Daily Digest

Daily Digest 3/29 - What's Missing In New York's Budget, Bernanke On Oil Shocks, Is Fukushima About To Blow?

Tuesday, March 29, 2011, 10:42 AM
  • When Integrity Dies
  • What You Won't See In New York's Budget
  • Japanese Government Backtracks Again: Edano Says No Plan To Nationalize TEPCO
  • Japan’s Electricity Shortage to Last Months
  • Japan Mulls Nationalising Fukushima Nuclear Plant Company
  • Bernanke On The Effects Of Oil Price Shocks, And Why The Fed Will Never Tighten In Response To Oil At Any Price
  • Is Fukushima About To Blow?
  • First Suicide - A Vegetable Farmer in Fukushima

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Economy

When Integrity Dies (Alfredo E.)

Some characteristics of Weimar Germany are apparent in the United States. Parallel observations are sometimes less than they appear (e.g., in both cases, the people enjoyed eating meat), but are striking. The German incident happened over four years (also arbitrary. It can be argued that any year from 1914 to 1921 was the point of departure.)

What You Won't See In New York's Budget (pinecarr)

Cuomo and the legislative leaders decided that a budget that was on time was so important, they took all the non-budget issues that are contentious out of the discussion," said Carol Kellermann, president of the Citizens Budget Commission. "They'll all now become hotly debated issues in the session.

Japanese Government Backtracks Again: Edano Says No Plan To Nationalize TEPCO (pinecarr)

If there is one thing the Japanese authorities are consistent in, it is their complete lack of consistency. First the government leaks information that it will nationalize TEPCO, sending the market panicking and the stock (9501.JP) triggering circuit breakers after it goes bidless, and a few hours later after seeing the devastation this is doing on the market (Nikkei down 1.5%), it backtracks and says it was only kidding.

Energy

Japan’s Electricity Shortage to Last Months (jdargis)

The places most affected are not only in the earthquake-ravaged area but also in the economically crucial region closer to Tokyo, which is having to ration power because of the big chunk of the nation’s electrical generating capacity that was knocked out by the quake or washed away by the tsunami.

Bernanke On The Effects Of Oil Price Shocks, And Why The Fed Will Never Tighten In Response To Oil At Any Price (Alfredo E.)

Curious what Bernanke thinks of ongoing oil price shocks? Wondering how long before the great Chairsatan will tighten in response to $120 Brent? The shorts answer - never. But don't take our word for it. Here is a paper titled by the eponymous nemesis of printer cartridge conservation, titled "Systematic Monetary Policy and the Effects of Oil Price Shocks" written when the urge for genocide was just a germ, a seedling if you will, back in the good old 1997. In it, Bernanke, who was yet to make his epochal statement about paradropping crisp Benjamins, makes it all too clear why neither oil at $120 nor oil at $1,120 will be enough to push the FOMC to hike: "an important part of the effect of oil price shocks on the economy results not from the change in oil prices, per se, but from the resulting tightening of monetary policy.”

Japan Mulls Nationalising Fukushima Nuclear Plant Company (pinecarr)

Japan's government is reportedly ready to consider nationalising the operator of the crippled power plant at the centre of the worst nuclear accident in the country's history. News that the state could take a majority stake in the Tokyo Electric Power company (Tepco) came after nuclear safety officials confirmed traces of plutonium had been found in soil in five locations in the Fukushima Daiichi atomic complex.

