REAL WORLD EVENT DISCUSSIONS

Globalization

POSTED BY: DEEPGIRL187
UPDATED: Tuesday, October 23, 2007 08:08
SHORT URL:
VIEWED: 4518
PAGE 1 of 3

Thursday, October 11, 2007 6:30 AM

DEEPGIRL187


I realize that this subject has probably been brougth up many times on the board. But I figured I'd gathered some opinions anyway. I'm currently taking a class on Global Cultures, and we focus a lot on globablization and it's effects on world economies.

Frankly, the more I've studied about the subject, the more frightened I become about where the world's heading. But since I don't want to form a concrete opinion on the subject quite yet, I wanted to hear what you guys think.

*****************************************************

"This is my timey-wimey detector. It goes ding when there's stuff. Also, it can boil an egg at 30 paces, whether you want it to or not, actually, so I've learned to stay away from hens. It's not pretty when they blow."


NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Thursday, October 11, 2007 6:36 AM

BIGDAMNNOBODY


Quote:

Originally posted by deepgirl187:
Frankly, the more I've studied about the subject, the more frightened I become about where the world's heading. But since I don't want to form a concrete opinion on the subject quite yet, I wanted to hear what you guys think.


Hey, write your own term paper.

NOTIFY: N   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Thursday, October 11, 2007 6:39 AM

DEEPGIRL187


Well, we do have one coming up actually (which my lazy ass hasn't currently started ). But I wanted to hear an opinion outside of class. One teacher in a class filled with barely-awake students doesn't always lead to spirited debate.

*****************************************************


"This is my timey-wimey detector. It goes ding when there's stuff. Also, it can boil an egg at 30 paces, whether you want it to or not, actually, so I've learned to stay away from hens. It's not pretty when they blow."

NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Thursday, October 11, 2007 7:34 AM

JONGSSTRAW


Asking for opinions on this board can sometimes be a dangerous thing, but not as dangerous as actually giving your opinion....but, here goes:
I look at globalization as both good & bad. It has opened up the world markets for American companies to do business with billions of people, it allows Americans to get cheap goods & services, and occasionally, as a side effect, it creates alliances and friendships around the world.
On the negative side I believe it has polluted American values; values that historically made America an industrious juggernaut and envy of the world, polluted our values of family and religion, and polluted our traditional values of personal responsibility.

NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Thursday, October 11, 2007 8:21 AM

HERO


Quote:

Originally posted by Jongsstraw:
Asking for opinions on this board can sometimes be a dangerous thing, but not as dangerous as actually giving your opinion....but, here goes:
I look at globalization as both good & bad. It has opened up the world markets for American companies to do business with billions of people, it allows Americans to get cheap goods & services, and occasionally, as a side effect, it creates alliances and friendships around the world.
On the negative side I believe it has polluted American values; values that historically made America an industrious juggernaut and envy of the world, polluted our values of family and religion, and polluted our traditional values of personal responsibility.


I second that and add the problems resulting from infringements on American soveriegnty (such as subverting economic interests to outside value judgements such as global warming...and the desire to place American servicemen under the jurisdiction of foriegn courts...and illegal immigration).

On the other hand, I love my 60" flatscreen Sony, the local Mexican food place (we never gonna raid them...except for lunch), and Indian doctor.

H

NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Thursday, October 11, 2007 8:37 AM

JONGSSTRAW


60" flatscreen Sony?...You bastard! You capitalist pig! You neo-con fascist!

NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Thursday, October 11, 2007 9:06 AM

FLETCH2


Quote:

Originally posted by Jongsstraw:
60" flatscreen Sony?...You bastard! You capitalist pig! You neo-con fascist!



Do you really need one that big? Seriously I have problems watching SD content on a 32 and there doesnt seem to be that much HD content to be had. Doesnt SD on a 60 inch look like Picasso?

NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Thursday, October 11, 2007 9:18 AM

RUE

I have a vote and I'm not afraid to use it!


http://www.amazon.com/Conflicting-National-Interests-Robbins-Lectures/
dp/0262072092


Global Trade and Conflicting National Interests (Lionel Robbins Lectures) co-authored by Ralph E Gomory and William J Baumol

Review
"The church of global free trade, which rules American politics with infallible pretensions, may have finally met its Martin Luther. An unlikely dissenter has come forward with a revised understanding of globalization that argues for thorough reformation. This man knows the global trading system from the inside because he is a respected veteran of multinational business. His ideas contain an explosive message: that what established authorities teach Americans about global trade is simply wrong--disastrously wrong for the United States."
-- William Greider, The Nation

Ralph E Gomory
http://en.wikipedia.org/wiki/Ralph_E._Gomory
Trained as a mathematician, Dr. Ralph E. Gomory first became a researcher and then an executive at IBM. Through his own research he created new areas of applied mathematics and later, both participated in and oversaw, the development of a broad range of critical new technologies. Many of the breakthroughs with which he was involved were fundamental to the advancement of the information revolution. Always more than just a researcher or a manager, he was known for his insatiable curiosity about the role of technological innovation in fostering a dynamic economy.

