Economics

[begreen]

I think you are missing the point. American corporations may have higher share valuations, but they are intrinsically weaker today due to increased debt, extended supply chains, bad decisions, etc. The Boeing example is just one debt that is being socialized. Should we be bailing out Boeing for the incredibly dangerous decisions made by management for the 737Max? This culture of profit and shareholder value above all else has cost many lives. In Japan or S. Korea there would be criminal charges filed. Here, crickets.

Wealth is now concentrated and hoarded at the top, instead of being much more evenly distributed and invested in the company and its workers. These are the people that will actual spend that money and keep the momentum of capital in the system. There is a reason why savings are lower now. The cost of life is much more expensive. Education, insurance, healthcare all cost a lot more than when I was going to college. The buying power of the dollar is less and real inflation, not the hedonized govt. variety, has exceeded wage increases for a long time. As a result the middle-class is disappearing quickly.

 

[NickW]

I agree. What is the solution?

I fear many of the previously proposed solutions will result in more jobs lost over the boarder. Would a law with some sort of formula capping upper management compensation packages and company profits in relation to worker wages be a solution? Would there ever be any ability to come to an agreement on the formula? Would it result in more jobs being lost to automation? Would this be an illegal restriction on free enterprise? There still has to be incentive to have a business. A flat tax has been proposed many times, but that doesn't account for the risk and losses of 9 out of 10 businesses failing. Only those with the amount of wealth at the top can afford those losses, and they need that 1 in 10 to be profitable enough to make up for it; otherwise there is no point in taking the risk.

 

[paulnlee]

I agree. What is the solution?

I fear many of the previously proposed solutions will result in more jobs lost over the boarder. Would a law with some sort of formula capping upper management compensation packages and company profits in relation to worker wages be a solution? Would there ever be any ability to come to an agreement on the formula? Would it result in more jobs being lost to automation? Would this be an illegal restriction on free enterprise? There still has to be incentive to have a business. A flat tax has been proposed many times, but that doesn't account for the risk and losses of 9 out of 10 businesses failing. Only those with the amount of wealth at the top can afford those losses, and they need that 1 in 10 to be profitable enough to make up for it; otherwise there is no point in taking the risk.

There is, it's called comunism

 

[begreen]

A solution is to start putting accountability back in the system. Take out the incentives that lead to this behavior. Roll back the Reagan era gifts that allowed corporate execs to get share bonuses. Those stock buybacks used to be illegal, remember? Get rid of tax loopholes that allow giants like Amazon to pay nothing. Enforce and strengthen anti-trust laws to stop giant mergers and break up the mega-corporations. Europe has much stronger laws for this than here. Stop the attacks on unions. Restore taxes on the wealthiest to 1980 levels. Repeal Citizens United. And above all, start restraining lobbying.

Yes some jobs will be lost to China. Critical supply lines should never have been allowed to go there in the first place.

 

[NickW]

There is, it's called comunism

And those at the bottom have done soooooo well there and have tons of opportunities and those at the top aren't a lot more comfortable...

 

[begreen]

That is neither spelled correctly nor an even remotely correct assessment. But it's ok to socialize the debt of major Wall St. corporations, eh? Total hypocrisy.

 

[NickW]

That is neither spelled correctly nor an even remotely correct assessment. But it's ok to socialize the debt of major Wall St. corporations, eh?

I assume it was tongue in cheek, as was my response... . The debt isn't socialized if the loans are paid back.

 

[begreen]

Great. Let me know when a real economist shows up here.

 

[Seasoned Oak]

The Boeing example is just one debt that is being socialized.

Should be no such thing as grants to big companies. Any bailouts make no sense unless as loans or equity 100%+ paid back. Also they would have to accept restrictions on executive compensation to get anything otherwise its rewarding incompetance. Gamble with your own money, not the taxpayers. If they want to outsource supply, let them but with tariffs if they want to ship back in for sale here. I am pro business but not pro business welfare.

 

[paulnlee]

I assume it was tongue in cheek, as was my response...

So I left out an M for all the so called moderates. You guys should just leave the USA and go find that utopia you're looking for. Damn glad I had none of you next to me Chu Lai

 

[Seasoned Oak]

Great. Let me know when a real economist shows up here.

How many economists are there in congress? Any at all? I dont think those making all the descisions are listening to the economists. Still wondering why no one ever went to jail for all the criminal acts leading up to the great economic meltdown 10+ yrs ago.

 

[begreen]

How many economists are there in congress? Any at all? I dont think those making all the descisions are listening to the economists.

