Great article on the economy, income inequality, the rural urban divide, and Monopsony

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  • alphasigmookiealphasigmookie Senior Member Posts: 8,072 Senior Member
    Understood Bisley. The larger point I am trying to make is that with some of these cities, the politicians were grasping at straws trying to revive their declining industries when they should have been looking forward for the next big thing (or lots of little things). Most of these jobs and industries were naturally declining and still would have under different leadership. Their failure was not having the vision to see beyond the past, and quite frankly, they were merely reflecting the views of their constituents.

    Trying to bring back the Blockbuster Video and the 8-track tape factory in your town like the old days isn't going to cut it, regardless of who is in charge.
    Yep. You'll also notice that certain rust belt cities are now doing quite well as they have given up on their past and looked to the future. Pittsuburgh is a perfect example. As much as I hate the city as a Browns fan, the city is one of the more economically successful cities these days. The transition can take a long time though. Even Detroit has some good things going on from what I've heard. It's never going to return to it's former glory, or population numbers, but it's turning the corner. Of course none of that can happen until enough of the population comes to realize that the past is dead and can agree on a vision for the future.
    "Finding out that you have run out of toilet paper is a good example of lack of preparation, buying 10 years worth is silly"
    -DoctorWho
  • alphasigmookiealphasigmookie Senior Member Posts: 8,072 Senior Member
    tennmike said:
    'Income inequality'. Buzz phrase for 'I'm too lazy to get off my dead rear end and onto my dying feet and work hard to better myself so I can make more money."
    Quite a tired and lazy argument Mike. You can do better than that. No matter how hard any individual works it doesn't change the structure of the economy or what jobs are available or how much they pay. That in and of itself is a problem. It leads to very real economic problems. The current trajectory things are going is unsustainable and will eventually fail in one way or another.
    "Finding out that you have run out of toilet paper is a good example of lack of preparation, buying 10 years worth is silly"
    -DoctorWho
  • alphasigmookiealphasigmookie Senior Member Posts: 8,072 Senior Member

    cpj said:
    zorba said:
    "Income Inequality" is one of those codewords that causes me to roll my eyes...
    I get that. I am not a fan of equity per se. There needs to be a gradient between those that excel and those that to the bare minimum or worse. That said the gradient has gotten pretty huge. When the top 0.1% capture over 10% of total gdp and about as much as the entire lower 50% we may have a problem. We do live in a country where the majority rules. When almost have the population is getting a tiny slice of the economic pie, don't expect them to stay silent and take it for too long. 
    zorba said:
    "Income Inequality" is one of those codewords that causes me to roll my eyes...
    I get that. I am not a fan of equity per se. There needs to be a gradient between those that excel and those that to the bare minimum or worse. That said the gradient has gotten pretty huge. When the top 0.1% capture over 10% of total gdp and about as much as the entire lower 50% we may have a problem. We do live in a country where the majority rules. When almost have the population is getting a tiny slice of the economic pie, don't expect them to stay silent and take it for too long. 
    if one really doesn't like his or her situation, they can tell The Man to **** off, then open their own business. 
    That works to a degree. But unfortunately many of the same dynamics that concentrate so much power into the hands of a relatively small number of companies also make starting a new business unattractive. I'm not saying it can't or shouldn't be done, but the deck is certainly stacked against you. Here are some factors making starting a new business challenging:

    1) many markets are saturated or dominated by big companies that will just crush you or if you're lucky buy you out.

    2) you need startup capital, if you're not already rich you'll need loans which can be hard to get and at high interest which limits your ability to make a profit (all you profit goes to the bank to pay the loans).

    3) Starting a business requires a lot of diverse skills that not a ton of people have and if you do have them you can probably already make a much better living selling those skills to an existing company vs. busting your butt to start a company that will probably fail eventually and will definitely take a lot more work.

    4) Tax laws are stacked against you. Let's say I have $1M in the bank. I can start a business, work 80hrs a week trying to keep it afloat, and earn $100k in profit. After all taxes I might pocket $60k because I have to pay tax at the higher personal income rate plus pay self employment taxes. Or I can invest my $1M in stock and bonds, earn at least a 7% return and pocket ~$60k per year while sitting on my rear doing nothing because I only have to pay 15% tax and no FICA or unemployment taxes.

