[rdst_1]

Originally Posted by PGA

Friends, there is some empirical evidence that is considerably disturbing me. It's wholesale prices of fresh vegetables that I grow. They have been on the downhill path for last two years and now have nosedived.

As someone who is just getting into farming, I believe that farmers themselves need to become proactive about selling their produce. The mindset that farmer's job is only about growing has to change. They need to run it like a business. Multicropping, especially a good mix of cash crops is what I feel is necessary.
Also, farmers need to come together (I know it is quite hard) and form small processing unita themselves. There are many examples of such cooperatives running quite profitably all over India.
Wholesale selling has to take a backseat and direct to consumer selling has to become the main source of income. Right now, we grow too much. The main purpose of a farmer has become to grow bumper harvests, beating last year's records year after year. This had to lead to gluts. Add to it, an inefficient distribution system, and the price disparities between wholesale and retail prices become more explainable.
All this will change, once direct selling becomes more mainstream. Even today, entrance of players in the vegetable delivery area is resulting in reducing the disparity between supply and demand. Farmers associated with such operations know how much they have to grow and are thus able to earn a steady income and get much better rates for their produce.

[PGA]

Originally Posted by rovingeye

PGA -

But I strongly suspect profiteering by the evil middlemen in the supply chain.

This isn't the case, middleman's earnings are percentage of the cost price so when they are low, his earnings are low too. If at all there is some increase in earnings it's at retail level, since his overall volumes are quite low, his earnings increase is not very visible.

Originally Posted by rdst_1

As someone who is just getting into farming, I believe that farmers themselves need to become proactive about selling their produce. The mindset that farmer's job is only about growing has to change. They need to run it like a business. Multicropping, especially a good mix of cash crops is what I feel is necessary.....

We will talk about all these issues maybe one year down the line, when all this will be reality for you.

Originally Posted by smartcat

PSU Banks are not lending to small traders. Rural focussed NBFCs used to lend but they have a tough time accessing funds too. New RBI Governor at the helm might ease liquidity. Do report back on your findings after 3 months.

https://indianexpress.com/article/in...y-now-5134049/

In my opinion, majority of these wholesalers operate outside the formal lending sector, so issues of Banks should not have impacted them. But as one of them mentioned to me that they have money lying in the bank since demonetisation but cannot get it out.

Something similar is published in the IE article mentioned above, extracted below:

"Or, is it that demonetisation, in combination with the goods and services tax, has made traders “afraid”? Anecdotal evidence suggests that the Rs 2-lakh daily limit on cash transactions and the fear of being “watched” by revenue authorities has made traders less inclined to buying and stocking up produce during the harvesting season, with a view to profit from price increases. Whether this is what’s, indeed, happening in APMCs and making farm prices more prone to fall than to rise is, however, hard to establish."

So as I see, the problem is likely to persist unless Govt comes out with some scheme to fund/bring credit back into the unorganised sector. As of now I don't see how that will happen. Will keep a close watch and get back if something else comes to my notice.
Thanks and regards

[Samurai]

Whenever I get into a debate on economics with someone, I often getting a feeling that we are talking at cross purposes. Weird thing is I know why it is happening, but have a hard time convincing the other side why it is happening.

Most people who study economics these days, primarily focus on a sub-field called business economics. According to wiki, business economics is a field in applied economics which uses economic theory and quantitative methods to analyze business enterprises and the factors contributing to the diversity of organizational structures and the relationships of firms with labour, capital and product markets. That is what you learn when you study economics in a business school. Therefore, a typical MBA graduate is only familiar with business economics. Such folks will scoff at terms like inequity and social justice, and will offer counter-arguments like Pareto principle or Demand/supply. Um, I must confess that I too thought like this for few years, since I too studied economics in a business school.

Post 2008 financial crash, I researched a lot about how/why/what of this global crisis. In that process, I became aware of other parts of economics, mainly socioeconomics, also known as social economics. According to wiki, it is the study of reciprocal relationship between economic science on the one hand and social philosophy, ethics, and human dignity on the other, in order to achieve social reconstruction and improvement. This sub-field of economics is usually taught to sociology students.

Generally, folks who study and practice business economics, tend to be stern capitalists or libertarians, or both. Similarly, folks who study and practice socioeconomics, tend to be liberals or socialist, or both. It take a serious life changing experience for them to switch sides or understand both sides. For me this life changing experience came while keeping the company floating through the debris of 2008 crash, and dealing with reality of raising an autistic child whose diagnosis happened in 2009.

Last year I was reading Lee Iacocca's autobiography, and was amused to note the Iacocca himself had undergone this transformation. His moment of crisis came when he got fired from Ford and took over as President of Chrysler, which was falling apart and needed federal loan. Here is the excerpt from his book.



Of course, democrats of the 70s were lot more social leaning than the current lot.

