[Jeroen]

Originally Posted by vrprabhu

One could argue either ways on the above subject, which Samurai has already indicated.

I would rather modify your statement and say that 'Capitalism is great for a select group with lesser benefits to substantial part of society'. Reason being, one cannot deny that there are bound to be ripple effects which will trickle down (like investment, employment, support services etc.) - the lowest strata may not derive the entire benefit, but will certainly benefit from overall growth / development.

It depends on your definition of lesser, but in general terms what trickles down is very little, if anything. Whereas in countries such as India it is easy to see how over the last couple of decades a continuous increasing percentage of the population is getting a better deal, in a country such as the USA it is actually the opposite.

People who start of with less, often find themselves with even less, even in periods of economic growth. Disposable income for those on the fringes of society have become less. People having to have two jobs to make ends meet is a relative new phenomena in the USA post second world war.

Number of people below the poverty line, since the 70's has remain stable or even slightly increased depending on definition (UN versus US federal definition). Irrespective, it hoovers around the 12% mark, some 40 million people in the greatest nation of the world.

Also the low income percentage has been on increase. This is actually a very large group of the total population (almost half) one level up from the poverty line

If you have no or very little income, getting your kids an education has become harder, not easier. etc.

Fact remains that the Greatest Nation in the world, as they like to see themselves, has large parts of their society on par with underdeveloped countries.

Jeroen

[civic-sense]

Originally Posted by Hayek

Responding to 3-4 posts here.

I suspect that lots of the “support” for dumb policies like wealth taxes is driven by how the question is asked. Yes, the hard left of the Democratic Party has been emboldened by the disgust against Donald Trump, and sees a chance to push its agenda of envy. That leads to outcomes - such as Amazon deciding not to invest in a depressed area of New York. But already, people are waking up to the fact that this leads to the loss of about 80 k direct and indirect jobs - not trivial even in New York. If the Democrats keep going down this path, it’s a recipe to get Trump re-elected.

If its going to be Bernie or Warren on the other side, the world would be better off with another Trump win. Saner voices in the Democratic party is being lost in the mayhem created by the leftists. Obama, Bernie, Warren and AOC are symptoms of the disease that has inflicted America. Dumb millenniels don't realize that it was the right that built America while the left ruined Argentina, Russia, Brazil and practically everywhere it set its foots on.

[vrprabhu]

Originally Posted by Jeroen

Fact remains that the Greatest Nation in the world, as they like to see themselves, has large parts of their society on par with underdeveloped countries.

Thanks, once again, for the perspective. I agree with your views - unfortunately, many in the 'third world' see America as the gateway to prosperity.

Talking about the percolation effect, does this makes sense ?

Mobile phones have become ubiquitous in India - instead of education & health care which would have had a better impact. Lopsided growth?

Improved literacy and health of the populace will definitely help the country to increase its productivity - whereas consumerism seems to be taking most of people's attention.

Originally Posted by civic-sense

Dumb millenniels don't realize that it was the right that built America while the left ruined Argentina, Russia, Brazil and practically everywhere it set its foots on.

Strong words! China is an example of left led development (is there a right in China?). But the left gained ground in the countries you have stated because of oppressive environment (not essentially to build a better country, but rather to enable to challenge the power of high and mighty).

I wouldn't paint Russia with the same brush as that of Argentina and Brazil. I remember the days when trade between India and Russia was done in Rupees with an absurd exchange rate - but for their support, when none would help us, would we have climbed up? I am skeptical.

Times change; people change; (economic) policies too need change in tune

[alpha1]

Originally Posted by Samurai

We should reached the UBI stage long ago. But we didn't because of a concept called BS jobs.

If you are not familiar with BS jobs, check this out.

In a famous essay drafted in 1928, John Maynard Keynes projected that, a century on, technological efficiency in Europe and in the U.S. would be so great, and prosperity so assured, that people would be at pains to avoid going crazy from leisure and boredom. Maybe, Keynes wrote, they could plan to retain three hours of work a day, just to feel useful.

It is from this article.

So, it is really a toss up between UBI and BS jobs.

I have a different theory.
People love competing with others.
No matter how much comfort / luxury / ease of living you give them - people invent ways to create distinct social strata on some or the other attribute and then people will compete among themselves to race to the top of such a social structure.

[Ithaca]

And the Democratic Socialists of America strike again.
This time it is the Amazon New York Headquarters

Amazon on Thursday canceled its plans to build an expansive corporate campus in New York City after facing an unexpectedly fierce backlash from lawmakers, progressive activists and union leaders, who contended that a tech giant did not deserve nearly $3 billion in government incentives.

