bradleybadly wrote:, Player yells to live in the real world,
Yelled?
Well anyway. Truthfully, I generally enjoy reading (not agreeing with) your posts. You do put thought into them. I don't agree, in general, but diverse opinions make for a good discussion. That said...
My basic problem with a lot of what you have said about capitalism and the free market is that it really doesn't apply today.
Most executives right now answer primarily to stock holders. The "product" being sold is not really the widgets a factory makes (or service it provides), it is the stock and the profits the stock can make. Sometimes, the two merge. Company A tries to make a better widget more efficiently than Company B. With some broad limitations (no monopolies, safe working conditions, controll of pollution, etc.) that works.
BUT, when the "product" is the stock ... profit from widgets often doesn't matter much at all. Many decent, profit making companies in the US have been closed because they were not making stockholders enough money. Not because they were unprofitable, not because the product was not being sold... it just was not "efficient". When that decision is made in an economic downturn, and NOT because of a historic track record of failures ... it hurts everyone involved.
Granted, not everyone dealing in stocks think this way ... at least not intentionally. But, many people don't even really know what stocks they "own". They are part of huge mutual funds. When they do, they do not have direct purchasing power. Those who have that power, with a few exceptions (certain so-called "morality" funds, for example) are "hired and fired" based upon results, that is stock profits. Nay, in many cases it isn't even that ... in many cases the traders trade simply because that's when they get their money. No trades, no (or less) income.
Talk about securities, and it gets even more complicated. They are sold and sold... as we saw in the mortgage crisis.
Bottom line: the biggest money being made is so far removed from "widgets", it is no wonder that things are starting to collapse.
The other issue I think I addressed earlier.
People who shop in Walmart may well think about the fact that the only reason they are getting those shoes cheaply is because the company relocated from Pennsylvania to China. BUT, they often don't consider that if Walmart "cannot" pay its employees enough to live on, those employees will be getting food stamps, childcare assistance, and free health care ... all at taxpayer expense. So, we are really robbing the average taxpayer to support the high stock prices and (in the case of Walmart at least) very high incomes of the executives.
If Joe smoe running the local video store, pays his help minimum wage, and brings in maybe $50,000 himself. That is one thing. He really and truly CANNOT afford to pay more, is open mostly in "after hours" and primarily hires teenagers who already have insurance and such from their parents. Its a good thing. BUT when a company the size of Walmart ... or Lowe's .. or any other large company claims the same "inability to pay" employees a living wage.... while bringing in HUGE profits. THAT is nothing more than a back-handed taxpayer subsidy.
IN both cases, at some point government intervention is needed.
Did Rockafeller complain when anti-trust laws were passed? You betcha! Did it hurt him? Yes, but did business as a whole collapse or did it flourish?
Did factory owners across the nation complain when worker safety standards were implemented ... absolutely (and sometimes they still do!)? Did business fail? Some, yes, but that is natural attrition. In general, those rules brought in a decade of the highest standard of living we have ever seen (yes, a little thing called WWII certainly had something to do with it also).
Did employers complain when the minimum wage was instituted. Yes! And, they found, much to their surprise, that folks actually used those wages to BUY things.
Government is a pull and take. People push, until it gets out of hand, then it is government's role to step in. The mortgage crisis is just one symptom of a broken system right now.
If you wish to call this "socialism" ... okay.
Finally, one note of "trivia". FDR instituted social security and welfare. The one folks objected to most? Social security. It was "socialism". Welfare, on the other hand, helped single women with kids and the disabled who could not help themselves. Now, its the opposite. Just a point of interest.