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Forum Post: There are two types of wealth.

Posted 2 years ago on Feb. 4, 2012, 9 a.m. EST by FriendlyObserverB (1871)
This content is user submitted and not an official statement

  • Wealth earned through hard work .

  • and wealth gained through profit.

Wealth gained through profit has reached extreme proportions.

The distribution of wealth earned through hard work opposed to wealth gained through profit is where the economy becomes unbalanced and the arguement of fairness and equality develops.

To place a Cap on profit wealth would create an equal distribution of wealth between both groups [ profit wealth vs hard work wealth ].

A Cap on profits will be placed on all points between buy and sell. This includes banks, but not manufacturing.

To leave the Cap off the production end will ensure a striving economy, but to cap the distribution end will ensure a thriving economy.

139 Comments

139 Comments


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[-] 2 points by jph (2652) 2 years ago

Hear hear!

I believe you have nailed it, this is the root of the problem. People like mitt R. who where born to vast wealth and never had to work for anything, are fully in control of the system. Creating laws that promote the striping of wealth from the many, and the growing concentration of wealth in the hands of the few (them!)

We have to stop this, because they will never willingly change this rigged game, that they and their families have been pushing for generations.

The one fact that makes their failure inevitable (if we do fight them relentlessly) is that they are, by definition, a small number of 'people', and we are a large mass of PEOPLE!

It is simple math.

[-] 2 points by Shawn22 (5) 2 years ago

I was middle class until a prejudice bigot of high status dramatized a phobia to violate my civil liberties reducing me to poverty. I have studied the constitution to get my revenge by fighting fire with fire. I have objectively researched all options, including Task Forces as the Courts recomended action. In conclusion, a political third party which delegates to be placed on the ballot are middle or lower class and pledge to use decision based stakeholder models to reach an objective and prudent policy in legislation.

[-] -1 points by Mooks (1985) 2 years ago

What did he do to you?

[-] 1 points by FriendlyObserverB (1871) 2 years ago

I agree , we have the rule of democracy, the power of vote and the freedom of speech to change what needs changing .. thanks to our ancestors relentless pursuits.

Building a better tomorrow.

[-] 1 points by Middleaged (5140) 2 years ago

I believe the first kind of Income tax was on people that didn't work for their wealth. They got income from owning property or selling property - maybe you could steal property to claim land back in those days.

The theory was that people that didn't work for income were making money without effort - and therefore somehow were undeserving.

I don't mind an increase in dividend taxes to 25-30% for this reason. If I got $1000-$3000 in one year in dividends, I'd hate to pay a tax on such small amounts. So I feel there could be a minimum level of free dividend income. Say no tax on the 1st $3000 of dividends.

I don't think I ever made much more than $1200 in dividends trying to get back after the financial crash.

[-] 1 points by SonOfDoomFook (-1) 2 years ago

We don't tax wealth in this country for the most part. We tax income.

[-] 1 points by Budcm (208) 2 years ago

A person owning a million dollar house pays more property tax than the one who owns a 100,000 dollar one. This is obviously taxing wealth. I'm not saying it is right or wrong. Just commenting on your definition.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

A cap is not a tax.

[-] 1 points by MattLHolck (16833) from San Diego, CA 2 years ago
  • wealth gained by property ownership
[-] 1 points by brightonsage (4494) 2 years ago

you are correct. The term have been defined by economists. There is no need to create new ones that nobody understands.

[-] 1 points by BradB (2693) from Washington, DC 2 years ago

there is also "Social Wealth"...

We have the PERFECT OPPORTUNITY to start our own "Social Reserve Bank" ... right now ....

http://www.occupywallst.org/forum/we-need-to-create-our-own-bank/

[-] 1 points by beautifulworld (21611) 2 years ago

Our economy definitely needs to re-define the way labor is valued.

[-] -1 points by asauti (-113) from Port Orchard, WA 2 years ago

Start with yourself, first. Re-define the way YOUR labor is valued.

