Greed is Good (Fodder for a broad discussion of economics :))

[MediumTex]

I give up.

You could certainly be right and I could certainly be wrong, as far as the odd nature of the monetary system.

Don't give up.

I was serious when I said to loosen your mind up.  If your mind isn't loose, you can't absorb such strange things.

Our system is bizarre.  I mean, really bizarre.

[Libertarian666]

To measure current productive capacity, I say:

Look around!

Ok - I did 

What do you see?  I see a lot of un and underemployment, slow if any economic growth, and the like.

If we continue to run deficits of about 3% each year, then we need about 3% of GDP growth just to maintain the current ratio of debt/GDP.  And I don't see many people predicting growth of much above that for the foreseeable future.

If the government spent less money, do you think that there would be fewer unemployed people?

I think that talking about optimal debt/GDP ratios in relation to a currency issuer is like talking about ideal body fat percentages for unicorns.

Government spending is waste. Waste is unproductive and drains resources from useful pursuits.

I don't know how getting rid of government spending would affect employment, because I don't know how many people would take the additional wealth as leisure and how many would take it as extra income. But I can say that without government, every productive person would be enormously better off.

[rickb]

I also agree 100% with MT. It's all about hurting others to get things. If you don't hurt others, I don't see the problem.

Of course, there are ways to hurt others to get your stuff as a biiiig baaaad capitalist that are really sneaky, like taking advantage of the welfare system to underpay your employees and let taxpayers make up the difference, or importing a bunch of slightly cheaper foreign labor or offshoring your production or IT work and firing your domestic employees, or polluting land owned by the government with their permission, knowing that the pollution will harm people who draw water from public lands or whose private land becomes contaminated, etc. There are lots of other things I can think of.

Those would be examples of the immoral accumulation of wealth and I would fully support reversing the policies that allowed or encouraged those people to behave that way. But barring stuff like that? Accumulate away.

The bolded portion sounds exactly like Walmart - see http://www.bloombergview.com/articles/2 ... ueens  I was push polled a while ago about about a local vote to change zoning requirements to accommodate yet another Walmart (there were already 2 Walmarts within 5 miles of the proposed new one).  I was asked what I think about Walmart - on a scale of 1-5 do you extremely like Walmart, like Walmart very much, like Walmart only a little, neither like or dislike, or somewhat dislike.  My response was that Walmart is one of the world's top 5 evils.  There's Hitler.  Stalin.  Pol Pot.  Walmart.  The "poller" hung up.

IMO, Walmart's owners have done more to hurt America than 10,000 ISIS terrorists ever could.  See, for example (from 2012), http://www.demos.org/publication/not-ma ... uring-jobs

Thousands of owners of retail stores have been replaced by greeters at Walmart.  Walmart basically put every independent retailer in every small town in America out of work (my brother-in-law's family used to run a sporting goods and toy store in a small town - his wholesale was more than Walmart's retail for many of the items he sold).

And, in a double whammy, thousands of US manufacturing firms have been forced to either relocate their manufacturing to low wage countries like China, or close.  Walmart insists everything they sell be sold to them at the globally lowest cost.  Guess what?  It's cheaper to manufacture pretty much anything in a 3rd world country and ship it to the US, than to manufacture it here.  And since Walmart is the world's largest retailer (sorry, Amazon, your $89B is still way less than Walmart's $485B), if you manufacture anything you want sold at the world's largest retailer you have to manufacture it in a 3rd world country.

Walmart has essentially single-handedly hollowed out a very large portion of the US middle class (owners of small town independent retailers, and manufacturing workers).

They are, of course, only one of the transnational capitalist companies, which IMO personify greed.

[barrett]

rickb, I agree with everything you wrote about Walmart. The book The Walmart Effect laid most of that out back in 2005 and it's only gotten more extreme. One other thing that is worth mentioning is that their stores have a net job creation of only a few jobs per year (I don't remember the exact figure but I think it's five or six jobs over the first five years at which point it levels out to virtuually none). The only positive that I can think of is that Walmart has actually significantly lowered inflation here in the US. And I don't know if even that can unanimously be seen as a positive.

So what's to done about it? It has to be dealt with from a federal government level, right? Or just accepted as one of those things that happens and it's too bad if you just can't compete?

As a consumer in a medium-size CT town, I often shop there because the options are 10 or 15 miles away. And the options look more and more like Walmarts in disguise (no expertise about what they are selling because that adds costs, few high-quality products because they take up shelf space for cheaper crap, etc.).

[Libertarian666]

IMO, Walmart's owners have done more to hurt America than 10,000 ISIS terrorists ever could.  See, for example (from 2012), http://www.demos.org/publication/not-ma ... uring-jobs

Thousands of owners of retail stores have been replaced by greeters at Walmart.  Walmart basically put every independent retailer in every small town in America out of work (my brother-in-law's family used to run a sporting goods and toy store in a small town - his wholesale was more than Walmart's retail for many of the items he sold).