Quickly now, without googling, how many of you know what sociologists do for a living? Do you know any sociologists? On the other hand, all of us know plenty of MBA grads working in various businesses, banks and consulting firms. Yes, this ratio between social and business economics majors is very lop sided, in favor of the latter. However, I did know one sociologist, will discuss him later.

Since we are mostly exposed to business economics, we tend to lean towards that philosophy. We dismiss ideas that goes against that philosophy as impractical or immature. But sociology looks at the same situation with a different lens.

When one of my staff member was a new mother, I had asked her, which is tougher, taking care of her infant for 2 hours or working at office for 8 hours. She instantly replied it was the former. Then I asked her which job deserves more pay, and what is the reality. She said obviously the infant-care deserves more, but the reality is office work earns more. What makes care-giving jobs so tough is the emotional labour aspect of it. Office work doesn't have emotional involvement. But any job that involves taking care or helping of another human or even pets, involves emotional involvement. Jobs with emotional involvement can be very draining.

What is the economic justification for this situation? The capitalistic justification is that the work of the engineer is revenue generating, while the work of the care-giver is just an expense. However, a sociologist will consider this a problem that needs to be solved. So social leaning governments have solved this by mandating fully paid maternity leave. In India, women get paid maternity leave for 6 months. Some European countries give up to 3 years of paid maternity leave. Meanwhile, the beacon of capitalism namely USA, mandates only 3 months of unpaid leave.

One of the major consequence of capitalism is money attracts money. Rich get richer, while poor get poorer, causing the income inequality to grow year by year. The capitalistic justification is Pareto principle and demand/supply. However, a sociologist will consider this a problem that needs to be solved. Too much inequity will lead to destabilization of the nation. French and Bolshevik revolutions are examples of this. So social leaning governments have solved this by having higher marginal tax rate, and by having lots of social welfare programmes targeting the poor.

It is clear from the above examples, that a sociologist requires the government to mandate and enforce humane policies to control corporate greed. That is why capitalists and libertarians are always arguing for smaller and less interfering government, and fight to remove as many social programmes as possible. We need both business economists and social economists to balance each other out. If any one side becomes dominant, it is not good for the society.

Before I conclude, I want to mention the only one sociologist I knew. He was my relative, and we used to play street cricket together in our school days. He went on to do his BA and MA in sociology. Later, he wrote and passed UPSC exams and become an IPS officer. He even earned a Phd from USA in public administration. Tragically, he passed away last month due to a medical complication. The article here explains how he used sociology to solve tricky problems while he served in different places.

[SmartCat]

Despite all the ridicule we foist upon politicians - giving credit where it is due - only they understand social economics and business economics. Without knowledge of social economics, they will not get the votes. Without knowledge of business economics, they won't get the money and influence to fight elections.

I see that politicians are assisted by economists and secretaries who are mostly drawn from Indian Administration Service or State Administration Service. Do these guys study and understand social economics and business economics?

Originally Posted by Samurai

But any job that involves taking care or helping of another human or even pets, involves emotional involvement. Jobs with emotional involvement can be very draining. What is the economic justification for this situation? The capitalistic justification is that the work of the engineer is revenue generating, while the work of the care-giver is just an expense.

Well, there are professional jobs that involve emotional involvement - and they are not "just an expense". They are critical to the success of many businesses. Examples:

- Nursing jobs
- Stewards & Stewardesses in an Airline
- Customer care & Technical Support executives
- Receptionists and Waiters in hospitality industry

An air hostess can have lots of personal problems, but she still has to smile when interacting with airline customers. But the pay depends on supply/demand as you put it. But some businesses pay MORE to get the best executives for such jobs - because it can be a differentiating factor for end customers

Regarding housework, here is a very interesting article -> the economic value of stay-at-home moms.
Why Stay-At-Home Moms Should Earn A $115,000 Salary
https://www.forbes.com/sites/jennago.../#69d21dfc75f4

[Samurai]

Originally Posted by smartcat

I see that politicians are assisted by economists and secretaries who are mostly drawn from Indian Administration Service or State Administration Service. Do these guys study and understand social economics and business economics?

Yes, the training does focus on social economics over business economics. Being at the receiving end of the decisions from government bureaucrats, I have often wished they had some business training too.

Even the IAS exams focus a lot on social aspect. See this list of most important topics that are asked in the IAS exams.

Originally Posted by smartcat

Well, there are professional jobs that involve emotional involvement - and they are not "just an expense". They are critical to the success of many businesses. Examples:

You haven't named the most emotional labour intensive job, therapists. Since 10 years, I have closely and regularly seen how speech therapists, behavioral therapists, occupational therapists & physiotherapists work. They have to be very emotionally involved to do a good job of it. Since the results are very sketchy and slow, they can get really frustrated. It often takes 3-6 months to teach a simple task to an autistic child. I simply have no idea how these people cope with stress. I can't handle that work even for 30 minutes.

