A simple economic lesson... raise capital gains to 43% will do what?

[JohnDB]

dude, that is the strategy to bring the jobs back to America. That's the strategy. end the jobs there just like the did here. Made in America. Ever hear of it?

You are in favor of sweatshop and child abuse are you?

Of course not...but I'm a fan of free trade...I'm not a fan of prison labor either.

Or forced labor of any kind.

I'm a coffee fanatic...but I also understand that it's getting too cheap too for the green coffee. As a result there's a dwindling supply. Nobody wants to work that hard for the too few dollars it produces.

Chocolate is another product in a similar situation. Beans are cheap...but unless the cocoa growers get more money there isn't going to be any. But I don't want to pay $20/kg for finished bulk chocolate either.

I'm against abuse wherever it exists. Period. Most of the problems in Africa exist because of abuses by French, German, and British companies...let's not forget the Italians or Spanish with the blame either. China is currently exploiting and abusing everyone everywhere they can get a foothold.

I'm all for solving the world's problems once I get my own solved.

 

[SavannahMann]

I have no additional insight, but I thought Fannie Mae and Freddie Mac were originally and always public?

They were semi public. They were like the post office supposed to be self sufficient. They were essentially a loan guarantee depository. A small fee and they would guarantee the low income loans. Since few loans defaulted, Freddie Mac and Fannie May, depending on what program you were using, rarely had to pay out. Like the VA loans for Veterans.

What made them semi public, was that their CEO’s and senior managers were all political appointees. Appointed by whomever was in charge when the previous term ran out. Like the Chairman of the Federal Reserve, appointed for a term.

Now as long as most loans did not default, things were fine. But when a lot of loans defaulted, they had to make good. And they didn’t have anywhere near the money they needed.

The Treasury bailed them out, and made them completely public. They were to use the vernacular of the technique, Nationalized.

Now in the interest of honesty, Bush (43) did warn that there were a lot of bad loans being written, and guaranteed by Fannie Mae and Freddie Mac. But Congress refused to act. Truthfully, by the time the warning was out, it was far too late anyway.

Let me give you an idea of how bad it was already. CDO’s were the Mortgage Bonds being bought and sold. Ok, no problem. But there were a finite number of Mortgages for the Collatoralized Debt Objects. So the banks like Morgan and Lehman came up with Synthetic CDO’s. These were CDO’s that were made up essentially as bets on the other CDO’s. Let me link to a bit of the movie The Big Short.



It is a nightmare, and that explanation is as good as any. But the important thing to understand for the moment is every dollar of actual mortgage bond, had twenty dollars riding on it. Twenty bucks bet on that one dollar. And if the Mortgage Bond failed, too many of the mortgages went bust, then those bets had to be paid.

When those insurance policies and bets were called, companies faced ruin. They had loved the things when all was going well. But when things went bust, companies lost more money than they had in every single holding.

It is fascinating to see what happened, and as I said I’ve read books and watched documentaries trying to understand. What amazes me is that the banks are doing it again. Today. Oh they’re using different terms. But it is the same thing, profit today and ignore the dangers tomorrow. Because all we did was TARP and then hold our breath and cross our fingers. We didn’t create new regulations to make sure it didn’t happen again. We didn’t create new oversight to stop banks from doing it, we just stood back and prayed that we made it through the recession. When we made it through nobody wanted to take the time to actually explain to the public what had happened. It sounded too much like fraud. It might have not been legally fraud, but morally, it certainly was.

Paulson panicked after Lehman failed. He had not realized how interconnected the banks were. Lehman bought insurance from AIG to cover the chance that they might lose. AIG bought similar policies from Bear, Morgan, and the rest. All of these policies were rated as AAA secure. It could never happen, the guys in charge were way too smart to let something like Lehman fail. Impossible.

When it happened, the stock holdings of Lehman were now worthless. And the stocks others had in Lehman were worthless. So Meryl had to admit they had lost billions in one night as Lehman went belly up. That loss made them look weak, and now they’re in trouble. All the bank stocks went south, and the companies holding those stocks went down too. It was a series of dominos. One led to the next, and you couldn’t stop it.

