United States Heading towards a Depression?

gworld, if I understand you correctly, you are making the point that Republicans are free-market capitalists. Is that correct?

The Republicans, in fact, are NOT free-market capitalists. Adam Smith postulated that a totally free-market system, with no regulation, would eventually result in all the wealth accumulating at the top. Adam Smith was not AGAINST government regulation, he was CAUTIOUS about it.

Not enough regulation results in a vast lower-class. Too much regulation and the system collapses. Both result in huge unemployment.

Both political parties agree with this. But while the Republicans speak publicly about removing regulations, and the Democrats speak publicly about adding regulations, if you look at the facts you'll see that with few exceptions they pretty much vote together when it comes to regulations. They may put on an act for the public, and stage some dramatic votes that appear to come close, but both parties are visited by the same lobbyists.

That's not to say that they are influenced by their own personal interests. Nancey Pelosi has invested much of her multi-million personal fortune in alternative energy boondoggles that have no chance of success. She was conned. She thinks that if she strangles this country's energy supply that her bad science will suddenly become good. She expects lead to be turned into gold. SHE is the true problem.

 

I am making the point that Republicans are cry babies and while singing the praise of Capitalism and free market, at the same time crying about how bad immigrants who are ready to work hard are and won´t let them to be lazy and just collect high wages.

Read Capital by Marx, wealth is created by surplus labor which is not paid to the laborer. Every product has an average price which is the average number of hours that takes to produce that product in different part of the world. People who produce the product under the average time required will make profit and those who make it over the number of hours required will lose in the market.
It is the Capitalism nature to reduce the number of hours either by automation or by paying less portion of work that went in to the product to laborer. This is the only way wealth is produced.

 

There you go again.

The key word is "ILLEGAL", not "BAD". HUGE difference.

 

Legalize free movement of laborers. Stop being a cry baby, sitting in your trailer and drinking beer and try to compete with people who are ready to work and let the free market and capitalism let the best man to survive.

 

I'm good with that. I'm moving into your old place in Quebec to live it up on your strong Canadian dollar and free health care. I'll send all the cash back to my family in CA. Did I mention I won't be paying your taxes?

 

"Illegal" aliens and their employment is the problem and nothing else - simply enforce the laws prohibiting their employment and the entire alien problem will be solved. No money or legislation is required, unemployment would be reduced.

The Obama Administration needs to wake up if it is not already to late.

 

mindlessnation, another cry baby who thinks the foreigners are too hard working for him to compete with.

The new Republican´s slogan: "Free market, Capitalism and Small government is good but a big government that stops free movement of laborer and protect our lazy ass and welfare checks is even better."

 

You must be reading impaired. I just said I'm all for it! California economy is in the tank for the next 5-10 years. Like I said, I'm headed to Canada. You are all for that, right?

 

"bad" immigrants? Don't you mean ILLEGAL immigrants? I understand you are a fan of non-regulation. Well, what would the economic state of the USA be if it was flooded with dirt-cheap labor that is overwhelmingly more than the jobs available? Wouldn't that result in massive unemployment, which would lead to economic devastation and record-high crime levels?

The USA's recession is the result of an economic war. ILLEGAL immigrants fuel that war. Open borders would be very nice, and I applaud your idealism, but a country has the right to regulate it's immigrants so that the workforce doesn't become flooded. Mexico's economic state is that it is flooded with dirt-cheap labor that is overwhelmingly more than the jobs available. That has resulted in Mexico's massive unemployment and record-high crime levels. That's why illegal immigrants found in Mexico can be shot by the government!

Understand now?

Marx wrote this BEFORE the age of automation and computers. He had no idea how they would dramatically reduce the need for an extensive work force. That is why, if you had bothered to do any intelligent research, you would have discovered that what you wrote above is totally out-of-date.

Capitalism can survive in any environment. Communism, to work, requires that the entire world be communist. Isn't that why a chief tenant of communism is to spread it's philosophy by military force? (Remember the Soviet Union?) Ironically, that means killing off much of the work force in wars.

You remind me of that list "You Must Be a LIberal If...". One of the items in the list is, "you believe that the reason why communism has failed is because people like YOU have not been in charge".

