patrick.net

Reality says

It's a very precise analogy of what you were saying. You literally were repeating the Ford propaganda nonsense about paying workers more so they could buy cars. It made no sense and makes no sense even today: the total number of cars that the workers could possibly buy could not amount to more than even 1% of the 20million or so Model T produced. The real reason why he raised wages was for worker retention.

I'm doing no such thing. I'm saying higher minimum wage will reduce corporate profits that go primarily to the rich, thereby decreasing inequality, and increasing demand. And since we're in a demand driven recession, it will benefit the overall economy (and society).

Reality says

Interest being so low is what's causing the lack of profitability among businesses and lack of investment opportunity: all the ponzi borrowers are kept in business to compete against the real productive firms. The inefficient businesses are kept in business to siphon real industry revenue to banks via interest payment. The banks producing very high profitability is the reason why you can cite high profitability among large corporations. Of course, it doesn't take extra employees to shuffle more money around in the banking system. That's why you see real industries face plight while banks live on high hogs without having to hire more people!

That is ridiculous. If businesses are inefficient, why aren't new companies sprouting up to compete with them? Low interest rates make the barrier to entry lower--should encourage new entrants.

So, please produce a graph showing the % of corporate profits from the banking industry now vs. 30 years ago. Let's see if you're right?

Reality says

. Minimum wage laws work by banning certain types of transaction from taking place. It does not require anyone to do more business or do any business at all. How can that possibly increase total transaction volume in the economy after inflation effect is fed through and adjusted?

It's simple really. Some transactions don't take place, but the ones that do are much, more beneficial to the economy. The overall sum is positive to the economy.

+1

FortWayne says

You don't want to subsidize, tell government to cut off welfare and all other hand outs. Property taxes are a tax write off, lets cut that off? But if you love welfare, than love to pay for it.

tatupu70 says

The graph was corporate profits. Period. Please post the data for small businesses then. Surely you've seen data to make you so certain. Of course there are some vacant spaces--we're still recovering for a recession and were overbuilt in 2008. The businesses that are left have less competition and are probably making higher profits now.

I already explained to you previously, on multiple occasions, the problem with the so called "corporate profits" you cite: because the financial industry account for about half of all corporate profit and financial industry is much more volatile than the average of all other industries, your "corporate profit" graph is in reality a reflection of financial industry profitability. We are more than half a decade into recovery! The high vacancy rate among small commercial real estate is reflective of the Main Street, especially small businesses, under a lot of stress.

tatupu70 says

Was Henry Ford driven out of business in 1917 when he paid workers multiple times that of his competitors?

You're comparing apples and oranges again. There was no other company making Ford cars at the time. A company doing the same thing but paying higher wages will be driven out of business as the more profitable company cuts prices.

What are you? Some former soviet statistician? No two businesses are supposed to be doing exactly the same thing the same way! Each business is supposed to be doing things just a little differently; the more efficient firm is supposed to be able to pay just a little more for input factors (material and human labor) than its competitors while charging the consumers a little less than the latters; that's precisely how the more efficient firm drives the less efficient ones out of business!

tatupu70 says

Why? Just because of your hand waiving? You are simply wrong: both Henry Ford nearly a century ago, and high tech companies more recently prove you wrong: by offering higher wages, they are able to attract more productive workers to work on their more productive ways of doing business.

Of course, if they hire more productive workers. Your original premise was that they hired the same workers but paid them higher wages. If you change the rules, then it's an entirely different discussion.

What are you talking about? No two workers are the same. It pay more for the same worker than its competitors can, therefore it is able to attract workers; because it is able to attract workers (thanks to higher pay), it is also able to choose the better workers. Just like in any competitive hiring environment. Are you retarded or just pretending to be?

tatupu70 says

I'm doing no such thing. I'm saying higher minimum wage will reduce corporate profits that go primarily to the rich, thereby decreasing inequality, and increasing demand. And since we're in a demand driven recession, it will benefit the overall economy (and society).

