NFIB

[Don]

Just thought everyone would like to see what NFIB, the National Federation of Independent Businesses, had to say about the presidents economic plans.

VOICE e-newsletter for Don Frantz

Welcome to the February 24, 2004, edition of VOICE: Volunteers Organized to Influence Congress and Elections. This e-newsletter is sent to NFIB members twice monthly. Look to NFIB to keep you informed about what's happening in Washington and the states, and how YOU can shape the politics and policy that affect small businesses.

MAIN STREET MESSAGE
President Bush Touts Permanent Tax Relief

As President Bush gears up for the 2004 election, he's making sure that the American people understand his priorities. He showed support for small business in his State of the Union address when he mentioned Association Health Plans (AHPs) and tax-cut permanency and reinforced his commitment to these issues by including funding for both in his fiscal year 2005 budget proposal.

One way that the president is communicating with the public is by holding roundtable discussions on important issues. On Feb. 19, President Bush heard firsthand from several small-business owners, families and farmers about the importance of making permanent the 2001 and 2003 tax packages. The participants included NFIB member Rex Hammock of Hammock Publishing in Nashville, Tenn. Hammock talked to the president about the benefits of recently enacted tax packages and the need to make them permanent.

After the closed-door discussion, the five roundtable participants stood behind President Bush while he told an audience why the tax cuts should be made permanent. He gave examples of how the tax cuts he has enacted have helped the economy and have encouraged companies to grow. He mentioned in his speech that Hammock Publishing was able to invest $100,000 in computer hardware and software due to the recent increase in expensing of capital investments. He noted that Hammock added two new employees last year, and plans on adding five this year.

NFIB's most recent Small Business Economic Trends Report (SBET) is further testimony to the benefits of the tax cuts. In January, the NFIB Index of Small Business Optimism hit 105.8, the fourth-highest quarterly reading in the survey's 30-year history.

The president also stressed the need for certainty in the tax code. NFIB's 600,000 members have long fought for eliminating mystery from the tax code. Uncertainty in the tax code is unfair to small-business owners. Small-business owners need a consistent tax code that allows them to plan and fully realize the potential of the recently enacted tax packages.

The Economic Growth and Tax Relief Reconciliation Act of 2001 provides small-business owners relief from high individual tax rates, eliminates the death tax, eliminates the marriage penalty, makes a number of significant tax cuts, and reforms our nation's pension laws. However, some of the provisions, such as the death-tax repeal, are scheduled to return, and procedural hurdles in the U.S. Senate have prevented the provisions from becoming a permanent change to the tax code.

The Jobs and Growth Act of 2003 was signed into law in May 2003, accelerating the income tax rate reductions from the 2001 bill, increasing small-business expensing limits, and lowering capital gains and dividend taxes. However, just like the 2001 bill, many of these provisions will expire unless Congress passes permanent tax-relief legislation.

VOICEBOX
Go to http://www.nfib.com/getinvolved. Urge Congress to pass President Bush's
budget and make the 2001 and 2003 tax cuts permanent.

FEDERAL FOCUS
NFIB President Participates in SBA Events

In honor of its 50th anniversary, the U.S. Small Business Administration (SBA) is holding regional events in 11 cities throughout the country. The SBA's 50th Anniversary Regional Events allow small businesses, SBA's resource partners, community leaders, and elected officials to gather together to discuss the challenges and opportunities for small businesses throughout America. These events are a chance for business owners to voice their opinions and come together to find workable solutions to the problems facing small business. The SBA began its 11-stop tour in October of 2003 and will make four stops before finishing the tour in April.

NFIB President Jack Faris was the luncheon key-note speaker at SBA regional events in Jacksonville, Fla.; Reno, Nev.; and Albuquerque, N.M. In his speech in Reno, he said that small businesses are desperate for a health care plan that would bring premiums down for small businesses.

Faris said, "The employee who manufactures a Chevy truck has health insurance. However, the mechanic down the street who repairs that same Chevy does not. The reason for the difference - the size of the company each man works for. And that's unfair. The family-owned garage and the giant auto manufacturer should have access to the same health insurance options."

The regional events enable entrepreneurs and small-business owners to meet with their local bankers, venture capitalists, resource and trade partners, and local SBA staff to kick-off a new small business or advance an existing one. There is a luncheon with the SBA Administrator and Deputy Administrator as well as representatives from each local community to discuss the challenges of owning a small business, and how to improve opportunities for entrepreneurs.

Upcoming stops include Morgantown, W.Va.; Green Bay, Wis.; Denver, Colo.; and Kansas City, Mo. Jack Faris will be the luncheon key-note speaker in Denver on April 5 and in Kansas City on April 12. For more information on SBA's 50th Anniversary Regional Events, visit http://www.sba.gov/.

STATE SPOTLIGHT
Election Watch 2004

Congressional primaries will take place in six states during the month of March. Make your voice heard and vote on primary election day.

California: March 2

Maryland: March 2

Ohio: March 2

Mississippi: March 9

Texas: March 9

Illinois: March 16

GRASSROOTS POWER
Sign Up to Attend the Summit for Permanent Death-Tax Repeal

If you think the death tax is unfair to small businesses, join NFIB and other death-tax opponents for the Summit for Permanent Death-Tax Repeal, a one-day event taking place March 31, 2004 in Washington, DC. Participants will hear from Congressional champions for death-tax repeal and spend the day meeting directly with members of Congress, helping them understand why permanent repeal is critical to small-business owners, their families and their employees. If you and others you know would like to be a part of this important event, contact us at 1-800-552-NFIB, x2015 or send an e-mail to mailto:grassroots@NFIB.org.

[Mark]

I still get a kick out of people's calling it the death tax.

[Cathy]

Thanks Don, that was very interesting. But you can be certain that even if small business owners and the less than "well to do" actually like and support the tax changes, the left liberals will hate them because Bush enacted them.

[Mark]

I hate the changes because I can read.

Click for info on the "death tax" myth. (http://www.cbpp.org/5-25-00tax.htm)

The uberwealthy don't need more tax breaks.

[Don]

what do you do for a living Mark? Just curious.

[Cathy]

I hate the changes because I can read.

Click for info on the "death tax" myth. (http://www.cbpp.org/5-25-00tax.htm)

The uberwealthy don't need more tax breaks.

"...because you can read" says absolutely nothing about exactly what you have a problem with in regard to the tax cuts.

In my debates with a left liberal leaning very good friend of mine, I get the impression that he will never be satisfied with any tax change that does not make certain that the tax structure isn't progressive enough to assure that a person making over $100,000 pays more in taxes than the person in a lower income bracket even makes.
Good tax policy, in the mind of a socialist liberal, only comes if you tax lower income folks very little, and you tax the higher income folks so much that all they have left is the same amount of income as the lower income person made in total. And it doesn't count to factor in the higher level of sales tax paid by people with more discretionary income. Or to even entertain the idea of creating a higher tax rate for "luxury item" purchases.
If the "death tax" causes double or triple taxation on the same property, then it is wrong, no matter which income bracket benefits most. The attempt to explain that away on this cited website can only be swallowed by a socialist. Property taxes go up whether you sell or stay, live or die, and tax will be paid on the appreciated value of the estate somewhere along the line
Let's go after corporate welfare instead.

[Wuptdo]

Mark, this is from Don's question; is this you?

http://www.bradrickforncsenate.com/


A simple yes or no will do.

Peace-out!

Wuptdo B-)

[Brent]

Mark, this is from Don's question; is this you?

http://www.bradrickforncsenate.com/


A simple yes or no will do.

Peace-out!

Wuptdo B-)

Well, if it is, I want to know when & how Mark co-opted the phrase "Common Sense". That belongs to Thomas Paine and Common Sense Cary! :)

[Cathy]

Do you really think that Mark might be a Republican?????

[Don]

what do you do for a living Mark? Just curious.

I'm still waiting for an answer. I didn't ask to be sarcastic, but to "try" and understand why Mark believes the way he does. As a small business owner, while it could be even much better, I am encouraged by what I read in my NFIB report. The group is also involved at the state level. Mark considers it humorous and I cannot understand why?

[johnb]

That is one seriously envious little person.

Mark has that very European fear that somewhere, someone is making something of their life and enjoying the fruits of their own labors.

Sad really.

[Anonymous]

I work for the Wake County unit of a nationally organized non profit - which I will decline to name because I honestly believe that certain members of this forum would give them a hard time or find that my political affiliation would tarnish the image of the institution.

Anyway, the estate tax is a protection from the formation of an entrenched aristocracy - a particularly unamerican and undemocratic concept. John accuses me of trying to hinder those making fruits of their own labors. John, apparently, has difficulty in understanding this issue. I object to people "making something of their life" (living luxuriously?) by enjoying the fruits of some else's labors, and not working for their own. Such as thing is odious democratic principles. And such a thing is guarded against, in part, and to a degree, by the estate tax.

And, I might add, that John is perpetuating a myth by avering that people make something of themselves by "the fruits of their own labors." It's the myth of the self made man. No doubt hard work, ingenuity and skill will dispose one to have more success, but to find that people are successful totally relying on factors internal to themselves is absurd. The political state and society generally affords a great many enhancements to the prospect of wealth creation. It's beacause states invest in infrastructure that business can be done. That there is a military and police force that society is reasonably safe and stable, and attractive for investment. That so much is spent on public universities and research that technological innovation makes, again, this country a beacon for investment and business profitable. It's because we educate our children, provide electricity, ensure a set of standard accounting practices, and a thousand other things that allows anyone to be as successful as they are in today's society.

Those things cost money, and if one wants to be successful one needs to pay for them through taxes. That is precisely why it is so objectionable that corporate taxes keeping dropping, and subsidies increasing - because what allows those corporations to function is the massive investment by society into all those factors that facilitate business. It makes sense that businesses, and not just individuals, should bear the costs.

Having said all that, I will acknowledge that taxes are a somewhat arbitrary beast. But, insofar as corporate tax rates have been declining and the highest tier personal income tax rates have been declining it is true to say that the richest Americans are paying a decreasing share of their wealth towards our national prosperity and, conversely, solidly midde and lower middle class people are paying more. I needn't flesh out any more the disparity in that. Suffice it to say that taxes create wealth for the richest people, yet the richest people are paying less and less for the source of their wealth. Fair? Hardly. And, as an aside, it's generally for these reasons that I'm opposed to the stock market as it is simply a vehicle for wealth redistribution, from the less well off to the wealthy... but rich people never seem to mind when it goes their way.

John thinks I'm envious. I am. I long for the day when I can make $200,000 a year as much as I long for the days when the top tax rate nearly 90%. Would that they both happened tomorrow. We'd all be better off for it.

[Anonymous]

Cathy, I agree that corporate welfare is a far more serious problem, the remedy of which would bring in far more revenue than would preserving the estate tax.

But, if I may comment, the double or triple tax argument is weak. It's often employed with respect to dividend receipts, corporate profits generally and even sometimes capital gains as well.

It's faniciful to pretend that money is only taxed once. My income is taxed. The same dollar is taxed at the Whole Foods when I pick up something for dinner. Whole Foods invests in some market index fund, it's taxed as some dividends come back. It's taxed again as sales tax for the company that supplies Whole Food with new checkout scanner equipment. That company keeps that money as retained earnings. Their stock price goes up, causing a bunch of people to sell at a new higher price. Their realized gains are (decreasingly) taxed again. One of those people uses that money to invest in her own business. It can build inventory, and be taxed. Then it's paid to an employee where it's taxed again.

A single unit, whatever it may be, can generate a lot of tax between individuals and I see no way of determining which are "valid" instances of double, triple, or quadruple taxation, and which are not. The issue of corporations being legal persons in a sense notwithstanding. wouldn't it also seem odd that some businesses are taxed on their sales, on selling certain products but not others (often because they're thought to be immoral), then again on research, then again on their profit, then again on the money it pays to it employees, which is to say, essentially, it pays to itself?

I agree with your friend. Any change in tax policy that reduces the tax burden of the wealthy is unjust. Such a change requires the less well off to pay a proportionately larger share - a larger share of improvements that tend to help the rich even more than the poor. So, to me, all tax code changes should be tend toward the most progressive rates possible - with each step towards that goal being less unjust than the step prior to it. It may at some point in that trend be necessary to expand the number of tiers to ensure that some incentive remains for people to acheive higher technical expertise or education. I have no problem with that, I model it similarly to the federal government's (perhaps this country's most socialist institution) pay scale.

[johnb]

-John accuses me of trying to hinder those making fruits of their own
-labors. John, apparently, has difficulty in understanding this issue.

Not at all, John understands quite clearly your desire to control other people's lives and fortunes. You didn't earn the money, the money is the property of the individual who earned it. If they wish to pass it on to their child that is NONE of your concern, period. Your accusation that it would create an "aristocracy" is hilarious. There is no aristocracy in America as you insinuate since this nation does not recognize noble titles and blood claims to the same.

-I object to people "making something of their life" (living luxuriously?)
-by enjoying the fruits of some else's labors, and not working for their
-own.

Manure. You object to other people being richer than you Mark. That burns you. You display that envy in your rather mean spirited attack on successful people. You have no right to dictate how another person disposes of their property, the fact that you are filled with envy and rage over the fact that there are people who are financially more successful than yourself seems to fill you with the urge to attack them for it. If that other person wants to leave their estate to their kids that is NONE of your concern.

-Such as thing is odious democratic principles. And such a thing is
- guarded against, in part, and to a degree, by the estate tax.

That is a lie. What is against democratic principles is YOU insisting on the right to control other people's lives and property.

-It's the myth of the self made man.

You are a true socialist Mark. Is there anything Marx and Engles wrote that you disapprove of?

-It makes sense that businesses, and not just individuals, should bear
-the costs.

Well, just like a socialist, you don't understand economics. Businesses don't pay taxes. Ever. All the cash looted from businesses by government is passed right back on to the customers in the form of higher prices and passed on to the owners (shareholders) in the form of no or lower dividends.

-Having said all that, I will acknowledge that taxes are a somewhat arbitrary beast.

That is true, arbitrary and punitive and the perfect way for socialists to attack/destroy those engaged in behaviours or at income levels you folks dislike. The true is, your socialist economics is more about envy and hate than anything else. You'll make false statements about your "concern" for this or that but that's horsesh!t and we both know it. Leftist economic/tax policies are about the leftists own envy, greed, hatred, and desire for control.

-John thinks I'm envious. I am. I long for the day when I can make
-$200,000 a year as much as I long for the days when the top tax rate
-nearly 90%.

Thank you for confirming exactly what I've said Mark.

Rather than get off your @$$ and EARN the money, you day dream about it while working at your nonprofit. It ain't gonna happen without government intervention. Your comment explains a lot.

[dhyatt]

Mark,
You're a socialist. Watching you debate John (a Libertarian) has got to be one of the most fascinating things I've seen in a while. I don't mean this in a mean way (so please don't take it that way) but I thought people like you were a myth conjured up by the ultra-conservatives. There is incredible paradox in your statement "I long for the day when I can make $200,000 a year as much as I long for the days when the top tax rate nearly 90%." I think you'll find most people don't see much benefit in earning another $50K if they can only bring home <$5K of it - especially when they worked hard and/or taken considerable risk to earn that extra amount. Suppose you and everyone else actually did make $200K (exactly $200K), you'd be just as "broke" as the rest of us. Forced redistribution of wealth is tacitly immoral to begin with and the fact that you think society would actually be better off if everyone had equal "net worth" is truly frightening.

I understand and applaud your willingness to help those that are less fortunate than you but they (and you IMO) would be better off embracing the concept of capitalism instead of pushing a socialist agenda which has been proven to eventually fail everywhere and everytime it's been tried.

[kellyc]

I'm not sure where I fall in this mix. The only times I think people should get a "free ride" is when they are little/young or old. I think all kids regardless of their parents should have access to any and all medicine/treatments they ever need. I also think that they should have all the same doors open to them, because I think every kid has the potential to succeed. And to some extent I think the same thing for the elderly. I dont think they should ever have to worry about paying for medication, heating bills...whatever.

However if you are of a working body I think everything is on your dime or time. I think if you want to collect welfare, but cant find a job...then the government should require 40 hours of documented volunteer time a week to get your benefits. I think whether or not a person chooses to help a fellow citizen to succeed is up to them, and the potential for success proabably a lot higher if someone helps from the heart instead of from forcably having the money removed from their wallet.

Just my 2cents worth.

Kelly

[Cathy]

Dear Guest,

It is extremely difficult for me to understand a person who holds onto the belief that more government oversight is the answer to the problems of life, and actively campaigns for the expansion of government bureaucracy. History and logic should prove to anyone that the larger the program and the farther it is removed from local control, the less efficient and more costly it becomes. You must see this every day.

I believe a grave mistake was made when corporations were given the status of an individual citizen. And although we do agree on some issues, like corporate welfare, since you have plainly stated your desire to see the highest tax rate reach 90%, I doubt that you and I could ever agree on the larger solution. When people are penalized for doing well and being successful, you will find your percentage of income earners that reach that bracket will become smaller and smaller, so what have you achieved?

Yes, our current tax policies have managed to put a tax on every turn of money, so double, triple taxation and more is inherent in the system, but that does not make estate taxes a "good thing". It sounds like just hate and envy for the rich, who according to the IRS information given to the Congress' Joint Economic Committee, in 1999, the top 25% of wage earners in this country pay more than 83% of all federal income taxes, while earning 66% of all income. Let's not "kill the goose that lays the golden eggs" just because one holds the belief that social utopia will be achieved when the government gets to "play Robin Hood".

When you say things like "So, to me, all tax code changes should be tend toward the most progressive rates possible - with each step towards that goal being less unjust than the step prior to it.", I am left wondering "What is your definition of justice????" Don't you realize in the slightest way that when this kind of socialism is forced on everyone in such a heavy handed manner that the "contributors" start to just "opt out" and become "takers"????? Why wouldn't they???? Yes, it takes 'self interest' to become wealthy. That's how it works. You can't keep penalizing people for achieving the wealth that you want to 'redistribute' without destroying the source you are drawing from eventually.

You appear to be solidly socialist in your views about governance, and there is where you and I WILL NEVER AGREE! Socialism is a proven failure. It will only work under the auspices of a genius, benevolent dictator, and there aren't any of those around, and history hasn't seen one yet.

[Cathy]

Reading your post to John is quite an experience! Questions abound!!
You are an avowed Socialist, and laying it out for all to see. The honesty, at least, is refreshing. But the commitment to socialism that I see here is puzzling at best. I wonder why a person would think this is the answer for humanity?
Do you subscribe to this ideology because you think that human beings are inherently "bad" i.e., selfish and therefore need to be forced to be "good", (unselfish)? Or is it that you think that human beings are inherently "good" and since all humans are actually, unselfish, highly motivated, hard working, striving to evolve into the best and the brightest that they can be, it only stands to (your) reason that socialism the ideal because only the truly needy will be in line for "assistance"?