William J Baumol
http://www.nyu.edu/econ/dept/vitae/baumol.htm
***************************************************************
"Global warming - it's not just a fact, it's a choice."

NOTIFY: N   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Thursday, October 11, 2007 9:26 AM

CHRISISALL


While I tend to agree with what Jongstraw said above (Satan must be wearing a parka), simply put, economies will be evening out, that is, the world will become mostly one big lower, lower middle class- good for many; not so good for Americans and the 'west' in general.

Prognosticatin' Chrisisall



NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Thursday, October 11, 2007 9:26 AM

JONGSSTRAW


Quote:

Originally posted by Fletch2:
Quote:

Originally posted by Jongsstraw:
60" flatscreen Sony?...You bastard! You capitalist pig! You neo-con fascist!



Do you really need one that big? Seriously I have problems watching SD content on a 32 and there doesnt seem to be that much HD content to be had. Doesnt SD on a 60 inch look like Picasso?


You have to ask Hero...he's the one with the 60"

NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Thursday, October 11, 2007 9:31 AM

RUE

I have a vote and I'm not afraid to use it!


"economies will be evening out, that is, the world will become mostly one big lower, lower middle class"

And I believe it will be a race to the bottom.

***************************************************************
"Global warming - it's not just a fact, it's a choice."

NOTIFY: N   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Thursday, October 11, 2007 9:32 AM

RUE

I have a vote and I'm not afraid to use it!


"economies will be evening out, that is, the world will become mostly one big lower, lower middle class"

And I believe it will be a race to the bottom. And with the capitalist system in general, it will be a race to see who can use up the earth first and fastest.

***************************************************************
"Global warming - it's not just a fact, it's a choice."

NOTIFY: N   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Thursday, October 11, 2007 9:32 AM

HERO


Quote:

Originally posted by Fletch2:
Do you really need one that big? Seriously I have problems watching SD content on a 32 and there doesnt seem to be that much HD content to be had. Doesnt SD on a 60 inch look like Picasso?


SD content is not bad...more like a subconcious blur.

HD content is available in my area on almost every network. I sprang for the special de-Picassonator...ie the HD DVR from my cable company.

I have tickets to some of the Browns games this season and I'm torn as to which I like better, the stadium...or my comfy stadium seat in front of the TV.

I note for the record that, at 2-3 the Browns have won every game I've seen in person and lost every game I've watched on TV.

H

NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Thursday, October 11, 2007 3:32 PM

MISSTRESSAHARA


Quote:

Originally posted by Hero:
On the other hand, I love my 60" flatscreen Sony




Can I come over to your house?

~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~
~Peter*Peter*Power>~re-peater~



HEROES IS MY CRACK!

~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~


NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 3:40 AM

FLETCH2


Classical economic theory involves the principle of comparative advantage, the idea that if another country can do something better than yours and is cheaper it makes sense to have them do it buy the cheaper product from them and sell them the things you are good at making. That's the principle on which Free Trade works. A problem with the theory is that it is based on agricultural or first level industrial products.

WHERE things are made is as important to the economy as the profit you make. Perhaps even more important because every $ you make through manufacture trickles down theough the local economy. That's why when the mill in a "mill town" closes, restaurants, movie theatres and stores tend to close as well. Economic theory tends to look at the big picture which is profits and GDP. People live in a smaller world and feel the effects directly.

So when you outsource production to China the chinese economy gets the trickle down advantages inherent in being where things are actually made. Over time this will build a middle class and small businesses there. Eventually in theory those people will start buying goods made in America and the world will be a good and happy place.

While that will happen eventually it's worth noting that,

1) It is the western economy that suffers pain from this transition.

2) It could take a while (decades) before the bounceback occurs.

3) the average western consumer uses far more than his own "fair share" of energy and raw materials. Since there is physically not enough material to allow the whole planet to share that same level of consumerism the current western system can only continue it some kind of false "two tier" world is created or the level of excess of Western consumerism will have to fall as the playing field "levels.."


NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 8:19 AM

SIGNYM

I believe in solving problems, not sharing them.


