Anyway, with that said, what exactly is being proposed, here: no regulation for businesses, or should they regulate themselves? Also, are we saying that no government is best? If so, who’ll be the referee? Or are you, perhaps, saying that there should be no referee and we all should just battle it out?

You’re right and wrong. It is true that income taxes and the like don’t really hit the idle wealthy and do ironically, keep the strivers from ever becoming wealthy. Very few wealthy people are happy about it though and no one wants to ’stick it’ to the strivers except the idle poor and many of the (misguided) strivers themselves. Among the wealthy there certainly is empathy for the strivers since most wealthy were strivers once. However the attitude is more like a resigned acceptance of the choices of the plebiscite – ie. you voted for this so I guess you didn’t want to have a chance to become wealthy. So be it.

What’s above could be published as the Cliff’s Notes for one of the plot elements of the book.

I just realized I had a major editing problem in my post. I meant that those banks should have gone out of business.

I’m not in a business like yours. There are no price controls but the business is very risky. You bring up an excellent point, of course.

Regulation increases the cost of doing business – thus, barriers to entry, reducing competition. And regulation is an indirect ownership of the means of production. With enough regulation, business owners are merely managers of a government entity and the difference between the Soviet economy and an American regulated one begin to disappear.

Enjoyed the logical explanation and share much of the same sentiment.

That said, Buffett depends on inflation to make his good picks seem great and his bad picks seem not so bad. The “oracle” believes the Democrats will generate more of it. He is not an income tax payer (he only pays dividend tax) and does not empathize with managers of operating businesses who are stuck with the USA’s (G7 comparatively) high corporate tax rates.

The Goldman maneuver was brilliant – he used the value of his name brand to get an effective 15% return on a loan to Goldman Sachs, which is now an FDIC insured bank. Goldman agreed to the terms because it brought investor credibility to their zombie business. Just like Trump’s name does for condos (for an appropriate licensing fee)!

Like you, I also have a regulated line (and a market-rate line) among my businesses. The regulated line barely generates EBITDA because the government controls prices to the bare minimum above costs to keep the owner from abandoning the business. The economic “tax,” if you will, is 90% before federal, state and local income taxes are taken. This is the natural state of a Democracy. Business owners whose businesses are beholden to a location will ultimately be taxed or regulated into providing their goods at cost plus management expenses. Location based businesses are all just utilities waiting to be recaptured by the majority. Real profit is only in the years leading up to the ‘utilitization’.

As you say, the regulatory body sets pricing and service standards and claims he is protecting the consumer from our ‘evil,’ but he is also protecting me from spending money on marketing costs, quality product and anything above rudimentary (regulatory minimum) customer service. All plebs will receive the same gruel, even if they wanted to pay more to get more.

An investor’s expectation of a government takeover decreases projected return and stifles location based innovation and business creation. That’s why no one wants to build a factory full of machinery and jobs in a place where the public is likely to take it over (by regulations, taxes or outright condemnation) sooner rather than later. That’s also not my problem. I just have to worry about which politicians need contributions to prevent them from claiming 100% of my regulated business profits instead of 90%.

Interesting discussion. I happen to own a business in a highly regulated industry which has been the target of recent congressional witch hunts. I agree with Bundler that business pays protection money to the mafia…I mean politicians. However, I also think Shannon has a good point. Look at Buffet’s latest maneuver. He bought a stake in Goldman that he had a much higher probability of losing on if the bailout didn’t go through, and then he proceeded to screech about the need for a bailout. Never mind that we’ll be left with massive moral hazard and zombie institutions that shoutdHe also has a large CDS position (which he called weapons of mass destruction a few years ago) and he needed the bailout to reduce the potential losses on that position.

The regulator for my industry effectively reduces competition and creates economic rents for us. The line sold to the public is that the regulator protects the public from our evil. I have recently given up fighting market regulation because the victims of this regulation spit in my face as I fight on their behalf. If they want to pay more to create rents for me, so be it. Most others in our industry don’t care. They’ll buy the rents with support for the left which loves to centrally plan every aspect of the economy. It’s in their interest.

I recently read that GM was lobbying in Washington to get national healthcare so they wouldn’t have such crushing pension obligations.

GM just paid some odd number of dollars to hand over retiree medical benefits to the union. They’ve washed their hands…
tom

That looks interesting. From the Amazon blurb, I suspect I might agree with it, although I think the end result will be less heirarchical than those old structures it suggests, and more of a decentralized network of people and talents.

Thx.

You might also find this of interest:
The Economy of Ideas
and (only vaguely related), this, too:
The Transparent Society
Both from back when Wired was worth reading, before Time, Inc., bought it.

I concur, with the codicil that logic is ALWAYS subject to GIGO.

If you start with inaccurate, idealistic, or otherwise unrealistic axioms, your result is uncoupled from both the real world and the rational goals you may well consider your ends.

If your very concept of “fairness” is distorted and unrealistic, then your actions towards increasing the “fairness” in the world are hardly likely to produce anything resembling ANYONE’S concept of “fairness” — not even your own.

Despite plenty of teachings to that effect, they cannot ever seem to recall what paving material makes up the proverbial Road to Hell.