Environment

Is Fukushima About To Blow? (rgwmusic)

Japan's damaged nuclear plant in Fukushima has been emitting radioactive iodine and caesium at levels approaching those seen in the aftermath of the Chernobyl accident in 1986. Austrian researchers have used a worldwide network of radiation detectors – designed to spot clandestine nuclear bomb tests – to show that iodine-131 is being released at daily levels 73 per cent of those seen after the 1986 disaster. The daily amount of caesium-137 released from Fukushima Daiichi is around 60 per cent of the amount released from Chernobyl. ("New Scientist", March 24 ---thanks to Michael Collins "They said it wasn't like Chernobyl and they were wrong")

First Suicide - A Vegetable Farmer in Fukushima (guardia)

A vegetable farmer (64 years old) hanged himself in the morning of March 24 in Sukagawa City in Fukushima Prefecture. It was one day after the government issued a "intake restriction" on some of the vegetables grown in Fukushima. The man was still looking forward to shipping the cabbages he grew, even though he was shocked by the damage by the earthquake. The family blames the nuclear plant for "killing" him.

Article suggestions for the Daily Digest can be sent to dd@PeakProsperity.com. All suggestions are filtered by the Daily Digest team and preference is given to those that are in alignment with the message of the Crash Course and the "3 Es."

19 Comments

saxplayer00o1's picture
saxplayer00o1
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Posts: 2590
Portugal's Rating Is Cut to Lowest Investment Grade by S&P on Ba

"Residential real estate prices dropped in January by the most in more than a year, raising the risk that U.S. home sales will keep slowing.

The S&P/Case-Shiller index of property values in 20 cities fell 3.1 percent from January 2010, the biggest year-over-year decrease since December 2009, the group said today in New York. The decline was in line with the 3.2 percent median forecast by economists in a Bloomberg News survey.

Rising foreclosures are swelling the number of houses on the market, which may put additional pressure on prices in coming months. At the same time, a further decline in home values may keep potential buyers on the sidelines as they foresee better deals, hurting construction and consumer spending as owners’ equity evaporates."

"Greece’s credit rating was cut two steps by Standard and Poor’s on concern the country may be required to restructure its debt and bondholders may lose out.

The rating was lowered to BB- from BB+ by S&P, according to a statement today. The outlook remains negative, according to the statement. "

"Standard & Poor’s Ratings Service cut Portugal’s credit rating for the second time in four days, saying the country will likely need an international bailout and debt restructuring.

S&P cut the rating to BBB-/A-3 from BBB/A-2, with a negative outlook, it said in an e-mailed statement today. BBB- is the lowest investment grade."

  • Other headlines: 

Massive Foreclosure Inventory Overwhelms Sales

San Diego bankruptcy filings hit record high

NJ tax revenue likely to be $4 billion below 2008 level

Postal Services loses more than $1.1B in February

Fed Presidents Support Completion of $600 Billion Bond Program

Italian 2010 Household Savings 20% Lower Than In 1990

'Hundreds' of Layoffs Loom as Judiciary Prepares to Slash Another $70 Million (NY)

Moody's Downgrades Most Of $4.1 Billion In Alt-A RMBS From Countrywide

Analysts Worry Rising Gas Prices Would Hinder Las Vegas Recovery

Michigan governor Rick Snyder signs bill to cut unemployment benefits in 2012

DRHolden's picture
DRHolden
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Gotta Love That Worker Productivity

Yout gotta' love it! Why hire more workers or properly compensate current workers when you can squeeze more work out the poor bastards, who probably feel lucky to have a job at all. Don't you love capitalism when it's firing on all eight cylinders? When profits are high and workers have no bargaining power? It's like a wet dream for grossly overpaid corporate CEOS. If we just wait a little longer, we'll be back to the glory days of the 1890s in no time.

http://www.declineoftheempire.com/2011/03/gotta-love-that-worker-product...

plato1965's picture
plato1965
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Posts: 615
UK headlines.

