Putting a stake thru the heart of corporations by SignyM

REAL WORLD EVENT DISCUSSIONS

Putting a stake thru the heart of corporations

POSTED BY: SIGNYM
UPDATED: Friday, June 16, 2006 05:31
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Tuesday, June 13, 2006 9:54 AM

I believe in solving problems, not sharing them.

When people suggest that we hand over yet MORE money to corporations (and the wealthy) its because they're misguided into thinking that the wealthy are a source of wealth and growth. They believe in the trickle-down theory.

You'd think that those who believe this so strongly would have made a point to study economic theory and data. But - sadly- trickle-down theory doesn't survive very long in the reality-based community.

First a look at the theory itself.

Let's assume that some large amount of money has shifted to the wealthy and corporations. The theory is that increased saving leads to increased investment. But is that necessarily true? What would investors do with that money? Well, they could invest in increased production. But with fewer consumers in sight (remember that the average person who spends all of his money just lost a chunk o' change) that's not a likely scenario. They could take that money and buy up their competitors, leading to greater consolidation- a more likely scenario. They could take that money and invest in more automation and less costly production. Although that gives them a higher profit percentage, in the long run they have just reduced their consumer base because they just kicked a lot of folks out of work. They could perform basic research- a possibility but not one that many corporations do. Or they could speculate with it and buy up gold, commercial real estate etc. With each turn of the crank, more money goes into fewer hands. Ultimately, production capacity far exceeds aggregate demand which leads to a crash.

But what about the happy ending? What about us? Aren't we a product of massive inequality of wealth? Well, the answer is ... no. During the Age of Industrialization, when displaced farmers flocked to the cities and many people starved in the streets while a few became fabulously wealthy, there was no indication that situation would ever revert to a better life for all through sheer accumulation of wealth. It wasn't until unions began to demand better wages and shorter work hours that the life of the average person became better, not worse. The same situation repeated itself in the USA. Life became better for everyone only when unions demanded it.

But, you say, doesn't income equality lead to economic stagnation? Once again, the answer is no. Empiric data collected both across countries and through time series within countries indicate that economic growth is higher in nations with economic equality, not lower. http://66.102.7.104/search?q=cache:ymS3B0YdY_AJ:www.economics.neu.edu/
papers/documents/03-006.pdf+savings+%
22income+distribution%22+united+states&hl=en&gl=us&ct=clnk&cd=3

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Don't piss in my face and tell me it's raining.

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Tuesday, June 13, 2006 10:24 AM

CHRISISALL

Well, we know that the rich will literally kill to stay rich (See: All of history, past and present), and we don't want starvation in the streets, so I think a baseline socialism mixed with an elitist capitalism (heavily regulated) might do the trick.
The rich can still cut eachother's throats for obscene profit, but the ones who want 'just enough' to start with would have it.

Or we could have a revolution. Viruses to shut down the computers of Earth. Then dumass CEO's would have to work for a living.

Chrisisall* wakes up from his dream...*

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Tuesday, June 13, 2006 11:12 AM

FREMDFIRMA

You know, in hindsight, the Luddites weren't as crazy as people thought, were they ?

-Frem

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Tuesday, June 13, 2006 11:26 AM

CHRISISALL

Quote:
Originally posted by Fremdfirma:
You know, in hindsight, the Luddites weren't as crazy as people thought, were they ?

I dunno, I'll ask the genetically designed replicant that replaced me at my last job.

Chrisisall

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Tuesday, June 13, 2006 11:50 AM

SIGNYM

I believe in solving problems, not sharing them.

Since the pro-capitalists are very quiet I'm going to poke them with a stick and see if they respond.

Not only is redistribution of wealth downwards a nice thing to do, it makes economic sense. Progressive taxes make sense. Raising the minimum wage makes wonderful sense. Heatlh care for everyone- also sensible economically-speaking.

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Don't piss in my face and tell me it's raining.

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Tuesday, June 13, 2006 12:01 PM

CAUSAL

I used to be a die-hard Reagonomic trickle-down capitalist. Then I found out that Bill Gates' personal wealth is larger than the bottom 40% of all Americans combined. That works out to something like $12,000 for every penny in the bottom 40%.

