How much for a degree?

[Nanos]

> Capitalism works like this: The hardest worker gets the million
> dollar prize. The second hardest gets $100,000 all the rest get $1,000.

Well now, that depends on what you mean by hardest worker...

It sounds like you mean the one that does the most work, when in fact, more usually those that earn't the most, do the least actual work, whilst those that do the most work, eg. the labour that produces the widget that your selling, get paid the least...

Sure there are rich business folk who work every minute of every day (Though I do wonder that they are in turn working for the banks...), but I know plenty of rich folk who just sit on their backsides most of the time and are highly skilled in manipulating other folk (politics..) into doing work for them.

As I've mentioned before, cooperatives work in a capitalist system, and yet on the whole for the same man hours produce double the output of more tradionally modern, every man for themselves, stab your co-worker in the back to climb the promotion ladder company..


> Why make the extra effort if the payoff is so low

Perhaps one should employ people who like the job, rather than ones intent on just earning money, that way you'd get more of a quality product, rather than people just doing a job because it pays the bills.


> People who want to go into business are a relatively rare lot.
> They ought to be encouraged.

I quite agree there.


> The countries that have reduced the reward have trouble attracting
> people who want to start businesses. They come to America for that.

Yet, look at the mess they are making there, huge debts, its almost as if the people don't know how to run a business properly...


> People have been looking for the New Socialist Man for 100 years.

I get the impression you see an either or solution here, either someone is capitalist, or socialist, and no middle ground.

Is not a cooperative capitalist a middle ground person ? (Eg. someone who pays all their workers equal hourly wage.)


> No socialist country has ever been able to find enough of them.
> Generally it is better to deal with human nature as it is.

Now, I do have some agreement with you there, I do wonder if there are enough people to run say cooperatives...

But, looking at how industrialised we are, how much labour is actually needed to keep things running, its not like we need to employ 100% of the people. (In the UK only 50% of the population work anyhow, and 1/5 of those work in government, so you quickly reduce the numbers you need to actually keep the lights on..)

I do wonder, that we might actually have enough as you describe them, 'socialists' to go around and who would be willing to work for a decent wage for a decent days work. (After all, look at a company I know whose management paid themselves $1 miilion each, and their workers $30,000, are they really getting an amazing manager for that money... many would say 'of course they are!' yet the company went bust owning hundreds of millions... now is that the fault of the workers or the management...)

It seems both our countries are full of uppermanagement who are not as bright and gifted as their salaries would seem to indicate... we might even be better off paying someone from the shop floor to come and run things if recent results are anything to go by...

Or maybe its the accountants fault, or the shareholders fault...

Its someones fault for sure, but I reckon the finger of blame points least at the people doing the actual donkey work than any other group.

[MSimon]

Perhaps one should employ people who like the job, rather than ones intent on just earning money, that way you'd get more of a quality product, rather than people just doing a job because it pays the bills.

I'm sure there are a few that work for the fun of it. But I got to tell you packing house work is dangerous and stinkin and if it didn't pay well I wouldn't do it.

Still, you are talking utopia. In the real world higher rewards garner either more efforts or smarter efforts. As a young buck I regularly put in 12 hour days to get projects on track. And I loved my work. But no way I was going to put in a killing effort without excellent rewards.

Good money gets good performance. I'd like to keep it that way.

In America upward mobility depends on extraordinary efforts. The fact that politics short circuits that is a detriment.

So why am I doing Polywell for free? Well I like it for one thing. The other is that if it takes off I expect to be well rewarded for further and more specific efforts.

[Maui]

Here is a supply sider who has decided to go out of business rather than face higher taxes and more government regulation.

http://www.americanthinker.com/2008/12/ ... osses.html

Now you have to ask yourself. What will it take to bring guys like this back into the market place?

Sorry, but this strikes me as utter B.S. It just makes no sense. Let's start with taxes:

Since the author fears the tax increase from Obama's proposal we can deduct that the author preports to run:
A) A sole proprietorship since an LLC wouldn't be affected by Obama's rollback of Bush's cuts.
B) A business that employs people (unlike the vast majority of small businesses)
C) Assuming "we" refers to him and his wife, his business earns more than $250,000 a year in profits.
(FactCheck.org found that less that 3% of the "23 million" small business that McCain talked about meet these qualifications.)In fact, most small business (like Joe the Plumbers plumbing business) would actually see tax decreases because of Obama's "Making Work Pay” and via incentives for providing healthcare to employees if their business does so.