[-] 4 points by beautifulworld (21611) 2 years ago

Done that. Not concerned with myself. I'm concerned with the one-half of Americans who earn less than $26,000 per year, the 22% of American children who live in poverty and the 1 in 7 on food stamps.

[-] -1 points by Mooks (1985) 2 years ago

What value would you put on the labor of say, a cashier at WalMart?

[-] 1 points by beautifulworld (21611) 2 years ago

When you sit down to re-evaluate labor in a way that we have never done before it will look quite different than what you are supposing. Thinking about the social contract and political philosophy would make us dig in to real questions about what purpose the economic system serves to the nation. In my mind, the economic system should benefit all of the people, not just a few at the top and corporations. Therefore, regardless of how menial a task, all jobs should pay a living wage. One where a person can live a dignified life being able to pay for basic necessities such as housing, transportation, healthcare, food, education, etc.

[-] -1 points by Mooks (1985) 2 years ago

Ok, say a 'living wage' is $15 an hour. I need someone to clean my floors and I pay Jim $15 an hour to do it. Bob comes along and offers to do the same job for $14. Explain why I shouldn't have Bob do the floor instead of Jim.

[-] 2 points by beautifulworld (21611) 2 years ago

He wouldn't. He couldn't. The living wage would be the living wage. It would raise all of us up. You see, if people made a living wage, they'd have more disposable income and they'd spend more. Don't get me wrong, a living wage is complicated. Many things come into play such as geography, cost of living, the size of the business, etc.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

I like the potential of a living wage. I like mostly that it considers the base cost of living as a bottom for everyone to have an equal start , and not get left without at least the basic needs of life. than let the wealthy have their wealth. At least the poor will not starve at the same time there is enormous wealth .. complicated ,but also effective.

[-] 1 points by beautifulworld (21611) 2 years ago

Right. We're not talking about limiting anyone's wealth. Don't want to scare them one percenters away. LOL!

[-] 1 points by FriendlyObserverB (1871) 2 years ago

Exactly everyone should have their basic needs accounted for , and than let those who want more proceed. It would be great to be a citizen in a country that would provide this !

[-] 1 points by beautifulworld (21611) 2 years ago

You will be. LOL! That's the point of this movement.

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[-] 2 points by FriendlyObserverB (1871) 2 years ago

Personally I believe a profit cap would be more effective .. although I do have a formula that would ensure everyone a minimum one third the average wage . taking it from the top wealth. thus providing a bottom starting point . I also believe most people would strive for more than one third they are given.

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[-] 1 points by FriendlyObserverB (1871) 2 years ago

Imagine living in a world where everyone is entitled to one third the average wage.. that one third amount wil rise and fall as with the economy. inflation will not affect this. It's not about creating more wealth ..

[-] 0 points by BetsyRoss (-744) 2 years ago

The average wage in the US for 2010 was $42,000.

ONE THIRD of that would be $14,000

[-] 1 points by FriendlyObserverB (1871) 2 years ago

if it's $14000 per year than yes.. thats per person .. buys a few sandwiches .. think of it as the monopoly game where every one recieves $200 .. it's not much but without it where would they be.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

the idea is to help everyone with an equal start , including those with no earnings [ they need it the most ], and the formula would include everyone eligible. working or not.

[-] 0 points by BetsyRoss (-744) 2 years ago

On $14,000 a year?

[-] 1 points by FriendlyObserverB (1871) 2 years ago

was that the average for the entire population, or just those paying income tax ?

[-] 0 points by BetsyRoss (-744) 2 years ago

All you said was "average wage"-you made no clarifications.

What happens to the other 2/3 of the wages?

Was actually the average wage index from here- http://www.ssa.gov/oact/COLA/AWI.html

http://www.data360.org/dsg.aspx?Data_Set_Group_Id=773

From here, average wage is calculated to be between $17 and $20 an hour.

You want everyone to earn between $5.60 and $6.66 an hour?

