Here is your thread back RK. I'm sorry it was hijacked.

[Ansley]

Originally written by Rudyard K

There has been much discussion in various threads related to a concentration of wealth in a very few people. They generally line up with the lefty’s expressing disdain for the wealthy and the righty’s expressing disdain for the “take the wealth away” folks. Personally, I do think that the concentration of wealth is an issue that needs addressing. It is, however, hard to get a word in edgewise when you have the flamers chastising those who have accumulated wealth as if they all did so in an unscrupulous manner…or that they are scrooges when they don’t simply line up to give it away. Admittedly, this is a Hooker/John board so not much meaningful will come from this discussion, but it does entertain.

Without getting off into most of human nature, it is the natural outcome of business to strive for efficiency…and bigger is better if efficiency is your goal. A company that makes 100,000 widgets can do so at a lower cost than 10 companies that each make 10,000 widgets. The big company has less senior management, and less lower level staff than the combined 10 companies. It has more buying power with which to procure its raw materials at a lower cost that the 10 companies can. Since it can procure its raw materials at a lower cost and its overhead (generally employee) costs are less, it can produce the widgets cheaper.

As such, society benefits by the fact that widgets are available at a cheaper cost. The downside is that fewer people are employed. Those that want to be employed are fighting over a smaller job pool…and competition forces that job pool to accept a lower salary.

The owner of the 100,000 widget company makes more money than all of the owners of the 10,000 widget companies…so wealth is concentrated. The senior managers of the 100,000 widget companies make more than the senior managers of the 10,000 widget companies…so wealth is concentrated there too. Hell, even the staff of the 100,000 widget companies make more than the 10,000 widget companies because the smaller companies must hold down overhead costs to be competitive with the larger company. The big company effect tends to hold down salaries of its competitors to compete.

Our more global economy has business trying to get bigger and bigger to compete across international borders and gain more efficiency. But how big is too big? If we want to equalize wealth across this country (I don’t really give a damn about the rest of them) we have to make businesses smaller. That doesn’t mean all “Mom & Pop” companies…but smaller indeed. Smaller businesses means more employers and more employees. There is much more opportunity for employment and higher overall salaries for the average man because his smaller company does not have to compete with the bigger, more efficient, behemoth. Of course, the downside is that widgets will cost more…so his buying power may not really be improved…it may even be worse. What will occur though, is that the concentrations of wealth in the very few will lessen. There will be more people making more money with a higher cost of goods and services and each having a diminished buying power per dollar made.

That is the dilemma that our society faces. We have all seen Wal-Mart come into small town, USA and wipe out the local 5 and dime, or clothing shop, or grocer. They can do so because they are huge and can provide those goods and services at a lower cost. As such, that is where we go shop. We would rather buy a TV made in China, produced by folks who make a dollar a day, because that TV is cheaper than if it were made in Ohio. If we were to take a much more isolationist view of our economy we would not allow any outside companies’ access to our consumers. That way, our consumers would be buying goods and services produced only within the confines of our country…and by our workers…providing all of us jobs. Of course, those goods and services would be more costly than they are today…but at least the many would feel like we are all in the same boat.

Now, no extreme is ever the right answer. But a less efficient world is going to reward more people than an efficient one. Simply taxing the wealthy (a more palatable phraseology than just calling it “taking”) to provide wealth (or free goods and services) to the less wealthy breeds as much friction (there are just fewer of them) as is produced among the less wealthy looking up to the lofty perch of the wealthy. Such divisiveness is good for no one. But right now, that perch looks way up there in the air…and it probably is. If it keeps going this way, I agree that the end result will be revolt.

The solution (assuming we don’t just give up on our “free will” society) will probably be to lessen the opportunity to be super-rich…by legislating the ability of individuals to concentrate wealth or of companies to do the same. Unfortunately, none of us may be better off than we are today…but we will all feel like we are better off cause we are all closer to being in the same boat…without as much disparity between the bottom and the top.

Just one man’s view.

[Valerie]

"Here is your thread back RK. I'm sorry it was hijacked."

Because quite clearly, your comments had nothing to do with the hijack

[Rudyard K]

Originally Posted by Valerie

"Here is your thread back RK. I'm sorry it was hijacked."

