The Long Cold Winter

[can't sit still]

Geekster, we all know that there are far more facets to this depression than adjustable rate mortgages. The PTB blew sequential bubbles because of and for basic structural problems. I could counter-claim that the ARMs could have been paid if the jobs hadn't been outsourced. The structural changes to the S&Ls years ago were such a big money-maker that structural changes to banks [Glass-Steagal} were foreseen as huge money-makers. Emptying SS to pay war profiteers was a huge money maker. All the savings in America were maneuvered so as to be accessible to pillaging. 401s are half gone. Pension funds are on the hit list. All of this pillaging has caused a huge turndown in consumer confidence that is flattening consumption. All facets.
They aren't calling it a depression yet. Give it 2 1/2 years.

Some numbers relevant to calling it a downturn;
"Department of Agriculture, which concludes that 50 million people in the US--one in six of the population--were unable to afford to buy sufficient food to stay healthy in 2008.

US Department of Agriculture Secretary Tom Vilsack said that he expected the number of hungry Americans to worsen when the survey for 2010 is released.

Today in the American Superpower, one of every six Americans is living on food stamps.
The Great American Superpower, which is wasting trillions of dollars in pursuit of world hegemony, has 22% of its population unemployed and almost 17% of its population dependent on welfare in order to stay alive.

[geekster]

Sure, pieces flew out from all sorts of places in that contraption. But the piece that started it all was adjustable rate mortgages adjusting up and people who could barely afford the current payments defaulted starting a whole chain of events. It was the first time rates were raised in years ... something like half a decade or more and the GSEs had been pushing sub-prime mortgages all those years. There were a lot of loans out there that people could barely afford. Those fell out when their mortgages adjusted up and the rest is a historic chain reaction.

[1durphul]

Sure, pieces flew out from all sorts of places in that contraption. But the piece that started it all was adjustable rate mortgages adjusting up and people who could barely afford the current payments defaulted starting a whole chain of events. It was the first time rates were raised in years ... something like half a decade or more and the GSEs had been pushing sub-prime mortgages all those years. There were a lot of loans out there that people could barely afford. Those fell out when their mortgages adjusted up and the rest is a historic chain reaction.

He is saying that one of the reasons people couldn't afford loans is because their wages have stagnated since the 1970's once you account for inflation.

Mortgages are supposed to get "cheaper" over time due to inflation and wage increases of the mortgage holder, however that thinking isn't reality anymore since wages haven't increased.

[geekster]

That is true in the private sector, yes. Wages in the public sector and in academia have risen faster than inflation, though.

[1durphul]

That is true in the private sector, yes. Wages in the public sector and in academia have risen faster than inflation, though.

The question is which one is out of whack? Don't automatically assume it is the public sector jobs that are out of whack.

[can't sit still]

It depends on your point of view. Productivity has gone WAY up so we should be receiving more money. R.O.W. wages are way lower so we should be receiving WAY less money.

[geekster]

[1durphul]

You missed my point geekster that the corporations have failed to maintain a social contract where in we ALL share in the wealth. Perhaps the Public Sector jobs have increased wages at the rate that Private Sector jobs should have been increasing pay. That it is the Public Sector that represents where the private sector should be but isn't.

[geekster]

Huh, where do you get off with this "social contract" crap? If you don't like your job, find a different one. You don't owe the company anything beyond your labor and they don't owe you anything beyond your paycheck.

"Share the wealth"? What kind of crap is that? You don't share the wealth. If someone is more productive, they should be paid more. If someone is less productive, they should be paid less. People work their ass off to get an "unfair" advantage by being better at their job, paying attention to details, giving good service. Once you start stealing their earnings to give to someone else, you absolutely kill incentive.

I will tell you why public sector pay is rising. It is because the idiots in government have negotiated multiyear contracts with unions that have guaranteed pay raises in them. The private sector is about 15% union, the public sector is about 50%. The private sector can react quicker to economic changes than the public sector can. When a city's revenues drop, they are unable to reduce hours or pay so they run the city or state into near bankruptcy.

"Social contract" my ass.