And sociologists are yet to address this area. Indian government is still paying lip service to the care required for autism. Many families undergo complete/partial breakdown when their child is diagnosed with autism. We have seen parents undergoing divorces, bankruptcy, depression, even suicides. In some cases, kids have been abandoned, or father has absconded, etc. The only SOP provided is limited tax break on treatment expenses. To avail that, I have to get my son evaluated by a government psychiatrist, that he is autistic. It is such a small drop in the bucket, so I have not bothered to get it done.

[ashokrajagopal]

Originally Posted by Samurai

Whenever I get into a debate on economics with someone, I often getting a feeling that we are talking at cross purposes. Weird thing is I know why it is happening, but have a hard time convincing the other side why it is happening.
.
.
.
Before I conclude, I want to mention the only one sociologist I knew. He was my relative, and we used to play street cricket together in our school days. He went on to do his BA and MA in sociology. Later, he wrote and passed UPSC exams and become an IPS officer. He even earned a Phd from USA in public administration. Tragically, he passed away last month due to a medical complication. The article here explains how he used sociology to solve tricky problems while he served in different places.

An intriguing write up, Samurai. Very well articulated. Can you do a weekly podcast ?

You are dead wrong about the Business Economics students not learning Socio Economics and no wonder none of them agree with you. Most of them do two courses -- they are called Atlas Shrugged and Fountainhead. Most of them also think they are done for life on Socio economics with these two courses.

[Samurai]

Originally Posted by ashokrajagopal

Most of them do two courses -- they are called Atlas Shrugged and Fountainhead. Most of them also think they are done for life on Socio economics with these two courses.

I didn't know Ayn Rand was compulsory reading for MBA. I thought that was just Paul Ryan.

[DigitalOne]

Originally Posted by Samurai

Most people who study economics these days, primarily focus on a sub-field called business economics. ..... That is what you learn when you study economics in a business school. Therefore, a typical MBA graduate is only familiar with business economics. Such folks will scoff at terms like inequity and social justice, and will offer counter-arguments like Pareto principle or Demand/supply.

I am fascinated by economics and try to read as much as possible on the subject though I have no formal background. Such debates and posts are much learning and thought-provoking for me. Thanks for this !

I am neither an MBA nor have I read Fountainhead or Atlas Shrugged (too bulky ). I do tend Libertarian/Capitalist and let me try to explain why so.

I believe Socialism tends to favor whoever has already got into the system, ignoring those who have been left out.

Let's take this example:

So social leaning governments have solved this by mandating fully paid maternity leave. In India, women get paid maternity leave for 6 months. Some European countries give up to 3 years of paid maternity leave. Meanwhile, the beacon of capitalism namely USA, mandates only 3 months of unpaid leave.

So the woman goes on paid maternity leave for 3 years and everybody feels good about it. Three months down the line an unemployed woman turns up, and says she needs the job. The company cannot offer her the job as there is no post vacant, and the company is still paying salary to the first.

So the employee who was already into the system and could lobby for a 3-year maternity leave gets favored than a person who didn't have a job.

Trade Unions, Pettai Autos (neighborhood autos, in tamil) etc all work on the same principle. Once you are in, you are well looked after at the detriment of those who couldn't get in.

His moment of crisis came when he got fired from Ford and took over as President of Chrysler, which was falling apart and needed federal loan.

So how do you justify billions of tax dollars of hard-working middle class workers being used to bail out one corporation? And Chrysler seems to have made a series of business blunders, and were whipped by German and Japanese cars. And they were bailed out for "nationalistic/patriotic" reasons.

Would you accept it now Indian government bails out Jet Airways? Of if Tata Motors for example is, hypothetically, swamped by cheaper Chinese electric cars, would you accept government bailing out?

Rich get richer, while poor get poorer, causing the income inequality to grow year by year.

Is inequality as big a problem as it made out to be? If we see the situation within India, states like MH, GJ, TN, KA have shown more capitalistic tendencies, enjoy higher growth rates, per capita incomes, and I can imagine that they would have higher inequality (though I could not statistics to back the higher inequality claim). States like WB, Bihar, UP who "enjoyed" good bit of socialism are comparatively poorer.

If Inequality was such a problem you would see migration from GJ or MH to WB or Bihar, right? Why doesn't it happen?

Why do people still queue up outside the US embassy and not Venezuelan embassy or Cuban embassy?

I believe that people strive to go to places where is there are more opportunities than to places where everybody is equally poor.

So governments should strive of Equalizing Opportunities than trying to Equalize Income. A poor student should have as much opportunity to study as a rich kid.

To that purpose, I would support a government which opens up schools and colleges, and not bail out Air India or Jet or a Chrysler. But guess what any government will do, even the so-called socialist ones?

Too much inequity will lead to destabilization of the nation. French and Bolshevik revolutions are examples of this.

The French and Bolshevik revolutions happened in non-democratic countries, and when there was no significant middle-class. Today the world has a huge middle-class population created because of capitalism. And democracies provide timely outlet for any perceived inequalities. Examples, Occupy Wall street, Yellow Shirt protests etc.