"In 1973, the typical CEO of a large company earned about forty times what a typical worker did; today, he earns from 190 to 419 times as much." (From Twilight of American Culture, by Morris Berman).

Just disgusting.

________________________________________________________________________
I wish I had a magical wish-granting plank.

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Tuesday, June 13, 2006 12:35 PM

CITIZEN

Quote:
Originally posted by Causal:
I used to be a die-hard Reagonomic trickle-down capitalist. Then I found out that Bill Gates' personal wealth is larger than the bottom 40% of all Americans combined. That works out to something like $12,000 for every penny in the bottom 40%.

"In 1973, the typical CEO of a large company earned about forty times what a typical worker did; today, he earns from 190 to 419 times as much." (From Twilight of American Culture, by Morris Berman.

Just disgusting.

Obviously you are mistaken!!

I have it right here, this economic textbook says wealthy people making and keeping more and more money makes everyone better off, and since Economics tells us everything worth knowing about the world, and all other Human endeavours are worthless before it, the text book must be correct and this ‘evidence’ wrong.

Remember if the real world doesn't resemble what happens in an economics text book, the real world is wrong.

Whoa, what was that? Did I just start channelling an economist again?

Okay back to the car battery for some more treatment for me.

More insane ramblings by the people who brought you beeeer milkshakes!
"I had a rose named after me and I was very flattered. But I was not pleased to read the description in the catalog: 'No good in a bed, but fine against a wall'." -- Eleanor Roosevelt.

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Tuesday, June 13, 2006 12:42 PM

CITIZEN

Quote:
Originally posted by SignyM:
They believe in the trickle-down theory.

Can we not elevate 'trickle down' to a theory? I mean I'd call it a religion but I've yet to find a religion that makes as little sense as trickle down.

By removing resources from the system everyone gains resources via, erm, err, Magic, yeah, economic magic.

Just like that.

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Tuesday, June 13, 2006 1:48 PM

SIMONWHO

A physicist, a chemist and an economist get stuck on a desert island. Starving, they come across a crate of baked beans. Unfortunately, they're the old fashioned cans and there's no tin opener.

The physicist says "Well, let's put the cans on those hot rocks over there. The contents will heat up, expand and the tins will be forced open."

The chemist says "No, we ought to put them in those puddles of salt water which will weaken the bond holding the lid on enough for us to get into them."

The economist says "Let's assume we have a tin opener..."

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Thursday, June 15, 2006 4:10 AM

CHRISISALL

Quote:
Originally posted by SimonWho:

The economist says "Let's assume we have a tin opener..."

BWAHAHAHAHAHAHAHAHAHAHAHAH!!!!!

Too true Chrisisall

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Thursday, June 15, 2006 4:16 AM

CHRISISALL

I wasn't too old when listening to Regan talk that 'trickle down' crap on a State of the Union address, and even then I saw the trick in the trickle.

On the other hand, I am rich today....

Like Han, I invested in corruption (social security) Chrisisall

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Thursday, June 15, 2006 4:55 AM

TAYEATRA

My my... there certainly seems to be a vein of socialism running through this thread. Admittedly that may not be a bad thing but it depends on the level of this baseline.

I live in the UK and I think that our health service (NHS) is a much better system than the American health system. The NHS is based on the theory that everyone has a right to health services, regardless of wealth. A large proportion of national funding disappears into the NHS and whilst it has it's problems, the goal is admirable.

However, should there be a limit to welfare benefits available. Child benefit, disability allowance and state pension are all worthy funds, but there should be (IMHO) a limit on job-seekers allowance available. This is where I veer away from socialism simply because I've seen too many instances of people getting something for nothing.

There is a vast difference between some of the corporate wealth highlighted above and a middle class income yet both are taxed on the same scale without accounting for dependents above the age of 16 or mortgages. So, whilst I agree with the basic theory of income-based tax, income is not always related to lifestyle or circumstance.

When it comes to issues of extreme wealth (Bill Gates for example), moral conscience is the deciding factor. You will find that some companies donate large sums of money to charities or initiatives that are not always reported. British Telecoms gave £1/2 million to the tsunami fund without announcing it publicly whereas some celebrities gave the equivalent of a weeks wages and were celebrated in the press. Too often wealth does not come with moral guidelines but if I ever become rich I like to think I would help others less fortunate, although I would never advertise generosity because it's trashy and unnecessary.

