tchitt said:People have learned that you can rack up all the debt you can imagine, then tell your creditors you can't pay... file bankruptcy and all is forgiven. I think it's just an overall death of the idea of personal responsibility and duty.
What's sad is that our system is set up so that the only duty you have is to yourself... and everybody wins that way. Until, that is, people start to see that everyone else will take care of them anyway. Complacency born from the amazing standard of living capitalism has given us. It's a cycle and very well may be the death of our economy. Perhaps a (painful) restart is just what people need to wake up.
OH don't get me wrong, there are millions of people out there who live well beyond their means and they should face the consequence.tchitt said:I understand what you're saying and you're correct to a point. What the credit card companies are getting away with right now by raising people's interest rates to ridiculous levels all of the sudden makes me sick. At the same time, I'm sure you can concede this to me; a large percentage of outstanding credit card debt is unnecessary... the product of peoples greed and inability to wait a few more months to splurge on that new flat-screen TV. And you can't tell me there aren't a LOT of people out there who don't push their income levels to the limits... like accepting new car payments of $600 monthly when they know full well that they only have $700 of disposable income every month. (My mom financed my car for me and it was about $400 dollars monthly over what she could actually afford... hence if I screw up my parents are in a bad way.) Fortunately, unless I can't find a larger source of income than a minimum wage job I can make the payments very comfortably. I only make large purchases when I have a coushin of at least a month's worth of bills AFTER the purchase. I receive medical benefits from my employer and always have. I've never worked a minimum wage job and I didn't go to college... just did enough to get by in high school. I didn't get anybody pregnant because I understood the consequences and took the necessary precautions. I make decent money for my skill level, and yes, I had to relocate in order to do so... but thems the breaks. I don't have a credit card and I don't want one. In my opinion they're nothing more than a clever scam people fall into by going for that big juicy carrot dangling in front of their faces. You might feel sorry for these people... I think they're just stupid and shortsighted.
It's not ALL the fault of corruption and greed on the part of the corporations... just everyone being equally idiotic.
Edit: I'm only calling it like I see it. Every single person I know first hand, without exception, that is in some sort of serious financial trouble bought a new truck or a nice house they could never afford. Paid sixty dollars a month for cable TV when broadcast television or doing something else to occupy their time could have sufficed. You know what I'm saying. Poverty happens when people make bad decisions and they have to live with them.
Now I have to ask why we need the corporate entity, by the same token.tchitt said:I'm just sayin' this is an extremely multi-dimensional issue and it bothers me how people have the tendency to attack the "big guy" all the time. I fear that sort of militant "DEATH TO CORPORATIONS" attitude is going to cause more problems than it's going to solve.
tchitt said:Why do we need the corporation? A corporation is nothing like a labor union... you're comparing apples and oranges.
The Case corporation employs 1,300+ people in my city. Considering there are only 40,000 people in my city I'd say that's a pretty significant contribution. The benefits and pay are unmatched for hundreds of miles in any direction for that type of work. They build 28 combines per day, every day, and ship them all over the world where they're used to FEED THE WORLD. There are 12 other businesses (many of which are corporations themselves ...albeit much smaller corporations, but they survive because Case survives) of varying sizes that do a lot of work for Case-IH (who subcontracts parts to be built outside the factory because they don't have the capacity to do it all themselves) which employ thousands more people and pay wages and bennies MUCH higher than they'd earn for working at Starbucks or Wal-Mart
Oh, and last year they donated $1,000,000 to the United Way. This year the goal is $1,200,000.
But yeah, screw them. They pull in five hundred million dollars a year selling 28 combines per day for $350,000 dollars a piece. (Roughly a 13.5% profit) Pure evil, I tell you.
Ford is really a stock trading business who incidently make cars on the side, Chrysler is entirely owned by a investment company since being sold by Merc. GE is basically a bank, GE Capital being much larger than any of it's engineering business.gravenewworld said:Don't they solely exist to make as much profit as possible and keep their stock holders happy?
There are good businesses out there as well as greedy ones. The greedy ones simply get all of the press.
Corporations were invented to protect the community.OAQfirst said:Now I have to ask why we need the corporate entity, by the same token.
mgb_phys said:Ford is really a stock trading business who incidently make cars on the side, Chrysler is entirely owned by a investment company since being sold by Merc. GE is basically a bank, GE Capital being much larger than any of it's engineering business.
Under the current system a greedy company is a good one - companies have only one moral obligation 'to enhance shareholder value'. This is because you are putting your savings into these companies and you need to trust that they will do the best thing for your money.
Unfortunately the system of reporting and share trading mean that it is only possible to do this a quarter at a time. A director of Ford could legitimately be sued for any investment such as R+D which isn't likely to pay off in an immediate rise in share price. Bonuses and promotions also follow this short term view - which also leads to more fraud, after all you only have to get away with it for long enough for tomorrows opening price to rise.
