Well funnily enough the ‘conspiracy theorists’ at rense.com and abovetopsecret.com have pretty much called it right so far…quite a few people have been calling this for a couple of years now…the next phase is the devaluation of USD.
I’m curious about why you wrote that. Unless you’re struggling to make ends meet, have massive debt, or were/are planning on retiring this year, this year is a year for massive financial gain. Unless things get so bad that the markets completely collapse, there are widespread job losses to the point where you lose your job, etc., then it should be all peachy. Buy, buy, buy. While all those who lived/live beyond their means were/are sowing the seeds of their future poverty, this could very well be the year for sowing the seeds of your future wealth.
Didn’t someone (Buffett?) once say that bear markets are when shares return to their rightful owners?[/quote]
Massive gain? Most workers are worried about losing their jobs, many with outstanding debts. News is getting worse and recession rapidly accelerating to depression with US leading the bunch…check today’s news about GM/Chrysler. Many stocks will be completely wiped out in the next few years, Buffett has lost billions of dollars as has Singapore buying too early…They should keep out of the market and so should most people for a couple of years at least.[/quote]
Buffett buys long term, he always has. Yeah in the short run (3-5 years) he may lose money, but the long term (10+ years) he as consistently gained. He was the second richest man in the world, so I think he has an idea about what he is doing.
As for the layman, yeah it sucks to lose your job. It’s worse that you (lets call the hypothetical person Joe/Jane the Plumber) lived above their means for so long. It’s sad that they didn’t save any money whatsoever in case of a “bad winter”. They ate all their seeds for the future, choosing to live for today and not save for the future. Now they have to pay the price for that SUV, the 4 bedroom 3 bath house 80 miles from the city center, and all the things they feel their are entitled for being Americans.
Do I feel sorry for someone losing their job? Yeah, it sucks to be fired. Do I still feel sorry for them when they can’t afford the mortgage on their over priced house while their salary was only 60k a year? Not really. Why should I? They decided to live well above their means and helped contribute to the problem. They didn’t save (just look at the statistics of the last 10 - 15 years showing a negative savings rate in the US).
As for GM/Chrysler, those assholes haven’t been able to make a profit for years except on SUV’s and large trucks. Why keep them alive if they can’t make a marketable product? Their compact cars and mid sized cars are pretty crappy compared to the “foreign” cars like Honda and Toyota, so I’m not all that upset if capitalism works as it’s supposed to and redistributes the capital tied up by them. That’s the purpose of the free market, to efficiently distribute capital to companies, not to “equitably” distribute to the companies that are heavily unionized and can bitch to Congress.
[quote=“lbksig”] Now they have to pay the price for that SUV, the 4 bedroom 3 bath house 80 miles from the city center, and all the things they feel their are entitled for being Americans.
Do I feel sorry for someone losing their job? Yeah, it sucks to be fired. Do I still feel sorry for them when they can’t afford the mortgage on their over priced house while their salary was only 60k a year? Not really. Why should I? They decided to live well above their means and helped contribute to the problem. They didn’t save (just look at the statistics of the last 10 - 15 years showing a negative savings rate in the US).
As for GM/Chrysler, those assholes haven’t been able to make a profit for years except on SUV’s and large trucks. Why keep them alive if they can’t make a marketable product? Their compact cars and mid sized cars are pretty crappy compared to the “foreign” cars like Honda and Toyota, so I’m not all that upset if capitalism works as it’s supposed to and redistributes the capital tied up by them. That’s the purpose of the free market, to efficiently distribute capital to companies, not to “equitably” distribute to the companies that are heavily unionized and can bitch to Congress.[/quote]
Couldn’t agree more. The government shouldn’t step in to reward idiots any more than it should obsolete companies. GM, Chrysler and Ford have had decades to see this coming, as have American consumers and auto workers. The huge numbers of people who have “lost” their houses never owned them in the first place. The market seems to be correcting itself quite well and it’s not because of any new regulations.
So, get your fat ass on a bicycle America! (Or into a nice, small Toyota)
Which leads us to. . .