*****
Taya
*****
I'm going to S3!!!
(*Insert hysterical celebration dance here*)

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Thursday, June 15, 2006 5:16 AM

CHRISISALL

Quote:
Originally posted by Tayeatra:

There is a vast difference between some of the corporate wealth highlighted above and a middle class income yet both are taxed on the same scale without accounting for dependents above the age of 16 or mortgages.

The UK must be quite progressive, 'cause Stateside, as your income goes up, your taxes go down to the point that big corporations get paid to not move to foreign soil.
Also, you can invest millions in a busness purposely set up to fail, and you sell it AND get tax credit on it, making more money than if the busness had succeeded.
I could go on and on, but you get the picture.

There's a lot of trees over our capitalist system here, yes, very shady.

Cynical Chrisisall (Not to be confused with Christhecynic)

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Thursday, June 15, 2006 6:46 AM

SIGNYM

I believe in solving problems, not sharing them.

The challenge is to create a system that combines the best of both worlds. Capitalism is very very good at some things- especially concentrating capital and creating labor-saving technologies. But it sucks at recycling wealth downwards where it can once again be used to purchase goods. Consdier the capitalist's dream-world, where all production is either automated or performed by people paid next to nothing. In those circumstances, who do you sell to?

---------------------------------
Don't piss in my face and tell me it's raining.

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Thursday, June 15, 2006 6:52 AM

CHRISISALL

Quote:
Originally posted by SignyM:
the capitalist's dream-world, where all production is either automated or performed by people paid next to nothing. In those circumstances, who do you sell to?

EXACTLY EXACTLY EXACTLY!
Extreme Capitalists are aiming toward self destruction, but they're gonna have fun before that happens...

Chrisisall

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Thursday, June 15, 2006 1:50 PM

CITIZEN

Quote:
Originally posted by SignyM:
The challenge is to create a system that combines the best of both worlds. Capitalism is very very good at some things- especially concentrating capital and creating labor-saving technologies. But it sucks at recycling wealth downwards where it can once again be used to purchase goods. Consdier the capitalist's dream-world, where all production is either automated or performed by people paid next to nothing. In those circumstances, who do you sell to?

The Robots obviously.

Geeze.

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Thursday, June 15, 2006 4:01 PM

RUE

I have a vote and I'm not afraid to use it!

Quote:
Originally posted by SignyM:
In those circumstances, who do you sell to?
Originally posted by citizen:
The Robots obviously.
Geeze.

HA HA HA HA HA HA HA HA HA Ha Ha Ha Ha Ha Ha Ha ha ha ha ha ha ha ....

But seriously.
I think I see some flaws in the scenarios. Help me out here.

1) The rich get to keep everything. The faster the handle cranks, the richer they get, so of course they crank as fast as possible. The rich get richer, the poor get poorer, and the motivating force (the rich who have the power) have a vested interest in using up resources and generating waste as fast as possible. The earth and most of humanity loses. Unsustainable.

2) Socialism and capitalism are married. The rich get to keep some, and the non-rich (there are no poor) are maintained at some minimal level. The rich have a vested interest in cranking the handle faster, b/c they get rich fatser, though at a slower rate than above. Eventually machines are doing all the work, the non-rich are subsidized, and, if the balance is maintained - like the cartoon character running on thin air - the system stays one step ahead of collapse. Except it is run on stripping the earth and generating waste at an accelerating rate to keep ahead of failure. Unsustainable.

3) Wealth is completely recycled into the working class. But since there is no concentration, there is (theoretically) no investment and no controlling factor. Large corporations break down into small units, and chaos ensues. Efficiency and coordination are lost, and resources are wasted. Unsustainable.

So what I see is that jiggering the old stuff won't work. What is needed is a whole new path.

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Friday, June 16, 2006 5:31 AM

CHRISISALL

Quote:
Originally posted by rue:

So what I see is that jiggering the old stuff won't work. What is needed is a whole new path.

No privately owned companies; employees own stock, government controls buisness/people control government, near 100% employment, no rich class, all citizens get a 'rich month' where they can partake of excess, so in effect 1/12 of the population is wealthy at all times, just in rotation.

I LIKE it!

Never happen Chrisisall

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