Japan may have lost race to save nuclear reactor

http://www.guardian.co.uk/world/2011/mar/29/japan-lost-race-save-nuclear-reactor

In the dark over oil reserves

Shell says we're entering a 'zone of uncertainty' over oil supply – a frank admission it hasn't a clue what's going to happen...

http://www.guardian.co.uk/global/2011/mar/28/oil-reserves-shell-supply

New nuclear is 'no brainer’, says ex-government adviser

http://www.telegraph.co.uk/earth/energy/8413600/New-nuclear-is-no-brainer-says-ex-government-adviser.html

( the sceptics may have an alternative interpretation of "no brainer" )

Broadspectrum's picture
Broadspectrum
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Our Collective Self-Delusion

The Collapse of Globalization, By Chris Hedges

The aim of the corporate state is not to feed, clothe or house the masses, but to shift all economic, social and political power and wealth into the hands of the tiny corporate elite. It is to create a world where the heads of corporations make $900,000 an hour and four-job families struggle to survive. The corporate elite achieves its aims of greater and greater profit by weakening and dismantling government agencies and taking over or destroying public institutions. Charter schools, mercenary armies, a for-profit health insurance industry and outsourcing every facet of government work, from clerical tasks to intelligence, feed the corporate beast at our expense. The decimation of labor unions, the twisting of education into mindless vocational training and the slashing of social services leave us ever more enslaved to the whims of corporations. The intrusion of corporations into the public sphere destroys the concept of the common good. It erases the lines between public and private interests. It creates a world that is defined exclusively by naked self-interest.

http://carolynbaker.net/2011/03/28/the-collapse-of-globalization-by-chris-hedges/

Broadspectrum

Broadspectrum's picture
Broadspectrum
Status: Bronze Member (Offline)
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Posts: 66
Our Collective Self-Delusion

The Collapse of Globalization, By Chris Hedges

The aim of the corporate state is not to feed, clothe or house the masses, but to shift all economic, social and political power and wealth into the hands of the tiny corporate elite. It is to create a world where the heads of corporations make $900,000 an hour and four-job families struggle to survive. The corporate elite achieves its aims of greater and greater profit by weakening and dismantling government agencies and taking over or destroying public institutions. Charter schools, mercenary armies, a for-profit health insurance industry and outsourcing every facet of government work, from clerical tasks to intelligence, feed the corporate beast at our expense. The decimation of labor unions, the twisting of education into mindless vocational training and the slashing of social services leave us ever more enslaved to the whims of corporations. The intrusion of corporations into the public sphere destroys the concept of the common good. It erases the lines between public and private interests. It creates a world that is defined exclusively by naked self-interest.

http://carolynbaker.net/2011/03/28/the-collapse-of-globalization-by-chris-hedges/

Broadspectrum

saxplayer00o1's picture
saxplayer00o1
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Posts: 2590
Plato1965..from your first link

Japan may have lost race to save nuclear reactor

http://www.guardian.co.uk/world/2011/mar/29/japan-lost-race-save-nuclear-reactor

"At least part of the molten core, which includes melted fuel rods and zirconium alloy cladding, seemed to have sunk through the steel "lower head" of the pressure vessel around reactor two, Lahey said.

"The indications we have, from the reactor to radiation readings and the materials they are seeing, suggest that the core has melted through the bottom of the pressure vessel in unit two, and at least some of it is down on the floor of the drywell," Lahey said. "I hope I am wrong, but that is certainly what the evidence is pointing towards.""

rjs's picture
rjs
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Posts: 372
You gotta' love it!

DRHolden wrote:

Yout gotta' love it! Why hire more workers or properly compensate current workers when you can squeeze more work out the poor bastards, who probably feel lucky to have a job at all. Don't you love capitalism when it's firing on all eight cylinders? When profits are high and workers have no bargaining power? It's like a wet dream for grossly overpaid corporate CEOS. If we just wait a little longer, we'll be back to the glory days of the 1890s in no time.

http://www.declineoftheempire.com/2011/03/gotta-love-that-worker-product...

