Re: Terrorism and Layoffs

["Sean Reilly" <seanjreilly@xxxxxxxxxxx>]

Henry,

"It is an official admission of the failure of the privatization of safety
and a
rejection of the theroy of marginal utlility as applied to fundamental
needs"

Read O'Neill's statement how you will, but my question is: is it your
objective to socialize everything?  If not, where does one draw the line.

"Amid of the noble outpouring of patriotism and spirit of pulling together,
one cannot help but notice that corporate mangement is announcing layoffs in
the tens of thousands while demanding government bailout,"

This is not going to be a popular sentiment in this community, but I, the
conservative monetarist, think that the corporations who are now hurting (I
have heard an estimate on NPR that the Airlines lost around $50 Mil./Day
that they were not operating) in the wake of the Sept 11th massacre should
have the option to lay people off, if revenue is dropping off.  That is
their right, but where I come to accordance with you is with regard to a
government bailout.  I don't think that the government should bail them out,
because credit is very lax in the current day.  Corporations should grin and
bear it.  The government did shut them down for several days though and
maybe for good reason, but that does not give the airlines a license to
demand compensation in the form of a bailout.

"Could not corporate American live up to its share of patriotism and delay
layoff for 18 months?"

Why should Corporations become patriotic in the form of delaying the
inevitable, while further leveraging themselves into a position that they
might not be able to climb out of.  Then we would have a furthering of the
downward spiral in the form of Corporate Patriotism.  Granted, from a Demand
oriented perspective, your suggestion would be a good solution, because
people would keep their Marginal Propensity to Consume (for the time being),
Investment would rise (S=I) vis a vis increased borrowing, Government
Expenditures would remain the same, and Net Exports would not be affected.
But on the Supply side of things, the Marginal Cost to the Firm would rise
and, ceteris paribus, profits will fall.  Profits are the reason the
Corporations continue to operate.  With that, is it your thought that
Corporations have a social responsibility to keep factors of labor on it's
payroll who do not contribute a sufficient margin of production as
determined by management who is accountable to the shareholders, who are
only concerned with profits.

Sean
----- Original Message -----
From: "Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx>
To: <pkt@xxxxxxxxxxxxxxxx>; <gang8@xxxxxxxxxxxxxxx>;
<lwside1@xxxxxxxxxxxxxxx>
Sent: Wednesday, September 19, 2001 8:05 PM
Subject: Terrorism and Layoffs


> Treasury Secretary Paul O'Neil called for the "socialization" of the
> cost of safety on the Lehrer News Hour tonight.  He added that safety
> should not be compromised merely because it costs too much.  It is an
> official admission of the failure of the privatization of safety and a
> rejection of the theroy of marginal utlility as applied to fundamental
> needs.  Would this logic now be extended to full employment, education,
> health.  The difference in the destruction lives by terrorist attacks
> and by unemployment, or lack money to education children or treating
> curable diseases is merely death by other means.
>
> Amid of the noble outpouring of patriotism and spirit of pulling
> together, one cannot help but notice that corporate mangement is
> announcing layoffs in the tens of thousands while demanding government
> bailout, when banks are flushed with easy credit and interest rate is at
> an all time low.  Could not corporate American live up to its share of
> patriotism and delay layoff for 18 months?  Its not enough that innocent
> people get killed, the survivers have to lose their
> jobs also so that mangement can use the terrorist attack as a pretext to
> improve earnings at the expense of employees?
>
> On a related issue, lets hope that the war, campaign or assault on
> terrorism does not degenerate into an assault on civil liberty.
> The wrost scenario would be for the US to apply the errors of its
> foreign policy domestically.
>
> Henry C.K. Liu
>
>