Because quite clearly, your comments had nothing to do with the hijack

C'mon Val. She did not say "who" hijacked it, just that it was hijacked. No one has to fall on their sword to stop being devisive (and I'm not alluding that she, you or anyone was being so)...they just need to stop being so. Sometimes, instead of bantering to a "I'm right and you're wrong" conclusion...it is best to say nothing...or move to another subject.

Now, back to the original thread...

Originally Posted by Randy4Candy

This is in no way meant to flame, but this is one reason why gathering one's political philosphy and economic philosophy from bumper stickers should be outlawed - and, hell's bells, the OP's statement is much more complex than "bumper sticker." RK took several paragraphs and outlined a cogent set of arguments. One problem, they are somewhat simplistic (probably a function of time and space) in that they do not go much past what can be gathered in a community college version of Econ 1103.

To be brief, some of what is left out is how the tax code is structured and, especially now with even more cut backs on top of ones already in place for enforcement, how the enforcement of existing rules is sorely lacking. Suffice it to say that I know enough about how small businesses can do taxes and not risk the ire of the few IRS auditors by raising any flags. Yes, audits can happen if the computer picks one out but unless it's rank, outrageous and egregious, no flags go up. Borderline license to steal - up to a certain level that's not that low. If one multiplies to get to the number of successful small businesses that there are currently operating in the USA, the "x" thousands of dollars each of them can slip by in unreported income becomes real money. Now, it's not much of a stretch to extrapolate that into the realm of medium size and large businesses who employ many legal and accounting minds for the explicit purpose of minimizing their "fair share" of tax payments.

The above is only one example of one area and there are many others possible. Cutting to the chase, if we're going to have rules then we need to enforce them (sounds kinda Republican, or at least fundamentalist Christian, eh). If we're going to merely "wink" at the rules and present them to the people as "fact" in order for the masses to feel like something's being done when they are only window dressing - well, hmmm, then there will be hell to pay somewhere down the line. We can delve into the realm of political contributions (both sides at major fault here), the "world economy," and several other areas but frankly, as far as I'm concerned, it's just too damn depressing.

If our system continues to preach what it doesn't practice and our alleged leaders on both sides continue to play games based on their needs and not what is good for the basic citizen, it is setting itself up for a backlash of monumental proportions - or - an onset of general malaise (a nod to Jimmy Carter LOL). Actually, many of the run-of-the-mill Tea Partiers (not the opportunistic "leaders" and the others in Rupert's pocket who bring the $$ and organization) sense that this is what has been happening. Unfortunately, due to their committment to the Fox Network of, shall we say, Entertainment they do not realize just how far down the sewer many, many things are.

Ahhh, just a few rays of sunshine.....

While "time and space" does certainly factor in to how much depth I could go into my original post...I do believe that an incremental approach to problem solving is the preferred method. And if we, as a society, cannot agree with the basic premise that full employment, at higher levels of income, will ultimately result in a higher cost of goods and services, then we probably need to stop there and explore the differences in our opinions. If we do agree with such premise, then we need to determine whether we need to weight our efforts towards "full employment" (admittedly, that would be my choice, since I think it gives people a sense of accomplishement) or weight our efforts towards low cost goods and services. Of course, there is a balance, but moving one direction on the pendulum tends to mean you are moving away from the other direction on the pendulum. Which direction do we want to tend?

The tax code, and compliance (or non-compliance) with such tax code, can dampen the effects of some tendencies. For instance, I believe that LTCG being one year is BS. That is not long term. If we want to encourage long term investment, as a means of helping achieve full employment, then make LTCG be LT...5 years?...10 years?...etc. 1 year is a flip.

I do believe that most people (particularly small businesses) comply with the general spirit of the tax code. That does not mean they don't use it to their advantage, but they do so within the bounds of reason. An example would be...if a small business owner and his best friend (who is also a fairly significant customer of the small business owner) go on a golf outing one weekend. Is the portion of the cost of the outing that was paid for by the small business owner a business deduction? I think, given the confines of my example, the answer is YES. There are many other factors that could sway the answer one way or another...but generally the answer is YES. I believe that is compliance with the spirit of the tax law. Trying to deduct the popcorn you bought at the movies with him and your spouses, I think, falls outside of the spirit of the law. My personal belief is that, for the most part, people try to comply with such spirit. But you can't design a sysytem that will be foolproof from every misuse. We need to try and get 70-80% there?...and move on to another subject.