even higher productivity with no pay: Jobs don't pay what they used to - VIA Tyler Cowen, here is a look at instances where the going wage rate appears to be zero:With nearly 14 million unemployed workers in America, many have gotten so desperate that they're willing to work for free. "People who work for free are far hungrier than anybody who has a salary, so they're going to outperform, they're going to try to please, they're going to be creative," "From a cost savings perspective, to get something off the ground, it's huge. Especially if you're a small business."In the last three years, Fallis has used about 50 unpaid interns for duties in marketing, editorial, advertising, sales, account management and public relations.  She's convinced it's the wave of the future in human resources. "Ten years from now, this is going to be the norm," she says. In the current labour market, it isn't too difficult to understand why a worker would do this. When long spells of unemployment are common, temporary unpaid work provides a means to maintain and improve skills while building contacts. Given stiff competition for new positions, unpaid labour allows a worker to signal his or her fitness for the job relative to applicants.

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mesaboogieman
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Guardian oil reserves article

Plato,   thank you for posting.      Great article on oil reserves (or the lack of).  Some great comments too.

Going halves with a friend on an electric car conversion, for evaluation at this stage.

www.e-volks.com/index.html?

In the US you seem to be way ahead of the UK with regard to electric conversions, even though fuel is cheaper. Probably because the kits are so expensive here. Even with delivery it's way cheaper to get a kit sent from the US.  Thanks guys!

Smile

Poet's picture
Poet
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Posts: 1840
Businesses Subsidized By Workers And Families And States

It's not just that they're working for free. The business is being subsidized by the state, by the worker's savings, by the worker's family helping out, etc. That's exactly where the business wants to be.

Capitalism is blind. It doesn't care who does the job or at what cost to itself - if it doesn't have to pay that cost. Patriotism or taking care of an employee is only useful if it is of benefit.

Poet

rjs wrote:

DRHolden wrote:

Yout gotta' love it! Why hire more workers or properly compensate current workers when you can squeeze more work out the poor bastards, who probably feel lucky to have a job at all. Don't you love capitalism when it's firing on all eight cylinders? When profits are high and workers have no bargaining power? It's like a wet dream for grossly overpaid corporate CEOS. If we just wait a little longer, we'll be back to the glory days of the 1890s in no time.

http://www.declineoftheempire.com/2011/03/gotta-love-that-worker-product...

even higher productivity with no pay: Jobs don't pay what they used to - VIA Tyler Cowen, here is a look at instances where the going wage rate appears to be zero:With nearly 14 million unemployed workers in America, many have gotten so desperate that they're willing to work for free. "People who work for free are far hungrier than anybody who has a salary, so they're going to outperform, they're going to try to please, they're going to be creative," "From a cost savings perspective, to get something off the ground, it's huge. Especially if you're a small business."In the last three years, Fallis has used about 50 unpaid interns for duties in marketing, editorial, advertising, sales, account management and public relations.  She's convinced it's the wave of the future in human resources. "Ten years from now, this is going to be the norm," she says. In the current labour market, it isn't too difficult to understand why a worker would do this. When long spells of unemployment are common, temporary unpaid work provides a means to maintain and improve skills while building contacts. Given stiff competition for new positions, unpaid labour allows a worker to signal his or her fitness for the job relative to applicants.

Mikey1052's picture
Mikey1052
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pinecarr's picture
pinecarr
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plato1965 wrote: New nuclear

plato1965 wrote:

New nuclear is 'no brainer’, says ex-government adviser

http://www.telegraph.co.uk/earth/energy/8413600/New-nuclear-is-no-brainer-says-ex-government-adviser.html

( the sceptics may have an alternative interpretation of "no brainer" )

Good line, Plato:)

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rhare
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Poet's of the world realizing the need to work to survive?

Poet wrote:
Capitalism is blind. It doesn't care who does the job or at what cost to itself - if it doesn't have to pay that cost. Patriotism or taking care of an employee is only useful if it is of benefit.

Really?  Do you really believe that?

Do you always shop at the place that has the lower price?  Do you always take advantage of your neighbors if it's means benefit to you?  If you don't why do you believe any one running a company does?  A company is just an extension of the people that run it.  I know when myself and my partners ran our company we didn't do everything possible to screw our customers or ourselves.  In fact we treated customers well, provided a service a good price and tried to take care of our employees.  Why?  Because it was good business.  Happy customers keep buying from you instead of going to your competitors.  Happy employees produce more, are loyal, and help build the business.