 

Decreased labor supply = higher wages. The answer to a sluggish worldwide economy is obvious.


Kinky sex makes the world go round

Definitely worth a listen

 

Digging my bunker deeper still.


And NO you're not invited!

 

LOL.

It is always funny when people who have no idea what they are talking about, try to act as an expert and tell other people to do "intelligent" research. Iam sure 150% that you have never read Capital and have no idea about Marx theory and that is the reason you make yourself look like a fool by posting this. Computers are not against Marx theory and actually accelerate the economical problem that he describes in Capitalism.

 

QUOTE=Obamanation;14650914]
Let me throw a few ideas out there.

1) Decrease labor supply(Cut off most H1B visas, temporarily lower all other forms of legal immigration, deploy the military to the border to kill off illegal immigration, and enforce Arizona style laws in every state to thin the herd that is already here)
2) Tighten rules around M&A to slow the process of consolidation. Consolidation may yield better earnings for stock holders when market expansion by other means is not possible, but from my layman's view of economics, it has helped to create these behemoths. Perhaps the problem is just that we have redefined what is and is not anti-competitive activity in the last 50 years.
3) Cut regulation on small employers. I'm talking DRAMATIC cuts for organizations employing less than 50 people. You want to encourage hiring and more competition, make it easier for new competitors to enter the marketplace.[/QUOTE]

Ideas 1 and 3 show exactly how Right Wing thinking is the no solution response to virtually every problem we have. They are based on twisted political theory of real economics and simply don't work.

O_Nation wants to throw out the illegal immigrants.

How much will it cost, O_Nation. The first simplest estimate was about $94 billion. That was based on an estimate of about 11 to 12 million illegal immigrants multiplied by the average cost of putting them in a prison by the average cost of the number of days in a prison before moving them out of the US and the average cost of sending to their nation of origin. It doesn't begin to calcuate the cost of finding immigrants, the process, and the mechanism. It doesn't consider the cost of sending enormous volumes of military to tighten a border. That would add $hundreds of billions.

O_Nation as a good right winger screams about spending federal money, screams about the dangers of federal debt, and yet wants to add Hundreds of billions of dollars of cost for what he sees is an economic solution. Pssh.

How incredibly expensive would it be to find these people. How incredibly intrusive would it be to identify them. Its racially motivated. Best estimates are that over 80% of illegal immigrants are from Mexico and Central American nations. The bulk of the rest are probably Asian according to best estimates. Its a racially motivated program.

O_Nation referenced "Irish illegal immigrants. Okay O_Nation send the cops and military into every household with an Irish surname to find the estimated 6-12 potential illegal Irish immigrants....just to give the veneer that this isn't racially motivated and focused. Spend billions trying to prove your point. What a waste.

If (and its a very big if) you can find and remove illegal immigrants you are removing about 3-4% of the total population and reducing occupancy of homes, probably mostly in the West and Southwest.

Wham....you just crushed any kind of housing recovery, especially in parts of the nation with weak housing. A regionally large amt of housing inventory goes vacant and the demand/supply curve for housing in those parts of the nation crumbles. Home values fall, more homes go into foreclosure. You've just killed the real estate element of the recession.

Since its estimated that most illegal immigrants have amongst the lowest paying jobs in the nation including a dramatically high percentage of agricultural work....you have created a minimal opportunity to put people back to work.

We don't have an unemployment problem because there are too many people. We have an unemployment because of an enormous loss in aggregate American wealth, the loss of demand for products, and the resultant reduction of labor forces everywhere. Its the wrong headed approach, that is enormously expensive, expands govt work dramatically, is racially motivated and points the finger at Hispanics for economic problems. Its what Hitler did after WWI in blaming the Jews for Germany's problems.

3. All the screaming about regulations for small businesses is in my mind one of the most misdirected loud wrong headed thinking that has been fostered on Americans. It needs to be debated.

I run small businesses. I'm not a theorist. I'm not out there trying to get one party elected or another. I simply have seen over decades the twisting of the right wing into a destructive extremist element.

Here is how we end up growing employment in our businesses. We grow revenues. I'll say it again. We grow revenues.