And even if there is a revolution, who is going to be targeted? Bezos? Gates? Mukesh Ambani? Earlier the Tsars and the Monarchs had no visible output which was benefited the poor. They had a ostentatious and repugnant lifestyle which obviously ignited the poor. Now the poor or middle-class use the same Amazon services, or Reliance phones, and are contributing to their wealth.

So social leaning governments have solved this by having higher marginal tax rate, and by having lots of social welfare programmes targeting the poor.

..... We need both business economists and social economists to balance each other out. If any one side becomes dominant, it is not good for the society.

That is true. We need both, and we need to start listening not only to whoever is already inside the system. Always remember, Trade Unions are also a lobby.

Only the people outside of the gate don't have a lobby.

[Samurai]

Originally Posted by DigitalOne

And Chrysler seems to have made a series of business blunders, and were whipped by German and Japanese cars. And they were bailed out for "nationalistic/patriotic" reasons.

Actually there were very good practical reasons.

Had Chrysler been allowed to fail, there would have immediately been 360,000 jobs lost. According to the Congressional Budget Office (CBO) in 1979, this would have caused a nationwide ripple effect and the loss of an additional 360,000 jobs as dealers and many communities that were dependent on the automaker were forced to make drastic cutbacks as a result of the bankruptcy. The fear was that with the economy in a recession, the job losses would continue to mount. Second, the bankruptcy of the company would force $800 million in unfunded pension obligations for the automaker's employees onto the federal government.
Source

And you should also know that Chrysler paid it all back in 3 years, with full interest.

Rest of your arguments are standard libertarian/capitalist talking points. Unless you get exposed to socioeconomics in real life (like it happened to me), you won't be able to appreciate the other side. So I will leave it alone for now. Just keep in mind that both sides have flaws, and are not perfect.

[ashokrajagopal]

Originally Posted by DigitalOne

I believe Socialism tends to favor whoever has already got into the system, ignoring those who have been left out.

This is also a proven problem of Capitalism, and there are many studies recently with good data to back it up. For instance Raj Chetty is a tenured Harvard Prof, and his study and backing data did a lot of analysis on this in US. He did a "Talk at Google" last week too.
The point is, any system which is too powerful run the risk of favouritism.

So the woman goes on paid maternity leave for 3 years and everybody feels good about it. Three months down the line an unemployed woman turns up, and says she needs the job. The company cannot offer her the job as there is no post vacant, and the company is still paying salary to the first.

So the employee who was already into the system and could lobby for a 3-year maternity leave gets favored than a person who didn't have a job.

A second kind of lobbying is by the corporate which is the employer here, to allow legislation like hire and fire, where they can fire or discriminate against a woman because of her reproduction plans. When the employee and employer are executing a contract, or suing each other for violating it, the Govt has to stand beside the employee because it is the interest of the people that the govt has to represent. Change your example to a 30 year old mother applying for a 6 months maternity leave being replaced by a 20 something youngster male for lower pay, and the lobbying for women would make sense. If given a chance, the corporation would only like to hire and fire, and discriminate based on immediate needs. The state is in charge of arriving at the policy.
I guess we all can agree that 3 years and 3 months both are very extreme and pointless. The fact that the largest economy in the world is running the 3 month thing, and some very small EU states running the 3 years ( I dont know which; I know Romania runs 2 years maternity leave, but we all know how much weight it pulls in world policy making), make it amply clear which extreme needs to be fought against right now.

So how do you justify billions of tax dollars of hard-working middle class workers being used to bail out one corporation? And Chrysler seems to have made a series of business blunders, and were whipped by German and Japanese cars. And they were bailed out for "nationalistic/patriotic" reasons.

Would you accept it now Indian government bails out Jet Airways? Of if Tata Motors for example is, hypothetically, swamped by cheaper Chinese electric cars, would you accept government bailing out?

I dont think any of the Socio economists are ever crying for bailing out large corporations. Especially the TARP kind, which happened after the Great Recession in US. The renewed interest in socialism in the end of last decade and the current one is simply because of the fact that during the recession the govts injected trillions of tax dollars to bail out corporations which were left scott free in the end. So, exactly at the capitalism crash juncture, all capitalists turned socialists and then are pretending it did not happen.
I understand you mentioned you are a libertarian, but please understand that having come out of the recession with government bailouts, going puritanical in capitalist theory is hypocritical for policy makers.

Is inequality as big a problem as it made out to be? If we see the situation within India, states like MH, GJ, TN, KA have shown more capitalistic tendencies, enjoy higher growth rates, per capita incomes, and I can imagine that they would have higher inequality (though I could not statistics to back the higher inequality claim). States like WB, Bihar, UP who "enjoyed" good bit of socialism are comparatively poorer.

If Inequality was such a problem you would see migration from GJ or MH to WB or Bihar, right? Why doesn't it happen?

