Is Capitalism Broken?

Economic value includes goods and services. As far as services are concerned, people are willing to pay me anywhere between $40 and $80 an hour to help them make their words come out right. That's economic value because it generates money based on perceived value.

If Beanie Babies have a perceived value above their cost, then that too is wealth. This is why eBay has its own Beanie Baby Buying Guide, including how to gauge their condition like they were baseball cards. I don't know where you draw the line between Craftsmen Tools and Beanie Babies, but I tend to draw the line between something of marketable value and something without it.

I'm not sure what study you're talking about. You'll have to point it to me. Do you know how they measure wealth?

Now you're trivializing it by saying, "Well, some do, some don't, y'know? You never know."

What's worse, though, is that you're denying your own claim. That's just lame.

For the record, you did say that. You said income is immaterial to people with "real" wealth. It's obviously false.

But what's the point? What value is that to the 47% who need to use their income to build wealth?

They also employed many ruthless tactics and were deceptive, unethical human beings. Andrew Carnegie is a prime example of the so-called "great" industrialists guilty of this. They're hardly good examples.

Why don't they focus on wealth? (I really need to stop asking you about this; I'm just flabbergasted by your claims.)

You can stop playing the martyr now.

No. They aren't all outliers like Zuckerberg.

Blah, blah, blah.... Thanks, Captain Obvious.

Trust me. You'll be the first to know.

 

Again, Aceventura ...why are you instructing people in concepts???

They're intelligent, they understand...they just don't agree with you.

Seems like a impasse to me...you don't get what they're saying, they don't get what you're saying.

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Now...I don't think Capitalism is broken in this context...it's working great at the moment.
U.S. Stocks Climb on Jobless Data as S&P 500 Nears Record

'Made in the USA' Making a Comeback

Foreclosures are down, Real Estate is up, Sales are up and more...
Even the government is looking like they are getting closure to a deal
and they've even started some patchwork fixes...
Lew Says He Is Optimistic About Agreement Over U.S. Budget

But I think this is what everyone is saying how Capitalism is broken,
cronyism, corruption, limited or non-prosecution of current regulations, etc...

JPMorgan Misled Investors, Dodged Regulator, Report Says

The Consumer Protection Agency can't move forward.
The SEC is spineless and not aggressive enough.
The FDIC is inconsistent too...and more.

It's not that we need more regulations, it is that we need enforcement of current regulations.
And make prosecution and penalties ...in a timely manner, with enough bite to prevent further scams and neglect.
That companies stop looking at the smaller business and citizens as just another patsy to take advantage of....and then walk away.

Or do you approve of Big Business just taking what they want...lying when they want??

I certainly don't.
Just do good business...Just give good service...make money, simple.
Or are corporations just a new form of mobsters???

 

There is a difference between the microeconomics that I am talking about, and the macroeconomics that you are talking about. I am talking about an individual family. Let me give what I hope is a clear example: If my husband and I make a total income of $17,000 we are not "identified as" being in poverty. As a family of two making $15,500 or more, we may be broke, but we are not officially in poverty. If we have a child we would then be "identified as" being in poverty because the poverty level for a family of three is $19,530 So, having a child has moved me into poverty. I am laying no collective blame on "the poor." I even realize that a hundred years ago that such "reproductive work" might actually have increased the capital stock of the family. However, that appears to no longer be true.

Doesn't it make more sense to just assume that the main reason that some people are too poor is because others are too rich?

Are you implying that multigenerational poverty is NOT a problem? If not, we should find a way to reward such a desirable situation. How about a $10K up front bonus for each child born into an impoverished family? And a $1K stipend monthly for the next eighteen years.
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I am not putting the entire blame for poverty on "these people." I will say that a person in poverty may have little control over their situation.
Reproduction is one thing that they do have control over. From the point of view of microeconomics, individually, they can take advantage of that. A microeconomic action. Even a small decrease in the rate of people being born into poverty, in the long run, would have a macroeconomic effect.
I would support a kind of "No child born behind the eight-ball of poverty" initiative that would reward the childless poor in some way, similar perhaps to the way that theEarned Income Tax Credit works.
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Of course, fairness means different things to different people. But I agree 100% and I'd happily volunteer to be the first Commissar of Compensation. Watch out class action lawyers, overpaid athletes and other entertainers, hedge fund managers with none of there own skin in the game...

 

I don't assume that. I just think it's odd that you'd expect an entire class of people to not have children. At all. I think you're looking at the problem from the wrong end.

Part of the problem is that they don't have the same full control over reproduction as would those in the middle or upper classes. There are a number of factors affecting this, including education levels, access to birth control, and access to abortion.