And, in a double whammy, thousands of US manufacturing firms have been forced to either relocate their manufacturing to low wage countries like China, or close.  Walmart insists everything they sell be sold to them at the globally lowest cost.  Guess what?  It's cheaper to manufacture pretty much anything in a 3rd world country and ship it to the US, than to manufacture it here.  And since Walmart is the world's largest retailer (sorry, Amazon, your $89B is still way less than Walmart's $485B), if you manufacture anything you want sold at the world's largest retailer you have to manufacture it in a 3rd world country.

Walmart has essentially single-handedly hollowed out a very large portion of the US middle class (owners of small town independent retailers, and manufacturing workers).

They are, of course, only one of the transnational capitalist companies, which IMO personify greed.

I think you should focus your hatred on the enablers of Walmart, without whom Walmart would not exist.

Of course I'm referring to those @#$% customers, who for some unknown and incomprehensible reason don't want to pay more money by shopping somewhere else! Why do they hate America?

[jafs]

If people don't have much money, their options are limited, and it makes sense for them to buy things at Wal-Mart.  People who have more money often make choices that can take into account other factors about the business they're patronizing.

Policies like keeping the minimum wage low create more customers for W-M, who can't afford to shop elsewhere.

The book "Wal-Mart:  The Bully of Bentonville" was very good.

[Libertarian666]

If people don't have much money, their options are limited, and it makes sense for them to buy things at Wal-Mart.  People who have more money often make choices that can take into account other factors about the business they're patronizing.

Policies like keeping the minimum wage low create more customers for W-M, who can't afford to shop elsewhere.

The book "Wal-Mart:  The Bully of Bentonville" was very good.

Right, so we should hurt poor people by not allowing them to shop at Walmart where they get lower prices. Got it!

[jafs]

That's a silly way to miss my point, and not worthy of you.

[Libertarian666]

That's a silly way to miss my point, and not worthy of you.

I'm afraid that you are the one who has missed the point, which is that poor people benefit from Walmart, so calling Walmart evil is an (indirect) attack on poor people.

Note: although we have a Walmart in town, I don't shop there if I have a choice, which I usually do. But then I'm able to afford to shop elsewhere, which many people here aren't. So eliminating Walmart from the world would hurt poor people much more than it would hurt me.

[Pointedstick]

I also agree 100% with MT. It's all about hurting others to get things. If you don't hurt others, I don't see the problem.

Of course, there are ways to hurt others to get your stuff as a biiiig baaaad capitalist that are really sneaky, like taking advantage of the welfare system to underpay your employees and let taxpayers make up the difference, or importing a bunch of slightly cheaper foreign labor or offshoring your production or IT work and firing your domestic employees, or polluting land owned by the government with their permission, knowing that the pollution will harm people who draw water from public lands or whose private land becomes contaminated, etc. There are lots of other things I can think of.

Those would be examples of the immoral accumulation of wealth and I would fully support reversing the policies that allowed or encouraged those people to behave that way. But barring stuff like that? Accumulate away.

The bolded portion sounds exactly like Walmart - see http://www.bloombergview.com/articles/2 ... are-queens

Yes, I was specifically thinking about this with Walmart.

It's actually one of my worries about a citizen's dividend. It seems like the policy has the chance to institutionalize this across the entire economy. If everyone is getting $1,000 a month, it seems possible that firms employing people at the low end of the labor market might pay them next to nothing and let the citizen's dividend make up most of their income.

[jafs]

Exactly.

And Wal-Mart, by hiring a lot of "part time" workers at 35 hr/week jobs for low wages, is creating their own customer base.

I never said we should "eliminate" W-M.  But we should do everything we can to reverse the trend of those at the bottom and middle struggling, while those at the top are getting more and more wealthy.

[rickb]

So what's to done about it? It has to be dealt with from a federal government level, right? Or just accepted as one of those things that happens and it's too bad if you just can't compete?

It's not rocket science and the fix is not to get rid of the EPA and unions and everything "big labor" has accomplished over the past 100 years.

1) Walmart is too big which allows it to exercise too much influence over everything (from local zoning laws to manufacturer's costs).  Any single company with more than $X billion in revenue (pick a number for X, possibly 1) should be broken up.  This does two things.  It creates more competition in a more level playing field.  And it prevents the executives of mega companies from accumulating such massive fortunes.

2) Charge an import tax on goods manufactured outside the US based on the labor practices and environmental standards where they were manufactured.  Very low (possibly nothing) for countries with standards reasonably similar to the US (which virtually nothing sold at Walmart is).  Much higher (possibly even outright ban) for countries with dissimilar standards.  Manufacture whatever you want, wherever you want.  But if you want to sell it in the US you have to adhere to our standards.