With small businesses, in order for us to make profits and (here is what we do) share profits with employees through incentives we have to grow revenues.

Why? Because typically we can't make as much in revenues per employee as do the uber large businesses that dominate the Fortune 500 or Fortune 1000. When our revenues increase we either, A) take home more profits, B) store the money in the event of future problems C) pay back initial investments D) give out incentive pay to employees E) hire more people to handle the bigger work load. Or we do some of all of the above.

We have regulation problems. I consider them headaches. The cost of regulation versus the challenge of making enough to pay for the staff, grow the business, add staff, expand the business etc. is minimal. If its too high, I'd drop the business. If I drop the business competitors pick up the market share and can make the extra money. Its the market.

Certain doctors can pay well over 6 figures on medical liability insurance. (6 figures = $100,000 and up). Wow....that is a problem. It means that the docs have to average hundreds of thousands of dollars in income/per person or more to make money, pay staff, keep their offices, handle paper work, etc. Its enormous. Its a problem that effects the costs of health care for everyone because it is enough to eliminate docs and certain medical care specialties. Its worth looking into.

Small businesses don't have regulation problems of that size. They can't have them and survive. Take the case of a gutter cleaning, repair, replacement business I described earlier in this thread. In before and during recession years it averaged about $100,000/employee. During the recession the article implied the owner kept all employees and cut salaries (Mia attacked me on this--I neve said I was for it or against it...but for the record I've applied it when I can--I prefer it to outright firings). Post this winter the business did some smart marketing and boosted revenues. If the business boosts revenues they can hire more people.

We deal with regulation issues by working more, after hours to handle paper work or farming it out for a cost. Its not pleasant. It simply is not the major focus, as it isn't with any small business. We try to increase revenues, increase market share, control costs, build our employees capabilities. When things go well we share the benefits. When things go real well we expand with more hires.

I speak to a good number of real business people. I've done it for years. For two decades the bulk of my commercial real estate business was wrapped around representing tenants and most of them were small businesses not huge corporations. I dealt with principals normally: Owners and chief business operators.

What were the issues? Making money and controlling expenses. I litterally can't remember business owners in masse whining about regulation. I simply can't. I recall that the big mega businesses and interests whom I represented simply didn't give much of a crap about real estate costs. They were too big to care at least with the deal I did. The other exception were a couple of uber political groups. On the right was a business started by a guy who learned political fund raising from Richard Virgurie, the godfather of direct mail fund raising, and a stalwart of the extreme right. On the left was at its extreme National Organization for Women (NOW) and one other group.

The politically oriented folks couldn't help but reference politics into every damn discussion. It polluted conversation about office space. They were wierd, the exceptions and frankly a pain in the neck.

Quit complaining about regulation. Its not the main stay of a business. I've had too many businesses and too many real clients to think otherwise. Its political nonsense.

A couple of years ago I argued the value of SOX (Sarbanes Oxley) financial regulation on large publicly heald companies. It went into practice after incredibly enormous and crooked finances by large companies in the late 1990's (early 2000's) that cost stock holders aggregates of hundreds of billions.

After SOX passed the slew of crooked financial statements STOPPED. Boom it worked. Calculations on the regulatory cost of regulations of SOX were broken down by mega businesses and large but not mega businesses. On the mega business side where the risk is greatest...the cost was so friggin low, that these huge businesses would and could waste tens of times of the cost of SOX on all kinds of buried overhead crap. It was insignificant.

On the non mega business side the percentage was higher. Do you know what the regulatory response was? We will fix it and cut the costs. Meanwhile the regulations didn't kill any of these large publicly owned businesses. They aborbed the costs. Its not that bad.

Grow your damn businesses. Focus on the revenue side, the cost control side, the enhancement of employee side, and quit whining with false claims that primarily start with a political party, not real business people.

As to the M & A point (mergers and acquisitions) I frankly can't be bothered with it. I'll say this, the deal makers on wall street love that stuff. Its one of the most lucrative ways to make money. I was a deal maker. Deal makers love deals. Good, bad, or indifferent they love deals.

