What IS The Free Market

[bripat9643]

Just consider how Detroit auto workers exploited stock holders, bond holders and the taxpayers.

How did productive auto workers exploit bond holders?

In a normal bankruptcy trial the bond holders are always first in line to receive the proceeds from any remaining company assets. The stock holders are second and the union thugs are last. They actually have no legal right to anything the company owns. Instead, the Obama/Holder injustice system awarded all the money to the union thugs and the bondholders and stock holders got nothing. Salaried employees also got nothing. The bond holders and stock holders actually had to put up real money of their own. The union thugs put up nothing.

That's how a fascist government like ours exploits people for the benefit of its constituents.

 

[georgephillip]

I do. But by definition such exploitation is a based on voluntary interaction.

Those who participated in the epidemic of mortgage fraud that culminated with millions losing their homes and jobs may have engaged voluntarily but the consequences of their actions affected many who did not volunteer for anything. I would suspect a state run economy would be even worse, but I don't think we're limited to only two choices here.

 

[bripat9643]

Nope. Under a free market people can only get rich by providing consumers with the products and services they want. The minute they stop doing that, their fortunes evaporate.

What you say may have been true at some earlier period of capitalism, but it's manifestly false today when you have a relatively small subset of capitalists in the finance industry whose "investments" exceed the total value added to global GDP in a single year. These capitalists get rich by providing goods and services to a fraction of 1% of the global population while entailing massive financial risks for the majority of humanity.

Your belief that the 1% consume the bulk of our economic output is charming if not remotely plausible. America produced 10 million cars last year. How many did the 1% buy?.

The assets of the wealthy are mostly tied up in investments. That means it's tied up in plant, equipment and infrastructure that provides jobs for you and me. Tax that away and you tax away all the private sector jobs.

If you think government can eliminate financial risk, then you're delusional or stupid. There's no way to eliminate risk from life. Government interference doesn't solve the problem. It aggravates the problem. The crash in 2008 was entirely the fault of government policies.

 

[dblack]

I do. But by definition such exploitation is a based on voluntary interaction.

Those who participated in the epidemic of mortgage fraud that culminated with millions losing their homes and jobs may have engaged voluntarily but the consequences of their actions affected many who did not volunteer for anything. I would suspect a state run economy would be even worse, but I don't think we're limited to only two choices here.

Fraud isn't 'voluntary'.

 

[bripat9643]

I do. But by definition such exploitation is a based on voluntary interaction.

Those who participated in the epidemic of mortgage fraud that culminated with millions losing their homes and jobs may have engaged voluntarily but the consequences of their actions affected many who did not volunteer for anything. I would suspect a state run economy would be even worse, but I don't think we're limited to only two choices here.

What "mortgage fraud?" Did anyone go to prison for this crime? People lost their homes because they purchased homes they couldn't possibly afford. Banks granted these mortgages because the government held a gun to their heads. As always, you're blaming capitalism for a problem the government caused. That's what anti-capitalists always do.

 

[georgephillip]

In a normal bankruptcy trial the bond holders are always first in line to receive the proceeds from any remaining company assets. The stock holders are second and the union thugs are last. They actually have no legal right to anything the company owns. Instead, the Obama/Holder injustice system awarded all the money to the union thugs and the bondholders and stock holders got nothing. Salaried employees also got nothing. The bond holders and stock holders actually had to put up real money of their own. The union thugs put up nothing.

Is this what you're referring to?
"In 2008, a series of damaging blows drove the Big Three to the verge of bankruptcy. The Big Three had in recent years manufactured SUVs and large pickups, which were much more profitable than smaller, fuel-efficient cars. Manufacturers made 15% to 20% profit margin on an SUV, compared to 3% or less on a car.[95] When gasoline prices rose above $4 per gallon in 2008, Americans stopped buying the big vehicles and Big Three sales and profitability plummeted."
Automotive industry crisis of 2008 10 - Wikipedia the free encyclopedia

 

[bripat9643]

In a normal bankruptcy trial the bond holders are always first in line to receive the proceeds from any remaining company assets. The stock holders are second and the union thugs are last. They actually have no legal right to anything the company owns. Instead, the Obama/Holder injustice system awarded all the money to the union thugs and the bondholders and stock holders got nothing. Salaried employees also got nothing. The bond holders and stock holders actually had to put up real money of their own. The union thugs put up nothing.

Is this what you're referring to?
"In 2008, a series of damaging blows drove the Big Three to the verge of bankruptcy. The Big Three had in recent years manufactured SUVs and large pickups, which were much more profitable than smaller, fuel-efficient cars. Manufacturers made 15% to 20% profit margin on an SUV, compared to 3% or less on a car.[95] When gasoline prices rose above $4 per gallon in 2008, Americans stopped buying the big vehicles and Big Three sales and profitability plummeted."
Automotive industry crisis of 2008 10 - Wikipedia the free encyclopedia

What's your point?

 

[regent]

If competition is removed from capitalism, is it still capitalism?

 

[bripat9643]

If competition is removed from capitalism, is it still capitalism?