And you are wrong. Higher minimum wage means bigger firms with easier capital access under the FED regime can replace workers with automated machines financed at favorable interest rates, whereas smaller firms without such privilege are driven out of business. The result is greater inequality, not less inequality: more wealth is concentrated into the hands of fewer large corporate shareholders and big banks, whereas the would be worker would have less employers to choose from in addition to losing the job at the smaller firm to begin with. Double Whammy!

tatupu70 says

That is ridiculous. If businesses are inefficient, why aren't new companies sprouting up to compete with them? Low interest rates make the barrier to entry lower--should encourage new entrants.

Because access to easy credit can keep inefficient firms in business, and their continued output drives down price and profitability of other firms.

So, please produce a graph showing the % of corporate profits from the banking industry now vs. 30 years ago. Let's see if you're right?

Are you serious? You are not aware that the financial industry has been taking up a rapidly growing share of total corporate profit in the past 30 years?

tatupu70 says

. Minimum wage laws work by banning certain types of transaction from taking place. It does not require anyone to do more business or do any business at all. How can that possibly increase total transaction volume in the economy after inflation effect is fed through and adjusted?

It's simple really. Some transactions don't take place, but the ones that do are much, more beneficial to the economy. The overall sum is positive to the economy.

Giving young people, especially underprivileged minority, their first job is one of the most socially beneficial transactions. Yet, that's precisely what raising minimum wage prevents.

Reality says

already explained to you previously, on multiple occasions, the problem with the so called "corporate profits" you cite: because the financial industry account for about half of all corporate profit and financial industry is much more volatile than the average of all other industries, your "corporate profit" graph is in reality a reflection of financial industry profitability. We are more than half a decade into recovery! The high vacancy rate among small commercial real estate is reflective of the Main Street, especially small businesses, under a lot of stress.

Yes, you've claimed that on numerous occasions. I'm asking you to support that assertion. Otherwise, I'll give that claim the same weight as all your other hand waving nonsense that was proven to be BS.

Reality says

No two businesses are supposed to be doing exactly the same thing the same way! Each business is supposed to be doing things just a little differently; the more efficient firm is supposed to be able to pay just a little more for input factors (material and human labor) than its competitors while charging the consumers a little less than the latters; that's precisely how the more efficient firm drives the less efficient ones out of business!

Obviously. I assumed this was a thought experiment otherwise it was completely meaningless. I should have expected meaningless out of you, I guess.

Reality says

What are you talking about? No two workers are the same. It pay more for the same worker than its competitors can, therefore it is able to attract workers; because it is able to attract workers (thanks to higher pay), it is also able to choose the better workers. Just like in any competitive hiring environment. Are you retarded or just pretending to be?

No kidding. I assumed that the company paying higher wages was stealing the workers from the company paying lower wages. Again I figured it was a thought experiment and had some value. Clearly it was just another dumb statement.

tatupu70 says

already explained to you previously, on multiple occasions, the problem with the so called "corporate profits" you cite: because the financial industry account for about half of all corporate profit and financial industry is much more volatile than the average of all other industries, your "corporate profit" graph is in reality a reflection of financial industry profitability. We are more than half a decade into recovery! The high vacancy rate among small commercial real estate is reflective of the Main Street, especially small businesses, under a lot of stress.

Yes, you've claimed that on numerous occasions. I'm asking you to support that assertion. Otherwise, I'll give that claim the same weight as all your other hand waving nonsense that was proven to be BS.

Do you dispute the following two facts:

1. Financial industry account for nearly half of total corporate profit at recent cycle peaks;

2. Financial industry profitability is much more volatile than most other industries during economic cycles?

Seems to me both facts are very obvious, and from these two facts alone one can easily deduce that the overall corporate profitability graph in an economic cycle is really a reflection of the dominant and most volatile industry, the financial industry. What is it that you want to dispute?

tatupu70 says

No two businesses are supposed to be doing exactly the same thing the same way! Each business is supposed to be doing things just a little differently; the more efficient firm is supposed to be able to pay just a little more for input factors (material and human labor) than its competitors while charging the consumers a little less than the latters; that's precisely how the more efficient firm drives the less efficient ones out of business!

Obviously. I assumed this was a thought experiment otherwise it was completely meaningless. I should have expected meaningless out of you, I guess.