My reading of economic history is that "bounceback" never occurs unless it is forced to occur through political action. If you look at the industrialization of England, when people were forced off the land in droves and starved under bridges or in poorhouses, the rich kept getting richer and the poor poorer until labor unions demanded better conditions. The same has pretty much happened everywhere. Under capitalism, the development of a "midddle class" in India, China, and Russia ia accompanied by the development of an even poorer class. (I'll be happy to link you with exhuastive amounts of data which proves this point). What happens is not wealth creation so much as upwards wealth redistribution. And that is simply capitalism doing what capitalism does best.

I have a problem with globalization under the purview of monopolies which will do their best to make sure that their profits are maximized while salaries are minimized everywhere. In the current dynamic, the big banks and corporations get to write the rules of international "free" trade which overrule national, state, or local laws for product safety, environmental effect, or worker protection. In other words, it is not possible to apply tariffs to products from Malaysia (for example) even if they were made by starving child-slaves in concentration camps. Until the equation is balanced... owners facing equally-organized employees- the "negotiation" which is an essential part of capitalism cannot occur.

---------------------------------
Always look upstream.

NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 8:39 AM

FLETCH2


I think the point here is that the market WILL grow, which is the aim of free trade and in time the developed economies will want to buy things from places like the US. The problem is that like a lot of things this would take a long time. America is an instant gratification culture, if it doesnt happen in 3-5 years people have no interest in it. That's why things like Global Warming doesnt stick here, 20-30 years is outside the US attention span. So when politicos "explain" the benefits of global free trade they make it sound like the loss of jobs to developing economies is a short term blip, that in 5 years India will be a huge market with an affluent middle class just crying out for US goods. That may happen but in a 30-50 year timecycle rather than 3-5 years. Politicos are selling the displaced worker the idea that the cycle will complete soon and that he will see the benefit of his "sacrifice" personally, in his work lifetime. That is probably not the case.

I read an article by the guy that wrote the book Rue linked (just to see the crux of his argument since I have no easy access to the book.) His view is very similar to mine including the same worries about the classical view of comparative advantage. He also thinks that benefits have a longer time scale than is being sold by politicians but he adds an extra factor, that loss of capability in the developed world can go so far that they are too weak to benefit from the improved markets that off shoring creates.

I do disagree with your historical take. Most poor Americans have electricity, TV's refrigerators, items that less than 100 years ago have been high end luxury goods. If enclosure hadn't happened and freed up the workforce for urban industry there would have been no industrial revolution. While you are correct that distribution of wealth was not even fact still reamins that the market grew and more wealth was created. People do better today on a smaller part of a larger pie than they did 100 years ago with a larger part of a smaller pie. What you are discussing is a social justice issue more to do with distribution of the gains the fact remains however that there WHERE gains and almost everyone benefits from them to some degree.

NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 8:44 AM

SIGNYM

I believe in solving problems, not sharing them.


Quote:

I think the point here is that the market WILL grow, which is the aim of free trade and in time the developed economies will want to buy things from places like the US.
And this is exactly what I'm contesting because IMHO the market will SHRINK in the long run. Has nothing to do with how long we wait or "instant gratification". The "American dream" was accompanied by a deterioration of many of our supplying trade partners: Africa, Central and South America, Indonesia, Maylasia etc. I believe that what we saw was nto so much "wealth creation" in the USA as much as wealth distribution from other nations to ours.

---------------------------------
Always look upstream.

NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 8:47 AM

CHRISISALL


Quote:

Originally posted by rue:

And I believe it will be a race to the bottom. And with the capitalist system in general, it will be a race to see who can use up the earth first and fastest.


There will be the inevitable 'feeding frenzy' as the corporations begin to be faced with just modest profits as opposed to a continual increase in gain....at that point we can expect the 'Corporate Wars' to decide the big winners, and it might or might not include violence.

'Just enough' is a hard nugget for Corporate America to imagine, much less swallow.

Duck and cover Chrisisall



NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 8:48 AM

RUE

I have a vote and I'm not afraid to use it!


Despite abundant historical examples, Fletch doesn't seem to understand how profit concentrates wealth which leads to depressions and smaller markets. And that's just on a strictly economic analysis. There is the problem of the commons and also the effects of structuring your society on the basis of an economy.

***************************************************************
"Global warming - it's not just a fact, it's a choice."

NOTIFY: N   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 8:49 AM

FLETCH2


Quote:

Originally posted by SignyM:
Quote:

I think the point here is that the market WILL grow, which is the aim of free trade and in time the developed economies will want to buy things from places like the US.
And this is exactly what I'm contesting because IMHO the market will SHRINK in the long run.
Has nothing to do with how long we wait or "instant gratification".
---------------------------------
Always look upstream.



Then explain your reasoning.

NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 9:09 AM

RUE

I have a vote and I'm not afraid to use it!


