Flow Of Money From South Texas Oil Startles Economists

September 24, 2014 | 1:27 PM
By
Oil & gas facilites in LaSalle County, part of the Eagle Ford Shale.

Photo by Dave Fehling.

Oil & gas facilites in LaSalle County, part of the Eagle Ford Shale.

Economists made a surprising discovery when they measured the economic impact of oil & gas drilling in Texas. For the past four years, Thomsas Tunstall and a team of economists at University of Texas-San Antonio have been measuring the economic impact of surging oil & gas drilling in the rock formation called the Eagle Ford in South Texas.

“Clearly the formation production has legs,” Tunstall told News 88.7.

And those legs are running faster than expected. Way faster.

The economists had predicted just last year that they expected the total economic impact to South Texas to be $89 billion in 2022. Instead, they now estimate that the impact has already reached almost that amount: $87 billion.

What’s making the difference?

Primarily all the jobs from drilling and running pipelines.

“But also because of lots of new manufacturing activity. And a lot of that is being driven by the low cost of natural gas,” said Tunstall.

That low cost natural gas made right here in Texas is what big industry uses to manufacture chemicals and other products. So manufacturing jobs are up as well as trade in places like the port in Corpus Christi.

It’s all adding billions to the Texas economy and to revenues for state and local governments. But how long will it last?

Tunstall says years longer based on projections on the number of wells yet to be drilled.

Comments

  • TropicalViewpoint

    Astro turf

  • Margon49

    Too bad this booming economy is not trickling down to the majority of low income workers… they’re still scraping by on $8/hr, 25 hrs/week, no benefits, 24/7 availability jobs and struggling. Many people are doubling up (living with friends and/or family) because they can’t afford rent.

    • Cracky McSmokem

      Then they’re losers. I could get a $100k this week if I lived in Texas driving trucks.

      • MoReport

        ‘Losers’ is a bit harsh, but in a 21st century Hi-Tech manufacturing
        economy, unskilled labor is not worth much, and unreliable workers
        even less.

      • Margon49

        Most truck drivers do not get that much despite what the ads say. They do make a lot of money, but they have swamped the local towns with out of town workers, so there are severe housing shortages. In the Eagle Ford Shale area, the drivers and workers pay up to $1500/week to bunk with a half a dozen other guys in a trailer. I live in an area about 2 hours from there, and the workers are commuting this far for a place to stay. They are taking over the senior RV Parks (because they can pay so much more). This is (was) a retirement area, but now the price of everything is skyrocketing because the store owners know these guys will pay anything for food, etc. Even with increased prices, the shopkeepers refuse to raise wages. It’s a matter of time before all the young people have left and the old people are too old to work. Maybe then they will raise wages.

        • Son of Kochthulu

          These kind of convulsions happen with any sudden disruption in the economy, good or bad. It’ll self-correct fairly quickly as new shops open up and new housing is built/made available – so long as they aren’t prevented from doing so by short-sighted policy.

        • cynthia curran

          Yeah, California type rents.A lot of manufacturing is below 20 per hour these days because it ins’t unionized. Chemical manufacturing is the chemists and so forth that make the money not the average Joe Bloe. In fact about 30 percent of factory work starts between 9 to 14 per hour this is the reason why folks are not getting rich. In both California and Texas I see low skilled factory work pay about 9 to 12 an hour and advertized in Spanish since whites are harder to find doing it.

    • Pedro

      If there weren’t so many illegal aliens and decendants of illegal aliens taking jobs at low pay, then American workers (including those of us who came to the U.S. legally) would be enjoying much higher wages.

    • Proud Skeptic

      I guess every silver cloud has a grey lining to you.

      • Margon49

        If the wealth was spread around more evenly the lining wouldn’t be grey. And we haven’t even talked about the devastation to surrounding towns whose roads are ruined and wells are being sucked dry. Many of them are getting zero benefits from this “economic boom”. I can tell that most of the commenters on this article do not live near fracking and drilling sites.

        • Proud Skeptic

          Obviously if roads are being damaged (the word “ruin” implies that they cannot be fixed) then that has to be dealt with. Hopefully the local towns and counties are smart enough to deal with this.
          Wealth is not “spread around”, as you say. People have to go and get it. That’s the way it works. This “economic boom” as you call it is the greatest thing to happen to the world in decades. It has had a huge impact on the recovery here in the US and put us in a much stronger position to deal with forces like Russia and the Mid East .
          I say “God Bless It”.