Your artificially constructed thought experiment is designed so that it's utterly pointless for either business to put the other out of business because they are equally efficient and doing exactly the same thing the exact same way. What is the point of competition among two firms like that? No wonder you socialist can only think in terms of bureaucrats controlling all production: you think all businesses do exactly the same thing! LOL

tatupu70 says

What are you talking about? No two workers are the same. It pay more for the same worker than its competitors can, therefore it is able to attract workers; because it is able to attract workers (thanks to higher pay), it is also able to choose the better workers. Just like in any competitive hiring environment. Are you retarded or just pretending to be?

No kidding. I assumed that the company paying higher wages was stealing the workers from the company paying lower wages. Again I figured it was a thought experiment and had some value. Clearly it was just another dumb statement.

Nope, you are the one tossing out dumb statements. You obviously missed the part where the more efficient firm is able to pay more for the same worker, and is willing to pay more for the same worker because it can generate more profit from hiring the worker than the worker's previous employer can.

Reality says

And you are wrong. Higher minimum wage means bigger firms with easier capital access under the FED regime can replace workers with automated machines financed at favorable interest rates, whereas smaller firms without such privilege are driven out of business. The result is greater inequality, not less inequality: more wealth is concentrated into the hands of fewer large corporate shareholders and big banks, whereas the would be worker would have less employers to choose from in addition to losing the job at the smaller firm to begin with. Double Whammy!

lol---you are ridiculous. Higher minimum wage might lead to more automation, yes. But that's going to happen anyway eventually. The sum will still be beneficial.

You bring up a good point though that automation tends to concentrate wealth. The US needs to develop a plan to deal with that inevitability and quickly. Higher unearned income tax seems to make the most sense.

Reality says

Because access to easy credit can keep inefficient firms in business, and their continued output drives down price and profitability of other firms.

If their price is so low that it drives out new competitors--they're not really inefficient. There is no easy credit for companies that continue to lose money.

Reality says

Are you serious? You are not aware that the financial industry has been taking up a rapidly growing share of total corporate profit in the past 30 years?

I said prove it. Post some data for god's sake. You look like an idiot when all you do is wave your hands all day.

Reality says

Giving young people, especially underprivileged minority, their first job is one of the most socially beneficial transactions. Yet, that's precisely what raising minimum wage prevents.

lol--I'm sure they said the same thing when 6 year olds were no longer able to work the coal mines.

tatupu70 says

And you are wrong. Higher minimum wage means bigger firms with easier capital access under the FED regime can replace workers with automated machines financed at favorable interest rates, whereas smaller firms without such privilege are driven out of business. The result is greater inequality, not less inequality: more wealth is concentrated into the hands of fewer large corporate shareholders and big banks, whereas the would be worker would have less employers to choose from in addition to losing the job at the smaller firm to begin with. Double Whammy!

lol---you are ridiculous. Higher minimum wage might lead to more automation, yes. But that's going to happen anyway eventually. The sum will still be beneficial.

You bring up a good point though that automation tends to concentrate wealth. The US needs to develop a plan to deal with that inevitability and quickly. Higher unearned income tax seems to make the most sense.

LOL! You do realize, you are creating the problem to begin with by using minimum wage law to put the smaller competitors out of business! How is that sum still beneficial? Who is doing the summation? Are you only counting campaign donations from big corporations?

High "unearned income" tax would lead to capital flight. Talk about socialists cooking up more taxes and regulations to correct their previous errors while making the situation worse!

tatupu70 says

Because access to easy credit can keep inefficient firms in business, and their continued output drives down price and profitability of other firms.

If their price is so low that it drives out new competitors--they're not really inefficient. There is no easy credit for companies that continue to lose money.

FED window interest rate is lower than inflation rate. Therefore a ponzi borrower can buy assets and sit on it and make profit just by arbitrating the difference between FED window rate vs. inflation. Continued presence of inefficient producers in an industry can not only depress price and profitability in an industry but also prevent economy of scale. Compared to such low return prospects in a real industry, investors may well choose to borrow from the FED window and sit on assets instead of investing in any productive industry. That's more or less what they have been doing; e.g. buying up single family houses and sitting on them at low interest rate.

tatupu70 says

Are you serious? You are not aware that the financial industry has been taking up a rapidly growing share of total corporate profit in the past 30 years?

I said prove it. Post some data for god's sake. You look like an idiot when all you do is wave your hands all day.