"at that point we can expect the 'Corporate Wars' to decide the big winners, and it might or might not include violence."

"Imperialism, the Highest Stage of Capitalism" Lenin

***************************************************************
"Global warming - it's not just a fact, it's a choice."

NOTIFY: N   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 9:09 AM

SIGNYM

I believe in solving problems, not sharing them.


I had added more to my post above.

I've tried to explain my reasoning several times already. The market shrinks because each time a "bundle" of money cycles through the economy, a certain portion of that money gets siphoned off into something called "profit". What happens to this "profit" is important to the economy. Let's say there is an average 10% profit, and in this case it goes into a mattress somewhere. That means each time the money is cycled through the economy, there is less and less money in circulation: $100B, then $90B... $91B... etc. "The market" shrinks simply because there is less and less money available to "buy stuff" with.


I know that profit doesn't go into a mattress... I'll get to that later but I need to know if you're with me so far.

---------------------------------
Always look upstream.

NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 9:13 AM

FLETCH2


Quote:

Originally posted by SignyM:
I had added more to my post above.

I've tried to explain my reasoning several times already. The market shrinks because each time a "bundle" of money cycles through the economy, a certain portion of that money gets siphoned off into something called "profit". What happens to this "profit" is important to the economy. Let's say there is an average 10% profit, and in this case it goes into a mattress somewhere. That means each time the money is cycled through the economy, there is less and less money in circulation: $100B, then $90B... $91B... etc. That inevitably shrinks "the market" simply because there is less and less money available to "buy stuff" with.


I know that profit doesn't go into a mattress... I'll get to that later but I need to know if you're with me so far.

---------------------------------
Always look upstream.



But this assumes that everyone who gains money by profit just sits and counts it like Scrooge McDuck. In reality if you just sit on money it becomes worthless (eroded by inflation.) To keep it's value the profit has to be reinvested or spent and when that happens it goes back into the economy.

"Profits" are somebody's wages. Now you could argue that it's not fair that some people have to work their assess of for "wages" and others can just live of their investments but that aside profits are spent.

IBM makes huge profits --- boo, hiss, fat cat corporate baskets.

except

40 something percent of IBM is owned by the California Teacher's union pension plan. So that profit is your old 3rd grade teacher's monthy check that lets her enjoy retirement. It's probably part of your 401K as well. When you retire (assuming you aren't stupid enough to hide your money in your matress) you will be living off investmant income. Those company profits will be your income.

Don't know what it's like here but in the UK most publically traded companies are effectively owned by pension funds.

NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 9:18 AM

RUE

I have a vote and I'm not afraid to use it!


But as economic analysis shows the person who gains profit never invests or spends it all. And the more they have, the less likely they are to be ABLE to do anything with the bulk of it (unless they give it away, which rarely happens).

***************************************************************
"Global warming - it's not just a fact, it's a choice."

NOTIFY: N   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 9:23 AM

RUE

I have a vote and I'm not afraid to use it!


Profit is not the same as stocks.

***************************************************************
"Global warming - it's not just a fact, it's a choice."

NOTIFY: N   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 9:25 AM

FLETCH2


Quote:

Originally posted by rue:
But as economic analysis shows the person who gains profit never invests or spends it all. And the more they have, the less likely they are to be ABLE to do anything with the bulk of it (unless they give it away, which rarely happens).

***************************************************************
"Global warming - it's not just a fact, it's a choice."



OK? Where is the money? Serously? If what you are saying is a fact where is it? Does Bill Gates have it under a tarp in his garage? I have trouble believeing it is not invested somehow. Even if you just have it in a checking account at a bank that money is being loaned out and used... don't believe Monty Python, they dont keep it in a shoebox under the desk.

NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 9:27 AM

FLETCH2


Quote:

Originally posted by rue:
Profit is not the same as stocks.

***************************************************************
"Global warming - it's not just a fact, it's a choice."



No it's the same as dividends. Which is what pension schemes try to use to fullfill capital requests because it keeps the principle invested and earning money.

NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 9:29 AM

CHRISISALL


Quote:

Originally posted by Fletch2:

But this assumes that everyone who gains money by profit just sits and counts it like Scrooge McDuck. In reality if you just sit on money it becomes worthless (eroded by inflation.)

So if you're worth 100 billion, and inflation cuts it in half, you'd still be on top. Rich folk buy stuff to own, like real estate and companies. You seem to be talkin' out of a textbook on how it's supposed to work, Fletch. A lot of it does, but not all of it IMO.
Economics is a science, staying at the top is a game.

Ve haf vays of makink you lose Chrisisall





NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 9:29 AM

RUE

I have a vote and I'm not afraid to use it!