          • Margon49

            The paved roads have been replaced with gravel roads. That is going backward in time as far as infrastructure is concerned.

          • Proud Skeptic

            Then you should be talking to your local politicians. That seems to be where your problem lies. Of course, if the oil companies are placing undue burdens on the roads they should be asked to kick in.
            Either way, it is up to the local government to handle this.

          • Margon49

            The local government is bowing and scraping to business interests, and when the laws are not convenient to business interest, our local politicians change them to suit them. The only time we get infrastructure projects completed in this area is when a large company chooses to move here (and is given tax breaks to do so). Then the county moves and widens highways and builds cloverleafs, sometimes cutting off existing businesses from traffic completely. They did it when we got a SuperWalmart and they’re doing for TPCO.

          • Proud Skeptic

            Still sounds like a local problem to me. You can push your local government or you can complain on sites like this. Complaining accomplishes nothing unless complaining is all that you want to accomplish.

            There is money there and a reasonable rationale to have the roads improved using money from the business.

            That said, your decision to include Walmart in your complaints leads me to believe that you are one of those people who are unhappy about development in general. There is little to be done about that.

            Sorry.

    • http://google.com SaraB55

      Margon49, did you ever hear of supply and demand? If there’s a plentiful supply of people to fill jobs that pay $8/hr part-time, and if the demand for such workers doesn’t increase relative to supply, then wages remain stable. “Trickle down” isn’t some magical process that just rains money on people.

      You might want to explore this question: Among the low-wager workers that you describe, how many have enough education to move up the ladder? How many are capable of producing more and thus earn more?

      • Margon49

        Among the low wage workers, especially over 30, they all have some kind of higher education (college – 2 years and more). Their children (under 30) have not been able to afford college (even 2-year schools) because it takes the income of everyone together just to keep a roof over one’s head and food on the table. Most of the people over 30 had lucrative careers in a neighboring larger cities until the Crash of 2008. Those jobs evaporated and no longer exist. The remaining jobs are service jobs, seasonal and with a high turnover because the employer might give you 25 hours one week and 12 the next with 24/7 availability. If a person can’t rely on a certain amount or hours. and have to be available for those erratic schedule, they leave to look for another job.

      • Margon49

        The technique by corporations to cut expenses is to eliminate the NUMBER of workers, even though the jobs have to be done. That leaves the remaining workers doing two or three jobs simultaneously. It doesn’t work. Short cuts are taken in safety measures and quality control and the end product is inferior, if not downright dangerous. It is cheating the supply-demand equation. The corporation shows a profit, the shareholders get a nice dividend, the CEO collects his/her bonus and moves on to the next victim.

    • http://chicagoboyz.net/ TMLutas

      Low income workers are being overwhelmed by immigrants coming over the border. The Democrats are on the wrong side of that argument too.

      • Margon49

        Since there is no way to document “undocumented workers” that argument is a sham. If we are truly “overwhelmed” by them and everybody knows who and where they are, why aren’t people reporting them to ICE?

        • scottm1207

          Un, because ICE is led by a regime that does not want to deport them.

          • Margon49

            Are you talking about the “Obama has deported more people than anyone else” regime?

        • http://chicagoboyz.net/ TMLutas

          I strongly suggest a review of the professional literature. It’s actually not that hard to figure out because, for very good public health reasons, we maintain a few areas where workers do not report illegals. In short, wisely, we prefer not to have plagues and have illegals than to strongly reduce the number of illegals, but have plagues.

          • Margon49

            Do you live in one of those areas and have seen this for yourself?

          • http://chicagoboyz.net/ TMLutas

            I’m not currently a healthcare worker though my wife is and when she maintained her own practice I helped out doing office manager duties among other things for her. Yes we live in a relevant area and I have discussed the matter with my wife who has had to process that sort of paperwork. One evening several years ago I broached the subject and she went, in detail, into exactly how dangerous, stupid, and irresponsible it would be for the native population to drive illegal immigrants underground out of contact with our public health system.

            It was a memorable talk.

          • Margon49

            It would be dangerous and irresponsible to report them? How then do you expect to deport them?

          • http://chicagoboyz.net/ TMLutas

            Just find them a different way. Immigration enforcement is an important value in order to safeguard jobs. Keeping americans safe from dying from communicable diseases is an important value. In this instance the two values conflict and you have to balance them. Saving lives won and it should have won.