Pumping money was the only thing Paulson could think of, and he pumped. He pumped like there was no tomorrow. Creating money out of thin air. He pumped and pumped and pumped. Congress needs more money? No problem. Snap the fingers and tap on a keyboard, and another half a trillion is in the internet waiting to be sent out.

I honestly was worried when he started doing that. Because in history nobody had ever pulled off the hardest part of printing money. The reduction of supply to stop the inevitable inflation. That’s what hit Germany in the 1930’s depression. They printed so much money that reporters took notes on hundred mark bills because it was cheaper than buying paper.

But the way Paulson did it, well that was different. The money was just ones and zeroes in the internet. He could add or subtract money with the tap of a few keys on a keyboard. Want to get some out, have the Fed sell back some of the bonds. The money is then removed from the internet supply and bam, the economy keeps going. I didn’t think he could do it. I’m still not sure how the hell they managed it. But they did, I’ll admit that.

The next one is going to be worse, because this time people will revolt and drag the fat cats out of their beds and hang them on their manicured front lawns.

 

[Donald H]

Here comes the supply side/Reaganomics bullshit again. The OP seems to think it can work one more time.

 

[SavannahMann]

My company was going to congress to find out how they could get a business in the US to make our chips for our products so we are no longer single threaded. I believe the car companies went in with them. Oh my fking god the stupid of demofks continues and continues. They really hate their fellow countryfolk.

It isn’t just the labor costs. Microchips require acids to manufacture them. Acids which are toxic and violate tons of environmental regulations. Otherwise the acids end up in the water supply.

If you are able to just dump, that means its cheaper. But how high would your tariffs have to be to make it fiscally sound to manufacture here? One hundred percent tariffs, two hundred percent? Because treating those toxic chemicals and rendering them safe costs a lot of money.

So labor costs and equipment is only a part of the problem. Then you have to have a permit to build a factory to do all these things. That means convincing the County Commission or City Councils that allowing your poisons into the community is a great thing. They’re not going to be happy. And even if you manage to convince them, ten seconds later you’re going to be hit with lawsuits about the danger you are presenting to the community.

That will take at least ten years to litigate. Then when you finally get that settled and get permission from the Courts to start building your factory, a new process will have been created, with different toxic chemicals, and you’ll have to start all over again.

Do you know why ships are sent to Indonesia to be scrapped? It isn’t just the low wages. It is worker safety. OSHA wouldn’t allow anyone to cut a ship up like that without decontaminating the various tanks and bunkers. Anything toxic would have to be removed by guys in respirators and probably hazmat suits before you could start cutting. Then transporting the stuff to an approved disposal facility would cost a small fortune in permits alone. Now finally you could cut up the ship, but it would be slow when you have to have a safety briefing every single day about the nature of the work.

Every accident would result in an OSHA investigation and a lawsuit.

That isn’t the case in Indonesia. They cut the ship up regardless of the toxic elements right on the beach letting the chemicals and materials fall into the ocean. Workers who are injured are replaced that day by someone else who wants the money.

Tariffs would have to be so high to cover those kinds of things that they would be repealed in about a year, if it took that long.

Besides you’re forgetting about the dock workers. Those ships bringing in that stuff get offloaded by the ILA and transported by Railroad union employees and teamsters. Three powerful unions that will object to your plan to put them out of work.

 

[Markle]

Created publicly but held privately. Some people lost a lot of money investing in them.

In part, due to Barney Frank telling everyone that they were a solid investment, after they were in trouble.

 

[Mac1958]

Here comes the supply side/Reaganomics bullshit again. The OP seems to think it can work one more time.

Well, they've spent the last 30+ years getting their "education" in economics from Limbaugh, Hannity and their alternate universe internet.

 

[Missouri_Mike]

The problem is not taxes, but that those employed to make the products only get about 15% if of the profits.
Those who get the majority of the profits did nothing but use their credit reference.
There are very few CEOs like Elan Musk who have any imagination.

I don’t think you understand the term profit. Profit is made after paying all of the employees wages and benefits. Employees aren’t paid from profit they are an expense.

 

[Missouri_Mike]

Here comes the supply side/Reaganomics bullshit again. The OP seems to think it can work one more time.

Well, since it works every fucking time maybe you should pay attention.