[can't sit still]

1durphul, there is a big difference. Private sector must be competitive to survive. Public sector thrives on waste. Private sector squeezes us for the last penny. Public sector pays me to dig holes and pays you to fill them in.
I suspect that corporations have not the slightest interest in any social contract. "Share the wealth" is for stockholders only. The public sector showers the wealth because they don't have to produce it.... NO pain.

[1durphul]

1durphul, there is a big difference. Private sector must be competitive to survive. Public sector thrives on waste. Private sector squeezes us for the last penny. Public sector pays me to dig holes and pays you to fill them in.
I suspect that corporations have not the slightest interest in any social contract. "Share the wealth" is for stockholders only. The public sector showers the wealth because they don't have to produce it.... NO pain.

If corporations serve no positive purpose, nor adhere to a social contract with society, than they should be abolished, as they clearly serve no good purpose for existing.

[1durphul]

Huh, where do you get off with this "social contract" crap? If you don't like your job, find a different one. You don't owe the company anything beyond your labor and they don't owe you anything beyond your paycheck.

"Share the wealth"? What kind of crap is that? You don't share the wealth. If someone is more productive, they should be paid more. If someone is less productive, they should be paid less. People work their ass off to get an "unfair" advantage by being better at their job, paying attention to details, giving good service. Once you start stealing their earnings to give to someone else, you absolutely kill incentive.

I will tell you why public sector pay is rising. It is because the idiots in government have negotiated multiyear contracts with unions that have guaranteed pay raises in them. The private sector is about 15% union, the public sector is about 50%. The private sector can react quicker to economic changes than the public sector can. When a city's revenues drop, they are unable to reduce hours or pay so they run the city or state into near bankruptcy.

"Social contract" my ass.

As you've so forcefully and painstakingly painted a picture of corporations as having no responsibility to society, nor adhering to any social contract with it, than clearly they should be abolished. The picture you paint of them is of a menacing, all consuming, nation destroyer.

[geekster]

Most "corporations" employ fewer than 50 people. What is this "social contract" crap? Can you point me to it in any federal, state, or local regulation that dictates what a company must do?

A "corporation" is simply a way of registering a business so that it can transact business as if it were an individual. Nothing more, nothing less. It is a way of establishing a business in such a manner so that many people can share ownership. A "corporation" is only as good or as evil as the people who work there. They aren't evil in and of themselves simply because they are registered as a corporation.

Say I have an idea and the drive to see it through but need 200 million dollars for a factory. How do I raise that capital? I can try to borrow it and run that factory as my personal business. Or I can incorporate and sell stock. That way a lot of people can buy a little bit of the business. I use that capital to build a factory (or buy a gas station) and operate an ongoing concern. The profits are split (dividends) according to how much each person owns or maybe I don't pay dividends and reinvest the profits back into the company to expand.

I don't get your knee-jerk reaction to being anti "corporation" as I am not sure you really know what one is. Most corporations are very small, most are private. Drive down any street in your town. Look at all the businesses that aren't major chains. The little shops. Practically every single one of them is a corporation.

[1durphul]

LOL as if anybody with $200 million is going to open a factory inside the U.S.! Surely not when they can abandon us and do the "patriotic" thing and off shore those wages to China, India, or anywhere willing to work at near slave wages.

That is the broken social contract. The trade off for being allowed limited liability is that we all share in the wealth creation. However in the last 30 years the wealth creation has almost exclusively stayed in the hands of the top, and is not trickling down to society in general.

Laws, and constitutions don't exist in a vacuum. It is that social contract (which has been torn up by the wealthy) that gave gov the incentive to create the legal corporate entity.

So I say it is time to abolish them. We do have that power.

[geekster]

Your "social contract" crap is made up in your own head. It doesn't exist in law. Stop expecting people to live up to some fantasy you have dreamed up. What stops people from starting a $200 million business isn't China, it currently is our government. They make it too expensive to start a business.

There is no reason why everyone in this country shouldn't go down to their county courthouse and pay the $50 fee or whatever it is where you live ($50 is high, most places it is like $20) to get a business license and be able to do business on their own. Everyone is a potential freelancer.

You are playing a class warfare game based on blaming someone else for your situation. You want to "blame" the wealthy. Well, how did they get that way? If you want to stamp out the wealthy, it reminds me of:

The Left's gleeful renewed attack on capitalism (and its inherent individual liberties and personal freedoms) brings to mind Tocqueville's observation that some Americans "are so enamored of equality that they would rather be equal in poverty than be unequal in freedom."

