What is the Tea Party?
Ok, there are a bunch of things being discussed now . The issue with the American economy being at this point so consumer based is the result of decades of increased technology and efficient manufacturing. It is not directly a result of exporting jobs, but it is somewhat related. The more automated manufacturing has become, the fewer people are needed to directly work on it, and people are freed up for different jobs, wages increase, and the overall economy shifts to being consumer based. This is definitely one of the key problems with the American economy.Griffon64 wrote:halplm - The average United States of America citizen, the middle class and lower middle class consumer, is an important part of the engine of the American economy. The figures say roughly 70% of the American economy is consumer based. That's a sizable majority. The American consumer's ability to spend, and therefore to generate profit for business, is dependent on their remuneration. If businesses cut salaries and wages to the point where people have to scramble to make ends meet ( interestingly enough, wage and salary cuts has been happening in the private sector a lot during this stubbornly persistent recession / slow recovery ) they will spend less on business goods, and business profit will be less.
It, however, has nothing to do with individual businesses seeking to increase their own profitability any way they can.
Well, things change when you start talking about the middle class as a single entity, rather than as a huge number of individuals. Yes, the economy suffers if the bulk of the people don't have enough money. Arguably, that is the definition of a bad economy. However, it is the result of a failing economic system, not the cause of it. You cannot generate a better economy by giving the middle class more money, because that money has to come from somewhere. The economy as a whole will just then have other problems.This isn't hard to understand. I realize you were a small business owner ( or at least had a stake, I cannot remember details ) for a while, so you may be approaching from a different angle than I am. But honestly, if the American middle class isn't properly compensated, the American economic model ( and that of other countries that export to America ) gets pretty shaky.
This, IMHO, is totally unfair. No CEO gets an infusion of cash into their wallet every time they press a layoff button. Arguably, if they're laying off people, they are going to be having their own job looked at closely because their business is probably shrinking. If they get anything out of it, it is likely because the business was shrinking already, something had to be done, and the layoffs put the company in a better position to be profitable again.... which is the job of the CEO, and when people do a good job, they should be rewarded.All that said, I will agree with you that everyone loses when government makes business unprofitable. But get back to me about profitability when a swath of CEOs are not earning 10 million plus apiece. I have a hard time seeing business in a good light when they choose to shovel incredible chunks of money at one person - the one with his finger on the layoff button, who gets a fresh infusion of cash to his wallet every time he presses it.
Really? I'd love to see numbers on this, I would be surprised. Although I suppose it could be the result of increasing the number of successful businesses, rather than having consolidated industries with fewer CEOs (ie, more big business, less small business).Back in the "good old days" when business was profitable and people were happy, CEOs weren't earning that kind of money in the numbers they are now.
There is no doubt that government regulation is necessary in some instances. The free market will only take care of all of that in an idealized society where everyone is perfectly informed and would take things like the environment hundreds of miles away into account when buying their cheep groceries.And hell yeah, I want some government regulation and interference! As you state yourself, the purpose of business is to make money. Not to make sure they don't pollute the environment, impact the health of people, and all that stuff. Until American businesses show me some responsibility on those fronts, I'm behind government "interference". Until then, I'm glad my home-grown spinach and habit of buying free-range eggs have kept me from having to worry even slightly about two of the more recent food recalls, and I'm glad no Chinese drywall ( cheap labor! ) was installed in my home.
However, the goal of such regulation should be for the improvement of the business and what it produces. That way the consumer is happier, and the business is forced to look to more efficient ways to make a profit, rather than cutting corners. Too often, instead, government regulation is used as a punishment for businesses based on politics and anti-or-non-business agendas. This does nothing but hurt business, increase price for consumers, and increase government bureaucracy that must be paid for.
I can't fix Bakersfield... sorryI'm probably a little biased because I live 30 miles from where the city of Los Angeles spread tons of their sewer waste on land to dry out and blow on the wind until I inhale it, because they and their residents are too cheap to treat it responsibly themselves, and where I wake up and jokingly say "I love the smell of cow butt in the morning" when the morning breeze blows in over the feedlots where those "California happy cows" stand cheek to jowl, on concrete or in dirt mixed with cow poo, and where you can see scenes like this: http://people.bakersfield.com/home/Blog ... yguy/60115
It's a fine line, for sure. Mostly, when I see a specific regulation I'm considering is good or bad... I ask the question of whether it gives power to the government or simply improve everyone's lives. If it somehow makes the business or the consumer dependent on the government, it is certainly a bad idea (think, for instance, needing approval to move ahead with something necessary for the business), although sometimes this is necessary. If, on the other hand, is something like a standard that must be met (car safety, for instance), then I have much less of an issue with it.