          • Margon49

            In other words, there are illegal alien ghettos somewhere that nobody really knows where except the CDC, in order to contain plagues? So whose jobs are these people taking if they’re in their own community?

          • http://chicagoboyz.net/ TMLutas

            No, it means that that guy who is hanging around the corner to pick up day labor doesn’t fear getting vaccinated will lead to deportation so they take their shots and report fevers to medical personnel more often than in your proposed system.

            You don’t know where newly arrived aliens are. Sometimes they’re couch surfing in the apartment of a legally documented friend in a very nice neighborhood. Their social connections determine where they’re staying on arrival quite often, not their financial means.

            The doctors need to have the ability to trace people in order to shut down plagues before a lot of people die, including a lot of citizens. They need that information so badly that it trumps immigration enforcement and for the sake of every american’s health, we collectively opened up a chink in the system’s armor. It was the right thing to do and remains the right thing to do.

  • MoReport

    …New manufacturing activity…is being driven by the low cost of natural gas…

    Surprise! Lowering the cost of energy is the easiest, most effective way
    to boost manufacturing, and the rest of the economy. That must be why
    the Progressives are so intent on raising the cost of energy.

    • The_Drill_SGT

      You are correct, but miss the other part.

      NG is a major input in the manufacturing of fertilizer, fabrics, glass, plastics, paint, and other products.

      • MoReport

        Nuclear for power, hydrocarbons for chemical feedstock = Even more economic growth.

  • RickCaird

    I love the way a couple of deluded lefties are trying to deride the report. Of course, cheaper, more available energy drives jobs. Only the left has not figured that out yet.

    • bricko

      Lots of things the Left have not figured out yet….likely never will

    • Margon49

      Like I said, the jobs aren’t showing up here. That’s no delusion. That’s a fact.

      • RickCaird

        Really? From the story:

        “What’s making the difference?
        Primarily all the jobs from drilling and running pipelines.”

        And,

        “So manufacturing jobs are up as well as trade in places like the port in Corpus Christi.”

        So, unless you have some counter facts that you can use to impeach the story and “Thomsas Tunstall and a team of economists at University of Texas-San Antonio”, you are just blowing smoke.

        • Margon49

          An example of the manufacturing jobs available in the Corpus Christi area would be the Chinese TAPCO plant in Ingleside. While it provides a couple of thousand jobs for the construction of the plant, the contracts have been won by companies outside the area, so the money for that leaves the area and then the construction workers go back home. The plant will produce seamless pipe, ostensibly for the oil & gas industry. It will employ 600-800 employees, mostly Chinese engineers, because they contend that Americans don’t have the “skills” for these jobs… and yet… this area has some of the best welders and steel workers in the world because of the presence of the Ingleside Naval Station which was the Mine Ship Capital of the world, until it closed several years ago. This area also produces the deep sea drilling rigs and repairs many large steel ships. How could they not find 600 Americans with the rights skills? They also gave this (foreign) company large tax breaks, while improving the infrastructure to the tune of a new cloverleaf and doubling the width o the highway (taxpayer provided). So these mfg. jobs are not for Americans or local residents. It will just spawn more service jobs for cashiers, inventory stockers and waiters. Legislators are even trying to promote a special Visa for these foreign workers to stay indefinitely.

          • RickCaird

            I see nothing that supports your claim that the TPCO will “.. employ 600-800 employees, mostly Chinese engineers, because
            they contend that Americans don’t have the “skills” for these jobs.” Perhaps you have a reference because Google comes up with nothing supportive. In fact, I am dubious of the claim because pipe manufacturing from scrap metal is not a highly engineered manufacturing process.

            Second, the construction claim is equally dubious. Large construction frequently win out of town contracts. But, they use local subs and they hire local workers. Now, this is a 2010 reference, but the story claims:

            “According to economic studies by Impact Data Source for the economic development corporation, TPCO America Corporation’s3 project near Gregory will generate new local tax ravenues exceeding $37 million for local taxing districts in San Patricio County, including school district revenues and local sales taxes (subject to abatement negotiations).

            The 10-year economic impact of the project will be $2.7 billion with $327 million in direct salaries for workers.”

            Construction workers are almost always sourced locally. It is the nature of construction that projects get completed, so I do not get the nature of your complaint about “going home”.

