about assistance. I'll never get behind that.

"I want help, but not THIS help."

+1. Besides, Macy even says she got something out of the job skill classes. Although it's not really clear what's so funny about them...

"(The) job skill classes are a joke because you don't get nothing out of them," said Macy.

+2

Not much to add to the abuse of government generosity debate.

Consolidation happens in every industry over time, so I'm not at all surprised to see the bank acquisitions.

Not in the automobile industry. Many of us believed, and still believe that a standard bankruptcy was the proper course for GM (possibly Crysler too). GM, by many accounts, is already back to its old ways. They have too much inventory. Their profitable vehicles are the gas guzzlers the current administration disincentives. Their labor contracts are a net drag on profitability. Simply put, GM has a model that does not work in the market. The market should have been allowed to correct this inefficiency via consolidation...which is exactly what would have happened had the government stayed out of it.

Nobody argues that the government is not capable of artificially propping up ANY company with 50-60 billion in taxpayer funds. If I sold mud pies, I could show you a quarterly profit if the government subsidized me 50-60 billion. The question is why?

If the bailout of the automobile industry was a good move...why not repeat it everywhere? Shouldn't volume bailouts produce even more prosperity? I think we all know the answer to that.

Now the taxpayer is on the line for billions (more than a "few") in losses. GM operations, while better than before, are not competitive with Hyundai, Kia, etc. Five years down the road we are still not certain GM will not get "consolidated."

Knowing this...watch the upcoming election cycle. Many politicians will claim that monthly quarterly profit statements are proof that their giant corporate welfare scam was successful. The taxpayer loses 20-60 billion (depending on who you believe) while GM claims 1-5 billion quarterly profits. All while GM is not paying tax revenue it otherwise would have had to IF they had followed the law and filed standard bankruptcy.

Joe taxpayer gets screwed by individual and corporate welfare every day. Any wonder we are 15 Trillion down?

Aamilj said:
GM, by many accounts, is already back to its old ways. They have too much inventory.

It's remarkably difficult to achieve optimum inventory levels when a recession just recently ended and another may be on the horizon. Combine that with the Japanese earthquake and the situation in Europe, and you have the perfect recipe for a vehicle market that no one really knows how to deal with, including Honda, Toyota, Kia, etc.

Their profitable vehicles are the gas guzzlers the current administration disincentives.

I'm pretty sure you meant to say "their most profitable vehicles", because with few rare exceptions, all vehicles (or rather, vehicle platforms) are profitable.

Regardless, are you suggesting a company should try to sell products that are less profitable than their other products? The reason those large vehicles are so profitable is because those vehicles are in high demand, and as such GM can charge more for them.

Their labor contracts are a net drag on profitability.

Not going forward. The new labor contracts for the Big Three (and others) are very different from what they had previously. Companies with legacy contracts still carry that burden moving forward, but that cost will only diminish over time.

Now the taxpayer is on the line for billions (more than a "few") in losses.

And taxpayers would very likely have been on the hook for even more lost revenue had GM been allowed to go under. Most economists agree on this point.

It's always easy to make the argument that so-and-so shouldn't have been bailed out, and that the oh-so-perfect free market would have simply made everything better. The reason that argument is so easy is because you don't carry the burden of actually proving the argument. Adding millions more people to the unemployment rolls during the biggest economic turmoil in nearly a century would likely have been disastrous in the short term, and perhaps only slightly less (or maybe more) expensive in the long run.

djDaemon said:
It's always easy to make the argument that so-and-so shouldn't have been bailed out, and that the oh-so-perfect free market would have simply made everything better. The reason that argument is so easy is because you don't carry the burden of actually proving the argument.

Well, in all fairness, that's only because bailouts did occur. If they hadn't, we'd be having the same debates in reverse.

Life doesn't present itself with many control groups.

djDaemon said:
It's remarkably difficult to achieve optimum inventory levels when a recession just recently ended and another may be on the horizon.

I totally disagree with this. Supply chain science is a solved problem. Standard consumer retail has been doing it for years, and it's the reason that places like Target and Walmart thrived while K-Mart nearly died. The supply chain success of Target and Walmart had a ripple effect on every supplier they worked with (for better or worse) that forced them to control their inventory. There are few practical reasons why an expensive item should sit in inventory more than a week.

I tend to agree that the auto industry should have been allowed to fail, for a lot of reasons. Banks are a different angle since its their lending that keeps the economy rolling.