Most restrictions just try and keep up with the latest trick, you need a more fundamental change of attitude to stock.gravenewworld said:what happens when you let capitalism run wild with no restrictions.
Why the focus on financial corporations and CEOs? Do not the government and, say, major league baseball players warrant the same description - greedy? What about their ethics? California alone took in http://www.capitolweekly.net/article.php?xid=xlblt7pmk2pult" (good seats for four - $1,248). How's that for predatory.gravenewworld said:No one is saying do away with corporations. But should corporations abide by business ethics? Why should a corporation have any obligation to the community and country? Don't they solely exist to make as much profit as possible and keep their stock holders happy?
There are good businesses out there as well as greedy ones. The greedy ones simply get all of the press.
How much profit is too much? Does there exist such a thing as too much profit? Is it really ethical that credit banks for years preyed upon people with poor credit histories because they knew they could give them high interest loans and make a killing in profit off of them?
...
That ended, if it ever occurred, in the 1800s/1920s.gravenewworld said:I completely concur.
The era of unfettered capitalism is over.
No restrictions? Where does that occur? Anyway, a big part of the news this week is that government can not police itself.It is obvious now that the corporate world can not police themselves. We are now seeing the true social cost of what happens when you let capitalism run wild with no restrictions.
gravenewworld said:No one is saying do away with corporations. But should corporations abide by business ethics? Why should a corporation have any obligation to the community and country? Don't they solely exist to make as much profit as possible and keep their stock holders happy?
There are good businesses out there as well as greedy ones. The greedy ones simply get all of the press.
How much profit is too much? Does there exist such a thing as too much profit? Is it really ethical that credit banks for years preyed upon people with poor credit histories because they knew they could give them high interest loans and make a killing in profit off of them?
I'll try to find the one WSJ article that I read that was about how credit card banks now almost make 35% of their entire profit from interest rate hikes and penalty fees.
WheelsRCool said:To fix the economy, I think they should do the following:
Cut the corporate tax rate
Make the Bush tax cuts permanent and cut the income tax rates down, making the top rate 28%
Eliminate Sarbannes-Oxley, maybe replace it with something more light and efficient.
Clamp down on government expenditures as much as possible, basically work to bring fiscal conservatism back to the government.
The tax cuts they will run a deficit of course at first, but they are running a larger deficit anyhow with these so-called stimulus programs and planned infrastructure spending.
But the U.S. has one of the highest corporate tax rates as is, so cutting it, in theory, should allow business activity to increase to create more jobs.
For small businesses that file as individuals, they can create more jobs by benefitting from a tax cut as well, as small business is the engine of the U.S. economy.
The 250 largest corporations paid on average 2.5%, Toys “R” Us, AT&T, Boeing, Eli Lilly, Merrill Lynch paid no tax at.WheelsRCool said:Cut the corporate tax rate
What about all the unemployed accountants.Make the Bush tax cuts permanent and cut the income tax rates down, making the top rate 28%
So international investors will stay out of the US market - since they have no way of knowing if the financial statements of the companies they are investing in are fake.Eliminate Sarbannes-Oxley, maybe replace it with something more light and efficient.
Except military of course - people who say this never want to cut spending on wars.Clamp down on government expenditures as much as possible, basically work to bring fiscal conservatism back to the government.
Most of the 'so-called stimulus programs' are to banks where the fed is backing the savings anyway. You could stop fed deposit insurance but then nobody would put their money in banks - so a totally cash economy - so no taxes for anyone.The tax cuts they will run a deficit of course at first, but they are running a larger deficit anyhow with these so-called stimulus programs and planned infrastructure spending.
The US has one of the lowest corporate tax rates, especially when you take into account that nobody pays it.But the U.S. has one of the highest corporate tax rates as is, so cutting it, in theory, should allow business activity to increase to create more jobs.
A reference to the Keynesian multiplier? What do you reckon is the real size of the multiplier when making this statement? There are certain temporary conditions that must be present for that to hold true. Do you believe they are in effect (i.e. liquidity traps)?gravenewworld said:Dollar for dollar, government spending has a more potent effect than tax cutting.
There are certainly some contrary views:The biggest reason we got out of the Great Depression was because of a massive increases in government spending, not tax cuts.
Henry Morganthau, FDR's Treasury Secretary, 1939Morganthau said:"We have tried spending money. We are spending more than we have ever spent before and it does not work. And I have just one interest, and if I am wrong ... somebody else can have my job. I want to see this country prosperous. I want to see people get a job. I want to see people get enough to eat. We have never made good on our promises ... I say after eight years of this Administration we have just as much unemployment as when we started ... And an enormous debt to boot!"
