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Pete at Home
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Re my use of the world steal as an illegitimate taking .... you think it appropriate for billionaires to pad their profits by keeping their Coolies on food stamps?
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Pete at Home
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The Book of Charles.
Chapter One

In the Beginning, Walmart created the economy and the market. And darkness was upon the face of the consumers.

quote:
Originally posted by Charles in Charge:
quote:
Originally posted by Pete at Home:
quote:
Originally posted by Charles in Charge:
To sum up, I assert that Walmart creates enormous net value.

The trouble is, it doesn't "create" such value; it steals it. Walmart's $9/hr American workers (whose work is essential to the survival of the Chinese jobs you speak of) are subsidized by the US welfare system.
The consumer surplus generated by Walmart is estimated to be $284 billion a year. That's several times the size of the entire Food Stamp program. There's a lot more value created than could be stolen.
The word created doesn't mean what you think it means. You have fallen into the Gary Larsen Days before Television fallacy. The consumer market existed before Walmart. Even in the self-serving language of big money, Walmart CAPTURED that market, did not create it. Just as TV took our time from previous activities .... families did not sit staring at the living room wall in the days before TV.
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Pete at Home
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You want to talk CREATING rather than capturing wealth, let's talk Ford Motor Co, another double tier public company/family empire. Differences:
1 Ford actually did help to create wealth rather than merely cannibalizing it.
2. Ford was founded on the principle of paying the highest wages to its lowest employees, and still today continues to pay well above sustenance wages wherever it operated.

Ford does more good, in proportion to its size, to both the US and to China.

While Ford's stock fell by 80% during 2008, it refused government money while its competitors took Federal bailouts.

That's the difference between a creator and a cannibal. Don't confuse them.

[ December 28, 2013, 08:23 AM: Message edited by: Pete at Home ]

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Charles in Charge
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quote:
Originally posted by Pete at Home:

Of course families were not better off then. But prosperity was growing among the middle class, hope was high, and America was consequently more generous. Spent a greater proportion of our wealth helping the world community out of the goodness of our hearts than the nickles and dimes that you cheer about trickling down to a few poor Chinese as the unintended consequence of Walton family self-enrichment.

The past 200 years have seen enormous growth in wealth around the world. How much of that do you think resulted from American charity?
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Charles in Charge
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quote:
Originally posted by Pete at Home:
Re my use of the world steal as an illegitimate taking .... you think it appropriate for billionaires to pad their profits by keeping their Coolies on food stamps?

It seems your complaint is that WalMart is not giving its employees as much money as you would like. Not giving is different than taking, right?

Do you think all employers who have employees that get government benefits are stealing?

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Charles in Charge
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quote:
Originally posted by Pete at Home:
The word created doesn't mean what you think it means. You have fallen into the Gary Larsen Days before Television fallacy. The consumer market existed before Walmart. Even in the self-serving language of big money, Walmart CAPTURED that market, did not create it. [/QB]

You're wrong twice here. Once by logic and once by fact.

By that logic you don't actually create any value at your job. The market existed before you came along. Someone else would have been hired if you weren't there.

Additionally, this logic doesn't differentiate WalMart from any other company, including Ford. They've all simply captured markets that already existed.

By fact, the annul $280+ billion in consumer surplus created by WalMart is an estimate of the marginal surplus created by WalMart's superior efficiency. If WalMart had the same efficiency as its competitors this method would have estimated a $0 consumer surplus. So even by your flawed logic its fair to say that WalMart creates $280+ billion in value every year that wouldn't exist otherwise.

[ December 28, 2013, 08:04 PM: Message edited by: Charles in Charge ]

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Pete at Home
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"By that logic you don't actually create any value at your job. The market existed before you came along. Someone else would have been hired if you weren't there."

All you did is show that you don't understand my logic or have any idea what I do for a living. In fact, I talked myself into a job that didn't exist and thanks to my efforts last week my boss made payroll. I did, in fact, create value.

In other positions, I did not create but simply maintained value. But then I didn't go around claiming to "create value."

Walmart is notorious for devastating local economies that it touches, so your claims of "creating value" is noxious. And your evasion of most of my points is obnoxious.

"The past 200 years have seen enormous growth in wealth around the world. How much of that do you think resulted from American [generosity]?" [removes your straw man word "charity" which misrepresented my position.