We have clear signs of distress everywhere in India with substantial farming economy. Since the fundamental issues remain, economic gimmicks like farm loan waivers do not do any good. EU in the last 10 years is a very clear example of how lack of ones on quality of life makes mass delusions like "others are enemies". Inequality has been the key campaign of Donald Trump and Bernie Sanders in the last election. And in most elections in the world after that.

In the "good" states you have chosen, would you please look at the doctors per 1000 number and see the disparity ? Maharashtra figures woefully wrong there, while TN is up there at top, along with Delhi, Kerala etc. For better social situation, you need policy that is framed for that, and not expect market would correct itself.

Why do people still queue up outside the US embassy and not Venezuelan embassy or Cuban embassy?

I believe that people strive to go to places where is there are more opportunities than to places where everybody is equally poor.

This idea that anybody who brings up inequality is trying to achieve equality of bank accounts and property is just a bail out. When the inequality is obscene, you need social programs to bring it to reasonable levels. Pretending it does not exist, or assuming this is a call for Red revolution is just ignoring the problem, which some of the governments around the world are now realising.

So governments should strive of Equalizing Opportunities than trying to Equalize Income. A poor student should have as much opportunity to study as a rich kid.

To that purpose, I would support a government which opens up schools and colleges, and not bail out Air India or Jet or a Chrysler. But guess what any government will do, even the so-called socialist ones?

Donald Trump said in a TV show "They want to take our Medicare money to pay for Socialism". You get what is wrong with that ? Medicare is socialism. Free education is socialism, and free opportunities is socialism. Everywhere people want more schools, more roads, more public transport, anything that can improve the quality of life of the poor. How does a government fund that ?

The French and Bolshevik revolutions happened in non-democratic countries, and when there was no significant middle-class. Today the world has a huge middle-class population created because of capitalism. And democracies provide timely outlet for any perceived inequalities. Examples, Occupy Wall street, Yellow Shirt protests etc.

And even if there is a revolution, who is going to be targeted? Bezos? Gates? Mukesh Ambani? Earlier the Tsars and the Monarchs had no visible output which was benefited the poor. They had a ostentatious and repugnant lifestyle which obviously ignited the poor. Now the poor or middle-class use the same Amazon services, or Reliance phones, and are contributing to their wealth.

The middle class was not created with capitalism. At least where it was created, it was created with social intervention and policy making aimed exactly at providing a better life for poor so they can lead comfortable lives and spend money and provide education to next generation. This was a massive surplus recycling mechanism which transformed the post world war US. The New Deal got the US thru the Great depression and the second world war. The continued govt policies in 50s and 60s including higher corporate tax are very instrumental in creating the middle class.

The ongoing Gilet Jauntes in France is a very good tiny example of how capitalism can all go wrong. Suppose a government has a budget deficit, and decides to adjust it be reducing the social programs while not touching corporate taxes, that is actually calling for a class war. In France's case the economic reforms are dubbed by Administration as "making us competitive", and "moving to a greener future" etc. But then, the poor feel it is discriminatory for good reason. Hence Gilet Jauntes.
So, there lies your answer. For all governments that do not open their eyes to the common man's quality of life, they are going to be targeted in the revolutions. Its the 3rd month now.
Yes, there may be a method to quell it, but the next one is going to come along.

With Amazon and Reliance, it is different from each other, so one size doesnt fit all. Amazon's HQ2's criticism is a good instance on this. While the corporate is seen as a benevolent job giver, there are tax breaks provided so that the company can create jobs with minimal guarantees. There is at least one case where HQ2's location was correctly predicted and it had been called out that the whole show is to win tax breaks or other incentives. The issue is all about the governments not transparently representing the people's interest when it comes to these kind of deals.

[DigitalOne]

Originally Posted by Samurai

Actually there were very good practical reasons.

Had Chrysler been allowed to fail, there would have immediately been 360,000 jobs lost. ....
Source

And the same linked article makes it amply clear why Chrysler came close to bankruptcy and needed government bailouts.

...many consumers cut back on the purchase of big-ticket items such as cars, while those who were in the market for new ones simply went to Chrysler's Japanese and German competitors, which offered more fuel-efficient cars ...

....In 1979, Chrysler specialized in making large cars, vans and recreational vehicles. As oil and gas prices rose sharply, many consumers purchased the more fuel-efficient cars that were produced by their competitors.

....A second problem that Chrysler had in this area was that, unlike its competitors, Chrysler would produce automobiles on speculation versus building the cars as the orders were received by the dealers. Since Chrysler's dealers were having trouble selling the company's inefficient cars, this led to an inventory build-up on Chrysler lots.

Looks like a series of business blunders - same kind of excuses which Vijay Mallya trots out for failure of Kingfisher.

Originally Posted by ashokrajagopal

This is also a proven problem of Capitalism, and there are many studies recently with good data to back it up.

The point is, any system which is too powerful run the risk of favouritism.

A second kind of lobbying is by the corporate which is the employer here, to allow legislation like hire and fire, where they can fire or discriminate against a woman because of her reproduction plans.

