Financial News

[Y2HH]

Great! I'd like to talk about why that is, if its fair or desirable and, if not, what might be done to change that.

 

Why?

 

Because of the people we put in the senate, congress, the presidency and our various courts.

 

How does it change?

 

Revolution and nothing short of it.

[Y2HH]

the same people that bought the new technology in the previous decades when productivity gains by labor resulted in increased wages for labor and increased profits for owners. What fundamentally changed in the late 70's or early 80's that changed this dynamic to owners keeping all of the productivity gains?

 

You already know the answer to this...but aren't acknowledging it.

 

What changed?

 

We went from a local "American" economy to a world economy with world competition. That's what changed.

[StrangeSox]

Why?

 

Because of the people we put in the senate, congress, the presidency and our various courts.

 

I don't see how the government would really control that, though. It's private firms determining whether to give a huge bonus package to top execs or to raise wages for the rest of employees. What regulations/tax changes/etc. changed in that period that necessitated this shift? To me, this looks like blaming the government for something entirely controlled by private enterprise.

 

How does it change?

 

Revolution and nothing short of it.

 

eta more seriously though we escaped the Gilded Age without violent revolution.

Edited September 9, 2011 by StrangeSox

[StrangeSox]

You already know the answer to this...but aren't acknowledging it.

 

What changed?

 

We went from a local "American" economy to a world economy with world competition. That's what changed.

 

That's a completely different explanation from your "jobs got easier thanks to computers/other tech" answer offered up earlier, though.

 

World competition in labor markets may be an answer, but I think that graph looks specifically at American productivity gains. I guess the implication would be that our productivity gains are the only things keeping us employed; were it not for them, we'd have to compete with third-world wages on the same level?

[Y2HH]

That's a completely different explanation from your "jobs got easier thanks to computers/other tech" answer offered up earlier, though.

 

World competition in labor markets may be an answer, but I think that graph looks specifically at American productivity gains. I guess the implication would be that our productivity gains are the only things keeping us employed; were it not for them, we'd have to compete with third-world wages on the same level?

 

Well, it's all encompassing...and of course, every facet of this matters. I was merely giving an example of one facet, but I can give more if you'd like...

 

* Jobs got easier due to automation/computer assistance (thus people are more easily replaced)

* World market competition (the talent pool just got far larger)

* Many foreign workers are used to having far less and are more accepting of a lower quality of life (which is of higher quality than they had before if they take the job), this effectively drives down wages

* Leading to my earlier point that computers and automation have enabled these less skilled workers to be almost as productive as their more skilled counterparts

 

In the end, I don't have an official answer -- because there isn't one specific answer, but many. Corporations are keeping their profits, especially now, in light of the recent economic collapse...as they found out what happens when you don't have BILLIONS of cash on hand just in case of an emergency...including emergencies caused by other entities out of your own control.

[StrangeSox]

See, meaningful discussion! Seriously, I appreciate the elaboration here.

 

I guess the common theme there points back to "lack of bargaining power," then, at least for unskilled or low-skills labor.

[Y2HH]

See, meaningful discussion! Seriously, I appreciate the elaboration here.

 

I guess the common theme there points back to "lack of bargaining power," then, at least for unskilled or low-skills labor.

 

See, my biggest problem with this is it's a internet forum...I'm much better at such discussions in person, as BS and others found out when I met them.

 

Unfortunately, when you talk about a global economy, an unprecedented and never seen before "unfairness" creeps into the equation as there is no level playing field. Different nations have different laws, different regulations, different rules, etc...so now we have a new economy based on different laws/rules/regulations depending on where you are, some prosecutable sometimes, sometimes not...

 

This is the same basic reason why the EU was destined to collapse (which I called for when they formed it), which a centralized monetary system (the Euro) spread over different governments following their own separate monetary policies. This cannot work...it's baffling that they thought it could, and these are supposed to be the smart people. This is our modern day job system. The playing field is no longer level...thus we have what we have.

Edited September 9, 2011 by Y2HH

[Iwritecode]

Garbage trucks, for example, lift the cans for the garbage men now...the cans are also 100x lighter, and no longer need replacement due to rust, etc...

 

Our garbage men still lift the cans into the trucks. Then in the winter when the plastic gets really brittle, they slam them back down and break them. I've had to replace 2 already.

 

This whole conversation reminds me of the scene in Office Space when Peter is talking to the 2 Bobs.

 

"You see Bob, it's a problem of motivation. If I work my ass off and Initech ships a few extra units, I don't see another dime."

[southsider2k5]

the same people that bought the new technology in the previous decades when productivity gains by labor resulted in increased wages for labor and increased profits for owners. What fundamentally changed in the late 70's or early 80's that changed this dynamic to owners keeping all of the productivity gains?

 

Where was it ever written that risk takers are obligated to share their rewards? I still don't understand the sense of entitlement to someone else's risk's payoffs, when the reality is if that person hadn't taken their risk you'd have nothing.

[southsider2k5]

Well, it's all encompassing...and of course, every facet of this matters. I was merely giving an example of one facet, but I can give more if you'd like...

 

* Jobs got easier due to automation/computer assistance (thus people are more easily replaced)

* World market competition (the talent pool just got far larger)

* Many foreign workers are used to having far less and are more accepting of a lower quality of life (which is of higher quality than they had before if they take the job), this effectively drives down wages

* Leading to my earlier point that computers and automation have enabled these less skilled workers to be almost as productive as their more skilled counterparts

 

In the end, I don't have an official answer -- because there isn't one specific answer, but many. Corporations are keeping their profits, especially now, in light of the recent economic collapse...as they found out what happens when you don't have BILLIONS of cash on hand just in case of an emergency...including emergencies caused by other entities out of your own control.

