No, really he isn't. That's not what communism is about.

I think the point in his hypothetical is that the whole economy pays more for unskilled workers (or at least underskilled), not just one business. This kind of artificial wage increase might destabilize things on short term, but long term there's no reason to think it wouldn't bolster the economy even more than giving rich folks more money (though it should be pointed out that it would give a steroid injection to the manufactured goods side of our economy, and not much of anything to the service side).

Spexxvet, details aside, I think you've got the right idea. Of course it helps the economy to allow competition, but why must the competitors be so bloodthirsty all the damned time? There's more than one way to help out the economic state.

Why can't we take a step back and realize when so much is plenty? That the money for my 12th car could just as well be spent on someone else's 1st? <southernhickvoice> My poppa always said if you aren't acting out of love, you shouldn't act at all. </southernhickvoice>

Don't tase me, bros!

Jesu le Criste, man, it all depends on what the business calls for. If you're running a traditional grocery store, then no, you really have no opportunity to raise your checkers' salary by 50%, because there's no advantage, your profit margin is near zero, and the additional costs mean the competition will ream the living shit out of you. The only way you can raise salaries is if you trick people into paying more for their cans of peas.

Costco, on the other hand, redefined checker pay by changing the entire model of what they do. Part of their game was tricking people into buying much larger cans of peas than they need, confusing people's usual price comparison. But there you have it.

At new types of grocery stores, such as Trader Joes and Whole Foods, the market is deciding -- just as you say -- that it prefers a different style of checker pay, and doesn't mind paying double for peas to get it.

But ironically, the people you are trying to help reject the Trader Joes/Whole Foods model, and buy their groceries at the big supermarkets. Why: they pay half for a can of peas.

...you sped right past my point. I said his hypothetical (that being the key word, because this would never happen without someone pointing a gun a Joe Americanbusinessowner's head) was that everyone raised the wages at the same time, be it in small increments (wiser) or all at once (hello 2nd depression). It no longer becomes an issue of competition.

And besides this whole idea is based on giving up most of your excess, not more than what you have to give. It's about trickle up (if that were possible) instead of trickle down (what a load of horse shit that was). Of course, this is still in hypothetical (even parenthetical... (I gotta lay off these)), because you're right there ARE companies with very small profit margins, and their employees would suffer because they can't afford a big pay hike.

Which is why ((I)) support socialism!! :D

It's really hard to understand, but... their lifestyles won't change if we do make their salaries more equitable.

Just giving people more money doesn't work, you have to give them more wealth, more purchasing power.

A famous economics study looked at a small system in a prison, where cigarettes were used as money. Let's say the price of a new pair of shoes was 200 cigarettes.

Overnight, a new supply of cigarettes came into the prison. Suddenly twice as many cigarettes were available. Was the result that every prisoner could now afford two pairs of shoes? No! The result was that the price of shoes doubled to 400 cigarettes.

The increase in money supply does not produce, magically, more goods and services to become available. It just changes the price of what is being bought.

One place to see how this principle works is in the price of college. For the last few decades, more and more money has gone to gummint grants and cheap loans -- to help the people who are worse off, so they can afford to go to college. But what has happened, at the same time, is that college tuition has risen at more than twice the rate of inflation... making it less and less available. Excellent post on this phenomenon

If more money is made available for a thing, the price of that thing increases. You can't fight this; it is a very powerful force doing what it does best.

Now you can argue, well, the inequity is a larger social problem than the lack of purchasing power of the poor. But what you're really doing is arguing for a less efficient economic system. Which will not really help the poor, in the long run.

I understand that, I have (as you advised others) taken econ 101. The point is, if the entire top crust gives up their excess wealth and uses it to pay the middle to lower crust, there is no freshly printed money or anything, they're actually giving the lower class more wealth at the expense of themselves.

And the idea that it's a less efficient system is something that is hotly debated. Would you rather have the majority of the purchasing power in the upper, middle or lower class? It used to be largely in the middle class, but it's crept higher and higher until now <distribution of wealth blah blah blah, we've all heard it>.

My personal opinion, and that of a fair share of economists, is that having such a overbalance of wealth in the hands of the enormously wealthy makes the economy unstable, in that it produces more service goods and fewer ACTUAL goods, which we outsource to other countries. While many debate whether a service or a physical product behave the same, I'm of an opinion they don't. SO, more wealth in the middle class equates to a more durable economy... IMHO.

Monkey wrench. The Fed just dropped interest rates by 0.5%. Now more money is made available to the economy. Therefore the prices of everything will only increase? How does throwing more money in the economy make more wealth? After all, the Fed is supposedly lowering interest rates only to stave off recession - the manufacturing of fewer goods. OK you Econ 101 experts. Explain that one.

hmmm.. maybe the

That in itself is no argument for your intellectual honesty, though. Tw is also pretty consistent throughout, and no one accords that dealer in half-truths a reputation for integrity.

This kind of economic argument is a nonstarter, though: no two people economically independent each of the other would likely have either quite agree with the other's assessment of what is enough for themselves, and they'd be reluctant to assess "enough" for the other party. A program intended to determine "enough" is merely stillborn -- everyone subject to it would recognize it as completely arbitrary and resent its inevitable strictures. Do it the way it's done now and be content.

Your whole statement is a straw man argument. Stop insinuating that I've proposed ideas that I haven't. I've never said anything about someone telling you what is enough. Nor have I said anything about a "program". I've saidd that you know what enough wealth is, and when you reach enough, you should voluntarily stop accumulating
more wealth.

The spirit behind Spexxvet’s post is too accurate. Greenspan in repeated interviews on his book tour, again repeats what he considers America's two greatest threats. 1) An education system that is not graduating sufficiently educated students. 2) An increasing disparity of wealth - the concentration of too much wealth among too few people. Last time this happened, America then ended up in the Great Depression. With too much money concentrated among too few, then the economy did not have liquidity necessary for growth. A major depression resulted much later.

Whereas the top man once made 14 times more money than his average employee, today, that number is in the hundreds - approaching 1000 times more money. There is no justification for that disparity. The free market system broke down when top management salaries has no relationship to free market forces. An elite simply bids up each other's salaries with no regard to value.

Ironically, the most poorly run companies were paying most for their top executives. Nardelli of Home Depot is a perfect example. Nardelli was running Home Depot slowly downward. Finally Home Depot paid him about $150 million just to leave. When do you get paid for being incompetent and fired?

Hey Griff- what's that? I'm not allowed to stream.

Dammit, that's the word I was looking for, liquidity. And I just heard it on the radio, too.

The Conchords singing The Humans are dead. hmmm... seemed like a good idea when I did it....