I hear ya, people need to have responsibility for their own actions, a lot of them were having a big ole party for years and now they inflict the hangover on everybody and expect somebody to help them clean up the mess. I think they should let those companies go down the tubes although it may be the case that the result would be horrendous in the short-term. Hard to call. I can’t help but thinking that globalisation hasn’t really helped out average workers in the US either over the last few decades…it’s helped other countries average workers but not Americans in my view …it makes me sick (even as a non-American) to see those CEOs and company boards holding on to their jobs when they were killed off a whole industry and lobbied US govt for low fuel efficiency for decades… if I was in Congress I’d say close those companies down, any new companies that open up should be fuel efficient and using the latest tech, all cars bought should be ‘made in America’. Most of the orders would go to the Japanese but the government could put in a rule that profits in America needed to be reinvested in plants there for the next 10 years or so. At least regular folks would have jobs. Hard to see American companies coming back into the automobile game in a big way as Japanese are streets ahead in the newest stuff such as hybrids and electric batteries.
Tough, tough times.
[quote][b]Chinese mistress contest takes tragic turn[/b]
BEIJING, China (CNN) – A married Chinese businessman who could no longer afford five mistresses held a competition to decide which one to keep.
But the contest took a fatal turn when one of the women, eliminated for her looks, drove the man and the four other competitors off a cliff, Chinese media reported.
The spurned mistress died and the other passengers were injured, the reports said.
Police initially thought the car had plummeted off a mountain road in eastern China on December 6 by accident. Then they learned of the contest through a letter the dead woman had left behind, the Shanghai Daily newspaper said.
The 29-year-old woman, identified only as Yu, was a waitress when she met the businessman at a restaurant in the coastal city of Qingdao in 2000.
At the time, the businessman, identified only by his last name – Fan – was married and had four other mistresses, according to the Peninsula Metropolis Daily newspaper in Qingdao.
The women knew of one another, but none elected to break up with the man and give up their rent-free apartment and a 5,000 yuan ($730) monthly allowance, the reports said.
When the economy soured, the businessman apparently decided to let go of all but one mistress.
He staged a private talent show in May, without telling the women his intentions. An instructor from a local modeling agency judged the women on the way they looked, how they sang and how much alcohol they could hold, the Shanghai Daily said.
The judge knocked out Yu in the first round of the competition based on her looks. Angry, she decided to exact revenge by telling her lover and the four other women to accompany her on a sightseeing trip before she returned to her home province, the media reports said.
It was during the trip that Yu reportedly drove the car off the cliff.
Fan shut down his company after the crash and paid Yu’s parents 580,000 yuan ($84,744) as compensation for her death.
The four other women left him, as did his wife when she learned of the affairs. [/quote]
HG
Buffett buys long term, he always has. Yeah in the short run (3-5 years) he may lose money, but the long term (10+ years) he as consistently gained. He was the second richest man in the world, so I think he has an idea about what he is doing.
As for the layman, yeah it sucks to lose your job. It’s worse that you (lets call the hypothetical person Joe/Jane the Plumber) lived above their means for so long. It’s sad that they didn’t save any money whatsoever in case of a “bad winter”. They ate all their seeds for the future, choosing to live for today and not save for the future. Now they have to pay the price for that SUV, the 4 bedroom 3 bath house 80 miles from the city center, and all the things they feel their are entitled for being Americans.
Do I feel sorry for someone losing their job? Yeah, it sucks to be fired. Do I still feel sorry for them when they can’t afford the mortgage on their over priced house while their salary was only 60k a year? Not really. Why should I? They decided to live well above their means and helped contribute to the problem. They didn’t save (just look at the statistics of the last 10 - 15 years showing a negative savings rate in the US).
As for GM/Chrysler, those assholes haven’t been able to make a profit for years except on SUV’s and large trucks. Why keep them alive if they can’t make a marketable product? Their compact cars and mid sized cars are pretty crappy compared to the “foreign” cars like Honda and Toyota, so I’m not all that upset if capitalism works as it’s supposed to and redistributes the capital tied up by them. That’s the purpose of the free market, to efficiently distribute capital to companies, not to “equitably” distribute to the companies that are heavily unionized and can bitch to Congress.[/quote]
Yes. Yes. Yes!