He doesn't divulge what he does with his billions. But generally, ultra-wealthy spend lavishly on things like homes, second homes and third homes around the globe, on private jets, and on acquiring more money-making investments - like corporations - which further concentrates wealth.

***************************************************************
"Global warming - it's not just a fact, it's a choice."

NOTIFY: N   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 9:34 AM

FLETCH2


Quote:

Originally posted by chrisisall:
Quote:

Originally posted by Fletch2:

But this assumes that everyone who gains money by profit just sits and counts it like Scrooge McDuck. In reality if you just sit on money it becomes worthless (eroded by inflation.)

So if you're worth 100 billion, and inflation cuts it in half, you'd still be on top. Rich folk buy stuff to own, like real estate and companies.

Quote:



and when they buy stuff they put money back into the economy. They dont sit on it.


Quote:


Economics is a science, staying at the top is a game.





Economics is not a science if it were you would have predictable results. It's an observation of the way that humans trade with one another to various degrees and at various levels. Every time you hear that economists are surprised (several times a year right?) that means that they guessed wrong --- or to be completely accurate the models they made didnt predict what real people decided to do.

NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 9:37 AM

RUE

I have a vote and I'm not afraid to use it!


"Economics is ... an observation of the way that humans trade with one another to various degrees and at various levels." Structured by human-made laws. It's not a natural process - it's highly artificial.

***************************************************************
"Global warming - it's not just a fact, it's a choice."

NOTIFY: N   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 9:40 AM

FLETCH2


Quote:

Originally posted by rue:
He doesn't divulge what he does with his billions. But generally, ultra-wealthy spend lavishly on things like homes, second homes and third homes around the globe, on private jets, and on acquiring more money-making investments - like corporations - which further concetrates wealth.

***************************************************************
"Global warming - it's not just a fact, it's a choice."



Second home --- jobs for construction workers, appliance workers, furnishers, decorators carpenters, computer hardware people, electricity and phone company staff.

Third home -- ditto

Private jet? -- work at Boeing in Seatle, work at the GE engine plants.

New car? work for guys at Mercedes and Rolls.

All money going back into the economy. He has concentrated wealth yes, but when he converts wealth into comodities he pays to do it and that is someone wages and that does mean the money stays in the economy rather than "disappearing" as Sig suggests.

NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 9:43 AM

FLETCH2


Quote:

Originally posted by rue:
"Economics is ... an observation of the way that humans trade with one another to various degrees and at various levels." Structured by human-made laws. It's not a natural process - it's highly artificial.

***************************************************************
"Global warming - it's not just a fact, it's a choice."



Very true but being human not predictable. I like my science to have predicatable results. It isnt a science.

NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 9:43 AM

CHRISISALL


Quote:

Originally posted by Fletch2:

and when they buy stuff they put money back into the economy. They dont sit on it.



Once they buy a villa or a yacht, they DO INDEED sit on it.
Quote:



Economics is not a science if it were you would have predictable results. It's an observation of the way that humans trade with one another to various degrees and at various levels. Every time you hear that economists are surprised (several times a year right?) that means that they guessed wrong --- or to be completely accurate the models they made didnt predict what real people decided to do.

Sounds just like regular old science to me...."Margarine is better for you...no wait; butter is better for you......................"

Chrisisall



NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 9:45 AM

SIGNYM

I believe in solving problems, not sharing them.


I agree. I know that people don't just sit on their cash (although BTW if they did inflation would NOT occur. In fact, their money would be more and more valuable with each passing day.) But that is why I said that it's important what happens to profits. As far as I can tell only a few things really happen: conspicuous consumption, investment, and speculation. (Run down the chain and it's going to be some combination of the three.) I'll eliminate conspicuous consumption and speculation as long-term "market-expanders" for the sake of simplicity. (but if you want we can get to that.)

So looking only at "investment"...

A business expands production when it sees an expanding market. But if the money supply stays the same the market will be stagnant, so a business will invest either to increase market share (improved product, acqusition/ consolidation) or to create higher profits through greater automation or lower pay rates. Neither one of those activites actually expands the market, and reduced pay rates and/or automation -while improving the bottom line in the short run- reduces the total amount of money that can be used to "buy stuff", and actively shrinks the market.

I know you'll prolly dispute my view of "what happens to profits" so if you'd like we can go thru a specific example of your choice.

---------------------------------
Always look upstream.

NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 9:46 AM

FLETCH2


Quote:

Originally posted by chrisisall:
Quote:

Originally posted by Fletch2:

and when they buy stuff they put money back into the economy. They dont sit on it.