All in the name of business profit. Disgusting, I tell you. If businesses cannot keep themselves in line, then yes, government will have to do it. And that adds all the additional restrictions and inefficiencies and overhead that you get with bureaucracy, but there you are.
[/soapbox]
Now, all of that was an interesting discussion of business and economics (on an extremely simplistic level, of course), but I'm unsure if it had anything to do with what we've been discussing. It has very little to do with what the Tea party movement is about, which is more on the individual level, and not the overall economy level.
I suppose you could say the Tea party movement is upset that the government is trying to manipulate the economy by moving money from one part to another, rather than by improving the situation we're in to generate new money. One in the Tea party movement might suggest this is not the role of our government, nor should it be, and thus, the Government should stop trying to do so, and work on making the economy a better place to create jobs, etc...
And yes, I do have a bit of a different point of view having had my own business, which failed for many reasons (including many mistakes on my own part) including government interference, greed by all parties that would have benefited more if my business had succeeded although they didn't see it that way, and the desire to compensate my employees so they were comfortable, which is FAR more costly than most people realize (not just talking paychecks here).
For the TROUBLED may you find PEACE
For the DESPAIRING may you find HOPE
For the LONELY may you find LOVE
For the SKEPTICAL may you find FAITH
-Frances C. Arrillaga 1941-1995
For the DESPAIRING may you find HOPE
For the LONELY may you find LOVE
For the SKEPTICAL may you find FAITH
-Frances C. Arrillaga 1941-1995
Well, I'm not sure which deregulation you are referring to, so if you want to discuss specifics, feel free.River wrote: You forgot to mention the excrement that was hitting the fan on Wall Street around this time two years ago. The financial sector got deregulated, the bankers and the brokers went to town. Like college freshmen at their first kegger...and the results were about as ugly. Uglier, even. The whole nation doesn't shake and quiver and toss millions of people into unemployment lines because some stupid kid passes out with his head in the toilet.
It's a nice fantasy we all have that responsible adults will act like responsible adults. Never seems to work out though.
There is no doubt there is an insane amount of corruption in wall street and the government that is simply astonishing whenever people actually investigate it. This is one of the reasons the Tea Party movement is just as angry at Bush and what he did as they are at the current government.
The big collapse 2 years ago was primarily centered around the housing market, however, which had less to do with deregulation, and more to do with forcing banks to make bad loans, and then bailing them out when those loans turned out to be... well... bad.
For the TROUBLED may you find PEACE
For the DESPAIRING may you find HOPE
For the LONELY may you find LOVE
For the SKEPTICAL may you find FAITH
-Frances C. Arrillaga 1941-1995
For the DESPAIRING may you find HOPE
For the LONELY may you find LOVE
For the SKEPTICAL may you find FAITH
-Frances C. Arrillaga 1941-1995
- Primula Baggins
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Banks weren't forced to make those loans; they sought them out. They used high-pressure sales techniques to get consumers who could have qualified for standard mortgages to take the iffy ones. They knew they were going to package and sell them as soon as they were made, and the risk would be someone else's. Only the immediate profit of selling the bundled loans would count.
As for CEOs and layoffs, it has been true for decades that layoffs generally cause a company's stock price to go up, in the short term. And CEOs are compensated for increasing the stock price in the short term—not for improving the company's long-term prospects, or its stability, or the quality of its products, or any other such triviality.
So, yes, laying people off has, for decades, made money for the CEOs who pressed the button. Never mind whether the company was going to be as effective, or as profitable, in two years because of the layoffs; in two years, on the strength of his fabulous stock-price résumé, the CEO would be off somewhere else laying off some other company's employees.
As for CEOs and layoffs, it has been true for decades that layoffs generally cause a company's stock price to go up, in the short term. And CEOs are compensated for increasing the stock price in the short term—not for improving the company's long-term prospects, or its stability, or the quality of its products, or any other such triviality.
So, yes, laying people off has, for decades, made money for the CEOs who pressed the button. Never mind whether the company was going to be as effective, or as profitable, in two years because of the layoffs; in two years, on the strength of his fabulous stock-price résumé, the CEO would be off somewhere else laying off some other company's employees.
“There, peeping among the cloud-wrack above a dark tor high up in the mountains, Sam saw a white star twinkle for a while. The beauty of it smote his heart, as he looked up out of the forsaken land, and hope returned to him. For like a shaft, clear and cold, the thought pierced him that in the end the Shadow was only a small and passing thing: there was light and high beauty for ever beyond its reach.”
― J.R.R. Tolkien, The Return of the King
― J.R.R. Tolkien, The Return of the King
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All in all the Tea Party movement is just a conduit for people's frustration and anger that (economic) life is far more uncertain than they previously thought, and that 'Big Daddy' Government doesn't seem able to apply the bandage.