Do you honestly think that without government intervention and assistance, we would have no infrastructure or educational opportunities? No philanthropy or charity? Or those "thousand other things that allows anyone to be as successful as they are in today's society" ??????? How conveniently vague!! Wow, it all seems like a winner when it is only a theory in your head, doesn't it?

My last question is that I am wondering what percentage of that dreamed for $200,000.00 a year would you be putting into the collective pool of social largess if we all lived in your ideal of society and governance???

Cathy

[johnb]

Cathy,


Let's not "kill the goose that lays the golden eggs" just because one holds the belief that social utopia will be achieved when the government gets to "play Robin Hood".

This is where the socialists cease to be amusing and start to become dangerous. They actually believe government is the "good guy" in all this. I am left wondering when that has ever turned out to be the case.

Was it BMW that burned 6 million Jews at Auchwitz, Treblinka, and Babi Yar in the Shoa?

Was it Faberge that slaughtered 20 million Ukrainian kulaks in the aftermath of Lennin's New Economic Plan?

Was it Toyota that sponsored the Rape of Nanking?

What Chinese capitalists engineered the Great Leap Forward/Cultural Revolution into which somewhere around 25 million human beings were slaughtered for being insufficiently socialist?

Was it GM that carried out the Indian Wars against the Plains Indians?

Funny isn't it that when you get to the core of all the truly large scale evil events there's always some government employee trying to explain himself/herself later saying they "meant well" or were "only following orders".

Government as the good guy, great fairy tale.

[kellyc]

SUrely John you dont think the corporations are the save all of society. I can only imagine what we'd be like if Bernie Ebbers or Fastow or Skilling ran the country.

Kelly

[kellyc]

Reading your post to John is quite an experience! Questions abound!!
You are an avowed Socialist, and laying it out for all to see. The honesty, at least, is refreshing. But the commitment to socialism that I see here is puzzling at best. I wonder why a person would think this is the answer for humanity?
Do you subscribe to this ideology because you think that human beings are inherently "bad" i.e., selfish and therefore need to be forced to be "good", (unselfish)? Or is it that you think that human beings are inherently "good" and since all humans are actually, unselfish, highly motivated, hard working, striving to evolve into the best and the brightest that they can be, it only stands to (your) reason that socialism the ideal because only the truly needy will be in line for "assistance"?

Do you honestly think that without government intervention and assistance, we would have no infrastructure or educational opportunities? No philanthropy or charity? Or those "thousand other things that allows anyone to be as successful as they are in today's society" ??????? How conveniently vague!! Wow, it all seems like a winner when it is only a theory in your head, doesn't it?

My last question is that I am wondering what percentage of that dreamed for $200,000.00 a year would you be putting into the collective pool of social largess if we all lived in your ideal of society and governance???

Cathy

Im not 100% sure who this is aimed at me or Mark.

Kelly

[johnb]

Did I say that Kelly?

I pointed out the obvious, government is NOT the "good guy". More often than not, government is a monster, a viscious blood soaked monster.

[Cathy]

Reading your post to John is quite an experience! Questions abound!!
Cathy

Im not 100% sure who this is aimed at me or Mark.

Kelly

Sorry for the confusion, Kelly.
It was to Mark. I'm not sure why you might think it was to you.(?)

Cathy

[kellyc]

Well I guess cause I had mentioned footing the bill for old people and kids. And you might say thats kind of socialist on my part.

Kelly

[Cathy]

Well I guess cause I had mentioned footing the bill for old people and kids. And you might say thats kind of socialist on my part.

Kelly

I don't disagree with caring for children and the elderly. It's the natural duty of any God respecting person who believes what the Bible teaches.
It's not necessarily socialist.

Cathy

Kelly,

Just because you are born or you get old, does not make it my responsibilty to foot the bill for your meds. How about lets let there family take care of that.

[kellyc]

Kelly,

Just because you are born or you get old, does not make it my responsibilty to foot the bill for your meds. How about lets let there family take care of that.

Well you are free to your opinion...its just a good thing people dont think the same about schools. I think its part of being human. You assume that someone has a family that can afford meds. You would really deny a kid medicine/treament because his Mom didnt have insurance and couldnt afford it? You really think the elderly should have to decide between paying the heating/water bill or paying for their heart medicine.

Kelly

[Anonymous]

Kelly,

You don't need insurance to get medicine. You can pay as you go, like when you go to the grocery store. What did people do before medical insurance? I know when I got sick as a kid my father would take me to the doctor and pay him in cash or write a check. The problem is people relate medical treatment with insurance. Maybe what we need is more people not using insurance. I am sure the cost of treatment will go down when peolpe stop going to the doctor for every little ache or pain.

[Anonymous]

John.

First, to where should I send a check for your psychoanalysis services? You've certainly got me totally figured out - it's all hate, greed, and envy.

And I'm lazy and generally don't want to make something of myself.

Here are some things John assumed in his post.

That I've always done what I do now, that is, that I never held another job, never made more money than I do now and don't have career goals beyond my current position. He further assumes that I'm not "sucessful" which I'm sure he roughly translates as "he doesn't have assests over x value."

He wants to accuse me of suggesting to control other people's lives and fortunes - as if this is something governments never did. I'll assume he drives though red lights for kicks. I'll bet he really minds that states keep 15 year olds from buying vodka. And, the point I've been making about the estate tax is that people who earn money should have a broad range of rights of things to do with it - but everyone accepts there are certain things one cannot do with money - I'm arguing that passing it onto ones children should be one of them. You can disagree on that one point, but don't pretend that it is any different in principle than the host of other limitations of people's actions.

John starts from the wrong assumption as well. That the money is the property of those that earn it. Not really true, it's the government's after all, and not just in a strict sense. The government makes it, the government sells it to the public, the government decides how, where, and for what it can be used and the government can take it. And, most importantly, that dollar bill you're borrowing only has any value because the United States has value, whatever value it holds you can reap only because the government is well funded enough to make this state secure, stable, and attractive enough for business. You seem to have forgotten that.

And, you needn't be so defensive about aristocracy. I doubt you admit to supporting a permanent monied class that adds no value in labor to this country but only extracts wealth. That aristocracy, and it happens now, and it's getting worse, and we should all be tired of paying for these people. (Interesting to note that many rail against having to pay for welfare recipients, but seldom speak out against the ultra wealthy that extract wealth from the rest of the system.)

I don't understand you're assertion that business don't get taxed. It's just absurd. Moving on...

More hate, desire for control, envy, blah blah blah exhortation for me to "get off my *** and EARN the money" blah... Again, you assume I already haven't. Even prior to that, you assume I don't prioritize my life around some other quantitative measure other than monetary gain. Both assumptions would be false. And that's kind of the funniest thing about John, apparently he can't even begin to see how that could be, that someone could be content with what they have, not really need any more, but still recognize the dangers of an aristocratic class, dislike supporting luxurious leisure with my hard work, and recognize that the value of that money that John holds so dear comes from the whole variety of institutions in this country, all regulated by that oh so loathsome federal government.

Mark

[Anonymous]

Don.

You've slightly misunderstood my position on taxation. Notice that I've written that I support ever increasing progressive structure within a tiered system. Taken to its logical extension this results in a discreet number of bands of income, and if the top tier is 100%, a maximum wage one can earn. It does not mean that everyone earns the same thing. However, I would probably be the case, and I would be satisfied if the top rate was somewhat short of 100%, but still much higher than it is now. Taken this way you'll see that my position isn't perhaps as extreme as John was characterizing it. It's simply a matter of degree within the exsisting framework.

I can't think of any state off of the top of my head where I think a pure socialism would work today if implemented. Though, had that been the initial condition in some places, it might have prevailed.

Anyway, your point is well taken that there would seem to be a disincentive in a pure socialist system where everyone earns the same. That's why I support the system I described above. My feeling is that people are generally good and want, maybe lamentably, to make as much money as they can. So long as there is an opportunity to make more money than one had before, people will avail themselves of it. So I don't think, as you do, that people will stop trying to make the most money possible just because the government will take more of it. That won't stop people from becoming doctors, from starting a business, or from undergoing some research. Sure not everyone will be so inclined, but not everyone is today either.

I'm going to contest two other things in your post. First, that if such a progressive rate were to be in place that the amount of revenue the government had, and the corresponding amount of spending they could, would radically redefine what "broke" is. If everyone made a little less but we had fantastic universal healthcare, food pricing support, a higher minimum wage, education scholarships or even free higher education than I quickly see many of things people feeling "broke" about resolving away.

Second, you write that "Forced redistribution of wealth is tacitly immoral..." And I wonder from where you have authority to write that. Is that a religious principle of your church, that people should horde money and live in a permanent state of splendor on earth? Last time I check most people were Chirstians in this country, and Christians, such as it is, are prone to do things that are against scripture now and again. Few seem to mind when government steps in to try and curtail bad behavior on the basis that it's immoral - think about gambling, but one example. So, I'd argue that there is a much better case to be made that having money in excess of your needs is immoral, and forced redistribution, as it only stands to help those in need, is, to put it bluntly, an act of moral charity on behalf of the state where individuals have so obviously failed.

A quick note to Cathy. More taxes need not necessarily go to a federal government and federal planners. That is cold war era thinking. It could just a feasibly be collected by states, or more local municipalities, or be distributed there. Admittedly, there would naturally be slightly more coordination of policy, but I'd argue that this would be of a setting a minimum standard (for example, of health care coverage) type.

Again, it's only in your mind that a tax is a penalty, or "successful" people are penalized. Doing so first admits that money seeking is a noble and moral goal that, the curtail of which, is immoral. I'll never admit that. I think of tax a supply stream for strengthening the ability of the entire nation to add value. That is 180 degrees away from punitive.

It doesn't concern me how much of the federal budget is paid for by the taxes of the rich for two reasons. Those people get the most out of the system, why shouldn't they pay the most - yes they're fewer in number, but they also take beyond their share of the profits and gains made by all members of society. Second, what I'm really concerned with is changes in the overall makeup of funding. If there is tax cut in the highest bracket, that means the most wealthy people will pay less of the total revenue stream. Which means every one else will pay more, all things being equal. That place more burden on people with less money... fair? No. Or, alternately, there is less revenue from the rich so the government cuts spending. Invariably those spending cuts affect programs with which lower income people are involved - there are no programs to cut for the super wealthy.

My definition of justice is that of John Rawls as described in "A Theory of Justice." It is, simply, fairness. Or, more precisely, that situtation which would be agreed upon by a set of members of society if they were to somehow discuss it in such a way that each had no idea where they stood in society. That is, if none had any notion that they were to return to society as say, a doctor or mason, black or white, male or female, rich or poor or any other mark of social recognition. Only when people can judge an outcome free of such factors are we sure that the solution is, simply, fair. And I believe that if such a situation were to have actually occured, or could occur now, that something tending towards the socialism I've described would result.

Socialism is not a proven failure. Socialism proper has never been tried. A name doesn't mean everything - John can say he's a libertarian all he wants, but he's a republican - no libertarian could support Bush's protectionist trade policy. Anyway, the type of socialism which recognizes human potential is alive an well in the world, and shades of it are in practice, most notably in the Scandinavian countries, though it can be found even on our continent too.

Mark

[Brent]

Mark,

There is so much tommyrot to quibble with in your last two posts (but please don't get me wrong -- you write well and your posts are very thoughtful. Sometimes I can even find something to agree with. But mostly they're just bad ideas expressed well).

In any case, I'll start with just two:
- Who are the people in this privileged class who are sucking the government dry of money, taking more than their share, and just how is it that they're doing this?

- Who are "the rich"? Please specify what conditions make one "rich". Apparently there is some line, and on one side of that line, a person is not "rich', whereas on the other side, the person is "rich" and therefore needs to be forced to contribute a larger share of his/her assets to government. So who are the rich? Oh, and I'm betting a big cookie that you don't consider yourself one of them...I am sure that part of the definition of "the rich" always includes "people with more assets than me", right? :roll:

[Wuptdo]

As this thread is a little too "deep" for me, I do submit the following:

1) Since 1960 the burden of "federal" taxes has shifted: 60% Corp/40% Individual. Now it is about 63% Individual/37% Corp in 2002.

2) In 2002, the top 10% individual taxpayers paid 65% of total federal income tax.

I used this data on a paper last year and can't remember which "taxpayer" website I pulled it from.

So who is really running the country?

Wuptdo B-)

[Cathy]

As this thread is a little too "deep" for me, I do submit the following:

1) Since 1960 the burden of "federal" taxes has shifted: 60% Corp/40% Individual. Now it is about 63% Individual/37% Corp in 2002.

2) In 2002, the top 10% individual taxpayers paid 65% of total federal income tax.

I used this data on a paper last year and can't remember which "taxpayer" website I pulled it from.

So who is really running the country?

Wuptdo B-)

Great additional points, Wuptdo!
Who's running things? I'd say it is the big money corporations! And I still don' t believe the Democrats will change that any more than the Republicans.

Cathy

[johnb]

First, to where should I send a check for your psychoanalysis services?

No fee til you're cured my friend, you're still sick, you're still a socialist.


You've certainly got me totally figured out - it's all hate, greed, and envy.

Yes it is. That is the root of socialism and what motiviates socialists. Marx himself was a horrific failure at capitalism, the man lived off the handouts of others. He lived like an animal in London because he refused to take action to sustain his own existance and relied on others to give him the means to survive. His hatred of capitalism was classically socialistic.


And I'm lazy and generally don't want to make something of myself.

Who is the one whinning about wanting to make $200,000 per year Mark? And yet works for a nonprofit? You indict yourself.


And, the point I've been making about the estate tax is that people who earn money should have a broad range of rights of things to do with it - but everyone accepts there are certain things one cannot do with money - I'm arguing that passing it onto ones children should be one of them.

Here is where your post becomes even more freakish, if that is possible. I concur with laws that are aimed at protecting A from B. B has no right to take action that would harm A. A would harm B by running a red light. A is NOT harmed if B passes his estate on to his child at his death. That harms NO ONE, except the socialist control freaks who are terrified that people may live their lives and dispose of their assets as they wish without your consent.


You can disagree on that one point, but don't pretend that it is any different in principle than the host of other limitations of people's actions.

Were you thinking when you wrote this Mark? Clearly, not.


John starts from the wrong assumption as well. That the money is the property of those that earn it. Not really true, it's the government's after all, and not just in a strict sense.

Yes Mark. John does make that assumption. John is not a socialist. John did not vote for JULIEFORCARY! for Mayor nor will John vote for Ralph Nader for President. Hyatt, Please, take Mark's comment and make it a banner or something. It is so breathtaking it hurts.


And, you needn't be so defensive about aristocracy. I doubt you admit to supporting a permanent monied class that adds no value in labor to this country but only extracts wealth.

You confuse defensive with condescending Mark. Your posts are so naively socialistic, I never thought I'd meet anyone past their teenaged years who thinks like you do. No sober adult subscribes to Marx's labor theory of value anymore Mark, it has been thoroughly discredited. Furthermore, the alleged "dangers" of a permanent monied class developing is overhyped on your part. Much like theories about Jews controlling the world and the illuminati it's 99% hype and 1% liquor. Money invested in stocks, bonds, land, and other resources most certainly does add value to this nation. If it does not the family fortune soon dwindles to nothing. It is unfortunate you know so little of economics.


I don't understand you're assertion that business don't get taxed. It's just absurd.

That is because you are a socialist. My bet is MOST Of the Cary City Council members don't understand it either. Especially not the RINO, JULIEFORCARY, Shoeboy, probably the Soccer Mommy as well. I suspect Joyce, McAlister, and possibly Smith understand it.

Let me spell it out for you Mark. I'll use simple words:

TAXES IMPOSED ON BUSINESSES GET PASSED ON TO THE CONSUMERS IN THE FORM OF HIGHER PRICES. *if* THE BUSINESS IS UNABLE TO PASS ON THE COSTS TO CONSUMERS IN THE FORM OF HIGHER PRICES DUE TO COMPETITION OR OTHER FACTORS THEY DEDUCT IT FROM THE DIVIDENDS PAID TO THE OWNERS.

At this point you're slobbering at that thought, however, stock portfolio's are owned not just by the "aristocracy". They largest owner of Disney stock is CALPERS. The California State Employees Personnel Retirement fund......the state employees retirement system is funded by investments in stocks. HORROR OF HORRORS! The workers rely upon the capitalists for their retirement! Put the booze down Mark, it happens all the time.

Business profits don't get converted into gold bars where some Daddy Warbucks troglodyte buries them in a vault in Manhattan. They are plowed back into the economy in numerous ways. Reducing that harms me, you, and everyone else.


And that's kind of the funniest thing about John, apparently he can't even begin to see how that could be, that someone could be content with what they have,

I'm not the one complaining about not making $200,000 per year am I Mark?

You're the only one making any comments indicating you are worried about or unhappy about your present income. Sorry 'bout that for you.

[johnb]

I'm going to contest two other things in your post. First, that if such a progressive rate were to be in place that the amount of revenue the government had, and the corresponding amount of spending they could, would radically redefine what "broke" is. If everyone made a little less but we had fantastic universal healthcare, food pricing support, a higher minimum wage, education scholarships or even free higher education than I quickly see many of things people feeling "broke" about resolving away.

Why don't you give some practical examples where these things have been implemented Mark. Please note that the cost, both in terms of money and personal liberty will be discussed immediatly thereafter along with the practicality of it.


So, I'd argue that there is a much better case to be made that having money in excess of your needs is immoral, and forced redistribution, as it only stands to help those in need, is, to put it bluntly, an act of moral charity on behalf of the state where individuals have so obviously failed.

The scary thing about this is that you would, of course, demand the right for yourself or someone who thinks as you do, to define what "Excess" means. Of course, the "forced redistribution" part needs no definition on your part Mark, we have seen that in action in the Soviet Union, China, Cambodia, North Korea, and countless other socialist paradises worldwide.

If you wish to engage in charity you have ever right to do so, what you have no right to do is steal others property from them for your income redistribution schemes. See, you and I both know the truth Mark. It isn't about helping anyone, it's about power. Socialists want the power of life and death over everyone else. It's a pattern that has repeated itself everywhere socialism has been implemented.


Those people get the most out of the system, why shouldn't they pay the most...

Conversely, the homeless wino's on the street add nothing of value to the system as such they should be happy to get the same in return.