Absolutely true. Capitalists and certainly the big business have their highly-paid lobbyists who will game the system to their advantage. Bailouts are one just example of this. The government while drafting the policies have to stand firm that it isn't unfair to anybody.

When the employee and employer are executing a contract, or suing each other for violating it, the Govt has to stand beside the employee because it is the interest of the people that the govt has to represent.

No, the government has to ensure that the contract when drawn is unfair to neither. And once drawn ensure that the judiciary should ensure it is complied with. It is not for the government to post-facto examine the contract.

I dont think any of the Socio economists are ever crying for bailing out large corporations.

I agree again. Neither are the libertarians support bailouts. Bailouts is not capitalism. It is just well-funded lobbyists in work. That is why big corporations are bailed out, but small business people are not.

I googled out what Libertarian leaning Senator Ron Paul had to say in 1979 in the Senate on the Chrysler bailout. All emphasis mine. It is enlightening. to say the least. Indeed, my respect for Ron Paul and libertarian thought has increased after reading this.

Quotes:

...In a nation that is sinking in a sea of debt, it is irresponsible for this Congress to be considering a measure that would add billions to that debt. The expansion of credit is one of the primary forms of inflation.

...Inflation causes unemployment — perhaps not immediately, but in the longer run — and we are now in the longer run of our past inflationary policies. It follows that a vote for aid to Chrysler, because it is a vote for inflation, is also a vote for more unemployment.

...Of course, the costs will not all be centered in Michigan; unemployment checks, welfare checks, food stamp benefits will increase nationwide, in big and small towns, urban centers and rural America. Rather than a few localities suffering noticeably; many will suffer almost invisibly. Workers who have nothing to do with Chrysler will lose their jobs or pay the taxes and higher prices caused by this bailout.

...We are being asked to shift the burden from the relatively well-off workers at Chrysler to the relatively worse-off workers throughout America. A Chrysler bailout will be a shifting of burdens that should be borne by those involved.

...Nor have I yet seen a valid moral argument concluding that we, as representatives of all the people, have the right to tax the American people — most of whom receive less in wages and benefits than Chrysler workers — to support a multibillion-dollar corporation.

...what right have we to force the American taxpayers to risk their money in a business venture which private investors dealing in their own funds have judged to be too risky?

...Last year there were 200,000 bankruptcies in this country, according to U.S. News & World Report. Yet we have selected only the largest for our aid. This is discrimination of the crassest sort. We ignore the smaller victims of this government’s policies simply because they are small. Only the largest, those with the most clout, the most pull, get our attention. This aristocracy of pull is morally indefensible. What answer can be given to the small businessman driven into bankruptcy by government regulations when he asks: "You bailed out Chrysler, why not me?" No justification can be given for this discrimination between the powerful and the powerless, the big and the small.

In the "good" states you have chosen, would you please look at the doctors per 1000 number and see the disparity ?

I didn't use the word good or better or bad. That is something the people living in those states to decide. Just made an observation that while we already privileged middle/upper class are debating on theory, poor people are voting with their feet and moving to more capitalistic societies where there is greater opportunities.

The middle class was not created with capitalism. At least where it was created, it was created with social intervention and policy making aimed exactly at providing a better life for poor so they can lead comfortable lives and spend money and provide education to next generation.

The US is not the only country in the world. Liberal economic policies in China and India in the last 3 decades. Millions in China and India have come out of poverty because of these liberal economic policies.

In fact, Global Inequality, if you see across countries has decreased (see point 5) in this article ; We keep hearing the opposite because we keep reading the same NYT or Guardian, which are the voices of the American/British workers. Again proves my point that the people with the loudest voices only keep getting heard.

[ashokrajagopal]

Originally Posted by DigitalOne

Absolutely true. Capitalists and certainly the big business have their highly-paid lobbyists who will game the system to their advantage. Bailouts are one just example of this. The government while drafting the policies have to stand firm that it isn't unfair to anybody.

No, the government has to ensure that the contract when drawn is unfair to neither. And once drawn ensure that the judiciary should ensure it is complied with. It is not for the government to post-facto examine the contract.

It is very much out in the open as to what kind of lobbying complements or tries to complement democracy and what kind does not. And what kind of lobbying has the money power. Respecting opinions, I do not think fairness of anything has to override democracy.

I agree again. Neither are the libertarians support bailouts. Bailouts is not capitalism. It is just well-funded lobbyists in work. That is why big corporations are bailed out, but small business people are not.
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I understand your premise, but I feel you did not understand what I am trying to say. Our generations biggest crash was bailed out with public money, ie. exactly opposite of libertarian market economics. Whichever puritanical thought of capitalism one thinks now, it is a hypothetical on hypothetical to say that capitalism makes the world run like right now. Who knows what would would have happened if the bailouts did not happen ? The world is what the world is today because of what happened in the past. Puritanical capitalism as a philosophy is acceptable, but you should remember that is not what happened.
Libertarian arguments can have only so much value because we survived the last crash with exactly opposite of that.
Just like communism. With a failed communist superstate, you cant say that communism works.

