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Author Topic: Is America no longer what it once was?
LoneSnark
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The money already exists to purchase the products of America, otherwise the makers of the products would not have made them and America's workers would have found alternative employment. We don't need any more dollars, we have plenty. Afterall, you do realize that for every dollar the Fed puts out many more will be created in the form of checkbooks and debit-cards?
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munga
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LS.

If the money exists, why is there inflation, which is equal to manufacturers taking their contracts to the bank and factoring them for money now, in order to purchase their raw materials, which cost is then folded into the next round of finished products, which is where inflation comes from?

The feds put out the money to the credit card institutions on a geared basis, the assets of CHASE bank are geared 7x. Enron was trying to up their allowance, which is why they were flying Bush around in their jet. The feds know that the institutions will put out the cash at high interest rate (liquidity absorption) but they cannot be accessed by any institution other than a bank, broker or federal program (via FFB, etc) so, what can they do about it?

We have no dollars, which is why lending and circulation are at an all-time low. This is why we are having market crashes and bailing out institutions with the tax credit (and why isn't congress going to demand cash for title?)

[ August 13, 2008, 02:45 PM: Message edited by: munga ]

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munga
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Talking to you is super confusing. It's like you know all the definitions but don't understand what they mean?

http://filebin.ca/ncxjed/WindowGEARINGpage141.pdf

"for every dollar the feds make more are put out in credit"

um, no. nothing counts as a dollar here, which is the final form of all securities, but dollars. I can't walk into a bank and give them an IOU, for my loan payment. Yes, there is injection via many instruments (I'm not saying the window isn't working for housing and all other sorts of industries, but its not working for MANY industries). If it were working for all industries..... we wouldn't have....... INFLATION!

(now, our nation cannot correct extra-national inflation- such as our dependence on gasoline products which is inflating many markets, but it can and must create dollars for all the INTRAnational industries).

[ August 13, 2008, 02:51 PM: Message edited by: munga ]

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RickyB
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"Attempts at monopoly are as old as time, so are the means people use to curtail them."

Wow, and here I was thinking the anti-trust acts were somehow novel... at least to the US.

This lie that employers, especially of low-tech industries, will of their own volition invest in any aspect of employee welfare absent a challenge by organized labor, is ludicrous. It's like saying sports leagues would have one day instituted free agency if the players hadn't forced them. Hah!

As for the technology and suburban lifestyle nonsense... whatever the technology, if workers make more money, they enlarge the manufacturers market. Workers in the 19th century weren't asking for a suburban lifestyle. Just a living wage and enough leisure time to lead dignified lives. When they demanded it effectively enough, they got it. Your desire to curtail their ability to demand it is laughable considering your belief in the market. I imagine you don't call for telling a "human resources" company what it can and cannot demand in return for the services of its employees. But should the employees dare unite themselves, in a non-corporate structure, to demand same - that's a threat to the system! Niiiiice.

And, um, lonesnark? Unless you're typing from Redmond, Omaha or someplace similar, the whole bunch of capital you have ain't even a flea fart in a shyt storm. [Big Grin]

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LoneSnark
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Toyota does not care about customers either, but they cannot charge whatever price they want for whatever crappy car they put out, or no one will buy them. Well, Toyota also operates in a different market buying workers. It must compete against other car makers for workers, just as it must compete against them for customers. The owners of Toyota may clearly despise both their customers and their workers, but if they want to earn a profit then they must do lots of things they really hate doing, which includes providing a competitive work environment by air conditioning their assembly plants, paying a competitive wage, and charging competitive prices.

And however you phrase it, my desire is to curtail their ability to have the government curtail the rights of other workers. If I am willing to do a job for less because I know there is no other way I can get the job, then I should have that right, just as I should have the right to make and sell cars for less than Toyota would like. Your rights should end where mine begin. If you want to strike then go right ahead, but if I want to show up to work anyway then you should respect my wishes.

And like I explained, even bankrupting 19th century mine owners would not have improved the miners lives very much. Unless you think a 10% raise is the difference between disrespectful and a living wage?

munga, yes, a checkbook does count as money. Using your example, I can walk into most any bank in the world and write a check as a loan payment even though there is not nearly enough cash in the vault to cover all the check and debit purchases that the bank customers made that day.

quote:
If the money exists, why is there inflation, which is equal to manufacturers taking their contracts to the bank and factoring them for money now, in order to purchase their raw materials, which cost is then folded into the next round of finished products, which is where inflation comes from?
Absolutely absurd. That process would only take hold if every producer in the market lacked operating capital, which is absurd since the vast majority of expansions are financed internally. But, even if you were right, that would be a finite price rise because once the price of capital was priced in, prices would stop rising (an industry wide tax increase works similarly).