Once there is prosperity again, the movement will all but disappear.
Once there is prosperity again, the movement will all but disappear.
It's about time.
Lord Morningstar, thank you for your detailed answering post.
I do not work in the market economy and I do not claim to understand the functionning - yet I see that I live in a country with only 3.5% (around that) of unemployment, even though wages are certainly among the highest of the world. (As a full time teacher your starting salary is arounf 80.000 Swiss francs, $ is close to one to one, and these salaries are considered low for academics) So, high wages cannot be the explanation of an economy failing - at least this is my conclusion. Now, in Switzerland, taxes and social charges are relatively low in comparison to other countries and the life quality is high, it's extrememly safe and the existing industries (parmaceutical, watch-making) require skilled to very skilled personal and thus are not easily outsourced. The banking sector has created so many losses and scandals in the last two years, that I don't see it as a positive factor in swiss economy, except for private banking for the ultra rich.
Germany is different: taxes and social charges are high, the country is a lot bigger and the economy is not doing as well as in Switzerland - but they also had a lot to digest in the last twenty years - yet it is doing better than almost all other European countries and si now considered as the motor of the European economy growth.
But in both of the countries, movements which do have some of the charateristics of the Tea Party Movement do exist. in Switzerland it would be the UDC (popular party pf Switzerland) which among others is the starter of the infamous minaret initiative. In Germany we had this terrible banker, Sarrazin and people fear he might create a party. The religious aspect which is part of the Tea Party Movement is absent in all European movements, as far as I see, but they are rather nationalist and xenophobic movements, usually opposed to tax rising and favoring liberal economy. The social-cultural questions like gay marriage and abortion have less importance, although they are not entirely absent either.
I am astonished, by the way, by this mix of very conservative social and rather liberal economic ideas.
But seeing those kinds of movement worldwide, I come to the conlcusion that there is something in the nature of modern democracy which enocourages them: the functionning of our economies and democracies has become so complicated that most people feel outpassed and tend to believe that less government would mean a world which would be easier to understand again. I don't think that many of them have clear concepts and ideas of a differently functionning government and/or world in mind, but that they fear this world, which is so complexe and which fails in so many ways that they want to opt for soemthing different -and those movements offer something different, moreover reduced to easy slogans which seem understandbale and attract people.
But this is just my opinion.
This is also why I think, that they won't go away with prosperity because a huge part of their reason to exist is irrational.
I do not work in the market economy and I do not claim to understand the functionning - yet I see that I live in a country with only 3.5% (around that) of unemployment, even though wages are certainly among the highest of the world. (As a full time teacher your starting salary is arounf 80.000 Swiss francs, $ is close to one to one, and these salaries are considered low for academics) So, high wages cannot be the explanation of an economy failing - at least this is my conclusion. Now, in Switzerland, taxes and social charges are relatively low in comparison to other countries and the life quality is high, it's extrememly safe and the existing industries (parmaceutical, watch-making) require skilled to very skilled personal and thus are not easily outsourced. The banking sector has created so many losses and scandals in the last two years, that I don't see it as a positive factor in swiss economy, except for private banking for the ultra rich.
Germany is different: taxes and social charges are high, the country is a lot bigger and the economy is not doing as well as in Switzerland - but they also had a lot to digest in the last twenty years - yet it is doing better than almost all other European countries and si now considered as the motor of the European economy growth.
But in both of the countries, movements which do have some of the charateristics of the Tea Party Movement do exist. in Switzerland it would be the UDC (popular party pf Switzerland) which among others is the starter of the infamous minaret initiative. In Germany we had this terrible banker, Sarrazin and people fear he might create a party. The religious aspect which is part of the Tea Party Movement is absent in all European movements, as far as I see, but they are rather nationalist and xenophobic movements, usually opposed to tax rising and favoring liberal economy. The social-cultural questions like gay marriage and abortion have less importance, although they are not entirely absent either.
I am astonished, by the way, by this mix of very conservative social and rather liberal economic ideas.
But seeing those kinds of movement worldwide, I come to the conlcusion that there is something in the nature of modern democracy which enocourages them: the functionning of our economies and democracies has become so complicated that most people feel outpassed and tend to believe that less government would mean a world which would be easier to understand again. I don't think that many of them have clear concepts and ideas of a differently functionning government and/or world in mind, but that they fear this world, which is so complexe and which fails in so many ways that they want to opt for soemthing different -and those movements offer something different, moreover reduced to easy slogans which seem understandbale and attract people.
But this is just my opinion.
This is also why I think, that they won't go away with prosperity because a huge part of their reason to exist is irrational.
"nolite te bastardes carborundorum".