My definition of justice is that of John Rawls as described in "A Theory of Justice." It is, simply, fairness.

Your words are meaningless, there is no objective definition for the word "fair". Furthermore, combined with the left's desire to use the tax code punitively, every tax hike will be justified as being more "fair". There can never be finality to the demands of the left for "fairness", "fair" is a unicorn, it is not a goal it is a tool to reach the goal. The goal is unlimited political power, then come the Killing Fields.


Only when people can judge an outcome free of such factors are we sure that the solution is, simply, fair.

Mark, do you live in the grown up world or in a John Lennon song?


Socialism is not a proven failure. -Mark

That is the dumbest thing I've read in a long time. I guess those 20 million Kulaks killed in the Ukraine during the Soviets land redistribution program/pogrom didn't really die did they? Where is Socialism a success Mark? So far I see North Korea, Vietnam, the Soviet Union, Albania, Cuba, and a host of other now most defunct regimes in eastern Europe.


Socialism proper has never been tried.

Yes it has. The first step in implementing socialism is the secret police and the mass execution of resistors/counter-revolutionaries. That is the only way to implement socialism. It has been tried numerous times and each time it has opened with mass death. It has always been and always will be.


A name doesn't mean everything - John can say he's a libertarian all he wants, but he's a republican - no libertarian could support Bush's protectionist trade policy.

Your right. You're also not very observant. I don't support Bush's trade policies. Why would you think I would? If you look at my little republic on Nationstates you'd see I have no tariffs, I am a free trader.


Anyway, the type of socialism

So how many different types of socialism are there Mark?

[johnb]

Let's start by identifiying one rather virulent socialist variant: National Socialism.

Balls in your court Mark. :P

[Cathy]

Thanks John, for dissecting Marks last post. It was so unbelievably, naively, blatantly absurd that I could almost not (or just didn't want to) try to make any sense of it!

I just wish that people like Mark who find themselves here in this country by birth, and are so unhappy, would move to a country that suits them better, instead of taking upon themselves, as their own perceived moral duty, to try to deprive all of us (who appreciate the form of governance that this country was founded on) of the continuation of this "noble experiment".


Socialism proper has never been tried.

That's what they all say, because it's all they have.

Cathy

[Anonymous]

[quote="Brent"]Mark,

There is so much tommyrot to quibble with in your last two posts (but please don't get me wrong -- you write well and your posts are very thoughtful. Sometimes I can even find something to agree with. But mostly they're just bad ideas expressed well).

In any case, I'll start with just two:
- Who are the people in this privileged class who are sucking the government dry of money, taking more than their share, and just how is it that they're doing this?

Brent, I'm not sure that I've written that there is any group of people sucking the government dry of money, only people that withhold what should be their due. There are people that rob the entire nation of wealth, however, and these happen to be the wealthiest people. Invariably the majority of the fortunes of the most well off is invested in the stock market. The market is unproductive, it does not create net wealth for the businesses for which it ostensibly operates. It functions as an extraction mechanism - shareholders reap profits on the value added by others. It's classicly undemocratic and, like John accuses me, all about power. Except when a few wealthy people want power I call it aristrocratic, when I espouse denying them that I call it democratic.

Next, your question concerning "who are the rich." Practically speaking there is not a line on one side of which a person suddenly beomes "rich." It's kind of a bad term to start with anyway. I've been asserting that it should be the duty of those that extract the most wealth from the system to pay for its upkeep. This includes all stockholders, though it doesn't make much sense to call all stockholders rich. Where we might start using that term is when, by a general agreement, a person's income or wealth is far out pacing their contributions to society and, more importantly, their income is a result of the work and value that is added by others. So an executive who sits on a half dozen boards, works for about 30 days a year, and takes home $300,000 certainly falls into that category.

I'm hesitant to put a dollar value on income or assests for this definition. There are far too many variables and different occupations command too various levels of compensation. There is, of course, at some point, which everyone agrees on, a certain level of wealth that can only be called excess. Wealth that so clearly no longer contributes to the health, well being or sustainment of a person or her family, but exsists only to create more wealth. And it is probably at that point, where the purpose of the wealth is no longer to create goods for the family, but to create more money that it becomes categorically rich, and I'd argue, immoral.

I hope that clears some of that issue up. And, to close, I do not have so much wealth that its only purpose is to create more. But, admittedly, I do probably have more than I need. So, in a way, I do consider myself among the wealthy, as opposed to those in poverty. I'm not suggesting that anyone without enough to be out of poverty should be considered "wealthy" for the purposes of our discussion here, however. Only that I'm sure that there are those with more than have I that I wouldn't consider excessively wealthy and those with less that I would.

[Anonymous]

John. You apparently missed where I wrote that I'd like to make $200,000 a year so I could get taxed at 90% on it. That's hardly the same as "whinning" that I don't make enough.




Here is where your post becomes even more freakish, if that is possible. I concur with laws that are aimed at protecting A from B. B has no right to take action that would harm A. A would harm B by running a red light. A is NOT harmed if B passes his estate on to his child at his death. That harms NO ONE, except the socialist control freaks who are terrified that people may live their lives and dispose of their assets as they wish without your consent.

Sorry, but you're wrong. It does harm people. Democracy and the overwhelming majority of individuals who we could not call wealthy in any meaningful way need to be protected from the few ultra wealthy people that contiuously reap wealth. Not only is it odious to democratic principles it is actually harmful to workers health, well being, and families by denying them wages and assets which they create. Wealthy stockholders are as dangerous to poor people as a malfunctioning red light. You don't see the contradiction in your thought do you? I'm a control freak but "that people may liv[ing] their lives and dispos[ing] of their assets as they wish" is actually preventing the multitude from having as much control of their own lives as is afforded to the wealthy. You thought seeks power and control - it simply happens to be the status quo, so you needn't speak about it in those terms.



Yes Mark. John does make that assumption. John is not a socialist. Please, take Mark's comment and make it a banner or something. It is so breathtaking it hurts.

Yet you ignored the most salient point I raised. Here it is again. " The government makes it, the government sells it to the public, the government decides how, where, and for what it can be used and the government can take it. And, most importantly, that dollar bill you're borrowing only has any value because the United States has value, whatever value it holds you can reap only because the government is well funded enough to make this state secure, stable, and attractive enough for business. " You cannot deny this. I minored in economics at university, John. This is 101 level. The money isn't yours, you've convinced yourself that it is, and that you, and only you, were the sole factor in acquiring it. That is, frankly, hilariously naive.

Here's another notion for you. First, I don't accept that no one "subscribes to Marx's labor theory of value anymore." Plenty of people do, not people with whom you associate, sure, but it is alive and well. But, who cares? How about a man near and dear to your heart, John Locke. Go read the second treatise again. You'll be surprised. A man can only own something by mixing his labor with it. It is wrong to use capital to acquire more than you can utilize on ones own. Such things must be guarded against to ensure democracy. I'm less Marxist and more Lockean than you'd think.


Money invested in stocks, bonds, land, and other resources most certainly does add value to this nation.

False, false, false. Well, at least how you're thinking of it with respect to the stock market. The stock market creates the most wealth for already wealthy individuals, and some wealth for lesser stockerholders. It doesn't create money businesses, or, more importantly, the human and environmental communities that support business. The market is extractive, it doesn't create wealth for business - business pays ivdividuals, I don't how many ways I have to say this.

You're using a semantic argument with respect to business taxes, not a principled one. I'll leave it.


At this point you're slobbering at that thought, however, stock portfolio's are owned not just by the "aristocracy". They largest owner of Disney stock is CALPERS. The California State Employees Personnel Retirement fund......the state employees retirement system is funded by investments in stocks. HORROR OF HORRORS! The workers rely upon the capitalists for their retirement! Put the booze down Mark, it happens all the time.

Ok, thanks for the example. Lets not ignore the facts which are actually important. The top ten percent of the U.S. population owns 81.8 percent of the real estate, 81.2 percent of the stock, and 88 percent of the bonds. That's Reserve Bank data from 1996. The top 1% alone owns 42% of all stock. So true, stock is not owned exclusively by the ultra wealthy (though when less than 25% of all U.S. households own more that $10,000 of stock, it's hard to grant even this - especially because the vast majority of that 25% is concentrated in mutal funds and retirement programs like the one you're describing) but it is the ultra wealthy who take the most out of and control board to ensure that the extraction mechanism stays working in their favor.

Profits do come back into the economy, though in most inefficient, dangerous and distorted way. I have no problem with companies retaining earning, or spending more on R+D for example. But, profits also get passed on in other ways that hurt society, like exhorbitant executive pay, dividends to shareholders who contribute nothing, increased stock price that allows the uber rich to reap more capital gains, further reducing the efficacy of the people that actually created the wealth... the employees of the business.

I'm for protecting and empowering them, you're for protecting and empowering the fabulously rich. I'm a control freak, and that makes you... a control freak, as well as a proponent of organized economic violence.

[Anonymous]

John, please read the post to Brent about defining excess.


Of course, the "forced redistribution" part needs no definition on your part Mark, we have seen that in action in the Soviet Union, China, Cambodia, North Korea, and countless other socialist paradises worldwide.

And every other country in the world that collects taxes? Oh, I see, you're connoting that forced redistribution goes from the rich to the poor. That's you're own hang up - I want resources spent on the impovement of all society.



If you wish to engage in charity you have ever right to do so, what you have no right to do is steal others property from them for your income redistribution schemes. See, you and I both know the truth Mark. It isn't about helping anyone, it's about power. Socialists want the power of life and death over everyone else.

See the previous posts. You can't steal from someone that which isn't theirs. Society creates wealth for all, the ultra rich capitalists keep it from all. It's really that simple. Socialists want not the power of life and death over everyone else, rather they wish to give everyone in society the satisfaction of at least a minimum set of options with which to choose how to live their lives. So long as predatory economic violence is an established part of this and other countries, you deny many the options to live as you do.


Conversely, the homeless wino's on the street add nothing of value to the system as such they should be happy to get the same in return.

Glad to finally get that off your chest?

[quote=johnb"
Your words are meaningless, there is no objective definition for the word "fair".[/quote]

If you're unfamiliar with Rawls that isn't my problem John. His theory is clear and concise and does have precise definition. You're obviously deny or refusing to acknowledge the crux of his argument anyway. I highly doubt that you'd choose the current economic system if you had no way to ascertain whether or not you'd be that homoless wino on the street. In fact, given the fact that it would be more likely that you'd be in poverty than be very wealthy, I suspect you, or anyone, would choose a more progressive system.

Again, there are progressive states across the globe implementing democratic socialism. Failed "socialist" states of yore were rarely even socialist in spirit, and never in practice - as that require a constant fostering of civic engagement and democracy. I wonder, too, how many deaths the cause of liberal capitalism has caused? Comparable, if not more, I'm sure - the difference being that it actually was capitalism on the one hand, and not really socialism on the other.

[johnb]

It does harm people.

How? Make your case Mark. At what dollar amount does one's annual income begin to "harm" others? Quantify that alleged "harm".


Democracy and the overwhelming majority of individuals who we could not call wealthy in any meaningful way need to be protected from the few ultra wealthy people that contiuously reap wealth.

And you socialists are just the guys ready to volunteer to "protect" society from people making money and believing their should be allowed to keep that which they have earned ain't that right Mark?


Not only is it odious to democratic principles it is actually harmful to workers health, well being, and families by denying them wages and assets which they create.

So the owner of a restraunt doesn't deserve to benefit from the investment of his life's savings, his labor, and his risk nearly as much as the hourly employees he hires is that right Mark?


Wealthy stockholders are as dangerous to poor people as a malfunctioning red light.

The hilarious thing about this is that those wealthy stockholders, well, all stockholders, are responsible for the job creation and economic growth required to raise living standards and create the opportunities for individuals with the desire to to raise themselves out of poverty. What is dangerous to the poor is what is dangerous to the rich, socialists with political power. Once in power, the shooting isn't far behind.


You don't see the contradiction in your thought do you?

I appreciate your confusion Mark. I have no desire to dictate the terms of other peoples lives. As long as A is not taking action to harm B I have no desire to see government harass or otherwise penalize A. I have no envy or greed driven anxieties which cause me to want to see A harmed or attacked by an intrusive and vicious government.


I'm a control freak but "that people may liv their lives and dispos[ing] of their assets as they wish" is actually preventing the multitude from having as much control of their own lives as is afforded to the wealthy.

Interesting, so now if letting people live their lives and dispose of their own assets as they wish is somehow preventing others from living their own lives and disposing of their assets as they wish I have to surmise that baldness is a hair color to you. Your statement is void of logic Mark.


The government makes it, the government sells it to the public, the government decides how, where, and for what it can be used and the government can take it. And, most importantly, that dollar bill you're borrowing only has any value because the United States has value, whatever value it holds you can reap only because the government is well funded enough to make this state secure, stable, and attractive enough for business.

The government makes green pieces of paper Mark. The value of any and all items is beyond their control. Including the value of that green piece of paper. The value is determined by you and I and everyone else, you see the value is what we will pay for that green piece of paper, that loaf of bread, or that 1/2 acre of land. The value is what we are willing to pay for it. If no one is willing to pay the price the seller is asking the item remains unsold or the price falls to the point where a buyer is attracted. That we use the US gov't little green pieces of paper is not significant Mark, if the public had reason to doubt the soundness of the little green pieces of paper we'd use copper, gold, silver, or platnium coins. We'd use Euros or Pounds Sterling. You confuse the medium of economic exchange with that which is bought by that tool. Your point is utterly worthless.

[i]
You cannot deny this. I minored in economics at university, John.

THERE IS NO FRIGGIN' WAY! IF THIS IS TRUE YOU SHOULD SUE THE UNIVERISTY FOR EDUCATIONAL MALPRACTICE!


First, I don't accept that no one "subscribes to Marx's labor theory of value anymore."

I should have clarified myself, I'm speaking of sober, educated, and thoughtful people.


I'm less Marxist and more Lockean than you'd think.

You're quite Marxist my friend, that you may pull a few out of context quotes here and there to take the edge of your militant socialism is not much of a sop.


You're using a semantic argument with respect to business taxes, not a principled one. I'll leave it.

Since you seem incapable of understanding basic economics I think this is a point that needs to be gone over til you are made capable of understanding. Business expenses are passed on to consumers in the form of higher prices for the goods and services offered for sale. In the case of a competitive marketplace this works against the interests of the workers employed at that firm since "wages" and "benefits" are simply expenses to the firm in line with "taxes". The firm must pay the taxes. Wage increases and enhanced benefits can simply be denied to cap business expenditures. *IF* we lived in a socialist system prices would rise or government would have to subsidize the venture to compensate for their tax burden. Either way, the workers are again penalized. While businesses may cut the dividend paid to the owners, the net result is that the owners will be less likely to allow pay/benefit raises to the employees and will be less able and less likely to invest in/particiapate in additional businesses. Again, net harm to the workers all the way around.


but it is the ultra wealthy who take the most out of and control board to ensure that the extraction mechanism stays working in their favor.

So stocks are nothing but "extraction mechanisms" for depriving the poor of money and power huh? This is hilarious.


But, profits also get passed on in other ways that hurt society, like exhorbitant executive pay, dividends to shareholders who contribute nothing, increased stock price that allows the uber rich to reap more capital gains, further reducing the efficacy of the people that actually created the wealth... the employees of the business.

Allowing the owners of a business, the guy who sunk his life savings into his landscaping business or restraunt, to reap the benefits is now nothing more than economic violence directed against the poor huh?

I am laughing myself silly over the dividends comment Mark. You have no idea how utterly foolish you sound. Coming on the heels of your claim to have minored in economics in college it is simply preposterous. Your data is the stuff of Communist Party USA bumperstickers, not sober, rational though my friend.


I'm a control freak, and that makes you... a control freak, as well as a proponent of organized economic violence.

You don't understand, again, I am all about preventing control freaks, such as yourself, from ever aquiring the political power where you could implement your agenda. I am all for empowering people, not bureaucrats, not homicidal socialist maniacs. :wink:

[johnb]

John, please read the post to Brent about defining excess.

No need, you and I both know the truth Mark, socialists want the right to define what "excess" income is and the right to punish the miscreant for claiming or having said income. You cannot deny what has been socialisms pattern time after time. What socialist nation has NOT had the prison camps and killing fields for it's caplitalist counter-revolutionaries?


You can't steal from someone that which isn't theirs.

That's not the problem. No one said socialists were going to steal the moon from anyone. Socialists will steal the income, assets, business, and lives of those they don't like. That is the problem, they will take that which does belong to others.


Society creates wealth for all, the ultra rich capitalists keep it from all. It's really that simple.

The only thing "simple" here is how simple minded you are Mark. "Society" creates nothing, society is a group of individuals. Individuals engaging in innumerable economic transactions every single day is what makes up this economy. "Society" as a term has value only when it is understood to be a grouping of individuals. That, of course, is antithetical to socialism. People create wealth, those that create that wealth through their work, their investment, and their risk taking are entitled to and in fact own that result. Good or bad.


Socialists want not the power of life and death over everyone else,

Bu!!$hit. Socialism is a political ideology using an economic system as a tool with which to aquire it's goal, unlimited political power. That naive fools are used to propogandize on behalf of this utopian fairy tale is immaterial. At the end of the road the Stalin's kill the Bukharin's and the Trotsky's. Always has been and always will be.


His theory is clear and concise and does have precise definition.
He is a horse's a$$ matched only by Foucault in pretensiousness.

My comment stands: Your words are meaningless, there is no objective definition for the word "fair".

[Brent]

Mark,

I am astounded that someone who claims to have minored in economics seems blisfully unaware that those who invest in the stock market risk their own money to buy an ownership stake in a corporation and provide capital so that the corporation can create and maintain jobs, perform R&D and provide goods and services. That investment risk can be rewarded with profit which is shared among the owners. It also can result in loss that is shared among the owners. Which university in China did you attend? :lol:

And if "the rich" are "those who have more than they need", then your solution of having the government confiscate the excess (that which is beyond basic needs) probably would indeed put everyone in the same financial situation. Of course, it also would remove all incentive to better oneself through education, hard work, risk-taking and innovation. I'm pretty sure that, among zillions of other things, this forum wouldn't exist in such a society.

Welcome to America.

[Anonymous]

I just wish that people like Mark who find themselves here in this country by birth, and are so unhappy, would move to a country that suits them better

Why? You were, in all probability, simply born here too, have you more right to this place than do I?


instead of taking upon themselves, as their own perceived moral duty, to try to deprive all of us (who appreciate the form of governance that this country was founded on) of the continuation of this "noble experiment".