I am really sorry, 1durphul, but I think you are a complete dumbass.

[geekster]

I take that back, I dont think you are a dumbass because I don't know you. I think you have expressed some dumbassed views.


Maybe you should read some of Walter E. Williams' stuff. He is an economics professor at George Mason University in Virginia. Particularly his stuff on "self interest".

This is a good one:

http://econfaculty.gmu.edu/wew/articles/06/caring.html

Actually, I will quote the whole damned thing:

George Orwell admonished, "Sometimes the first duty of intelligent men is the restatement of the obvious." That's what I want to do -- talk about the obvious, starting with the question: What human motivation leads to the most wonderful things getting done?
How about the charity and selflessness we've seen from people like Mother Teresa? What about the ceaseless and laudable work of organizations like the Red Cross, Habitat for Humanity and Salvation Army? What about the charitable donations of rich Americans, to use the silly phrase, who've given something back?

While the actions of these people and their organizations are laudable, results motivated by charity and selflessness pale in comparison to other motives behind getting good things done. Let's look at it.

In December 1999, Stephen Moore and Julian L. Simon wrote an article titled "The Greatest Century That Ever Was," published by the Washington, D.C.-based Cato Institute. In it they report: Over the course of the 20th century, life expectancy increased by 30 years; annual deaths from major killer diseases such as tuberculosis, polio, typhoid, whooping cough and pneumonia fell from 700 to fewer than 50 per 100,000 of the population; agricultural workers fell from 41 to 2.5 percent of the workforce; household auto ownership rose from one to 91 percent; household electrification rose from 8 to 99 percent; controlling for inflation, household assets rose from $6 trillion to $41 trillion between 1945 and 1998. These are but a few of the wonderful things that have occurred during the 20th century.

Returning to my initial question: What human motivation accounts for the accomplishment of these and many other wonderful things? The answer should be obvious. It was not accomplished by people's concern for others but by people's concern for themselves. In other words, it's people seeking more for themselves that has produced a better life for all Americans.

Take a minor example. I think it's wonderful that Idaho potato farmers get up early in the morning to toil in the fields, which results in Walter Williams in Pennsylvania enjoying potatoes. Does anyone think they make that sacrifice because they care about me? They might hate me, but they make sure that I enjoy potatoes because they care about and want more things for themselves.

What about all those people who've invented and marketed machines that do everything from diagnosing illnesses to controlling air flight? Were they basically motivated by a concern for others, or were they mostly concerned with their own well-being?
One of the wonderful things about free markets is that the path to greater wealth comes not from looting, plundering and enslaving one's fellow man, as it has throughout most of human history, but by serving and pleasing him. Many of the wonderful achievements of the 20th century were the result of the pursuit of profits. Unfortunately, demagoguery has led to profits becoming a dirty word. Nonprofit is seen as more righteous, particularly when people pompously stand before us and declare, "We're a nonprofit organization."

Profit is cast in a poor light because people don't understand the role of profits. Profit is a payment to entrepreneurs just as wages are payments to labor, interest to capital and rent to land. In order to earn profits in free markets, entrepreneurs must identify and satisfy human wants in a way that economizes on society's scarce resources.

Here's a little test. Which entities produce greater consumer satisfaction: for-profit enterprises such as supermarkets, computer makers and clothing stores, or nonprofit entities such as public schools, post offices and motor vehicle departments? I'm guessing you'll answer the former. Their survival depends on pleasing ordinary people, as opposed to the latter, whose survival is not so strictly tied to pleasing people.

Don't get me wrong. I'm not arguing that self-interest and the free market system produce perfect outcomes, but they're the closest we'll come to perfection here on Earth.

Read more here:

http://econfaculty.gmu.edu/wew/articles.html

[1durphul]

I am really sorry, 1durphul, but I think you are a complete dumbass.

Regardless of what you think of me, complexity is part of our universe. Laws (and corporations exist due to laws) do not exist in a vacuum. There is a complex set of factors that lead to corporations existing in the United States. When the U.S. was created there was no "right" for a corporation to exist under the U.S. constitution. The fact that there was a societal NEED to create the legal framework in the new U.S. legal system is because corporations were thought to bring positive benefits to society. THAT is the social contract.