Once they buy a villa or a yacht, the DO INDEED sit on it.
Quote:





As do you in the house you own, so does the guy working the night shift at GM. Your point is? If your argument is taht all ownership is theft will you give back what you stole first?

NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 9:54 AM

RUE

I have a vote and I'm not afraid to use it!


"All money going back into the economy."

It's not true that ALL the money goes back into the economy. The vast majority never does.


When Billy and Faisel and Warren spend for market goods the money does return, though poorly. (That spending tends not to multiply efficiently. For example, a person buying a private jet creates enough demand for one jet. A bunch of people flying on commercial jets create enough demand for a fleet - plus fleet maintenance, airports, regulations, airline companies, cabs and shuttles, travel agencies, on-line services ...)

But Billy and Faisel and Warren simply CAN'T spend ALL their money and return it to the economy, no matter how much gold dust they have added to the concrete in their driveway.

And that isn't their interest anyway. Their interest is in making MORE money. So they spend the vast majority of their money in acquiring more money making opportunities or in buying up the competition.

And that further concentrates wealth.


***************************************************************
"Global warming - it's not just a fact, it's a choice."

NOTIFY: N   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 9:56 AM

CHRISISALL


Quote:

Originally posted by Fletch2:

As do you in the house you own, so does the guy working the night shift at GM. Your point is?

Ummm, Fletch, I pay TAXES on my house, I don't have lawyers at Wolfram & Hart finding me loopholes and subsidies, and I can't write off my yacht and corporate jet as 'work-related' expenses.

Money magically makes having more money possible Chrisisall





NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 10:02 AM

RUE

I have a vote and I'm not afraid to use it!


BTW Fletch, I highly recommend this book, available at Amazon.com, which I have and have read.

If you're looking for the voice of globalization experience AND analysis, this is the book for you.

http://www.amazon.com/Conflicting-National-Interests-Robbins-Lectures/
dp/0262072092


Global Trade and Conflicting National Interests (Lionel Robbins Lectures) co-authored by Ralph E Gomory and William J Baumol

Review
"The church of global free trade, which rules American politics with infallible pretensions, may have finally met its Martin Luther. An unlikely dissenter has come forward with a revised understanding of globalization that argues for thorough reformation. This man knows the global trading system from the inside because he is a respected veteran of multinational business. His ideas contain an explosive message: that what established authorities teach Americans about global trade is simply wrong--disastrously wrong for the United States."
-- William Greider, The Nation

Ralph E Gomory
http://en.wikipedia.org/wiki/Ralph_E._Gomory
Trained as a mathematician, Dr. Ralph E. Gomory first became a researcher and then an executive at IBM. Through his own research he created new areas of applied mathematics and later, both participated in and oversaw, the development of a broad range of critical new technologies. Many of the breakthroughs with which he was involved were fundamental to the advancement of the information revolution. Always more than just a researcher or a manager, he was known for his insatiable curiosity about the role of technological innovation in fostering a dynamic economy.

William J Baumol
http://www.nyu.edu/econ/dept/vitae/baumol.htm

***************************************************************
"Global warming - it's not just a fact, it's a choice."

NOTIFY: N   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 10:04 AM

FLETCH2


Quote:

Originally posted by SignyM:

So looking only at "investment"...

A business expands production when it sees an expanding market. But if the money supply stays the same the market will be stagnant, so a business will invest either to increase market share (improved product, acqusition/ consolidation) or to create higher profits through greater automation or lower pay rates. Neither one of those activites actually expands the market, and reduced pay rates and/or automation -while improving the bottom line in the short run- reduces the total amount of money that will be used to "buy stuff" with and shrinks the market.

I know you'll prolly dispute my view of "what happens to profits" so if you'd like we can go thru a specific example of your choice.

---------------------------------
Always look upstream.



No. For one thing the economy expands because of increased economic activity. You have set up a situation where the economy can not expand -- kind of like a soviet style command economy, then you show activity dwindling, those are unrealistic start conditions. If the money supply can never expand to reflect the value in the economy you could not even pay people to mine raw materials, you would be almost unable to buy anything.

In reality the money would just increase in value as the amount of worth in the economy expanded. So even in your world the total number of notes traded would be the same but their exchange value would increase. Money, gold any unit of exchange only has the value that people are willing to trade it for. "The money supply" is just a very rough estimate of an agreed intrinsic value.


Let's look at a more realistic point of view.

Apple has a success with Ipod.

Competitors seeing success with Ipod engineer their own version. They are not trying to "grow" the economy, they want to steal part of Apple's market share.

All of these companies want return on their investment but the market at the price Apple sets is finite. So to get market share they cut prices -- accept smaller profit to get return on investment.