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[-] 1 points by FriendlyObserverB (1871) 2 years ago

well we agree spending money will increase demand.. and create jobs may I add. And this is why in previous arguements I advocate a cap on wealth to distribute the money evenly and create demand and jobs , because as you say the billionaires are not spending the money and thus creating jobloss.

inflation vs wealth ..

if the price of compuers go up so does wealth and so does the average wage .. thus the third of the average wage as a basic minimum will go up as the wealth increases .. in direct corelation .. it's like a bottle bobbing up and down on an ocean wave..

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[-] 0 points by BetsyRoss (-744) 2 years ago

I read here somewhere that if you took ALL of the money owned by the 1% and distributed it equally amongst all US citizens, it would amount to $800 each. A whopping $66 a month if you pay them in installments.

No Porsche. No "fancy" computer. Not life changing. And once you've taken all of the "rich" people's money, who are you going to go after next?

[-] 1 points by BetsyRoss (-744) 2 years ago

"If you added up all the sales profit in the past year , how much would that be ?"

You are the one talking about how outrageous sales profits are-why don't YOU know how much it was?

[-] 1 points by FriendlyObserverB (1871) 2 years ago

If you added up all the sales profit in the past year , how much would that be ?

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[-] 2 points by FriendlyObserverB (1871) 2 years ago

how would this create hyper inflation ?

[-] 2 points by BradB (2693) from Washington, DC 2 years ago

why not fight for economic freedom ?

the opposing ideologies strive for...

Individual Freedom & Economic Prosperity....

the opposing strives for...

Economic Freedom & Individual Prosperity....

why one or the other ?

why not strive All at the same time ?

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[-] 2 points by BradB (2693) from Washington, DC 2 years ago

I think "living wage" equates to EARNING enough wage to afford the simple "American Dream"... ie a simple house... an education... food.. and healthcare...

WITHOUT having to accept "welfare" ....

[-] 0 points by BetsyRoss (-744) 2 years ago

"He wouldn't. He couldn't."

Why not? Who is going to stop him? The government? You?

[-] -1 points by Mooks (1985) 2 years ago

Bob does not have a job, he thinks that make $14 an hour is better than nothing.

The value of labor is not just determined by the value that person gives to a final product but also by the scarcity, or lack thereof, of the labor. It is how 2 old coins can be worth drastically different amounts of money despite having equal amounts of silver. One is just much more common.

[-] 3 points by beautifulworld (21611) 2 years ago

That is the very problem with the way labor is valued right now. You are not thinking out of your traditional mindset. Think big. Think outside the box. In the new system, and I'm not saying I know what that system would be, this would not be the case. Power to the worker!

[-] -2 points by Mooks (1985) 2 years ago

" In the new system, and I'm not saying I know what that system would be, this would not be the case."

If you admit that you don't know what this new system would be, how do you know this would not be the case?

I think you are assuming that every single person who wants a certain job will have it. As long as there are people who want to be employed or want to be employed in a better job, there will always be people willing to do that job for a dollar less than the next guy. Where that price finally settles, and it can go up too, is what the true value of that labor is.

[-] 2 points by beautifulworld (21611) 2 years ago

I can say that because that is the very reason to discover a new system. You state the main fault of the current system. The way things are today, the capitalist system is rigged for the benefit of the capitalist. The new system would be rigged to benefit the workers.

[-] -1 points by Mooks (1985) 2 years ago

I think we should have a system that is not rigged one way or other, but rather fair for both the capitalist and the worker. That means getting rid of crony capitalism and the influence of business in government right along with letting the market decide what someone's labor is worth.

[-] 3 points by beautifulworld (21611) 2 years ago

The problem with an unregulated capitalist system is that it quickly regulates itself in favor of the capitalist. This is the little detail libertarians don't like to talk about. The rich get richer and the poor get poorer. Exploitation is the basis, the foundation of capitalism. Beware.

Think of the Industrial Revolution and the conditions back then. That was due to unregulated nascent capitalism. Regulations had to be put in place to reign it in.

[-] 2 points by FriendlyObserverB (1871) 2 years ago

the market can decide the value of labor , but how does the market justify profit ?

[-] 1 points by Mooks (1985) 2 years ago

Why? As someone who owns a business, I will tell you net profit is much more important than gross profit. The net profit is the amount that actually goes back to the investors who own the company. It is the return they are getting on their investment.

