A Lesson in Economic for Liberals

[BluePhantom]

Now this is actually a decent post.

But you cant just imagine all tax money is at the expense of economic growth. How much future private sector growth was created by the governments decision to spend tax money creating ARPANET, the original internet?

There are times when tax investment can indeed act as a springboard for economic growth, but as I pointed out to Foxfyre that is an example of something that I would classify as a confounder that is worth discussing once the initial point is established.

Actually the bush administration took great steps to exempt halliburton and other oil/natural gas companies from the clean water act and the safe drinking water act.

Ok let me act like a lot of other liberals on USMB....."LINKS! I WANT LINKS! DON'T MAKE A DAMNED STATEMENT OF FACT UNLESS YOU CAN SUPPLY LINKS TO SUPPORT IT!!!!" I threw the evil face in for good measure.

Now assuming that's true ( I will wait for your supporting documentation) I would counter by pointing out that the Obama administration has granted at least 1,800 waivers from Obamacare (20% of the April round of waivers which are businesses in Pelosi's district). If it's so great, what the fuck's up with that?

Oh here's your link to support those last statements.

Pelosi Defends Obamacare Waivers To 1,800 Firms: 'They're Small Companies' - Nancy Pelosi - Fox Nation

Health Care Law | San Francisco | Nancy Pelosi | The Daily Caller

 

[Foxfyre]

Blue Phantom, calm down. You have a most EXCELLENT thesis here and presented it competently and effectively. At least for those who are interested in actually being educated on economics.

The leftists/statist class warfare promoters, eternally brainwashed and unwilling to be educated, of course won't debate you on the merits of your thesis but have predictably been diverting and baiting you to create a foot fight and derail the topic. Don't take the bait.

You were quite right in your statement that business is mostly not in business to promote the general welfare or to benefit anybody but those in business. That is the way the free market works. And when it is allowed to work as unfettered as possible and still secure everybody's unalienable rights, it is the most efficient, effective, and yes beneficial system ever devised by humankind.

In one of my very favorite Walter Williams essays "An Economic Miracle", he says this:

. . . .The average well-stocked supermarket carries over 60,000 different items. Because those items are so routinely available to us, the fact that it is a near miracle goes unnoticed and unappreciated. Take just one of those items — canned tuna. Pretend that Congress appoints you tuna czar; that's not totally out of the picture in light of the fact that Congress has recently proposed a car czar for our auto industry. My question to you as tuna czar is: Can you identify and tell us how to organize all of the inputs necessary to get tuna out of the sea and into a supermarket? The most obvious inputs are fishermen, ships, nets, canning factories and trucks. But how do you organize the inputs necessary to build a ship, to provide the fuel, and what about the compass? The trucks need tires, seats and windshields.

It is not a stretch of the imagination to suggest that millions of inputs and people cooperate with one another to get canned tuna to your supermarket.

But what is the driving force that explains how millions of people manage to cooperate to get 60,000 different items to your supermarket? Most of them don't give a hoot about you and me, some of them might hate Americans, but they serve us well and they do so voluntarily. The bottom line motivation for the cooperation is people are in it for themselves; they want more profits, wages, interest and rent, or to use today's silly talk — people are greedy.

Adam Smith, the father of economics, captured the essence of this wonderful human cooperation when he said, "He (the businessman) generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. ... He intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain." Adam Smith continues, "He is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. ... By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it." And later he adds, "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest."
Economic Miracle by Walter E. Williams on Creators.com - A Syndicate Of Talent

What I see today is the brainwashed 'Marketist'...ideology driven right wingers like you who have no concept of markets. There is no such thing as a free market; all markets are constructed. All markets have rules. The 'as unfettered as possible' ideology can be just as catastrophic as Marxism.

One politically popular myth, that free market economics and government non-intervention provide the basis for true democracy, flies in the face of history. The first democrats, the classical Athenians, had a word for the ideal free marketer, the homo economicus, working for his own economic gain but unconcerned with the community. It was not particularly complimentary, the ancestor of our word “idiot.” Pericles expressed the sentiment underlying this: “We regard the citizen who takes no part in these [public] duties not as unambitious but as useless…”

Over the past half-century we have seen lower tax rates and less government interference. We have come a long way toward free enterprise from the proto-socialist policies of Franklin D. Roosevelt. Since the Kennedy Administration we have reduced the marginal tax rate on our highest incomes from the 91% that remained in effect from the 1940s into the mid-1960s (and a brief peak of 94% during World War II) to 28% in the 1986 tax code. Yet our economic growth has slowed.