 

Not to mention the consumers have benefited from lower prices from most technologies.

[Y2HH]

Where was it ever written that risk takers are obligated to share their rewards? I still don't understand the sense of entitlement to someone else's risk's payoffs, when the reality is if that person hadn't taken their risk you'd have nothing.

 

I think in large part, he doesn't see established corporations as the risk takers they once were...and to a degree, I agree.

 

For example, the current CEO of Ford, Alan Mulally -- what kind of risk is the success of failure of Ford to him?! He gets paid millions either way. If we are talking about the risk Henry Ford took, however, that's a different story.

Edited September 9, 2011 by Y2HH

[Balta1701]

Where was it ever written that risk takers are obligated to share their rewards? I still don't understand the sense of entitlement to someone else's risk's payoffs, when the reality is if that person hadn't taken their risk you'd have nothing.

Isn't the idea that the rewards for risk takers are limited a basic tenet of free market capitalism?

 

At least in the sense that if I invent something new, product or service...either someone is going to come along and offer a competitive item at a price below my item, or someone is going to figure out how to do a better item at the same price?

 

The only way that would break down is if you had something else, say like a government or a near-total monopoly, where someone was taking various measures to make sure that competitive services/products did not come to market, or if they did come to market they had the same price inflation.

[StrangeSox]

Where was it ever written that risk takers are obligated to share their rewards? I still don't understand the sense of entitlement to someone else's risk's payoffs, when the reality is if that person hadn't taken their risk you'd have nothing.

 

I don't understand the sense of entitlement to someone else's labor because you own a thing they use, when the reality is that you'd have nothing if that person hadn't worked!

 

your post completely ignored my question, though. What's inherently different about the "risks" of buying an employee a computer in 2000 instead of, say, a typewriter in 1940?

Edited September 9, 2011 by StrangeSox

[StrangeSox]

Not to mention the consumers have benefited from lower prices from most technologies.

at the expense of their own jobs and exploding household debt!

[southsider2k5]

I think in large part, he doesn't see established corporations as the risk takers they once were...and to a degree, I agree.

 

For example, the current CEO of Ford, Alan Mulally -- what kind of risk is the success of failure of Ford to him?! He gets paid millions either way. If we are talking about the risk Henry Ford too, however, that's a different story.

 

Great example of the auto industry. What did the shareholders who financed GM for decades get? Nothing. As a matter of a fact, they lost all of their investment. The bondholders who largely financed those plants and the equipment being used to make those cars? They took a huge hair cut. The employees got to keep their jobs for the most part. Even in a liquidation the shareholders lose everything, the bondholders get to split whatever liquidation brings, and the employees lose their jobs, but no financial stake.

 

 

[southsider2k5]

I don't understand the sense of entitlement to someone else's labor because you own a thing they use, when the reality is that you'd have nothing if that person hadn't worked!

 

That's just it. They aren't entitled to it. They pay a wage to obtain it, just like they pay for any of the machines that provide them productivity.

 

[southsider2k5]

at the expense of their own jobs and exploding household debt!

 

Both of which are mostly their own damned faults for not supporting industries which use high priced labor. If people really believed in that stuff, they would put their money where their mouths are.

[StrangeSox]

That's just it. They aren't entitled to it. They pay a wage to obtain it, just like they pay for any of the machines that provide them productivity.

 

Ok, so, why has the wage not increased with productivity? If I'm generating more profits for the corporation, why should I not be entitled to a share? Why should I get even less of a share of the profits generated from my labor than I was the year before?

[StrangeSox]

Both of which are mostly their own damned faults for not supporting industries which use high priced labor. If people really believed in that stuff, they would put their money where their mouths are.

 

 

Globalization of labor and supply markets are the "fault" of the American lower and middle class? Huh?

[southsider2k5]

Ok, so, why has the wage not increased with productivity? If I'm generating more profits for the corporation, why should I not be entitled to a share? Why should I get even less of a share of the profits generated from my labor than I was the year before?

 

Why should you? Why are you entitled to someone else's risk taking?

[southsider2k5]

Globalization of labor and supply markets are the "fault" of the American lower and middle class? Huh?

 

Was someone holding a gun to their head when they bought a Hyundai instead of a Pontiac? Then yes, it is their fault.

[StrangeSox]

Why should you? Why are you entitled to someone else's risk taking?

 

You haven't explained where the additional risk is coming in that means I should get even less of a share of profits than I was before.

[StrangeSox]

Was someone holding a gun to their head when they bought a Hyundai instead of a Pontiac? Then yes, it is their fault.

 

NAFTA: the fault of the middle class

[southsider2k5]

You haven't explained where the additional risk is coming in that means I should get even less of a share of profits than I was before.

 

First off, has no one bought equipment, built new factories, hired new employees, issued new stock, or floated new bond issues in the last 30 years? That is all risk. Anything that comes with a cost, or potential cost, is risk.

 

Secondly it shouldn't matter if it is any additional risk at all honestly. All you should be entitled to is your compensation package. There shouldn't be some silly sliding scale that automatically gives you stuff simply for having smart people run your company. If the risk takers feel it is their best interest to reward people, that is there business. The idea that they are obligated to is anti-capitalistic.

[southsider2k5]

NAFTA: the fault of the middle class

 

Right, because exports/imports started in the 90's. Heck the television industry in America was bankrupt long before then.