Frankly, there are all kinds of bs theories and reasonings about mergers. There are strong efforts to validate M & A based on cost savings and elimination of duplicate services. Who the F knows. Some mergers work. Some fail miserably. Its hard consolidating different operations and getting them to work. Its all in how it is managed over time and in facing the challenges. The theories are bull sh1t. The reality is putting them into place.

O_Nation: you want to tighten M & A activity? You sound like a friggen liberal. Ha ha ha.

There is no doubt our nation's economic productivity is dominated by huge businesses. Of that the facts speak for themselves.

 

GWorld: I think Marx and Engels are incredibly outdated and with that their theories need huge overhauling. I say this, after years and years of focusing on small and large businesses while always looking at the cost of labor, the relative revenue per employee numbers. Those are core components of the Marx Engels analysis of labor and owners.

labor costs and revenue per employee are standard financial tools, though not the most often used. I've favored them for years, specifically for small businesses, which is what I like.

Couple of amazing factoids: Apple and Google currently average about $1.2 million revenues/employee. Bam....those are profit making behemoths. Other tech companies don't come close to those numbers. OTOH, lots of valued employees at those companies (typically tech wizards) get stock with their hiring. That is a nice part of equity.

Oil businesses, specifically production and transportation average over $1 million revenues/employee. That is a lot of moolah per person.

OTOH, the example I through out here a bit ago of a local gutter replacement business was about $100,000 revenues/employee. Huge difference versus those businesses and industries at $1 million + per employee.

Businesses like the gutter business on the small side and the mega businesses have other elements of costs that have changed the Marx/Engels analysis from 1848. In order to gain the revenues vast processes must be put in place to gain revenues. Chinese factories that hire workers at a pittance and sell stuff to America have to use vast networks of contacts, resources, etc. to get their goods from China to Walmarts in Kansas and into the hands of an American housewife. Its not as simple as the average cost of worker productivity and the price of selling a good. There is more to it than that.

The Marx Engels analysis of 1848 simply never considered any of that.

Meanwhile of note, there is a labor movement going on in China demanding higher wages. It will be interesting to see if the uber powerful Chinese government allows it to grow and blossom. All to be determined in the future.

 

@Earlpearl: Quite a pigs breakfast you've thrown out. I don't have time to respond to it all, so let me cherry pick it a bit

Comic to watch you spend the first half of your book spewing politispeak and partisan nonsense and the second half disparaging partisans and the politically engaged. It has a certain dis-associative identity disorder chic to it.

Interesting approach. Make it sound expensive and maybe we can talk the fiscal conservatives into keeping illegal immigrants around. Too bad the recent facts highlight how false your claims of cost are. Take Arizona for instance. The minute it looked like they were going to enforce the laws, the illegals began making a mass exodus, all on their own. 80-90% of those people are not going to stick around to be incarcerated. Laws against employers who hire them will dry up the job market for them and they will leave. I also found the comments at the bottom of your book about a particularly cost effective piece of legislation quite effective in combating most of the claims you made in this section of your book.

Are you on the Journ-o-List? Your talking points are right on message. Listen, I've had friends who were/are illegal immigrants hanging about since I was 16. Mostly Australians, a few Irish, and one Brit. It may be true that most of the current illegals are from south of the border, but if you don't think the country is awash in illegals from a variety countries, you are sadly mistaken. A good friend of mine from the UK is currently living illegally in Texas, pulling down close to 7 digits a year as a business consultant and small business man. If the law changes, he will move. There will be no need to "track him down" or invade his home.

The left smear and scare campaign of gestapo like tactics and racially motivated requests to enforce laws already on the books are laughable at best. I notice your book(post) didn't address the fact your previous post quoted a scholar who agrees enforcing immigration laws would strengthen the US labor market. No longer useful? Apparently he didn't believe the only jobs being consumed by illegal immigrants are in agriculture.

So which is it. Its only 3-4% so a negligible effect, or its a substantial enough reduction in consumers to destroy the housing market? It cant be both. I've heard Olbermann hammer this issue a lot. Enforcing immigration laws = damage to the US consumer base. What a load of crap. When most of these people arrive here, they have very little. They shack up in flop houses with 10-15 people living in a three bedroom. They consume very little and send most of their savings back to their families abroad. After they've been here a while, they matriculate into society and become consumers, but still send most of their money home while relying on every poverty based program our state has to offer. If you think we are going to lose more business and tax revenue than the money spent on social services by enforcing our immigration laws, you need to put down the crack pipe.