Decade/Average Real GNP/per Capita GNP Growth
1960-1969 4.18% 2.79%
1970-1979 3.18% 2.09%
1980-1989 2.75% 1.81%
1990-1994 1.95% 0.79%
(Maddison, Monitoring the World Economy 1820-1992 p. .183, 197)

Despite our adoption of the most enlightened free market policies, our performance resembles that of a declining Great Britain in the late nineteenth century.

Free market apologists contend the closer we come to pure laissez faire, the better. But there is little evidence for even this position. The U.S. has come closer to laissez faire than most other countries, especially since the Reagan Administration. If free market policies are the best economic policies then we should have experienced the most robust growth in the world during this period. But this has not happened. We have been outstripped by our trading partners.

Our 'lower taxes' still result in the second highest, by a tiny fraction, corporate tax rate in the world and our Fearless Leader is just salivating with intent to raise it. We have much more government interference now and multiple times more regulation than we had a half century ago.

It is not the operation of the free market that results in most of the unfairness and inequities, but in the meddling of a government that assigns winners and losers. The only regulation that should be coming from the federal government is in the areas in which the states cannot protect themselves--shared, air, water, and soil for instance and to prevent dishonest and unethical business practices that violate the right of all to life, liberty, and the pursuit of happiness.

We have not had a 'free market' for some time now as the government increasingly manipulates the price of commodities and excessively interjects itself into the system controlling everything from hours, wages and benefits to how much ethanol refineries are required to include in automobile fuel. And we don't even need to mention the blatant graft and corruption involved when we get to unwritten commands of what they are expected to contribute and what certain PC stances they are expected to adopt.

Give us a government with the insight and integrity to establish a tax and regulation policy that favors American business on American soil rather than that which enhances government's power, prestige, and personal fortunes, and you will see the economy take off like a rocket. Won't happen with the Congress and President we have right now though.

DISCLAIMER for the reading comprehension challenged: I am NOT advocating NO federal regulation of any kind. So don't even go there.

 

[BluePhantom]

How about instead of just posting smileys you articulate your point.

Because 1) Suggesting that it's easier to make $500 than it is to make $5 is about the most ludicrous argument I have ever heard and 2) as Foxfyre correctly pointed out, it's aside from the point. It's an attempt to draw the discussion into a side argument that has has little or nothing to do with the thrust of the discussion

 

[cbirch2]

Now this is actually a decent post.

But you cant just imagine all tax money is at the expense of economic growth. How much future private sector growth was created by the governments decision to spend tax money creating ARPANET, the original internet?

There are times when tax investment can indeed act as a springboard for economic growth, but as I pointed out to Foxfyre that is an example of something that I would classify as a confounder that is worth discussing once the initial point is established.

Actually the bush administration took great steps to exempt halliburton and other oil/natural gas companies from the clean water act and the safe drinking water act.

Ok let me act like a lot of other liberals on USMB....."LINKS! I WANT LINKS! DON'T MAKE A DAMNED STATEMENT OF FACT UNLESS YOU CAN SUPPLY LINKS TO SUPPORT IT!!!!" I threw the evil face in for good measure.

Energy Policy Act of 2005 - Wikipedia, the free encyclopedia

"

• it exempts oil and gas producers from certain requirements of the Safe Drinking Water Act;"

Editorial - The Halliburton Loophole - NYTimes.com

"It stripped the Environmental Protection Agency of its authority to regulate a drilling process called hydraulic fracturing"

It also classified the fracking chemicals as propriety chemicals not subject to regulation or even identification. Natural gas companies dont even have to release what chemicals they use for certain lubricants and drilling fluids.

A more useful approach might be to look at the law the obama administration is attempting to pass to repeal the exemptions:

Fracturing Responsibility and Awareness of Chemicals Act - Wikipedia, the free encyclopedia

Now assuming that's true ( I will wait for your supporting documentation) I would counter by pointing out that the Obama administration has granted at least 1,800 waivers from Obamacare (20% of the April round of waivers which are businesses in Pelosi's district). If it's so great, what the fuck's up with that?