    In short the way the system is rigged right now starting a business is a suckers game unless you identify an unoccupied niche, have cheap financing, and have most of the skills required to get the business off the ground. This isn't to say there aren't opportunities and that people can't be successful, we see it all the time, but most of the time most people who try will fail and would have been better off investing their money elsewhere and keep working for the man.
    "Finding out that you have run out of toilet paper is a good example of lack of preparation, buying 10 years worth is silly"
    -DoctorWho
  • JermanatorJermanator Senior Member Posts: 14,252 Senior Member
    In markets, if there is more of something, you tend to drive the price down. Now let us say that something happened in a society where you essentially have twice the amount of workers that you used to-- I bet that would drive down the cost of labor quite a bit.

    Now look at women entering the workforce starting in the 1970's. I bet you are going to see some sort of correlation.
  • earlyagainearlyagain Posts: 1,718 Senior Member
    Assuming the markets are free from the influence of the Mandarins.
  • BAMAAKBAMAAK Senior Member Posts: 4,256 Senior Member
    It does not take a million dollars to start a business.  You have a mop, a bucket and some paper towels you can start a cleaning service.  You have a lawnmower and a truck you can start a lawn service.  We are talking about common folk, not millionaires.

    I don't believe manufacturing is dead, it's just relocating.  No it will never be the same in Detroit or Flint but we have more factories opening here then ever.  Toyota engine plant is on it's third expansion, Polaris just opened a huge plant, Toyota/Mazda are building a plant with 3000 employees, Bezos is building a million sq foot rocket plant, Airbus, Boeing, shoot every tech company you can name.  I could go on but the point is, we have a 3.7 % unemployment rate cause the govt does what it takes to get and keep businesses.  Unfortunately, I kind of wish the growth would stop, or at least slow down.
    "He only earns his freedom and his life Who takes them every day by storm."

    -- Johann Wolfgang von Goethe, German writer and politician
  • earlyagainearlyagain Posts: 1,718 Senior Member
    Supposedly my Camry is the most American made car one can purchase. I think it and my old Tacoma are made in plants located in the southern US.
  • knitepoetknitepoet Senior Member Posts: 17,738 Senior Member
    Supposedly my Camry is the most American made car one can purchase. I think it and my old Tacoma are made in plants located in the southern US.
    My '07 Tacoma went through final assembly out in California IIRC. I don't know what year yours is
    Seven Habits of Highly Effective Pirates, Rule #37: There is no “overkill”. There is only “open fire” and “I need to reload”.


  • earlyagainearlyagain Posts: 1,718 Senior Member
    edited March 13 #40
    98'
  • cpjcpj Senior Member Posts: 38,291 Senior Member

    cpj said:
    zorba said:
    "Income Inequality" is one of those codewords that causes me to roll my eyes...
    I get that. I am not a fan of equity per se. There needs to be a gradient between those that excel and those that to the bare minimum or worse. That said the gradient has gotten pretty huge. When the top 0.1% capture over 10% of total gdp and about as much as the entire lower 50% we may have a problem. We do live in a country where the majority rules. When almost have the population is getting a tiny slice of the economic pie, don't expect them to stay silent and take it for too long. 
    zorba said:
    "Income Inequality" is one of those codewords that causes me to roll my eyes...
    I get that. I am not a fan of equity per se. There needs to be a gradient between those that excel and those that to the bare minimum or worse. That said the gradient has gotten pretty huge. When the top 0.1% capture over 10% of total gdp and about as much as the entire lower 50% we may have a problem. We do live in a country where the majority rules. When almost have the population is getting a tiny slice of the economic pie, don't expect them to stay silent and take it for too long. 
    if one really doesn't like his or her situation, they can tell The Man to **** off, then open their own business. 
    That works to a degree. But unfortunately many of the same dynamics that concentrate so much power into the hands of a relatively small number of companies also make starting a new business unattractive. I'm not saying it can't or shouldn't be done, but the deck is certainly stacked against you. Here are some factors making starting a new business challenging:

    1) many markets are saturated or dominated by big companies that will just crush you or if you're lucky buy you out.