You totally misunderstand the problem then. Why leave? Why not spend the time to make it better? I'm not trying to deny this country to anyone, but rather to extend and fulfill its promise to all. I believe that this country has as, or nearly, good a founding document as any in the world. It's truly magnificent. But it has been betrayed and this state is perhaps slipping into a polar system that has no intention of honoring the spirit of our constitution. I want to see that spirit realized, for all, not just some. This country is quite good comparatively, but quite good is relatively easy... making it great will take some work. And it is a challenge that we should all accept.

Which brings me to the most poignant criticism of conservatism yet. You call it a "noble experiment." But, at nearly every stage of the game, there has been traditional folk who are fine with the status quo - not for any principled or logical reason, merely because that's the way it is. You can imagine some young man in the 20's saying, "women, voting... you can't be serious. Why, they've never done that, and we've been just fine without them." But, fortunately, he loses that debate. Fast forward 40 years. He's fine with women voting, still might not love it - but the situation is now acceptable. But, then he says, "Blacks, hell no, never had any use for them but in the fields."

The position is totally inconsistent and not logically defensible. It relies on the preception that, whatever we've done up until this point is enough, we've reached the most favorable blend and state of being - it might even be the supreme manifestation of God's will. That is totally irrational.

If the United States ever was a liberal (small L) experiment than it cannot ever stop so being. It must always change itself and stive to be a "more perfect" union - it will never get there, but it can approach it asymptotically. The faster the better.

[dhyatt]

[snip]
I'm not trying to deny this country to anyone, but rather to extend and fulfill its promise to all. [snip]

Mark,
Therein lies the problem. You cannot simply extend the promise to someone. It's not up to you to somehow grant me or anybody else the ability to succeed. That's what makes this country different. Anybody - and I repeat anybody - with the wherewithal to work hard, take risks, and strive to succeed can do so. You can help someone by teaching them and affording them opportunities but you nor anyone else can simply guarantee their success. Even lottery winners often wind up broke so simple redistribution of wealth (especially forced redistribution) won't solve the problem.

Are you willing to look some poor kid in the eye and tell them point blank that they'll have to work harder and smarter than most everyone else in order to succeed? I am. Because I believe they really can do it if they want to. You see, I really do believe that all are created equal. You and most other libs say you do but you really don't. You're convinced that some need 'extra' help because they really aren't quite as good as the rest of us...

[Anonymous]

To my myriad detractors, I'll begin addressing you generally now.

First, let us no longer beat around the bush. You are all blissfully unaware of the true nature of the stock market. Maybe you will have never heard nor read the information that I will presently impart to you. Maybe you never cared to listen.

First, an analogy that you've surely heard before. I buy a car from Nissan. I drive it 6 years, it's been a good car 80,000 solid miles. I need a minivan though, kids on the way, so I sell to John. I paid $22,000 for, I let it go for $4000... it's in reasonably good condition. Just in case you didn't realize, Nissan of America nor Nissan Japan sees a dollar of that second purchase. Obvious, right? Why would they, it's a private sale. Further, Nissan is no longer bound to honor any warranty left and they certainly don't pay that second owner to drive their car around. Keep all this in mind.

I've written many times that the stock market is unproductive. It's true, and you cannot refuse it. Let us know find out why.

It is argued, as Brent did, that individuals buy stock to provide to corporations capital with which to buy capital equipment, hire workers, and pay other costs. There is a risk in this for which these investors are compentsated with dividends. Also, the investors, and the market generally, provides fluidity, which costs money, so they're also compensated for function as well.

However, only those people who purchase the inital offering of stock are sending money to any corporation. Every subsequent sale does not fund the company - those sales are speculative. The risk involved is not that the investment in the company will fail, it's that the companies profits will fall, cutting dividends or, worse, the stock price will tank.

Moreover, subsequent sales of stock still transfer ownership rights. Isn't that odd? You've provided nothing, aboslutely nothing, of value to help the company operate, yet they've given you decision making power over how they operate. Moreover, they'll pay you for the privelege. It's like John's buying my Nissan, demanding that the company reinstate the warranty, given him power to decide the terms and then pay him for advertising their product.

I think you're all ready for some numbers. One way to look at it is this. In 1999, the last year for which I have figures, the value of all new common stock was $106 billion. $106 billion dollars reached corporations. That's tons of money. But, the value of all shares traded was $20.4 trillion. Less than 1% of stock market activity actually went toward the much heralded purpose of the market, funding corporations.

We might look at is another way by examining only the increase in stocks from year to year with respect by how much was put into the system. From 1998-99 there were sales of roughly $83 billion in new offerings while the total market added about $1.1 trillion. Roughly 7%. So maybe the market is 7% productive.

But, it's not. The situation gets even worse. We haven't included buybacks which make up a substantial piece of the pie. The Reserve calculate the net new equity each year, ipos less buybacks, and for that period in 1998 the figure was, brace yourselves, negative $267 billion. To say it another way, corporations paid out more to "investors" than they got from them, to the tunes of hundreds of billions of dollars.

By the way, we still haven't even talked about dividends. What did all these owners get for not contributing anything? Another $238 billion in dividends that year. Individuals do not, do not, fund a rising market, the corporations they control pump money into the system to prop it up.

Pause, to let that all sink in.

So all these people who "own" these companies and extract wealth from them haven't helped the corporation. The inital investors have, and they should be compensated, but they can be by a fixed rate bond of some sort. And what are these companies? Let us turn to John for the answer. Society, he wrote, creates nothing because it's just a collection of individuals. A ha, he's onto something here. What is a business? A collection of individuals and, well, a lot of stuff. Without human elements to operate, manage, and run things a plant full of equipment does nothing but depreciate. Business too are nothing but collections of individuals, and it is the individuals that add value, and it is they that should reap the benefit.

Such is the essence of socialism. John can refuse to acknowledge my Locke example for value added labor- refuse to acknowledge that is the actions of a complex network of actors, acting in concert under the rules set by the political state they among them founded - refuse to acknowledge that stealing the wealth from those that created it, causing a downward pressure on wages, health, and well being creates a demonstrable harm - refuse to acknowledge that the matrix of control exerted by the wealthiest individuals does, in fact, limit the choices of the bulk of society. And he can remain a "rational, educated, and thoughful" person of the most curious variety, one that will not confront the irrationality of his cherished stock market, chooses to remain uneducated about how it actually functions, and thoughtlessly denies any complicity in the harm it causes.

That is all for today.

[Anonymous]

And if "the rich" are "those who have more than they need", then your solution of having the government confiscate the excess (that which is beyond basic needs) probably would indeed put everyone in the same financial situation.

Brent, you're mischaracterizing my position - and I believe you're doing it deliberately, attempting to set up a straw man only to easily put it asunder.

Here is the crux of what I wrote again. "There are far too many variables and different occupations command too various levels of compensation. There is, of course, at some point, which everyone agrees on, a certain level of wealth that can only be called excess. Wealth that so clearly no longer contributes to the health, well being or sustainment of a person or her family, but exsists only to create more wealth. And it is probably at that point, where the purpose of the wealth is no longer to create goods for the family, but to create more money that it becomes categorically rich"

I did not say that the rich are those who have more than they need. As I've written the rich are those with a certain portion of their assests the sole value of which is to accrue more money. I've shown that they do this largely through the stock market, at the expense of other productive members of society, and that such behavior is harmful to the health, well being, and financial prospects of others, and should, on those grounds, be curtailed. I'm not saying that people shouldn't have some savings, or are not allowed to spend money on their own enjoyment or leisure (though I'd question the morality of doing so excessively), only that money, which gets its value from all society, should not be used to gain ever more money at other's expense. I will forever fail to see what is exactly so radical about that proposition.

Further, I've written repeatedly that I favor a tiered progressive tax system that does offer incentive of higher pay for those with more skill, knowledge, talent and ambition. There are jobs that need to be done that benefit society that society must be willing to pay a premium for if it wishes to partake of them. I do not think it possible to institute pure socialism in the United States today. Ideally, the system as I envision it consists of something like 10 to 15 tiers with tax rates ranging from about 10% to 90%, or maybe slightly higher. While this does not explicitly forbid the possibility of wealth being used solely to create more wealth, it would effectively curtail the rate at which fortunes could accumulate, resulting in a more equitable distribution.

I said in my previous post that it would be the last of today, but I just caught this part of yours and could not let the inaccuracy stand.

“It is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God” Mark 10:25

[johnb]

Mark,

That is breathtaking.

You have demonstrated, in spades, that you lack even a basic understanding of economics. There is no way you minored in economics in college, if you did sue the school for educational malpractice. They cannot be allowed to turn out graduates of such poor academic calibre.


Just in case you didn't realize, Nissan of America nor Nissan Japan sees a dollar of that second purchase. Obvious, right? Why would they, it's a private sale.

You don't seem to understand basic economics and law. Company stock is not a product the company makes and sells. Nissan makes and sells automobiles. On the stock market Nissan itself is sold. The stock is NOT analguous to the car, by purchasing a share of stock one is purchasing a share of the company itself. If Nissan goes bankrupt the owner of a 10 year old Nissan automobile is out absolutely nothing. The owner of 5,000 shares of stock is out the cost of the shares. Just ask the owners of stock in Kmart, WorldCom, Enron, or any other firm that has ever gone bankrupt what happened to their investment.

It is beyond stupid to compare the sale of company products to the trading of stocks. It's not even apples to oranges, are you too ideologically blinded to understand basic economics and law?


I've written many times that the stock market is unproductive. It's true, and you cannot refuse it.

This is simply bizarre. You are chattering nonsense Mark, do you even understand what you're typing? I've seen Larouche propoganda that's made more sense than what you're making.


creates a demonstrable harm -


You ever gonna get around to showing how the stock market "harms" non investors Mark?

[johnb]

There is, of course, at some point, which everyone agrees on, a certain level of wealth that can only be called excess.

That is a lie. "Everyone" does not agree to that.

What you want though, is the power to define what is "excess" and what is not "excess" for other people and punish the miscreants accordingly. What makes you fit to pronounce these judgements on other people? Who died and made you the local deity?


Wealth that so clearly no longer contributes to the health, well being or sustainment of a person or her family, but exsists only to create more wealth. And it is probably at that point, where the purpose of the wealth is no longer to create goods for the family, but to create more money that it becomes categorically rich"

Who in the h@ll do you think you are that you have some divine right to make pronouncements like this on other people's property? Again, who died and made you the local deity?


As I've written the rich are those with a certain portion of their assests the sole value of which is to accrue more money.

Who truly gives a d@mn what you say on the subject? It isn't your money, it isn't your investment portfolio, it isn't your work, your risk nor is it your reward or loss in the end. It is NONE OF YOUR BUSINESS Mark. Your intense desire to stick your nose into the financial affairs of others is perverse and a gross violation of your neighbors right to privacy.


I've shown that they do this largely through the stock market, at the expense of other productive members of society, and that such behavior is harmful to the health, well being, and financial prospects of others, and should, on those grounds, be curtailed.

You've not shown any such thing. The stock market is an extremely productive area of our economy, providing enhanced wealth and standards of living for large percentages of the population. It is an effective tool to spread business risk and reward and allow everyone to participate in the national and international economy.


I'm not saying that people shouldn't have some savings, or are not allowed to spend money on their own enjoyment or leisure (though I'd question the morality of doing so excessively), only that money, which gets its value from all society, should not be used to gain ever more money at other's expense.

Oh Thank YOU! Who the h@ll cares what you question or don't question regarding the alleged morality or immorality of other people's spending habits. It isn't your money to fret over you nosey socialist. This post truly crystalizes the abhorent and autocratic mentality you bring to quesitons of personal liberty Mark. I'm not sure why you think yourself so morally justified in passing judgement on other people with respect to their savings, investments, and economic status but here is a clue for you - you have every right to chatter, you have no right to take action to deny others their own property, no matter how you attempt to justify it. You are no more fit or worthy of being the moral arbiter of the nation than anyone else. Get over yourself.


I will forever fail to see what is exactly so radical about that proposition.

Because the people that think like you start with and progress through:

1- I'm a good person.
2- My politics are moral.
3- People who disagree with me aren't good.
4- Their politics are evil.
5- Evil must be stopped.
6- People who disagree with me must be stopped.

Since you have no respect for private property rights (the ultimate of which is the right to one's own life) there is nothing to protect innocent people from folks like you once in power. The people of Cambodia, North Korea, the Soviet Union, China, et al had no way to defend themselves against your socialist kin. Minus the barrier of the rule of law backed up by free people ready to defend themselves socialists have always progressed to the Killing Fields. It can be no other way.


“It is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God” Mark 10:25

Stop trying to play God, let Him handle the questions of morality and money and you worry about your own affairs. Keeping your nose in your own business and leaving other people alone to tend to theirs would be a welcome change.

[Brent]

Here is the crux of what I wrote again. "There are far too many variables and different occupations command too various levels of compensation. There is, of course, at some point, which everyone agrees on, a certain level of wealth that can only be called excess. Wealth that so clearly no longer contributes to the health, well being or sustainment of a person or her family, but exsists only to create more wealth. And it is probably at that point, where the purpose of the wealth is no longer to create goods for the family, but to create more money that it becomes categorically rich"

OK, we'll go with that. What is that point that "everyone agrees on" that is "excessive"? I think there is no such thing. It is your premise that at some point wealth exists for its own sake, rather than to provide benefit to its owner or those whom the owner decides to provide for, that is in error. Let's pick the wealthiest guy, Bill Gates. He must be one of these people with "excessive" wealth, according to your criteria. I'm not his #1 fan, but he's giving billions to good causes. He is contributing to the health, well being and sustainment of a whole lot of people, beyond his own family. I guess you want to take most all of his money (the "excess" part...how much would that be?) so that you can instead help, whom? Other people of your choosing instead of his?


I did not say that the rich are those who have more than they need. As I've written the rich are those with a certain portion of their assests the sole value of which is to accrue more money. I've shown that they do this largely through the stock market, at the expense of other productive members of society, and that such behavior is harmful to the health, well being, and financial prospects of others, and should, on those grounds, be curtailed. I'm not saying that people shouldn't have some savings, or are not allowed to spend money on their own enjoyment or leisure (though I'd question the morality of doing so excessively), only that money, which gets its value from all society, should not be used to gain ever more money at other's expense. I will forever fail to see what is exactly so radical about that proposition.

What is that "certain portion"? Maybe they're accruing more money to start new foundations or companies (i.e., help others/create jobs). And you want to curtail that?!? How much savings are you going to allow people to have? Who gets to decide when people are spending on their own enjoyment "excessively"? (oh, I forgot, you do :roll: ). What is so radical about your proposition is that (1) people who are lawfully making money aren't doing so at the "expense" of others; they're producing, buying and selling things, and paying wages and sharing profits and losses, all based on mutually agreeable terms; and (2) the idea that YOU get to decide how much is too much and what is "fair".


Further, I've written repeatedly that I favor a tiered progressive tax system that does offer incentive of higher pay for those with more skill, knowledge, talent and ambition. There are jobs that need to be done that benefit society that society must be willing to pay a premium for if it wishes to partake of them. I do not think it possible to institute pure socialism in the United States today. Ideally, the system as I envision it consists of something like 10 to 15 tiers with tax rates ranging from about 10% to 90%, or maybe slightly higher. While this does not explicitly forbid the possibility of wealth being used solely to create more wealth, it would effectively curtail the rate at which fortunes could accumulate, resulting in a more equitable distribution.

Which is fine, if "equitable distribution" is your goal. It's not mine. Equal opportunity, not equal results, is what makes sense, as Hyatt pointed out. You assume that money can be put to good use only if the government takes it from the people who make it. Scary.


I said in my previous post that it would be the last of today, but I just caught this part of yours and could not let the inaccuracy stand.

Well, pardon my paraphrasing, but it still seems like you have some idea of when a person has more money than they ought to have. Whether it's just above basic needs or at some higher point, it's arbitrary and I don't see why you should get to decide.


“It is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God” Mark 10:25

You are the last person I would have guessed would use a Christian citation to support your argument. I will await your explanation of the generally accepted Christian theological interpretation of the lesson to be found in this chapter, from which you have cited one verse in isolation.

[Brent]

Mark, I don’t vehemently agree with JohnB very often (in fact, it made headlines in the Cary Politics News awhile back when we agreed on something), but I’m 100% in agreement with him that this stock market post of yours is “breathtaking”. In fact, I find it so outrageous that I had to stop and wonder if you are serious, or if you’re just pulling our legs and we’ve missed out on some really entertaining satire because we didn’t catch your biting sarcasm.

I’m still hoping that you’re going to tell us that it’s all in fun and the joke’s on us. But on the off chance that you really are serious, and if so, on the off chance that any of this will actually get through to you, here goes:


To my myriad detractors, I'll begin addressing you generally now.

I certainly won’t claim that the majority is always right, but when you have “myriad detractors” from such a diverse group, there may be a lesson in there for you.


First, let us no longer beat around the bush. You are all blissfully unaware of the true nature of the stock market. Maybe you will have never heard nor read the information that I will presently impart to you. Maybe you never cared to listen.

Certainly someone here is “blissfully unaware” of the true nature of the stock market, or chooses to ignore the big picture. I will admit that I had heretofore not heard such a myopic explanation of it.


First, an analogy that you've surely heard before. I buy a car from Nissan. I drive it 6 years, it's been a good car 80,000 solid miles. I need a minivan though, kids on the way, so I sell to John. I paid $22,000 for, I let it go for $4000... it's in reasonably good condition. Just in case you didn't realize, Nissan of America nor Nissan Japan sees a dollar of that second purchase. Obvious, right? Why would they, it's a private sale. Further, Nissan is no longer bound to honor any warranty left and they certainly don't pay that second owner to drive their car around. Keep all this in mind.

Ignoring the fact that Nissan probably DOES need to honor any remaining warranty, depending on the terms and conditions of the warranty, it is entirely unsurprising that Nissan gets no money from the resale. You see, Nissan transferred ownership of the car to a dealer before you bought it, at a mutually agreeable price. The dealer transferred ownership to you, at a mutually agreeable price. You transferred ownership to John, at a mutually agreeable price. This car has now caused $26,000 to change hands, not counting the dealer. John now owns a car he wanted. You no longer own that car, but you have $4,000 that presumably you will apply toward a purchase of a minivan. Meaning that more money will change hands and more goods and services will be provided, more profits will be made and more wages will be paid. Regardless of whether you buy a new Nissan minivan or some other minivan, some corporation presumably profits from your purchase. Based on your decision and the decisions of many others, the various automotive corporations become more or less valuable, based on the level of profits that they return to their owners – the stockholders. Some of those owners might choose to transfer their ownership of Nissan to others at a mutually agreeable price. They may profit or incur a loss on that sale. But as a result, the buyer takes ownership of a piece of the company and the seller has some more $ that might be used to buy something else of value at a mutually agreeable price (maybe stocks, maybe a car, maybe food, maybe a yacht). As a result, more goods and services are produced, more wages are paid, more profits are made.