 

[Rigby5]

I don’t think you understand the term profit. Profit is made after paying all of the employees wages and benefits. Employees aren’t paid from profit they are an expense.

Yes, that is technically correct, but if the company were employee owned, you would do it the other way, and consider the wages as % of profits.
It is really the same thing, but makes it easier to compare.
Calling wages just an expense prevents the valid comparison in revenue gain between workers who actually produce, and hands off owners who only invest and plunder.

 

[Rigby5]

Well, since it works every fucking time maybe you should pay attention.

No, supply side economics never works.
Without strong regulation, those with wealth would cheat anyway they could.
The offshoring of the last 20 years should be proof enough that supply side or trickle down, is a fraud.

 

[Missouri_Mike]

Yes, that is technically correct, but if the company were employee owned, you would do it the other way, and consider the wages as % of profits.
It is really the same thing, but makes it easier to compare.
Calling wages just an expense prevents the valid comparison in revenue gain between workers who actually produce, and hands off owners who only invest and plunder.

That’s not how it works at all. Even employee owned companies have to account for labor as an expense before distributing the profit portions. The hands off investors as you call them are not getting any of that expense money. They ONLY get a portion of the profit. If there’s no profit they get nothing. The motive to produce for the workers is keeping their job. If they get all of the profit the investors shut it down and move on to something else. Meaning you lose your guaranteed wages.

Investors aren’t some horrible evil group of lazy people. They invest looking for solid reasonable returns on their money. As a matter of fact if you own stock on your own or through a 401k, you are the investor. You’re basically wanting your own retirement fund to not grow and be taxed into a loss.

 

[Missouri_Mike]

No, supply side economics never works.
Without strong regulation, those with wealth would cheat anyway they could.
The offshoring of the last 20 years should be proof enough that supply side or trickle down, is a fraud.

Reaganomics started 40 years ago. And it worked. It actually floated Clinton through his terms. The reason the last twenty years with a short break because of Trump have sucked is because of the taxes and regulation. What fails every single time is the high tax, massive spending and high regulation of the democrats.

 

[Rigby5]

That’s not how it works at all. Even employee owned companies have to account for labor as an expense before distributing the profit portions. The hands off investors as you call them are not getting any of that expense money. They ONLY get a portion of the profit. If there’s no profit they get nothing. The motive to produce for the workers is keeping their job. If they get all of the profit the investors shut it down and move on to something else. Meaning you lose your guaranteed wages.

Investors aren’t some horrible evil group of lazy people. They invest looking for solid reasonable returns on their money. As a matter of fact if you own stock on your own or through a 401k, you are the investor. You’re basically wanting your own retirement fund to not grow and be taxed into a loss.

No, an employee owned company can do it anyway they want, including all being paid by percentage of profits.
Makes no difference to the IRS if the the company never makes a taxable profit because they get their taxes by taxing each individual instead.
There is never any investor who gets nothing, unless they are totally incompetent.
The investors typically get vastly more than those who actually earn, produce, and deserve it.

And no, owning stocks is not at all investing in a company.
When you buy stocks, the money goes to the person who sold you the stock, not the company.
And the company can do badly while the value of the stock goes up, or the company can do well while the value of the stock goes down.
Stocks are totally fake, are not backed by any equity or ownership, and should be illegal.

Investors are only necessary because our government is too corrupt to do its proper social function of helping communities to coordinate joint resources for jointly needed improvements.

 

[Rigby5]

Reaganomics started 40 years ago. And it worked. It actually floated Clinton through his terms. The reason the last twenty years with a short break because of Trump have sucked is because of the taxes and regulation. What fails every single time is the high tax, massive spending and high regulation of the democrats.

It worked under Clinton because there was no massive government waste.
It did not work under Reagan because he wasted so much on SDI, the Mujahedeen, and other military spending.
The fact it can work does not change the fact it usually does not work.
It depends on the intentions of those in charge.

 

[Markle]

No, supply side economics never works.
Without strong regulation, those with wealth would cheat anyway they could.
The offshoring of the last 20 years should be proof enough that supply side or trickle down, is a fraud.

That's just goofy.

 

[Markle]

It worked under Clinton because there was no massive government waste.
It did not work under Reagan because he wasted so much on SDI, the Mujahedeen, and other military spending.
The fact it can work does not change the fact it usually does not work.
It depends on the intentions of those in charge.