Without some qualifiers on that statement, I am not aware of any Economists that have made such a statement?In fact, there are economists out there that will argue that tax cuts simply have no effects at all.
mgb_phys said:Except military of course - people who say this never want to cut spending on wars.Clamp down on government expenditures as much as possible, basically work to bring fiscal conservatism back to the government.
tchitt said:I think of asking the government to cut DoD spending as sort of a lost cause. We The People don't matter anymore. Our representatives shoot down the bail-out bill... the President turns around and does it anyway with a different pile of our money.
Sorry wasn't meant personally! Anyone who hasn't been involved in building military kit wouldn't believe the amount of waste of time and money involved.I want to clamp down on government expenditures, especially military spending -- I think the DoD is extremely wasteful.
Dollar for dollar, government spending has a more potent effect than tax cutting.
Since we are already in a recession, the government should NOT be cutting spending right now. It should be increasing it. The government is a consumer just like you and me. Will it increase the deficit? Yes. But so do tax cuts. Why not get the most bang for your buck?
The biggest reason we got out of the Great Depression was because of a massive increases in government spending, not tax cuts.
In fact, there are economists out there that will argue that tax cuts simply have no effects at all.
The 250 largest corporations paid on average 2.5%, Toys “R” Us, AT&T, Boeing, Eli Lilly, Merrill Lynch paid no tax at.
So international investors will stay out of the US market - since they have no way of knowing if the financial statements of the companies they are investing in are fake.
Except military of course - people who say this never want to cut spending on wars.
The US has one of the lowest corporate tax rates, especially when you take into account that nobody pays it.
tchitt said:People have learned that you can rack up all the debt you can imagine, then tell your creditors you can't pay... file bankruptcy and all is forgiven. I think it's just an overall death of the idea of personal responsibility and duty.
What's sad is that our system is set up so that the only duty you have is to yourself... and everybody wins that way. Until, that is, people start to see that everyone else will take care of them anyway. Complacency born from the amazing standard of living capitalism has given us. It's a cycle and very well may be the death of our economy. Perhaps a (painful) restart is just what people need to wake up.
Yes if the result of so much wealth redistribution is that a significant part of the economy suffers for the benefit of a much smaller part. Both times that gasoline prices rapidly and greately increased in the USA, the USA auto industry suffered, and eventually the rest of the economy. This last time, we were already in a recession, the first time it started part of the recession process.gravenewworld said:Does there exist such a thing as too much profit?
So in the case of World War II, the massive military build-up is an example of government created jobs that worked very well, and continued on into a relatively prosperous era through the 1950's when the middle income class, suburbs, and a transition from a rural economy to a urban economy. The issue here is that money, like anything, has a perceived value, and generally, gun based economies work better than gold based ones.WheelsRCool said:Every dollar the government spends first has to be taxed out of the economy, or borrowed from somewhere else. Government spending takes away capital that could better be spent in the private sector. I would say tax cuts give us a bigger bang for the buck (if they're the proper tax cuts). The problem is government can "create jobs" but it cannot create wealth which is what counts.
World War II is what pulled us out of the economy because of the massive military builup. This is also how Hitler instantly "fixed" the German economy from the depression.
This is the real problem in my opinion. Only a fraction of the USA workforce is required to provide the basic essentials, food, clothing, shelter, energy, government, and education. Most people in the USA have jobs that involve non-essentital consumer related goods or services. Credit debt is also used to increase the supply of money being spent on all goods or services. This drives up the perceived value of goods and services.consumer economy, perceived value
I'm not sure that there is any good way to fix a consumer based economy. To me all the non-essential stuff is simply play money with perceived but no intrinsic value. How do you distribute wealth when only a small fraction of the population is required to provide the basic essentials? For all the non-essential stuff, how do you control their perceived value? How many jobs, if any, should the government create, other than police, military, and governing? Should government fund research projects at universities? Should government fund space projects, environmental projects? Where do you draw the line?how to fix the economy
People have learned that you can rack up all the debt you can imagine, then tell your creditors you can't pay... file bankruptcy and all is forgiven. I think it's just an overall death of the idea of personal responsibility and duty.
What's sad is that our system is set up so that the only duty you have is to yourself... and everybody wins that way. Until, that is, people start to see that everyone else will take care of them anyway. Complacency born from the amazing standard of living capitalism has given us. It's a cycle and very well may be the death of our economy. Perhaps a (painful) restart is just what people need to wake up.
Yes if the result of so much wealth redistribution is that a significant part of the economy suffers for the benefit of a much smaller part. Both times that gasoline prices rapidly and greately increased in the USA, the USA auto industry suffered, and eventually the rest of the economy. This last time, we were already in a recession, the first time it started part of the recession process.