It depends on how you define "forced" I guess. They were given massive incentives to lend to people who couldn't afford it, and were denied government aid if they refused people who shouldn't have qualified in the first place. "high-pressure sales techniques?" What exactly are those... things like "you can buy this house if you want to because we're giving you an interest only loan with nothing down." Yeah, that's high pressure I guess... for people that can't afford a real mortgage and want a house.Primula Baggins wrote:Banks weren't forced to make those loans; they sought them out. They used high-pressure sales techniques to get consumers who could have qualified for standard mortgages to take the iffy ones. They knew they were going to package and sell them as soon as they were made, and the risk would be someone else's. Only the immediate profit of selling the bundled loans would count.
The excuses made for government fraud and corruption astonish me sometimes.
Oh really, CEOs aren't compensated for improving a company's long-term prospects, its stability, or the quality of its products? Seriously? What exactly do you think the job of a CEO is? Do you honestly believe their job is to just flip a company's stock price in the short term? If that were the case CEOs would only last a quarter or two, and then they'd be out the door. CEOs MANAGE COMPANIES. They have many many responsibilities, and that's why they get paid a lot of money to do their job. If all they had to do was push the "layoff button" to make their millions, then they wouldn't be necessary EVER. Why hire someone and pay them a ton of money to do something any manager could do? Seriously... it blows my mind what people think it takes to run a company.As for CEOs and layoffs, it has been true for decades that layoffs generally cause a company's stock price to go up, in the short term. And CEOs are compensated for increasing the stock price in the short term—not for improving the company's long-term prospects, or its stability, or the quality of its products, or any other such triviality.
So, it's your opinion, that the only thing the chief executive of a company does is layoff employees? That's the only way companies improve their stock price? That Management of companies are only out to screw their employees whenever possible for their own personal gratification?So, yes, laying people off has, for decades, made money for the CEOs who pressed the button. Never mind whether the company was going to be as effective, or as profitable, in two years because of the layoffs; in two years, on the strength of his fabulous stock-price résumé, the CEO would be off somewhere else laying off some other company's employees.
How about government execs? what do they do? Do they fire people who don't do their job? Do they do whatever it takes to make sure the taxpayers dollars aren't wasted on employees and programs that DO NOTHING? Or are they noble and self-sacrificing (for their 90% pensions when they retire at 50 of course because they are so noble), and only out for the little guy and they don't care if they lose money all the time because the taxpayers can always afford to give more?!
Business CREATES, whether it is iPods, or cable news, or science fiction novels. Anything that doesn't create wealth just spreads it around, which is a net loss, because there's always waste. Only business striving for a profit ever creates any wealth. And yes, you need a competent CEO to manage that creation or it will die before it succeeds, and then everyone involved loses... and yes, everyone involved is the investors, the management, the board, the CEO and the freaking EMPLOYEES.
unbelievable.
For the TROUBLED may you find PEACE
For the DESPAIRING may you find HOPE
For the LONELY may you find LOVE
For the SKEPTICAL may you find FAITH
-Frances C. Arrillaga 1941-1995
For the DESPAIRING may you find HOPE
For the LONELY may you find LOVE
For the SKEPTICAL may you find FAITH
-Frances C. Arrillaga 1941-1995
The Tea party movement doesn't WANT "Big Daddy" government to apply a bandage. They want the government to NOT be a big daddy, and leave them alone to be able to make something of their economic life without being taxed into oblivion.Lidless wrote:All in all the Tea Party movement is just a conduit for people's frustration and anger that (economic) life is far more uncertain than they previously thought, and that 'Big Daddy' Government doesn't seem able to apply the bandage.
Once there is prosperity again, the movement will all but disappear.
For the TROUBLED may you find PEACE
For the DESPAIRING may you find HOPE
For the LONELY may you find LOVE
For the SKEPTICAL may you find FAITH
-Frances C. Arrillaga 1941-1995
For the DESPAIRING may you find HOPE
For the LONELY may you find LOVE
For the SKEPTICAL may you find FAITH
-Frances C. Arrillaga 1941-1995
This whole thing got very confusing very quickly so I might be wrong but as I understand it, the gov. had a significant role in creating the weirdly irrational situation where making loans people couldn't pay off became profitable.Primula Baggins wrote:Banks weren't forced to make those loans; they sought them out. They used high-pressure sales techniques to get consumers who could have qualified for standard mortgages to take the iffy ones. They knew they were going to package and sell them as soon as they were made, and the risk would be someone else's. Only the immediate profit of selling the bundled loans would count.
I wanna love somebody but I don't know how
I wanna throw my body in the river and drown
-The Decemberists
I wanna throw my body in the river and drown
-The Decemberists
I think my view of the world is so different that I cannot contribute to this discussion.
