The Rich Don't Create Jobs

[bripat9643]

I never said it was unlimited, nor did I ever say (or imply) that capital consists only of money. What I did imply, and will now say outright, is that capital ALWAYS EXCEEDS CONSUMER DEMAND in a capitalist economy.

There is always plenty of capital, because any capital above and beyond what consumer demand justifies is waste.

BWHAHAHAHAHAHA!

Man, you really crack me up!

You posture as some kind of expert on economics, but you don't know the first thing about it. First, you use nebulous expression like "plenty of capital." That statement is meaningless. If a good is an economic quantity, then the supply of it is limited. The Marxist abracadabra is the source of the theory that there is always an excess supply of capital, and it's utterly wrong. There are times when the consumers demand more finished goods relative to capital goods, and other times when they demand the inverse, but capital does not "ALWAYS EXCEEDS CONSUMER DEMAND." To believe that implies a profound misunderstanding of economics.

Our current economic problems stem from the fact that because of government meddling there was an excess expenditure on housing - more housing the consumers really wanted. When consumers expressed their true desires, this surplus housing couldn't be sold. What consumers really wanted is more capital. This demand is expressed as more savings. Now we have a lot of misallocated capital devoted to the production of housing.

The main constraint on our standard of living is the amount of capital per worker.

No. That ceased to be true a long time ago. The main constraint on our standard of living now is the amount of PAY per worker.

It's always true. It's a basic fact of economics. "PAY," is you call it is just worthless scraps of paper. Money is a claim on wealth. It's not actual wealth itself. Real wealth consists of houses, automobiles, flat screen TVs and computers. It also consists of factories and machinery. Money is just the means we use to keep score.

 

[bripat9643]

Except:

A. The ipad and iphone were both built on tech developed by the government. Look up Dennis Ritchie.

Liberals claim government determines the credit for everything. If the development of a product involved steps A, B, C, D, E, F, G and I by private firms and step H by the government, a liberal would claim the government gets all the credit for the existence of the product. The truth is that private firms would have also performed step H, but why bother when government has saved them the trouble?

Furthermore, of what relevance is your claim to the theory that "demand" creates products?

B. The Volt hasn't failed. Quite the opposite...it is selling well.

GM has sold a little over 6000 volts. That's a failure in anyone's book.

 

[Dragon]

you use nebulous expression like "plenty of capital." That statement is meaningless.

It's not meaningless. I defined the term implicitly. The amount of capital that will be invested in the production of goods and services (and hence in the creation of jobs) is limited by consumer demand. "Plenty" of capital means more than enough to do that. As long as we have enough capital to meet consumer demand, we have enough; forming more will accomplish nothing.

If a good is an economic quantity, then the supply of it is limited.

Insofar as it is less than infinity, yes. Insofar as it is less than the demand for it, not necessarily. Demand is also limited, and goods produced in excess of demand are superfluous.

Our current economic problems stem from the fact that because of government meddling there was an excess expenditure on housing - more housing the consumers really wanted. When consumers expressed their true desires, this surplus housing couldn't be sold. What consumers really wanted is more capital.

No, a mortgage loan is not capital. That's consumption. What consumers really wanted was more INCOME. More spending money. More consumption.

Money to build the houses was capital. Money to buy them was consumption. What you are saying here mirrors what I am saying rather than refuting it: capital exceeded consumer demand. Consumer demand was propped up with cheap (and irresponsible) credit so as to inflate the housing market. It worked for a while, then it crashed.

It's always true. It's a basic fact of economics.

No, it's not. It's only true when capital is scarce, as in an economy trying to industrialize. It's never true in a developed, mature industrial economy. The problem in such an economy is not capital, but consumer demand.

"PAY," is you call it is just worthless scraps of paper. Money is a claim on wealth. It's not actual wealth itself. Real wealth consists of houses, automobiles, flat screen TVs and computers.

As long as the monetary system remains sound, those scraps of paper are not "worthless." They ARE houses, automobiles, flat screen TVs and computers, according to the consumer's choice.

It also consists of factories and machinery. Money is just the means we use to keep score.

There's a distinction to be drawn between houses, automobiles, flat screen TVs and computers, on the one hand, and factories and machinery on the other. One group is consumption. The other is capital. Money is a means of EXCHANGE, not just of keeping score.

Capital is used to produce goods for consumption. Consumption and capital need to balance. Otherwise, either there will be insufficient goods to satisfy demand (something that is theoretically possible but that never happens in a mature industrial economy), or there will be insufficient consumption to sell the goods produced (something that happens all the time).

The problem in a mature economy is not capital but consumption, and it arises because too much capital is accumulated and not enough wealth is shared broadly in the form of consumption.

More money to the rich will NOT create jobs, for that reason. More money to the middle class and poor will -- for the same reason.

