Why shouldn't capitalism be better regulated?

[nekrodev]

If you're thinking about regulating Capitalism you better think globally.

That's not really required, nor a realistic expectation in in our foreseeable future.

 

[Waddy]

That's not really required, nor a realistic expectation in in our foreseeable future.

I disagree. That "foreseeable future" is right now. Gone is the time when you could impose government will on one country and make it stick. The global market is fluid, mobile and a power unto itself. It is beyond one country, one government. Global trade and instant communication worldwide has weakened central governments and rendered them ineffectual. But if you insist on playing Whack a Mole go right ahead. But be aware you just can't win.

 

[nekrodev]

I disagree. That "foreseeable future" is right now. Gone is the time when you could impose government will on one country and make it stick. The global market is fluid, mobile and a power unto itself. It is beyond one country, one government. Global trade and instant communication worldwide has weakened central governments and rendered them ineffectual. But if you insist on playing Whack a Mole go right ahead. But be aware you just can't win.

The only way for your idea to be a reality is for there to be a larger centralized power for all the countries on the planet. If you think that's realistic, then I don't know what to tell you. And I'm certainly not interested in the war that will need to happen to make that reality.

 

[Waddy]

The only way for your idea to be a reality is for there to be a larger centralized power for all the countries on the planet. If you think that's realistic, then I don't know what to tell you. And I'm certainly not interested in the war that will need to happen to make that reality.

No, what it would take is trade agreements that factor in taxes, environmental issues, labor rights and wage scales, along with prohibitions on intellectual theft, copyright infringement, etc. We could also include product liability, minimum quality and safety, etc.

You could prohibit transferring wealth to avoid taxes, but better yet agree on an international tax scale, so moving money around wouldn't be profitable. What good would it do to raise the top rate in the US to 90% if wealthy people could simply move the money offshore and pay NO taxes?

No need for some big "one world" government". Almost everything needed to better regulate Capitalism can be accomplished through responsible global trade deals.

 

[jaeger19]

You forget that the increased profits of the last 40 years had to go somewhere...to someone. Is it your contention that if top rates stayed at >70% CEO's would still have taken the same salaries and paid 2/3rds of it to the govt? We know they didn't take them when those rates were in effect.

Nope.. those CEO's would have done the same things to avoid taxes that they were doing in the 1960's. Creating holding companies, getting cars and other perks that at the time were billable as a cost.. etc.

Marginal rates. are not EFFECTIVE tax rates.

So.. CEO's were not paying an effective rate of 70%. They had multiple ways to avoid it...

Which we know.. because when you look at the USA's effective tax rate? Its about the same as its been now.. about 18%.. sometimes even lower. So if those tax rates were so confiscatory.. then the rates should be higher. But they are not.

SO.. now.. many of the perks, holding companies.. etc.. which were away to avoid taxes have gone away... BUT the income taxes rates have lowered as well.. so.. now CEO pay can go on the earned income column.. (though they also try to get as much as they can in capital gains as well. ).. So ceo's take a larger salary now.

I mean.. think what you are saying.


So.. you think that if I or another CEO... makes 10 million dollars that will get taxed at 70%...


You think that RATHER than putting 3million IN MY OWN POCKET.


I would rather pay out the 10 million in wages... so that.. next year? If my company doesn't gross as much as this year (for whatever reason)… I am going to be stuck with salaries that well above my competitors? OR, I am going to have to drop salaries drastically in a year, that I DON"T have the tax liability...


What you are proposing..simply doesn't make ANY financial sense. Its poor business.

 

[DifferentDrummr]

So.. you think that if I or another CEO... makes 10 million dollars that will get taxed at 70%...


You think that RATHER than putting 3million IN MY OWN POCKET.


I would rather pay out the 10 million in wages... so that.. next year? If my company doesn't gross as much as this year (for whatever reason)… I am going to be stuck with salaries that well above my competitors? OR, I am going to have to drop salaries drastically in a year, that I DON"T have the tax liability...


What you are proposing..simply doesn't make ANY financial sense. Its poor business.

Okay, let's just say for argument's sake that Joe CEO brings in bonuses of $3M this year which he KNOWS he can't keep, because his only choices are:

a) give it all to the government, or

b) find ways to reinvest some or all of it into the company.

Now even if he can't necessarily find a wonderful investment within his company, don't you think that Joe is a lot more likely to choose option B over A?

 

[iguanaman]

Nope.. those CEO's would have done the same things to avoid taxes that they were doing in the 1960's. Creating holding companies, getting cars and other perks that at the time were billable as a cost.. etc.

Marginal rates. are not EFFECTIVE tax rates.