The difference between Eastern Europe and Western Europe circa 1992. The difference between Taiwan and Guadong circa 1975. The second of each pair shows what the countries would have been like without US involvement. The 2nd with US involvement. No, it's not everything, but it's something significant. Otherwise you would not need to employ straw men to contradict me.

"Additionally, this logic doesn't differentiate WalMart from any other company, including Ford. They've all simply captured markets that already existed."

[DOH] There was no mass market in the USA for cars before Ford. And Ford again pioneered that mass market in China during the 1990s. I saw it myself in Shanghai. Have you even been to China, man? Do you have any idea what you're talking about?

quote:
Do you think all employers who have employees that get government benefits are stealing?
Of course not. Stealing is an intentional act. Many companies pay what they can afford to pay and it's not enough. Walmart could afford to pay more, but chooses to systematically keep employees at sub-subsistence levels where the government has to pay their salaries.

I don't understand why it's so hard for you to grasp the outrage over billionaire playboys mooching off the welfare system.

[ December 28, 2013, 08:35 PM: Message edited by: Pete at Home ]

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Charles in Charge
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quote:
Originally posted by Pete at Home:
"By that logic you don't actually create any value at your job. The market existed before you came along. Someone else would have been hired if you weren't there."

All you did is show that you don't understand my logic or have any idea what I do for a living. In fact, I talked myself into a job that didn't exist and thanks to my efforts last week my boss made payroll. I did, in fact, create value.

In other positions, I did not create but simply maintained value. But then I didn't go around claiming to "create value."

This definition of creating value seems strange to me and not at all what I meant when I used the phrase. My use doesn't differentiate between people who work at jobs they created for themselves and those who work for jobs created by someone else. I propose an alternate definition of providing a good or service to someone else that they value. If we use that definition do you agree that WalMart creates value?

quote:

Walmart is notorious for devastating local economies that it touches, so your claims of "creating value" is noxious. And your evasion of most of my points is obnoxious.

Which points do you think I haven't addressed?

quote:

The difference between Eastern Europe and Western Europe circa 1992. The difference between Taiwan and Guadong circa 1975. The second of each pair shows what the countries would have been like without US involvement. The 2nd with US involvement. No, it's not everything, but it's something significant. Otherwise you would not need to employ straw men to contradict me.

I wasn't trying to contradict you. I really thought you were talking about charity. If the America mood were to change what US involvement in the world do you think would happen?


quote:

There was no mass market in the USA for cars before Ford. And Ford again pioneered that mass market in China during the 1990s. I saw it myself in Shanghai. Have you even been to China, man? Do you have any idea what you're talking about?

Look, I like Ford too. I think they've created a ton of value. And I was impressed when they didn't take government handouts. But they didn't invent the personal transportation market. If they didn't provide cars someone else would have provided horses and eventually someone else would have provided cars. This is one reason I find your definition of "create value" hard to use. It requires distinguishing between new markets and variations on old markets.

quote:

quote:
Do you think all employers who have employees that get government benefits are stealing?
Of course not. Stealing is an intentional act. Many companies pay what they can afford to pay and it's not enough. Walmart could afford to pay more, but chooses to systematically keep employees at sub-subsistence levels where the government has to pay their salaries.

OK - I think you're using unfamiliar definitions again for familiar words. What do you mean by sub-subsistence?

quote:

I don't understand why it's so hard for you to grasp the outrage over billionaire playboys mooching off the welfare system.

I understand that there's lots of moral outrage, but it seems like manufactured outrage fueled mostly by jealousy and envy. But I am still hopeful that you can give me a better explanation for the outrage.

The outrage feels manufactured because the argument relies on a misleading use of the word steal. Normally, steal means illegal taking and its obviously morally wrong. In this case the word is used to describe not paying employees enough. It feels like the article is deliberately misusing the word in order to trigger moral outrage.

The basic facts seem like the following;
The Waltons are really rich because they own a lot of WalMart stock.
WalMart has a mult-class stock structure.
WalMart is very profitable.
WalMart pays many of its employees $9 or $11 an hour.
Some of these employees qualify for and receive food stamps from the government.

From those basic facts, it's not at all obvious that the Waltons are thieves. It's also not obvious why WalMart was singled out for this argument. A slight variation of the basic facts would describe many companies (and yes I get that you think WalMart is especially evil because of its multi-class stock structure).