The transnationalists might say that by locating factories in 3rd world countries they're helping raise the standard of living in those countries enabling them to buy US products - but I think it's quite obvious what really happens.

[jafs]

Also, we could raise the minimum wage, establish maximum CEO/average salaries, etc.

[WiseOne]

But we should do everything we can to reverse the trend of those at the bottom and middle struggling, while those at the top are getting more and more wealthy.

The fundamental problem is competition for the existing jobs by an ever-increasing number of unskilled job-seekers.  Raising the minimum wage is an attractive idea, but I fear it would only make this worse by reducing the number of available jobs.

Unfortunately there is no getting around it:  practically unlimited influx of unskilled labor, plus ready availability of unskilled labor outside our borders, is going to depress salaries.  And as Craig has pointed out, this isn't limited to unskilled labor but applies also to many STEM jobs e.g. software development.  So, do you let it happen or do you try to stop these two trends by clamping down on immigration and instituting measures to make offshore labor less attractive?  Those are the only real choices.  It may be that Option #2 is impossible, or that it can't be fixed without damaging our society in other ways, but for right now I think it is worth trying.

[jafs]

The studies that I've seen tend to conclude that's not actually what happens.

And, we definitely should take actions that make it much less attractive/impossible for corporations to off-shore labor.

I wouldn't object to pausing all immigration for a while in order to fix some of this.

[WiseOne]

Ah then, you do agree with Trump!

Details on said studies?  I haven't seen any that refute my statement. 

[jafs]

I'm sorry - I don't have any details.

I just googled the issue a while back, and my recollection is that most studies done on raising the minimum wage show minimal job losses, and a lot of other gains.

Of course, it would depend on how much we raised it - I wouldn't want to raise it up to some ridiculous amount. 

The things that Trump has said about immigration that bother me are the ideas about limiting it based on religion - I think that pausing all immigration isn't a bad idea (with exceptions for refugees, unless we change the laws about them).

[Libertarian666]

I took jafs' point to be that an increased minimum wage would give workers at the bottom of the income scale more options, other than Walmart.

Yes, it would give them the option of unemployment!

[Libertarian666]

I'm sorry - I don't have any details.

I just googled the issue a while back, and my recollection is that most studies done on raising the minimum wage show minimal job losses, and a lot of other gains.

Of course, it would depend on how much we raised it - I wouldn't want to raise it up to some ridiculous amount. 

Why not? If $15/hr is good, why not $100/hr? Don't you want everyone to be rich?

[jafs]

That's not really a serious question, is it?

There's obviously some sort of reasonable place for minimum wage, and it's not $100/hr.

[Libertarian666]

That's not really a serious question, is it?

There's obviously some sort of reasonable place for minimum wage, and it's not $100/hr.

How do you know?

[barrett]

I read a jarring stat last night. The source is the latest Time magazine.

The richest 62 people in the world have as much wealth as the bottom half of the whole world's population - that is, the poorest 3.6 billion. Presumably not included are cows, corrugated metal on the roofs of shacks, etc.

I know the inequality debate gets a lot of airtime but I found this shocking. When someone has assets of 50 billion, it's just almost impossible to comprehend how much money that is. For perspective, I heard somewhere in the last couple of years that Michael Jordan (who has been in a major "accumulation phase" for the last three-plus decades) was just closing in on a billion dollars.

[jafs]

That's not really a serious question, is it?

There's obviously some sort of reasonable place for minimum wage, and it's not $100/hr.

How do you know?

Because I understand the logic behind minimum wages, and know enough about costs of living to figure it out.

Minimum wages were created to make sure that those in low-skilled full-time jobs could support themselves, albeit at a modest level.

I saw that article too, barrett, and had the same reaction.

[Libertarian666]

That's not really a serious question, is it?

There's obviously some sort of reasonable place for minimum wage, and it's not $100/hr.

How do you know?

Because I understand the logic behind minimum wages, and know enough about costs of living to figure it out.

Minimum wages were created to make sure that those in low-skilled full-time jobs could support themselves, albeit at a modest level.

I saw that article too, barrett, and had the same reaction.

It is impossible for minimum wage laws to raise wage levels without also causing unemployment, because employers will bid up the wages of people whose marginal productivity is above their current wage until they approximate that marginal productivity. All that can be accomplished by setting a minimum wage above the marginal productivity of a specific worker is to make that worker unemployed.

In fact, minimum wages were created to reduce competition between union and non-union labor, by preventing employers from replacing one highly-paid union laborer with more than one lower-paid non-union laborer. That's why labor unions whose members are paid much more than the minimum wage support raising the minimum wage; that is not altruism on their part.

Hope that helps.

[jafs]

That's a highly ideological view, and the studies I've seen don't support it.  What they seem to show is a very small reduction in jobs, and many other gains for those at the bottom of the socio-economic scale, and also for those above that, as the folks at the bottom spend more of their money, which circulates in the economy.