The decision was an abrupt turnabout by Amazon after a much-publicized search for a second headquarters, which had ended with its announcement in November that it would open two new sites — one in Queens, with more than 25,000 jobs, and another in Virginia.

Source: NY Times Amazon’s Retreat on New York City Headquarters Followed Unexpected Backlash

Because they were emboldened by the Foxconn Wisconsin disaster
Source: Bloomberg article New York Dodged an Amazon Bullet. Wisconsin Still Faces a Bazooka.

Amazon.com Inc.’s decision to ditch its plans for a New York headquarters doesn’t augur well for governments and corporations intent on using taxpayer money to fund job-creation schemes.

Many in New York, and on the left, are celebrating their victory over big, bad Amazon; they should spare a thought for the people of Wisconsin who are stuck with the boondoggle known as Foxconn.

[Ithaca]

Sorry for back to back posts.

Charlie Munger : In Connecticut, "they've driven out all the rich people. California is doing the same thing. I know a lot of rich people who have left California," Munger added. "I think it's really stupid for a state to drive the rich people out. "They are old, they keep your hospitals busy, they don't burden your schools, police departments or prisons. Who wouldn't want rich people?"

Source: CNBC Article California, Connecticut have been 'stupid' for driving rich people away

https://www.youtube.com/watch?v=ILLni4oVgg4

Source: Investors Business Daily The Rich Are Leaving High-Tax New York

Charlie Munger, Warren Buffett's right-hand man at Berkshire Hathaway, said that places like California and Connecticut have been very "stupid" for driving rich people away from their states.

"It's been serious. Driving the rich people out is pretty dumb if you're a state or a city," Munger told CNBC's Becky Quick in an interview Thursday. "There are a number of places that have shot themselves in the foot; Connecticut, California, New York City."

[V.Narayan]

Amazon deserves more than rejection from New York. It should be punished
by Matt Stoller

https://www.theguardian.com/commenti...e-must-do-more

[hothatchaway]

Originally Posted by V.Narayan

Amazon deserves more than rejection from New York. It should be punished
by Matt Stoller

https://www.theguardian.com/commenti...e-must-do-more

I wonder what the antitrust enforcers (we have the competition commission of India) in the US were doing when Amazon was using its dominant position to run businesses out of, well business. I do not have much sympathy for businesses which have remained complacent, took customers for granted and are now facing extinction. The publishers which the article refers to, if they are traditional ones, have done very little to innovate and deserve their fate.

I am not a fan of Amazon and lesser still of governments trying to run businesses to create jobs. But if it has a watchdog then they better be doing their jobs which American ones have famously failed to do. At least in India they were able to enforce the FDI guidelines, never mind that Amazon found a way around it. No private enterprise is in the business of charity and without incentives they can choose to take their business elsewhere.

[Samurai]

Originally Posted by hothatchaway

I wonder what the antitrust enforcers (we have the competition commission of India) in the US were doing when Amazon was using its dominant position to run businesses out of, well business.

Current (and outdated) trade laws were not designed for monopoly of digital platforms. This is a case of law not catching up to new business models. The legislature needs younger lawmakers who understand technology and new business models. The kind of questions some lawmakers were asking Mark Zuckerberg during his senate hearing was very revealing, about how outdated the lawsmakers were.

First, the lawmakers should not be from business background. They are pretty clueless about administration of a country, although they don't realize it. The former Starbucks CEO is running for President, and he doesn't understand why he is not the right candidate.

Here is a number for him:
Annual median personal income is $31,099 for a US citizen (US Census data 2016)
Annual median personal income is $12,754 + 52lbs of coffee, for a Starbucks employee. (Starbucks data)

The current CEO pay at Starbucks is ₹13.4 million. That makes CEO:Median pay ratio of 1050:1 without counting the pay in coffee powder.

Government needs young lawmakers trained in socioeconomics, like AOC.

[Jeroen]

Originally Posted by Samurai

The legislature needs younger lawmakers who understand technology and new business models. The kind of questions some lawmakers were asking Mark Zuckerberg during his senate hearing was very revealing, about how outdated the lawsmakers were.

First, the lawmakers should not be from business background. They are pretty clueless about administration of a country, although they don't realize it.

Unfortunately, many Americans are still fascinated by successful business people and believe commercial success is a measure for success in just about anything else. Which is simply not true. Trump, to name one, is not particularly good at building and maintaining a monogamous relationship. Divorces have a huge impact on families and actually society at large. What is more important, succes in business or succes in your personal relationships? I know what I would choose.