            I believe you are quite unrealistically pessimistic about the impact of the TPCO plant on Corpus.

          • Margon49

            I was repeating information from a Corpus Christi Caller times article published a few months ago. They may use some local subcontractors, but the profits go to companies outside of this region, they don’t stay here. And for all the “prosperity” rained down on this area in the last five years, the lower half of the income spectrum continues to scrape by on close to minimum wage, doing 2 or 3 people’s jobs in their stingy 25 hours they are allowed. Even Gregg Abbott admitted, in his recent debate with Wendy Davis, that 90% of the increased wealth brought into Texas by new companies here, went to the upper half of the income spectrum.

          • RickCaird

            The profits are much smaller than the wages paid. So the profits go out of the area is true, but not very important. That argument also applies to products from any company not headquartered in Corpus. For example, grocery stores are usually chains and the profits (if not family owned) go mostly to shareholders.

            The 25 hours is essentially an ObamaCare problem. Direct you complaints to the White House. I

            I am not sure what you mean about 90% of increased wealth go to the upper half. If a guy did not have a job and now has a job, he has participated in the increased wealth. You need to flesh that claim out a bit.

          • Margon49

            The 25 hours is NOT an Obamacare problem. Obamacare is a solution to employers cutting back hours, which they have been doing way before Obamacare was enacted. Now people can have insurance and preventative medical care without having to rely on their employers’ greed.

            Abbott was saying that 90% of the new jobs in Texas’ increased economy went to people in the upper 2/5ths (top 40%) of the income scale. Our whole economy is based on people in the upper half of the income scale increasing their income, wealth and security on the backs of the lower half, who are losing ground daily. It’s too bad that you can’t see it all around you.

          • RickCaird

            Well, I wondered why you were complaining about a new plant. Now I know. You are a lefty. It is common knowledge employers are cutting hours below 30 whenever possible to keep away from ObamaCare. This includes, wait for it, universities and local governments. Sure, retail and food service guys have always kept the hours down, but now there is added incentive. Here is a recent reference:

            http://news.investors.com/politics-obamacare/090514-669013-obamacare-employer-mandate-a-list-of-cuts-to-work-hours-jobs.htm

            And another from 6 weeks ago:

            http://freebeacon.com/issues/employers-hiring-more-part-time-workers-due-to-obamacare/

            I had fun reading ThinkProgress and HuffPo try to deny the ObamaCare part time job pressure, but even HuffPo had to say:

            “Here’s proof positive: Based on August 2013 statistics, the Department of Labor Household Survey revealed that 77 percent of new jobs created were part-time, and the trend continues, consistent with U.S. Chamber of Commerce survey data. Twenty-three percent of new jobs were full-time. That’s a bleak labor market.”

            Now, to your second paragraph. Our economy is based on people with actual job skills that cannot be automated continuing to create. The manual laborer are being run out by, wait for it, illegals who are lowering the wage rates. Look, the demand for basic labor is declining. Go look at how many fewer employees the auto makers have compared to 20 years ago. The fast food workers better look out. Robots are available to make hamburgers and people are used to doing their own checkout. Do you really think there will be more demand for fast food workers? I don’t.

          • Margon49

            The part time hours are not limited to fast food workers. My town is a resort and retirement area. Many of the jobs are service jobs, but that doesn’t mean they are not important. There are receptionists at hotels, restaurants. We have print shops, art galleries, hardware stores…. workers have to know what they are doing in these shops. They cannot be ignorant and expect to fulfill their customers’ needs.

            Even working for the city government is only part time for many positions. One example is an ad for a Mechanic/Vehicle Maintenance technician. Has to have his own vehicle and tools (wouldn’t want to waste city money on their own tools for their own vehicles!), be able to repair anything from lawn mowers to to diesel dump trucks, must have 24/7 availability and work is only 25 hours. $8-$10/hr depending on experience. REALLY?

            The city is increasing property taxes yet cutting back on services and particularly the school budget, even though our population of school age children is increasing. Just last month they dumped the County EMS system for a private contractor from a city 40 miles from here! 26 good paying, FULL TIME worthwhile jobs gone forever, and replaced with part timers! A few years ago they did the same to a small county bus route. Dumped the full time drivers and farmed it out to part time drivers from a city 30 miles away. Where is the economy in the drivers commuting 30-40 miles a day, each way TWICE because the drivers no longer drive a full day, but have to be replaced by their part time counterpart?