Problem for the Domestic 3 with repsect to inventory levels (at least prior to the new contracts which I have not seen) is that if there was glut of inventory, they could not realize the benefit of shutting down plants beause they still had to pay 80-90% of wages for laid off employees. Foreign badged makers could layoff employees and realize expense savings because they didn't have to pay their workers while they were laid off. As a result, the Domestic 3 were less likely to pay much attention to inventory levels.

Jeff said:
Supply chain science is a solved problem. Standard consumer retail has been doing it for years...

While true, standard consumer retail is a very different animal than the auto market. This is especially true when you consider the effect rising gas prices, recession and worldwide economic fears, all happening at the same time.

As an example, the Big Three increased their European presence in order to lower their reliance on what most agree will be a tumultuous next few decades in the US, as American consumers (hopefully) learn that their driving (or more accurately, vehicle buying) habits must evolve. Then the European market, which was already harshly competitive, collapsed.

So yeah, while it's true that supply chain science isn't new, all three domestic automakers are venturing into new territory. The thing is, they should have done so sooner.

Banks are a different angle since its their lending that keeps the economy rolling.

The estimated millions that would have been suddenly dropped into unemployment would have been an enormous drag on the economy. If this industry was allowed to collapse, perhaps the mile high, hundred-years-in-the-future view doesn't seem that bad. But the period between now and then, which is already enormously problematic for other reasons, could have been very bleak.

GoBucks89 said:
Foreign badged makers could layoff employees and realize expense savings because they didn't have to pay their workers while they were laid off. As a result, the Domestic 3 were less likely to pay much attention to inventory levels.

That's true. And remember, when the foreign automakers lay folks off, the US taxpayer (rather than the Big Three & UAW) foots the bill for their unemployment checks.

djDaemon said:
That's true. And remember, when the foreign automakers lay folks off, the US taxpayer (rather than the Big Three & UAW) foots the bill for their unemployment checks.

And they paid premiums into the unemployment system that is paying those benefits. So what is your point?

That compared to the Big Three overbuilding inventory to avoid layoffs, what you described is a net drain on the economy.

Based on what? Do you know how much the foreign badge manufacturers pay into the unemployment systems compared to how much benefits are paid out during temporary layoffs? Are you factoring in the costs of the bailouts of GM and Chrysler?

Why would I factor in the bailouts? I was simply expanding on your comment regarding domestic auto manufacturers' inventory levels.

Thing is, I don't see a lot of unsold new cars heading for junkyards. Cars are durable goods, and somehow the automakers seem to be able to sell as many as they build. Granted, a lot of them get sold for below average retail as "leftovers" but they do get sold, and they DON'T get sold at a loss. So they are able to make some adjustments to production to control inventory levels, otherwise you'd be able to find "new-old-stock" vehicles to buy.

It seems the bigger problem with fluctuations in demand is simply making sure you have someplace to park the excess inventory *until* it sells, as it ultimately does. And even at that, it doesn't appear that any automaker is just mindlessly cranking out cars hoping someone might buy...

--Dave Althoff, Jr.

djDaemon said:
Why would I factor in the bailouts? I was simply expanding on your comment regarding domestic auto manufacturers' inventory levels.

Labor practices of the Domestic 3 (such as continuing to build inventory because you still have to pay 70-80% of employee wages and ultimately, because you cannot continue to build unneeded inventory beyond on short term basis because at some point, you won't be able to sell them -- people will want next years models, you pay folks not to work at all -- happens at northeast Ohio plants anyway) were a large factor in needing bailouts. You need to take long term issues into account as well as short term.

And you expanded on my comment by making something up about a net drain on the economy as far as I can see.

Dave -- Ultimately, there is a limit to how much excess inventory you can build. At some point, you stop building and just pay workers not to do anything. At least from what I have seen. You also have problems when there are shifts in demand from one type of vehicle to another (typically with increased gas prices cutting demand for SUVs). That demand may not come back for a while and you will be limited in terms of how many employees you can transfer to other plants.

Unfortunately right now we make too many decisions based on the short term mainly because in politics, long term is the next election cycle. It may well be that based on a longer term view (like 5-10 years out), we would have been better off letter GM and Chrysler go. Same is true of TARP. Financial institution bailout probably made sense (though unless we don't get our debt under control -- currrent fools in DC in both parties leave nothing to create any confidence -- it may not matter anyway). Its too soon to know if the rest of it, stimulus packages, etc. were good decisions. Its not even clear they were good decisions in the short term. Will help politicians seeking re-election in 2012 though.