So.. CEO's were not paying an effective rate of 70%. They had multiple ways to avoid it...

Which we know.. because when you look at the USA's effective tax rate? Its about the same as its been now.. about 18%.. sometimes even lower. So if those tax rates were so confiscatory.. then the rates should be higher. But they are not.

SO.. now.. many of the perks, holding companies.. etc.. which were away to avoid taxes have gone away... BUT the income taxes rates have lowered as well.. so.. now CEO pay can go on the earned income column.. (though they also try to get as much as they can in capital gains as well. ).. So ceo's take a larger salary now.

I mean.. think what you are saying.


So.. you think that if I or another CEO... makes 10 million dollars that will get taxed at 70%...


You think that RATHER than putting 3million IN MY OWN POCKET.


I would rather pay out the 10 million in wages... so that.. next year? If my company doesn't gross as much as this year (for whatever reason)… I am going to be stuck with salaries that well above my competitors? OR, I am going to have to drop salaries drastically in a year, that I DON"T have the tax liability...


What you are proposing..simply doesn't make ANY financial sense. Its poor business.

Can you read a graph? It is quite obvious that CEO's did not take salaries of 250+ times their workers when top tax rates were at confiscatory rates. They did not pay those rates because they did not take those exorbitant salaries. The money from increased profits went elsewhere and that is what we want to happen again. Greed can no longer be coddled and admired. You do know that income inequity was a major cause of the Great Depression and those high rates came about from efforts to prevent its re-occurrence. One by one we have thrown those safeguards out the window in the name of "good business" which is another term for increased profits for the 1%.

 

[jaeger19]

Okay, let's just say for argument's sake that Joe CEO brings in bonuses of $3M this year which he KNOWS he can't keep, because his only choices are:

a) give it all to the government, or

b) find ways to reinvest some or all of it into the company.

Now even if he can't necessarily find a wonderful investment within his company, don't you think that Joe is a lot more likely to choose option B over A?

Well first.. if he knows that the tax structure is such that 3million in bonus is not going to benefit him.. then he will get compensated in another way. He will get other perks, like sole use of the company retreat, a car to drive around in.. the private jet.. all the things that were done back in the day. Find a way to start a holding company, etc.

What he is NOT going to do is reinvest that money in the the company. Because if that was his plan... HE WOULD ALREADY DO IT. And why? because its an opportunity to make more money.

AND if you tell him.. "sorry but you can't make anymore"..well then there is no incentive to grow the company now is there?. So now its all about figure ways to avoid taxes. Lobbying for tax shelters.. etc.


What it is certainly NOT going to do.. is increase wages so that he is paying more than the market for his employees. Especially if that money is coming out of what would have been a one time ceo bonus. Because.. if the next year is not as profitable... he has now increased his wage costs...

 

[jaeger19]

Can you read a graph? It is quite obvious that CEO's did not take salaries of 250+ times their workers when top tax rates were at confiscatory rates. They did not pay those rates because they did not take those exorbitant salaries. The money from increased profits went elsewhere and that is what we want to happen again. ][/QUOTE

Ummm.. I think I already addressed this. Either 1. The tax rate limits were so high that simply very very few would even qualify. For example... if you went ahead and said "after 150 million in salary you are taxed at 70%.."...it would be pretty meaningless when the top paid ceo is about 103 million.


OR.. 2. Yep.. they did not take their compensation in the form of salaries. They took some of that salary in the form of other types of compensation that were allowed back then when the tax code was different and there were other ways to hide your money. For example.. company cars for their exclusive use..company jets, vacation homes, or they started holding companies to keep the money tax free in corporate accounts away from corporate funds.. and so on.


What they DID NOT do.. is raise wages. Because that would make no sense.. to raise wages one year.. because you had a banner year... and then the next year when you have a mediocre or poor year. .. be stuck with above market wages for your employees.. and have to LOWER wages that year...

 

[DifferentDrummr]

Well first.. if he knows that the tax structure is such that 3million in bonus is not going to benefit him.. then he will get compensated in another way. He will get other perks, like sole use of the company retreat, a car to drive around in.. the private jet.. all the things that were done back in the day. Find a way to start a holding company, etc.

And where does Joe CEO "get compensated" from? Certainly not the government. If it's a public company, the shareholders aren't likely to be very happy with Joe dipping into the company resources.

However, for simplicity, let's just assume in this hypothetical that there's some kind of "perquisite tax" that Joe would have to pay from using the company car, jet, etc., so that he'd have no financial incentive to do things like this.

What he is NOT going to do is reinvest that money in the the company. Because if that was his plan... HE WOULD ALREADY DO IT. And why? because its an opportunity to make more money.