But, again, you have skipped several steps of adjustment. Producers cannot simply raise prices unilaterally as demand would drop in response, leaving producers with unsold inventory. As such, it is only after the tax (or capital cost) drove firms to cut back production (such as shutting down) would prices rise to restore profitability and halt further production cuts. However, production cuts have a side effect of increasing unemployment which dampens wage growth, a sign of deflation.

As such, increasing taxes (or capital costs) on industry is not inflationary even though it does drive up prices. This is because it only drives up the price of industrial goods; it actually drives down the price of everything else (workers, property, fixed assets, gold, etc).

[ August 13, 2008, 05:10 PM: Message edited by: LoneSnark ]

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munga
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LS,
(lots of edits)
In our highly competitive economic environment, producers are not "whistfully" raising prices. They are raising prices because they cannot locate sufficient capital to buy their raw materials, and must, as you say "rent capital" (for a price) at the bank, which additional cost gets rolled into the product, hence, inflation. If our govt were injecting liquidity properly, it wouldn't be happening, but the disaster is embedded into the moronic myths we've been teaching accountants for years and, like the toll booths of paid-off roads, no one can seem to disengage themselves from the mechanisms that have been enriching them.

You seem to be thinking our manufacturers, which are near collapse, are raising prices arbitrarily? Wow, well, gutsy people, ya know... to be raising our prices because they just want to. You'd think that the competition might step in. In fact, it does, which is why the prices are INFLATED (the manufacturer got a loan and the cost is rolled into the new product price) or the manufacturers are going into soft default or receivership (because they were not lucky enough to get a loan so they could continue to compete). When, in our highly-competitive state, costs are still rising, you know the lack of capital is acute. Executives everywhere go batty when they have to raise a product price, seeing their life's work possibly about to be destroyed because of lack of liquidity.

This is the supply/demand dynamic of the DOLLARS that manufacturers need to create the products for which there is more than enough demand (we have more people eating than ever), in a climate in which insufficient liquidity is deliberately released in order to create poverty.

clue- the check that you write is drawn from DOLLARS at the bank. A check is a simple "security" in that it is paper representing dollars elsewhere. Still, no new dollars are printed. The way you refer to checks as money reminds me of a kiting scheme.

deflation- when products cost less (which causes wages to go up)

Why.... would anyone increase taxes??

How can we increase capital costs for industry?
Are you suggesting that we should make the factory equipment cost more, or increase the interest rates on equipment leases?

Where in heaven's name do you come up with these ideas? I think you and I may be using different terminology because your language doesn't make any sense to me.

[ August 13, 2008, 05:53 PM: Message edited by: munga ]

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RickyB
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"f I am willing to do a job for less because I know there is no other way I can get the job, then I should have that right, just as I should have the right to make and sell cars for less than Toyota would like. Your rights should end where mine begin. If you want to strike then go right ahead, but if I want to show up to work anyway then you should respect my wishes."

I actually agree that unions go too far in preventing workers from competing by lowering the price of their service, especially in latter years, where many protections have been codified in law. However, you people throw the baby out with the bathwater and deny unions were ever necessary to get to the point where they have too much power sometimes.

Plus, you utterly ignore the dynamic I pointed out - absent defenses, employers can starve the workers into accepting pretty much any wage that will keep them alive. It's been done. Like I said. Boss man can have dinner without the factory. Worker joe can't.

I doubt anyone (or nearly anyone) went bankrupt because of the modest gains made by organized labor in the 1800's, and if you think the robber barons were maing 10% annually, I seriously don't know what to tell you. Remember they weren't paying income tax.

"And like I explained, even bankrupting 19th century mine owners would not have improved the miners lives very much. Unless you think a 10% raise is the difference between disrespectful and a living wage?"

a) sometimes it can be.
b) you keep trumpeting the 10% figure as though it has some kind of constant validity. I do not accept that at all.

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LoneSnark
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quote:
However, you people throw the baby out with the bathwater and deny unions were ever necessary to get to the point where they have too much power sometimes.
Who is you people? I already said that I have no objection to workers forming a union as long as they can't have their fellow workers imprisoned for crossing picket lines then I am satisfied, and I am glad to see you are too. As such, despite our drastically different rhetoric, I believe we agree on policy.

quote:
Plus, you utterly ignore the dynamic I pointed out - absent defenses, employers can starve the workers into accepting pretty much any wage that will keep them alive. It's been done. Like I said. Boss man can have dinner without the factory. Worker joe can't.
Really? So, if what you say is true, whenever a factory closes in America all its workers starve to death? Then I suggest we have a bigger problem than lack of unions; workers starving to death for lack of work.

But, like I have said, it is not always so. Some factory owners have had a bad time of it and due to the crushing debts associated with losing their factory would need to get another job to avoid starvation. But, in the same boat, some factory workers would need to get another job to avoid starvation. Most workers would not starve without another job, as their spouse works, or they have family that works, or they have built savings, etc etc.