If I read this:
Same on this account:
And another no:
And many things are created that have no value in business or are not created for that purpose.
So, if the Tea Party defends a world like the one described in halplm's posts, it is not a world in which I would like to live.
If I read this:
I cannot help feeling directly aimed. I am a government employee after all, and I am not in business, so in the view of the world of someone defending the tea party, my work is a net loss? Of course, I have to disagree! I think what I do is highly valuable. Important and essential, even though it is not business. Is wealth such a desirable value? And how about culture? Financing an opera from Mozart - waste?Anything that doesn't create wealth just spreads it around, which is a net loss, because there's always waste. Only business striving for a profit ever creates any wealth.
Same on this account:
I disagree. And luckily, many businessmen obviously do too and are concious that they also have a social role to play - and this even right from the start of the Industrial Revolution. Business is not only about money, it's also about people. Without people, money is worth nothing, it would not even exist and if your only aim is profit, you go historically wrong towards exploitation which ends up in revolutions. (Ok, I do exagerate).Business's purpose is to make money.
And another no:
People create. They make things, have ideas and write. Business sells or not.Business CREATES, whether it is iPods, or cable news, or science fiction novels.
And many things are created that have no value in business or are not created for that purpose.
So, if the Tea Party defends a world like the one described in halplm's posts, it is not a world in which I would like to live.
"nolite te bastardes carborundorum".
- Primula Baggins
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Yes, in that case the government's involvement consisted of removing the regulatory oversight that had prevented such things before. And, yes, both parties colluded to do so.
As I've been trying to say, market forces, especially now, do not do well at all with any investment that is expensive and long-term, no matter how essential the product that investment creates might be. The stockholders won't reward people who spend millions to build an airport, or billions to educate millions of kids. They also won't reward money spent to protect against disasters that everyone knows can never happen because nobody makes mistakes and nature can be controlled.
Government is a necessary part of the economy, and business and its customers depend on what government does.
Not if it reduces the company's short-term bottom line and dings the stock price. They are fired.halplm wrote: Oh really, CEOs aren't compensated for improving a company's long-term prospects, its stability, or the quality of its products?
A year or two is more typical, but that's the pattern. For high-level execs as well.Seriously? What exactly do you think the job of a CEO is? Do you honestly believe their job is to just flip a company's stock price in the short term? If that were the case CEOs would only last a quarter or two, and then they'd be out the door.
Well, there's also cutting salaries, and reducing benefits, and refusing to allow anyone to be hired to help meet increased demand. Those are rewarded, too. If they have an impact on this quarter's budget, they are rewarded.So, it's your opinion, that the only thing the chief executive of a company does is layoff employees? That's the only way companies improve their stock price? That Management of companies are only out to screw their employees whenever possible for their own personal gratification?
Let me see if I have this right. Teachers who take uneducated kids and turn them into educated citizens are creating no wealth. Soldiers, police, and firefighters who protect citizens and infrastructure from disaster and attack aren't creating any wealth. Doctors and nurses at public and military hospitals who treat the sick and wounded and return them to productiveness aren't creating any wealth. Government inspectors who protect citizens from mass food poisoning, mine disasters, gas-line explosions, etc., aren't creating any wealth. They are all parasites and should be swept away so the free market can step in.Business CREATES, whether it is iPods, or cable news, or science fiction novels. Anything that doesn't create wealth just spreads it around, which is a net loss, because there's always waste. Only business striving for a profit ever creates any wealth.
As I've been trying to say, market forces, especially now, do not do well at all with any investment that is expensive and long-term, no matter how essential the product that investment creates might be. The stockholders won't reward people who spend millions to build an airport, or billions to educate millions of kids. They also won't reward money spent to protect against disasters that everyone knows can never happen because nobody makes mistakes and nature can be controlled.
Government is a necessary part of the economy, and business and its customers depend on what government does.
“There, peeping among the cloud-wrack above a dark tor high up in the mountains, Sam saw a white star twinkle for a while. The beauty of it smote his heart, as he looked up out of the forsaken land, and hope returned to him. For like a shaft, clear and cold, the thought pierced him that in the end the Shadow was only a small and passing thing: there was light and high beauty for ever beyond its reach.”
― J.R.R. Tolkien, The Return of the King
― J.R.R. Tolkien, The Return of the King
You are wrong. And you are oddly obsessed with a companies stock price. Do you realize how many companies don't even have publicly traded stock? Do you realize how many companies actually prefer profit to random stock changes. The stock market is legalized gambling if you're being generous and a giant Ponzi scheme if you want to be more accurate.Primula Baggins wrote:Yes, in that case the government's involvement consisted of removing the regulatory oversight that had prevented such things before. And, yes, both parties colluded to do so.