LOL. You sound like an idiot asking people to prove the sun rises from the east, a piece of common knowledge. You should really do some google search before asking such silly questions. Here is the first link came up on my search:

http://www.washingtonmonthly.com/magazine/novemberdecember_2014/features/frenzied_financialization052714.php?page=all

"The financial system has grown rapidly since the early 1980s. In the 1950s, the financial sector accounted for about 3 percent of U.S. gross domestic product. Today, that figure has more than doubled, to 6.5 percent. The sector’s yearly rate of growth doubled after 1980, rising to a peak of 7.5 percent of GDP in 2006. As finance has grown in relative size it has also grown disproportionately more profitable. In 1950, financial-sector profits were about 8 percent of overall U.S. profits—meaning all the profit earned by any kind of business enterprise in the country. By the 2000s, they ranged between 20 and 40 percent. This isn’t just the decline of profits in other industries, either. Between 1980 and 2006, while GDP increased five times, financial-sector profits increased sixteen times over. While financial and nonfinancial profits grew at roughly the same rate before 1980, between 1980 and 2006 nonfinancial profits grew seven times while financial profits grew sixteen times."

Do you see that 40% number? That was around 2007, around the peak of the economic cycle. Of course, the next year it was negative. That's why the overall corporate profit graph you cite is really a reflection of financial industry profitability. Please remember this time. I'm sick of having to explain that same thing to you over and over again.

tatupu70 says

Giving young people, especially underprivileged minority, their first job is one of the most socially beneficial transactions. Yet, that's precisely what raising minimum wage prevents.

lol--I'm sure they said the same thing when 6 year olds were no longer able to work the coal mines.

Are you saying young black male aged 18+ should not be allowed to work at all?

Reality says

LOL! You do realize, you are creating the problem to begin with by using minimum wage law to put the smaller competitors out of business

Nope--I realize that you are incorrect. Smaller competitors are often more efficient. And profitable small companies have access to capital.

Reality says

FED window interest rate is lower than inflation rate. Therefore a ponzi borrower can buy assets and sit on it and make profit just by arbitrating the difference between FED window rate vs. inflation.

Not this nonsense again. Fed window is overnight borrowing and is almost never used. It is irrelevant.

Reality says

investors may well choose to borrow from the FED window and sit on assets instead of investing in any productive industry. That's more or less what they have been doing; e.g. buying up single family houses and sitting on them at low interest rate.

More BS. Please list any "investor" that has been borrowing from the Fed window.

Reality says

You sound like an idiot asking people to prove the sun rises from the east, a piece of common knowledge. You should really do some google search before asking such silly questions. Here is the first link came up on my search:

There--was that so hard for you? I never said you were wrong, I only said you need to support your assertions once in a while. But, regardless, you were wrong. You said 50%. Your source said 20-40%. Middle would be 30% which is about what the sources I found said. Not nearly 50%. So you were wrong, as usual.

Reality says

Are you saying young black male aged 18+ should not be allowed to work at all?

Of course not. I'm saying they should all be working making at least $15/hour

Call it Crazy says

Do you think your chart is a true indicator of all corporations across the country?

I'm think it's a summation of profits at US corporations graphed vs. year.

Of interest:

http://noahpinionblog.blogspot.com/2013/02/finance-has-always-been-more-profitable.html

Notice the jump in share in the 1980s. Consider also that the years 1947-1980 saw the greatest increase in the Standard of Living in the US, the explosion of suburbs, car ownership, and other things typically financed. However, since around 1980, wages have stagnated while credit skyrocketed.

tatupu70 says

That's going to happen eventually anyway. All we're doing now is subsidizing corporate profits with our tax dollars.

That makes a solution even easier, just cut welfare benefits.

tatupu70 says

LOL! You do realize, you are creating the problem to begin with by using minimum wage law to put the smaller competitors out of business

Nope--I realize that you are incorrect. Smaller competitors are often more efficient. And profitable small companies have access to capital.

Some of that efficiency comes from lower nominal wages in exchange for better and more personable working conditions. For example, Walmart endorses the raising of minimum wage because WMT itself pays higher than minimum wage, whereas many of its competitors in the grocery and supermarket business pay only minimum wage while offering workers a more personable working environment.

