patrick.net

GraooGra says

This is incorrect right there. You are implying that the rich are making their money on the backs of the rest of the people. You are implying that they gouge them, steal from them. That's Marxism my friend.

What Bill doesn't understand is that if a family is struggling say with two wage earners busting their butts every day for survival level (barely) pay,... that doesn't benefit the rich. They aren't contributing anything productive to society the way that capital can. In fact these people are takers. If the guy or his wife is out of work for even a short time, they will be sucking at the govt tit with food stamps or unemployment, just taking again from the truly productive people who have money working for them.

What are you going to do with these people who can't even take care of themselves? If they had any gumption, intelligence, or motivation they should be millionaires by now, and they only have themselves to blame if they aren't. Anyone who doesn't realize how easy it is to move up in to prosperity in this country just isn't paying attention.

And for those who can't cut it, hey, deal with it, this is what we like to call social Darwinism.

So what if middle class incomes haven't gone up at all in the last few decades, and incomes for the 5% have more than doubled? That's just a testament to the power of capital and wealth. We all know that investment in equities, real estate, and emerging economies is what drives employment in this country. Without these job creators, we are in big trouble.

GraooGra says

There is no social struggle right now. Upward mobility is possible in the modern time unless the administration is going to freeze people in their current predicament forever just to get more votes for the future.

Yes, that corrupt monster Obama is only thinking of ways he can hurt the economy, by taking from the job creators and holding the middle class down so that they will continue to be takers that vote for democrats. Evil evil democrats !

Our only hope is that republicans can figure out how to increase the income and wealth gap even more, so that the job creators can help more people pull themselves up to the top 5%.

Bellingham Bill says

Where do you think all the great incomes of the 1% are coming from???

Contract between willing parties.
I agree that government shouldn't bail out the Wall Street. Let too big to fail fail. Let the market correct it. We would be already over the crisis by now.

Bellingham Bill says

Plus on top of that we have skyrocketing corporate profits. Here's profits (blue) vs. wages (red) as a % GDP:

Profit is not greed or maybe 'greed is good'. If markets are normal there are competing players and prices are equalized so the profit is right. When market is not in balance then there is 1% and 99%. Who makes imbalance?

Peter P says

There is no evil except the self-limiting thought in people's heads.

If you must choose between two evils, pick the one you've never tried before

.
.
.

A conclusion is the place where you got tired of thinking.

Steven Wright

Peter P says

deepcgi says

Everything holding stable for the moment, but eventually you have Bastille Day.

I usually have Country French for dinner on Bastille Day, even though I prefer Provençal food.

My family tradition on Bastille day begins with a hearty breakfast of brains and eggs, followed by a day trip to the local memorial park where we walk around and laugh at the gravestones of the richest people in the cemetery.

GraooGra says

If markets are normal there are competing players and prices are equalized so the profit is right.

this is free marketeer theology with a tenuous relation to reality.

Profits from mere ownership of natural wealth -- resource rents -- are never "right". We just allow it because we are stupid.

How can one "compete" in the land market anyway? Land cannot be manufactured and it cannot be imported. It is where it is.

Housing can be constructed but each construction actually lessens the value of neighboring lots, which is why increasing density is subject to NIMBYist restrictions (everyone wants to be the last to build in a particular area).

In Soviet America, it is the top 5% skimming ~30% of the economy for their own benefit:

http://taxfoundation.org/article/summary-latest-federal-income-tax-data-2012#table1

In Soviet Russia, it was party insiders skimming ~30% of the economy for their own benefit:

Membership in the party ultimately became a privilege, with a small subset of the general population of Party becoming an elite class or nomenklatura in Soviet society. Nomenklatura enjoyed many perquisites denied to the average Soviet citizen. Among those perks were shopping at well-stocked stores, access to foreign merchandise, preference in obtaining housing, access to dachas and holiday resorts, being allowed to travel abroad, sending their children to prestigious universities, and obtaining prestigious jobs (as well as party membership itself) for their children. It became virtually impossible to join the Soviet ruling and managing elite without being a member of the Communist Party.

http://en.wikipedia.org/wiki/Communist_Party_of_the_Soviet_Union#Membership

Well aside from the foreign merchandise thing, we're looking pretty Soviet these days!

When market is not in balance then there is 1% and 99%. Who makes imbalance?

THE MARKET CAN MAKE THE IMBALANCE.

Markets are not perfect wealth-distributing machines. If you believe this your understanding of reality is completely defective, and for that matter your understanding of history ca. 1800-now is utterly lacking.

To fix things, we have to fix the leaks in the 99% economy, where the 1% are siphoning wealth out of the 99% via their many rent-taps, in land, health care, energy extraction, and other high-rent "necessity" areas of the economy.

For people who want to know why profits are at record highs, there is an explanation. The economy is in the tank with high unemployment. This naturally puts pressure on wages. Most of the jobs lost in the '08 and '09 crash are slow to come back, many of them will never come back. Businesses are not in a hurry to hire and invest in new production capacity because they know that the only thing stimulating the economy is artificial government backed debt stimulus. Therefore they know that it is unsustainable. Furthermore, government has put further cost burdens on private business through new healthcare requirements. So why would any responsible business executive hire more people and ramp up production under these circumstances?