Not if it reduces the company's short-term bottom line and dings the stock price. They are fired.halplm wrote: Oh really, CEOs aren't compensated for improving a company's long-term prospects, its stability, or the quality of its products?
Only fools and crooks would fire CEOs for such reasons.
Where are you getting your information?A year or two is more typical, but that's the pattern. For high-level execs as well.Seriously? What exactly do you think the job of a CEO is? Do you honestly believe their job is to just flip a company's stock price in the short term? If that were the case CEOs would only last a quarter or two, and then they'd be out the door.
I understand now. Business is evil, management is out to screw employees, and only the local Union can save us. Well, as long as you aren't biased in any particular direction.Well, there's also cutting salaries, and reducing benefits, and refusing to allow anyone to be hired to help meet increased demand. Those are rewarded, too. If they have an impact on this quarter's budget, they are rewarded.So, it's your opinion, that the only thing the chief executive of a company does is layoff employees? That's the only way companies improve their stock price? That Management of companies are only out to screw their employees whenever possible for their own personal gratification?
No, they're not, because it costs more to do so than it should or the education is worth.Let me see if I have this right. Teachers who take uneducated kids and turn them into educated citizens are creating no wealth.Business CREATES, whether it is iPods, or cable news, or science fiction novels. Anything that doesn't create wealth just spreads it around, which is a net loss, because there's always waste. Only business striving for a profit ever creates any wealth.
No, they're not, but they do provide essential services i.e. safety, which I mentioned before.Soldiers, police, and firefighters who protect citizens and infrastructure from disaster and attack aren't creating any wealth.
No, they're not, but see above.Doctors and nurses at public and military hospitals who treat the sick and wounded and return them to productiveness aren't creating any wealth.
No, they're not, but see above.Government inspectors who protect citizens from mass food poisoning, mine disasters, gas-line explosions, etc., aren't creating any wealth.
I did not say this.They are all parasites and should be swept away so the free market can step in.
I'm sure you're aware that stockholders would indeed reward people spending millions to build an airport if that airport was profitable. I'm sure you're aware that many private schools and those that attend them reward their educators a great deal for good educations. I'm sure you're also aware of the amount of aid for disaster victims that comes from simple generosity of private organizations.As I've been trying to say, market forces, especially now, do not do well at all with any investment that is expensive and long-term, no matter how essential the product that investment creates might be. The stockholders won't reward people who spend millions to build an airport, or billions to educate millions of kids. They also won't reward money spent to protect against disasters that everyone knows can never happen because nobody makes mistakes and nature can be controlled.
Your position seems to be that only the government can provide these functions, and I say that is entirely incorrect. While I have also clearly stated that the government is useful in many of these areas, that does not change my point, as much as you would like to try to redefine my point for me.
Government is a necessary part of society, certainly. It is not necessary that it interferes in the economy in ANY way. Business and its customers should not ever have to depend on the government. That path leads to where we are now.Government is a necessary part of the economy, and business and its customers depend on what government does.
and your misplaced quotation of the Bible (without reference I might add), adds nothing to the discussion here as yet another attempt to alter my position for me.vison wrote:"For what shall it profit a man, if he shall gain the whole world, and lose his own soul?"
There are many kinds of wealth.
There are indeed many kinds of wealth, and if you would like to have a discussion on the differences in such kinds of wealth and how much matters or don't with regards to your immortal soul, then feel free to start one. Here, in the Tea Party thread, we're discussing economic driving factors, and the government's determination to stomp them down or control them in whatever way they can manage.
The attempt to justify wasteful spending and gross corruption based on moral superiority is disgusting.
No one person's work is a net loss in my generalization. Governments will always do things less efficiently than private enterprise, because their budgets aren't fixed, they always have access to more tax money, so if they want to put on an opera, are given 100,000 to do so, and end up spending 200,000, no one ultimately cares... but were it a private opera house, if they hit 50,000 and are not going to make it, they all get fired, and people who can get it done for 100,000 are hired and get it done.Nin wrote: I cannot help feeling directly aimed. I am a government employee after all, and I am not in business, so in the view of the world of someone defending the tea party, my work is a net loss? Of course, I have to disagree! I think what I do is highly valuable. Important and essential, even though it is not business. Is wealth such a desirable value? And how about culture? Financing an opera from Mozart - waste?
And nothing I've stated has anything to do with wealth being a "desirable value?" You're talking personal moral choices, and I'm talking economic driving forces.