            This is not good economics or finances… it’s just moving the money around from those that do the work to those that manipulate the system. It is so much bigger than Obamacare or automation of labor.

          • RickCaird

            I am not sure you understood what I said. I said that part time was traditionally done by food and retail, but that it was being extended now due to ObamaCare. I specifically mentioned universities and local government. Your mechanic story is supporting my point.

            ObamaCare is raising costs for local governments, too. It will cost more to cover their full time workers than it did before. The only real revenue stream government has is taxes. Governments have been outsourcing for years. It used to be employees worked for local government for security even though the wages were lower. Now, between government pensions and government employee unions, wages are higher than the private sector. So, the smart thing to do is to outsource. That is all you are complaining about. The situation has changed over 20 years and the response has change. This is basic economics. The function of local government is not to be an employment agency. It is to provide services to the residents in the most cost efficient manner possible.

            BTW, the ambulances are not sitting in a garage 40 miles away. They are in the area waiting for a call.

          • Margon49

            If this outsourcing and reducing labor costs has been going on for 20 years or more, how can you possibly blame it on Obamacare?

          • RickCaird

            LOL. Incentive, tipping point, cost of an employee has changed. It is like the minimum wage. If you raise the cost of labor, people buy less labor. Raise the price of steak, people buy hamburger. In fact, the government inflation reports assume substitution.

          • Margon49

            Any company that cannot make a profit without impoverishing its workers is not worth being in business. How do you feel about big companies’ workers receiving public assistance because the company doesn’t pay them enough to live on? Is this okay in the capitalism/supply/demand equation? They are, after all, your taxes subsidizing these large companies.

          • RickCaird

            Really. You are now the advisor to people already working on whether they should keep the job they have or go look for another that pays better? Great. How do your clients feel about your advice?

            You are giving the classic “Walmart argument”. The people who already have jobs denigrate Walmart, but when Walmart says they are hiring, they are inundated with job applications. It turns out the only people who hate Walmart jobs are people who aren’t working there. Besides, you cannot expect to support a family on a fast food job when its whole workforce is oriented around entry level and first time workers. There are a lot of people who just don’t get the concept of starting and then working your way up in the same or in a different company. The way to earn more money is to make yourself more valuable. This concept seems foreign to you.

          • cynthia curran

            Yeah, but 20 years ago when the Retail industry was more full time and had higher wages people were able to afford more. If you lower manufacturing jobs under 20 per hour and retail and fast food at 7.25 per hour it destroys demands since less people have the money to buy.

          • RickCaird

            That is a variation on the chimera that Henry Ford raised his workers pay so they could buy his cars. That is not true. Even more, it assumes that the worker would spend his money on a new car rather than something else. Further, it assumes the profit from the car would be more than the cost of the additional pay. None of that actually works. It is a bad economic analysis.

            Now, looking at the BLS employment report for September, the retaiil employment is 15 million out of a total of 139 million. So, it is not really that many anyway (not much more than 10% of total employment.

          • Margon49

            There are no better positions or different companies in many communities in the U.S., this one included. There is NO place to go. You just don’t get the concept of “dead end jobs” which describes half the labor force today. If you become a manager at any of these companies, sure, you make more money by getting a salary, but your hours also double. 50 hours a week required MINIMUM, and if some one misses a shift, you have to do that shift until a replacement is found. Working 70 hours a week is not unusual to make what 35 hours would make 20 years ago!

          • Gypsy Boots

            Yes, it was going on before, but Obamacare added incentives to accelerate the process. Remember: The White House let insurance companies write large portions of the law that was going to require that Americans buy their product. How does this square with your alleged anti-corporate stance? Or, like this administration, do you only support crony capitalism? If you think Obama and his staff are hostile to corporations or the wealthy, you are deluded. He regularly gives talks bashing the “one percent” to rooms full of millionaires who have paid $50K or more a plate. Get real and wake up, Margon49.

          • Margon49

            But the ambulance drivers come from the other city. They aren’t hiring the local people who were operating the service before.
            Your argument about Obamacare is so full of holes and self contradictory that it is hard to respond to. You say they have been cutting back ( eliminating workers’ rights and benefits) for decades, yet it is Obamacare that has been the last straw in completing this disaster. Companies are just using Obamacare as another excuse to continue this action even further. They have used every other excuse to justify demeaning the value of human labor, and they ought to thank Obama for giving them another well publicized one! You should be celebrating Obamacare for allowing employers to push the supply/demand argument to this end result, because you actually believe that this is free market economics at work.