Government interference is the only way you can remove competition from capitalism, and, no, then it's no longer capitalism. It's more properly called either fascism or socialism.

 

[georgephillip]

Capitalism is the order that results when people are free to pursue their self-interest. So in a sense it is the natural order of things.

Is it part of the natural order for capital markets to increase economic inequality by elevating the rate of return on capital over the rate of growth of the overall economy?
http://www.nytimes.com/2014/01/29/opinion/capitalism-vs-democracy.html

 

[bripat9643]

Capitalism is the order that results when people are free to pursue their self-interest. So in a sense it is the natural order of things.

Is it part of the natural order for capital markets to increase economic inequality by elevating the rate of return on capital over the rate of growth of the overall economy?
http://www.nytimes.com/2014/01/29/opinion/capitalism-vs-democracy.html

No, that's the work of the FED which is pumping trillions of dollars into financial markets with "Quantitative Easing." The natural order of things would be for people to use gold for money like they did for thousands of years before the invention of counterfeit fiat currencies.

 

[georgephillip]

Businesses don't restrict economic rights. Government does. Businesses also don't restrict so-called "social rights." Most "social rights" are just faux rights invented by liberals.

When business contaminates local water tables or fails to provide a wage sufficient for a decent living, it violates the economic rights of its workers. When business destroys or contaminates sources of food, it violates the economic and social rights of its workers and their families.

 

[georgephillip]

No, that's the work of the FED which is pumping trillions of dollars into financial markets with "Quantitative Easing." The

Between 1914 and 1973 the rate of economic growth exceeded the after-tax rate of return on capital. Since then the rate of economic growth has declined while the return on capital has been rising for decades before QE was enacted.
"'If the rate of return on capital remains permanently above the rate of growth of the economy – this is Piketty’s key inequality relationship,' Milanovic writes in his review, it 'generates a changing functional distribution of income in favor of capital and, if capital incomes are more concentrated than incomes from labor (a rather uncontroversial fact), personal income distribution will also get more unequal — which indeed is what we have witnessed in the past 30 years.'”

"Piketty has produced the chart at Figure 1 to illustrate his larger point.

http://www.nytimes.com/2014/01/29/opinion/capitalism-vs-democracy.html

 

[bripat9643]

No, that's the work of the FED which is pumping trillions of dollars into financial markets with "Quantitative Easing." The

Between 1914 and 1973 the rate of economic growth exceeded the after-tax rate of return on capital. Since then the rate of economic growth has declined while the return on capital has been rising for decades before QE was enacted.
"'If the rate of return on capital remains permanently above the rate of growth of the economy – this is Piketty’s key inequality relationship,' Milanovic writes in his review, it 'generates a changing functional distribution of income in favor of capital and, if capital incomes are more concentrated than incomes from labor (a rather uncontroversial fact), personal income distribution will also get more unequal — which indeed is what we have witnessed in the past 30 years.'”

"Piketty has produced the chart at Figure 1 to illustrate his larger point.

http://www.nytimes.com/2014/01/29/opinion/capitalism-vs-democracy.html

Pikkety has been proven to be a hack.

 

[georgephillip]

ikkety has been proven to be a hack.

By whom?
"In a 20-page review for the June issue of the Journal of Economic Literature that has already caused a stir, Branko Milanovic, an economist in the World Bank’s research department, declared:

“'I am hesitant to call Thomas Piketty’s new book Capital in the 21st Century one of the best books in economics written in the past several decades. Not that I do not believe it is, but I am careful because of the inflation of positive book reviews and because contemporaries are often poor judges of what may ultimately prove to be influential. With these two caveats, let me state that we are in the presence of one of the watershed books in economic thinking.'”

http://www.nytimes.com/2014/01/29/opinion/capitalism-vs-democracy.html?_r=0

 

[bripat9643]

ikkety has been proven to be a hack.

By whom?
"In a 20-page review for the June issue of the Journal of Economic Literature that has already caused a stir, Branko Milanovic, an economist in the World Bank’s research department, declared:

“'I am hesitant to call Thomas Piketty’s new book Capital in the 21st Century one of the best books in economics written in the past several decades. Not that I do not believe it is, but I am careful because of the inflation of positive book reviews and because contemporaries are often poor judges of what may ultimately prove to be influential. With these two caveats, let me state that we are in the presence of one of the watershed books in economic thinking.'”

http://www.nytimes.com/2014/01/29/opinion/capitalism-vs-democracy.html?_r=0

Piketty s Class-Warfare Tome Bad Numbers Bad Analysis - Daniel J. Mitchell - Townhall Finance Conservative Columnists and Financial Commentary - Page 1

Thomas Piketty…remains a hero on the left, but the honeymoon may be drawing to a sour close as evidence mounts that his numbers don’t add up. …data are so misleading as to be worthless. They attempt to estimate top U.S. wealth shares on the basis of that portion of capital income reported on individual income tax returns—interest, dividends, rent and capital gains. This won’t work because federal tax laws in 1981, 1986, 1997 and 2003 momentously changed (1) the rules about which sorts of capital income have to be reported, (2) the tax incentives to report business income on individual rather than corporate tax forms, and (3) the tax incentives for high-income taxpayers to respond to lower tax rates on capital gains and dividends by realizing more capital gains and holding more dividend-paying stocks.​

 

[georgephillip]

ikkety has been proven to be a hack.