Small businesses have less capital access than big businesses do, in general. On top of that, replacing workers with automation involves economy of scale; that fundamentally benefit bigger businesses at the expense of smaller businesses.

tatupu70 says

Not this nonsense again. Fed window is overnight borrowing and is almost never used. It is irrelevant.

More BS. Please list any "investor" that has been borrowing from the Fed window.

You are the one spouting BS. You can see FED discount window borrowing data here (with 2yr delay in release):

http://www.federalreserve.gov/newsevents/reform_discount_window.htm

The FED window is of course relevant. It is the fundamental function of the FED: lender of last resort. And that is what fundamentally sets the cap on saver's interest.

tatupu70 says

There--was that so hard for you? I never said you were wrong, I only said you need to support your assertions once in a while. But, regardless, you were wrong. You said 50%. Your source said 20-40%. Middle would be 30% which is about what the sources I found said. Not nearly 50%. So you were wrong, as usual.

You are such a habitual liar. Of course you were suggesting I was wrong; you are trying to claim I was wrong even now! I said about half near the peak of economic cycle, not necessarily exactly 50%; the exactitude of those numbers is dependent on reporting methods of numerous companies, so never exact: the result of any statistical study can never be more exact than its inputs. Also, the number in the article was percentage of total business profit, not just corporate profit. In any case, the scale of the number should be common knowledge for anyone knowledgeable about the subject, just like the sun rises on the east. Your gratuitous lies and ignorance only prove that you are an idiotic propagandist with little understanding of economics or current economic affairs. . . and intellectually dishonest on top of your ignorance.

tatupu70 says

Are you saying young black male aged 18+ should not be allowed to work at all?

Of course not. I'm saying they should all be working making at least $15/hour

In other words, you are saying they should not be allowed to work if nobody is willing to pay $15/hr or more. That's exactly what the minimum wage law says. You ignoramus.

FortWayne says

If you are anti subsidies as you say, ask Obama to raise interest rates

This should tell you all you need to know about arguing with this guy.

Reality says

You are such a habitual liar. Of course you were suggesting I was wrong; you are trying to claim I was wrong even now!

Well, you were/are wrong. Despite your lame attempt to distract, there's a big difference between 30% and 50%.

Reality says

In any case, the scale of the number should be common knowledge for anyone knowledgeable about the subject, just like the sun rises on the east. Your gratuitous lies and ignorance only prove that you are an idiotic propagandist with little understanding of economics or current economic affairs. . . and intellectually dishonest on top of your ignorance.

Are you under the impression that the scale of that number was unknown to me? Let me dispel you of that notion.

Reality says

In other words, you are saying they should not be allowed to work if nobody is willing to pay $15/hr or more. That's exactly what the minimum wage law says. You ignoramus.

Actually I'm saying any company that wants to hire a worker must pay $15/hour to that worker. That's not the same thing.

tatupu70 says

My tax dollars are subsidizing large corporations.

No, they are subsidizing lazy losers who think McDonald's is a career.

So then the key is don't hire anybody to work for a company. Hire everybody as independent contractors.
Then the little shits will get the 8.75/hr that they deserve...

tatupu70 says

Reality says

In other words, you are saying they should not be allowed to work if nobody is willing to pay $15/hr or more. That's exactly what the minimum wage law says. You ignoramus.

Actually I'm saying any company that wants to hire a worker must pay $15/hour to that worker. That's not the same thing

zzyzzx says

No, they are subsidizing lazy losers who think McDonald's is a career.

All those high-tech jobs of the future exporting to the 1 Billion!!!11!! customers in China are going unfilled. Lazy STEM people don't want jobs, prefer to get 20 hours at Starbucks.

zzyzzx says

No, they are subsidizing lazy losers who think McDonald's is a career

OH, so now $15/hr is a good career wage ? Maybe when you were 16 it was. But newsflash, using a CPI based inflation calculator (which is conservative), $15 now is like
$2.63 in 1972. And the $15/hr min wage doesn't kick in most places that are doing it until 2017, so make that $2.50.

Minimum wage jobs were never intended to be career jobs.
why are you conflating the two?

marcus says

zzyzzx says

No, they are subsidizing lazy losers who think McDonald's is a career

OH, so now $15/hr is a good career wage ?