Category: American Affairs

TOO BIG TO WHAT?

~ Jnana Hodson ~ Leave a comment

When you invest, even if it’s just for retirement, you’re told to diversify your risks.

Why is it, then, that it seems OK to keep having big corporations merge into less and less competition? During the Bush I and Bush II regimes, we saw what that meant for the banking industry: big bailouts on the taxpayers’ tab.

We were, after all, faced with another Great Depression.

Seems to me it would be far healthier to spread the risks here, too: break out into smaller companies – which would make more of them, too.

Along the way, there would be fewer layers of high management – and think of all the savings in executive pay along the way.

Those who advocate a free market need to remember: any company that’s too big to fail without taking down the rest of the economy is a threat. Period.

THE DISAPPEARING INDIVIDUAL

~ Jnana Hodson ~ Leave a comment

Not too long ago, the pharmacist owned the drug store, the corner bank had its own president, the local publisher owned the newspaper, and so on. Each one knew the community, and each one could make independent decisions. Each one also had a desire to be respected by those he or she served. Often, too, it was a family affair.

Now, of course, the pharmacy is headed by a manager who reports to a district supervisor who may report to an assistant vice-president somewhere who reports to a president of a subsidiary who reports to another vice-president of a conglomerate who reports to a president who reports to a CEO who probably has little real decision-making power, thanks to all of the policies that must be followed, thanks to a board of directors beholden to the major stockholders. As if you could name any of these people. Ditto for the bank and the newspaper and what used to be the local department store.

At each level of hierarchy, there’s little room for discretionary action – it’s all a matter of enforcing policy, especially as it relates to maximizing short-term profit.

Important local leaders have been reduced cogs following orders from afar. And the big money follows. Note, too, that the emphasis is on stockholders, not shareholders, who would include the workers, their communities, and even the faithful customers.

How, then, do we reclaim our full community, and heal the damage? It’s a basic question for democracy, after all, if the American Experiment is to continue, especially with any sense of equality and fairness.

ABOUT THAT ADVANTAGE

~ Jnana Hodson ~ 1 Comment

Where I live, you’ll often hear about the “New Hampshire Advantage,” which argues that the state’s economic growth is a consequence of its lack of income and sales taxes. Don’t get me wrong, I enjoy not paying extra at the store. But I also know that the sharp difference in my rent in Manchester, when I arrived, and what I was paying in Baltimore was caused by the property taxes here. When I added my Baltimore and Maryland income taxes to my rent there, it equaled what I was paying here. Voila! You’ll pay one way or another. The question is where and who bears the brunt of the cost.

The real New Hampshire Advantage is its proximity to Greater Boston and the economic powerhouses connected with the Harvard Business School and the Massachusetts Institute of Technology. Nearly half of the New Hampshire population that has a job commutes south each morning to workplaces across the border. The better-paying jobs, in fact. It’s largely a one-way flow, too. If lower taxes were a real stimulus, the entire Granite State would be booming, which is hardly the case in our economically depressed North Country or the Connecticut River’s Upper Valley. Just take a look around Berlin or Claremont and all their devastation.

Still, public services cost money, and the dynamic is that anything requiring labor is going to cost increasingly more. In economics, it’s called the Baumol effect, after a study of performing arts institutions.

New Hampshire is no exception. The real question is just where the additional state revenue will come from, and that always returns us to ill-fated proposals for an income or sales tax.

But complicating any income-tax discussion in the Granite State is the matter of reciprocity: normally, you pay a state income tax where you work rather than where you live. And normally, there are roughly equal numbers of workers commuting between two states to balance the equation. But that’s not the case in New Hampshire. So an income tax to lower property tax bills, as it’s usually framed, would mean either that the cross-border commuters would have to pay twice, both at the workplace and then at home, or that those folks who both live and work within the Granite State would have to subsidize the break given to the others.

It’s a genuine conundrum. Advantage? Beggar-thy-neighbor works only so long.