Return on investment (%) = Net profit ($) / Investment ($) * 100 %

[-] 1 points by FriendlyObserverB (1871) 2 years ago

but than they can splurge on expenses with money gained through profit .. personally I don't care what they do with it .. it's just not an accurate account to show the net vs the gross.

[-] 1 points by Mooks (1985) 2 years ago

Why isn't it accurate? Revenue of $422 billion and a net income of $16.4 billion. That is a profit margin of 3.8%.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

net income is after salaries.. profit should include salaries .. / wages

[-] 1 points by Mooks (1985) 2 years ago

I agree that WalMart is a middle man. There is value, however, in being able to go down the street any buy a roll of toilet paper in 2 minutes as opposed to going to the manufacturing plant to buy it. Like I said, WalMart's profit margins are pretty low, and like you said, that reflects on the fact that they are really just a middle man.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

that is not an accurate account of profit.

[-] 0 points by Mooks (1985) 2 years ago

If something is too expensive, people will not buy it. Profitable companies are creating products that people want at a price that people are willing to pay.

You have to remember too that profit is a relative term. People will point out WalMart (and I don't like them, I just know this from looking at their stock) that they made a profit of about $12 billion last year. What they fail to point out is that represents about a 3% profit margin. Considering that investors have over $200 billion invested in a massive operation like WalMart, a 3% margin is pretty reasonable.

[-] 2 points by FriendlyObserverB (1871) 2 years ago

Why do distribution companies claim association with product creation ? Walmart does not create product.

There is a seperation between companies that create and produce product, and companies that distribute product. those that distribute product are merely a link in the supply chain. The producers desrve all the credit for the product itself and thus all the profit gained by demand.

[-] 1 points by BetsyRoss (-744) 2 years ago

To respond to FOB's comment below

WalMart provides a SERVICE-it locates items/products people want, purchases them, and then relocates those products in a central location closer to the people who want them.

The people who "produce" those products do NOT have to "sell" those items to WalMart. They can pay for their own distribution, marketing, and delivery of their products if they choose to. But that either increases the cost of the product or bites into their profit margin.

Bringing a million items to ONE location is something people are willing to PAY someone else to do because it saves us time, money, our environment, wear and tear on our cars and infrastructure, and makes OUR time more valuable because it enables us to earn more or do more with it.

[-] 2 points by 1169 (204) 2 years ago

and that is the thinking that has to be changed, peacefully and by going back to unions representing the worker, fairly compensating so it all doesn't go to the 1%

[-] -2 points by Mooks (1985) 2 years ago

Ok then, tell me why you would pay Jim $15 to mop your floor when Bob will do it for $14?

People shop around for labor just as they shop around for a new car, groceries, or a new suit.

[-] 2 points by 1169 (204) 2 years ago

thats where the union comes in, you bargin for wages etc. and hopefully it is a fair wage, union and managment agree on the wage. the key is that it is fair to the worker from the workers point of view, don't worry how much is agreed on, we already know the 1% have enough to spread the wealth around.

[-] 0 points by Mooks (1985) 2 years ago

You say jobs are scarce so you settled for less. The value of labor also depends on things out of your control, like the supply of labor, which is too high right now.

[-] 0 points by 1169 (204) 2 years ago

ok so that brings us to the point of this forum, the 1% who have it all can create jobs with their wealth(they even said they would calling it trickle down economics), what jobs u ask, look out ur window the infrastructure is falling apart, switch from a fossil fuel energy world to a green one, solar, wind, hydro, geothermal, that would create more jobs than we have people, the point is think out of the box.

[-] 0 points by Mooks (1985) 2 years ago

So Bob just remains unemployed, even though he is willing and wants to do Jim's job for less money?

I think wages should be fair for the worker, of course, but also fair for the employer, AND fair for the person who is unemployed and looking to enter the job market.