Again, just one man's view.

[Rudyard K]

Yikes!! MA, I just noticed you closed the other thread (probably appropriately)...and I had moved something from there to here while you were doing so.

I'm not trying to do a "go around". If you want to close down the whole subject matter?...feel free to shut this one down too.

[Marcus Aurelius]

Subject matter is fine. No more personal attacks though.

[Guest083011]

Originally Posted by Marcus Aurelius

Subject matter is fine. No more personal attacks though.

I'll second that motion. Do NOT start the attacks here or other threads. My patience was tested (muttering: they couldn't even wait three hours.....). I guess MA's was too.

[Egrbvr]

There might be room for animosity if wealth were a zero sum game.

I have an "abundance" mentality...there is an increasing pool of wealth out there, plenty enough to go around to those who honestly and cleverly seek it.

Using one's energy to hate the wealthy takes away from one's life in so many ways. If only to channel all that energy into creating more wealth for themselves if that is important to them.

[pjorourke]

Originally Posted by Egrbvr

There might be room for animosity if wealth were a zero sum game.

I have an "abundance" mentality...there is an increasing pool of wealth out there, plenty enough to go around to those who honestly and cleverly seek it.

That is one of those "bright line" questions that determine an individual's entire point of view: Is wealth limited or unlimited?

[WTF]

Originally Posted by pjorourke

That is one of those "bright line" questions that determine an individual's entire point of view: Is wealth limited or unlimited?

Do you think the Earth's resources are unlimited

[WTF]

Originally Posted by Egrbvr

There might be room for animosity if wealth were a zero sum game.

I have an "abundance" mentality...there is an increasing pool of wealth out there, plenty enough to go around to those who honestly and cleverly seek it.
.

No there is not plenty to go around!

If there was we would not be fighting over the worlds resources.

You and PJ might need to put down those fantasy self help book fables!

[Rudyard K]

Originally Posted by WTF

Do you think the Earth's resources are unlimited

Originally Posted by WTF

No there is not plenty to go around!

If there was we would not be fighting over the worlds resources.

You and PJ might need to put down those fantasy self help book fables!

Actually, for most of humanity the world, wealth and natural resources are limited. They are limited by conventional wisdom and belief.

But for some, they are limitless. Just like when the world was flat, most of humanity worker within those confines. Then the world became round and new horizons unfolded. Then the natural resources were only on the surface. Until innovation found them below the surface.

We have only touched the earths natural resources that convetional wisdom and beliefs know how to achieve. But we have hardly touched nuclear, geothermal, wind, solar, etc. And those are only the things we can conceive today. There will be others...on this earth and perhaps beyond.

But I am a simple man who only knows how to utilize convetional wisdom and belief. But that does not mean I believe wealth, resources or opportunities are limited. They're just limited for most of us. Innovation changes those conventional wisdoms and beliefs every day...to where ultimately the new discoveries become conventional.

[WTF]

Originally Posted by Rudyard K

Actually, for most of humanity the world, wealth and natural resources are limited. They are limited by conventional wisdom and belief.

But for some, they are limitless. Just like when the world was flat, most of humanity worker within those confines. Then the world became round and new horizons unfolded. Then the natural resources were only on the surface. Until innovation found them below the surface.
.

You obviously have not heard of the Black Swan.

Just because we have always innovated our way out of natural resources limitations does not mean we will always do so.



But that was not even my question. My question/statement was that the world has limited resources. If you do not believe that then so be it. You will make a great dinosaur, they had the same belief.

Why fight for resources Rudyard? Afterall we will just invent something better!

[charlestudor2005]

Originally Posted by WTF

But that was not even my question. My question/statement was that the world has limited resources. If you do not believe that then so be it.

Why should I care? I'm not going to be faced with a shortage of natural resources in my lifetime.

[WTF]

Originally Posted by charlestudor2005

Why should I care? I'm not going to be faced with a shortage of natural resources in my lifetime.

That is the Tragedy of the Commons view!


The tragedy of the commons is a dilemma arising from the situation in which multiple individuals, acting independently and rationally consulting their own self-interest, will ultimately deplete a shared limited resource even when it is clear that it is not in anyone's long-term interest for this to happen

[NinaBrooke]

lol