[ December 28, 2013, 10:43 PM: Message edited by: Charles in Charge ]

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TomDavidson
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In what sense would this outrage be "manufactured," i.e. less than genuine and whipped up to fit someone else's narrative? It seems to me that there are substantial dollars at play suppressing perfectly natural outrage that would otherwise be bubbling up, and very little doing the reverse.
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Pete at Home
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Charles, I apologize for the tone of some of my previous postings. I actually am glad that you're here to make certain challenging arguments.

"The outrage feels manufactured because the argument relies on a misleading use of the word steal. Normally, steal means illegal taking and its obviously morally wrong. In this case the word is used to describe not paying employees enough. It feels like the article is deliberately misusing the word in order to trigger moral outrage."

Hold on there, cowboy. The fact that I used the word steal in an arguably hyperbolic fashion doesn't mean that the outrage is "manufactured." You'd have a better argument to say out of proportion. In response to your earlier comment about "steal" I'd already clarified that I'd meant an "illigitimate [intentional] taking" (as opposed to an illegal one). This isn't a legal usage, I agree, but it's a common usage, just as people use the word "murder" often to mean a killing that they find morally repugnant, as opposed to illegal. In addition to clarifying what I'd meant, I *set aside* the word stealing and used "mooching" instead, which you did not address. It seems more outrageous to have a billionaire mooching off the poor and systems designed to help the poor.

"and yes I get that you think WalMart is especially evil because of its multi-class stock structure"

That's not quite it, though, as I pointed out that Ford has the same structure. The dual structure in itself is suspicious, but in my mind becomes outrageous when the family protectionism comes at the expense of the poor and of mooching off of the welfare system, as with the Waltons.

If my argument relied on the word "stealing" your counter would be relevant. But it doesn't. If it were an actual theft I'd be saying we should get our money back. Instead I'm saying we should cut off the subsidy. That in the future we're going to disgorge those food stamp monies from the 2nd tier profits. That if anyone wants to set up a dynasty that they've got to earn it, rather than bleeding the welfare system.

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Pete at Home
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I missed this:

"If the America mood were to change what US involvement in the world do you think would happen?"

If America were to regain the upwardly mobile middle class that it had back after the end of WWII, I think we'd be taking on Marshall Plan-style infrastructure and business programs in Haiti, India, Pakistan, Bangladesh, and central Africa. My father was involved in something like that in Haiti, but small scale, due to fewer resources. We'd be bringing in our third world brothers and sisters into the our age of prosperity, as we did with Europe.

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Charles in Charge
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quote:
Originally posted by TomDavidson:
In what sense would this outrage be "manufactured," i.e. less than genuine and whipped up to fit someone else's narrative?

I'm not sure I follow your question. I think the outrage is manufactured in the sense that it resulted from a misleading, hyperbolic telling of the facts. Without that extra embellishment I don't think most people would be morally outraged by the story.

quote:

It seems to me that there are substantial dollars at play suppressing perfectly natural outrage that would otherwise be bubbling up, and very little doing the reverse.

Do you have any examples of such suppression in this case?

I would be surprised if WalMart's PR department wasn't constantly trying to figure out how to improve its image, which would include reducing any moral outrage (justified or not) against its business practices. But in many cases, possibly including this one, the best choice would be to not to engage directly.

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Charles in Charge
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quote:
Originally posted by Pete at Home:
I missed this:

"If the America mood were to change what US involvement in the world do you think would happen?"

If America were to regain the upwardly mobile middle class that it had back after the end of WWII, I think we'd be taking on Marshall Plan-style infrastructure and business programs in Haiti, India, Pakistan, Bangladesh, and central Africa. My father was involved in something like that in Haiti, but small scale, due to fewer resources. We'd be bringing in our third world brothers and sisters into the our age of prosperity, as we did with Europe.

I think that's an interesting idea and I applaud the goal of raising the world's poor into prosperity.

It seems like direct help, such as funding of infrastructure, isn't very effective without supporting changes in culture, political organization and other institutions which we don't know how to do very well. I think Western Europe benefited from the Marshall Plan because they already had the necessary institutions and just needed cash. Helping today's poor countries will be much more difficult.

My favorite ideas to address the deeper issue are to experiment with charter cities and allow higher levels of immigration from broken countries to well functioning countries.

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Pete at Home
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Charles, good point re western Europe having institutions in place, and agreed that sending money would not suffice wheregovts are corrupt. We would need to be more iinvolved.

It's easier to do when we're not fighting the Taliban.