I’m reading The Intelligent Investor by Benjamin Graham right now. I read Margin of Safety by Seth Klarman a while ago. Fantastic stuff. The problem, essentially, seems to be that few people have allowed any margin of safety at all, from individuals to companies to government.
Globalisation has helped American workers, or could have, if they’d been smart and responsible. Firstly, whilst it’s killed their own jobs, it’s also allowed them to buy a ton of cheap stuff. They could, and should, have been spending that money to advance their educations, invest, etc. The problem was they bought too much cheap stuff, often on credit. The other thing they should have been doing was acquiring new skills and moving into new industries. Nothing is forever, yet these jerks treated everything like an entitlement. Unions played a large part in helping to kill many industries too.
As for big, inefficient cars, sure, part can be blamed on other sources, but part must also be blamed on consumers. No one made them go out and buy houses on wheels. Again, part of the entitlement mentality that while many other parts of the world were embracing smaller, more efficient vehicles, far too many Americans thought it was their birthright to melt an iceberg and flood a Bangladeshi village every time they drove to work. Piss-poor, or non-existent urban planning over the past half a century is a large part of the problem too.
Check this video on TED: http://www.ted.com/index.php/talks/james_howard_kunstler_dissects_suburbia.html
It’s all very well to say that America should go in for protectionism, but that would simply set off a series of similar policies across the globe, which would almost certainly have unintended consequences, the main one being that suddenly, American companies would not be allowed to invest in other countries. Bad move.
Protectionism, which is what you are advocating, is a horrific idea. That is what happened with the Smoot-Hawley Tariff Act of 1929. That tariff was one of the reasons the Great Depression deepened and was so much more painful than necessary. If the US government does something that foolish again then I for one will invest in tar and feathers and string up my congressional representatives. I may anyways since the idiot had two houses default and one be foreclosed (and sold) but used her influence as a congresswoman to force Washington Mutual to rescind the sale 2 months later. I voted against her, and despite almost months of bad publicity she still fucking got elected. Stupid voters in my district.
Trade is good. Trade allows those countries with comparative advantages to produce goods cheaper than they can in America, get money and then purchase goods with that money. The consumers are better off because they can purchase more variety of goods for a lower cost. Trying to insert a condition that “you have to invest in American plants” is silly. Companies like Toyota and Honda will invest in the US if it’s worthwhile, while enforcing a “made in America” requirement will only cause prices to go up, and fewer people able to purchase the goods. When you throw up barriers, that makes it less likely for them to want to invest. In fact, they have plants in the deep south; states like Alabama and Tennessee off the top of my head. Compared to other jobs in the area, their wages are good, their benefits are good, and most importantly their are non-union. Unions, while good for the individual, are bad for companies. Look at the rust belt and tell me that unions did their dues paying members any good in the last 40 years.
Globalization has driven down the cost of goods, turning most things into commodities and increasing purchasing power. That’s what it has done to help the average American. Globalization is also very efficient at allocating for comparative advantage. The jobs that require the most labor and least capital are the ones that go overseas. The problem is that the previous category largely includes union jobs, and as such they are the ones being outsourced fastest. If you’ve been working at a union your entire life and never went on to college, you’ll be screwed if that job moves away.
If there is money to be made with an electric or hybrid car, someone will come up with a way to market it. That’s the capitalist system. Maybe the first 10 will fail, but the last will succeed. The market is great at making winners and losers while central planning is horrible at it. Just because other companies have a head start doesn’t mean they will keep it. Look at a different technological field; computers. IBM was king for decades, then Apple made its rise. Apple was largely replaced by Dell, Gateway and others. I’ll bet you can find tons of articles about how IBM was king and no one could replace them, or Apple was the new player and nothing else was needed. Who needs more than 64K of RAM?
Protectionism, which is what you are advocating, is a horrific idea. That is what happened with the Smoot-Hawley Tariff Act of 1929. That tariff was one of the reasons the Great Depression deepened and was so much more painful than necessary. If the US government does something that foolish again then I for one will invest in tar and feathers and string up my congressional representatives. I may anyways since the idiot had two houses default and one be foreclosed (and sold) but used her influence as a congresswoman to force Washington Mutual to rescind the sale 2 months later. I voted against her, and despite almost months of bad publicity she still fucking got elected. Stupid voters in my district.