History has shown that, unfortunately, it tends to be the weak and feeble minded folks that look for so called Strong Leaders. And you end up with a Trump and stuff like a Brexit. i would rather see well balanced leaders who show common sense, empathy and know what they are talking about, ensure they get sound advice from both sides of the fence, before they make any decisions.

There is no doubt in my mind that business people have a lot of insights and ideas that would be really good for any administration. Ideally an administration would have a good mix of people with different backgrounds, expertise, experience and that would include business people too. Here in western Europe not many business people make it into national politics. So a lot of our politicians have little or no experience working in commercial enterprises. Same is true for the civil servants.

Jeroen

[alpha1]

Originally Posted by Samurai

Here is a number for him:
Annual median personal income is $31,099 for a US citizen (US Census data 2016)
Annual median personal income is $12,754 + 52lbs of coffee, for a Starbucks employee. (Starbucks data)

Is this figure for Starbucks employee IN the great US of A?
(I read that they make "quite a lot" via tips though)

[V.Narayan]

^^^^
$12,754 per year in USA is like a salary of Rs 24,000 a month in India after adjusting for purchasing power parity. And after you consider that the standard of living in USA ie of those around you is a lot lot higher this sort of wage is a poverty line wage or worse and psychologically corrosive. Paying folks in pounds of coffee sounds sick. That person desperately needs cash.

[Samurai]

Originally Posted by alpha1

Is this figure for Starbucks employee IN the great US of A?

Yup. It was according to their own disclosure.

Originally Posted by alpha1

(I read that they make "quite a lot" via tips though)

That is one of the reasons US hospitality industry uses to underpay their employees. There is even a different minimum wage for tipped staff. Tip is paid by the customers, not the employer. It leads to all kinds of hanky panky.

[Jeroen]

Originally Posted by V.Narayan

^^^^
$12,754 per year in USA is like a salary of Rs 24,000 a month in India after adjusting for purchasing power parity. And after you consider that the standard of living in USA ie of those around you is a lot lot higher this sort of wage is a poverty line wage or worse and psychologically corrosive. Paying folks in pounds of coffee sounds sick. That person desperately needs cash.

This is the sort of salary that in the USA is to much to starve on and to little to live on. More so if you are a single mother with some kids.

No pension, no health care and no social safety nets. And these are people who hold a proper job, work plenty of hours, but can not afford to go to the doctor. Health insurance costs thousands and thousands of dollars and even a visit to the doctor and a few blood test will easily top a thousand dollars.

Poverty comes in many shapes and formats of course. There is worse, but consider this. The greatest nation in the world has tens of millions of people living like this. And tens of millions well below this, with less income or noincome.

To start enjoying life in the USA and live the American dream you need to pull in at least 75K, be employed with an employer that offers a good 401k scheme (pension) and has an attractive health insurance scheme for you and your family.

Health insurance is a huge thing in the USA. Premiums are astronomical, but so are treatments if you have to pay from your own pocket.

Simple things can cripple you financially, let alone if it is a bit more severe.
Twice I ended up in the ER due to a fall of my bicycle. The first time I made it to the ER by myself. The second time I was knocked unconscious and woke up in the ambulance on the way to the hospital.

I can not remember the exact amounts, but the first time cost about $3000,— the second time was 5-6000,—. This was just in the ER to be seen by a doctor, some tests, an X-ray and lots of stitches and a tetanus shot. Nothing very fancy.

I was lucky as my employer paid health insurance covered every last dollar, but what if you are an employee on 10-12K gross a year with no coverage? You die, or go broke!

The greatest nation in the world only looks after those who are well and rich enough to look after themselves.

Jeroen

[V.Narayan]

Originally Posted by Jeroen

This is the sort of salary that in the USA is to much to starve on and to little to live on. More so if you are a single mother with some kids.

No pension, no health care and no social safety nets. And these are people who hold a proper job, work plenty of hours, but can not afford to go to the doctor. Health insurance costs thousands and thousands of dollars and even a visit to the doctor and a few blood test will easily top a thousand dollars.

Brilliant post. This one and the one earlier by you. I never grasped why simple medical tests or a visit to the Doctor costs such usurious amounts in USA and you have to wait endlessly unless you go through the emergency room. And on top of that many upper middle class Americans (my old class mates for example) are adamant the Govt should not be providing universal healthcare for the bottom 1/4th of their society. In India or Bangladesh or Vietnam if you are poor you still have a strong social system of family and immediate society that gives you mental and financial air cover and cheap medical services or traditional medicines are available at the bottom rung too. But in USA it is a crime to be poor. Their lack of public transport is a direct result of the car industry buying out their politicians as one example.