Those are bad businessmen then, although certainly good people. And when you go back to the Industrial Revolution, you are talking about entirely different economic situations. Indeed, exploitation does end up in revolutions, but not against businesses... against governments...I disagree. And luckily, many businessmen obviously do too and are concious that they also have a social role to play - and this even right from the start of the Industrial Revolution. Business is not only about money, it's also about people. Without people, money is worth nothing, it would not even exist and if your only aim is profit, you go historically wrong towards exploitation which ends up in revolutions. (Ok, I do exagerate).
A fair distinction. People do create ideas, but its business that allows those ideas to develop if they are going to be any effect on the economy, which is what we used to be talking about.People create. They make things, have ideas and write. Business sells or not.
And many things are created that have no value in business or are not created for that purpose.
For the TROUBLED may you find PEACE
For the DESPAIRING may you find HOPE
For the LONELY may you find LOVE
For the SKEPTICAL may you find FAITH
-Frances C. Arrillaga 1941-1995
For the DESPAIRING may you find HOPE
For the LONELY may you find LOVE
For the SKEPTICAL may you find FAITH
-Frances C. Arrillaga 1941-1995
Hal, the strategy group in our univ studies CEO compensation, CEO tenure and even CEO narcissism (and the effect it has on the company). And the average tenure is 4-5 years, there has been an excessive focus on stock price returns as the compensation of CEOs and top-level executives is based on stock options. This has actually hurt companies in the long-term... and part of the problem is the shorter tenure. Now, this is largely true of US-based publicly listed companies, where the corporate governance practices are actually quite behind. For example, having the same chairman of the board and the CEO (something so blatantly stupid). The European corporate governance model is actually better.Quote:
Seriously? What exactly do you think the job of a CEO is? Do you honestly believe their job is to just flip a company's stock price in the short term? If that were the case CEOs would only last a quarter or two, and then they'd be out the door.
A year or two is more typical, but that's the pattern. For high-level execs as well.
Where are you getting your information?
Now, for the firms that are not publicly traded - its really tough to say what CEO tenure, compensation etc. is like because data is not available and their dealings cannot be looked into. Which is sometimes a good thing, and sometimes not.
'You just said "your getting shorter": you've obviously been drinking too much ent-draught and not enough Prim's.' - Jude
What is the Tea Party?
I believe it is a movement with no coherent philosophical foundation. What is the driving principle of the Tea Party movement? That taxes must be cut? That spending must be reduced? This is what I hear from them most often.
That is fine, but I have heard this before, and meanwhile we have two pressing problems in the United States right now, the state of the economy and the state of the budget deficit, and any political movement that does not address at least one of these concerns will fail. And to be sure the Tea Party movements often talk about reducing the deficit and improving the economy. But I don't think they've made a persuasive case. You must address Social Security and Medicare if you are to address the budget deficit. The stimulus, large as it was, was a one time expense that has nothing to do with long term deficits. Many economists believe the stimulus was necessary to help the economy improve. And yet the stimulus is targeted as if it was hurting the economy and making deficits unmanageable. Of course, if it worked, then tax receipts would go up and over the long term the stimulus would pay for itself.
Do the Tea Party organizations have an evidence-based counter to the idea that the stimulus package helped the economy? They may, but this is not what they present to the public. What I mostly hear is slogans, about smaller government and so on. What is interesting is that it appears that the Obama administration doesn't believe in the Stimulus anymore because they passed on trying to pass more of it even though a lot of economists said we needed more.
I think the cartoons were spot on because they illustrate all the ways that the Tea Party movement can and has gone bad. I do not believe that the Tea Party movements are intrinsically racist, or even mostly racist, but a lot of racists and "birthers" will gravitate towards the Tea Party organizations because they are opposed to President Obama. The Tea Party movement is very emotion based, and there are a lot of traps they can fall into.
As for the housing bubble, there are obviously a lot of factors. I think it would have been good if people had stopped and asked themselves a simple question: can I really afford this? And for the lenders to ask, can this loan applicant really afford this? Of course, if you are the buyer and you are convinced that real estate prices will keep going up, then you don't need to worry much about affording it, and if you are the bank and can just sell the mortgage on down the line to someone who doesn't really have a good idea what he's buying, then you won't care either. I think there is plenty of blame to go around. If you act irresponsibly, then guess what, we probably needed those damn regulations.
I believe it is a movement with no coherent philosophical foundation. What is the driving principle of the Tea Party movement? That taxes must be cut? That spending must be reduced? This is what I hear from them most often.
That is fine, but I have heard this before, and meanwhile we have two pressing problems in the United States right now, the state of the economy and the state of the budget deficit, and any political movement that does not address at least one of these concerns will fail. And to be sure the Tea Party movements often talk about reducing the deficit and improving the economy. But I don't think they've made a persuasive case. You must address Social Security and Medicare if you are to address the budget deficit. The stimulus, large as it was, was a one time expense that has nothing to do with long term deficits. Many economists believe the stimulus was necessary to help the economy improve. And yet the stimulus is targeted as if it was hurting the economy and making deficits unmanageable. Of course, if it worked, then tax receipts would go up and over the long term the stimulus would pay for itself.