I've written many times that the stock market is unproductive. It's true, and you cannot refuse it. Let us know find out why.

It’s false and absurd and easily contradicted when one looks at all of the data rather than just selected data. Let us now find out why.


It is argued, as Brent did, that individuals buy stock to provide to corporations capital with which to buy capital equipment, hire workers, and pay other costs. There is a risk in this for which these investors are compentsated with dividends. Also, the investors, and the market generally, provides fluidity, which costs money, so they're also compensated for function as well.

However, only those people who purchase the inital offering of stock are sending money to any corporation. Every subsequent sale does not fund the company - those sales are speculative. The risk involved is not that the investment in the company will fail, it's that the companies profits will fall, cutting dividends or, worse, the stock price will tank.

If the price tanks, it probably is an indication that the company’s outlook for continued profits is bleak. It certainly means that people generally are not willing to pay as much for an ownership stake in the company as they previously were. The company NEVER had any expectation that it would get more money from resale of its ownership shares, as you pointed out (unless the company owns a lot of its own shares, which can happen but which need not be considered in this argument, although it would amplify my point…oh, and I see we’ll get to that later). The fact that the price that people are willing to pay for an ownership stake in the company changes is unrelated to the fact that the transfer of that ownership does not result in additional $ flowing to the company. When you bought your Toyota, Nissan made its profit and expected no more money. The fact that you transferred ownership of the car to John is irrelevant to Nissan (ignoring things like warranties or maintenance revenue). But it’s NOT irrelevant to the value of the car, and it’s NOT irrelevant to the affect on the economy. The company sold an ownership stake at an agreed upon price. The company didn't expect any additional money if that ownership stake is transferred to someone else.


Moreover, subsequent sales of stock still transfer ownership rights. Isn't that odd?

Not at all! A “sale” means transferring ownership in exchange for something of value, generally $. Do you really find it odd that if I buy something, I own it?!? 8O


You've provided nothing, aboslutely nothing, of value to help the company operate, yet they've given you decision making power over how they operate.

You have agreed with the seller about the value of owning a piece of the company. That tells them something about how well they are doing, but that’ secondary. The company has given you some say in their operations because that is what goes with owing a piece of the company. The seller gave up that right when they sold the stock. The company assigned a value to that ownership when they originally sold the stock. You and the seller assigned a new value to that ownership when you traded the stock. Just because that value may be different now than it was then doesn’t mean that owning the stock has different rights or risks. Why would it?


Moreover, they'll pay you for the privelege. It's like John's buying my Nissan, demanding that the company reinstate the warranty, given him power to decide the terms and then pay him for advertising their product.

It’s nothing of the sort. You paid a price to buy a piece of the company. You gained some rights and took on some risks in doing so, the same as the original buyer did. When John bought your Toyota, he assumed ownership rights and risks that went with it. If John can operate the car more cheaply than you could, or if he finds $100 in the glove compartment, or if the engine blows tomorrow, he expects nothing from Nissan (unless the warranty transferred with the sale), and Nissan expects nothing from you or from John. But all this trading put more money in the economy to pay wages and make profits.


I think you're all ready for some numbers. One way to look at it is this. In 1999, the last year for which I have figures, the value of all new common stock was $106 billion. $106 billion dollars reached corporations. That's tons of money. But, the value of all shares traded was $20.4 trillion. Less than 1% of stock market activity actually went toward the much heralded purpose of the market, funding corporations.

We might look at is another way by examining only the increase in stocks from year to year with respect by how much was put into the system. From 1998-99 there were sales of roughly $83 billion in new offerings while the total market added about $1.1 trillion. Roughly 7%. So maybe the market is 7% productive.

Apparently the money that did flow directly to corporations made them overall more profitable, thus increasing their value in their owners’ eyes. You are proving the opposite of what you are trying to show, which is that the market actually is highly leveraging capital to increase the overall value of the economy.


But, it's not. The situation gets even worse. We haven't included buybacks which make up a substantial piece of the pie. The Reserve calculate the net new equity each year, ipos less buybacks, and for that period in 1998 the figure was, brace yourselves, negative $267 billion. To say it another way, corporations paid out more to "investors" than they got from them, to the tunes of hundreds of billions of dollars.

Corporations buy back their own stock when they think it is undervalued; i.e., they believe that the value of owning the corporation will increase over time. Just means that the corporation is taking on some of its ownership and the risks/rewards that go with the ownership. The corporations expect to make back the money they paid as dividends and to purchase the stock by increasing the value of the stock. They may be right or wrong about that; it’s the risk of ownership.


By the way, we still haven't even talked about dividends. What did all these owners get for not contributing anything? Another $238 billion in dividends that year.

What are you talking about, not contributing anything? Those people bought those ownership shares from other people with an expectation of receiving dividends, and took the risk that maybe they wouldn’t receive them. The people who sold the stock no longer expect to share in its profits (dividends) or loss. The ownership transferred. So what? Different people are participating in the ownership of the company, that's all.


Individuals do not, do not, fund a rising market, the corporations they control pump money into the system to prop it up.

Absurd, and totally backward. The corporations share their profits in the form of dividends among their owners. If profits grow, the value of the corporation grows, causing people to be willing to pay more for a stake in its ownership, and when the ownership is transferred for a higher price, the buyers are funding a rising market.


Pause, to let that all sink in.

Please do. If this didn’t sink in when you took econ in college, I expect you will need a very long pause. :lol:


So all these people who "own" these companies and extract wealth from them haven't helped the corporation.

Why do you place “own” in quotes? These people do own the company. Whether they are initial investors or they bought the shares from someone else, they own the company. They aren’t “extracting wealth” from the corporation, they are sharing in its profits or losses. By your reasoning, if the company stops paying dividends and the stock price falls, apparently the owners are “injecting wealth” into the corporation?!? :roll:


The inital investors have, and they should be compensated, but they can be by a fixed rate bond of some sort.

No, the initial investors should NOT be “compensated”. They should share in the profits, if there are profits. If they choose to sell their ownership stake to someone else, increasing their profits or losses, that’s their business, if they can find a willing buyer. Then that buyer takes on ownership and associated rights and risks.


And what are these companies? Let us turn to John for the answer. Society, he wrote, creates nothing because it's just a collection of individuals. A ha, he's onto something here. What is a business? A collection of individuals and, well, a lot of stuff. Without human elements to operate, manage, and run things a plant full of equipment does nothing but depreciate. Business too are nothing but collections of individuals, and it is the individuals that add value, and it is they that should reap the benefit.

And they do. They get wages if the corporation succeeds. They COULD use those wages to buy stock, perhaps, if they’re interested in an ownership stake and risking some of their money on themselves and their colleagues. Oh, and all the “stuff” was purchased with the money of the investors.


Such is the essence of socialism.

What, ignoring how successful economies operate? Yeah, I guess so.


John can refuse to acknowledge my Locke example for value added labor- refuse to acknowledge that is the actions of a complex network of actors, acting in concert under the rules set by the political state they among them founded - refuse to acknowledge that stealing the wealth from those that created it, causing a downward pressure on wages, health, and well being creates a demonstrable harm - refuse to acknowledge that the matrix of control exerted by the wealthiest individuals does, in fact, limit the choices of the bulk of society. And he can remain a "rational, educated, and thoughful" person of the most curious variety, one that will not confront the irrationality of his cherished stock market, chooses to remain uneducated about how it actually functions, and thoughtlessly denies any complicity in the harm it causes.

Well, there are a lot of things I disagree with John about. But he has exhibited a much better understanding of the stock market and economics than you have. Apparently you are entirely uneducated about how the stock market and overall economy functions, or you just choose to ignore the reality of it.


That is all for today.

Thank heavens. That was more than enough. One surreal fantasy per day is plenty for me. :lol:

[Brent]

This country is quite good comparatively, but quite good is relatively easy... making it great will take some work.

Wrong, pardner. "Great" is thoroughly overused and all too often misapplied. But this country is indeed great. It did take a lot of work, and keeping it great will require a lot more work.

[Don]

[quote="Anonymous"]To my myriad detractors, I'll begin addressing you generally now.

First, let us no longer beat around the bush. You are all blissfully unaware of the true nature of the stock market. Maybe you will have never heard nor read the information that I will presently impart to you. Maybe you never cared to listen.

First, an analogy that you've surely heard before. I buy a car from Nissan. I drive it 6 years, it's been a good car 80,000 solid miles. I need a minivan though, kids on the way, so I sell to John. I paid $22,000 for, I let it go for $4000... it's in reasonably good condition. Just in case you didn't realize, Nissan of America nor Nissan Japan sees a dollar of that second purchase. Obvious, right? Why would they, it's a private sale. Further, Nissan is no longer bound to honor any warranty left and they certainly don't pay that second owner to drive their car around. Keep all this in mind.

quote]

WRONG!!!!!!. You see while Nissan is not making any money off the resale of the car, surely they are making money on parts sales........and possibly more than they did off the original sale of the car.

70% of vehicle manufacturer's profits is from parts sales. John now has cheap transportation, but it needs repaired periodically, as well as serviced. Nissan continues to see the "fruits" of THEIR labor.

[Don]

I'm just gonna agree with John and Brent and go grab a beer. I had to read these three times to absorb it all. Unbelieveable to say the least guys.

[Anonymous]

Yeah folks, I am still waiting for my 40 acres and one mule!

Jess

[dhyatt]

Yeah folks, I am still waiting for my 40 acres and one mule!

Jess

Jess Ward? :D Where the heck have you been!??? :-D

[Brent]

I'm just gonna agree with John and Brent and go grab a beer. I had to read these three times to absorb it all. Unbelieveable to say the least guys.

I had to read Mark's post twice before I could believe that anyone would seriously espouse such dung. I'm still hoping he's going to tell us that he was just kidding (Mark, let us in on the joke, we'll all have a good laugh!). Surely no one could find it "odd" that when you buy something, the ownership rights are transferred. Right? Right? Anyone? Anyone? Bueller? Bueller? :lol: :roll:

[Cathy]

Mark wrote:

To my myriad detractors, I'll begin addressing you generally now.

(Sounds like he does think he is King already!)

Yes, please do tell us, Mark, your version of the meaning behind the "eye of the needle" parable!! I can't wait!

Yes Mark, we are both here in this country by birth. I appreciate and am quite happy with the form of governance that was created by the Founding Fathers. You apparently find it highly flawed because it is insufficiently socialist. I think that it has been corrupted more than enough by socialists. I will fight just as hard (and do), against people who think the way you do, to stop the effort to tranform this nation into a socialist state. The socialists should go find somewhere else in the world that will give them free reign to attempt their utopia.

Certain things about our form of governance should not be changed, and the reason for the Bill of Rights and the 'checks and balances'. Expanding the inclusion of more people to those rights does not erode the American form of governance. Exchanging property rights, free commerce, and individual liberty (bedrock basics of America!) for a communal, socialist style governance "for the common good" most certainly erodes what has made America a land of opportunity, innovation, increasing wealth for more people.

I believe that I have "certain unalienable rights" to "life, liberty, and the pursuit of happiness (commonly understood at the time written as a right to property)" And I recall something about "self-determination". No where do I read that one has a "right" to take that away from me in order to "evolve" to some "higher, more perfect, order of things".
There are plenty of places in the world already where you can go to enjoy life without all of the above things that I claim as my rights.

Cathy

Oh, and Mark, I believe that the world will see that genius, benevolent dictator, that I mentioned before, one of these days. And I would bet that you will like Him even less then than I suspect you like Him now.

[kellyc]

WRONG!!!!!!. You see while Nissan is not making any money off the resale of the car, surely they are making money on parts sales........and possibly more than they did off the original sale of the car.

70% of vehicle manufacturer's profits is from parts sales. John now has cheap transportation, but it needs repaired periodically, as well as serviced. Nissan continues to see the "fruits" of THEIR labor.

I'd take it one step further Don. If Nissan builds a great car in the first place...odds are John's sellar is going to buy another Nissan. Ask Honda folks about Honda loyalty.

AS for my thoughts on stock..I see it as an opportunity for employees to buy into their company. If they buy into the company then they see the fruits of their labor thru the rise and fall of their stocks. Its an incredible incentive for employees.

Many people see it as a way to pay for colleges for kids, or future retirement homes. Its not just the rich that benefit from the stock market, but the average person like me.

Kelly

[Brent]

Kelly and Don, please stop confusing Mark with basic economics! :lol:

[johnb]

I have to confess I've not met a graduate of the Ringling Brothers Clown College before....and to think....they offer minors in economics too. Must've been where Marx and Engels studied capitalism.

[dhyatt]

Mark,
You need some help and I mean that seriously. You can't continue to take such a beating by yourself. Please encourage like-minded friends to join CP and help fend off the constant conservative barrage. I know your heart is in the right place so it has to be frustrating to engage in such heavy debate with posters stacked against you by about 8-1. If you choose to let this thread die (and I wouldn't blame you), please don't interpret the responses so far as "we don't want you here." I run the joint and I do want you and others that share you opinions to participate. I applaud you for standing up for what you believe in. The world would be a far better place if everyone did as you do.

[Brent]

I agree w/ Hyatt. More views/more participants is better. Even though I thoroughly disagree with Mark on this issue, I hope he continues to share his views and recruits others to do the same. I want to find something I agree with Mark about. Surely there's something...I found a few things to agree with JohnB & Stan about! :lol:

[Spiros]

Hey guys and gals, I have to get on this debate from another perspective.
As an immigrant to our great nation, (my parents came over from Greece)
I think Mark's point of view is very European! He does say that he has a minor in economics at university?? That sounds European speak to me. Just check out Germany, France and any other European country and how socialistic they have become!!

I do not think I would have been as successful in business had I been raised in Greece. That's what makes this country so great!! I am in my third carreer, and the opportunities to change paths are another reason for the successes we all have as a nation.
Don't get me started on the stock market investing, since I am in the business of helping people reach their financial goals investing in equities.

Spiros the Greek

[Cathy]

Thank you Spiros!
What a great contribution you have made to this discussion! You validate the reasons that I and everyone must do all that we can to hold back the socialists who are absolutely trying to radically change this country!

Cathy

[SteveG]

I'd take it one step further Don. If Nissan builds a great car in the first place...


...the higher the resale value of the item. The initial price will be affected by its resale price, which is determined by the inherent value of the item.

A company simply cannot sell new stock to investors if the resale value is expected to be poor. That is why the resale value of stock is important to the company.

-Steve Goodridge

[johnb]

Very true Steve, but the new stock is only of consistant value if the company itself is growing. It is still not a "product" of the company but a further division of the existing ownership of the firm sustained by economic growth.

[Anonymous]

I'll post more about this tomorrow or the next day, but will take just a few moments to respond to some of the most recent posts. By the way, I should mention in fairness that I'm borrowing heavily from Majorie Kelly, founder of Business Ethics magazine, it is from her work that I discovered the statistics in my previous posts.

Hyatt, I appreciate your sentiment. You've always struck me as reasonable in that way. I think you're wrong about this, and gay marriage, and I'm sure some other things too, but I, again, appreciate and applaud you tolerance, even advocacy, of alternate viewpoints. I don't mind defending myself, as it were, from multiple avenues... I'm sure you can imagine that I'm somewhat used to it. What I do mind, and greatly dislike is some of the dishonesty and absence of decorum in some of these posts, which makes response difficult and tends to preclude meaningful discussion.

For example, I provided a full four paragraphs of figures that ran totally counter to the prevailing myth about what the stock market's alleged function is. Those figures didn't just challenge that myth, they utterly destroyed it. In response I got a lot of headshaking, name calling, and general refusal to acknowledge the points. John didn't even try to challenge my argument on its merits, or refute my facts, he simply said that's absurd. Brent said, that my figures wouldn't make sense if we looked at all the data - and then didn't provide any. He then tried to make an argument but was already too far down the road of presuppositions to actually get the point of my post, and the car analogy.

No, no one thinks it's odd that when you buy something you own it. The word buy has no meaning if this is not true. And, John is right, a company's stock isn't like its other product. A company stock isn't just ownership of a widget, it's metaownership all together. So everyone grants that, sure, why would Nissan care to whom I sell the car, it's a private sale. But why would Nissan honor that private sale with priveleges of access into its internal dealings? What I think is odd is that corporations would allow secondary buyers access. What benefit is that to the corporation? All of this preceeds the question of value, with which Brent's post was principally concerned.

When you buy a good you obtain ownership of some material thing. When you buy a stock you obtain "ownership" of ownership. That is an entirely different beast, one that loses touch with a ground in reality. The ownership that corporations should be concerning themselves with, and providing access for, is of the type that provides capital to the corporation. That's it. I'll go into more detail about the differences of metaownership later and how owning ownership, which is what speculators do (those 99% of all transactions) is different that ownership, which is what investors do.

There was more deception too. Both John and Brent deny that they have any notion of someone's having excess wealth. They are hiding behind semantics. Bill Gates provides a good example, someone brought him up. For sure, he does good things with some of his money. No one would argue, however, that bulk of his fortune is not in active productive use and serves as a vehicle to create more wealth, independantly of his intentions to do good with it. Now, John or Brent may not want to take, and will assert Gates' right to do with it as he pleases, but they're lying, flat out lying, if they claim that they don't have a notion that, all things being equal, his money could probably be better spent on some good elsewhere.

Again, that's not saying that he should spend it, or anyone to take it. All that is saying is acknowledging the notion that every human being has - that if there is a man in control of a box of 10 million dollars, and a whole city of hungry, uneducated children around him, that, while you might not force him to spend it on their behalf, you kind of wish he would, and think that all those resources could probably be put to good use bettering society. That is what I'm claiming everyone has, I just called it excess. It is nearly impossible for a human not to have that thought.

I'd ask Cathy why she wants to hear my "version of the meaning" of the word of Jesus. Let it speak for itself. Also, I'm curious why you feel it's merely a parable, and not a statement of fact? Surely you've then been doing some interpreting of your own?

And, you accuse me of being for a "communal" style of governance, which I have never here written and think is probably rubbish. You also underestimate how socialist in temper our founding document is, and fail to convince me why you should have reign to continue your bloody experiment on this soil and that I, wanting to extend democracy to its fullest extent, should go elsewhere. You also seemingly poke fun at government being "for the common good" though, I'm sure, that was generally the feeling of all people whom enacted political states for their mutual protection as well as explicitly being the purpose of most business, through their chartering documents.