Prices fall. Some competitors fail however the money they invested in their attempt to grab market share has bought buildings and equipment, paid staff who have bought goods/food/rent all of which is economic activity that has put coin in people's pockets.

Because prices fall the survivors products are now in a different price point to where they started, consequently folks that couldn't have afforded Ipod at the original price now can do so. As it happens there are people that now have money because of the successfull or unsuccessfull investments. The market for MP3 players (generic name) is seen to have expanded. There are now more people making more money than there was when apple was the only game in town.


NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 10:09 AM

FLETCH2


Quote:

Originally posted by rue:
BTW Fletch, I highly recommend this book, available at Amazon.com, which I have and have read.
."



As I said above I did read his testimony to congress and I agree completely with that (though he's more pessimistic than I am.) In his testimony he doesnt say that Free trade is good or bad, he says it is mixed (which it is.) If you read what I wrote at the begining of todays thread, there are problems with the reality of what Free Trade guru's push. Doesn't mean it's all bad, just means expectations are unrealistic.

NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 10:10 AM

CHRISISALL


Quote:

Originally posted by Fletch2:

Let's look at a more realistic point of view.


Okay, let's. Can the average first week's paycheck of a McDonald cashier buy more 'stuff' back in 1980, or can today's first week's paycheck buy more right now?

Tough one Chrisisall



NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 10:23 AM

FLETCH2


Quote:

Originally posted by rue:
"All money going back into the economy."

It's not true that ALL the money goes back into the economy. The vast majority never does.




I think you'll find it all does one way or another. Unless like Saddam they have some wrapped in plastic in an outhouse.



Quote:



For example, a person buying a private jet creates enough demand for one jet. A bunch of people flying on commercial jets create enough demand for a fleet - plus fleet maintenance, airports, regulations, airline companies, cabs and shuttles, travel agencies, on-line services ...)




But this is a different question. That's like saying that because you own a house and don't use it as a hotel you are not making as good use of the money and depriving maids/porters/checkin staff of a living. It may be true but it's beside the point.

If a private jet costs $9M then in buying it you have still put $9M back into the economy irrespective of how you use it. Now had you invested $9M in an airline could you have produced more economic activity? If that is your argument then the answer is yes. However in that case you are being an A*hole to not use your house as a hotel. In the end the nature of private property is that it's principle purpose is private.



Quote:



And that isn't their interest anyway. Their interest is in making MORE money. So they spend the vast majority of their money in acquiring more money making opportunities or in buying up the competition.

And that further concentrates wealth.
."



That's called "investment" amongst other things it pays to start and expand businesses and thus hire working Joes that use their pay to buy food/housing/ consumer goods etc. If the money was never invested and wrapped in plastic you would have a point but it isn't it goes ultimately to pay guys to do stuff.

NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 10:30 AM

FLETCH2


Quote:

Originally posted by chrisisall:

Okay, let's. Can the average first week's paycheck of a McDonald cashier buy more 'stuff' back in 1980, or can today's first week's paycheck buy more right now?




How much are you willing to pay for a burger? If it's less than $5 then chances are the "value" added by the cashier isn't enough to pay them more. That applies to a lot of people.

You can't afford to pay someone more than the value they add to the product. If you Chris would pay more for a burger then the cashier would be paid more. As it is if the local McD raises prices you will just go to Wendy's and the McD goes out of business. Ultimately YOU decide what that gal gets paid by waht YOU will pay for her product.

NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 10:35 AM

CHRISISALL


Quote:

Originally posted by Fletch2:

How much are you willing to pay for a burger? If it's less than $5 then chances are the "value" added by the cashier isn't enough to pay them more. That applies to a lot of people.

You can't afford to pay someone more than the value they add to the product. If you Chris would pay more for a burger then the cashier would be paid more. As it is if the local McD raises prices you will just go to Wendy's and the McD goes out of business. Ultimately YOU decide what that gal gets paid by waht YOU will pay for her product.

Ummm, the answer is, the first week's paycheck in 1980 could buy more stuff. Just makin' the point that our economy is catchin' up (or down, if you wanna get technical) with the rest of the world- we will have a true global share soon enough.


Chrisisall


Edit to add: I don't eat burgers you omnivore!

NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 10:36 AM

SIGNYM

I believe in solving problems, not sharing them.


Quote:

That's called "investment" amongst other things it pays to start and expand businesses and thus hire working Joes that use their pay to buy food/housing/ consumer goods etc. If the money was never invested and wrapped in plastic you would have a point but it isn't it goes ultimately to pay guys to do stuff.
Did you even read my post? A company will not invest in increasing production unless they see an expanding market. Why would I, as a business, invest in producing more widgets if I don't think anybody will buy them? Now, considering that I'm already holding onto 10% of the last amount of money which cycled through the economy, that's 10% NOT available to buy my widgets.