I didn't use the word good or better or bad. That is something the people living in those states to decide. Just made an observation that while we already privileged middle/upper class are debating on theory, poor people are voting with their feet and moving to more capitalistic societies where there is greater opportunities.

No, you are bypassing the problem again. Poor people are not just voting with their feet, they protested twice in Mumbai. Pretending distress is not there in MH is not accurate. I pointed out that amongst the states you mentioned as favourite for migration, there is this one which is standing out with distress. Goes on to prove my point that it is not the theme in general that matters for human benefit but policies aimed at that.
I do not want to discuss Indian states particularly because that would go into open politics, lets keep the Indian states out.

The US is not the only country in the world. Liberal economic policies in China and India in the last 3 decades. Millions in China and India have come out of poverty because of these liberal economic policies.

In fact, Global Inequality, if you see across countries has decreased (see point 5) in this article ; We keep hearing the opposite because we keep reading the same NYT or Guardian, which are the voices of the American/British workers. Again proves my point that the people with the loudest voices only keep getting heard.

The millions out of poverty in China, India are a favourite stat used by many, but there are two assumptions. They are only pointing to per capita incomes in dollar terms. In this thread multiple times we have gone thru how the quality of life aspect is not looked at, and that is the reason for all these distresses across the sectors.
I do not think India and China even qualify if you are on libertarian side.
Anyways, I would like to keep India out because I do not want to discuss Indian politics.

About hearing the opposite etc, I believe you are absolutely wrong. You only have to look at Gilet Jauntes. People are protesting, sometimes very violently, because they have issues. Its not NYT or Guardian. Its actual human experiences which make them arrive at conclusions. The French suburbs dint read any Left leaning newspaper and decide they are all facing inequality.
Trump, Brexit, Bolsonaro, Salvini and the scores of surprise election results and protests all over the world are not because some left leaning news paper decided to influence people.

[Samurai]

Originally Posted by DigitalOne

And the same linked article makes it amply clear why Chrysler came close to bankruptcy and needed government bailouts.

Chrysler's problem was caused by capitalistic businessmen. It was saved by fully collateralized government loan, which was fully paid back in 3 years with interest. Government didn't take any risk with public money. Almost half a million jobs were saved. Ron Paul has no reason to crib, more on him later.

Listen, bailouts are a financial tool available to the government. It can be used by either socialistic or capitalistic government. While Chrysler bailout of 1979 by a democratic government was $1.5B, the 9/11 Airlines bailout was $15B, by a republican government. The latter didn't even have a repay clause, it was a donation.

Originally Posted by DigitalOne

I googled out what Libertarian leaning Senator Ron Paul had to say in 1979 in the Senate on the Chrysler bailout. All emphasis mine. It is enlightening. to say the least. Indeed, my respect for Ron Paul and libertarian thought has increased after reading this.

Ah, Ron Paul. I first noticed him during his 2012 bid for US Presidency. He impressed me because he was taking all the culprits of 2008 financial crash to the cleaners. And then I heard his solution... Wait, go back to gold standard??? Then I realized Ron Paul knows nothing about modern economics. He is a medical doctor with no training in any kind of economics. Going back to gold standard is like going back to alchemy or flat earth theory. What is the point in listening to his take on economics?

Originally Posted by DigitalOne

Liberal economic policies in China and India in the last 3 decades. Millions in China and India have come out of poverty because of these liberal economic policies.

Are you under impression that India moved from socialism to capitalism in 1991? China did, but not India. Like most countries, our economic system is a mix of socialism and capitalism. To my knowledge, none of the social policies have decreased since then. It may have gone up actually. What changed was regulation governing finance and industry. Starting and running a business became lot easier after 1991, because lots of red tape was removed. That unleashed lots of opportunities for Indian entrepreneurs.

I would compare it with similar unleashing of opportunities when Rajiv Gandhi removed the restriction of import of computers and telecom technology in 1984. I was a direct beneficiary of this because I worked on telephony technology in the late 80s using computers, made possible by this shift in policy by Rajiv Gandhi. In 1984 and 1991, artificial restrictions were removed. In 1984, it was in technology area. In 1991, it was the entire business/finance area.

Meanwhile, education/job reservations in various categories have only increased. Social programs have increased too. Only decrease in redistribution I can think of happened in 1997, when the tax slabs/rates were changed drastically.

After 1991, capitalism was allowed to work lot efficiently compared to before. It didn't come from decreasing the pie for socialism. In a poor country like India, politicians will be very vary of moving away from socialistic policies that benefit the poor, who make up the majority of the voting public.

[DigitalOne]

Originally Posted by ashokrajagopal

Respecting opinions, I do not think fairness of anything has to override democracy.

I didn't understand the statement. Fairness is a cornerstone of democracy.