Trade is good. Trade allows those countries with comparative advantages to produce goods cheaper than they can in America, get money and then purchase goods with that money. The consumers are better off because they can purchase more variety of goods for a lower cost. Trying to insert a condition that “you have to invest in American plants” is silly. Companies like Toyota and Honda will invest in the US if it’s worthwhile, while enforcing a “made in America” requirement will only cause prices to go up, and fewer people able to purchase the goods. When you throw up barriers, that makes it less likely for them to want to invest. In fact, they have plants in the deep south; states like Alabama and Tennessee off the top of my head. Compared to other jobs in the area, their wages are good, their benefits are good, and most importantly their are non-union. Unions, while good for the individual, are bad for companies. Look at the rust belt and tell me that unions did their dues paying members any good in the last 40 years.
Globalization has driven down the cost of goods, turning most things into commodities and increasing purchasing power. That’s what it has done to help the average American. Globalization is also very efficient at allocating for comparative advantage. The jobs that require the most labor and least capital are the ones that go overseas. The problem is that the previous category largely includes union jobs, and as such they are the ones being outsourced fastest. If you’ve been working at a union your entire life and never went on to college, you’ll be screwed if that job moves away.
If there is money to be made with an electric or hybrid car, someone will come up with a way to market it. That’s the capitalist system. Maybe the first 10 will fail, but the last will succeed. The market is great at making winners and losers while central planning is horrible at it. Just because other companies have a head start doesn’t mean they will keep it. Look at a different technological field; computers. IBM was king for decades, then Apple made its rise. Apple was largely replaced by Dell, Gateway and others. I’ll bet you can find tons of articles about how IBM was king and no one could replace them, or Apple was the new player and nothing else was needed. Who needs more than 64K of RAM?[/quote]
To expand upon your point about cheaper prices, it’s because under protectionism, there’s absolutely no incentive to do something more efficiently. Companies (and their workers) become fat, lazy and complacent. When they eventually do have to compete, they’re completely unable to. We’ve seen it countless times before, especially in the former Eastern Bloc. When Germany re-unified, they had endless headaches bringing the East Germans up to speed. It would be the same if Korea re-unified. Protectionism would be a great short-term fix for America, but one generation later, it would be completely screwed.
Free trade is a race to the bottom. We hit the bottom.
It didn’t have to be this way. Remember when there was all the arguments about whether or not to liberalize markets and some people said that it made sense so long as the trading partners were held to certain standards of environmental protection, labor rights, accountablity, transperancy etc?
Those people were right.
The mess we are in right now is due to the fact that the investment classes have been able to set up offshore corporations which could avoid taxation and then invest their profits back into economies that require state sponsorship in the form of infrastructure, education, healthcare etc. There was no way it could work. They manipulated every situation to their advantage (primarily by taking on and extending credit where is wasn’t safe to do so) until there is no more advantage to be had, for anyone. Now governments have to find some way to enable people to keep making payments on homes that have lost a quarter of their value and will lose another quarter before this is done. They have to keep people employed, and they have to pay for it, and the way to do that will be by taxing the super rich more, and since this is a global phenomenon they have to agree to all do it at the same time. I think it should take the form of a massive luxury tax. If you are investing in a new company, great, but invest in a four million dollar private yatch, a ten million dollar painting, a two hundred thousand dollar car, or a six hundred dollar bottle of perfume and you can fucking well pay the tax.
I know the arguments against protectionism as in bringing on WWIII etc. but in the end who benefited most? Middle and upper management, not regular workers in the US who actually have seen their spending power and quality of life decline in the ‘race to the bottom’ as they exported their technologies and factories to places with no welfare system. That fact is clear.
[quote=“Huang Guang Chen”]Tough, tough times.
[quote][b]Chinese mistress contest takes tragic turn[/b]
BEIJING, China (CNN) – A married Chinese businessman who could no longer afford five mistresses held a competition to decide which one to keep.
But the contest took a fatal turn when one of the women, eliminated for her looks, drove the man and the four other competitors off a cliff, Chinese media reported.