I didn't set the parameters towards a stagnant economy. The shrinking supply of dollars that can be used to "buy stuff" did.

---------------------------------
Always look upstream.

NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 10:48 AM

FLETCH2


Quote:

Originally posted by SignyM:
Quote:

That's called "investment" amongst other things it pays to start and expand businesses and thus hire working Joes that use their pay to buy food/housing/ consumer goods etc. If the money was never invested and wrapped in plastic you would have a point but it isn't it goes ultimately to pay guys to do stuff.
Did you even read my post? A company will not invest in increasing production unless they see an expanding market. Why would I, as a business, invest in producing more widgets if I don't think anybody will buy them? Now, considering that I'm already holding onto 10% of the last amount of money which cycled through the economy, that's 10% NOT available to buy my widgets.


.



If your idea is to isolate one economic element your argumant is baseless. In your simplification you have postulated a world where one manufacturer has a monopoly making something nobody would buy. In that case they go to the wall like buggy whip makers.

If there is a market for your wiget, then other people will make them at lower prices to steal the market share of your odd little monopoly. This will make jobs for folks put money in the economy that will be used to buy widgets at a lower price. If there is a cap on the number of notes in the economy the value of the ones being traded will rise. Expansion in the money supply ultimately reflects increase in wealth in the economy, if it doesnt the value of the notes falls and you get hyperinflation. If by "money supply" you mean the number of notes then if that doesnt expand the value of each one goes up. If by money supply you mean wealth in the economy then you are right, you are in a bad way but then in effect you are saying "in a world where the economy is failing economic activity declines."

To which I say "Doh Sherlock"

NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 10:53 AM

CHRISISALL


Quote:

Originally posted by Fletch2:

If your idea is to isolate one economic element your argumant is baseless. In your simplification you have postulated a world where one manufacturer has a monopoly making something nobody would buy.
If there is a cap on the number of notes in the economy the value of the ones being traded will rise. Expansion in the money supply ultimately reflects increase in wealth in the economy, if it doesnt the value of the notes falls and you get hyperinflation.

Ummm... but how does this explain quantum singularities?

Not good with hard words Chrisisall



NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

Friday, October 12, 2007 11:00 AM

SIGNYM

I believe in solving problems, not sharing them.


Quote:

If your idea is to isolate one economic element your argumant is baseless. In your simplification you have postulated a world where one manufacturer has a monopoly making something nobody would buy. In that case they go to the wall like buggy whip makers.
Apparently the idea of "aggregate" is foreign to you. If you can't handle the idea of aggregate, don't try discussing economics. My manufacturer is a stand-in for ALL manufacturers, as my nominal 10% profit is a stand-in for ALL profits.

So, let me try this again: Why would ANY manufacturing invest in expanding production if the market wasn't there?

---------------------------------
Always look upstream.

NOTIFY: Y   |  REPLY  |  REPLY WITH QUOTE  |  TOP  |  HOME  

YOUR OPTIONS

NEW POSTS TODAY

USERPOST DATE

OTHER TOPICS

DISCUSSIONS
Does Whitmer leap frog Cuomo as worst governor of all time ?
Wed, December 1, 2021 15:08 - 50 posts
Bald F*ck MAGICALLY "Fixes" Del Rio Migrant Invasion... By Releasing All Of Them Into The U.S.
Wed, December 1, 2021 15:01 - 17 posts
I think it's time to bring these threads all together: 1984. Today (AKA "Libtard" terrorist thread)
Wed, December 1, 2021 14:57 - 49 posts
Pedophile Freemasons steal $3-billion from Shriners Hospitals
Wed, December 1, 2021 14:34 - 28 posts
ARREST PIRATENEWS
Wed, December 1, 2021 14:28 - 88 posts
Ports, Shipping and the Supply Chain issues
Wed, December 1, 2021 14:05 - 145 posts
Kevin Spacey, movie actor, producer, Knighted Order Commander of the British Empire, an Academy Award winner, tv actor accused of sexual harassment assault
Wed, December 1, 2021 13:48 - 6 posts
QAnons' representatives here
Wed, December 1, 2021 13:28 - 655 posts
Some Covid-19 thoughts
Wed, December 1, 2021 13:24 - 3376 posts
Funny Cartoon sparks Islamic Jihad !
Wed, December 1, 2021 13:17 - 202 posts
In the garden, and RAIN!!!!
Wed, December 1, 2021 13:13 - 9283 posts
Ellen Page is a Dude Now
Wed, December 1, 2021 13:10 - 76 posts

FFF.NET SOCIAL