I look at this problem from a different point of view.  What we are seeing in the labor pool is a recognition of work and production as the goal.  We are seeing people suddenly discovering that what they did was not of enough benefit or valuable enough to provide for their own survival.   We are also starting to see the true cost of government programs and interference.  Ultimately a person has too provide for themselves, rely on others (volunteered, stolen, forcibly taken by government), or die.

Are there rich people who game the system and take advantage of others, of course.   Are their poor people who will do anything they can to not work and free load?  Yep and both of these two extremes are using government to advantage themselves at the expense of others.

DRHolden's picture
DRHolden
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Posts: 128
...electric car conversion

mesaboogieman wrote:

Plato,   thank you for posting.      Great article on oil reserves (or the lack of).  Some great comments too.

Going halves with a friend on an electric car conversion, for evaluation at this stage.

www.e-volks.com/index.html?

In the US you seem to be way ahead of the UK with regard to electric conversions, even though fuel is cheaper. Probably because the kits are so expensive here. Even with delivery it's way cheaper to get a kit sent from the US.  Thanks guys!

Smile

If you haven't already, check out http://evalbum.com/ for some more success stories...

Poet's picture
Poet
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Posts: 1840
Capitalism is blind - Walmart As An Example

rhare wrote:

Poet wrote:
Capitalism is blind. It doesn't care who does the job or at what cost to itself - if it doesn't have to pay that cost. Patriotism or taking care of an employee is only useful if it is of benefit.

Really?  Do you really believe that?

Do you always shop at the place that has the lower price?  Do you always take advantage of your neighbors if it's means benefit to you?  If you don't why do you believe any one running a company does?  A company is just an extension of the people that run it.  I know when myself and my partners ran our company we didn't do everything possible to screw our customers or ourselves.  In fact we treated customers well, provided a service a good price and tried to take care of our employees.  Why?  Because it was good business.  Happy customers keep buying from you instead of going to your competitors.  Happy employees produce more, are loyal, and help build the business.

I sometimes shop at Walmart because the prices are much lower. I know Walmart does many socially unacceptable/unethical things in its employee relations and in relations with suppliers. However, I still sometimes shop there because it's cheaper and I have to buy what's cheaper to take care of my family's needs.

But even if I were to shop at a more socially-conscious stores (let's say, Target), Walmart would still do just fine.

Walmart's employees and suppliers don't have to be happy - and I personally know a few Walmart employees and suppliers who are not happy with Walmart at all - they just have to do enough for Walmart to be cost effective enough, for Walmart to offer the low prices to attract customers and build their business in that manner.

Walmart and Companies
"Wal-Mart wields its power for just one purpose: to bring the lowest possible prices to its customers. At Wal-Mart, that goal is never reached. The retailer has a clear policy for suppliers: On basic products that don't change, the price Wal-Mart will pay, and will charge shoppers, must drop year after year. But what almost no one outside the world of Wal-Mart and its 21,000 suppliers knows is the high cost of those low prices. Wal-Mart has the power to squeeze profit-killing concessions from vendors. To survive in the face of its pricing demands, makers of everything from bras to bicycles to blue jeans have had to lay off employees and close U.S. plants in favor of outsourcing products from overseas."
http://www.fastcompany.com/magazine/77/walmart.html

Walmart and Employees
Outsourcing health insurance to the state to keep costs low by making it too expensive for them to purchase, and making workers wait 6 months to get into the plan, while taking money from governments to create jobs. Numerous examples.
http://www.walmartmovie.com/facts.php

Poet

rhare's picture
rhare
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Capitalism bashing and hyposcrisy

Poet wrote:
I sometimes shop at Walmart because the prices are much lower. I know Walmart does many socially unacceptable/unethical things in its employee relations and in relations with suppliers. However, I still sometimes shop there because it's cheaper and I have to buy what's cheaper to take care of my family's needs.

