This Capitalist Gets It. Capitalists without Consumers are Out of Business

• QuakerOats

  Imagine that ----- big tax increases but the budget woes only worsen:
  
  SPRINGFIELD, Ill. (CBS) — Illinois keeps falling farther behind on its debt.
  As WBBM Newsradio’s Regine Schlesinger reports, officially, the state has a backlog of more than $4.25 billion in unpaid bills.
  Illinois State Comptroller Judy Baar Topinka says when one factors in other bills, the figure is closer to around $8.5 billion.
  Those other outstanding bills include tax refunds, employee health insurance, and bills that have not yet reached her desk.
  Topinka says this is extremely disappointing, since a year ago, the state sharply increased income taxes (by 67 percent) and corporate taxes.
  “After the largest tax hike in our history, the state continues to be in this precarious fiscal position with persistent payment delays, and frankly, the situation is unlikely to significantly improve in the near term,” she said.
  Some state officials say the solution is more borrowing to pay the bills, but Topinka says the solution is to cut spending.
  http://chicago.cbslocal.com/2012/01/19/topinka-illinois-unpaid-bill-crisis-just-keeps-getting-worse/
  
• Skyhook79

  

  QuakerOats;1024141 wrote:Just take all the money the rich have and give it to the middle class and the poor.
  
  Then we can all move on to other pressing issues.
  
  Next.

  Interesting concept:
  An economics professor at a local college made a statement that he had never failed a single student before, but had recently failed an entire class. That class had insisted that Obama's socialism worked and that no one would be poor and no one would be rich, a great equalizer.
  The professor then said, "OK, we will have an experiment in this class on Obama's plan". All grades will be averaged and everyone will receive the same grade so no one will fail and no one will receive an A.... (substituting grades for dollars - something closer to home and more readily understood by all).
  After the first test, the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were happy. As the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too so they studied little..
  The second test average was a D! No one was happy. When the 3rd test rolled around, the average was an F. As the tests proceeded, the scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else. To their great surprise, ALL FAILED and the professor told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great, but when government takes all the reward away, no one will try or want to succeed. It could not be any simpler than that.
  Remember, there IS a test coming up. The 2012 elections.
  
  These are possibly the 5 best sentences you'll ever read and all applicable to this experiment:
  1. You cannot legislate the poor into prosperity by legislating the wealthy out of prosperity.
  2. What one person receives without working for, another person must work for without receiving.
  3. The government cannot give to anybody anything that the government does not first take from somebody else.
  4. You cannot multiply wealth by dividing it!
  5. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of any nation.
  — with Bill Essmann.
• Cleveland Buck

  

  @zerohedge zerohedge
  
  Bernanke does not respond if he will resign if asked to. "Has a job to do". Keyboard keys CTRL and P can do his job for free

  LOL.
• gut

  QuakerOats;1059955 wrote:Imagine that ----- big tax increases but the budget woes only worsen:

  Just more anecdotal evidence of class-warfare obfuscation.
  
  But, to be fair, IL has a problem because they doled out huge tax breaks and corporate favors. Not sure what the end effective result was, but the simple fact is this shit doesn't work when a corporation can pack up and get incentives and deals to go to a state hungry for the jobs.
  
  Same thing will play out, in a variety of different forms but with the same result, if you try to jack-up rates on the rich. It's 99 people sitting around a table short $400 on the bill and blaming the 1 rich guy for not kicking in another $100.
• Cleveland Buck

  

  I don't want to wait for a new thread to get approved, so I'll put this here.
  

  This is one of the most interesting and startling articles I have read in a long time. In the usual version of events, the poor are helpless victims of capitalist exploitation, and only the wise intervention of the state can improve their condition. The growth of what experts call System D, the unofficial economy that operates outside the state’s arena of taxation and regulation, suggests that the reality is quite different. It is by evading the state’s alleged help that the most vulnerable have managed to eke out tolerable livings for themselves.
  
  
  [INDENT]Today, System D is the economy of aspiration. It is where the jobs are. In 2009, the Organisation for Economic Co-operation and Development (OECD), a think tank sponsored by the governments of 30 of the most powerful capitalist countries and dedicated to promoting free-market institutions, concluded that half the workers of the world — close to 1.8 billion people — were working in System D: off the books, in jobs that were neither registered nor regulated, getting paid in cash, and, most often, avoiding income taxes. . . .
  
  In many countries — particularly in the developing world — System D is growing faster than any other part of the economy, and it is an increasing force in world trade. But even in developed countries, after the financial crisis of 2008-09, System D was revealed to be an important financial coping mechanism. A 2009 study by Deutsche Bank, the huge German commercial lender, suggested that people in the European countries with the largest portions of their economies that were unlicensed and unregulated — in other words, citizens of the countries with the most robust System D — fared better in the economic meltdown of 2008 than folks living in centrally planned and tightly regulated nations. Studies of countries throughout Latin America have shown that desperate people turned to System D to survive during the most recent financial crisis….
  