Kelly raises a good point about employee stock ownership, but it's ultimately unsatisfying. It is better that employees share in some of the profit that they alone create, but acknowledging that they should share it is an acknowledgment that they created. It isn't a far step to ask why they should share it with anyone but the original providers of capital. Anyway, employee ownership schemes are generally objectionable if only because they reinforce the primacy of ownership as the only mean by which to share the profits of the firm.

We might want to ask why maximizing shareholder return is both the benchmark and goal anyway. Why aren't, for example, rising employee wages, the criteria on which we evaluate a firms sucess. Doing so recognizes more the contribution of the individuals, the communities that support them and the environment. John is against anyones making decisions on his, or our, behalf... but he seems not mind that the decision that maximizing shareholder return was the legal obligation of corporations was made by a few state supreme court justices in Delaware. Truly, there could not long sit a board that actively tried to rearrange the income statement in favor of employee gains at the expense of shareholder gains.

Corporations, we should also realize, are fundamentally undemocratic and financially feudal. Employees, as such, who create nearly all the wealth of a firm are denied access to the highest levels of decision making while speculators, who have provided no capital to the firm are granted acess, and are paid some of the employee's added value. John fails to see how this is harm. He must not have been out of his home there on Balmoral Dr. recently. I see plenty of hardworking people every day who didn't have enough growing up to get a good education, can't save enough to move out of their apartments nor to invest in their own education, yet work 50-60 hour weeks in jobs few of us would stoop to do, to the detriment of their own physical and mental well being as well as, more importantly, their children's. Nope, no harm here. But if the richest 10% of people did not remove 90% of the value added by workers to firms, but it was instead used for their benefit... well, that certainly would be an improvement.

Another thing generally unacknowledged about capitalism is that it necessarily creates a downward pressure on wages. This is, prima facie, a harm. Profit is revenue less costs. You can make more profit by gaining revenue or cutting costs. Employee wages are costs folks, employee jobs are costs. Where are employees on the balance sheet? Assets = Liabilities + equity. Stockholders appear as equity, but employees don't appear at all. And here I'll quote Kelly, "When a corporation looks around and records everything it has of value (its assets) it doesn't see employees. It's commonly said "Our employees are our greatest asset" but this isn't true in accounting terms. In accounting terms employees have no value. Money has value, objects have value, ideas (intellectual property) have value, even something called goodwill has value. Employees, by contrast, have negative value: They appear on the income statement as an expense - and expenses are aimed always at a singular goal: to be reduced.

So, to sum up all that, I don't think employees should accept that situation and agree that, to have any value, they must too become owners. Such a thing is offensive, as is it the theft of their labor.

Anyway, like I said, I would like in the next few days to respond directly to some more specific parts of the several replies I've gotten. 'til then.

Mark

[johnb]

John didn't even try to challenge my argument on its merits, or refute my facts, he simply said that's absurd.


And, John is right, a company's stock isn't like its other product. A company stock isn't just ownership of a widget, it's metaownership all together.

John has demolished your "arguments", you even touch on the truth here, although you (deliberately) mistate it. I did not say stock isn't like a companys other product. I said it is NOT a company product. No firm remains in business for the purpose of issuing stock. The stock is a share of ownership in the firm itself whereas the automobile is Nissan's product, ie, that thing they sell in order to earn a profit for the firm's owners.

You deliberately wish to confuse the two because doing so allows you to take the next illogical step and insinuate that ownership of stock is somehow deterimental to the economy as a whole and the poor/middle class. This second step is erroneous because it is based on your incorrect understanding of what stock actually is. Until you understand that the discussion really can't go forward because you'd still be chattering nonsense Mark.


Both John and Brent deny that they have any notion of someone's having excess wealth. They are hiding behind semantics.

Now, John or Brent may not want to take, and will assert Gates' right to do with it as he pleases, but they're lying, flat out lying, if they claim that they don't have a notion that, all things being equal, his money could probably be better spent on some good elsewhere.


These comments reveal a lot about you Mark.

First, I'm not hiding. Neither you nor I have the right to make a determination for anyone aside from ourselves what "excess wealth" may be. You have the right to make choices (for yourself and your minor children. You do not have the right to impose your warped sense of ethics upon anyone else in these matters. Period. You have never shown or quantified any harm to anyone through the ownership of stock or the passing of wealth on to one's children. Period.

It is unethical for you to claim Bill Gates is the owner of "excess wealth". It's not your money. You had no hand in the creation of Microsoft, the creation of DOS or Windows, the performance of the stock, or his handling of his stock options, salary, etc... That is between him and the board of directors of the firm and him and his wife. You and I are not a part of the equation. It isn't our business. What you want is the power to make and enforce decisions like this and inflict some retribution/punishment on the miscreants. What Gates does with his fortune is HIS concern, not yours. If he stashes the majority of it offshore in the Cayman Islands to protect it from the US govt in order to preserve it for his kids, more power to him. I hope he suceeds.

Second, there is NO BETTER USE of Gates' money than the uses he chooses for it, providing he is not using it to harm others, ie hiring a hit man to whack people he doesn't like. Whether he donates all or none of it to charity is irrelevant.

By the way, disagreeing with your inflamatory screed is not analguous to "lying". Propogandizing this socialist rot is an intellectual condemnation of yourself Mark, it is an ideology that simply cannot be taken seriously as it is based upon a series of lies and exists as a serious option only for those who will not allow themselves to understand capitalism and have no respect for human liberty.

[Cathy]

"I'd ask Cathy why she wants to hear my "version of the meaning" of the word of Jesus. Let it speak for itself. Also, I'm curious why you feel it's merely a parable, and not a statement of fact? Surely you've then been doing some interpreting of your own?"

Because that has to be the Socialists favorite quote from Jesus. They like to trot it out as an indictment of any Christian who does not subscribe to Socialism. I'd like to hear them hold the same fondness for some other things that Jesus said, like " I am the Way, the Truth, and the Life. No one comes to the Father except through me." It would probably be pretty difficult to find a Marxist, or many socialists, or even leftist liberals, who like that one much.

And I think the definition of parable fits the quoted analogy pretty well:
parable
\Par"a*ble\, n. [F. parabole, L. parabola, fr. Gr. ? a placing beside or together, a comparing, comparison, a parable, fr. ? to throw beside, compare; ? beside + ? to throw; cf. Skr. gal to drop. Cf. Emblem, Gland, Palaver, Parabola, Parley, Parabole, Symbol.] A comparison; a similitude; specifically, a short fictitious narrative of something which might really occur in life or nature, by means of which a moral is drawn; as, the parables of Christ. --Chaucer.


parable

n 1: a short moral story (often with animal characters) [syn: fable, allegory, apologue] 2: (New Testament) any of the stories told by Jesus to convey his religious message; "the parable of the prodigal son"

A logical interpretation in my opinion:

From such wildly outrageous comparisons like this one of Jesus, comes much of Jewish humor. Specificity and exaggeration are essential elements of humor. A camel going through the eye of a needle is funny. Jesus, by making this famous saying, does not condemn the wealthy as such. He just muses in a funny way about those who are absurdly connected to their wealth.


"And, you accuse me of being for a "communal" style of governance, which I have never here written and think is probably rubbish. You also underestimate how socialist in temper our founding document is, and fail to convince me why you should have reign to continue your bloody experiment on this soil and that I, wanting to extend democracy to its fullest extent, should go elsewhere. You also seemingly poke fun at government being "for the common good" though, I'm sure, that was generally the feeling of all people whom enacted political states for their mutual protection as well as explicitly being the purpose of most business, through their chartering documents."

It now sounds like we would have to argue degrees of "socialism". How socialist where the founders and those who influenced them? How socialist are you, Mark? How socialist would I be willing to be?
What is the definition of "commune" that is being applied here? Perhaps I should have been more clear in my meaning and used the word "collective".
I'm not going to play that game with you, because what I am reading in Locke's Treatise is not a support of the socialism you apparently long for. It is an examination of the natural rights of man under natural law in respect to the role of government (or a society). What does one lose and gain when one joins a society? It comes down to full individual freedom of person and property vs. the protection of life, liberty and estate by joining into a society.

Chapter 9: Of the Ends of Political Society and Government

John Locke

Sect. 123. IF man in the state of nature be so free, as has been said; if he be absolute lord of his own person and possessions, equal to the greatest, and subject to no body, why will he part with his freedom? why will he give up this empire, and subject himself to the dominion and controul of any other power? To which it is obvious to answer, that though in the state of nature he hath such a right, yet the enjoyment of it is very uncertain, and constantly exposed to the invasion of others: for all being kings as much as he, every man his equal, and the greater part no strict observers of equity and justice, the enjoyment of the property he has in this state is very unsafe, very unsecure. This makes him willing to quit a condition, which, however free, is full of fears and continual dangers: and it is not without reason, that he seeks out, and is willing to join in society with others, who are already united, or have a mind to unite, for the mutual preservation of their lives, liberties and estates, which I call by the general name, property.
Sect. 124. The great and chief end, therefore, of men's uniting into commonwealths, and putting themselves under government, is the preservation of their property.
Sect. 125. Secondly, In the state of nature there wants a known and indifferent judge, with authority to determine all differences according to the established law:
Sect. 126. Thirdly, In the state of nature there often wants power to back and support the sentence when right, and to give it due execution,
Sect. 131. But though men, when they enter into society, give up the equality, liberty, and executive power they had in the state of nature, into the hands of the society, to be so far disposed of by the legislative, as the good of the society shall require; yet it being only with an intention in every one the better to preserve himself, his liberty and property; (for no rational creature can be supposed to change his condition with an intention to be worse) the power of the society, or legislative constituted by them, can never be supposed to extend farther, than the common good; but is obliged to secure every one's property, by providing against those three defects above mentioned, that made the state of nature so unsafe and uneasy. And so whoever has the legislative or supreme power of any common-wealth, is bound to govern by established standing laws, promulgated and known to the people, and not by extemporary decrees; by indifferent and upright judges, who are to decide controversies by those laws; and to employ the force of the community at home, only in the execution of such laws, or abroad to prevent or redress foreign injuries, and secure the community from inroads and invasion. And all this to be directed to no other end, but the peace, safety, and public good of the people.

Sir William Blackstone's Commentaries on the Laws of England
"By the absolute rights of individuals we mean those which are so in their primary and strictest sense; such as would belong to their persons merely in a state of nature, and which every man is entitled to enjoy whether out of society or in it. But with regard to the absolute duties, which man is bound to perform considered as a mere individual, it is not to be expected that any human municipal laws should at all explain or enforce them. For the end and intent of such laws being only to regulate the behavior of mankind, as they are members of society, and stand in various relations to each other, they have consequently no business or concern with any but social or relative duties. Let a man therefore be ever so abandoned in his principles, or vitious in his practice, provided he keeps his wickedness to himself, and does not offend against the rules of public decency, he is out of the reach of human laws."

This is NOT the socialism of Marx and Lenin, nor Sweden, Denmark, France, or anywhere else. It is not the socialism that apparently you subscribe to and think "has never been tried" anywhere.
I do not "poke fun at government being "for the common good"", but I do not think that "the common good" should be so broadly interpreted to include the confiscation of one person's wealth in order to pass it around to everyone equally. The "public good" was defined as protection of life, liberty, and property!
I don't see where the founders of this country, the architects of our founding documents, or the people who influenced their thinking held your socialist kind of beliefs either. Far to the contrary! They worked hard to limit the loss of "natural rights" and ensure that Leviathan was on a short leash.


"(Socialism)..is based upon a series of lies and exists as a serious option only for those who will not allow themselves to understand capitalism and have no respect for human liberty."
John B (and I agree)
Cathy

[Brent]

Brent said, that my figures wouldn't make sense if we looked at all the data - and then didn't provide any. He then tried to make an argument but was already too far down the road of presuppositions to actually get the point of my post, and the car analogy.

No additional data is necessary. Your own data suffices. You note that the vast majority of money that changes hands in the stock market is a result of people trading ownership shares, as opposed to funding new corporations. You then conclude that this represents “wealth building” with no value to the economy. I conclude instead that this means that people have found willing buyers for their ownership shares in corporations and they have decided to sell those shares. They may profit or take a loss on those sales. But that money doesn’t somehow magically disappear. It fuels the overall economy. This is the part of the big picture that you are not considering. Are you suggesting that once people buy stock, they should not be allowed to sell it? :roll:


No, no one thinks it's odd that when you buy something you own it. The word buy has no meaning if this is not true. And, John is right, a company's stock isn't like its other product. A company stock isn't just ownership of a widget, it's metaownership all together. So everyone grants that, sure, why would Nissan care to whom I sell the car, it's a private sale. But why would Nissan honor that private sale with priveleges of access into its internal dealings? What I think is odd is that corporations would allow secondary buyers access. What benefit is that to the corporation? All of this preceeds the question of value, with which Brent's post was principally concerned.

Why indeed would Nissan honor the sale of a car with ownership privileges in the company? As John has pointed out, the car is a product that the corporation produces. A share of stock, on the other hand, represents an ownership interest in the corporation. Why do you think it is odd to transfer ownership privileges when that share is sold? Indeed, this is precisely what the buyer is buying: ownership in the company! When you buy the car, you get the ownership privileges of the car (which do not include an ownership stake in the company). When you buy stock, you get the ownership privileges of the stock (which does include – in fact, is – an ownership stake in the company). The corporation expects no benefit from this transaction. The corporation decided in the past that it would issue some number of ownership shares. In general, the corporation doesn’t care who holds those shares any more that Nissan cares who owns the car it produced. The car never represents ownership in the company, no matter who owns it. The stock always represents ownership in the company, no matter who owns it.


When you buy a good you obtain ownership of some material thing. When you buy a stock you obtain "ownership" of ownership. That is an entirely different beast, one that loses touch with a ground in reality. The ownership that corporations should be concerning themselves with, and providing access for, is of the type that provides capital to the corporation. That's it. I'll go into more detail about the differences of metaownership later and how owning ownership, which is what speculators do (those 99% of all transactions) is different that ownership, which is what investors do.

This distinction is bogus. A stock buyer isn’t buying ownership of ownership; he or she is buying ownership of a corporation. Doesn’t matter if he or she is the first or twentieth owner of that stock; it still represents an ownership stake in the corporation. After the initial stock sale, the corporation becomes concerned with producing goods and services to generate profit. The initial investment was for this purpose; the corporation is now in business and is no longer concerned (in general) with raising additional capital by issuing ownership shares. The corporation also is unconcerned (in general) with what happens to those existing shares it already sold. If the original owners sell them, that’s their business. Of course, the price of such sales is generally determined by how well the corporation is running its business.


There was more deception too. Both John and Brent deny that they have any notion of someone's having excess wealth. They are hiding behind semantics. Bill Gates provides a good example, someone brought him up. For sure, he does good things with some of his money. No one would argue, however, that bulk of his fortune is not in active productive use and serves as a vehicle to create more wealth, independantly of his intentions to do good with it. Now, John or Brent may not want to take, and will assert Gates' right to do with it as he pleases, but they're lying, flat out lying, if they claim that they don't have a notion that, all things being equal, his money could probably be better spent on some good elsewhere.

Interesting interpretation. I didn’t say I have no notion of excess wealth. I said that not “everyone agrees” about what is “excess”, as you claimed. And even if I believe that someone has “excess wealth”, it doesn’t matter, and even if they use it for purposes I don’t approve of, it doesn’t matter, because it’s theirs. You apparently don’t approve of people “building wealth” through trading stocks. I am sure I have some ideas about how Bill’s money could be put to better use. I’m free to suggest my ideas to him, and he’s free to tell me to take a hike, because it’s his money. I can tell you that I think it would do more good if you would forego eating out and donate that money to the Boy Scouts. It doesn’t matter if I think Bill’s money, or your money, or John’s money could be put to a “better” use. I can’t force my values on Bill or you or John. I have no right to tell Bill that he can keep only $1B, or $2B or $10B and he must sell the remainder of his stock and spend the proceeds “to do good”.

Oh, and maybe Bill is keeping all those Microsoft shares because he wants to own a lot of the company, and not just to “build wealth”. If I’m not mistaken, he “built negative wealth” last year. What is your solution for that? Do you propose to give people money back if they lose money in the stock market and all of a sudden no longer have “excess wealth”, whatever that is?


Again, that's not saying that he should spend it, or anyone to take it. All that is saying is acknowledging the notion that every human being has - that if there is a man in control of a box of 10 million dollars, and a whole city of hungry, uneducated children around him, that, while you might not force him to spend it on their behalf, you kind of wish he would, and think that all those resources could probably be put to good use bettering society. That is what I'm claiming everyone has, I just called it excess. It is nearly impossible for a human not to have that thought.

Depending on the totality of the circumstances, I might or might not feel that way. And I am free to wish and hope that the man use his money to help others. I could even suggest to him that he do so. You say here that this doesn’t mean that anyone should take his money. You said elsewhere that you favor “the government” taking up to 90% of it.


We might want to ask why maximizing shareholder return is both the benchmark and goal anyway. Why aren't, for example, rising employee wages, the criteria on which we evaluate a firms sucess.

Um, I think it’s because people buy ownership in companies hoping to get some return (share in the profits), with the risk that they might actually lose money. Do you believe that people would buy ownership in a company to increase the company’s employees’ wages? Why would they buy something that has no value to them?


Corporations, we should also realize, are fundamentally undemocratic and financially feudal. Employees, as such, who create nearly all the wealth of a firm are denied access to the highest levels of decision making while speculators, who have provided no capital to the firm are granted acess, and are paid some of the employee's added value. John fails to see how this is harm. He must not have been out of his home there on Balmoral Dr. recently. I see plenty of hardworking people every day who didn't have enough growing up to get a good education, can't save enough to move out of their apartments nor to invest in their own education, yet work 50-60 hour weeks in jobs few of us would stoop to do, to the detriment of their own physical and mental well being as well as, more importantly, their children's. Nope, no harm here. But if the richest 10% of people did not remove 90% of the value added by workers to firms, but it was instead used for their benefit... well, that certainly would be an improvement.

Restated, this says (1) corporations are not democracies (I agree); (2) the owners of the corporation, not the employees of the corporation, make the decisions about how the corporation is run (I agree, although smart corporations listen to what their employees have to say about running the business); (3) to be profitable, corporations need employees (I agree; they need many other things, too); and (4) because of 1, 2 & 3, employees of corporations are harmed (I disagree; this is not slavery; the employer and employee have decided on a mutually agreeable price for service (wages), and it’s not my place to tell them that they’ve agreed on the wrong price…if they don’t continue to agree, that is for them to work out).