 

[Bern80]

Again..one has to question how alot of those people are getting into those positions. And actually..as I've said before, I would rather see investigations into people making huge salaries..as opposed to tax increases. They would have to be able to justify them.

As in:
- They are adding value to the company in terms of market share.
- They are not costing the communities they service, resources
- They are not burdening the economy at large.

You'd probably see alot of them begging for the tax increases.

That's the problem with you libs. How is it any of your business how some one earns their living? Until they wrong you in some legal sense, it isn't. Why do you think you should get a say in how much the the CEO of Ford makes? No one has to justify to you their income. And the free market has a mechanism for handling the bad CEOs and directors boards. The press and the consumer. The press' responsbility is to expose them and YOUR job as the consumer is to reaserch and, if warranted, not purchase their product if you feel that strongly about it. The issue is, as always, libs just dont' want to have to deal with that level of responsibility.

The stupidity is..paying people to do crappy jobs. Which is what you on the right fight tooth and nail to do.

Good job boys.

Because this economic calamity was authored and owned by the right.

If you're a boss, yes it is stupid to pay someone to do a bad job. If it's a business owner that doesn't answer to anyone above them then you YOU, the consumer, stops paying them by not purchasing their product if you feel that strongly about it.

I just never ceases to amaze me how stupid you libs are. Corporate america is all about greed and getting more money in your eyes then you go on to tell us how their victimizing all these people in various ways which is a bit odd when you objectively look at all those things and see that none of the deeds you accuse these businesses of perpretating are in their financial best interests in the first place. How the hell is it in the interest of greed for a CEO to pay someone who does a bad job? How is it in the interest of greed that a CEO him or herself would do a bad job?

 

[LordBrownTrout]

What an absolutely shitty and entirely irrelevant argument.

The sun will rise whether you want it to or not.

Demand all you want...Unless there is someone out there willing to take the risk that you aren't the only one demanding this or that, you can demand in one hand and shit in the other.

Rich people don't take risks.

That would be the poor and middle class.

Yes they do. I've seen it on numerous accounts.

 

[Bern80]

What an absolutely shitty and entirely irrelevant argument.

The sun will rise whether you want it to or not.

Demand all you want...Unless there is someone out there willing to take the risk that you aren't the only one demanding this or that, you can demand in one hand and shit in the other.

Rich people don't take risks.

That would be the poor and middle class.

Yes they do. I've seen it on numerous accounts.

Actually about that he is right. The really smart people, really rich people, don't make financial decisions that have a degree of risk of loss to them. Warren Buffet said it best in saying investing is like a baseball game where the batter gets an infinite number of chances to hit a home run. In investing you never have to 'swing' until all of the variables are perfect and your're virtually gaurunteed to hit it out of the park. That's how the really smart investors operate. We're not talking so much about stock market investing, but more like venture capital investments.

There is however lot's of risk in starting a business as the bulk of them fail, but that is also the starting point for an awful lot of people who are awfully wealthy.

In other words it does take risk sometimes to go from nothing to being rich. It doesn't take risk to stay there.

 

[Oldstyle]

I'm curious, Dragon...do you think repeating something twenty times makes it any more true than the first time you said it?

Nope. It was 100% true the first time I said it and it remains 100% true now. Nobody has offered a single item in rebuttal, and the evidence in favor is overwhelming. So I'm going to keep repeating it. Thanks for your advice, but I believe I'll ignore it.

Taking the incentive away from those with capital to invest it is not the way to grow the economy.

The incentive to invest lies in consumer demand for the products to be produced by investing it. No one invests in products that won't sell, which is why the economy has been so slow to grow recently.

More money to the rich does NOT create jobs.

More money to the middle class and poor creates more consumer demand, which does.

Everyone who invests in the production of a good or service "thinks" they will sell, Dragon but there is never a guarantee of that taking place. And let's be honest here...the incentive to invest is profit. Without profit there is ZERO reason for investors to risk capital. I don't know why you find that concept so hard to grasp.

 

[LordBrownTrout]

Rich people don't take risks.

That would be the poor and middle class.

Yes they do. I've seen it on numerous accounts.

Actually about that he is right. The really smart people, really rich people, don't make financial decisions that have a degree of risk of loss to them. Warren Buffet said it best in saying investing is like a baseball game where the batter gets an infinite number of chances to hit a home run. In investing you never have to 'swing' until all of the variables are perfect and your're virtually gaurunteed to hit it out of the park. That's how the really smart investors operate. We're not talking so much about stock market investing, but more like venture capital investments.

There is however lot's of risk in starting a business as the bulk of them fail, but that is also the starting point for an awful lot of people who are awfully wealthy.

In other words it does take risk sometimes to go from nothing to being rich. It doesn't take risk to stay there.