It's very silly to classify investment decisions in such a stark, binary way: i.e., either it will definitely make money or it definitely won't. There will always be plenty of possibilities on the borderline that could be considered. After all, companies that invest heavily in R&D lose quite a bit of money there, at least in the short term.

What it is certainly NOT going to do.. is increase wages so that he is paying more than the market for his employees. Especially if that money is coming out of what would have been a one time ceo bonus. Because.. if the next year is not as profitable... he has now increased his wage costs...

More than the market? I agree, that doesn't usually make sense - unless the company has some "star"employees here and there that are so talented and knowledgeable that they truly add more value than almost any of their counterparts would.

I have no issue whatsoever with Joe CEO paying the fair market value to the employees. It's all those Joes out their who try to get away with paying significantly LESS than market rates that need to be, um, corrected.

 

[RealityNow]

The maliced filled statement "Greed is Good" in the 1980's set off another round of madness... from the Junk Bond game... to the run away madness of Mergers and Acquisition.... wrapped in "debt" with a inherent design that would certainly see one company destroyed and the remaining company loaded with debt, while the "spin of the stock game" fleeced the system with exaggerated valuation. Then comes the repeat of the Paper Shuffle Games that took down the nation in 1929!

People forgot or never learned that Industry has responsibility not only to the community, but to the people who make up the community, as well as to the stability of the nation.

Currency is a "Federal Reserved Note"... when its parked off shore, and spun into investment in foreign countries, it become used in a format that is treasonous against the system of american industry and the American Economic Principles that sustain the American system of Business and Industry. Money circulating is what is the basis of currency design, to make fair trade with a % of profit... When profit become more important than doing good stable and functional business that is beneficial to the whole of the system and society... Then "capitalism" becomes abused, for the sake of "individualized" and "corporate structured greed".

That process "bastardizes the system of capitalism".
Today, "fictional advertisement" blinds people and send them into a material and monetary self measure pursuit, and the game of promoting "debt" based programs that is focused only on enriching the lender... followed by the "game of spin the sale of the debt", until its pushed into the cycle of "derivitatives"... fractionalized to create even more paper spin.... while extending more lending to create more debtors...
This is widespread and increased by the promotions that "material excess" is the measure of success... until people bury themselves in debt... chasing the fictional imagery of success... until.... even the simplicity of "love relations" is now measured on money and ability to engage in material excess madness. Love is now far too often measured by the cost of the gift, or the expense of a date... to the point that relationships are built upon the "bartering cycle of the "trade up" game"...

Kids left in the void, by the chase of external imagery and the delusions that material excess and fictional caricaturist of provocative lusting and lure... deludes people to think... the "fantasy of endless lust" will give them something they have not tried to find within the soul of themselves.

The chase of the 10 minute sex act... is so often misconstrued to be considered the basis of love, followed by the flaunting of "bling", excesses, and even now the measures of who can ink up the body, attach fake hair, and inject silicone bags into the body... while strutting around "advertising the shape of the butt".. and/or the act of being as near naked as one can get.
the mis-concept of what "dignity is"... is bought and sold by the "lure to barter"... sadly its the game of the "bad boy and the slut", "the slut and the bad boy", to the delusions of "the temptress and the tempted".... and time finds, that the "fictional smile" is only tied to the concepts of material based self measure, and the flaunting of money as the lure, until the mix of such, bring people to accept anything... without a concern for character, dignity, integrity and absolutely no concept of anything beyond and expectation of devotion, for a "Price".

Capitalism is a good system... it is the minds of the human beings.. that make it into a cycle of vile promotions and promoting vile. Result... It damages the principles of Capitalism and the Economic of a Nations and promotes the destitution of the people. That destitution... starts within the individual and is promoted by the society expectations to measure persons based on money and materialism, due to the lack of self to value self without monetary measure. Which drives one to fleece another and anyone... for the pursuits of "money" !!!!

 

[jaeger19]

And where does Joe CEO "get compensated" from? Certainly not the government. If it's a public company, the shareholders aren't likely to be very happy with Joe dipping into the company resources.

.

Well first.. if Joe is already in line for a 3 million dollar bonus as you suggested.. that's coming from the board of directors if its a public company. They are doing it to retain joe. IF, there is no benefit for joe for that 3 million.. then they are going to compensate him in other ways.

Ho

wever, for simplicity, let's just assume in this hypothetical that there's some kind of "perquisite tax" that Joe would have to pay from using the company car, jet, etc., so that he'd have no financial incentive to do things like thi

Sure. but that's a hypothetical that hasn't happen nor is it likely to happen. There is a reason that over the history since the income tax.. for much of that time.. the taxation rate as a country.. our effective tax rate if you will.. is about 18% of GDP. So when marginal rates were really high.. top rates were 90%... we were still bringing in about the same percentage of money into the government.