Just a bit hypocritical there!  Sorry, but you don't get to claim Wal-mart is evil and awful and they say but I shop their because I need the low prices to take care of my familty.   Why do you think they have low prices?  Because they work to drive inefficiencies out of the system.  You shop their because it is better for you, so you are simply removing inefficiencies from your situation - same thing.  So does that make you unacceptable/unethical?

FastCompany Article wrote:

To survive in the face of its pricing demands, makers of everything from bras to bicycles to blue jeans have had to lay off employees and close U.S. plants in favor of outsourcing products from overseas.

I actually read that article when it first came out in Fast Company.  I might even still have the issue.  At any rate, the US plants having to be closed is a systemic problem in the US corporate environment where government, unions, environmental groups, and an entitlement mentality have all taken a toll at reducing competitiveness in the US enough to drive companies overseas for labor enough to offset the costs of shipping goods 1/2 around the world.  What this signifies is that manufacturing costs and labor costs are too high in the US.

No matter what, unless we are going to be an isolationist country (very difficult given our externally supplied resource needs), we will have to be competitive on a world wide scale.  In order to do that we are going to have to be competitive - that means salaries, standard of living, resource usage are all going to have to fall.  As pointed out in the Crash Course we have all been living well beyond on means, much of it do to the reserve currency status of the dollar.  Soon that will be gone, and with it the support for those non-productive members of our society.

However, none of this covers my biggest problems with your statements regarding capitalism.  My biggest gripe is that you lump the 25 million small businesses in with the Wal-marts, GMs, and GEs.  That becomes a huge problem because just like the "hate the evil rich" rhetoric we also get the "hate the evil businesses" message as well.  So we pass a bunch of laws aimed at punishing the big guys, who help write the laws and cripple the smaller businesses in the process.

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Vanityfox451
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Wal Mart:: The High Cost Of Low Price

~ VF ~ With a fully working pulse ...

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darbikrash
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Of GreenSpannery and crackPOTTERY

Alan Greenspan weighs in:

“With Notably Rare Exceptions”

Alan Greenspan wrote:

Today’s competitive markets, whether we seek to recognise it or not, are driven by an international version of Adam Smith’s “invisible hand” that is unredeemably opaque. With notably rare exceptions (2008, for example), the global “invisible hand” has created relatively stable exchange rates, interest rates, prices, and wage rates.

Alan Greenspan is back as free market evangelist, and it’s rather wonderful.

It’s best not to interpret this as an empirical claim, but a carefully-thought-out bid for Internet immortality. It has the sublime combination of supreme self-confidence and utter cluelessness of previously successful memes such as “I am aware of all Internet traditions” and the “argument that has never been made in such detail or with such care,” but with added Greenspanny goodness. I tried to think of useful variations on the way in to work this morning – “With notably rare exceptions, Russian Roulette is a fun, safe game for all the family to play,” and “With notably rare exceptions, (the Third Punic War for example), the Carthaginian war machine was extremely successful,” but none do proper justice to the magnificence of the original. But then, that’s why we have commenters. Have at it.

And the pundits weigh in: (My fave is # 5)

“With notably rare exceptions, Newt Gingrich is a loyal and faithful husband.”

“With notably rare exceptions, Japanese nuclear reactors have been secure from earthquakes”

“With notably rare exceptions, Charles Manson has lived a peaceful life”

With notably rare exceptions, Adolf Hitler was extremely tolerant of diverse religions and cultures.

With notably rare exceptions, people of the same trade can meet together, if only for merriment and diversion, with relatively little in the way of a conspiracy against the public or of any contrivance to raise prices.

With notably rare exceptions, the United States follows its treaty obligations.