Another thing generally unacknowledged about capitalism is that it necessarily creates a downward pressure on wages. This is, prima facie, a harm. Profit is revenue less costs. You can make more profit by gaining revenue or cutting costs. Employee wages are costs folks, employee jobs are costs. Where are employees on the balance sheet? Assets = Liabilities + equity. Stockholders appear as equity, but employees don't appear at all. And here I'll quote Kelly, "When a corporation looks around and records everything it has of value (its assets) it doesn't see employees. It's commonly said "Our employees are our greatest asset" but this isn't true in accounting terms. In accounting terms employees have no value. Money has value, objects have value, ideas (intellectual property) have value, even something called goodwill has value. Employees, by contrast, have negative value: They appear on the income statement as an expense - and expenses are aimed always at a singular goal: to be reduced.

It is good to see that you understand the economic principle of profit, revenue and expenses. I was getting a bit worried. :) I grant you that corporations generally wish to maximize profit, which involves minimizing cost. Wages are a price paid for a service. The service has a value. If the price paid for the service becomes terribly out of kilter with the value of the service, it will be corrected (it’s called a free market). Corporations do not wish to overpay in wages. They also are generally incented to keep employees who provide value. If wages become too low, employees will walk. If that is sustained, the corporation will not benefit in the long run.


So, to sum up all that, I don't think employees should accept that situation and agree that, to have any value, they must too become owners. Such a thing is offensive, as is it the theft of their labor.

Employees have value whether or not they are owners. They are compensated for the value they provide to the corporation with wages. If you pay for something, it is not theft.


Anyway, like I said, I would like in the next few days to respond directly to some more specific parts of the several replies I've gotten. 'til then.

We’ll be waiting.

[Cathy]

Take an Economics Quiz:
Find out if you are an Austrian or, Heaven forbid, a Friedmanite, a
Keynesian, or a Marxist.
Benefit: A thorough understanding of all of the questions and possible
answers on this list is equivalent to the knowledge an average graduate
of a US-based BA program in economics has.

http://www.mises.org/quiz.asp?QuizID=4

Take the following quiz of 25 questions on economic issues (or go to truncated 10-question version). There is also a Spanish edition. Click on the answer that most describes your view. You must answer all 25. Submit your quiz, and get your score emailed to you. There will be no follow up emails. (Q&A prepared with the assistance of Randall Holcombe, Peter G. Klein, Robert Murphy, D.W. MacKenzie, Joseph Stromberg, Mark Thornton, and many others who have suggested improvements in wording—none of whom bear final responsibility for the answers.)

The method and scoring of the quiz will be revealed once you submit your answers.

[kellyc]

Mark

Do you actually own stock? a 401K plan?

Kelly

[johnb]

Carhy,

Interesting quiz. I scored a 98.

I guess I'm an Austrian, or pretty damned close to one, maybe Swiss.

[Cathy]

Cathy,

Interesting quiz. I scored a 98.

I guess I'm an Austrian, or pretty damned close to one, maybe Swiss.

And an interesting website.
My score came back as:

Austrian-17
Keynesian-4
Chicago-3
Socialist-1 (it was the stock mkt question!)

Cathy

[johnb]

I had 24 Austrian and one Chicago. :)

[Brent]

John, we're disappointed...we thought you would be the first person to break 100! :lol:

I had 63: 10 Austrian, 11 Chicago, 4 Keynesian. At least I don't have socialist tendencies, like Cathy! :lol: (sorry, Cathy, just couldn't resist).

Mark, can you take the quiz? Maybe you'll be the first to score a negative number :lol: (sorry, couldn't resist that one either).

[Cathy]

John, we're disappointed...we thought you would be the first person to break 100! :lol:

I had 63: 10 Austrian, 11 Chicago, 4 Keynesian. At least I don't have socialist tendencies, like Cathy! :lol: (sorry, Cathy, just couldn't resist).

Mark, can you take the quiz? Maybe you'll be the first to score a negative number :lol: (sorry, couldn't resist that one either).

I did throw it out there for all to see. My feelings about the stock market got the better of me.

[johnb]

You're both just a couple of half-@$$ed imitation socialists....fess up... :twisted:

[Cathy]

You're both just a couple of half-@$$ed imitation socialists....fess up... :twisted:

I am duly impressed with the purity of your Austrian economic score John B.!
I just don't gamble in Vegas or the in the stock mkt.
Y'all are right about the Stock mkt._
Mark is wildly wrong_ except in his own mind.
I just think that most publicly traded companies get so caught up in how they look on paper to Wall Street that they begin to cannibalize themselves.

Cathy

[johnb]

The danger of the economic principles of Von Mises, Hayek, et al is that they require the individual to analyze risk and take responsibility for themselves in their saving and investing. That is a concept a large chunk of America rejects and hates with vicious intensity.

Some people are risk averse, that is not the same as not understanding the market or wanting to destroy the market. Ultimately it is a matter of how well one adapts to and accepts volatility.

If you find the markets to volatile, I humbly suggest bonds.

[Wuptdo]

Ok, having never taken an economics course, I was a little lost on the scoring. Should I be ashamed or take up reading Marx?

51 out of 100
5 Austrian
12 Chicago
7 Keynesian
1 Socialist (military)

Once upon a time I was a "player", till the 1988 S&L crises. Now somewhat risk adverse, but like tax-free municiple bonds and investing in land (they don't grow anymore of it :grin: ).

Wuptdo B-)

[johnb]

We just need to bulk up your Austrian numbers Wup...

Vee vill have you talking and acting like Ahhnold soon enuff my friend.

[johnb]

On www.frontpagemag.com Lowell Ponte has an article that leads me to believe he reads Carypolitics, well, at least my commentary on Carypolitics. A comment, dated 15 March reads:

It is fair to say that most Leftists are either insane or opportunistic. What sane or ethical person would embrace the socialist philosophy of Stalin and Hitler and Pol Pot? Yet that is precisely what the Left is – the belief by some that humankind can be perfected through dictatorship, slavery, and the genocide of undesirable peoples or ideas or values. If we can just exterminate the Jews, the Kulaks, or capitalist greed, Leftist utopians have promised, then heaven will appear on Earth.

But the fruits of 100 years of socialist experiments have been more than 100 million murdered human beings killed by Communism and perhaps another 40 million killed by Adolf Hitler’s National Socialism, the slightly smarter but equally evil near-twin of Marxism.

Added to this death toll have been more than two billion slaves. Communism stole from these people their right to liberty, their pursuit of happiness, and their right to the fruits of their own labor. These people were conscripts, slaves whose lives were spent in coercion, forced to build somebody else’s pyramid, somebody else’s absurd utopian dream – in exactly the same way that slaves 150 years ago had their lives and labor stolen to build someone else’s plantation house and Scarlett O’Hara dresses.

These experiments have, without exception, refuted the utopian claims Karl Marx made for “scientific socialism.” The idea does not work. It is too far from human nature to work. It produces only dictatorship, suffering and death. Socialism kills. Socialism is theft. It is a pretty, poisoned flower that has always produced poisoned fruit.

But the toxin in this fruit intoxicates many. It does feed one dark aspect of the human soul – the covetousness, envy and impulse to steal from others that are marked out as evils by the 10 Commandments.

[Brent]

Anyway, like I said, I would like in the next few days to respond directly to some more specific parts of the several replies I've gotten. 'til then.

Mark

Anxiously awaiting.

[Cathy]

Johnb,

Since this is the 60th anniversary of Hayek's outstanding, must read, book, 'The Road to Serfdom', and your high score in the Austrian school of economics, it is probably more than coincidence that you and the author of this timely article sound very much in agreement.

And Brent, I too am waiting for that promised elucidation of Mark's theories on life, the role of government, and economics in America!

Cathy

[johnb]

The Road to Serfdom? Huh? Isn't that paved with good intentions? Or at least "free" doggie parks, aquatics palaces, and social security?

[Cathy]

The Road to Serfdom? Huh? Isn't that paved with good intentions? Or at least "free" doggie parks, aquatics palaces, and social security?

A big affirmative on that one, John.
And it's looking like the road most traveled around here lately.

[johnb]

I think we reach a milestone when, if we have not already, come to the point where society generally believes it has some right to vote itself goods pilfered from someone else's wallet.

That's not a good milestone by any means, it's one' we're gonna have to work awful hard at getting back to once this society hits rock bottom.

[Brent]

And Brent, I too am waiting for that promised elucidation of Mark's theories on life, the role of government, and economics in America!

Cathy

I heard a rumor that Mark was off studying how people are "building wealth" through tax-deferred retirement accounts, even though if the retirees buy a used golf cart, Cushman doesn't get any money off the sale.

Or something like that. :lol:

[Brent]

Wow, all those retorts in several other posts, and still no evidence from Mark that he's got wonderful new data proving his point on the topic of this thread. But I, for one, am STILL waiting anxiously!

Baiting? You bet. :lol:

[Mark]

You'll continue to wait then.

I, in part, checked out of this thread for a bit to allow you, or anyone, to actually attempt to refute the statisics I've already provided rather than simply trying to a) wish them away or b) ignore them all together. Why should I spend more time and energy when my prior efforts have been so disregarded?

Anyway, this thread, once everyone had jumped in, lost much of its focus anyway. People seem to be unable to recall what they're actually responding to once the replies are burried a few pages. It started with taxes, that wasn't enough, so it turned to the market, which wasn't enough, so we started with economic systems generally. You'll notice that in several other threads my responses could just have well been posted here but, trying to narrow each issue at hand, I've refrained from so doing.

So, John claims to have "demolished" my arguments, and you claim that my numbers indict themseleves or, rather, you draw conclusions from them that I did not. True, you went to great effort to explain that, "You then conclude that this represents “wealth building” with no value to the econom...They may profit or take a loss on those sales. But that money doesn’t somehow magically disappear. It fuels the overall economy. This is the part of the big picture that you are not considering." Again, true, I recognize that and admit that it is something that I am not considering.

Why? Remember what we had been talking about. I claimed the stock market was unproductive, strictly speaking, businesses had to pay out more (in reality, much more) than they took in to support it. That is true, and every one of you has ignored it. It is precisely that stockholders get money through dividends or capital gains, and can put it back into the economy, that I object to. Because, you see, other than the initial capital providers who I've maintained all along should be compensated, that money could be injected into the economy in at least one other fashion... by being returned to the people that created it. If it's true that the market represents a net flow from the business community to private individuals (the overwhelming majority of whom are already wealthy), and no one has provide data to the contrary, then what - I will again ask - is the market's purpose? It does not exist as a capital generating device; it does provide, in some limited cases, fluidity; it is the most effective means that someone can turn a large fortune into an even larger one (all the while providing no productive benefit for the economy in so doing!)

This is perhaps the third time I've written this and consider it well enough shown. If you have anything specifically that you'd like to me respond to, by all means, post away or refer me back to something you've written earlier. But, should you choose to do so, please place at the top of your post the sentence, in bold, "I recognize that the stock market's greatest function in today's society is to transfer the wealth created for corporations by their workers to a class of shareholders which, quite literally, taken as a group, did not provide any capital for the creation of said wealth." Once that is established we might be able to move on.

[dhyatt]

Mark,
I have a question: In your mind, what's the difference (if any) between buying stocks and gambling and/or a lottery? I ask the question because I think the root of your irritation with the stock market has more to do with current tax law than anything else.

I would assert that the problems with the stock market have more to do with the people running it and basic human nature than with the market itself. It's nothing more than fear/greed that forces stock prices to sometimes be way out of whack with a company's true intrinsic value. Enforcing securities law (as the Bush administration is doing I might add) should help fix some of the inequities (bad pun) in the system.

And here's a really provocative question: What do you think would happen to the stock market if CEO's and directors were not allowed to own stock in the companies they managed???

[Mark]

Don, a thoughtful response, I appreciate it.

There are differences in speculating on stocks and playing the lottery, but those differences lie not in the fact that both are essentially gambling, but rather in the odds of success. Stocks, of course, do have some fundamental underpinning in reality. That's why people invested in them in their intial offerings and, ostensibly, people speculate on them thereafter. Companies with low costs, superior products and efficient supply chains, all other things being equal, should be able to move more product, command a fair price for them and reap profits. One could rightly think that buying the stock of such a firm today, with the likelyhood that the actual and perceived value of the company would increase would turn out better than playing your birthday on the daily numbers.

You do hit on a good point. The firm's actual value may increase, it may have more cash on hand, be stocking more inventory, be increasing market share without its preceived value increasing. Or, as we all know, the preceived value could so far outstrip its actual value as to land squarely in the land of comedy. I agree, enforcing current, or tighter, securities law would assist in curtail some of the most egrigious abuses of the system. So too would closing some of what are nearly universally acknowledged as tax loopholes that exist solely for those with enough to afford them. Enforcing tighter security of an otherwise flawed system is, however, necessarily an inomplete and unsatisfactory solution. We would be left with the ordinary type of speculation (as opposed to the type hyperreal bubble speculation that lead to, for example Priceline's being valued at $20b in its first month of operation... as much as the airlines whose tickets it was selling) that occurs as the de facto standard.

Anyway, to sum that up, even though one can have more information about the chance of "success" of stock market speculation it is still fundamentally the same as gambling, leverging money with intent, and hope to beat the odds, to earn more.

Re. your question about CEO's holding their own stocks. Not too much, I think, on the order of the whole market. Individual firms, and the welfare of their employees may be somewhat better off. I'd imagine that without that direct incentive some of the more objectionable business practice might be somewhat curtailed. But, we should remember, it's not because a CEO or board holds stock and seeks to gain that they, for example, outsource to Indonesia, it's because they've a legal obligation to their shareholders (who want the same thing as they do, as owners) do so. But, like I said, maybe some of the smaller, quicker and less substantial cost cutting measures might not get made, but we're talking a penny or less on the dollar in terms of its effect on the entire market.

[dhyatt]

[snip]
Anyway, to sum that up, even though one can have more information about the chance of "success" of stock market speculation it is still fundamentally the same as gambling, leverging money with intent, and hope to beat the odds, to earn more.
[snip]

There is, however, a difference in how they are taxed: Profit from gambling is taxed as normal income - it gets added into your gross and you're taxed at whatever rate you wind up with. Short term capital gains (assets that are held less than a year) are treated much the same way although the law is a little vague cn what happens when short term capital gains push you into a higher tax bracket. i.e. - are you taxed at the lower rate or the higher rate once your capital gains are added.

Long term capital gains are taxed from 8%-20% depending on when you bought them and whether or not you're in the lowest 15% tax bracket. This is lower than the tax on 'gambling' income and significantly lower than the tax on lottery winnings when taken as a lump sum (where the winners gets reamed but don't care).

I provide the background only to point out that - if laws are enforced - stock market jackpot winners may not 'produce' anything but they do pay a fair share in taxes. Those that hold stocks for a long time (typically retirement & 401K investors) pay a bit less in taxes but their earning are also eroded by inflation.

All in all - if not for shelters and loopholes - a fairly equitable system. I think we are all in agreement that the holes should be plugged.

Of course there's always the question of why should gains on my stocks be taxed when a large portion of gains on my real estate isn't???

[Brent]

This is perhaps the third time I've written this and consider it well enough shown. If you have anything specifically that you'd like to me respond to, by all means, post away or refer me back to something you've written earlier. But, should you choose to do so, please place at the top of your post the sentence, in bold, "I recognize that the stock market's greatest function in today's society is to transfer the wealth created for corporations by their workers to a class of shareholders which, quite literally, taken as a group, did not provide any capital for the creation of said wealth." Once that is established we might be able to move on.

I recognize that the stock market's main function is to establish and trade ownership in companies among willing buyers and sellers.
I guess I missed the part where you posted, in bold letters, how ridiculous it was to compare car ownership and sales to stock ownership and sales.

Apparently you object to certain people making money via investments, and you would rather force those people to give that money to others who make money via wages. Many wage earners are stockholders. Many people who invest in the stock market are not wealthy (count me among them). You also choose to ignore that the stock market involves risk and that the people who are "building wealth" could just as easily "lose wealth" in the stock market. Is it OK by you if "wealthy" people lose a lot of money in the stock market?

[Brent]

Anyway, to sum that up, even though one can have more information about the chance of "success" of stock market speculation it is still fundamentally the same as gambling, leverging money with intent, and hope to beat the odds, to earn more.


So, do you advocate confiscating all money spent on gambling and instead giving that money to some set of wage earners, I don't know, maybe casino workers?

What is your position on a state lottery?

[Cathy]

Hey Marx,
Why don't you go argue with this author? Or write a blog on the website? They might need the input of such a committed socialist.

http://www.mises.org/fullstory.asp?control=1469

[Wuptdo]

Mr. Mark,

What about our nations "progressive" tax code (guess what we are doing the last couple of days). The top 10% of earners pay about 65% of the annual income tax. Is it fair to this small population to bare such a burden? What about the bottom 25% wage earners that basically pay no tax at all? (Federal Income Tax)

What are the three worst words to any taxpayer who happens to have some capital gains this tax year?

Alternate Minimum Tax or AMT (known as the socialist equalizer)

To change the subject: What a the favorite 3 words on Spring Break?

GGW - Girls Gone Wild!

Gotta Go - Witch Hunter Robin is on!

Peace-out!

Wuptdo B-)

[johnb]

So, John claims to have "demolished" my arguments,

Yes and you are still pretending to not understand the difference between stock (a share of ownership in the firm) and the companys product line (those things it sells whether goods or services). You're obviously a sentient being, how it is that can claim to not see a distinction between these two things can ONLY be explained by your rabid adherance to Marxian polemics.

Your coming to grips with the reality that these two things are not the same nor are they even comparable is necessary for this discussion to really move forward. If you refuse to embrace the truth/reality we have an unstable conversation. We have some group of people in the real world, dealing with facts and a socialist off elsewhere pretending that Marxism "just hasn't been tried".

If that economic truth, this distinction between stocks and revenue generating goods and services, makes clinging to your political ideology too painful I suggest you align your ideology with reality.

That my friend is the problem with socialism, it survives only in minds unfettered by the contraints of reality and truth.

[Cathy]

John,

I don't believe Mark-EEE!-Marx will ever get it. Reality conflicts with what he wants to believe!

Cathy

[Brent]

Hey Marx,

Cathy,

This is beautiful, a classic. Wish I had thought of it!

[Cathy]

Hey Marx,

Cathy,

This is beautiful, a classic. Wish I had thought of it!

Thanx.....(but I do kinda like Mark-E!-Marx even better;)

Cathy

[Mark]

I recognize that the stock market's main function is to establish and trade ownership in companies among willing buyers and sellers.

No.

Let's see what the markets think of themselves.