It's very silly to classify investment decisions in such a stark, binary way: i.e., either it will definitely make money or it definitely won't. There will always be plenty of possibilities on the borderline that could be considered. After all, companies that invest heavily in R&D lose quite a bit of money there, at least in the short term.

That's EXACTLY how you have to be in business. Companies invest heavily in R and D.. only do so BECAUSE THEY BELIEVE IT WILL MAKE THEM MONEY.


What they are not doing is putting money into the company that's wasted or going to increase costs above what they should be.. . like increasing wages above market value.. Especially when this could bite them in the butt the next year.

More than the market? I agree, that doesn't usually make sense - unless the company has some "star"employees here and there that are so talented and knowledgeable that they truly add more value than almost any of their counterparts would.

If they are truly more valuable then they are getting market based wages.

It's all those Joes out their who try to get away with paying significantly LESS than market rates that need to be, um, corrected.

Well.. the only way to really do that is through immigration, legal or illegal.. Or by having a monopoly.

 

[James972]

So this thread is an effort to explore suggestions and ideas on how to properly regulate capitalism to do just that.

Best not to regulate it since once you open the door to regulations you get socialists like Sanders and the other libcommie candidates.

 

[James972]

how to properly regulate capitalism to do just that.

of course regulation would be by a stupid and/or corrupt govt monopoly which is far worse than capitalism which naturally operates to control and destroy monopolies. The problem of mankind as seen by our genius founders is to regulate govt monopoly not to regulate freedom and capitalism.

 

[RealityNow]

There was/is a reason why people reveled over "Bonnie and Clyde", gave a massive parade for John Gotti, and hailed Al Capone as some form of Icon, and people like Bernie Madoff could do what he did, and why People hold a blind eye to the history of Trump...

It just might be the mindset of some to: "worship and embraces wishes of whim to want to have the money themselves, regardless of how its obtained"... this is the kind of mentality that accept and even make hero's in their mind of these types of people, who pursue money with regard for little else other than getting "money". Some, maybe even "many"... are fascinated by those who engage the risk taking by malice, mayhem, madness and even savagery, regardless of what is damaged in the processes within the pursuit for money.

We know that is true, by the history of "Systems of Slavery" and the vile that was done to support and promote it, in the aims of getting "money"... it mattered not what acts were engaged by those who backed it for and within their lusting for money... by savage brutality, by the acts of Robbers, Murderers, Embezzlers and every kind of criminal act, and any act of inhumanity that one can imagine has been engaged for the pursuit of "money"....

For The Love of Money |

Those with the amassed wealth would see the world destroyed before they'd give up their thirst for more money..... thus so... they'd fight any kind of regulation of "money".... but... "technology" is advancing where "currency will become (more) traceable"...

If people take note of the concept of "block chain"... at some point... it may become a format used for regulatory management of Capitalistic Greed.

More people use "direct deposit", "debit cards", "credit cards" and other non cash in hand means of exchange.

 

[RealityNow]

Man is becoming more aware, that if he does not find means to invoke regulation within the arena of capitalism, the uncontrolled element of greed, will destroy the principles that Capitalism was founded to promote.

 

[Nickyjo]

details, we need details

regulate HOW

by WHOM

controlled by WHAT

i own a business....ie i am a capitalist at heart....government going to tell me how to run my business? what to pay my vendors? my employees? how much to charge my customers?

if so, then i am no longer a businessman....just another in a long line of government managers....been there, done that...and already have my tee shirt

thanks but no thanks

i dont mind following a few rules as far as safety....and getting licenses....and dealing with the county on zoning bull****

you can keep the rest of the crap

These are the rules: you can make money, sometimes a lot of it, but you have obligations to what makes that possible or things you can harm: workers, the enviornment, neighbors who don’t want a factory next door, etc. And you certainly can lobby to make things easier for yourself.

 

[Obscurity]

Man is becoming more aware, that if he does not find means to invoke regulation within the arena of capitalism, the uncontrolled element of greed, will destroy the principles that Capitalism was founded to promote.

I'd argue it already has destroyed the principals of capitalism and what is was founded for.

 

[Casca XV]

It's more than just about monopolies. The free market was demanding ever increasing exploitation of child labor, until the creation of child labor laws. These kids were working 80 hour weeks, with dangerous equipment and chemicals, with no liability from their employers. They were not getting even a basic education.

And they still weren't making enough to eat properly.