The spurned mistress died and the other passengers were injured, the reports said.
Police initially thought the car had plummeted off a mountain road in eastern China on December 6 by accident. Then they learned of the contest through a letter the dead woman had left behind, the Shanghai Daily newspaper said.
The 29-year-old woman, identified only as Yu, was a waitress when she met the businessman at a restaurant in the coastal city of Qingdao in 2000.
At the time, the businessman, identified only by his last name – Fan – was married and had four other mistresses, according to the Peninsula Metropolis Daily newspaper in Qingdao.
The women knew of one another, but none elected to break up with the man and give up their rent-free apartment and a 5,000 yuan ($730) monthly allowance, the reports said.
When the economy soured, the businessman apparently decided to let go of all but one mistress.
He staged a private talent show in May, without telling the women his intentions. An instructor from a local modeling agency judged the women on the way they looked, how they sang and how much alcohol they could hold, the Shanghai Daily said.
The judge knocked out Yu in the first round of the competition based on her looks. Angry, she decided to exact revenge by telling her lover and the four other women to accompany her on a sightseeing trip before she returned to her home province, the media reports said.
It was during the trip that Yu reportedly drove the car off the cliff.
Fan shut down his company after the crash and paid Yu’s parents 580,000 yuan ($84,744) as compensation for her death.
The four other women left him, as did his wife when she learned of the affairs. [/quote]
HG[/quote]
Wow! This guy really got pwned by his own arrogance, didn’t he?
That’s because instead of preparing themselves for possible future bad times, either by investing their money sensibly or by gaining more education or better skills, they were living it up. Very much their own fault in that respect.
[quote=“bob”]Free trade is a race to the bottom. We hit the bottom.
It didn’t have to be this way. Remember when there was all the arguments about whether or not to liberalize markets and some people said that it made sense so long as the trading partners were held to certain standards of environmental protection, labor rights, accountablity, transperancy etc?
Those people were right.
The mess we are in right now is due to the fact that the investment classes have been able to set up offshore corporations which could avoid taxation and then invest their profits back into economies that require state sponsorship in the form of infrastructure, education, healthcare etc. There was no way it could work. They manipulated every situation to their advantage (primarily by taking on and extending credit where is wasn’t safe to do so) until there is no more advantage to be had, for anyone. Now governments have to find some way to enable people to keep making payments on homes that have lost a quarter of their value and will lose another quarter before this is done. They have to keep people employed, and they have to pay for it, and the way to do that will be by taxing the super rich more, and since this is a global phenomenon they have to agree to all do it at the same time. I think it should take the form of a massive luxury tax. If you are investing in a new company, great, but invest in a four million dollar private yatch, a ten million dollar painting, a two hundred thousand dollar car, or a six hundred dollar bottle of perfume and you can fucking well pay the tax.[/quote]
Free trade is not a race to the bottom. The alternative is bloated protected industries. As has been mentioned, comparative advantages work well for both sides to increase everyone’s standard of living.
I agree that government shouldn’t be bailing out corporations or executives, but that’s hardly free trade.
Again, a luxury tax is misguided. If you tax the crap out of someone, they stop spending or they move their money elsewhere (and you will never get every country in the world to close ranks in that respect). If they stop spending on the luxuries, those companies lose money, which means they in turn sack workers. Perfume or fancy cars don’t just materialise out of thin air. They’re produced by someone.
If you’re going to do that though, why not cut off the welfare for all the people who are too fucking stupid or lazy to buy birth control, or who supposedly need a handout yet always have money for tobacco, alcohol, gambling, junk food, etc.? Or how about all the middle class twits who go and buy big houses and fill them with big electronic devices and drive big cars? I forgot though, that the rich deserve to be taxed into oblivion because they’re, well, a bunch of rich pricks.
No, free trade distributes money and resources to wherever they have their highest value. US manufacturing jobs go to China because the same thing - making cars, television etc - can be done cheaper there. A few US workers lose their jobs but every consumer can buy more goods for the same money, with money left over to buy more. More jobs are created in new industries than are lost overseas.