Good point, it looks like David Brat is the only one in the House. Problem is that good economics often makes bad politics. There's far too few scientists in Congress too. The New Republic has a great POV. It’s a classic example of what I call the Lamppost Theory: Politicians use economics the way a drunk uses a lamppost—for support, not illumination.

Why Good Economics Make Bad Politics

Trump is hardly the first politician to push misguided fiscal policy.

newrepublic.com

 

[Seasoned Oak]

Politicians use economics the way a drunk uses a lamppost—for support, not illumination.

That pretty much sums it up. No one ever listened to the US comptroller who was sounding the alarm for yrs before the meltdown.

U.S. Debt Ceiling Is Like ‘Playing With a Tactical Nuclear Weapon’: Former Comptroller General

While most of us are packed up and pumped up about the three-day Memorial Day weekend, former U.S Comptroller General David Walker is fired up about the nation's debt. Walker, who founded the Comeback America Initiative and served 10 years as comptroller general (1998-2008), has been sounding...

finance.yahoo.com

 

[Sodbuster]

I think what needs to happen is that we need to lose the whole concept of "too big to fail", if a company makes a crappy product, let them go under, keep gov't out of it. GM is a good example, and I drive one, but they are crap when compared to the foreign brands.

 

[Seasoned Oak]

I think what needs to happen is that we need to lose the whole concept of "too big to fail",

That was mostly the banks. And we did lose one american auto brand to foreign ownership over the whole meltdown. Would have been nice to keep Dodge. Now its the big 2 instead of the big 3. Foreign brands also subsidize their auto and other critical industries.

 

[bholler]

So I left out an M for all the so called moderates. You guys should just leave the USA and go find that utopia you're looking for. Damn glad I had none of you next to me Chu Lai

I gaurantee there were lots of liberal mined people next to you. We are all Americans. We all have different perspective on things. And what built this country was a balance of capitalism and socialism. The problem now is there is no balance both sides are so dug in and won't even consider compromises. That leads to the deadlock we have been in for decades. And it is attitudes like yours that make that problem even worse.

That and no one in the govt is fiscally conservative any more at all. They just spend our money on different things depending upon which political side they are on.

 

[Sodbuster]

I gaurantee there were lots of liberal mined people next to you. We are all Americans. We all have different perspective on things. And what built this country was a balance of capitalism and socialism. The problem now is there is no balance both sides are so dug in and won't even consider compromises. That leads to the deadlock we have been in for decades. And it is attitudes like yours that make that problem even worse.

That and no one in the govt is fiscally conservative any more at all. They just spend our money on different things depending upon which political side they are on.

I agree, they all spend money to buy votes. I am a conservative and a fiscal one at that, so I guess I would be considered a Libertarian. The last Speaker of the House that did a great job in my opinion was the liberal Democrat Tip O'neil. He worked across the aisle to get things done.

 

[begreen]

I think what needs to happen is that we need to lose the whole concept of "too big to fail", if a company makes a crappy product, let them go under, keep gov't out of it. GM is a good example, and I drive one, but they are crap when compared to the foreign brands.

I have a GM product, made in Detroit. It was the first American car I had owned in years and I love it. No complaints. Previous car was a Prius. The Volt that replaced it was an all-around better car. Much more fun to drive too. I liked it so much I bought a newer one last fall.

But I agree. This too big to fail is BS. It's not always about a crappy product, sometimes it's crappy management.

 

[Seasoned Oak]

There is no auto maker that never put out a bad or defective product a times. Worst truck i ever had was a Toyota, but i wouldnt use that experience to say they only make junk . I know thats not the case. They are all capable of making both great and not so great products. Except possibly Yugo.

 

[CaptSpiff]

A solution is to start putting accountability back in the system. Take out the incentives that lead to this behavior. Roll back the Reagan era gifts that allowed corporate execs to get share bonuses.

Back a lifetime ago, or as you mockingly called it the Reagan era, laws were written to try to corral what was perceived as "runaway executive pay". The politicians were proudly backslapping and issued the proclamation that "any company can pay their executives any amount they want, but any salary over $1Mil/yr cannot be claimed as a business expense".
As expected smart folks found the loopholes and executive compensation drifted toward bonuses. "Suddenly" we found ourselves with negotiated executive bonuses 8-10 times their annual salary value. When a man has the ability to earn 8-10 years salary in one year by focusing on 5 or so tight goals, he will screw the company into the ground to get it.