Though unredeemably(sic) opaque, Mr. Madoff’s operations delivered excellent returns, with notably rare exceptions.

With notably rare exceptions, Germany remained largely at peace with its neighbors during the 20th century.

With notably rare exceptions, Mrs. Lincoln enjoyed the play.

With notable rare exceptions Glenn Beck is a rational and conscientious media personality.

With notably rare exceptions, the levees protecting New Orleans have held fast in the face of major hurricanes.

With notably rare exceptions, simply stated, there is no doubt that Saddam Hussein had weapons of mass destruction after August of 2002.

With notably rare exceptions, George Bush, Jr. kept us safe.

With noticeable rare exceptions, smoking doesn’t kill you immediately.

With notably rare exceptions, locking all exits to the workplace is a harmless way to improve your employees’ productivity.

With notably rare exceptions, petroleum extraction has minimal environmental impact.

With notably rare exceptions, Alan Greenspan has been right about everything.

Poet's picture
Poet
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I Can Say What I Say Even If I Shop There, Rhare

Rhare

rhare wrote:

Just a bit hypocritical there!  Sorry, but you don't get to claim Wal-mart is evil and awful and they say but I shop their because I need the low prices to take care of my familty.   Why do you think they have low prices?  Because they work to drive inefficiencies out of the system.  You shop their because it is better for you, so you are simply removing inefficiencies from your situation - same thing.  So does that make you unacceptable/unethical?

Yes, I do get to claim Walmart can be evil and awful to their employees and suppliers, even if they do deliver the goods to a consumer such as myself.

Just as you pay your taxes and enjoy government-provided services even as you object to certain things your government does. Or many expect certain benefits of government even as they complain of taxes or complain to high heaven of its employees and their earnings. Or someone complains of a relative who badmouths them, but still invite them for Thanksgiving. Or someone buys a cheaper car from a neighbor who doesn't pick up after his dog versus from a neighbor they do like with a more expensive used car.

Although I've never heard of paying workers so little they have to supplement their ways and means with welfare - or requiring suppliers to keep reducing prices each year despite inflation increasing each year - to be "driving inefficiencies out of the system." Good one!

rhare wrote:

FastCompany Article wrote:

To survive in the face of its pricing demands, makers of everything from bras to bicycles to blue jeans have had to lay off employees and close U.S. plants in favor of outsourcing products from overseas.

I actually read that article when it first came out in Fast Company.  I might even still have the issue.  At any rate, the US plants having to be closed is a systemic problem in the US corporate environment where government, unions, environmental groups, and an entitlement mentality have all taken a toll at reducing competitiveness in the US enough to drive companies overseas for labor enough to offset the costs of shipping goods 1/2 around the world.  What this signifies is that manufacturing costs and labor costs are too high in the US.

No matter what, unless we are going to be an isolationist country (very difficult given our externally supplied resource needs), we will have to be competitive on a world wide scale.  In order to do that we are going to have to be competitive - that means salaries, standard of living, resource usage are all going to have to fall.  As pointed out in the Crash Course we have all been living well beyond on means, much of it do to the reserve currency status of the dollar.  Soon that will be gone, and with it the support for those non-productive members of our society.

However, none of this covers my biggest problems with your statements regarding capitalism.  My biggest gripe is that you lump the 25 million small businesses in with the Wal-marts, GMs, and GEs.  That becomes a huge problem because just like the "hate the evil rich" rhetoric we also get the "hate the evil businesses" message as well.  So we pass a bunch of laws aimed at punishing the big guys, who help write the laws and cripple the smaller businesses in the process.

I didn't lump the 25 million small businesses in with Walmarts, GMs, and GEs. You're insisting that I have ,but I have not.

You consider the good small business owners and good large companies out there to be operating on capitalism alone. I say those good small business owners and good large companies are NOT operating on capitalism alone. They are run by people who, in addition to striving in a free market environment and being for profit, understand what fairness and duty is about. They have a sense of conscience, and/or a sense of patriotism, or and/or a sense of community-minded spirit that tempers their capitalism.