We are nowhere near “the bottom”. Being at the bottom would mean living as a hunter gatherer, or a peasant. Before there were markets everybody was poor. Capitalism, and only capitalism, creates wealth. The relationship between free markets and wealth is not questioned by anyone. Gordon Brown, supposedly a creature supposedly of the labor left, accepts Thatcherism. No one in the US or anywhere else is talking about governments permanently running banks. The debate is over. Now people are only working on the matter of market regulation.
And this economics crisis is a mere hiccup.
Now it’s official:
[quote][b]
Taiwanese economy slumps into recession
Story Highlights[/b]
Taiwanese economy now in recession now after second straight quarter of losses
In January, government offered residents up to $108 each to stimulate economy
Slump of 8.36 percent followed third-quarter slump of one percent
read more[/quote]
[quote=“bob”]Free trade is a race to the bottom. We hit the bottom.
It didn’t have to be this way. Remember when there was all the arguments about whether or not to liberalize markets and some people said that it made sense so long as the trading partners were held to certain standards of environmental protection, labor rights, accountablity, transperancy etc?
Those people were right.
The mess we are in right now is due to the fact that the investment classes have been able to set up offshore corporations which could avoid taxation and then invest their profits back into economies that require state sponsorship in the form of infrastructure, education, healthcare etc. There was no way it could work. They manipulated every situation to their advantage (primarily by taking on and extending credit where is wasn’t safe to do so) until there is no more advantage to be had, for anyone. Now governments have to find some way to enable people to keep making payments on homes that have lost a quarter of their value and will lose another quarter before this is done. They have to keep people employed, and they have to pay for it, and the way to do that will be by taxing the super rich more, and since this is a global phenomenon they have to agree to all do it at the same time. I think it should take the form of a massive luxury tax. If you are investing in a new company, great, but invest in a four million dollar private yatch, a ten million dollar painting, a two hundred thousand dollar car, or a six hundred dollar bottle of perfume and you can fucking well pay the tax.[/quote]
You are wrong and they are wrong. That’s harsh and I’ll try to explain why.
Nike shoes. They are known world wide and are valuable to the people who can buy them for intrinsic reasons. Whether or not this is true is largely irrelevant as it’s an example, not a case study. They are an American company who uses their influence to get Congress to put up a trade barrier on imported shoes. They get Congress to do this because they employ a great deal of Americans. Since there is an import duty, other shoes are more expensive relative to Nike’s, so people will buy Nike’s first. That’s good for Nike but not good for the consumer. And as a bonus, every other country puts a tax on Nike’s and other American made shoes.
Now instead of having a potential market of approximately 6 billion (the number of people on Earth) you have a potential market of 300 million (the market size of America). It’s potential since not everyone in the world, nor America, will want to buy Nikes. The example stands as to show why free trade is better than protected markets. There isn’t enough domestic demand for most goods in any given country. Free trade is what allows people to get more goods, of better quality at a cheaper price. Putting up walls to protect your domestic industries is the race to the bottom. Korea 1997 is an example of that, and their incestuous Chaebol system.
What does free trade have to do with “environmental protection, labor rights, accountablity, transperancy etc?” All those things come about as a result of having to follow stricter standards to trade with other countries. Lack of standards and free trade aren’t synonymous. China can peddle crap filled with melamine within it’s own country as much as it likes, but they take a major hit when they send it to other countries. You aren’t going to get vast government changes through free trade but you’ll make incremental steps at improving property rights, enforcement and other features over time. It took the west roughly 600 years to develop Capitalism, property rights, bankruptcy, a working court system and everything else. You think that practically overnight every other system on earth, some of which are centuries or millenniums old, can be rewritten without conflict?
Companies employ people to make and sell widgets. From their profits they pay taxes. Those taxes pay for healthcare, education, infrastructure and everything else. Where did you think that money came from? Almost every state has a gasoline tax to help pay for infrastructure; the more you use the more you pay. Education comes out of the budget as does health care (sadly). How does someone being offshore make a difference? They still pay sales tax in the locality. They still pay payroll taxes and social security taxes and everything else. The more the US government raises taxes, the more people move offshore when they can.