 

[Sodbuster]

There is no auto maker that never put out a bad or defective product a times. Worst truck i ever had was a Toyota, but i wouldnt use that experience to say they only make junk . I know thats not the case. They are all capable of making both great and not so great products. Except possibly Yugo.

I drive GM trucks, always have and probably always will, despite the fact that they pi$$ me off from time to time. Case in point, I have a 2010 Chevy Silverado with the 6.2L gas engine, love the engine and the drive train. It's all the little stuff that causes the dislike. My wife's Camry had 180,000 miles on it, and I was planning on 300,000 miles out of that car. A teenager ran a stop sign, and put an end to that quest. Up until then, I had to replace the brakes, tires and fan belts. That's it, and no rust. My 2010 Chevy is rusting out through the rear quarters, as they all do, I had to replace a cable in the door that snapped and I could only open it, by rolling down my window and opening it from the outside. It leaks oil from the oil pan, easy fix, park it on a 4x8 sheet of OSB for $10. The passenger side window cannot be rolled down using the drivers side control, but it can be rolled up using the same button. The seats wore out, and started falling apart at the seams, which caused me to have to buy $300 seat covers. (How long has GM been making seats?) Now the tire pressure monitoring system has failed and that will be another $300 to replace the sensors. I have a feeling that the left front it the culprit, but the others aren't far behind.

 

[Sodbuster]

That was mostly the banks. And we did lose one american auto brand to foreign ownership over the whole meltdown. Would have been nice to keep Dodge. Now its the big 2 instead of the big 3. Foreign brands also subsidize their auto and other critical industries.

SOUTHFIELD: General Motors rose in New York trading after House Speaker Nancy Pelosi urged Congress to pass an auto-industry bailout, embracing the premise that GM is too big to be allowed to fail. In urging Congress to enact emergency aid for the ailing auto industry, Pelosi rejected calls to let GM collapse and sided with the company and its allies in trying to prevent a ���devastating��� domino effect that would cost millions of jobs.

GM seen as too big to fail; auto bailout gets more backing

General Motors rose in New York trading after House Speaker Nancy Pelosi urged Congress to pass an auto-industry bailout, embracing the premise that GM is too big to be allowed to fail.

economictimes.indiatimes.com

 

[Seasoned Oak]

Now the tire pressure monitoring system has failed and that will be another $300 to replace the sensors. I have a feeling that the left front it the culprit, but the others aren't far behind.

I have the same problem with that system, but
my solution to that is to let it be ,didnt need it anyway. Just another thing to go wrong in the future. Not worth $300 to me. I can can ck my own tire pressure just fine. That new tailgate lowering feature is the newest total waste of money. Who is that for? Possibly triple amputees. If you cant lower your own tailgate you probably cant load anything in the box anyway. Whats next self opening front doors? Just another motor to go bad. (end of rant).

 

[Sodbuster]

I have the same problem with that system, but
my solution to that is to let it be ,didnt need it anyway. Just another thing to go wrong in the future. Not worth $300 to me. I can can ck my own tire pressure just fine. That new tailgate lowering feature is the newest total waste of money. Who is that for? Possibly triple amputees. If you cant lower your own tailgate you probably cant load anything in the box anyway. Whats next self opening front doors? Just another motor to go bad. (end of rant).

I've found a piece of black electrical tape will make trouble lights go away.

 

[vinny11950]

SOUTHFIELD: General Motors rose in New York trading after House Speaker Nancy Pelosi urged Congress to pass an auto-industry bailout, embracing the premise that GM is too big to be allowed to fail. In urging Congress to enact emergency aid for the ailing auto industry, Pelosi rejected calls to let GM collapse and sided with the company and its allies in trying to prevent a ���devastating��� domino effect that would cost millions of jobs.

GM seen as too big to fail; auto bailout gets more backing

General Motors rose in New York trading after House Speaker Nancy Pelosi urged Congress to pass an auto-industry bailout, embracing the premise that GM is too big to be allowed to fail.

economictimes.indiatimes.com

GM and Chrysler still went through the bankruptcy process. Investors did lose money, and new structures and ownerships were setup post bankruptcy. So the investors were not bailed out, but the employees kept their jobs because the government put up the loans to keep the companies functioning. I think what really annoyed Republicans about that bail out was that it helped the workers and wiped out the investors.

The loans totaled about $85 billion. Compared to today's bail outs that is a small amount. Also, most of the loans from the auto bail out were paid back and the government only lost about $14 billion. Again, a small amount compared to today's money.