          • RickCaird

            You misinterpreted what I said. I said that governments have been outsourcing for years. What I did not say is that government has been hiring part time workers for years or cutting back on “rights and benefits”. In fact, the very fact that governments have not been cutting back on pensions is exactly what is leading them to bankruptcy. That part is new with ObamaCare. Similarly, universities are now capping adjunct professor’s hours at less than 30. That, too, is new and it is a part of ObamaCare.

            Look, Manufacturing companies, on site service companies, and, in fact, most businesses prefer full time workers. That has always been the case because if you take a job and share it with two people, there are communication problems. It is less cost effective and with ObamaCare they have to watch the overtime. That is the counterpoint to your claim “Companies are just using ObamaCare…”. No, they are reacting to the new costs with ObamaCare. I do not understand why the left seems unaware that companies are just as rational as they are with their own home spending.

            You have a very low opinion of business in general and employers in particular. That opinion is wrong. The fact is employers are reacting to ObamaCare, not taking advantage of it.

          • RickCaird

            Please the difference to the labor force or any place else if the the same number of drivers are employed as before, but located in a different geography. Why do you care?

          • cynthia curran

            Cause Rick Perry believes in the free market and anyone including foreign companies should have a bid to drive down wages and keep cost low, sorry Republicans its true.

      • MoReport

        Sigh. No schadenfreude here, just the sad fact that the consumer economy generally, and the service economy in particular, are going away and won’t be coming back.
        The Federal government supported them for decades with fiscal policy which distorted
        and damaged the entire economy, but something which can’t go on forever won’t;
        The Feds are bankrupt, the economy is stalled, about to crash, and payback will be Hell.

        • Margon49

          You left out the Wall Street predators…

    • Gypsy Boots

      Of course they have! It’s just that they are against growth and prosperity, though they rarely admit it.

      • Margon49

        No. Liberals are just against greed, especially when it hurts or kills other people. It is a sad fact that the motivator behind the U.S. economy is simply greed and avarice, and has so many people like you who think that is a good thing.

        • Gypsy Boots

          “The” motivator? The only one? Really? Every businessman who tries to make a profit is simply “greedy”? No benefits for anyone else? We have no choice but to buy those products?

          If you’re not against growth, as you claim, how else are we going to get growth except through “greedy” business? governments sure as hell can’t generate growth by themselves, as they’ve proven many, many times.

          I think you’ve just made my point for me. Now be completely honest and admit you want a centrally-planned economy with unaccountable bureaucrats who think like you making decisions instead of free buyers and sellers.

          Oh, wait…we tried that. It was called Communism.How’d that work out?

          • Margon49

            Actually what we have is a return to the days of the robber barons. It’s not so much that I think the government should control the economy as I wish the corporations DIDN’T have as much control over legislators as they do. The “greed” I speak of is about the phenomenon of gross inequality of wealth in the world today.This is not MY opinion. This is a fact and an issue being discussed world wide.

            How do you account for CEOs receiving 30 times the income of that of the average worker 35 years ago with CEOs now receiving 300 times that of the average worker? Is this what you call free enterprise? When CEO make their bonuses by eliminating workers from jobs and making the remaining people do 2 to 3 jobs at once, ostensibly to cut expenses, productivity seems to go up, but infact the jobs do not get done properly. And you consider this a GOOD system for people to live under? This issue is not about any rational economic system. It is about a few people controlling all the resources in the world through wars and exploitation of human beings. When you start calling people “human capital” and treating them like commodities, you are going down a very slippery slope where people are dispensable and extermination for convenience becomes an option.

            This was happening before Obamacare, for the last 35 years, in fact. Obamacare is a response to this suppression of income for most people, because people have been dying (26,000 a year) simply because they could not afford preventative care or going to a doctor for an ailment. Sorry if saving people’s lives is too Socialist for you! By the way, when did we ever have Communism in this country?

      • Margon49

        True prosperity is prosperity for ALL in a society. It’s not hard to have a society where a few people benefit from the labor of everyone else. You can find that in every dictatorship and potentate in the world. Since when is the credo of capitalism “prosperity for the few and poverty for the many”?