Rewards like better wages, better working conditions, better education, less violence, better housing, and better healthcare?

It makes one wonder.

 

Save what? A portion of one's income.

You say income does not build wealth. You then say, in a span of no more than 30 words, that a legitimate way to build wealth is to save.

This means one of four things is likely occurring here: 1) You don't know what you're talking about, 2) You don't know how to express yourself in terms that most people would understand, or 3) You are intentionally trying to confuse people.

This is trivial and assumptive.

Far too many people bust their asses and have nothing to show for it despite their best efforts to get their financial houses in order. Next time you want to seriously consider an issue, try looking at the big picture instead of cherry-picking.

It's not "my view." It's a fact. Your view is some kind of ideological posturing. You are so rigid in this posturing that you've contradicted yourself more than once as a result.

Independent in this context means there is no connection.

Wealth is connected to income in that one uses one's income to save up a sum of money in order to make an investment. Otherwise there would be no way to make an investment (outside of debt) if one has no wealth to speak of. Without an income (or debt), there are few practical ways to built wealth. Regardless, there is certainly a connection between wealth and income. Even wealthy people use income to invest (often income from their investments). Example: 401K (U.S.); RRSP (Canada)

Income is connected to wealth in that one can generate a substantial income from investments. Otherwise, the wealth is merely trapped as a book or intrinsic value. One cannot use book or intrinsic value outside of their inherent uses. One cannot clothe oneself with book value, nor can one feed one's family gold bullion. Without income, the wealth will remain trapped forever. Therefore, people will consider various income options for their wealth, including realized capital gains, dividends, or interest payments. Regardless, there is certainly a connection between income and wealth. Example: Buying 1,000 shares in a company for $1 each and selling them for $1.50 each.

I think you know these things. I shouldn't have had to type them out. I just wanted to make a point that your use of language or ideological posturing or whatever your problem is is distracting because it's wrong. Say what you want to say another way or at least admit you're wrong.

As outlined above, they aren't dependent on each other per se, but there is certainly an essential connection between them. This is especially the case for people with no assets and low income. They can't wake up tomorrow and decide to have $1 million in assets to work with, income be damned. They need to use their income to generate wealth. They take savings, they invest, they build wealth. They take the wealth and use income generated from it to build it further, all the while contributing to it from their regular income.

It's not difficult. I think you know this; you just have a really shitty way of saying things. Wealth and income are not independent. Yes, they're different things, and yes, they operate as distinct entities, but to say they're independent is misleading. They're not.

I've worked with several financial advisors, money managers, and fund managers to the extent of helping them present their knowledge, advice, and ideas in a way that is easily digested. Not one of them would dare suggest that income and wealth are independent. Making the two work together is necessary, and it's something everyone needs to learn in order to adequately manage their finances.

Now please drop the posturing and start talking in practical terms.

You're not an idiot; I'm not an idiot. Stop wasting my time.

 

We're talking about income, not savings. No wonder you're at a loss for words. Try to stay focused, champ.

 

This is for the best. There's a term for what you're doing. It's called weaseling. You can say up means down, and that left is left but there is no right, and that we should just ignore backwards because forwards is where it's at. However, that doesn't change a goddamn thing, does it?
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We're not talking about that exclusively. (You're doing it again; see above.)

 

This post? I would call it a waste of my time.

It's a good thing this conversation didn't happen because things are already confusing. I could say "investment income," and you'd likely say, "No such thing!"

After all, in your world, dividends and capital gains aren't income. The IRS begs to differ.

 

A lot of them also work for money—a lot of money.

 

The actual wealth distribution shouldn't come as much of a surprise when you realize how easy it is to build wealth with the more wealth you have. Beyond the usual practices of wealth management, you have favourable tax rates and widespread nanny statism supporting the corporate practices one builds their wealth from. I at first thought plutocracy was a strong term when referring to the U.S., but the more you look at it, the more fitting it is.
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The country can't afford that shit. I mean, look at Canada: The minimum wage ranges from $9.75 to $11, and we're headed for anarchy.

 

Are you drunk or something? I can almost hear your slurring.

I like your style though. Keep adding abstractions, and maybe I'll eventually agree with you. Classy.

Pro tip: I won't agree with something that's objectively false unless I'm tricked while I'm drunk.

My guess is that it will take five beers before you could trick me into believing that a dividend isn't income. (I don't recommend trying this with the IRS.)

Do you doubt Paris Hilton's intellect? Her shrewdness? She even has you fooled? Wow. She's better than I thought.