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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: thames_sider who wrote (93182)	11/3/2008 7:56:22 AM
From: Lane3	Respond to of 541379

Thanks for the thoughtful post.

To: thames_sider who wrote (93182)	11/3/2008 3:32:12 PM
From: cnyndwllr	Read Replies (2) \| Respond to of 541379

Thames, re: "Hence these two factors, the availability of high-return financial investment paths which do not increase production, and the globalisation of supply which encourages productive investment outside the US, mean that tax cuts for the rich in the developed world are not going to have a beneficial effect in their home nations." And that's only the tip of the iceberg. Some of the multinational corporations have become financially larger than most of the national economies in the world. With fewer and fewer suppliers making investment and production decisions the risk of poor decision-making on a major scale is increased. And the fact, as I mentioned in an earlier post, that the management of those companies is often untethered to traditional ownership constraints and is too often narrowly focused on short term profits, means that the long term efficiency of multinational "free markets" is suspect. And they don't have any incentive to put American workers to work, in fact they have every incentive to move jobs to places where they can utilize workers who are relatively powerless and where they don't have to bear hidden costs like controlling pollution and protecting worker safety. And, as the world's population becomes more skilled and educated and they learn how to better utilize the emerging skills of such people, they can increase the pace with which they move more production out of America. Which is fine, but only if we can replace those lost jobs with American worker production of some other goods and services that will keep our economy viable and our workers employed. Your point that there is a lot of money tied up in markets that have little to do with increased production is also valid. I think one reason for that, however, is that production capacity currently exceeds demand and there is a lot more money out there looking for home than is needed for investment in increased production capacity. If that changed then I think you'd see that money flow back into increasing production. And, as I posted earlier, a big underlying problem results because of the short term versus long term perspectives of the management of many of our corporations. I think you can view of them as being similar to pillaging Vikings. The Vikings raped, pillaged and destroyed without regard to the health of the village because they had little or no interest in leaving anything behind. It appears that in many instances we see the same perspective from today's managers; in today's free wheeling business environment they can rape and pillage and then move on. But they have sometimes become such a large part of the economy that they are quasigovernmental in the sense that for the good of the many we'll pay them to stay in business even when they've failed the Darwinian market test. And where's it going to stop? Concentrating that much power in the hands of a few companies, leaving them virtually unfettered and tying ourselves to their well being is not something we should welcome but, in the today's multinational market economies, that's how each country seems to play the game. Maybe Obama is prepared to bring in some advisors willing to think outside the box, and maybe the American public can stomach a new look at the wisdom of the multi national, corporate-dominated market, and maybe a new Congress has the intelligence and courage to take on these powerful, entrenched interests, but I'm not holding my breath. Ed

To: thames_sider who wrote (93182)	11/5/2008 5:44:27 PM
From: TimF	Read Replies (2) \| Respond to of 541379

The financial sector did get bloated, but its undergoing a correction (even with the bailout reducing this correction) And even during the bubbles (tech stock bubble, housing bubble etc.) financial investment had a net positive real world impact. Other than the fraction of this investment that represents investment in the actual costs of running the financial system, the financial investment is indirect investment in the "real-economy". The problem of over investment in people, facilities etc. for the financial sector itself was real, but the main problem was misallocation of investment in the real economy. This is not a new or unique problem. It happened in bubbles throughout history.