Social contracts are rarely EXPLICITLY set down in text, they are more often a collection of the zeitgeist of popular thought, and the times they exist in. Our corporations today have grabbed hold of the very convenient (to corporations) social contract of the Reagan era and are refusing to let go of it despite the fact that society and the world have changed and as a result so has the social contract.

You gave me some reading, which I promise you I'll read later, so I'll ask that you bone up on this:
http://en.wikipedia.org/wiki/Social_contract

[geekster]

Burning Man is a corporation. I think you don't even really know what a corporation is. It is nothing more than a way to register a business. How else is someone going to do business? There is no alternative to the corporation. What would you propose as an alternative to incorporating?

Imagine there was no such thing as the corporation. Burning Man would either be a sole proprietorship or a partnership. That means that the assets of Burning Man would be the personal property of the partners themselves. So now one of the partners gets into a car accident and is sued or defaults on a loan and someone comes after them personally for money and takes that person's stake in the org which could mean real physical property, equipment, office space, etc. Is that a good thing?

People tend to look at incorporation as only shielding individuals from acts of the corporation. It also shields the corporation from the acts of the individuals. There is nothing inherently bad about incorporating a business. In fact, the Obama administration has issued regulations that are going to require sole proprietors to incorporate in order to keep government contracts.

It isn't "incorporation" that causes people to act irresponsibly.

And of course "social contracts" aren't explicit because if they were, nobody would sign one and there would be no way to morph what it means every time you feel like it. It is a notion made up in someone's head that doesn't exist. We all as individuals have a certain social contract with our neighbors, that is called society. That is called civilization. But you seem to be stuck on this thing about being against a certain way of registering business that is illogical and seems to be the product of someone else's thought that you have simply adopted and spew without any real critical thinking on your part.

What would be the alternative to the corporation?

[1durphul]

This is a good one:

http://econfaculty.gmu.edu/wew/articles/06/caring.html

Actually, I will quote the whole damned thing:

...



In December 1999, Stephen Moore and Julian L. Simon wrote an article titled "The Greatest Century That Ever Was," published by the Washington, D.C.-based Cato Institute. In it they report: Over the course of the 20th century, life expectancy increased by 30 years; annual deaths from major killer diseases such as tuberculosis, polio, typhoid, whooping cough and pneumonia fell from 700 to fewer than 50 per 100,000 of the population; agricultural workers fell from 41 to 2.5 percent of the workforce; household auto ownership rose from one to 91 percent; household electrification rose from 8 to 99 percent; controlling for inflation, household assets rose from $6 trillion to $41 trillion between 1945 and 1998. These are but a few of the wonderful things that have occurred during the 20th century.

Let's go down this list of and examine each claim, you quoted it, so I assume you actually considsered each. But let's run through them anyway since the remainder of the article uses these "accopmlishments" and attributes them to corporations.

Illness: in almost every illness listed above the curative vaccine was discovered by a government entity such as a public unversity, or non-profit recipient of government grant money.

Agricultural workers fell from 41 to 2.5 percent of the population... why is this good? Where did those people go? Are they now unemployed? Do their families still own the farms? Or does a mega corporation like Monsantos? 41% to 2.5% is a huge swing. Undoubtedly communities by the thousands, and Americans by the 10's of millions, were destroyed by such a dramatic change.

Auto ownership was up to 91% from the 1800's?! LOL The first mass produced automobile was in 1901, the model T in 1906. Of course ownership increased dramatically during that time period. So that percentage increase can't be used to justify his statements. What about the "goodness" of the personal automobile. I personally would prefer not to own a car and to live in a society where mass transit were well funded, and the highway system were a simpler network of 2 lane roads, and goods continued to be moved by rail. Heck we're already starting to see major drawbacks of a society with an infrastructure built entirely on the idea that we'll have limitless oil.

Household electrification of the soviet union seemed to go along at a fine pace without corporations. The electric grid is a mix of public and private sector origins in the U.S. but I'll give him this one. Surely the profit potential to utility providers increased the deployment to densely populated areas. What about rural though? Since we developed along the model of limitless gasoline we don't have rural villages where all the farmers live together and travel to their farmland, instead we have very isolated homes living on the farmland, miles from their nearest neighbor. Without gov't regulators requiring it you can bet corporations would never have extended that grid to rural homes.