[-] 1 points by 1169 (204) 2 years ago

ok I think were saying the same thing, I have had union jobs and non-union jobs, Bob remains unemployed? unions work to insure a fair benefit package for the worker, the economy we are in right now this minute Bob is unemployed and millions of others! I was unemployed and was forced to take a job at a lot less than I was making on my previous job not because I could shop around, I took the only job I could get, because the jobs are SCARSE.

[-] 2 points by XaiverBuchsIV (508) 2 years ago

Without regard for the consequences of their decisions.

Thus we have impoverished the vast majority of this country with demand for more and ever cheaper "goods". Yet if we kept money circulation within our own communities, we would have prosperous working citizens rather than part-time WalMart employees who get their food from food stamps and their health from Medicaid.

I will gladly pay more, for less, to support my local community. It is the only truly patriotic choice.

[-] 1 points by richardkentgates (3269) from Fort Walton Beach, FL 2 years ago

because at that rate, bob cannot afford your products at that wage(less money coming back to you) and only bargains for it out of desperation. Bob will quit the second he can find better pay and is not so desperate. By hiring bob you have saved in the short run but created an unstable and unpredictable future.

[-] -1 points by Mooks (1985) 2 years ago

It is true that labor turnover is higher among low income earners but that is because they live on the margins of employment and changes in the supply/demand of labor have big effects on them. People shop around for labor just as they shop around for other purchases in order to get the best deal.

And hiring someone like Bob has minimal effects on the predictability of my business because even if he does quit tomorrow, it will not be hard to replace him because his job requires essentially no special skills. Even if I do have to then pay the $15 again. The price of labor is fluid.

[-] 1 points by richardkentgates (3269) from Fort Walton Beach, FL 2 years ago

This doesn't account for the lack of capital in the system that would otherwise be in circulation. Lower volume means you have to charge more for the same product, cutting yourself out of potential sales and paying higher prices to your vendors because your entire industry is strapped with this burden. It's fine as long as you are only concerned with yourself, as other business owners are. You are essentially all tearing each other down in the process, myself included. More capital in circulation means there is more capital in circulation. It's an obvious fact ignored for reasons beyond my comprehension.

[-] -2 points by asauti (-113) from Port Orchard, WA 2 years ago

Good to hear. The point of my post was mostly directed at you, but it is also directed to anyone who allows others to devalue their labor.

Read this: http://occupywallst.org/forum/printing-presses/

I look forward to your feedback.

[-] 1 points by beautifulworld (21611) 2 years ago

Yes. I know all about fiat money. But, I also know when capitalists, who own the means of production, corporations, are running off with all of the profit instead of sharing enough with the workers (the laborers) so that they can lead decent lives.

Corporate profits are at an all time high. 30 years ago the average CEO earned 40 times the wage of the average worker. Today, the average CEO earns 343 times the wage of the average worker. Over the past 10 years wages have declined for the average worker while skyrocketing for those in the top 1%. This is greed and greed brings down civilizations. We need labor to be valued in a way that makes the economic system work for the majority of people. You know, promotes the general welfare of the citizens of this country.

[-] 0 points by asauti (-113) from Port Orchard, WA 2 years ago

Did you read "Part II", as well?

My main reasoning for posting that was not simply to define a fiat money system. I'm hoping to make the reader come to the same conclusion, that "We the People" have but ONE thing that needs to be "overthrown" or changed. And that if we could do it, it would return America to a real system of freedom and equality and a true "free market"... and that ONE thing is to shut down The Federal Reserve.

Further, the presidents that "we Americans" seem to continue to embrace and put into office never even talk about "ending the Fed". So for all the complaints out there about the system... I say, stop voting for these "puppets"! Elect people into government will stop "following the orders" of the Federal Reserve.

[-] 1 points by beautifulworld (21611) 2 years ago

Does ending the Fed for you also include an Austrian economic system where we have free-wheeling unregulated capitalism? Just wondering, because that won't work, that will send us back a few hundred years.

[-] 0 points by asauti (-113) from Port Orchard, WA 2 years ago

First of all, to answer your question: I don't know. I don't know what system should replace the current Federal Reserve system. Although, I do have at least a few ideas to include in that discussion.