Oh here's your link to support those last statements.

Pelosi Defends Obamacare Waivers To 1,800 Firms: 'They're Small Companies' - Nancy Pelosi - Fox Nation

Health Care Law | San Francisco | Nancy Pelosi | The Daily Caller

I cant even count how many time i have had to explain the waivers to people on USMB....

The waivers are only a hold over until the interstate insurance exchanges are set up in 2014, at which point they wont be necessary in such huge numbers.

Bush and Cheney granted waivers for an industry they used to partially own, solely to allow them to increase profits by damaging the environment.

Totally different situations.

 

[cbirch2]

How about instead of just posting smileys you articulate your point.

Because 1) Suggesting that it's easier to make $500 than it is to make $5 is about the most ludicrous argument I have ever heard and 2) as Foxfyre correctly pointed out, it's aside from the point. It's an attempt to draw the discussion into a side argument that has has little or nothing to do with the thrust of the discussion

I never suggested it was easier to make $500 than $5...jesus christ....

I'm saying that its harder for a small economy to raise $500 than it is for a larger economy.

Im just making sure you know its not easier for a country with a smaller GDP to grow by 5% than it is for a large country to grow 5%.

Where you got the idea that i claimed its easier to raise 500 than 5 is beyond me...

 

[Greenbeard]

Now assuming that's true ( I will wait for your supporting documentation) I would counter by pointing out that the Obama administration has granted at least 1,800 waivers from Obamacare (20% of the April round of waivers which are businesses in Pelosi's district). If it's so great, what the fuck's up with that?

Those are waivers from one page of the legislation, the one requiring a phase-out of annual limits on insurance policies between now and 2014. A small percentage of health insurance plans have annual limits on benefits and the law seeks to end that; however, some of those plans would be destabilized by that change and, if they can demonstrate that this is the case, they can avoid that change until 2014 (the GAO looked into the waiver process and found the process to be clean, with approvals and denials based on a numerical standard for the premium increase caused by the annual limit phaseout).

The actual impact of that annual limit phase out is small because annual limits aren't particularly prevalent:

Only 8 percent of large employers, 14 percent of small employers and 19 percent of individual market policies impose an annual limit and thus would be directly impacted by these interim final regulations. [54] In the first year of implementation (beginning September 23, 2010), it is estimated that less than 0.08 percent (less than one tenth of one percent) of large employer plans, approximately 2.6 percent of small employer plans, and 2.3 percent of individual plans would have to raise their annual limit to $750,000. [55] This first-year increase in annual limits would potentially affect an estimated 1,670,000 persons across the three markets. The second year of the phase-in, beginning September 23, 2011, would affect additional plans and policies, requiring a cumulative 0.7 percent of large employer plans, 3.9 percent of small employer plans, and 5.3 percent of individual policies to increase their annual limit to $1,250,000. The second-year increase in annual limits would affect an estimated 3,278,250 persons across the three markets. The third and final year of the phase-in period (beginning on September 23, 2012) would affect additional plans and policies requiring a cumulative 2.4 percent of large employer plans, 8.1 percent of small employer plans and 14.3 percent of individual policies to increase their annual limit to $2 million. The third-year increase in annual limits would affect an estimated 8,104,500 persons across the three markets. Note that the estimated number of plans and people affected are upper-bound estimates since they do not take into account grandfathered health plans and plans that receive a waiver from the annual limits policy.

 

[BluePhantom]

Energy Policy Act of 2005 - Wikipedia, the free encyclopedia

Dude...come on.....Wikipedia? Really? Wikipedia is the only source of information I have specifically banned in my class for students to use as a source of reference. None of my colleagues allow it either that I am aware of. The other links you provided I will accept pending further investigation.

The waivers are only a hold over until the interstate insurance exchanges are set up in 2014, at which point they wont be necessary in such huge numbers.

Why are they even necessary at all? I have a feeling...just a slight little hunch that those waivers will remain intact.

Regardless, it's not the point. I only brought it up to demonstrate that crony capitalism exists on both sides of the aisle. I could have just as easily have brought up Solyndra or a million other things. It's total bullshit regardless of which party is doing it. Additionally, look at the language I used in my post. I said "I don't think you will hear many people argue that we should lift regulations that provide clean drinking water.....". I didn't say you would never hear anyone make that argument. I try very hard to avoid speaking in absolutes because there is almost always an exception.