President Clinton handed off a recession due to the dot.com bubble that burst. Remember that? Yeah, I thought you might have forgotten that little economic blip.

During the run-up in the bubble, I vividly recall Warren Buffett on one of the financial shows. He said that he would not invest in something he didn't understand and he didn't understand how a stock could continue to go up, in spite of the fact it never showed a profit. Turned out, he was 100% correct. If you recall, there were dozens, if not hundreds of dot.com companies that were going belly up, one after the other.

If money was wasted on SDI, why is it that we now have very effective rocket systems that take our enemy missiles? Numerous missiles were fired at Kabul Airport while we were surrendering and not stuck, how'd that happen?

The money spent rebuilding our military, you say was wasted. Really? That was the direct cause of the collapse of the Soviet Union and the unification of East and West Berlin.

How can you be wrong for so long and still keep up your front?

 

[Missouri_Mike]

No, an employee owned company can do it anyway they want, including all being paid by percentage of profits.
Makes no difference to the IRS if the the company never makes a taxable profit because they get their taxes by taxing each individual instead.
There is never any investor who gets nothing, unless they are totally incompetent.
The investors typically get vastly more than those who actually earn, produce, and deserve it.

And no, owning stocks is not at all investing in a company.
When you buy stocks, the money goes to the person who sold you the stock, not the company.
And the company can do badly while the value of the stock goes up, or the company can do well while the value of the stock goes down.
Stocks are totally fake, are not backed by any equity or ownership, and should be illegal.

Investors are only necessary because our government is too corrupt to do its proper social function of helping communities to coordinate joint resources for jointly needed improvements.

Where. In the flying fuck. Did you learn this shit. Jesus H Christ.

 

[Missouri_Mike]

It worked under Clinton because there was no massive government waste.
It did not work under Reagan because he wasted so much on SDI, the Mujahedeen, and other military spending.
The fact it can work does not change the fact it usually does not work.
It depends on the intentions of those in charge.

Holy fuck.

 

[pknopp]

nope. It's an import tax paid by the shipper. For fk sake, the price of the product didn't change. So tell me how consumers pay for it?

Of course the price changed.

 

[jc456]

It isn’t just the labor costs. Microchips require acids to manufacture them. Acids which are toxic and violate tons of environmental regulations. Otherwise the acids end up in the water supply.

If you are able to just dump, that means its cheaper. But how high would your tariffs have to be to make it fiscally sound to manufacture here? One hundred percent tariffs, two hundred percent? Because treating those toxic chemicals and rendering them safe costs a lot of money.

So labor costs and equipment is only a part of the problem. Then you have to have a permit to build a factory to do all these things. That means convincing the County Commission or City Councils that allowing your poisons into the community is a great thing. They’re not going to be happy. And even if you manage to convince them, ten seconds later you’re going to be hit with lawsuits about the danger you are presenting to the community.

That will take at least ten years to litigate. Then when you finally get that settled and get permission from the Courts to start building your factory, a new process will have been created, with different toxic chemicals, and you’ll have to start all over again.

Do you know why ships are sent to Indonesia to be scrapped? It isn’t just the low wages. It is worker safety. OSHA wouldn’t allow anyone to cut a ship up like that without decontaminating the various tanks and bunkers. Anything toxic would have to be removed by guys in respirators and probably hazmat suits before you could start cutting. Then transporting the stuff to an approved disposal facility would cost a small fortune in permits alone. Now finally you could cut up the ship, but it would be slow when you have to have a safety briefing every single day about the nature of the work.

Every accident would result in an OSHA investigation and a lawsuit.

That isn’t the case in Indonesia. They cut the ship up regardless of the toxic elements right on the beach letting the chemicals and materials fall into the ocean. Workers who are injured are replaced that day by someone else who wants the money.

Tariffs would have to be so high to cover those kinds of things that they would be repealed in about a year, if it took that long.

Besides you’re forgetting about the dock workers. Those ships bringing in that stuff get offloaded by the ILA and transported by Railroad union employees and teamsters. Three powerful unions that will object to your plan to put them out of work.

They aren’t going anywhere