I wouldn't argue the people with less money don't take risks. They do take more. The people with more money, however, do take risks. Some are big. I think it depends on how we assign degrees of relevance in reference to the term "rich"

 

[Bern80]

Yes they do. I've seen it on numerous accounts.

Actually about that he is right. The really smart people, really rich people, don't make financial decisions that have a degree of risk of loss to them. Warren Buffet said it best in saying investing is like a baseball game where the batter gets an infinite number of chances to hit a home run. In investing you never have to 'swing' until all of the variables are perfect and your're virtually gaurunteed to hit it out of the park. That's how the really smart investors operate. We're not talking so much about stock market investing, but more like venture capital investments.

There is however lot's of risk in starting a business as the bulk of them fail, but that is also the starting point for an awful lot of people who are awfully wealthy.

In other words it does take risk sometimes to go from nothing to being rich. It doesn't take risk to stay there.

I wouldn't argue the people with less money don't take risks. They do take more. The people with more money, however, do take risks. Some are big. I think it depends on how we assign degrees of relevance in reference to the term "rich"

In terms of degree. We're talking smaller than 'the 1%'. Maybe .01%. These are like your Trumps and your Buffets. I was surprised to hear the income level that equates to the top 1% is low six figures so yeah, from that perspecrive a lot of rich people probably are taking risks.

 

[Oddball]

What your "demand is all" fails to address, kiddies...is the innovative product that nobody KNEW they wanted until they saw it.

Wrong. I addressed that above. Demand, you see, consists of two things: the desire to buy plus the ability to buy. In other words, people not only have to WANT that innovative product when they see it, they also have to be able to AFFORD it. If they can't, it doesn't matter whether they want it or not, it still won't sell.

Which is why innovative products tend to come to market more in good economic times when people have money to spend. That's why we got television in the late 1940s (instead of the late 1920s when the technology was perfected), radio and mass-production cars in the 1920s, a whole string of market innovations in the 1950s, 1960s, and 1970s, personal computers in the 1980s, Internet commerce in the 1990s -- and bugger-all of late.

An innovative product can still fail if people have plenty of money, because the desire to buy also has to be there. But it will CERTAINLY fail if people DON'T have money to spend.

More money to the rich does not create jobs -- even jobs making innovative products.

More money to the middle class and poor does.

There was once an entire society based upon such willfully ignorant and economically puerile presumptions...It was called the Soviet Union.

They had all the demand in the world and goddamn near starved.....Well, that is except for those who joined the Communist Party and played along with the charade, anyways.

 

[Dragon]

Everyone who invests in the production of a good or service "thinks" they will sell, Dragon but there is never a guarantee of that taking place. And let's be honest here...the incentive to invest is profit. Without profit there is ZERO reason for investors to risk capital. I don't know why you find that concept so hard to grasp.

I don't find it hard to grasp. None of it conflicts with what I've been saying. If a product doesn't sell, it can't make a profit. If demand for it (both desire AND ABILITY to buy it) isn't sufficient, it won't sell.

Of course everyone who invests in production thinks the product or service will sell. But, first, that's an educated guess not a wild guess, and if the product actually will sell, then business is more likely to think it will and to invest accordingly. And, second, if they think it will sell and it turns out they're wrong, jobs will be created only for a short time.

A healthy economy depends on narrow income gaps.

 

[Dragon]

There was once an entire society based upon such willfully ignorant and economically puerile presumptions...It was called the Soviet Union.

There remains an entire school of right-wing argument that relies on using words like "Soviet Union," "Communist," and "Karl Marx" like magical incantations without any reference to the reality behind them.

The Soviet Union was NOT based on any of the points I've presented here.

They had all the demand in the world

No, they didn't. But the more important point is this. Everything I've been saying applies to a capitalist economy. A planned, bureaucratic, top-down socialist economy like the USSR develops a completely different set of problems.

The model I refer to is not the Soviet Union, but the United States in the postwar decades, and Europe or Japan today -- social democracy, or a mixed economy, not bureaucratic socialism.

 

[The Rabbi]

What an absolutely shitty and entirely irrelevant argument.

The sun will rise whether you want it to or not.

Demand all you want...Unless there is someone out there willing to take the risk that you aren't the only one demanding this or that, you can demand in one hand and shit in the other.

Rich people don't take risks.

That would be the poor and middle class.

Yes they do. I've seen it on numerous accounts.

Every economic act of asset allocation involves risk. Buy Treasuries, that's a risk (2 really). Stick the money in a mattress, that's risk.
Swallow is among the most economically-illiterate posters here,but that's an enormous club, unfortunately.

 

[Oldstyle]

Everyone who invests in the production of a good or service "thinks" they will sell, Dragon but there is never a guarantee of that taking place. And let's be honest here...the incentive to invest is profit. Without profit there is ZERO reason for investors to risk capital. I don't know why you find that concept so hard to grasp.