        • Gypsy Boots

          That system is called crony capitalism, in which the market is not truly free because it is restricted to the leader’s friends. it’s the only type of capitalism that Obama and lefties like. For a sample, look south to Venezuela: years of Hugo Chavez’ brand of socialism have crippled and impoverished what was once a prosperous democracy, to the point where this oil nation has to import oil and can’t even keep power on all day anymore.

          Meanwhile, Chavez’ family, mysteriously, are billionaires.

          http://www.usatoday.com/story/news/world/2014/10/01/venezuela-supermarket-fingerprinting/16501811/

      • Margon49

        Growth and prosperity implies that the economy, the entire society benefits…. otherwise, when just a few benefit, it’s called exploitation and manipulation.

  • Misanthrope

    Economists are always surprised – especially if one of their predictions is accurate.

  • Gypsy Boots

    Margon49: What is your definition of “trickle-down”? I know firsthand that the McDonalds in Victoria, Texas, is forced to pay its workers a starting wage of $21 an hour to keep them from going to the oil fields.

  • Gypsy Boots

    I’m not questioning anything you say about greed; I’m just asking, what’s your alternative? It’s not a simple-minded alternative between “greed” and “justice.” What’s important is not capitalism per se, but the freedom that makes it possible.

    “Democracy and capitalism are the worst systems – except for all the others.” (with apologies to Winston Churchill.)

    When I say “we” tried communism, I meant humanity, in the former Soviet Union and other countries, not just America. (Apparently my outlook is more “global” than yours!)

    “We” (meaning America) may not have tried Communism (yet), but we are now trying soft-core nannyist versions of socialism that come close. A free market will always allow opportunities for greed, unfortunately, despite regulations; that just means we have to be always vigilant. (There’s no such thing as “eliminating” greed, or any other sin.)

    But a totally administered society run by unaccountable bureaucrats is even more corrupt and can’t even offer prosperity and opportunity to compensate for tyranny and control.

    By the way, Obamacare did not create income inequality, as you say; but it’s making it worse because it incentivizes more of it. It creates incentives for business to lay off full-time workers and make as many as possible part-time, contributing to the “temping” of America. You’re quite mistaken (and gullible and naive) if you think that anything about Obamacare was a challenge to any business practice; the big insurance companies were allowed to write key provisions to benefit themselves. The increases in premiums are being passed along to us, the consumers. Obamacare was a gift to Big Insurance, your alleged corporate bad guys.

    • Margon49

      An excellent example of an alternative is the social system in Australia. My mother and other family members have lived there for decades. She said she would never come back here because she can’t believe what a sewer American has become because so many people here emulate predatory capitalists and ideologues and forget that ALL citizens must benefit from a society or else it is not viable. They are GLAD, grateful even to pay higher taxes, to have every need and right assured.

      She is from a country that was behind the iron curtain, and she is pretty sure that was NOT communism. It was the same vampiric system that any country with wealthy people on the top of a mountain of poor people is. We have just become like the mid-east countries with embarrassingly wealthy sheiks and royal families, like Russia with it’s oil barons, like some African countries with mineral wealth, forgetting that the majority of the population is barely surviving.

      • Gypsy Boots

        So America is now equivalent to African and Mideast countries and former Communist regimes? Really? I’ve visited all those places. They all have huge waiting lists for U.S. visas. I wonder why? You must know something they don’t. Australia is a fine place, and I would love to visit there. I like many things they’re doing. They still practice capitalism, however.

        • Margon49

          America has been through this twice before… which resulted in tremendous reforms in how capitalism is practiced. The form of exchanging goods and services, capitalism in this case, is never a description of the totality of a culture (even though capitalists have adopted that word as if it were). What is being practiced here is not capitalism because there is no free market… it is rigged to benefit the few and powerful as they pay legislators to write laws putting them in control (look up the organization ALEC). YES, all the new voter disenfranchisement and Citizens United decisions makes our elections no better than the rigged elections in those countries.

    • Margon49

      I never said Obamacare was the cause of income inequality.
      The most important benefit of Obamacare is that people like me and my daughter, who are both self-employed, can now get affordable insurance. Also the abolition of denying affordable coverage or any coverage at all for pre-existing conditions is already saving lives. Too bad those factors don’t fit into the free market thought patterns.

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