Do the Tea Party organizations have an evidence-based counter to the idea that the stimulus package helped the economy? They may, but this is not what they present to the public. What I mostly hear is slogans, about smaller government and so on. What is interesting is that it appears that the Obama administration doesn't believe in the Stimulus anymore because they passed on trying to pass more of it even though a lot of economists said we needed more.
I think the cartoons were spot on because they illustrate all the ways that the Tea Party movement can and has gone bad. I do not believe that the Tea Party movements are intrinsically racist, or even mostly racist, but a lot of racists and "birthers" will gravitate towards the Tea Party organizations because they are opposed to President Obama. The Tea Party movement is very emotion based, and there are a lot of traps they can fall into.
I believe this could only be true for those stocks which will never pay out dividends. Ultimately, isn't the only reason any stock should have any value because it may pay out dividends in the future ( or is already paying them out )?The stock market is legalized gambling if you're being generous and a giant Ponzi scheme if you want to be more accurate.
As for the housing bubble, there are obviously a lot of factors. I think it would have been good if people had stopped and asked themselves a simple question: can I really afford this? And for the lenders to ask, can this loan applicant really afford this? Of course, if you are the buyer and you are convinced that real estate prices will keep going up, then you don't need to worry much about affording it, and if you are the bank and can just sell the mortgage on down the line to someone who doesn't really have a good idea what he's buying, then you won't care either. I think there is plenty of blame to go around. If you act irresponsibly, then guess what, we probably needed those damn regulations.
This is the part that still doesn't make sense to me - why would anyone pay good money for something without knowing exactly what it is or what it is worth? In my vague understanding, this is where some of the gov's rules came into play but maybe I'm wrong. I just can't see any normal business buying huge quantities of unknown products for made up values in a normal free-market system.Faramond wrote:...to someone who doesn't really have a good idea what he's buying, then you won't care either.
I wanna love somebody but I don't know how
I wanna throw my body in the river and drown
-The Decemberists
I wanna throw my body in the river and drown
-The Decemberists
It's a gamble and a numbers game. It becomes much less risky when the government has proven it will buy up every mortgage imaginable... but if that were not the case... the risk is calculated based on the probability the mortgage will increase in value based on many issues.yovargas wrote:This is the part that still doesn't make sense to me - why would anyone pay good money for something without knowing exactly what it is or what it is worth? In my vague understanding, this is where some of the gov's rules came into play but maybe I'm wrong. I just can't see any normal business buying huge quantities of unknown products for made up values in a normal free-market system.Faramond wrote:...to someone who doesn't really have a good idea what he's buying, then you won't care either.
I spent a year researching strategies of when exactly you want to buy and sell mortgage backed securities and how making people refinancing offers at various times would effect the value of those securities. The prediction formulas are complicated, but the value of the property, or ability for the owner to avoid defaulting... were not first or even second order terms (i.e. they were negligible).
For the TROUBLED may you find PEACE
For the DESPAIRING may you find HOPE
For the LONELY may you find LOVE
For the SKEPTICAL may you find FAITH
-Frances C. Arrillaga 1941-1995
For the DESPAIRING may you find HOPE
For the LONELY may you find LOVE
For the SKEPTICAL may you find FAITH
-Frances C. Arrillaga 1941-1995
A big part of the problem was (and still is) short-term compensations. There was a market on the upswing. the really smart players bought and sold these securities as they ticked up. They didn't hold them for long... and the ones which noticed the latest game in town late, were left holding them (like Citigroup). Plus, these were AAA rated securities - that's as high as it gets. Of course, then the problem is that the rating agencies are paid by the products' owners (now, this does not mean that rating agencies rate everything A+, they don't. Why they did so in this case still remains unclear). And it was a bubble - like all bubbles - everyone, everyone wanted to believe that this bubble is real, and this bubble will make them money. Including the consumers who took out these loans, and believed that their housing price will keep rising, indefinitely.yovargas wrote:This is the part that still doesn't make sense to me - why would anyone pay good money for something without knowing exactly what it is or what it is worth? In my vague understanding, this is where some of the gov's rules came into play but maybe I'm wrong. I just can't see any normal business buying huge quantities of unknown products for made up values in a normal free-market system.Faramond wrote:...to someone who doesn't really have a good idea what he's buying, then you won't care either.
'You just said "your getting shorter": you've obviously been drinking too much ent-draught and not enough Prim's.' - Jude