I don't find it hard to grasp. None of it conflicts with what I've been saying. If a product doesn't sell, it can't make a profit. If demand for it (both desire AND ABILITY to buy it) isn't sufficient, it won't sell.

Of course everyone who invests in production thinks the product or service will sell. But, first, that's an educated guess not a wild guess, and if the product actually will sell, then business is more likely to think it will and to invest accordingly. And, second, if they think it will sell and it turns out they're wrong, jobs will be created only for a short time.

A healthy economy depends on narrow income gaps.

If a product isn't perceived to be able to make a profit it wouldn't be built in the first place REGARDLESS of demand. Unless of course it's a company like Solyndra who took the taxpayers to the cleaners. Why make a product that's viable when you can make one that will get you millions of dollars from the Federal Government without selling any? Ah, yes...the wonders of "green jobs".

 

[Dragon]

If a product isn't perceived to be able to make a profit it wouldn't be built in the first place REGARDLESS of demand.

So what?

 

[Oldstyle]

If a product isn't perceived to be able to make a profit it wouldn't be built in the first place REGARDLESS of demand.

So what?

So what? You've spent the entire day putting forth the premise that demand is the overiding driver that creates jobs. Now it's "so what?"

I'm sorry, Dragon but anticipation of profit is what creates jobs...without that nothing happens. The biggest drawback to progressive job creation is that you guys hate the idea of some rich person making a profit so much that you'd rather have a thousand working stiffs go without a job rather than let one wealthy guy make more money.

 

[Dragon]

If a product isn't perceived to be able to make a profit it wouldn't be built in the first place REGARDLESS of demand.

So what?

So what? You've spent the entire day putting forth the premise that demand is the overiding driver that creates jobs. Now it's "so what?"

I don't see how this conflicts with anything I've been saying. Thus, "So what?"

I'm sorry, Dragon but anticipation of profit is what creates jobs.

Temporary ones, perhaps. But it's only ACTUAL profit -- which relies on ACTUAL, not merely anticipated, consumer demand -- that creates jobs that last any reasonable length of time.

 

[The Rabbi]

I'm sorry, Dragon but anticipation of profit is what creates jobs.

Temporary ones, perhaps. But it's only ACTUAL profit -- which relies on ACTUAL, not merely anticipated, consumer demand -- that creates jobs that last any reasonable length of time.

Brilliant. But you can't have one without the other.

 

[Wiseacre]

I think there's a lot to be said for both sides of the demand argument. Sure you have to have more demand, nobody is going to invest more money in any venture without the expectation of sufficient profits. Some of that expectation is based on current demand data, extrapolated to estimate future demand.

But that isn't enough, and this is where the progressive liberal contention that demand is the total answer goes wrong. Because demand is also tied to price, if the price is too high then no matter how much you want it you ain't going to buy it. And no businessperson is going to produce it unless it is believed that the supply side (costs) are going to permit some degree of profit. IOW, enough demand will exist at that price. Investment capital will flow to whether that degree of profit expectation is greatest, whether it's here in the US or elsewhere.

So the left can proclaim all day long that more demand is the answer, and it is but only to a point. The supply side also has to be favorable if the price is not going to be prohibitive. And BTW, it damn well is the rich guys that put up most of the capital investments that get new ventures off the ground. Banks don't loan out hundreds of thouands of dollars to just anybody; you gotta have financial backing, and that means rich people, like it or not.

 

[Mr.Nick]

I love how progressives pretend that authoritarian and totalitarian socialism are some kinda ******* "story" like the Wizard of Oz...

They act like the Tin Man (Stalin) is make believe and the Lion (Mao) is make believe and the scare crow (Lenin) is make believe, then in 1995 Dorthy woke up and thought it was a dream..

Progressives ARE IN FACT SOCIALISTS. They're just so ******* stupid they have the notion that socialism is a utopia.

It's funny how the socialists cant look past 1980..... No they imagine European socialism (which is ******* failing as I post this)...

The euro is how old again???

Oh yeah... Your medical system is how good??? yeah you only self assist suicide when you cant afford to treat an individual - even more so push them into self-suicide...

That is socialized medicine for you...

Everytime a gangsta gets Swiss Cheesed - guess what??? those motherfuckers are taking money from cancer patients who need medication in your POS "socialized system."

What ban guns and that will make everything better??? -- yeah you go down to the ******* projects ans take those "banned guns" from the gangbangers in the projects...

Those ******* criminals don't even have the legal right to own guns but would make a city like Chicago or NY look like Iraq...

And those are the illegal gun owners...

So yeah, dumb progressives can go save the world with their, banning guns and Obamacare bullshit which is absolutely illogical....