 

[Sallow]

Capitalism depends on competition.

No competition..no capitalism.

Simple thing you conservatives don't get. At all.

 

[BluePhantom]

Capitalism depends on competition.

No competition..no capitalism.

Simple thing you conservatives don't get. At all.

Oh yeah...that's completely beyond our comprehension. That's why we want to promote competition by allowing people to buy insurance across state lines while liberals don't want that huh? That's why we want less government intrusion in business to allow us to compete globally while liberals oppose that huh? That's why conservatives are the ones who say "let the market take care of it" and liberals are the ones who say "let the government take care of it".

Christ al-fucking-mighty

 

[BluePhantom]

Give us a government with the insight and integrity to establish a tax and regulation policy that favors American business on American soil rather than that which enhances government's power, prestige, and personal fortunes, and you will see the economy take off like a rocket. Won't happen with the Congress and President we have right now though.

BING, BING, BING!!!! We have a winner! The entire point of this thread is to demonstrate that the current policies in place by our government (over-taxation, over-regulation, over-unionization, etc), combined with crony capitalism, and corruption have created a business environment in this nation where it is in a company's best financial interests to leave. With our natural resources, our workforce, and our ambition, all we have to do is create a business environment which is conducive to domestic production and domestic operation and conversations like comparing Sweden and Norway to the United States economy will become so laughable no one would even try to bring it up.




Teaser alert: watch for my next big hit "The Phantom's 10 Easy Steps to Economic Recovery" coming soon to a message board near you.

 

[cbirch2]

Energy Policy Act of 2005 - Wikipedia, the free encyclopedia

Dude...come on.....Wikipedia? Really? Wikipedia is the only source of information I have specifically banned in my class for students to use as a source of reference. None of my colleagues allow it either that I am aware of. The other links you provided I will accept pending further investigation.

The waivers are only a hold over until the interstate insurance exchanges are set up in 2014, at which point they wont be necessary in such huge numbers.

Why are they even necessary at all? I have a feeling...just a slight little hunch that those waivers will remain intact.

Regardless, it's not the point. I only brought it up to demonstrate that crony capitalism exists on both sides of the aisle. I could have just as easily have brought up Solyndra or a million other things. It's total bullshit regardless of which party is doing it. Additionally, look at the language I used in my post. I said "I don't think you will hear many people argue that we should lift regulations that provide clean drinking water.....". I didn't say you would never hear anyone make that argument. I try very hard to avoid speaking in absolutes because there is almost always an exception.

Wikipedia is sourced at the bottom you realize that right? All you have to do is google "haliburton loophole" anyways.

Basically the government treats the fluid that lubricates the bit and pressurizes the rock as proprietary chemicals, which dont have to be disclosed because theyre "trade secrets". Its the same reason KFC doesnt have to disclose its secret spices.

Except its not pepper its benzene and ethelyn glycol

 

[Greenbeard]

The waivers are only a hold over until the interstate insurance exchanges are set up in 2014, at which point they wont be necessary in such huge numbers.

Why are they even necessary at all?

See above.

 

[cbirch2]

The idea that solyndra is some form of crony capitalism falls a little short, i have to say.

Why would obama use a solar company to funnel money to his buddies? That seems like a precarious industry to use. It seems a lot more likely that a company receiving money and participating in a highly competitive industry failed.

 

[Sallow]

Capitalism depends on competition.

No competition..no capitalism.

Simple thing you conservatives don't get. At all.

Oh yeah...that's completely beyond our comprehension. That's why we want to promote competition by allowing people to buy insurance across state lines while liberals don't want that huh? That's why we want less government intrusion in business to allow us to compete globally while liberals oppose that huh? That's why conservatives are the ones who say "let the market take care of it" and liberals are the ones who say "let the government take care of it".

Christ al-fucking-mighty

The "insurance" over state line thing is a method to eliminate competition.

In any case..you guys love monopolies. The corporate conglomerates we see cropping up again..is a direct result of you guys shirking and destroying the FDR anti-trust laws.

Competition promotes cheaper prices and allows for innovation.

You guys hate all of that.

 

[BluePhantom]

Wikipedia is sourced at the bottom you realize that right? All you have to do is google "haliburton loophole" anyways.