The NYSE mission statement begins, "To add value to the capital-raising and asset- management process..."

The Nasdaq mission statement begins, "To facilitate capital formation in the public and private sector...."

I'll stop there.

It's clear that while no one doubts that the stock markets function as an exchange, in the strict legal sense, they think of themselves, the public thinks of them, and the common sense notion of them is as captial raising institutions. Truly, if that were not the base of them, they would not exist. If no capital ever did or will reach companies, and the markets existed merely for the purpose which you described they could not have ever begun in the first place - else they would have been from the start exposed as the speculative farce they are.

Any reasoning that attempts to justify stock markets on the basis that firms base buying, hiring, and a myriad other decisions on their stock price is necessarily circular. It must begin with the market's function of providing capital - acknowledging its failure to do so is to begin and end the argument in the same sentence. And, since you not so curiously chose terms to define the market's function without any reference to providing capital whatsoever, I'll take it that you do acknowledge (in conjunction with the fact no one, still, has attempted to provide an alternate set of statistical analysis) that failure.


I guess I missed the part where you posted, in bold letters, how ridiculous it was to compare car ownership and sales to stock ownership and sales.

Here's the thing about that, and John still seems to be hung up on it too. I understand perfectly well that stocks are a different sort to thing than the other material goods or services a firm provides. But, stocks are indeed the only thing in the world in which ownership is traded. They are in that regard unique, so I fail to see why people balk at the suggestion that there should be a unique set of rules in place to govern them.

When a normal transaction occurs, perhaps selling a car, we don't talk in terms of ownership being traded. That isn't what is being sold. A material thing is; the car. One trades various pieces of metals and plastics for money. The previous owner used to have a car, valued at what ever she receives from the current ower. If the trade was executed fairly, the assets of both people remain constant. Owner A used to have assets car and cash x. Owner had assets cash y. Owner A now has assets cash x+y, less car, and B correspondingly has assets car less cash y. It's an equation - they're equal.

The concept of ownership only enters this equation because we've attached it to the material good that isn't money. Money is, in not just a literal sense, a material good. It makes perfect sense to say that we own money... as much sense as saying we own a car anyway. With ownership come the right to, within the laws of the land, use the object attached to the ownership (be it a car, or money) in whatever way you please.

Let's move to stocks and see how they're unique. Stocks are traded just like cars for money. Owner A owns it, but, uniquely what she owns is ownership of something else. Owner B thinks that ownership of something else has value, and will pay owner A for it. Once the transaction has been made, it would seem, like the car, that the net gain or loss of assets for both parties internally is zero. One lost some cash, but gained the stock, the other lost the stock but gained some cash.

It is in every respect the same as the transaction with the car except that, and it's a monumental exception, the material changing hands, and conferring a new title of ownership, is itself a title of ownership.

Look at it this way, any title of ownership must grant to its owner "something" with which they are relatively, within legal bounds, free to do what they want with. If you're the owner of a car, that "something" is a "car." You're free to drive it around 'till your heart's content. What about stocks, what is the "something" that which the owner, by the title of ownership, is free to do with as she pleases? It is, ownership.

Two levels - I used the term metaownership in a previous post. All that to illustrate that stocks are indeed different in at least one significant way than other goods, and to dispel insinuation of my critics that the notion of regulating different sorts of things differently is anathema.

What's more is that it is precisely the ambigous state of this metaownership that adds, in the speculators eyes, "value" to the market.


Apparently you object to certain people making money via investments, and you would rather force those people to give that money to others who make money via wages. Many wage earners are stockholders. Many people who invest in the stock market are not wealthy (count me among them). You also choose to ignore that the stock market involves risk and that the people who are "building wealth" could just as easily "lose wealth" in the stock market. Is it OK by you if "wealthy" people lose a lot of money in the stock market?

No. You haven't been reading. I encourage principal investment. All persons who provide capital to companies deserve some reasonable compensation for their contribution. There are, too, other sorts of investment beside stock market speculation. These are, by and large, less objectionable than stocks, generally.

You write "rather force those people to give that money to others." Interesting. What "that money" are you talking about? The money that some guy sitting in his cube slamming out 200 lines of code a day adds to his project, to the firm's product, to the company's profits, that some "investor" then takes? No, what I'm saying is it was never stockholders money in the first place.

A last couple of points. "Many wage earners are stockholders. Many people who invest in the stock market are not wealthy (count me among them)." Let me reprint some figures I posted earlier in this thread. The top ten percent (in terms of wealth) of the U.S. population owns 81.8 percent of the real estate, 81.2 percent of the stock, and 88 percent of the bonds. That's Reserve Bank data from 1996. The top 1% alone owns 42% of all stock. So true, stock is not owned exclusively by the ultra wealthy (though when less than 25% of all U.S. households own more that $10,000 of stock, it's hard to grant even this - especially because the vast majority of that 25% is concentrated in mutal funds and retirement programs like the one you're [John in a previous post] describing) but it is the ultra wealthy who take the most out of and control board to ensure that the extraction mechanism stays working in their favor.

It's kind of ridiculous question to ask if I think it's "ok" if people loose money on stocks. It's like asking someone who is against the death penalty if they prefer lethal injection or execution. When people loose money on stocks, someone else is gaining. Not all of it, of course, but there are always winners. Taken internally, I feel as badly for people that lose money in stock as I do those who lose money at gambling.

It should come as no surprise, if you've been reading all of my posts, that I find gambling significantly less objectionable than the stock market. Gamblers are willing participants, all the money that is in the system they add willingly and do so for the benefit of themselves. This differs from businesses where workers add value to the system to benefit others. And, no, I don't support a lottery, primarily because of its racial bias.

[Mark]

John, see the post above for the majority of what my response would be to you.

I would also, for about the seventh time, like to add that I am not a Marxist. I generally eschew any further labeling beyond the level of democratic socialist, which, when pressed on the matter, is probably how I describe myself most of the time. I'm not smitten with or a follower of Marx, though I am obliged to point out a great error in your thinking on behalf of those who are.

You write, "We have some group of people in the real world, dealing with facts and a socialist off elsewhere pretending that Marxism "just hasn't been tried"." You, seemingly, state that in a pejoratively. Like I said, I'm not sure a Marxist state is a) desirable (in fact there is scarcely anything in his work about what a state might actually look like) or b) actually inevitable. But, it is true that his general philosophical plan for such a state has never, even remotely, been tried in practice. And this is very easy to see. Recall that socialism and communism, for him, are a stage of historical evolution that must necessarily follow from a technologically advanced, reasonably democratic, capitalist state. Those are conditions that no government that has ever claimed to leading a Marxist experiment has ever approximated. Remember, at the time of Marx's peak of creative output, he saw the revolution happening in England, where he was writing, where the conditions were more, he would say, ripe, not in agrarian totalitarian societies like Russia, and later China.

Anyway, that's kind of a closer parsing of Marx than I'd expect most people to be familiar with, but I just wanted to set the record straight in response to the tone, and intention, of your post.

[Brent]

I recognize that the stock market's main function is to establish and trade ownership in companies among willing buyers and sellers.

No.

Let's see what the markets think of themselves.

The NYSE mission statement begins, "To add value to the capital-raising and asset- management process..."

The Nasdaq mission statement begins, "To facilitate capital formation in the public and private sector...."

I'll stop there.

And I can see why...had you continued, you would have noted that the NYSE's mission statement goes on to say "by providing the highest- quality and most cost-effective self-regulated marketplace for the trading of financial instruments ...". In other words, a venue for trading ownership in companies among willing buyers and sellers (it seems I read that somewhere before).


It's clear that while no one doubts that the stock markets function as an exchange, in the strict legal sense, they think of themselves, the public thinks of them, and the common sense notion of them is as captial raising institutions. Truly, if that were not the base of them, they would not exist. If no capital ever did or will reach companies, and the markets existed merely for the purpose which you described they could not have ever begun in the first place - else they would have been from the start exposed as the speculative farce they are.

Any reasoning that attempts to justify stock markets on the basis that firms base buying, hiring, and a myriad other decisions on their stock price is necessarily circular. It must begin with the market's function of providing capital - acknowledging its failure to do so is to begin and end the argument in the same sentence. And, since you not so curiously chose terms to define the market's function without any reference to providing capital whatsoever, I'll take it that you do acknowledge (in conjunction with the fact no one, still, has attempted to provide an alternate set of statistical analysis) that failure.

Hold on there, pardner. I can see where it wasn't crystal clear, but in "establishing ownership", I include initial investments that provide capital for companies to begin doing business.

The NYSE disagrees with your assertion, too, for that matter (from their annual report): "Absent the broad and active participation of America’s 85 million investors, market growth and economic well-being are at risk. The
corporate sector—both in America and abroad—depends on the public’s participation to effectively raise capital for business expansion, job creation, and new product research and development. Investors turn to publicly traded companies to fund dreams, fulfill ambitions, and build brighter futures for their families and loved ones." I know you don't accept that, but you might be interested in the report of the US House Joint Economic Committee report from 2000; here are a few excerpts:

"This analysis examines recent trends in stock ownership and explains the reasons for the dramatic increase in stock ownership among a broader and increasingly diverse number of Americans. The key reasons for this democratization of the stock market include:
The popularization of the mutual fund.
The general reduction in the multiple taxation of savings and investment that resulted from the genesis of the IRA and 401(k) plan.
The emphasis of the Federal Reserve on price stability that has lowered interest rates, stabilized financial markets, and acted as a de facto tax cut.
"

"Recent data released by the Federal Reserve shows that nearly half of all U.S. households are stockholders. In the last decade alone, the number of stockholders has jumped by over fifty percent. According to one observer, this explosion in stock ownership has been 'one of the great social movements of the 1990s'. The shift of many individuals from wage earners to worker capitalists has stimulated discussion on the implications of this economic shift. On the surface, it might seem that broadened stock ownership is of little importance. There are many positive benefits, however, to the expansion of stock ownership. Not the least of these benefits is the ability, over the long-term, for families to accumulate wealth to provide for their needs including retirement, education, medical care, and potential unemployment. "

And one of my favorites: "In addition to providing a basis for investment needed for economic growth, the increase in stock ownership appears to be cultivating a deeper appreciation and understanding of private enterprise. The involvement of new stockholders in the capitalization of the companies that create wealth allows these new investors to have a better understanding of financial matters. Furthermore, it is suggested that broadened stock ownership can erode class conflict, for 'as capitalism expands, a lot of "them" can become "us." It [stock ownership] brings us all together as stakeholders-in-common.'"

This seems to me to be in conflict with the idea that a few wealthy people are stealing money that belongs to wage earners via stock trading.



I guess I missed the part where you posted, in bold letters, how ridiculous it was to compare car ownership and sales to stock ownership and sales.

Here's the thing about that, and John still seems to be hung up on it too. I understand perfectly well that stocks are a different sort to thing than the other material goods or services a firm provides. But, stocks are indeed the only thing in the world in which ownership is traded. They are in that regard unique, so I fail to see why people balk at the suggestion that there should be a unique set of rules in place to govern them.

When a normal transaction occurs, perhaps selling a car, we don't talk in terms of ownership being traded. That isn't what is being sold. A material thing is; the car. One trades various pieces of metals and plastics for money. The previous owner used to have a car, valued at what ever she receives from the current ower. If the trade was executed fairly, the assets of both people remain constant. Owner A used to have assets car and cash x. Owner had assets cash y. Owner A now has assets cash x+y, less car, and B correspondingly has assets car less cash y. It's an equation - they're equal.

The concept of ownership only enters this equation because we've attached it to the material good that isn't money. Money is, in not just a literal sense, a material good. It makes perfect sense to say that we own money... as much sense as saying we own a car anyway. With ownership come the right to, within the laws of the land, use the object attached to the ownership (be it a car, or money) in whatever way you please.

Let's move to stocks and see how they're unique. Stocks are traded just like cars for money. Owner A owns it, but, uniquely what she owns is ownership of something else. Owner B thinks that ownership of something else has value, and will pay owner A for it. Once the transaction has been made, it would seem, like the car, that the net gain or loss of assets for both parties internally is zero. One lost some cash, but gained the stock, the other lost the stock but gained some cash.

It is in every respect the same as the transaction with the car except that, and it's a monumental exception, the material changing hands, and conferring a new title of ownership, is itself a title of ownership.

Look at it this way, any title of ownership must grant to its owner "something" with which they are relatively, within legal bounds, free to do what they want with. If you're the owner of a car, that "something" is a "car." You're free to drive it around 'till your heart's content. What about stocks, what is the "something" that which the owner, by the title of ownership, is free to do with as she pleases? It is, ownership.

Two levels - I used the term metaownership in a previous post. All that to illustrate that stocks are indeed different in at least one significant way than other goods, and to dispel insinuation of my critics that the notion of regulating different sorts of things differently is anathema.

What's more is that it is precisely the ambigous state of this metaownership that adds, in the speculators eyes, "value" to the market.

I will just say that this is an "interesting perspective". I will say that I can buy a car, or I can buy a share of stock, or I can buy a service. They all have value and entitlements. The stock is a share of ownership in a company and generally conveys certain entitlements. If I have the stock, I don't "own ownership", I own a share of the company. This is not metaownership, and it is not ambiguous.


Apparently you object to certain people making money via investments, and you would rather force those people to give that money to others who make money via wages. Many wage earners are stockholders. Many people who invest in the stock market are not wealthy (count me among them). You also choose to ignore that the stock market involves risk and that the people who are "building wealth" could just as easily "lose wealth" in the stock market. Is it OK by you if "wealthy" people lose a lot of money in the stock market?


No. You haven't been reading. I encourage principal investment. All persons who provide capital to companies deserve some reasonable compensation for their contribution.

No, they don't. You have largely described a bond transaction. Stock investors put their money at risk to provide capital because they believe that the company they're buying will increase in value.


You write "rather force those people to give that money to others." Interesting. What "that money" are you talking about? The money that some guy sitting in his cube slamming out 200 lines of code a day adds to his project, to the firm's product, to the company's profits, that some "investor" then takes? No, what I'm saying is it was never stockholders money in the first place.

No, I'm talking about the money that people invest in the stock market. Half of the households in America, including a lot of wage-earners. I see that you claim that someone's money was never theirs (how curious!), but the "investor" isn't "taking" any money. The investor, as an owner, is reaping some of the profit that her investment made possible. The employee is compensated for his work.


A last couple of points. "Many wage earners are stockholders. Many people who invest in the stock market are not wealthy (count me among them)." Let me reprint some figures I posted earlier in this thread. The top ten percent (in terms of wealth) of the U.S. population owns 81.8 percent of the real estate, 81.2 percent of the stock, and 88 percent of the bonds. That's Reserve Bank data from 1996. The top 1% alone owns 42% of all stock. So true, stock is not owned exclusively by the ultra wealthy (though when less than 25% of all U.S. households own more that $10,000 of stock, it's hard to grant even this - especially because the vast majority of that 25% is concentrated in mutal funds and retirement programs like the one you're [John in a previous post] describing) but it is the ultra wealthy who take the most out of and control board to ensure that the extraction mechanism stays working in their favor.

So the people with the most money invest more in the stock market, and those who invest more money can expect to make or lose more than those who invest less? And the people with the greatest ownership share of a company have a big say in who runs it? Sorry, none of this shocks me.


It's kind of ridiculous question to ask if I think it's "ok" if people loose money on stocks. It's like asking someone who is against the death penalty if they prefer lethal injection or execution. When people loose money on stocks, someone else is gaining. Not all of it, of course, but there are always winners. Taken internally, I feel as badly for people that lose money in stock as I do those who lose money at gambling.

It should come as no surprise, if you've been reading all of my posts, that I find gambling significantly less objectionable than the stock market. Gamblers are willing participants, all the money that is in the system they add willingly and do so for the benefit of themselves. This differs from businesses where workers add value to the system to benefit others. And, no, I don't support a lottery, primarily because of its racial bias.

Well, it just seems that you're really upset about people making money in the stock market, and I'm just wondering if you're equally upset about people losing money in the stock market. If the investors lose money on their investment, should they be entitled to grab some money from the workers who made that loss possible? Symmetrically to giving the money to the workers, as you suggest?

[Wuptdo]

Mr. Mark,

Four items. Are you open minded enough to see the various flaws in your logic, i.e., are your learning something here?

Are you just doing these postings just to "stir the pot" and see what kind of responses you will get, i.e., these are not your true values.

Are you a native America, i.e., born in the U.S.?

Did you attend college? If so, which one.

Curious minds want to know.

Wuptdo B-)

[Mark]

Wup.

1- I learn when challenged, sure. My position is a good one and I wouldn't bother holding it if I hadn't already developed it and submitted it to reflection over a lengthy period of time. Generally, in debates of this kind, I find that when I'm in error it tends to be over a technical or logistical matter, not a theoretical one. In the course of the present thread I have revised some language in my own thoughts, and have had to research and confirm certain things in an attempt to make precise that which I wanted to say. Most of the critique I receive, however, isn't pointing out flaws in my style or content of argument, but rather of the, "Well, that's one way to look at it, but like this..." type. At this point though, 8 pages in, the two sides are scarcely talking about the same thing.

2- No. These are assuredly my true values. I am compelled to respond whenever I see someone either perpetuate a myth or commit some sort of fallacy. It particularly bothers me when I preceive that this is done intentionally. I like people to challenge my opinions - obviously, I wouldn't sit here and be subjected to this otherwise - because it makes me question them and resolve whether or not I'm sure of them. I require that of everyone, I will not let unchallenged or false assumptions slide. One cannot simply say, "The stock market creates wealth." and get away with it. It may be true, be we have to be explict about, for example, for whom it's true, why it's true, through what mechanism is it true, etc. Ultimately, I guess, I hope that if people don't see the correctness of my position, they've at least thought about an issue that they may not previously have.

The quote attributed to Socrates, with which many people are familiar, "The unaxamined life is not worth living" is something I keep in mind always. Knowing why one thinks a certain way is, in some respects, as important as the thought itself.

3- Yes.

4- Yes. Emory University.

[Wuptdo]

Mark,

Thanks. Glad to know that your are sincere about your logic and thought process. Nothing wrong with being a "Gadfly!" Though you may see the glass as half full or water, I will still view as half empty. In the real big picture of "life," we are all stardust.

Wuptdo B-)

[Brent]

Mark,

You will be happy to learn, I am sure, that I guest lectured at Emory University a couple of years ago. At the Huizenga business school, no less. I encountered all capitalists there, as far as I can recall.

[Mark]

Goizueta. The Huizenga school is in Florida, if I recall correctly. And yes, your preception is true, the B school, as well as Emory's main campus was lamentably conservative.