Ultimately, the people would have to decide.

Again, my statement for argument is this: The Federal Reserve and the people behind it are the 1% of the 1%. I believe this to be true. Do you have an argument that is in opposition to my statement?

[-] 1 points by beautifulworld (21611) 2 years ago

I think ending the Fed is a major talking point of libertarians. I agree that central banks cause more problems than they are worth, funding wars, printing fiat money and supporting fractional reserve banking, etc. I'm honestly not sure if it needs to be abolished, although I do think it definitely needs to be more transparent and structured so that it works for the benefit of the people and not toward empire building.

[-] 1 points by Shawn22 (5) 2 years ago

In the height of the Civil Rights Movement, JFK prompted a Fed Reg Office of Economic Opportunity to empower the lower classes to eliminate poverty. One program was to mobilize the poor politically to ballot which compelled goverment obligation. Once traditional delegate privilege came vulnerable, state legislators prohibited political activities of government funded programs. Thus, if the 99% under party rules put delegates on the ballot box, they would become the legislators and correct past abuses without opposition. The traditional political parties with unlimited campaign finances would loose to the unionized 99% effort. Thus, 1,9,and 10 amendments would embrace the citizens as a 4th check and balance, promote the general welfare by specialization of trade of the working class to be heard and counteract the majority will of special interest and lobbyist, Then, to impliment the iniative and referendum and recall of public officials at all levels by popular vote. End of self regulation errors, broken campaign promises, and refuting the contradiction with the other party as the good cop - bad cop scapegoat. As a result, the majority of numbers as absolute dominance over the perception of wealth as authority transends into a social technological scientific evolution of citizen politic obligation. Monetary compensation to all citizens that participate in the political process is a privilege as the market place of ideas produces prudent decisions when all voices are heard. The result will be the general will over the majority will to the republic for which it stands indivisible with liberty and justice for all.

[-] 0 points by Shawn22 (5) 2 years ago

I have spent the past 8 years to reach enlightenment that this is the only way to advance equality and justice. Democratic and GOP philosophies will change to accomodate the middle and lower class pledge to objective and prudent decisions in opposition. Leveraged by indivisible majority claims Power and Dominance into public offices until the constitution is ordained that citizens by 2/3 majority vote are substantial in check and balance to all branches of government in order to establish a more perfect union. We the people claim equal protection without limitations or restrictions unto the other and alter the U.S. Constitution and to guard and to promote justice to the general welfare of all.

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[-] -2 points by smartcapitalist (143) 2 years ago

what is wealth gained through profit? Please explain?

[-] 2 points by beautifulworld (21611) 2 years ago

It is the wealth of the capitalist, the owner of the means of production.

[-] -2 points by smartcapitalist (143) 2 years ago

And how do these owners become the owner?

[-] 3 points by beautifulworld (21611) 2 years ago

They either work as laborers where they are actually paid enough to set aside some money to buy capital. Note, one-half of all Americans earn less than $26,000 per year so don't be expecting too many entrepreneurs from that pool of people. Hard to buy capital when you can't pay your bills.

Or, they inherit the capital.

[-] -3 points by smartcapitalist (143) 2 years ago

No not necessarily. Entrepreneurs become rich because their ideas work. Sure most come from humble backgrounds but they are not laborers. And you don't have to save up capital to start a business, if you have a good enough idea you can either bootstrap or get seed funding (more of a recent trend).

Inheriting wealth is not a sin. If I work hard I would love to leave something for my kids.

[-] 3 points by XaiverBuchsIV (508) 2 years ago

Especially ideas about avoiding taxes, insider trading, high-frequency trading, credit default swaps, hedge-type (negative bet) investments, insurance scams, creating legislation for one's own benefit, outright corruption, etc., etc.

[-] -3 points by smartcapitalist (143) 2 years ago

Just a bunch of disparate and incoherent terms that shows not just your poor understanding of these above terms but also entrepreneurship in general.