Basically the government treats the fluid that lubricates the bit and pressurizes the rock as proprietary chemicals, which dont have to be disclosed because theyre "trade secrets". Its the same reason KFC doesnt have to disclose its secret spices.

Except its not pepper its benzene and ethelyn glycol

Yeah I get it....again it's not the point

 

[BluePhantom]

The idea that solyndra is some form of crony capitalism falls a little short, i have to say.

Sigh.....I was just about to give you a small measure of credibility too.

Why would obama use a solar company to funnel money to his buddies?

Because that's where Kaiser's investments were. It was the perfect vehicle to do it and to launder money to himself. But yet again...that's beside the point. I will be happy to debate that on another thread or in private if you wish.

 

[Sallow]

The idea that solyndra is some form of crony capitalism falls a little short, i have to say.

Why would obama use a solar company to funnel money to his buddies? That seems like a precarious industry to use. It seems a lot more likely that a company receiving money and participating in a highly competitive industry failed.

It's a dog whistle and a conservative pipe dream. Far more money was lost on 2 freakin wars where the private sector had their grubby hands all over it.

Not one serious investigation into any of that. From Halliburton to Blackwater.

And somehow..Solyndra jumps to the head of the line in terms of "corruption".

Gotta love it.

 

[BluePhantom]

Capitalism depends on competition.

No competition..no capitalism.

Simple thing you conservatives don't get. At all.

Oh yeah...that's completely beyond our comprehension. That's why we want to promote competition by allowing people to buy insurance across state lines while liberals don't want that huh? That's why we want less government intrusion in business to allow us to compete globally while liberals oppose that huh? That's why conservatives are the ones who say "let the market take care of it" and liberals are the ones who say "let the government take care of it".

Christ al-fucking-mighty

The "insurance" over state line thing is a method to eliminate competition.

Wow. As much as I would love to hear you try to explain that statement, yet again...it has nothing to do with the point. I know it's difficult for you to stay on topic Sallow, but I do wish you would make more of an effort to engage the actual merits of the debate instead of making outlandishly asinine statements.

 

[rdean]

Today, class, we shall attempt to explain to the liberal mind how taxation, regulation, unionization, and entitlements (such as Obamacare) stagnate the economy, diminish market share for American industry, enhance foreign profit margins, discourage domestic investment, and increase unemployment. To accomplish this we are going to set up a hypothetical set of businesses, a basic chain of distribution, and some basic initial assumptions.

First consider an American company that manufactures widgets. We will call them Widgets Inc. They require 2x4s to make the widgets which they get from Lumber Inc., and Lumber Inc. requires raw materials (logs) which they get from Loggers Inc. Additionally, we have Foreign Inc. that also manufactures widgets and begins with the exact same parameters as Widgets Inc. except that Foreign Inc. is located in a foreign country we will call “Foreignavia”. Both Widgets Inc. and Foreign Inc. sell their widgets to “Phantom-Mart” in the United States for distribution to the American consumer. We will also assume that the quality of the widgets produced by each company is the same and each year 1,000 widgets are sold by Phantom-Mart. We will also assume that one log produces one set of 2x4s which in turn produces one widget.

Let’s toss out some economic givens:
Loggers Inc. has the following factors: $1.00 on logs, $1.00 on labor, and $1.00 profit for a selling price of $3.00 per log

Lumber Inc. has the following: $3.00 on materials (logs), $2.00 on labor, and $1.50 profit for a selling price per bundle of 2x4s of $6.50

Widgets Inc. has the following: $6.50 on materials (2x4s), $3.00 on labor, and $2.00 profit for a selling price of $11.50

Foreign Inc. has the exact same parameters as Widgets Inc. except that it costs them $1.00 to transport their widgets from Foreignovia to the United States so they have a selling price of $12.50

Phantom Mart has the following: $1.50 for labor and $2.00 profit, meaning they sell widgets to the consumer at a price of $15.00 for widgets from Widgets Inc. and $16.00 for widgets from Foreign Inc.

We will calculate market share as the percentage differential in price between the two so since Widgets Inc. sells at a price that is 6% lower than Foreign Inc. we will assign a starting market share of 56% - 44% in favor of Widgets Inc. We will also assume that a factory can produce 100 widgets per year so Widgets Inc. requires six factories to meet the consumer demand of 560 widgets and Foreign Inc requires five factories to meet the consumer demand of 440 widgets a year.