  In Africa, many cities — Lagos, Nigeria, is a good example — have been propelled into the modern era through System D, because legal businesses don’t find enough profit in bringing cutting- edge products to the third world. China has, in part, become the world’s manufacturing and trading center because it has been willing to engage System D trade. Paraguay, small, landlocked, and long dominated by larger and more prosperous neighbors, has engineered a decent balance of trade through judicious smuggling. The digital divide may be a concern, but System D is spreading technology around the world at prices even poor people can afford. Squatter communities may be growing, but the informal economy is bringing commerce and opportunity to these neighborhoods that are off the governmental grid. It distributes products more equitably and cheaply than any big company can. And, even as governments around the world are looking to privatize agencies and get out of the business of providing for people, System D is running public services — trash pickup, recycling, transportation, and even utilities.
  
  [/INDENT]
  System D employs nearly two billion people today. More evidence that as the world’s public sectors implode from the pressure of all their impossible promises, the result will not be desperation and want, but an explosion in wealth, creativity, and civilization.
  

  http://www.tomwoods.com/blog/how-the-poor-are-prospering-by-ignoring-the-state/
  
  Full article:
  http://www.foreignpolicy.com/articles/2011/10/28/black_market_global_economy?page=full
• gut

  ^^^so, basically poor people cheat taxes and avoid regulation as much as the rich people?
  
  And I'm sure that, at least in the US and Europe, these same people "double-dip" by receiving social welfare and sucking the govt tit hard.
• Cleveland Buck

  

  I don't know what you read, but this is about the black market being the fastest growing economy in the world because it is free of government interference, and as a result of this free market, even the poorest people around the world have enjoyed increased wealth and standard of living.
• gut

  Cleveland Buck;1073965 wrote:I don't know what you read, but this is about the black market being the fastest growing economy in the world because it is free of government interference, and as a result of this free market, even the poorest people around the world have enjoyed increased wealth and standard of living.

  It's a REAL stretch to jump to that conclusion. Without property rights, you ultimately do not have value creation. Those markets are thriving by ripping-off from the hard work and creative minds they're stealing from.
  
  I don't disagree that taxes and regulation raise the hurdle for ROI, but at the same time you find too little or no regulation is as bad as too much (i.e. consumer protection laws being one of the healthiest form of regulations that can actually increase demand).
• Cleveland Buck

  

  gut;1074037 wrote:It's a REAL stretch to jump to that conclusion. Without property rights, you ultimately do not have value creation. Those markets are thriving by ripping-off from the hard work and creative minds they're stealing from.
  
  I don't disagree that taxes and regulation raise the hurdle for ROI, but at the same time you find too little or no regulation is as bad as too much (i.e. consumer protection laws being one of the healthiest form of regulations that can actually increase demand).

  I don't know who you think they stole from. They are buying and selling products with cash. And I'm sure those people in Nigeria are happy to have access to these products and aren't worried about getting their government involved in regulating them. Increasing demand isn't the government's job.
• gut

  Cleveland Buck;1074250 wrote:I don't know who you think they stole from. They are buying and selling products with cash. And I'm sure those people in Nigeria are happy to have access to these products and aren't worried about getting their government involved in regulating them. Increasing demand isn't the government's job.

  Ohhhhh, absolutely. It's not like stealing is a central part of the Nigerian economy or anything. They're so flooded with legit cash that they have a shortage of honest businessmen to help them transfer the money to secure banks in the US.
  
  Black markets by their very nature are typically stolen or illicit goods because, believe it or not, it's better for both business and consumer to operate in regulated markets (to a point). As I said, some regulations actually create positive benefits/externalities, and economists don't disagree with that.
• Cleveland Buck

  

  gut;1074334 wrote:Ohhhhh, absolutely. It's not like stealing is a central part of the Nigerian economy or anything. They're so flooded with legit cash that they have a shortage of honest businessmen to help them transfer the money to secure banks in the US.
  
  Black markets by their very nature are typically stolen or illicit goods because, believe it or not, it's better for both business and consumer to operate in regulated markets (to a point). As I said, some regulations actually create positive benefits/externalities, and economists don't disagree with that.

  I am talking about the people and businesses in the article. They pay cash for their goods, smuggle them into these countries, and sell them for cash on the streets. They didn't steal them from anyone. I'm sure there is a lot of that going on in Africa and elsewhere, simply because the governments are so corrupt and contribute to the chaos. That isn't what the article was about though.
  
  And because it is someone's opinion that regulated markets are better for business doesn't make that a fact or a reason to discredit the real results in unregulated markets. Big companies love regulated markets, because they lobby for regulations that cripple their competition. That has nothing to do with what is right, though, or better for society as a whole. There are many types of economists with many different ideas. The ones who wrote the textbooks used in schools are showing to hold a failed philosophy.
• gut

  Cleveland Buck;1074412 wrote: And because it is someone's opinion that regulated markets are better for business doesn't make that a fact

  Umm, it IS a fact, not an opinion, and there's plenty of research on the subject. That's different from saying any and all regulation is good, but that which relates to quality and correcting information assymetries is typically good for buyer AND scrupulous sellers.