The mess we are in isn’t because some investors decided to go off shore with their gains. You are looking at the result (off shore tax shelters) and missing the cause (high taxation). Investors take their gains where they’ll be taxed least for a reason; they took the risk in investing. Why should the government get to take the lions share of my profits when I take a risk by investing? Even in good markets, some companies do poorly and there is a risk I’ll lose my shirt. Will the government reimburse me if things go bad? Not a chance in hell.
That risk is in par with the reward in a well functioning market. In a poorly functioning market, the risk is out of alignment with the reward, i.e. the sub-prime market. If I take the risk, I should get to keep the lions share of my profits. The government shouldn’t get to decide that I really don’t need that much profit because there is someone else who wasn’t as smart, disciplined or educated as me. Why take any risk then if there isn’t a reward? If the government is going to decide to tax me at a high tax bracket, then I’m less likely to invest in a new company or start a new company. Instead I would just wait out the storm until I could afford to purchase something nice and new.
But wait, you want to tax the “super rich”. Soak the rich! Except there isn’t even enough wealth that the super rich hold to help us through this. If you hit them with a luxury tax, which at face value seems logical, you’re going to fuck workers harder. If the “rich” don’t buy yachts, then someone won’t build the yachts. That means the Plexiglas manufacturers won’t make the Plexiglas for the orders, the engine company won’t make the engines and everything else required for the boats won’t get made. As a result, everyone who would have helped to make those boats are now worse off. They could have been better off. They are now suffering from a dead weight loss due to taxation.
Congratulations bob, you and everyone who thinks they know better now made the situation worse. High taxation on income makes it less likely people will risk starting new companies that would otherwise have employed some of the newly unemployed. They are disinclined to buy new “luxury” goods because those have a high tax on them. That discourages them from doing anything other than waiting out the storm, which is now longer because of those two previous actions.
As for your homes and jobs thing, people purchased homes they couldn’t ever afford. If they lose 50% of the value after this is over that’s a good thing because others will be able to afford a home. Maybe they’ll learn a harsh, but necessary lesson, to not speculate on housing. 0% down on a house with a 110% mortgage. That’s the kinda people who are hurting now, ones who didn’t ever plan on owning the home. They planned on flipping it for more easy money in a few years. Their greed, combined with hiding the true risk of the sub-prime mortgage loans, got us into this.
Why do you assume the government, any government, can do anything but fuck the situation up worse than it is already? They are the same assholes who can’t balance a budget. Look at Social Security in the US. Look at medicare or the state of the public schools. The reliance on the government to try and fix things is a scary situation. There is no “right” to being employed or owning a big house, despite what the governments of the world say. You have to work hard in order to make a living. Central planning just doesn’t work. You’d think the USSR falling apart would have shown the world that but this is exactly what you and others are advocating bob.
I thought of the Nike example already. I think protectionism now and protectionism in the 1930 are two different things due to the rise of distributed global multinationals. Govt can support older workers and less educated workers (not everybody can have a high education nor is it useful to society actually if everybody had PhDs, it wouldn’t mean everybody suddenly got smarter suddenly and who could fix a car?) by giving incentives and tax breaks to companies doing large and complex manufacturing locally (whether foreign/local HQed). Countries do this already in the form of massive subsidies to agriculture, culture, social welfare etc AND tax breaks to the ultra-rich. The type of incentives I’m talking about are actually productive incentives, keeping jobs and taxable income and growing technological prowess and skills base in the local economy. You want the market, you should do something in the form of jobs for the local market. I think it’s a simple concept that would work for the US. Protectionism ugly, for who? Japanese do the same thing and so do Koreans…works pretty damn well for them. It’s all about access to markets…you want access to a big market, what are you going to do for us?
No, I don’t think I’m wrong.
A lack of government regulation over the banking system is what allowed this situation to develop and it is government regulation of the banking system that everyone agrees will be part of the solution.
Massive government investment will be required to move the economy out of the situation we are now in. Everybody seems to agree to that as well. Where is the money supposed to come from, increased taxes on the middle class? On investors? I don’t think so. It has to come from somewhere and the sensible place is from a tax on luxuries. It’s not a perfect solution but it is better than the alternatives.