Don't get me wrong. The free market is a great thing. It's a very powerful tool, like a bulldozer or a chainsaw. But every powerful tool needs very careful safeguards and safety features.

Child Labor was ended by pressure from people who today would be called "The Religious Right" Henry Ford created the 40 hour work week and he hated the Left.

 

[iguanaman]

Child Labor was ended by pressure from people who today would be called "The Religious Right" Henry Ford created the 40 hour work week and he hated the Left.

Henry Ford also promised all his workers at least $5 a day and was called a communist for it. He understood what few here do that if workers have more money they will spend it on your products. This was the basis for the postwar boom created by the rise of our great middle class. The problem was that corporations and CEO's were not satisfied with an economy that lifts all boats equally... after all they were the "job creators" and Reagan told them they deserved more. They took him to heart when he cut their tax rates in half. Then the great wealth transfer began. We went from one wage earner who could comfortably support a family to 2 who struggle paycheck to paycheck. From CEo's that made 20-25 times their workers to today when they make 250-300 times.

 

[jaeger19]

Henry Ford also promised all his workers at least $5 a day and was called a communist for it. He understood what few here do that if workers have more money they will spend it on your products.

So..you are saying that if I pay my employees more..they will get sick and need more healthcare?

 

[DifferentDrummr]

Sure. but that's a hypothetical that hasn't happen nor is it likely to happen. There is a reason that over the history since the income tax.. for much of that time.. the taxation rate as a country.. our effective tax rate if you will.. is about 18% of GDP. So when marginal rates were really high.. top rates were 90%... we were still bringing in about the same percentage of money into the government.

Are you implying that Congresses of the past were intentionally designing the tax structure to bring in about that percentage?

If so, whose idea was it, and why was that idea considered a good one?

That's EXACTLY how you have to be in business. Companies invest heavily in R and D.. only do so BECAUSE THEY BELIEVE IT WILL MAKE THEM MONEY.

NOT "exactly." If it were, every investment would carry zero risk.
Companies invest in R&D (or anything else) because they believe it has a reasonable chance of making them money. Important distinction.

If they are truly more valuable then they are getting market based wages.

You're using "market rate" in a different context now. I was referring to the average rate for a specific geographic area, for a specific profession, with specific skills and experience. Some workers perform above that average, and yes, the market generally reflects that in their compensation.

Well.. the only way to really do that is through immigration, legal or illegal.. Or by having a monopoly.

Those aren't the ONLY ways: far from it, actually. (Although both of the above are major problems in the US right now.)

An employer can use a variety of manipulative tactics to convince a new hire to accept less than the market rate that I defined above. Or the new hire might simply be desperate.

 

[iguanaman]

So..you are saying that if I pay my employees more..they will get sick and need more healthcare?

LOL No but they will likely take better care of themselves and be under less stress.

 

[jaeger19]

Are you implying that Congresses of the past were intentionally designing the tax structure to bring in about that percentage?

.

hmmm.. intentionally? In a way maybe. Not like "we need to keep the percentage at 18%"...

but really more like "this is what our constituents, (probably especially rich people which have always had a bigger voice in politics).. will tolerate"...

In other words..if there was an increase in the tax that would have pushed too hard on constituents.. then push back from these politically would result in a tax break that mollified constituents (and thus ending up back at that 18%).

Most likely with the wealthy but also with poor and middle class.. but likely less so.. given how politics works.

Companies invest in R&D (or anything else) because they believe it has a reasonable chance of making them money. Important distinction.

No.. not really for this discussion. They sure as heck are not doing r and D out of the goodness of their hearts.. or "just because I could avoid giving it to the government"..

You're using "market rate" in a different context now. I was referring to the average rate for a specific geographic area, for a specific profession, with specific skills and experience. Some workers perform above that average, and yes, the market generally reflects that in their compensation.

nope I am not. like you just stated.. for with specific skills and experience. IF folks are above and beyond.. and this has resulted in higher compensation.. its most likely because it represents the market for these particular people and skills, work ethic, experience....

And NOT simple the company being magnanimous

Those aren't the ONLY ways: far from it, actually. (Although both of the above are major problems in the US right now.)

Not really..

An employer can use a variety of manipulative tactics to convince a new hire to accept less than the market rate that I defined above.

Well you have just nuanced the discussion with "new hire"... And there may be tactics to convince a new hired to accept less than market rate..but usually only for opportunity to make MORE than market rate later. Or to advance faster.

Or the new hire might simply be desperate.

Which is either reflective of market conditions...


Or some other rare individual circumstance and not reflective of the average.

 

[jaeger19]

LOL No but they will likely take better care of themselves and be under less stress.

Actually not necessarily.. In fact.. it can create more stress.