So don't worry; these "evil" profits, which happen to be putting food on the tables of millions of retirees through their pension plans, are paying for things like dividends and stock buy backs instead of new production. But don't worry about those horrible, horrible profits. They will disappear once the stimulus ends. Then the evil capitalists won't have any profits to give back to those undeserving retirees, pensioners and savers ... and all will be well in the minds of progressives everywhere.

GraooGra says

Contract between willing parties.

LOL, the 1% figured out a long time ago how to avoid that unpleasant loss of their power position.

It took the Black Death killing off half the population to make labor valuable again and an equal bidder in these "contracts between willing parties".

Or perhaps some people lack the will to power.

JohnLaw says

So don't worry, these "evil" profits, which just so happen to be putting food on the tables of millions of retirees through their pension plans

This is particularly odious bullshit, wheeling out grannie in front of the 1% who've enslaved the population.

While I agree the baby boom pensions have to be paid out of the surplus we all make, we can tax the 1% to pay for a helluva lot.

If the top 5% paid a 40% tax burden instead of 20%, we'd have another $550B to go around.

If corporations faced double their current tax burden, we'd have another $350B.

Together that's $900B, which would close the deficit completely if we could get our overall economy back on track and more people back to work.

marcus says

Yes, that corrupt monster Obama is only thinking of ways he can hurt the economy, by taking from the job creators and holding the middle class down so that they will continue to be takers that vote for democrats. Evil evil democrats !
Our only hope is that republicans can figure out how to increase the income and wealth gap even more, so that the job creators can help more people pull themselves up to the top 5%.

Oh yes! And who is John Galt?

Peter P says

Or perhaps some people lack the will to power.

The sooner you fall behind, the more time you'll have to catch up.

again, Steven Wright

Peter P says

Or perhaps some people lack the will to power.

"Will to power" leaves you firing a Smith & Wesson into your temple while biting on a cyanide capsule.

Who is John Galt?

That is a good question.

This past Halloween I was Altas Shrugged. I actually shrugged and dropped the Pilates Ball I was carrying on my shoulders.

Will to power is the driving force behind everything in the universe. It is just amazing so many people thought their only purpose in life is to procreate.

That is just like littering.

GraooGra says

And who is John Galt?

Things can go too far to either extreme.

Bellingham Bill says

In Soviet Russia, it was party insiders skimming ~30% of the economy for their own benefit:

Membership in the party ultimately became a privilege, with a small subset of the general population of Party becoming an elite class or nomenklatura in Soviet society. Nomenklatura enjoyed many perquisites denied to the average Soviet citizen. Among those perks were shopping at well-stocked stores, access to foreign merchandise, preference in obtaining housing, access to dachas and holiday resorts, being allowed to travel abroad, sending their children to prestigious universities, and obtaining prestigious jobs (as well as party membership itself) for their children. It became virtually impossible to join the Soviet ruling and managing elite without being a member of the Communist Party.

http://en.wikipedia.org/wiki/Communist_Party_of_the_Soviet_Union#Membership

Well aside from the foreign merchandise thing, we're looking pretty Soviet these days!

GraooGra says

Profit is not greed or maybe 'greed is good'. If markets are normal there are competing players and prices are equalized so the profit is right. When market is not in balance then there is 1% and 99%. Who makes imbalance?

Greed is just another name for the will to power. It is not only good, it is the defining property of anything.

There will always be the 1% and the 99% though. But only technocrats are obsessed with such numbers.

When I'm not in my right mind, my left mind gets pretty crowded.

Steven Wright

I don't want to bury my question:

Who creates/who is responsible for imbalances in the free market economy?

Peter P says

Greed is just another name for the will to power. It is not only good, it is the defining property of anything.

Profit is just a reward for the risk taking. It is not greed. Marxists always talk about corporate profit as if it is ugly, bad, and evil greed.

GraooGra says

Profit is just a reward for the risk taking. It is not greed. Marxists always talk about corporate profit as if it is ugly, bad, and evil greed.

Well, I really think greed is good because it is the life force of the universe.

Yes, profit is the reward for the risk taking. But the want for profit is greed.

Want is NEVER wrong.

Bellingham Bill says

If markets are normal there are competing players and prices are equalized so the profit is right.

this is free marketeer theology with a tenuous relation to reality.

Profits from mere ownership of natural wealth -- resource rents -- are never "right". We just allow it because we are stupid.

Bill, I just wrote that profit is a reward for the risk taking. But in non-mystical world it is only the end result of the accounting formula:
Revenue - Expenses = Profit (Loss).

If you don't make enough profit you won't do the business. As simple as that.

Peter P says

Want is NEVER wrong.

Want and Greed are not this same things for me. Greed might be excessive want.
Excessive want/greed means that you do anything for obtaining it even immoral, unethical or illegal.