I understand your premise, but I feel you did not understand what I am trying to say. Our generations biggest crash was bailed out with public money, ie. exactly opposite of libertarian market economics....
Libertarian arguments can have only so much value because we survived the last crash with exactly opposite of that.

The crash happened in the first place because of failure of the government to regulate capitalism. I am not advocating unregulated, unfettered, capitalism/libertarianism. I think that is downright impractical. But in general with the right amount of regulation and oversight, capitalism has worked.

No, you are bypassing the problem again. Poor people are not just voting with their feet, they protested twice in Mumbai. Pretending distress is not there in MH is not accurate.

When did I state that there is no distress in MH? They did protest in Mumbai and yet they still continue to migrate to it.
And also MH was just 1 in 4 states that I mentioned where migration is happening to.

I do not want to discuss Indian states particularly because that would go into open politics, lets keep the Indian states out.

Same here, but keeping politics aside you still have to wonder why people from certain states migrate to certain states

The millions out of poverty in China, India are a favourite stat used by many, but there are two assumptions. They are only pointing to per capita incomes in dollar terms. In this thread multiple times we have gone thru how the quality of life aspect is not looked at, and that is the reason for all these distresses across the sectors.

I had pointed out before (Understanding Economics) that India's and China's not only GDP but also HDI has improved dramatically in the last 3 decades. Distress is there but things are not so bad as earlier.

The French suburbs dint read any Left leaning newspaper and decide they are all facing inequality.
Trump, Brexit, Bolsonaro, Salvini and the scores of surprise election results and protests all over the world are not because some left leaning news paper decided to influence people.

I reiterate : I am not denying inequality. I am just saying it is not as big a problem as it is made out to be. Secondly, whereas inequality within countries has gone higher, Global inequality has come down.

The real problem is the politicians who just are in the pockets of big corporates, wall-street financiers, and other special interest groups (including trade unions). Nowadays, the left leaning politicians are just that.

[ashokrajagopal]

Originally Posted by DigitalOne

I didn't understand the statement. Fairness is a cornerstone of democracy.

Yes, it is, but what is fair and what is not ? The standards have to be arrived by democracy, especially about the society. Which also means when conditions change the definitions has to change. Democracy can have answers. My opinion, just that. I do not believe in set in stone standards for anything environmental, social, or cultural. Situations change and standards have to change.

The crash happened in the first place because of failure of the government to regulate capitalism. I am not advocating unregulated, unfettered, capitalism/libertarianism. I think that is downright impractical. But in general with the right amount of regulation and oversight, capitalism has worked.

It is your opinion that it is because of lack of regulation and thus some issue with government, but I do not agree. My opinion is that the system is built to create a lack of regulation with terms like "ease of doing business" so crashes are systemic in nature with the system. The right amount of regulation is just a perspective, which changes with each point of view. It is the nature of capitalism to constantly reduce the shackles that stop profit.

When did I state that there is no distress in MH? They did protest in Mumbai and yet they still continue to migrate to it.
And also MH was just 1 in 4 states that I mentioned where migration is happening to.

Distress or not and the degree is dependent on state policies. Which includes the economic policies and the social policies. Having a high migration state does not guarantee anything. Anyways none of the Indian states are running any kind of capitalist economy, they are all a mix.

Same here, but keeping politics aside you still have to wonder why people from certain states migrate to certain states

There are clear economic answers. There is also the question of which cities got a headstart during colonial rule. Ease of doing business is a lot dependent on existing business in respective places. Anyways, lets not digress to politics.

I had pointed out before (Understanding Economics) that India's and China's not only GDP but also HDI has improved dramatically in the last 3 decades. Distress is there but things are not so bad as earlier.

HDI is improved by policies aimed at improving HDI. That has no connection to business economics and it has all to do with social economics. Where policies are done to take care of this, they have improved. Only in those places. It is not because of any capitalist rule book, it is based on studying and improving the society, often using socialist policies in varied levels. Capitalist economies can improve HDI using policies, not relying on market to correct it.

I reiterate : I am not denying inequality. I am just saying it is not as big a problem as it is made out to be. Secondly, whereas inequality within countries has gone higher, Global inequality has come down.

Trying to keep politics out of the discussion, let me just say these statements are not just assumptions, but they are also deeply inhumane. Are you implying that the people who are protesting/acting about their quality of life are all exaggerating their miseries ? Or are they simply stupid to believe in some left leaning study which blows the inequality out of proportion ? There is a reason a statement about inequality by politicians anywhere in the world gets thundering applause. Pretending it is some sort of mass delusion is just pretending the problem does not exist. This is exactly how the shock results in elections come about.

The real problem is the politicians who just are in the pockets of big corporates, wall-street financiers, and other special interest groups (including trade unions). Nowadays, the left leaning politicians are just that.

So, capitalism is something very pure, but the implementation is going wrong because of the above reasons ? USSR fans would love this argument.

Just like the by-products of communism, capitalism has its by-products and side effects which causes systemic failures.