If we'd done this with Afghanistan in the 1990s as Charlie Wilson had suggested, we would never have seen 9/11

On the bright side, our struggle with ayatollatalutarianism gives us impetus to improve the world as the cold war did in the 1950s (hence my quibble w the word charity . . There was some self interest and that's not a bad thing!) What we lack is prosperity. Relative prosperity is irrelevant: we are only generous when we sense we are on an upward track.

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Charles in Charge
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quote:
Originally posted by Pete at Home:
Charles, I apologize for the tone of some of my previous postings. I actually am glad that you're here to make certain challenging arguments.

Thanks. Apology accepted.

quote:

"and yes I get that you think WalMart is especially evil because of its multi-class stock structure"

That's not quite it, though, as I pointed out that Ford has the same structure. The dual structure in itself is suspicious, but in my mind becomes outrageous when the family protectionism comes at the expense of the poor and of mooching off of the welfare system, as with the Waltons.

I poked around looking for more information on the actual structure. None of the sources I found mentioned a multi class stock structure. Several did mention that the Waltons straight up own about 50% of WalMart stock; which would mean they can retain control without multiple tiers of stock. Do you have a specific source that led you to think WalMart has multiple classes of stock?

quote:

I'm saying we should cut off the subsidy. That in the future we're going to disgorge those food stamp monies from the 2nd tier profits. That if anyone wants to set up a dynasty that they've got to earn it, rather than bleeding the welfare system.

I don't think having variable minimum wages based on company structure, profitability, etc... is a good idea.

WalMart employs some 2 million people with its current wage structure. If it was forced to offer significantly higher wages there would be many more people willing to work at WalMart. WalMart would naturally choose the best qualified from this expanded pool and many of the less qualified current employees would lose their jobs. Alternatively, WalMart could change the mix of benefits it offers to employees. The salary would be higher so they wouldn't have to offer as nice working conditions, paid time off, etc... Job security would also be lower because it would be easier to replace employees at the higher wages. It would become a lot more dangerous to disagree with your boss.

All in all I think the unintended consequences of such a regulation would hurt the most vulnerable WalMart employees.

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Charles in Charge
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quote:
Originally posted by Pete at Home:
It's easier to do when we're not fighting the Taliban.

If we'd done this with Afghanistan in the 1990s as Charlie Wilson had suggested, we would never have seen 9/11

On the bright side, our struggle with ayatollatalutarianism gives us impetus to improve the world as the cold war did in the 1950s (hence my quibble w the word charity . . There was some self interest and that's not a bad thing!) What we lack is prosperity. Relative prosperity is irrelevant: we are only generous when we sense we are on an upward track.

Agreed, though I confess I don't know what ayatollatalutarianism means.

Interestingly, it seems Venezuala is investing pretty heavily in Haitian infrastructure right now. It will be instructive to see if that leads to a higher growth rate in the long term.

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Pete at Home
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http://ivn.us/2014/02/02/government-anything-fix-economic-inequality-government-lot-create


quote:
“As riches increase and accumulate in few hands. . . the tendency of things will be to depart from the republican standard.”–Alexander Hamilton at the New York Ratifying Convention, 1788
One of the most pernicious myths of modern political discourse is that, in a complex society of 300 million people, it is even theoretically possible for the government to “do nothing” with respect to the economy. This was barely possible for a tribal chieftain ruling 200 or so people in the early days of agriculture; it is fundamentally impossible in the kind of complex global economies that exist today.

One of the roles of a government is to create the playing field that economic activity occurs upon—and there is no way to do this neutrally. Every decision that a government makes about taxation, regulation, economic policy, educational opportunity, and the legal environment is a decision to do something that will result in advantages for some people and disadvantages for others. That is simply how complex societies work.

Take a fairly straightforward example. According to one kind of political logic, the government acts “intrusively” when it regulates and fines companies that release pollution into the environment and “fairly” when it does not. But when the government (through which we the people act to regulate our common resources) allows private companies to pollute those resources at no cost, it actually socializes the costs of a private economic activity by compelling everyone to accept increased illness, missed work days, shorter life spans, increased risk of death, etc. without any corresponding socialization of the revenue.

Economists use the term “rent seeking” to describe activities that capture wealth without creating it. Economic activities that socialize costs or risks, while keeping revenues in private hands, are forms of rent seeking that end up shifting wealth and income from those on the lowest  end of the socioeconomic spectrum to those on the highest



[ February 10, 2014, 09:55 AM: Message edited by: Pete at Home ]

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