Household assets up trillions, how would that look though if we took out the top 1%. Your guy conveniently avoids that reality. This number is meaningless without distribution taken into account. A much more useful number would be the increase of the median's household asset value. Interesting that your guy didn't use that number, he is a professor and trained to use the best data, yet he seems to be avoiding it. Seems a bit intellectually dishonest to me.

Returning to my initial question: What human motivation accounts for the accomplishment of these and many other wonderful things? The answer should be obvious. It was not accomplished by people's concern for others but by people's concern for themselves. In other words, it's people seeking more for themselves that has produced a better life for all Americans.

And so he goes onto make a claim that is completely unfounded by his initial arguments. You called me a dumbass earlier, so I'm going to be straightforward, you don't challenge any assertion you're handed. You don't critically think about any information you've been spoon fed. Had you done so you would have found another article for my consideration than this one.

Yet despite my careful research that your guy forgot to do, you'll now attack me for some minor error I made somewhere in this post. There was recently a study about people like yourself who are wrong, but even after being shown facts and information that completely refute the wrong information in your head, people like you just become more adamant that the erroneous ideas in their heads are the only true and correct ones.


So geekster, I don't really expect you to see my point of view. And you are going to harp on endlessly in this thread about how awful government is and how corporations are the greatest thing since High Fructose Corn Syrup. Just know I'm not posting for you though, you're a lost cause. You could be shown that the sky is sometimes white but being convinced it was blue and only blue by Limbaugh, Beck, and Hannity you'd scream at the top of your lungs that it was blue and only blue period until they day you die. Even if I were to take you outside on an overcast day and point at the clouded over sky and say "Look, white." You would scream "BLUE!!!"

[geekster]

" you don't challenge any assertion you're handed. "

I haven't see you make any specific assertion yet other than "corporations are bad" and some babbling about this nebulous social contract that you haven't defined as to exactly what it is.

Let me back up. A corporation doesn't make decisions, people do. I believe the social contract you speak of is what is actually instilled in the hearts of people, not what is written in law. You can not codify ethical behavior. It takes a certain moral fortitude for someone to refuse to do something that they believe is wrong or to do what is right.

The minute you try to codify that, people start looking for loopholes and begin to comply with the letter rather than the spirit of it. Good corporate behavior begins with the social contract that is between people and placed into someone's consciousness when they are being raised.

It is easy to blame "corporations" for commercial misconduct when nearly every business is one. It isn't that corporations are inherently bad, it is just that people who do bad things are likely to be working for one as they employ something like 99% of the people in this country.

What is needed is a strong foundation of teaching people what is right and what is wrong and people absolutely refusing to do things which are bad. You can't make a law or regulation to do that. It starts in your heart, it starts in raising of children. It comes from actually FEELING a social contract with your neighbor, your community, your customers, etc.

You can't regulate that on paper.

[1durphul]

" you don't challenge any assertion you're handed. "

I haven't see you make any specific assertion yet other than "corporations are bad" and some babbling about this nebulous social contract that you haven't defined as to exactly what it is.

Let me back up. A corporation doesn't make decisions, people do. I believe the social contract you speak of is what is actually instilled in the hearts of people, not what is written in law. You can not codify ethical behavior. It takes a certain moral fortitude for someone to refuse to do something that they believe is wrong or to do what is right.

The minute you try to codify that, people start looking for loopholes and begin to comply with the letter rather than the spirit of it. Good corporate behavior begins with the social contract that is between people and placed into someone's consciousness when they are being raised.

It is easy to blame "corporations" for commercial misconduct when nearly every business is one. It isn't that corporations are inherently bad, it is just that people who do bad things are likely to be working for one as they employ something like 99% of the people in this country.

What is needed is a strong foundation of teaching people what is right and what is wrong and people absolutely refusing to do things which are bad. You can't make a law or regulation to do that. It starts in your heart, it starts in raising of children. It comes from actually FEELING a social contract with your neighbor, your community, your customers, etc.

You can't regulate that on paper.

As much as I'd love to talk about this more with you I just found myself protected by the 14th Amendment and I'm feeling a little overwhelmed with relief and happiness.

