They actually can. Businesses have a lot of profit that they pump directly into the hands of investors in the form of dividends and stock buy backs. They have massive capital expenditure projects. Many or all of these things could be put on hold or slowed so that cash-on-hand to handle expenses can be saved.
Business practices seem to say that saving money for a rainy day is a dumb move for the business, because profit is the only goal or money saved is wasted because it’s not doing anything productive. That line of thinking is just plain wrong. So much of the recessions that impacted so many and required massive government bailouts could have been prevented by increased cash-on-hand. The implication that you’ll go out of business guaranteed if you aren’t constantly investing in growth at the highest possible level is asinine.
Rates are at historical lows, sitting on piles of cash is bad business. Those massive capital expenditure projects are as cheap as ever.. the point is to encourage spending when the economy is struggling. If you want to blame someone you should blame the fed for years of artificially lowered rates.
You seem to have a misconception that fiduciary duty must be to shareholders. Plenty of people (although it's a lot more common in Europe than the US) hold the viewpoint that companies have a duty to their employees. IMO our economy would end up a lot more balanced if companies paid higher wages rather than passing that money on to shareholders.
Fiduciary duty for a public company is to the shareholders, by definition. The board and officers of the corporation serve as the agents of its owners, their principals, without whose investment the corporation would not exist. Of course there is usually some overlap between the shareholders and the employees, and the company has other kinds of duties toward its employees in the form of contracts as well as a less formal stake in employee retention and goodwill. If you want a co-op structure where the shareholders and the employees are one and the same, that sort of thing does exist and can sometimes work out reasonably well but there are some obvious trade-offs when it comes to raising capital. In particular you can't fund growth by selling equity, only by going into debt, which means the co-op and its shareholder-employees are taking on the lion's share of the risk if the venture should fail.
https://www.investopedia.com/ask/answers/042915/what-are-som...
As far as I'm aware fiduciary duty actually has a broad meaning as above. Of course under our current legal system, fiduciary duty is to shareholders. But there's no reason why we have to setup society like that.
Co-ops are a good way of organising things, but as you say they have downsides. But there are lots of in-betweens. For example, we could require that a proportion of the board (say 25%) are employees. The markets have shown that they are willing to invest a lot of moeny in companies like Facebook where preferential shares allow non-majority shareholders to retain control of the company.
The officers and board represent the shareholders because the shareholders own the company. The employees do not own the company. Their relationship to the company is transient at best; they have an ongoing and hopefully amicable relationship but no real stake in the company's future. Either side can terminate the employment contract at will with at most a few weeks' notice and some minor payout (or payback) of (un)accrued benefits. If a given employee wants to take an equity position in the company and obtain some influence and a portion of the profits they have only to purchase some shares, but in practice they would probably be better off investing that same money in a more diversified portfolio. I myself could hold a "democratic" share in my employer (market cap divided by number of employees) right now via my 401k if I put most or all of it in company stock, but I'd really rather not take that kind of risk.
Every dollar that is spend in the public sector flows into the private economy as well. For instance, the wages paid to civil servants and employees in the public sector ultimately gets spend in private businesses: food, clothes, entertainment, housing and so on. Public investments in public infrastructure also create wealth in the private sector: public procurement is a prime example, public funding and grants are another example. The there's the creation of value through education (schools & universities), ensuring security (law enforcement & justice), mobility (roads & bridges), health (hospitals),... which create the affordances for private enterprises to become successful (no Silicon Valley without skilled/schooled workers, right?)
Also, let's not forget that 'money' is above all a token of exchange that represents economic value, it's not the economic value proper. Government and the public sector aren't competing with the private sector: the primary goal is governing the distribution of wealth in society according to a prevailing economic framework or ideology, and managing the supply/volume of money in an economy is an important lever to do just that.
> A lot of government employees (and contractors) just got paid to sit at home for 3-4 months during the pandemic if they worked in secure areas (can’t take classified information home). That’s a benefit that the private sector just can’t provide.
No. But at the same time, unemployment benefits are in essence the public sector directly stepping in because the private sector runs out of liquidity.
> We need hard work
This is true. All of the above doesn't negate the work that happens in the private sector or private businesses. On the contrary. What we ought to remember is that value creation is equally, if note more, important as wealth creation.
Put differently, there's no point in gazing at the trillions of dollars that get shifted around if the entire discussion becomes detached from any tangible value which gets created and consumed. Whether it's the bread of the sandwich you ate for lunch, or whether it's the leather in the shoes you're wearing.
The thing that worries me more then discussing who gets an arbitrary amount of money and who doesn't, is supply chains, manufacturing, businesses,... all of that shuttering due to this health crisis. The one thing that truly drives people to the street and bloody riots is a scarcity of something as basic as wheat and bread.
