"Sin" in western business ?

Discussion in 'Economy' started by Widdekind, Jun 23, 2012.

  1. Widdekind
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    Widdekind Member

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    "Pride & Greed"
    workers Pride themselves, in the wages that they can command; and are Greedy for higher pay. Reducing wages, during recessions, would be a blow to workers' Pride & Greed:
    For Pride & Greed, workers demand mandated minimum wages, and higher wages generally (e.g. Unions), even when others in their own "class" suffer there-from:
    Government Greed, for tax revenues, also impedes business:
    By the time everybody gets done Greedily demanding their "special piece of the pie", it's hard to get much done.



    "Sloth"
    western workers have voted themselves welfare doles, so that they need not work, even when others in their own "nations" must pay for their welfare:


    "Deception"
    Logically, wages that pay per hour worked do not reflect employer goals. Rather, employers only want their 'widgets' produced, so that their natural pay incentive-structure would be per 'widget' produced, not per hour bodily present and breathing on premises. Hourly wages motivate "going thru motions", "dragging feet", and otherwise making production take longer than necessary. Thus, hourly wages motivate Deception, in the work-place, between workers & managers. Conversely, pay per product produced would honestly reflect employer goals; would generally require no renegotiation during recessions (although order volumes, and hence total pay, would decline); would motivate workers to produce as fast and efficiently as possible, so that they could take their pay, and move on (to other jobs, or leisure). Why do western businesses willfully invite Deception into their organizations? What would be wrong with, "we can afford to pay you $X per 'widget', that's what the customers will pay for, the more product they buy, the more we all make, let's get the production-run done"? Hourly wages are obvious economic mis-communications, mis-representing economic incentives, and promoting Deception & division, within organizations, between workers & management. How is that good management? (Nominal hourly wages could be easily converted into per-item payments, by adjusting accounted hours, at whatever hourly wage, to yield the appropriate total payment.)



    reference:
    Boyes & Melvin. Economics
    , p.349+
     
  2. georgephillip
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    georgephillip Gold Member Supporting Member

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    "Sloth" and "Deception" could apply just as easily to investment banks who've bribed government into providing subsidies that are used for big salaries and bonuses, in spite of generating market distortions that fuel crises like the recent subprime-lending disaster.

    As of 2009 this particular form of corporate welfare has been estimated to shave 0.8% off large bank borrowing costs which is up from 0.6% in 2007.

    Per Bloomberg:

    "To estimate the dollar value of the subsidy in the U.S., we multiplied it by the debt and deposits of 18 of the country’s largest banks, including JPMorgan, Bank of America Corp. and Citigroup Inc. The result: about $76 billion a year. The number is roughly equivalent to the banks’ total profits over the past 12 months, or more than the federal government spends every year on education."

    Dear Mr. Dimon, Is Your Bank Getting Corporate Welfare? - Bloomberg

    How many widgets/year can you produce with $76 billion?
     
  3. Not2BSubjugated
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    Not2BSubjugated Callous Individualist

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    The problem with trying to assign deception and -blind- greed (I'm of the mindset that greed, when tempered with intelligence and integrity, isn't a negative, but that's another argument) exclusively to labor, government, or business, is that all three of these groups are inhabited entirely by human beings, who often tend to be deceptive and dishonest in their self interest.

    Generally speaking, if you give a group the potential to rig the game in their favor, it's not gonna be long before you find that the game has been rigged.
     
  4. georgephillip
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    georgephillip Gold Member Supporting Member

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    I suspect you're correct when you say giving any group the potential to rig the game in their favor will result in corruption. While that's true in "normal" times, what happens in times are anything but normal?

    That's to say in time of epoch change when a very old system violently dies...

    "The private creation of money at interest is the granddaddy of all pyramid schemes; and like all such schemes, it must eventually collapse, despite a quadrillion dollar derivatives edifice propping it up. Willie and Kirby think that time is upon us. We need to have alternative, public and cooperative systems ready to replace the old system when it comes crashing down."

    Why the Senate Won’t Touch Jamie Dimon » Counterpunch: Tells the Facts, Names the Names
     
  5. Widdekind
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    Widdekind Member

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    Inexpertly, the public is willing to deposit at banks, and creditors are willing to lend to banks, for 0.8% less in interest, than they otherwise would, in the absence of government bailout insurance. Evidently, the 18 largest US banks have combined assets (deposits + debts) of about $10T, so that they save $80B/year in interest-payments. Note that the actual benefit to the banks, is reduced expenses (they pay out less interest), not any increase in revenues (no tax rebates).

    That pseudo "subsidy" of about $80B is about half-a-percent (0.5%) of US yearly GDP. The "easy credit" attracts many more borrowers to banks -- people who borrow to buy houses, businesses who borrow to buy machines & factories. The "easy credit" generates about $500B / year of additional (leveraged borrowing and then) spending per year, boosting GDP by over 3%:
    Again, "easy credit" apparently bloats borrowing by an amount equivalent to 3.4% (from 4.9% ---> 8.3% of US GDP), or about 1/30, of US GDP, or about a half trillion dollars per year. That boils down to basic supply & demand, as the "price" of credit becomes cheaper (lower interest-rates), the quantity of credit demanded increases:
    [​IMG]

     
  6. Truthmatters
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    links?
     
  7. signelect
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    signelect BANNED

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    This reflect the current thinking. The president of Chase Banks get called on the carpet when it is announced that the Bank has lot 2 billion or so and he first reply is that he guesses they thay should look into it. About a week later he convinces the stock holders to approve a 23 million dollar annual compensation package. Hell, I would have done the same job for a lot less, a whole lot less and I could have even lost more money if they want to.
     
  8. Widdekind
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    Widdekind Member

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    the OP Bloomberg article
     
  9. EdwardBaiamonte
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    EdwardBaiamonte Gold Member

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    so then you like Republican capitalism rather than liberal crony capitalism where, for example, BO encourages government business relations like Obamacare or like when he gave 71% of energy money to soviet companies like Solyndra who contributed to his election fund??


    Welcome aboard!!
     
    Last edited: Jun 25, 2012
  10. georgephillip
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    georgephillip Gold Member Supporting Member

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    Republicans AND Democrats get most of their campaign contributions from the same 1% of Americans.
    Hence, Hank Paulson's crony capitalism involving Goldman Sachs and AIG was equally corrupt, right?
     

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