Talk about ignoring context, how’s that?
1) Which ones have the soapboxes? Right. That 1% you’re talking about being so minute. THAT is the bunch I’m talking about. Not necessarily the so-called “businesspeople” you find so concerned with “free expression” (more on that in a moment, however)
2) The USSR had a more than 70 year history of various successes, and a lot of failures. One would think that some stories about such would be entertaining, I’d think, as well as informative. It can get people to actually talking about socialism and the downside to “share the wealth” concepts, as well as what sort of governmental behaviors eventually pervert themselves to totalitarianism. How is it that we can find literally hundreds of movies about Nazi Germany, which lasted all of about 15 years, but very, very few films about the USSR, almost 5x as long, and killed at least as many people? How about some views of the kind of ecological nightmares produced by the Soviet state and dumped in the laps of the Czech Republic? Funny how the depredations of business spawn several “Erin Brockovich” or “A Civil Action” type pix a year, but does anything commenting on how much worse a government can be ever get made?
3) Back to the “free expression” aspect of things:
How to Get So Dead in This Town
And then there’s
Free speech for me, not for thee
And, uh, do I really, really NEED to go into the threat to free expression called the “Fairness Doctrine” which is almost a certainty if we get a Dem PotUS and a Dem Congress?

OooooooooBOEEEEEY. Those lefties, they are SOOOOOO out to protect my free expression rights.

Yeeeeaaaahh.

> This whole simplistic and misguided pseudopsychological explanation

OK, once more: SHE’S AN M.D. Psychiatrist with more chops than you’ve got in whatever damned field you believe yourself expert in.

You have NO chops in psychology or psychiatry, I am willing to bet.

So your vastly astute “analysis” of her well explained and detailed professional analysis (which, chances are, you didn’t even read beyond a paragraph or two, if that) has ZERO truth value.

I tell ya what. You stop trying to distort what was said and actually deal with it on a factual basis as far as refutation goes, and I’ll take you seriously. Considering that you ignored 95% of the information so you could focus on one narrow, tiny little thing that you managed to come up with a halfwit level of excuse for.

And even THAT part was pretty ineptly done — You’ve made NO effort to explain why a vast percentage of Hollywood is leftist nutjobs to the extent where many Republicans and Conservatives have to literally hide what they are and believe until they have some major clout of their own.

> If the new left needs Hollywood to stuff Bush’s Iraq adventure in order to guarantee their first amendment rights, they will play along.

I REPEAT: *LOAD* *OF* *CRAP*

I have YET to see *any* of these oh-so-brave people speaking “Truth to Power” getting thrown in jail, blacklisted, or otherwise oppressed for expressing in some cases some fairly treasonous and certainly outright Anti-American views.

As a matter of fact, there are lots of cheers and accolades for these oh-so-brave people making such statements in public. They readily wind up getting onto talk shows and paid speaking gigs where they can further express such notions.

Um… yeah, can *I* get some of that kind of oppression?

Sir Bundler: You were terribly oppressed.
Sir O’Bloody: Look, let me go back in there and face the oppression.
Sir Bundler: No, it’s too oppressive.
Sir O’Bloody: Look, it’s my duty as a victim to sample as much oppression as I can.
Sir Bundler: No, we’ve got to find the Holy Grail of Communism. Come on.
Sir O’Bloody: Oh, let me have just a little bit of oppression?

—-

OTOH, I think it’s pretty damned clear that Robert J. Avrech feels *QUITE* threatened and intimidated just by saying “Look, I don’t talk politics. I’m here to make a movie.”

That’s not even him EXPRESSING his views — that’s just him saying “I don’t want to DISCUSS my views”

Now, tell me again, please, in more specific detail — who, exactly, is threatening whom?

S:-/

.

I had not heard of the claim that the Democrats created tax loopholes and shelters for the wealthy, and that Reagan eliminated them.

The Democrats did not so much create the loopholes and shelters as much as their ideology of government directing the economy lead them to support myriad targeted tax breaks. This occurred over a period of 30 years and accelerated in the late 60’s.

Leftist policies are laced with such unintended perverse outcomes. Leftist don’t seem to have a very strong sense that their is a profound difference between what you intend to do and what actually happens.

Any historical source of tax burdens will show that the tax system grew more progressive after Reagan’s tax reforms. Reagan cut rates but he also got rid of the loopholes and shelters. As a result, tax revenues went up and taxes grew more progressive.

http://www.amazon.com/Sovereign-Individual-Mastering-Transition-Information/dp/0684832720

I had not heard of the claim that the Democrats created tax loopholes and shelters for the wealthy, and that Reagan eliminated them.

Is there any substantiation to those claims?

Indeed ‘Politics makes strange bedfellows.’

It’s more complex than that and the patterns of alignment much more firm. People do make tradeoffs in politics but the tradeoffs they choose form the same pattern. Moreover, the same sets of people make the same tradeoffs on many different unrelated issues.

I’ve been researching and thinking about this issue form over 15 years now, so frankly, your off the cuff explanation is (1) trite and (2) wildly insufficient.

A better explanation is that different intellectual subcultures form different models of causality. For example, a leftist general model of how the entire planetary economy works is fundamentally different than that of someone on the right. Phrased another way, they have different axioms so even though each uses perfect logic, they end up with different conclusions.

I would recommend Thomas Sowell’s “A Conflict of Visions” as a good starting place for examining this phenomenon.