Many progressives hate profit because they do not understand risks and they refuse to accept the stochastic nature of worldly affairs.

GraooGra says

Want and Greed are not this same things for me. Greed might be excessive want.
Excessive want/greed means that you do anything for obtaining it even immoral, unethical or illegal.

I think want is always good.

How you manifest wants can have other moral and/or legal consequences.

Who is to tell someone that he is wanting too much?

when you break the moral/ethical and legal code.

Legal code is questionable because the current legislature can create a law which is immoral. Example socialist government created a law of no private market. Black market of everyday goods for sale was illegal but it was moral. People broke that law constantly and didn't feel bad about it.

GraooGra says

when you break the moral/ethical and legal code.

Wants cannot possibly break any code. On the other hand, actions can break code.

One must take moral responsibility for his actions but one should never censor his wants.

I suspect many poor people are poor now mostly because they grew up hearing their parents moaned and bitched about those "evil" rich people.

Peter P says

Many progressives hate profit because they do not understand risks and they refuse to accept the stochastic nature of worldly affairs.

They don't understand profit. K. Marx misunderstood profit. He equated it to greed. Progressives take it from Marxists.

This is my meta-ethical belief:

1) everyone should self-legislate his own moral code, and

2) a moral code is valid if and only if the moral value of any given action can be determined ex ante

GraooGra says

They don't understand profit. K. Marx misunderstood profit. He equated it to greed. Progressives take it from Marxists.

I guess Karl Marx misunderstood greed too.

Progressives tend to favor certainty over unknown. They also tend to confuse "knowledge" with epistemology and they loathe to contemplate unknowability.

JohnLaw says

Therefore they know that it is unsustainable. Furthermore, government has put further cost burdens on private business through new healthcare requirements. So why would any responsible business executive hire more people and ramp up production under these circumstances?

You are answering my question of who is creating imbalances in the free market economy.

Government creates imbalances. Big government and its interference into the free market creates imbalances.

I believe in laissez faire market. You let it go it is going to self adjust really fast.

Peter P says

This is my meta-ethical belief:

1) everyone should self-legislate his own moral code, and

2) a moral code is valid if and only if the moral value of any given action can be determined ex ante

Don't go to metaphysics with me. I believe in ethical monotheism. The code has to be external and dissociated from our emotions and subjectivity.

GraooGra says

Government creates imbalances. Big government and its interference into the free market creates imbalances.

One paradox though: the sole function of an ideal government is to protect private properties. This alone can create distortions in the market.

As market participants, we just have to make business decisions around these distortions.

GraooGra says

If you don't make enough profit you won't do the business. As simple as that.

Sure. I make profit on my work, everybody makes profit.

But economics rents -- profit -- are eroded by competition, so the powerful seek to find economic areas with reduced competition.

This is called rent-seeking.

Real estate, natural resources, telecommunications (both wired and RF), health care have been natural monopoly opportunities with high barriers to entry and thus protected profits.

The imbalance comes from the 99% having to "willingly contract" with these rent-seekers for life's necessities.

Money just keeps flowing up the pyramid, and the rent-seekers just buy up more natural monopolies.

http://news.firedoglake.com/2012/11/15/hedge-fund-blackstone-buying-100-million-in-foreclosed-homes-every-week/

Recall your last game of Monopoly for how this dynamic ends.

GraooGra says

Don't go to metaphysics with me. I believe in ethical monotheism. The code has to be external and dissociated from our emotions and subjectivity.

Meta-ethics is not the same as meta-physics.

I give up on external value systems long ago. And we really do not need one. Now I am a subjectivist who respects Ayn Rand.

The market is supposed to

1) allow individuals with different values communicate expectations
2) enforce that such expectations be met

It really is an amazing thing.

Peter P says

One paradox though: the sole function of an ideal government is to protect private properties. This alone can create distortions in the market.

So whoever has property creates the government. I believe if government is small enough it would be true representative of the people. It doesn't become a self serving beast.

GraooGra says

The code has to be external and dissociated from our emotions and subjectivity.

now that's some good "pseudo-rationalist" thinking!

GraooGra says

So whoever has property creates the government. I believe if government is small enough it would be true representative of the people. It doesn't become a self serving beast.

Absolutely. The government should exists only to protect individual private properties.

But since the government is comprised of self-serving individuals it too can become self-serving.

GraooGra says

So whoever has property creates the government

No, government creates property. No property exists without government.

Well, real property at least:

"A right of property in moveable things is admitted before the establishment of government. A separate property in lands, not till after that establishment. The right to moveables is acknowledged by all the hordes of Indians surrounding us. Yet by no one of them has a separate property in lands been yielded to individuals. He who plants a field keeps possession till he has gathered the produce, after which one has as good a right as another to occupy it. Government must be established and laws provided, before lands can be separately appropriated, and their owner protected in his possession. Till then, the property is in the body of the nation, and they, or their chief as trustee, must grant them to individuals, and determine the conditions of the grant." --Thomas Jefferson, 1812.