[Ugly Dougly]

27% FAT
http://www.latimes.com/health/boostersh ... 5256.story
Not just "overweight" - 27% Americans are OBESE.

Holy crap, I am going to be paying for these fat people's medical bills.

[Token]

All of this becomes irrelevant once we develop quantum singularity teleporters and can quick jump to Santiago in the midle of winter to buy our fresh produce.


This message brought to you by the Umbrella Corporation.

[geekster]

How do you think we feed vegetarians in Minneapolis in the middle of January? You think we ship all that stuff from Chile using OIL? HAH!

[geekster]

This sounds paradoxical. Politicians often sneer at libertarians, saying, "You want to get rid of traffic lights?!" Well, yes, actually. In some cases, traffic moves better and more safely when government removes traffic lights, stop signs, even curbs.

It's Friedrich Hayek's "spontaneous" order in action: Instead of sitting at a mechanized light waiting to be told when to go, drivers meet in an intersection and negotiate their way through by making eye contact and gesturing.

The secret is that drivers must pay attention to their surroundings -- to pedestrians and other cars -- rather than just to signs and signals. It demonstrates the "Peltzman Effect" (named after retired University of Chicago economist Sam Peltzman): People tend to behave more recklessly when their sense of safety is increased. By removing signs, lights and barriers, drivers feel less safe, so they drive more carefully. They pay more attention.

In Drachten, Holland, lights and signs were removed from an intersection handling about 30,000 cars a day. Average waiting times dropped from 50 seconds to less than 30 seconds. Accidents dropped from an average of eight per year to just one.

On Kensington High Street in London, after pedestrian railing and other traffic markers were removed, accidents dropped by 44 percent.

"What these signs are doing is treating the driver as if they were an idiot," says traffic architect Ben Hamilton-Baillie. "If you do so, drivers exhibit no intelligence."

Once again, freedom and responsibility triumph.

http://en.wikipedia.org/wiki/Peltzman_effect

[can't sit still]

Token, Calif already has year round vegetables. People buy Twinkies. People eat tons of sweets and don't care to think about the effects. We pay for the bad effects of obesity, cigarettes, alcohol and crack,,,, etc. Just take good care of your health and don't buy insurance. That's what i do.

[geekster]

Texas declares war on the EPA.

http://www.globalwarming.org/wp-content ... letter.pdf

Texas is slated to gain 3 or 4 house seats in 2010.

[Trishntek]

Just my 2 cents worth about the "Societal Contract" or whatever mentioned above,,,,,

Corporations offer a product worth something whether it is goods or services or some combination of such. The contract with society is in the greenback. I pay something valuable to you for something you have that I want. If you don't like their product, then do not seek a "contract" with them.

What the fuck should anybody care what I do with my money, what you do with your money or what that corporation does with their money? It's all the same pile of money circulating in the veins of a free market system.

The fangs of gubmint chomp on those veins at every intersecting contractual agreement. There they are sucking life out of it. Money represents time and effort in the production of a good or service. Gubmint does not produce anything which did not already exist in society. Whereas, the society of private enterprise, creativity, invention and inovation are provided by the private sector. The only thing gubmint creates is more gubmint. Hear that sucking sound? Their thirst is never quenched.

[geekster]

Well, it is my opinion that every human being has a social contract, whether they work at a corporation or not. It begins with the "golden rule" and goes from there.

Abolishing "corporations" will not abolish unethical behavior. That existed long before there was ever such a thing as corporations and will exist long after.

[Trishntek]

Well, it is my opinion that every human being has a social contract, whether they work at a corporation or not. It begins with the "golden rule" and goes from there.

Abolishing "corporations" will not abolish unethical behavior. That existed long before there was ever such a thing as corporations and will exist long after.

No doubt there has been and always will be unethical behavior in the private sector. Afterall, it is a jungle out there!

But if you are going to bring up ethics, D.C. is the mecca of corruption, elitism, class warfare, racism, statism and,,,, they consider themselves superior to their constituents.

I have no problem with the golden rule. It fuckin' pisses me off to no end when the majority of our leadership in federal gubmint dare to believe they are a necessity in our lives for our own good. That is hubris of the highest order,,,,, the order of benevolent monarchs and gracious papacy.