So in the case of World War II, the massive military build-up is an example of government created jobs that worked very well, and continued on into a relatively prosperous era through the 1950's when the middle income class, suburbs, and a transition from a rural economy to a urban economy. The issue here is that money, like anything, has a perceived value, and generally, gun based economies work better than gold based ones.
Well bombing Japan and Germany is a novel way of helping Detroit.WheelsRCool said:One thing to keep in mind about the 1950s is that the U.S. economy came out of the war relatively unscathed, with a massive industrial base built up, while the rest of the industrialized world had been bombed out.
WheelsRCool said:This is how Joseph Schumpeter claimed capitalism would eventually kill itself off, that because of the incredible standard of living it gives to the people of the nation, complacency is born, laziness, and a hostility to capitalism begins to be born from those who do not understand it and take it for granted, particularly among the intellectual class.
mgb_phys said:Well bombing Japan and Germany is a novel way of helping Detroit.
Agreed, the missile defense program needs to go, or be scaled back by 10-20xedward said:...
We recently upgraded the missile defense system contract to the multiple warhead missile defense system. The cost is staggering.
The entire defense budget, especially spending on big ticket systems that only fit into a "what if" situation needs to be looked at realistically. ...
mgb_phys said:Well bombing Japan and Germany is a novel way of helping Detroit.
Um - the US government owned most of the land in the US at one time, e.g. Louisiana purchase, then all the land W. of the Mississippi River, Alaska (purchased from Russia - Seward's Folly), Gadsden Purchase (from Mexico), Adams-Onís Treaty of 1819*, etc. The US government still owns a lot of land (e.g. National Forests), and the mineral rights in much of the western US.WheelsRCool said:The problem is government can "create jobs" but it cannot create wealth which is what counts.
We'll just have to wait and see.New York – The economic storm that has engulfed the United States – and the world – is expected to continue for most of 2009.
If there is a silver lining, it is that as the year progresses, economists expect the rate of decline in the economy to start to slow – with some modest growth possible by the last quarter of the year.
Before the skies brighten, however, unemployment will rise, business bankruptcies will accelerate, housing prices will continue to fall, and consumer confidence will remain low, according to most forecasts.
"It's a struggle to say there is an upbeat outlook," says Richard DeKaser, Washington-based chief economist at National City Corp. "We would not call the forecast for 2009 optimistic."
Indeed, the worst of the economic news may be just arriving, economists say. Consumer spending for the holidays will be the worst in years, even with all the store promotions. Stores will continue to offer bargains into 2009 in a desperate attempt to unload inventory. Weak consumer spending will be one of the major reasons the economy as measured by the gross domestic product (GDP) will shrink by as much as 4 to 6 percent on an annualized basis in the fourth quarter.
Lagging economic growth at year-end is not a good sign for the New Year. "You try to get a push off into the next year, and if you don't, it sets the tone," says Dan Meckstroth, chief economist at Manufacturers Alliance/MAPI in Arlington, Va.
By the end of March, the economy, as measured by GDP, will shrink another 4 percent on an annualized basis, estimates IHS Global Insight, an economic forecasting concern in Lexington, Mass. By the second quarter, the annualized rate of decline will slow to 1 percent, according to Global Insight. Then the economy will grow by 1 percent in the third quarter and by 2 to 3 percent in the final quarter of the year.
. . . .
WheelsRCool said:Every dollar the government spends first has to be taxed out of the economy, or borrowed from somewhere else.
Government spending takes away capital that could better be spent in the private sector. I would say tax cuts give us a bigger bang for the buck (if they're the proper tax cuts).
Would have to disagree here. The massive increases in government spending likely only helped prolong the Great Depression. The massive government spending took capital that otherwise could have been spent in the private sector to actually create jobs.
The problem is government can "create jobs" but it cannot create wealth which is what counts. For example, in simple theory, the government could employ 50% of the unemployed digging graves, and the other 50% filling them back in. Are those jobs? Yes. Is there any wealth creation? Nope. Thus you can alleviate the pain of a depression or recession somewhat, but not create any recovery. Sort of like how the government can print money, but without wealth creation, this won't work in the long term.
However, a side effect of this spending is that it took away capital that otherwise could have been spent in the private sector by individuals and businesses, which likely helped contribute to prolonging the depression. The Japanese tried repairing their economy after the 1989 real-estate bubble burst with lots of infrastructure spending as well and nevertheless experienced a ten year long recession.
By 1938 the unemployment rate was still at about 8% and the stock market crashed a second time. FDR was actually very close to losing re-election because he had failed to fix the economy.
World War II is what pulled us out of the economy because of the massive military builup. This is also how Hitler instantly "fixed" the German economy from the depression...
...They will stay out of it more because of the increased compliance costs which make it harder to grow businesses and create IPOs. However, like I said, find a lighter, more efficient way to regulate that does the job Sarbannes-Oxley is supposed to do.
IMO.