    2) you need startup capital, if you're not already rich you'll need loans which can be hard to get and at high interest which limits your ability to make a profit (all you profit goes to the bank to pay the loans).

    3) Starting a business requires a lot of diverse skills that not a ton of people have and if you do have them you can probably already make a much better living selling those skills to an existing company vs. busting your butt to start a company that will probably fail eventually and will definitely take a lot more work.

    4) Tax laws are stacked against you. Let's say I have $1M in the bank. I can start a business, work 80hrs a week trying to keep it afloat, and earn $100k in profit. After all taxes I might pocket $60k because I have to pay tax at the higher personal income rate plus pay self employment taxes. Or I can invest my $1M in stock and bonds, earn at least a 7% return and pocket ~$60k per year while sitting on my rear doing nothing because I only have to pay 15% tax and no FICA or unemployment taxes.

    In short the way the system is rigged right now starting a business is a suckers game unless you identify an unoccupied niche, have cheap financing, and have most of the skills required to get the business off the ground. This isn't to say there aren't opportunities and that people can't be successful, we see it all the time, but most of the time most people who try will fail and would have been better off investing their money elsewhere and keep working for the man.
    What world do you live in?  Who the **** invests a million bucks in a  start up business? .00001% of business owners? 
    "I'm here for the guns, hunting, and skirt wearing men."
    Zee
  • JermanatorJermanator Senior Member Posts: 14,252 Senior Member
    edited March 13 #42
    BAMAAK said:
    It does not take a million dollars to start a business.  You have a mop, a bucket and some paper towels you can start a cleaning service.  You have a lawnmower and a truck you can start a lawn service.  We are talking about common folk, not millionaires.
    I didn't start with much more than that. The Washington Post did a fact check that gives a realistic explanation of the outcome for small business start ups. The failure rate isn't as bad as it sounds and sometimes what is called failure, really isn't.

    https://www.washingtonpost.com/news/fact-checker/wp/2014/01/27/do-9-out-of-10-new-businesses-fail-as-rand-paul-claims/?utm_term=.132fa373e84d


  • alphasigmookiealphasigmookie Senior Member Posts: 8,072 Senior Member
    BAMAAK said:
    It does not take a million dollars to start a business.  You have a mop, a bucket and some paper towels you can start a cleaning service.  You have a lawnmower and a truck you can start a lawn service.  We are talking about common folk, not millionaires.
    I didn't start with much more than that. The Washington Post did a fact check that gives a realistic explanation of the outcome for small business start ups. The failure rate isn't as bad as it sounds and sometimes what is called failure, really isn't.

    https://www.washingtonpost.com/news/fact-checker/wp/2014/01/27/do-9-out-of-10-new-businesses-fail-as-rand-paul-claims/?utm_term=.132fa373e84d


    I mean the numbers still aren't awesome. 50% failure in 5 years 66% in 10, but yeah not always complete failure. Definitely high risk/high reward pathway. Then again if it was easy everyone would do it. 

    Obviously you are one of the successful ones. At least in your primary business. 
    "Finding out that you have run out of toilet paper is a good example of lack of preparation, buying 10 years worth is silly"
    -DoctorWho
  • alphasigmookiealphasigmookie Senior Member Posts: 8,072 Senior Member
    cpj said:

    cpj said:
    zorba said:
    "Income Inequality" is one of those codewords that causes me to roll my eyes...
    I get that. I am not a fan of equity per se. There needs to be a gradient between those that excel and those that to the bare minimum or worse. That said the gradient has gotten pretty huge. When the top 0.1% capture over 10% of total gdp and about as much as the entire lower 50% we may have a problem. We do live in a country where the majority rules. When almost have the population is getting a tiny slice of the economic pie, don't expect them to stay silent and take it for too long. 
    zorba said:
    "Income Inequality" is one of those codewords that causes me to roll my eyes...
    I get that. I am not a fan of equity per se. There needs to be a gradient between those that excel and those that to the bare minimum or worse. That said the gradient has gotten pretty huge. When the top 0.1% capture over 10% of total gdp and about as much as the entire lower 50% we may have a problem. We do live in a country where the majority rules. When almost have the population is getting a tiny slice of the economic pie, don't expect them to stay silent and take it for too long. 
    if one really doesn't like his or her situation, they can tell The Man to **** off, then open their own business. 
    That works to a degree. But unfortunately many of the same dynamics that concentrate so much power into the hands of a relatively small number of companies also make starting a new business unattractive. I'm not saying it can't or shouldn't be done, but the deck is certainly stacked against you. Here are some factors making starting a new business challenging:

    1) many markets are saturated or dominated by big companies that will just crush you or if you're lucky buy you out.

    2) you need startup capital, if you're not already rich you'll need loans which can be hard to get and at high interest which limits your ability to make a profit (all you profit goes to the bank to pay the loans).

    3) Starting a business requires a lot of diverse skills that not a ton of people have and if you do have them you can probably already make a much better living selling those skills to an existing company vs. busting your butt to start a company that will probably fail eventually and will definitely take a lot more work.

    4) Tax laws are stacked against you. Let's say I have $1M in the bank. I can start a business, work 80hrs a week trying to keep it afloat, and earn $100k in profit. After all taxes I might pocket $60k because I have to pay tax at the higher personal income rate plus pay self employment taxes. Or I can invest my $1M in stock and bonds, earn at least a 7% return and pocket ~$60k per year while sitting on my rear doing nothing because I only have to pay 15% tax and no FICA or unemployment taxes.

    In short the way the system is rigged right now starting a business is a suckers game unless you identify an unoccupied niche, have cheap financing, and have most of the skills required to get the business off the ground. This isn't to say there aren't opportunities and that people can't be successful, we see it all the time, but most of the time most people who try will fail and would have been better off investing their money elsewhere and keep working for the man.
    What world do you live in?  Who the **** invests a million bucks in a  start up business? .00001% of business owners? 
    Depends on the business. A lot take a fairly nice chunk of change. Others not so much. The ones that are easy to start also tends to have a lot of competition. 
    "Finding out that you have run out of toilet paper is a good example of lack of preparation, buying 10 years worth is silly"
    -DoctorWho
  • JermanatorJermanator Senior Member Posts: 14,252 Senior Member
    BAMAAK said:
    It does not take a million dollars to start a business.  You have a mop, a bucket and some paper towels you can start a cleaning service.  You have a lawnmower and a truck you can start a lawn service.  We are talking about common folk, not millionaires.

    I don't believe manufacturing is dead, it's just relocating.  No it will never be the same in Detroit or Flint but we have more factories opening here then ever.  Toyota engine plant is on it's third expansion, Polaris just opened a huge plant, Toyota/Mazda are building a plant with 3000 employees, Bezos is building a million sq foot rocket plant, Airbus, Boeing, shoot every tech company you can name.  I could go on but the point is, we have a 3.7 % unemployment rate cause the govt does what it takes to get and keep businesses.  Unfortunately, I kind of wish the growth would stop, or at least slow down.
    It isn't dead. But has changed quite a bit. It takes less man hours now to build the same widget .now days. The factories that were built in the rust belt back in the 1930's through 1960's are essentially obsolete now. Lots of things manufactured in house are now trucked in, just in time from parts suppliers. Shipping and logistics has improved dramatically to the point where you can use parts from all over the world at one final assembly plant basically wherever they want. Location becomes much less of an issue.

    Detroit and Flint still builds the ever living crap out of cars and trucks, but it uses a whole lot less people to do it now. Back in the day, recruiters would go down south and hire people to come here. We have neighborhoods nicknamed "Little Missouri", "Burtucky" and others as a testament to this. Now, they just build the factory down south.
  • RugerFanRugerFan Senior Member Posts: 1,579 Senior Member
    After the 1927 flood, thousands and.thousands of displaced African Americans left Mississippi for Chicago and Detroit and jobs. It was called the Great Migration. 
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