For every ass there is a seat. Markets run on supply and demand. When I was 16 years old, I ran a window cleaning business. I made around 80$/hr when I was working, because window cleaning was not a job most people wanted to do. When the construction, landscaping, and agriculture jobs have new openings for lack of illegal immigrant labor, the wages for those jobs will go up. When those jobs compete for the same labor force that might work at Costco, the wages for Costco employees will go up. When wages for Costco employees go up, the salaries will compete with low end management positions at larger companies, and force those wages up. And so on and so on and so on. Please don't treat us like we are stupid by implying that reduction of labor supply in any segment of our workforce doesn't have an impact on the wages in every section.

While I think the idea that the US has lost an enormous amount of wealth is very debatable, I will say this. How we got here is irrelevant. You cant argue with the market economics of my solution. If you want to compare our existing federal laws on immigration, and by extension, the US federal government to Nazi Germany, that is your affair. I've broken Godwin's law often enough myself. In this case, it is obviously a pathetic argument.

Let me summarize most of what you put under this section of your post in a single sentence:

"Regulations do not have an impact on business. Shut up and focus on marketing and profits"

If I didn't know you to be the partisan hack you are, I would say that line of thinking would make me think you don't know the first thing about running your own business. Running a business is about making deals and controlling costs. Even before the recession, operating a labor intensive business in California was difficult due to labor compliance fees and costs (Workers comp, medical care, overtime, payroll compliance, payroll taxes, benefits administration, etc). In hard times, margins run a lot thinner, and you cut costs where you can. Every little bit helps. Frankly, I'd say the administrative issues with kicking off a small business in this climate are oppressive enough to be called hostile. We want more small businesses, not less. We want people to try, even if they fail. I'm not sure how you can argue that our current climate caters to any but big business and those with lots of existing experience navigating such waters. If you want to know why people don't start new businesses, you better wake up.

Not the first time I've been called a liberal. I'm not quite as liberal as George W. Bush, but pretty damn close.

Now didn't we start off this conversation by agreeing the consolidation of our nations GDP into the fortune 500 was actually a bad thing?

 

Why not help small businesses by having more illegal immigrants since they don´t need workers comp, medical care, over time, payroll tax,,....? It seems you are both for and against regulations.

 

I have just one question, have you read Capital? Can you tell me what is the central ideal in Capital about how wealth is produced? If you answer that question you will see his idea has nothing to do with computers, transport systems or how many contacts you need to sell a product and generate revenue.

 

Pot. Kettle. Black

Amen, brother!

 

Gworld: Read large parts of it years ago. A guy in a factory makes something. He gets paid $2 for what he makes. The owner sells it for $10. The owner keeps $8. The factory worker gets $2. Marx and Engels didn't like that distribution of funds As I recall that is the central idea. Am I right or not? Am I warm or not? (didn't bother to research it) .

 

O_Nation: You had a hard time w/ all those payroll elements? Get better payroll software or hire a payroll company. Payroll companies are pretty damn cheap IMHO and experience. Automate it. So much of this crying and whining about regulation gets down to software. Get better software. I've had pieces of businesses since the 1980's. We have more overall regulation. Some of the businesses are subject to greater than normal levels of govt. regulation and oversight. We have better software to handle the questions. A lot of it is easier than it was. Dramatically better. Every time an action has to be taken that is overseen by some regulatory govt. office, some staff checks a box, fills out something and we accumulate it automatically. Its dramatically easier to deal with.

Frankly, the tax industry is a function of complex taxes. Now that is a burden. Of course, now there is software to help people with medium to heavy levels of paperwork. If anyone should be complaining about burdensome difficult govt crap its the individual taxpayer. The GOP right wing windbag machine doesn't rev up like crazy on that issue. It makes general commentary on burdensome business problems without getting into specifics.

Get better software. problem solved. Also, for those that haven't been around to develop an historical context on this....the software today is infinitely better to handle so many issues...and its relatively cheaper. Buy it. Problem solved. Go out and sell something and quit complaining.