These employers and corporations treat their employees more generously than they need to (some even provide paid 6-month sabbaticals to employees every 5 years, or offer free tuition assistance, or annual bonuses each year for every year they've worekd for the company). They contribute greatly to charity, they don't go out of their way to lobby for paying zero corporate taxes or get government subsidies, and despite the smaller profits, they keep jobs in America that they could outsource if they wanted to. Some have actually bankrupted themselves in order to make sure their employees are paid for time served.

But it isn't capitalism that makes them do these things even if they consider themselves to be capitalist - just as religion isn't what made me give a few dollars to a homeless woman outside a local supermarket on Saturday even if I am religious.

I don't think you and I even agree on the definition of capitalism. Therefore you take great insult at what I say. Economically speaking, capitalism is an economic system in which the means of production are privately owned and operated for profit. It doesn't say operated for personal spiritual enrichment, for abiding by one's social conscience, or operated for building friendships or meaningful relationships.

Economically speaking, profit is money. Operating less than efficiently, or giving away unnecessary benefits, these all take away from profit. It isn't capitalism that makes these socially responsible and conscientious small business owners and corporations do what they do for their employees or their community.

Poet

rhare's picture
rhare
Status: Diamond Member (Offline)
Joined: Mar 30 2009
Posts: 1267
Shopping at Wal-mart is voluntary, paying your taxes is not.

Poet wrote:

But it isn't capitalism that makes them do these things even if they consider themselves to be capitalist

I disagree with this.  Part of what makes companies donate, or treat their employees well, or give to the communitiy is absolutely capitalism.  Generating a good image for your company, keeping employees happy by offering better benefits - thus keeping the good employees from leaving for competitors is all capitalism.  Those who strickly run things based entirely on profit motives will not be capitalists for very long, they will be bankrupt.

I guess why I keep responding to these posts is that many of the "corporate bashers" like to point out how evil companies are, but never seem to dig even a little deeper to figure out why?  Most complain about special treatment large corporation receive from government and blame the coporations for lobbying efforts, but don't seem to ever look at this as a result of an oversized government run amuk. 

So, lets take Wal-mart as an example, you clearly seem to believe they are as you put it "unacceptable/unethical", why?  I see a company that employees over 2 million people, many unskilled.  Gives millions away to charity.  Has lowered prices for everyone even if they don't shop at Wal-mart  by putting downward price pressure on competitors and pushing efficiency gains in the supply chain (can always debate if that is good or bad for resiliency).  Yet they are evil? Why?  They passed on $14B of profit last year onto their shareholders via dividends of just under 3%.  Doesn't seem like they are raping and pillaging their employees for those evil shareholders.  So exactly what would you have them do differently?

However, all of this is immaterial.  The GEs, Wal-marts, etc of the world don't matter.  They are small potatoes compared to the massive deficit, debt,  and unfunded liabilities problems we face.  Our current deficit is 3x larger than all goods sold at Walmart, much less their profit which is about 3.5% of their sales.   If given a choice right now between our current elected officials running this country or the board of Wal-mart, I'd take Wal-mart at least they have a clue about budgeting.

Poet wrote:

Just as you pay your taxes and enjoy government-provided services even as you object to certain things your government does. Or many expect certain benefits of government even as they complain of taxes or complain to high heaven of its employees and their earnings.

Ahh, but there is a very big difference. You can easily shop elsewhere, you just have to pay more, but that's what you want, right?  You want everyone to pay more so that the employees can have a better life and you don't mind giving up some of your wealth to help.  With a government you don't have a realistic choice, at least not on a federal level.  I can move cities, states, but moving out of the country to avoid a repressive goverment is a pretty heavy price versus shopping at a different store a block away.

Another big difference is I'm not be forced to shop at Wal-mart, it's a voluntary action on my part, not so with taxes and regulatory burdens.

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