But, workers in a free economy are never without defenses. Another job is often within reach, and the mere threat of competition is usually enough to keep employers in line. Name any employer in a free economy that is currently setting wages just high enough to keep the workers alive? If you know of one then I believe you have found a profit opportunity offering to pay just a little more and doing the same work.

quote:
I doubt anyone (or nearly anyone) went bankrupt because of the modest gains made by organized labor in the 1800's, and if you think the robber barons were maing 10% annually, I seriously don't know what to tell you. Remember they weren't paying income tax.
I guarantee some did go bankrupt (afterall, firms go bankrupt all the time without artificial wage gains). But, even if they did not, then that is because their modest gains came at the expense of their customers, not their employers, which within a few years were back up to 10% of returns on revenue. An economist working for the federal reserve bank of atlanta generated a graph showing the average return on revenue for the 20th century and it was awesome. Regretfully, I have lost the link and google is not cooperating... But yes, it turns out that the return on revenue oscillates around 10%, except for the great depression when it slid below zero for one year. And yes, it is after-tax return.

What people find hard to understand is that businesses are not a fixed quantity. If you understand the mathematics, however, I believe you will grasp it. This figure is an average to 10%, some firms are earning 20% returns, some 0% returns. If you increase taxes on revenue, or artificially drive up wages, such that the average return to revenue is now 0%, that means some firms are earning 10% and the others losing 10%. Well, the ones losing money will go bankrupt, leaving only the other firms which are still earning 10% of revenue. As such, the average of remaining firms is once again 10% of revenue. So you see, it is this constant killing of firms near 0% which keeps the average up around 10% over the centuries regardless of what happens in washington or on the shop floor.

munga, I was saying that charging manufacturers for capital would look no different from a tax on revenue: it would be a fixed cost increase, so once it was priced in prices would stop rising. That inflation has not gone away with time we know it was not caused by borrowing costs.

quote:
A check is a simple "security" in that it is paper representing dollars elsewhere.
Really? Ok, try this, get all your fellow customers today and write a check for the full amount in your checking out to cash and withdraw it. This is called a run on the bank, and it results in failure, because there are not nearly enough physical dollars in your bank to cover the amounts in everyones checkbook.
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RickyB
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"as long as they can't have their fellow workers imprisoned for crossing picket lines"

At the risk of appearing ignorant, this refers to something that actually happened? Prison?

If that's your only objection, I warmly welcome you to the pro-labor camp. If you have any more restrictions you'd like placed on unions, please do speak up - it won't necessarily compromise the aforementioned new membership and all its attendant benefits [Smile]

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LoneSnark
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Absolutely prison. The government levies a fine on employers and ocasionally employees for failure to halt work during a government recognized strike. Well, believing the strike to be unjustified, the parties refuse to pay the fine. Well, shortly there after they are found in contempt of court and carted off to prison for up to six months.

But it is not always so stark. Sometimes the state simply makes it a prisonable offense to continue employing non-union workers when the government recognizes you as a union shop.

So, yes, the entire country should be a right-to-work state. If an employer wishes he can fire people for striking and replace them with non-strikers. Given this provision, unions will only be effective in the rare instances that they are a good idea and unions will return to their historic role of being a benefit for society at large.

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Jesse
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There is a reason Industry bowed to organized labor - those wildcat strikes cost more than dealing with the risk of a strike every five years when a contract came due.

Unfortunately, there are very few unions in existance in America today - instead we have guilds which call themselves unions.

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RickyB
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"Absolutely prison. The government levies a fine on employers and ocasionally employees for failure to halt work during a government recognized strike. Well, believing the strike to be unjustified, the parties refuse to pay the fine. Well, shortly there after they are found in contempt of court and carted off to prison for up to six months."

Please source. And delete any example having to do with a public service. Private enterprise only.

Besides of which, fines aren't prison sentences, and are within the reasonable scope for a civil infraction. Refusal to abide by a court order is always a jailing offense.

Jesse - very good point.

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RickyB
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"So, yes, the entire country should be a right-to-work state. If an employer wishes he can fire people for striking and replace them with non-strikers."

So again, you think employers should be able to hold out for the absolute lowest price anyone will work for. Well, see, we dispute that. We see that as a malignant dynamic, to be curtailed, because that absolute lowest price will invariably be less than what an adult supporting children will require for any kind of dignified life.

I wonder what you do for a living, and how you'd like an unrestricted influx of people willing to do your job for 1/10, or even 1/2 of the price. Perhaps you think that in your field it's impossible, but I wonder what a relaxation of regulation would do.