But, fine, that's no consolation for Mr. Wright and his apparently thriving business.

This begs the question, then, what alternative is he turning to? Assuming he plans to work for someone else, it is only logical he would be anticipating making a comperable amount. But is salary would be taxed in the exact same way his business would. For exampl, if his business made $500,000, his income after Fed taxes would decrease to $348,000 from $359,000. But he would "suffer" the exact same fate by working for someone else. So why is it more beneficial to close his businees? Is he irrational enough to want to take a lower salary to avoid the tax increase? Even though income after federal taxes for someone making $250,000 would go unchanged at $192,000, why would $192,000 be better for Mr.Wright than $348,000?
(I used ElectionTaxes.com for my calculations)

If you ask me, his story doesn't add up. I bet Mr. Wright will be making just as much money and paying the same "penalty" in taxes going forward as he did with his business. At the very least, if we are to believe that taxes under Obama would cripple him, why would a rational businessman not wait until Obama's tax changes take effect? Why throw away money you could be earning over the next year (or more) in the meantime?

About regulation-- I might believe him if he cited exactly what regulation he is fearing. Was he running a sub-prime mortgage shop and is afraid of being forced to obtain earning verification from his borrowers? And really, outside of the mortagage industry where about everyone agrees it became too unregulated, Obama has never been leading any big charges on regulation. For example, here's an excerpt from an interview back in April:

WALLACE: Over the years, John McCain has broken with his party and risked his career on a number of issues — campaign finance, immigration reform, banning torture.

As a president, can you name a hot-button issue where you would be willing to buck the Democratic Party line and say, "You know what? Republicans have a better idea here?"

OBAMA: Well, I think there are a whole host of areas where Republicans in some cases may have a better idea.

WALLACE: Such as?

OBAMA: Well, on issues of regulation. I think that back in the '60s and '70s a lot of the way we regulated industry was top-down command and control, we're going to tell businesses exactly how to do things.

And you know, I think that the Republican Party and people who thought about the markets came up with the notion that, "You know what? If you simply set some guidelines, some rules and incentives, for businesses — let them figure out how they're going to, for example, reduce pollution," and a cap and trade system, for example is a smarter way of doing it, controlling pollution, than dictating every single rule that a company has to abide by, which creates a lot of bureaucracy and red tape and oftentimes is less efficient.

Anyway, as with taxes, even if there was some sort of regulation Obama has proposed that would cripple Mr. Wright's business (that he suspiciously doesn't care to mention), why forego the profit you could earn in the meantime?

Finally, about malpractice suits-- as with the previous points, if Obama has proposals that he feels are going to jack up his malpractice insurance, how does it make any sense to shut down now instead of waiting for the increase to become a reality? Anyway, while Obama doesn't support caps on punitive damages, he has proposed tort reform to help drive down the cost of liability insurance.

Basically, I just don't buy this guy's story. He appears to be a free-lance writer (which either is the basis of the small business he describes, or is a small business in his own right). That certainly doesn't appear to be a line of work in which regulation or malpractice suits would be much of a concern. And it just boggles my mind why someone whose business was being forced to close via a specific federal policy would not be ranting about that specific policy that was forcing them under. Who would really fold the tent and give up money in the short term on generic and speculative taxes/regulation/tort fears?

This guy was "closing his business" regardless of who got elected, then found it convenient to blame on Obama.

If you want tangible evidence of business reaction to Obama, why not discuss surge in stocks as the business world reacted to Obama's economic team and proposals?

[MSimon]

Anyway, as with taxes, even if there was some sort of regulation Obama has proposed that would cripple Mr. Wright's business (that he suspiciously doesn't care to mention), why forego the profit you could earn in the meantime?

Efforts vs rewards.

Have you ever run a small business? I have. The effort is brutal.

Now you may believe that the link I posted is bunk. But time will tell. The tax year ends 31 Dec. If you see a jump in unemployment post that date you can figure out what is happening.

[MSimon]

I just looked at the Russel 2000.

http://www.russell.com/Indexes/characte ... _Index.asp

It hasn't moved since your link from 25 November.