Not really. My terms are actually widely available in a lot of private sector jobs, just not in software development. If I was a HR consultant in a private company, I would have basically the same rights as I do now.
It’s because the rights come from unions, and being in the public sector as a software development puts you on the same category of unionisation that any other white collar public worker. So my rights are the same as anyone else in the administration.
Software development in the private sector never really unionised in Denmark. Partly. Because there was never really a need as there were always more jobs than developers.
There are a few private companies that try to attract developers with benefits, but the vast majority of them do it with money.
They just told you that their still making 10-20% less than colleagues in the private sector - when all benefits are factored in. So obviously those benefits are basically as affordable as employing someone at private sector type wages . Of course they are in Denmark, so the benefits for the private sector are also a lot better than you get in the U.S - at least for non-FAANG (I believe for FAANG as well but haven't researched)
Individual A and B both make $200k a year. Individual A made that by giving an hour long speech. Individual B made that by working all year. On paper they are treated the same, but their reality is drastically different. You can't just tell person B "you don't need to work so much." They wouldn't be at the same level as person A without having done so.
Everyone is different. Some people are insanely smart. Incredibly efficient. Ridiculously productive. For every person out there that is making as much as you and working less there is also someone working more and making less. "We don't need to work so much" is a privilege, and in my personal opinion, is unrealistic.
Big companies are often as unproductive as the public sector, with whole departments often existing just to make some managers feel important.
In my eyes, the reason much of the public sector is unproductive is not because it is not motivated by profit. But rather that it is too similar to large companies with loads different management-levels.
I once worked in the public sector when they embraced real autonomous teams with leaders that could actually make decisions when the team needed it. It was just as efficient as the best agile teams I have worked at in the private sector.
That doesn’t mean that small companies always are more efficiently run in all aspects. I expect my local McDonalds be much more efficient than the small sushi place around the corner, which can afford being inefficient due to low rent and probably close to minimum salary for the owner.
While HUD is certainly less productive (per capita) than a small team of highly talented people, turns out that in most large organizations half the people are below average talent/motivation. And designing for this instead of pretending that all of your staff is above average allows them to have higher productivity.
That's not necessarily true. Governments frequently intervene in the running of public companies. Also, many public companies compete against privately run businesses.
Large private enterprises, publicly-traded or otherwise, that fall prey to inefficiency get disrupted. Governments do not get disrupted short of foreign invasion or revolution, so the inefficiency remains entrenched.
> Governments do not get disrupted short of foreign invasion or revolution
And also elections. This is especially true in countries that don't have a two-party system.
> And also elections.
Sure, in theory. I suppose if an election actually changed things enough to be considered "disruptive" then you could consider that a form of revolution, but disruption of that sort generally has exactly the opposite effect: Everything becomes much less efficient as the new party struggles to take control, and then gradually returns to baseline as they realize that it's the masses of unelected bureaucrats that really run things on a day-to-day basis. Even if they were explicitly running on a platform of improving the efficiency of public services, it's not as if there is any actual competition in the provision of those services. People aren't choosing between two or more proven service providers; at best they have the current entrenched system with its known issues and a bunch of vague promises regarding a half-cooked proposal for a replacement which the candidate may never see implemented and which probably wouldn't work as advertised even if it were.
Do you realize that (1) half of all government spending is at the state and local levels; and (2) many states and cities have been run by “the other party” (not the bad one) for decades? Cities like Chicago, Philadelphia, San Francisco, Baltimore, etc., have been run by Democrats for longer than many posters on HN have been alive. If there was any truth to the notion that the US public sector is poorly managed because “one major party” “sabotages” it you should see a marked difference in the states run by the other party. But you don’t. Indeed, the major population trend in the US is people leaving Democrat-run states and moving to Republican-run states.
For many of the things people complain about (transit, housing, education, policing) 90% of funding and 99% of oversight authority happens at the state and local level. Republicans in national government have pretty much zero say over say affordable housing policy in California. Trying to pin California's failures in those areas on Republicans in Kansas is specious.
Second of all, even if you only take into account income taxes, Federal income taxes aren't re-distributed to other parts of the country in the way that you think.
The biggest line items in the Federal budget is (in decreasing order) are:
- Social Security
- Medicare + Medicaid
- Defense
Social Security isn't really "distributed" to other parts of the country, it's mostly concentrated in regions where retirees happen to live. Ditto Medicare.
You could argue that Medicaid is "distributed", however it is funded by both States and the Federal government[1].
The comment to which you are replying is correct: most public sector services like education, electricity, water, sewage, libraries, law enforcement, fire departments, etc are all funded predominately at the state and local level.
[1] https://www.kff.org/medicaid/state-indicator/federalstate-sh...