I'm a translator, among other hats, and I wish to all gods and goddesses there was a way to enforce standards and pay, particularly in the subtitle industry. And I know first hand that the market can absolutely stand it. The xlation studios charge 10 times what they pay the translator, about 4 times what they pay all professionals involved in the chain of taking a text/word file in English and putting it in subtitles. So don't talk to me about 10%. [Smile]

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RickyB
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"Name any employer in a free economy that is currently setting wages just high enough to keep the workers alive? If you know of one then I believe you have found a profit opportunity offering to pay just a little more and doing the same work."

Depends on what you call a "free" economy. Indonesia qualify (Nike, Freeport McMoran, I could go on...)? Thailand? What people like you fail to recognize is that what you instinctively call "a free economy" is one with a good healthy dose of regulations and limitations on "the absolute lowest price I can possibly pay". Where those are absent, things stink of corruption to you, and rightly so. [Smile]

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LoneSnark
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quote:
So again, you think employers should be able to hold out for the absolute lowest price anyone will work for.
But they already do! You may be a contractor, I suspect, which would mean the minimum wage does not apply to you. However, I suspect you earn more than 5.15 an hour. What you currently earn is the lowest your employer believes anyone will work for, whether it is true or not.

And no, new entrants to my field are not impossible. It is very prevalent, lots of engineering work goes to China nowadays. But, while it is not in my best interest, I recognize the right of other human beings to apply for my job. Morally, I am not more worthy than you or anyone else. If I lose my job to a Californian, or even overseas, then I will find another one or do something else.

And to the point, if the xlation studios earn so much then why don't you and a few friends go start your own? However, while what you say is definitely true, I doubt it is as profitable as you suggest, since you fail to recognize the contribution of your fellow employees and the risk involved (they must pay at least some of you whether the company gets work or not).

quote:
What people like you fail to recognize is that what you instinctively call "a free economy" is one with a good healthy dose of regulations and limitations on "the absolute lowest price I can possibly pay".
We have already covered this. There is no law which applies to either you or me in relation to the lowest price we can be paid. Neither you nor me earn anywhere near $6.55 an hour, which means our employer is perfectly free to hold out for less. However, my employer believes they will never find anyone competent to work for less than $24 an hour. I would be happy to accept a job for less, but as another company made the same offer I would have no reason to do so and my employer knows it.

[ August 15, 2008, 08:18 AM: Message edited by: LoneSnark ]

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RickyB
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"What you currently earn is the lowest your employer believes anyone will work for, whether it is true or not. "

Um, no, not at all. Anyone contracting my services knows there are people who will do it for less. If they don't, I inform them. When they choose to pay me, it's for quality.

As for you and me - it ain't about your or me. It's precisely about those earning the minimum wage, which by the by isn't a dignified living wage for a parent.

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Omega M.
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Um, maybe when LoneSnark said "work" he meant "perform a particular task at a particular level of quality"? No need to be snarky (sorry for the pun).
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munga
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I think the minimum wage, which is similar to anyone's reductive logic of "how little can I pay this guy and still make myself rich" is Jesus' embodiment of "The poor ye have always with you."

I think he's right.

Consider Jacob, working for his wives' father. Even family will pay each other as little as we can because everyone makes their businesses for one reason only- to make THEMSELVES money, never as a public service to feed the neighborhood.

I think the answer isn't that we need to do more mandating of wages in America. And we can't control other countries, even though Stray wishes he could.

I think the long-term answer to conditions for every worker, is to *I'm sorry to do this, but you see how it always comes around?* make easy access to capital for each poor worker who, after two years of working for his stingy neighbor, wants to go into business for himself with a new idea, and new products. Taking more from the employers is a bad idea, they'll just outsource overseas, or move on to the next just-out-of-high-school-living-with-mom-and-dad wage-slave, who works harder than anyone else around on the "peter-principal."

The average kid should be taught how to demonstrate value without cash down (dNPV collateral upon a contract) so that each and every kid knows how to walk into the "Open Access" currency creator and demonstrate future-flow and start his or her own special dream productions. Then, they in turn will find the people they can pay the lowest wages and make discontent until they have cogitated their own contribution to society. Or buy real live robots and obtain a lasting convenience of that fashion.

I want our poor phase to be the period of painful living we undergo to force us to the creativity and "find what we will contribute" (isn't this more useful than going to Europe to find ourselves?) until we know how to make our own projects and live on residual incomes.

I think we will always have the poor with us, who will be those who never think of a good idea, never have the self-control to carry out a plan, are so unworldly that they live in la la land all the time and can't stick to a schedule, and simply those going through the grunt phase of life prior to becoming free via economic development, which, if parents aren't crippling their kids with coddling when they really shouldn't, would be at one time or another, everyone.

[ August 15, 2008, 11:25 AM: Message edited by: munga ]

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