Now that we have that established, let’s start taxing. The government imposes a 10% tax on production and manufacturing. Now one might think that this will raise the price of the $15.00 American widget to merely $16.50. But that’s not the case at all. It must be applied across the entire chain of distribution. Neither can a company simply add 10% to their selling price in order to maintain their profit. Loggers Inc. for a $3.00 price per log must add more than just $0.30 to their cost because at a new selling price of $3.30 the 10% tax is $0.33 translating into a profit of only $0.97 per log instead of the $1.00 they had pre-tax. So in order to maintain their $1.00 of profit they must raise the price to $3.33 representing an 11% increase. This is then passed on to Lumber Inc. who now has to pay $3.33 per log increasing their pre-tax price per bundle of 2x4s to $6.83 but again they now have a tax to pay as well which initially would be $0.68. Again however they cannot simply add $0.68 to their price as it would reduce their profit. They actually must raise the price $0.76 to cover their tax and the increased cost of logs. Their final selling price is now $7.59 which represents a 17% increase in against their initial price of $6.50. This will continue to Widgets Inc. who in the same way will now be forced to charge $13.99 per widget.

We will assume that the tax does not apply to sales so Phantom Mart will not get taxed but they must now pay $13.99 for an American widget as opposed to the pre-tax price of $11.50 which means they must sell the American widget for $17.49 instead of the pre-tax price of $15.00 and vs. the Foreign Inc. widget which remains at $16.00. The 10% manufacturing tax has resulted in a final increase of nearly 17% for the American consumer. But Foreign Inc. does not just sit back and do nothing. They realize they can increase their price and realize a greater profit and still sell at a lower price than their American competitor. So they split the difference and raise their prices from $12.50 to $13.25. With the new selling prices in mind when we calculate production for the next year Foreign Inc. now gains a 54% - 46% market share advantage (a ten percent swing) and they are realizing a 38% increase in profit. This means that out of the 1,000 widgets to be sold next year Widget Inc. will only sell 460. They have six plants that produce 100 widgets each but with only a demand for 460 they are forced to close one plant or they will be overproducing and lose their profitability. Foreign Inc. on the other hand now needs to produce 540 widgets and as such they must build a new plant to accommodate the increased demand. This means American workers just got laid off, they will be requiring fewer 2x4s from Lumber Inc, who will in turn be requiring fewer logs from Logging Inc.

Now here is an important point. Even if we now eliminate that tax the selling price for Widgets Inc. will not revert to its original price of $11.50. This is because over time people become accustomed to paying the higher price and if that tax is eliminated Widgets Inc. will merely split the difference and lower their price to $12.75. They realize greater profits and the consumer still thinks they are getting a good deal with a lower price. The longer a tax is in place the greater this effect. So once you assess a tax, the damage is done. Prices will never revert to their original pre-tax price.

Now let’s regulate!

Environmentalists are pissed at Logging Inc because they are destroying the habitat of the Northwestern Checkered Sloth, and they are demanding that action be taken to clean up the carbon emissions coming from the factories at Lumber Inc. and Widgets Inc. Government imposes emissions standards that increase the cost of production at Lumber Inc. and Widgets Inc. by $0.75 and declares part of Logging Inc’s forests as federally protected. This forces Logging Inc to go into areas that are more difficult to access and further away to provide logs. The additional cost is $0.50 per log. So where Logging Inc was producing logs at $1.00 a pop they now pay $1.50 to produce the same thing. This increases not only their base selling price but the amount of tax they must pay as well since that is calculated as a percentage. Their selling price now goes from $3.33 per log to $3.89 per log. Lumber Inc. now pays that higher price for raw materials, has to deal with their own regulations, and the increased tax burden and they have to raise prices from $7.59 to $9.04. Same thing with Widgets Inc who must raise their price from $13.99 to $16.43 and now Phantom Mart must sell American widgets for $19.93 compared to their pre-regulatory price of $17.49. Again, Foreign Inc sees an opportunity and raises their prices by half of the difference to $14.84. Foreign Inc has now seen their profit margin grow 117% compared to their original price while the American companies have seen no increase in profit. The price for consumers has risen 22% even for the cheaper foreign widget that has done nothing to demand an increase in sales price.