And further - the real news won't hit for 12 to 18 months when all the inflationary money currently being pumped into the market starts affecting business negatively. Inflation almost always makes things look better for a while.

You might also like to read the comments at the article I posted. Wright isn't the only one to have made the calculation he did.

[Maui]

Now you may believe that the link I posted is bunk. But time will tell. The tax year ends 31 Dec. If you see a jump in unemployment post that date you can figure out what is happening.

Wait-- I just went through all that effort to lay out why it makes absolutely no sense for someone to close their doors based now based on what may or may not happen in the future, yet you expect me to accept that whatever happens to the jobs market in Q4 is primarily due to the actions of a president that doesn't assume office until next year? Unemployment is a lagging indicator. What happens to unemployment in Q4 has much more to say about the state of the economy in Q2 than it does Q4. Maybe it feels good to scapegoat Obama, but its ridiculously unsupported.

About effort vs rewards: I fully understand that many small business owners put in a lot more hours than a normal salaried worker. My point was simply that if prior to Obama assuming office the equation of effort vs reward was on the side of effort for Mr. Wright, then it will be a while before anything changes to that equation. For example, tax-wise Obama has indicated he may let Bush's tax cuts die naturally which wouldn't happen until 2010. Anyway, it seems unlikely a scenario like the one above that would reduce his income by 3% would tip the balance of that decision one way or the other. For instance, he claims he's run the business for 30 years, which means he's already run the business for a decade under the same tax rate he would after Obama's tax change takes effect. And he offers scant suggestion about what specifically might change in regards to regulation and malpractices policy that would alter his analysis.

Basically, without providing more details about what has suddenly changed in his effort vs reward analysis, I don't buy for a second that whatever decision was made was really made as a result of Obama.

[Maui]

I just looked at the Russel 2000.

http://www.russell.com/Indexes/characte ... _Index.asp

It hasn't moved since your link from 25 November.

Uh, well, right-- all of Obamas major economic announcements came on Nov 24 - 26. After that they were factored into the market and it would be very hard to argue that any changes beyond then (whether up, down or level) were in response to those announcements.

The Friday before Obama's announcements the Russel 2000 stood at 406.54. The following Wednesday (after Obama's third and final press conference), it closed at 468.8 which is a jump of 15%.
Russel 2000 over the past month.

[hanelyp]

Does 'producers' also mean employees ?

Yes. But unless fraud or coercion is involved, I see that as a matter between the employer and employee.

Regarding MSimon's comment, if 'equality' means lopping off the top without raising the bottom, it serves nothing more than envy, one of the deadly sins.

[MSimon]

I just went through all that effort to lay out why it makes absolutely no sense for someone to close their doors based now based on what may or may not happen in the future,

Actually business is all about anticipating what happens in the future.

A lot of capital sat out the Depression because the actions of government on the business climate were uncertain. Once uncertainty declined (war production had priority) business picked up.

[Maui]

Actually business is all about anticipating what happens in the future.

A lot of capital sat out the Depression because the actions of government on the business climate were uncertain. Once uncertainty declined (war production had priority) business picked up.

What you are talking about is investment. I don't disagree that many business are currently deciding not make new investments based on the current economic climate.

That's a completely different beast than a cash cow. Wright claims to be putting down his cow now because in 1 or 2 years it may start producing 3% less milk (as it did during the boom of the 90's). He wasn't wrangling over whether to buy a new cow.

EDIT: Oh, and if you speaking now more towards unemployment data, your point is one of the primary reasons that unemployment is a lagging indicator. Jobs are always being lost as some businesses shrink and fail. In a good economy, that is more than offset by investments expanding other businesses and creating new ones. But when a company decides to expand or a new company is created, depending on the exact circumstances (contracts, planning, etc), it takes often takes awhile before the decision actualy results in any new jobs. So if the decisions begin to get turned down on new investments, its only at the time that those jobs would have come online that it shows up in unemployment numbers.

[MSimon]

Wright claims to be putting down his cow now because in 1 or 2 years it may start producing 3% less milk

Not exactly. If he assumes his current assets are declining in value and will continue to decline due to political factors the thing to do is to sell now (go cash or gold) and wait for the assets to decline further and then pick them up at greatly reduced prices.

Sell high. Buy low. A classic recession/depression strategy.