Thursday, June 23, 2016

Steve Landsburg on how Hilary Clinton, wants to force you into a profit sharing arrangement

See Clintonomics.
"Are you a corporate employee who wishes that your income were tied more closely to your employer’s profits?

I have good news for you: There’s an easy way to make that happen. Take 10% (or 5% or 20%) of your wages, and use them to buy corporate stock.

Are you a corporate employee who *doesn’t* wish that your income were tied more closely to your employer’s profits?

I have good news for you, too. You don’t have to buy additional stock if you don’t want to.
Hilary Clinton, however, wants to change all that. She wants to force you into a profit sharing arrangement that is, for all practical purposes, equivalent to forcibly converting part of your salary into corporate stock. If you were planning to do that anyway, this will make no difference to you. If you weren’t planning to do it anyway — if, for example, you preferred to diversify your risks by investing your wages in some other industry — then, of course, this will make you worse off.

(I trust that none of my regular readers is silly enough to respond that Clinton’s plan is much better than buying stock, because you get the profit-sharing in addition to your existing salary. But for the benefit of the occasional drive-by reader, this is not possible. Market pressures insure that your total compensation is equal to the value of what you produce for the company, and if one facet of that compensation goes up, then another must go down.)

I have the impression that Clinton supporters like to tout her credentials as a true policy wonk. But the first rule of wonkism is that before you start dictating changes in voluntary chosen arrangements, you’ve got to identify a market failure that you’re trying to alleviate. In this case, what is that market failure? As far as I’ve been able to determine, Clinton has not even attempted to address that question. This is not policy analysis; it is a declaration or contempt even for the possibility of a thoughtful analysis. Don’t we already have enough of that on the other side."

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