Again we must recalculate market share and we find that Foreign Inc now has a 58% - 42% advantage. With this and the rate of production per plant there is no need to build or shut down plants although Widgets Inc will certainly be forced to suspend operations for part of the year. More workers are laid off, less 2x4s required from Lumber Inc, less logs required from Logging Inc.

Now let’s apply Obamacare!

Obamacare we will say will cost an additional 15% against labor. You know what’s coming by now. The price of logs jumps from $3.89 to $4.06. The price of 2x4s from $9.04 to $9.57. The price of widgets from $16.43 to $17.52. But this time Phantom Mart gets hit too because they have employees as well they must provide for and so the selling price for an American widget jumps from $19.93 to $21.25 (a 6.6% increase) but the foreign widget only jumps from $18.34 to $18.57 (a 1.2% increase). This time Foreign Inc does nothing to their prices. They decide they are going to go for the market share and squeeze Widgets Inc. and by doing so they grab a 64% - 36% market share advantage. This means Foreign Inc will have to produce 640 widgets when they only have the capacity to produce 500. They must build two new plants. Widgets Inc. now only has a demand for 360 widgets but they have the capacity to produce 500. They must close another plant.

Now about this time along come Billy Bob. Billy Bob is a manager at Phantom Mart and he’s saved some cash and he wants to invest. Well he could invest in the American Widgets Inc. but over the last couple years they have shown a market share decrease of 20% and they have not shown any increase in profitability. Foreign Inc on the other hand has shown a market share increase of 20% and profitability has increased 117% meaning a trend of a strong return on investment. Who do you think Billy Bob is going to invest in? This means American money generated through goods and services is now going to help Foreign Inc to build their two new plants.

Now let’s unionize!

The workers unite across the board and strike a deal for an initial 10% increase in wages and a mandatory 5% increase every year. I will skip to the bottom line because by now you are surely getting the point. In the first year American widgets increase to $22.11 while foreign widgets increase to $18.72. At this point Foreign Inc makes a bold move. They slash their profit margin back to the original level and start selling again at $12.50 because they know that within six years American Widgets Inc. will be forced to charge double the price of their own product enabling them to grab a full 100% market share and driving their American competitors out of business.

This is not lost on Widgets Inc and they realize they have only one choice that will keep their company from a total collapse. They are forced to close all their plants and move to Foreignovia where they can compete with Foreign Inc. at an even level. Of course this means they are no longer buying 2x4s from Lumber Inc and in turn Logging Inc gets slaughtered as well. The result is that we have taxed, regulated, Obamacared, and unionized our American business to the point that it simply cannot compete while foreign profits and employment have increased. Because of the closure of all these plants due to a decreased market share American workers are out of a job, unemployment has skyrocketed, and the economy has ground to screeching halt. Thankfully though, the Northwestern Checkered Sloth is happy as a pig in shit.

At this point, liberals, environmentalists, and union workers start scratching their heads wondering where all the jobs have gone and their solution is “raise taxes and increase union influence”. And they wonder why we are where we are.

Class dismissed.

You can't make shit up and say that's a lesson. No wonder you guys don't do well in school.

Here, let me give you a "REAL" lesson.

Companies say they aren't hiring because of a lack of "demand".

Republicans hear, "Companies aren't hiring because of "uncertainty".

True story.

Here, let me say that again.

Companies say they aren't hiring because of a lack of "demand".

Republicans hear, "Companies aren't hiring because of "uncertainty".

Apparently, Republicans don't understand the relationship between "demand" and "jobs".

 

[Sallow]

Oh yeah...that's completely beyond our comprehension. That's why we want to promote competition by allowing people to buy insurance across state lines while liberals don't want that huh? That's why we want less government intrusion in business to allow us to compete globally while liberals oppose that huh? That's why conservatives are the ones who say "let the market take care of it" and liberals are the ones who say "let the government take care of it".

Christ al-fucking-mighty

The "insurance" over state line thing is a method to eliminate competition.

Wow. As much as I would love to hear you try to explain that statement, yet again...it has nothing to do with the point. I know it's difficult for you to stay on topic Sallow, but I do wish you would make more of an effort to engage the actual merits of the debate instead of making outlandishly asinine statements.

Explain what statement? What part of it do you have trouble comprehending?

Eventually bigger companies would eat up the smaller ones. Simple as that.