But my point is, even if you think that phenomenon actually exists in practice rather than theory, shouldn’t Democrat-run state and local-level places be a counter-example? School, police, transit, etc. are all mainly state-level services. In places like Illinois and New York and California, it’s Democrats that set the taxes and Democrats that set the budgets and Democrats that oversee spending. In those places, you should see a marked difference between federal services (where big bad Republicans have a say) and state and local services (where it’s all controlled by a one-party Democratic system). But you don’t.
We’re seeing this happen with police. Police funding and administration is almost entirely a local matter. If Chicago PD is running CIA-style interrogation sites (or what’s happening in Baltimore or Atlanta or Minneapolis) you can’t blame Republicans. If schools aren’t good or transit is bad, or housing is expensive, you can’t blame Republican “sabotage.”
It’s a perverse argument. It’s saying to disregard Democrats’ obvious failures to run government services—it would all be better if you just gave Democrats more power. (That is not to say that Republicans would run things better. For the most part, they wouldn’t even claim to, and would point to that as justification for doing less. My recently-red/trending purple Maryland county has pretty good government services, but mostly because it doesn’t try to do much.)
I take your broader point that it's unproductive to pin the productivity concerns of the public sector on Republicans; especially in state government, I probably agree with you in sort of assigning good governance and management to the GOP, and expanding public employment and benefit rolls to Democrats.
But, like, I think you'll have a hard time making the argument that run amok policing isn't at least somewhat attributable to Republican voters. It's not "sabotage", in the mostly-mythical Grover Norquist sense, but it's a public policy mistake they mostly own.
I’m not sure I understand. Baltimore just revealed a new budget that contains zero cuts to the police budget.
To your point about city mayoralties, on average, Republican-led metros have lower inequality and higher cost-of-living-adjusted incomes than Democrat-led metros[1][2].
There isn't really a strong correlation between successful government and the predominant governing party. What you'll find is that things are not so simple that you can pin all of our problems on a single party in a neatly packaged way.
[1] https://www.theatlantic.com/business/archive/2014/10/why-are...
[2] https://www.nytimes.com/2019/11/13/upshot/red-blue-diverging...
Isn't it just that they are smaller and less successful?
> less successful?
That depends on what your criteria for "success" is. San Francisco has among the highest per capita GDP of any city in the Union as well as a thriving technology economy, but also has the highest rate of homelessness, as well as the highest percentage of people living below the poverty line. What does "success" mean?
How big is Claremont? How big is the LA metro area? How big is Elgin compared to Chicago? Provo is maybe half as big as Salt Lake.
When you're in Claremont, and you want a night out, do you stay in Claremont? Do you in Elgin? In Provo, you're more likely to stay local than go up to Salt Lake. As I said, it's geographically more distinct, but there's also a more insular mindset. "Claremont" is a legal entity, and it's a collection of colleges, but it's not much of an entity in peoples' minds. It's just part of the LA metro area, sharing LA's smog. Provo, in contrast, has a separate identity from Salt Lake, and even has separate smog.
Colorado Springs is probably the better example for the argument.
Colorado Springs does. It has a much more independent existence. It's across the Palmer Divide from Denver. It probably depends on the Air Force at least as much as it depends on Denver. In the same way, Provo probably depends on BYU as much as it depends on Salt Lake. (Whereas Elgin and Claremont are much more tied in to Chicago and LA, respectively.)
How many residents of Elgin work in Elgin? I suspect the fraction is much higher in Provo (and Colorado Springs).
And also, as another commenter pointed out, suburbs/exurbs can also be net producers themselves.
It seems to me the biggest reason people are leaving San Francisco seems to be the rent is too damn high which is a pretty straightforward effect of the city's housing policies.
I think it's pretty clear that the Republicans party doesn't have a monopoly on poorly run government at the city and state level. (At the federal level there does seem to be a large gap in the ability to govern between parties.)
Local government spending is what educates the children, paves the roads, keeps my house from burning down or getting robbed, runs the parks and libraries, etc.
A lot of established public companies are like that.
In fact, the most insanely motivated people I've ever met were in the public sector.
To an extent isn’t this because these types of benefits aren’t affordable? The pension, extra vacation, etc wouldn’t be possible without the tax revenue raised from your friends who are working more hours.
In America there is a saying “good enough for government work.” I think a lot of public sector jobs get a bad rep because they hand out middle class lifestyles (arguably maybe even upper middle class in Washington DC metro area) at the expense of the private sector.
A lot of government employees (and contractors) just got paid to sit at home for 3-4 months during the pandemic if they worked in secure areas (can’t take classified information home). That’s a benefit that the private sector just can’t provide.
I guess I don’t really agree with the article. We need hard work, it’s what keeps the system going. We have it so much better than other parts of the world and we shouldn’t take that for granted.