By whom?
"In a 20-page review for the June issue of the Journal of Economic Literature that has already caused a stir, Branko Milanovic, an economist in the World Bank’s research department, declared:

“'I am hesitant to call Thomas Piketty’s new book Capital in the 21st Century one of the best books in economics written in the past several decades. Not that I do not believe it is, but I am careful because of the inflation of positive book reviews and because contemporaries are often poor judges of what may ultimately prove to be influential. With these two caveats, let me state that we are in the presence of one of the watershed books in economic thinking.'”

http://www.nytimes.com/2014/01/29/opinion/capitalism-vs-democracy.html?_r=0

Piketty s Class-Warfare Tome Bad Numbers Bad Analysis - Daniel J. Mitchell - Townhall Finance Conservative Columnists and Financial Commentary - Page 1

Thomas Piketty…remains a hero on the left, but the honeymoon may be drawing to a sour close as evidence mounts that his numbers don’t add up. …data are so misleading as to be worthless. They attempt to estimate top U.S. wealth shares on the basis of that portion of capital income reported on individual income tax returns—interest, dividends, rent and capital gains. This won’t work because federal tax laws in 1981, 1986, 1997 and 2003 momentously changed (1) the rules about which sorts of capital income have to be reported, (2) the tax incentives to report business income on individual rather than corporate tax forms, and (3) the tax incentives for high-income taxpayers to respond to lower tax rates on capital gains and dividends by realizing more capital gains and holding more dividend-paying stocks.​

"Piketty’s wealth tax solution runs directly counter to the principles of contemporary American conservatives who advocate antithetical public policies: cutting top rates and eliminating the estate tax.

"It would also run counter to the interests of those countries that have purposefully legislated low tax rates in order to attract investment."

http://www.nytimes.com/2014/01/29/opinion/capitalism-vs-democracy.html?_r=0

The suppression of wage growth we've seen over the past 40 years isn't likely to improve without policies that "...reform the structure of American business so that workers can supplement their wages with significant capital ownership stakes and meaningful capital income and profit shares.

"In other words, let's turn everyone into a capitalist.?

 

[bripat9643]

ikkety has been proven to be a hack.

By whom?
"In a 20-page review for the June issue of the Journal of Economic Literature that has already caused a stir, Branko Milanovic, an economist in the World Bank’s research department, declared:

“'I am hesitant to call Thomas Piketty’s new book Capital in the 21st Century one of the best books in economics written in the past several decades. Not that I do not believe it is, but I am careful because of the inflation of positive book reviews and because contemporaries are often poor judges of what may ultimately prove to be influential. With these two caveats, let me state that we are in the presence of one of the watershed books in economic thinking.'”

http://www.nytimes.com/2014/01/29/opinion/capitalism-vs-democracy.html?_r=0

Piketty s Class-Warfare Tome Bad Numbers Bad Analysis - Daniel J. Mitchell - Townhall Finance Conservative Columnists and Financial Commentary - Page 1

Thomas Piketty…remains a hero on the left, but the honeymoon may be drawing to a sour close as evidence mounts that his numbers don’t add up. …data are so misleading as to be worthless. They attempt to estimate top U.S. wealth shares on the basis of that portion of capital income reported on individual income tax returns—interest, dividends, rent and capital gains. This won’t work because federal tax laws in 1981, 1986, 1997 and 2003 momentously changed (1) the rules about which sorts of capital income have to be reported, (2) the tax incentives to report business income on individual rather than corporate tax forms, and (3) the tax incentives for high-income taxpayers to respond to lower tax rates on capital gains and dividends by realizing more capital gains and holding more dividend-paying stocks.​

"Piketty’s wealth tax solution runs directly counter to the principles of contemporary American conservatives who advocate antithetical public policies: cutting top rates and eliminating the estate tax.

"It would also run counter to the interests of those countries that have purposefully legislated low tax rates in order to attract investment."

http://www.nytimes.com/2014/01/29/opinion/capitalism-vs-democracy.html?_r=0

The suppression of wage growth we've seen over the past 40 years isn't likely to improve without policies that "...reform the structure of American business so that workers can supplement their wages with significant capital ownership stakes and meaningful capital income and profit shares.

"In other words, let's turn everyone into a capitalist.?

You think an NYT opinion piece successfully refutes the fact that Piketty's numbers are bullshit?

 

[georgephillip]

You think an NYT opinion piece successfully refutes the fact that Piketty's numbers are bullshit?

I think you haven't established Piketty's numbers are bullshit.

 

[bripat9643]

You think an NYT opinion piece successfully refutes the fact that Piketty's numbers are bullshit?

I think you haven't established Piketty's numbers are bullshit.

Read the entire article. I obviously can't quote the whole thing.