[-] 3 points by XaiverBuchsIV (508) 2 years ago

Were you born stupid or is it something you acquired over time by dint of hard work and FOX news?

entrepreneur n. A person who organizes, operates, and assumes the risk for a business venture.

"Business ventures" are not necessarily the production of any material goods or services, and may be focused solely on financial gain. As such, vulture capitalists like Romney can sock away hundreds of millions - almost completely tax free - based on the "hard work" and "sweat equity" of others.

From a purely semantic point of view, since many of these guys don't assume the risk (leveraged buyouts, taxpayer bail-outs, etc.), it is questionable as to whether they qualify as entrepreneurs according to the classical definition.

[-] -1 points by smartcapitalist (143) 2 years ago

Not sure about me but you sure were born stupid.

In case you haven't realized, 'business ventures' are meant for 'financial gains'.

As for Romney, he worked for Bain Capital which is more of a PE firm (and not Venture Capital btw. VC is a subset of PE). His firm (which includes him) invested in private firms, some of which did well, some didn't. Bain Capital assumed the risk of losing all its money and that is the risk they get paid for. Romney in various capacities ensured that the money goes to viable companies and the management uses that money effectively (that's what all PE guys do).

Do you know what a leveraged buy out is? Because from your statement it's doesn't seem so. And Bain Capital (or any VC/PE/Hedge/Mutual fund) did not get bailed out by the tax payer. And the banks did receive tax payer money paid it back and with a total interest of over $40 billion.

FYI, jobless people like you watch Fox News. I get my daily news digest from interns or juniors

[-] 2 points by XaiverBuchsIV (508) 2 years ago

FYI I was talking about entrepreneurs, not Romney, but since you bring him up:

"Romney soon switched Bain Capital's focus from startups to the relatively new business of leveraged buyouts: buying existing firms with money mostly borrowed against their assets, partnering with existing management to apply the "Bain way" to their operations (rather than the hostile takeovers practiced in other leverage buyout scenarios), and then selling them off in a few years."

"Bain Capital's leveraged buyouts sometimes led to layoffs, either soon after acquisition or later after the firm had left. Bain Capital's acquisition of Ampad exemplified a deal where it profited handsomely from early payments and management fees, even though the subject company itself ended up going into bankruptcy."

Once again, deludedCapitalist proudly displays his ignorance. Only this time he blames it on his "interns". Better give them a good talking to, they are making you even more stupid.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

I am surprised Romney has the gull to show his face in public after what he done to gain his wealth, let alone run for president.

[-] 2 points by XaiverBuchsIV (508) 2 years ago

When people have that much money they think they are really special.

Masters of the Universe.

[-] -2 points by smartcapitalist (143) 2 years ago

It's 4am on a Sunday morning and I am at work. That's the kind of dedication you get to see in the financial sector. And therefore we make the money we do. How many weekends did you spend working?

[-] -2 points by smartcapitalist (143) 2 years ago

Romney built successful companies. what have you done?

[-] -2 points by smartcapitalist (143) 2 years ago

What ignorance are we talking about here? LBOs are not new, particularly in PE. A LBO has a debt component (the leverage) and a equity component (supplied by the PE firm) with debt being around 60-70% in most deals. The firm makes money only after the debt (senior and mezzanine) is paid for, so simply selling assets would hardly give much (or any) return to the investor (PE firm). Usually, PE firms buy in for 3-5 years, streamline operations and put in a better structure and finally exit once they have earned enough value.

As for Ampad, dude not every PE effort is successful. Bain held 1/3rd of Ampad shares which became worthless when it failed. And why don't you mention Staples, Dominos etc which are successes of BainCap?

Though I voted for Obama last time, I am gonna vote Romney this time (despite the fact that he is a mormon and my view that mormons are nut jobs) because it makes practical sense.

Companies dont make money by keeping over paid employees who under-deliver. They make money by keeping the least possible employees and getting the highest effectiveness from those employees. If an employee wishes to slack, they should find some other firm that would adequately compensate them for their worthlessness.

[-] 2 points by XaiverBuchsIV (508) 2 years ago

Bain used LBOs to crash about 1/4 of it's "investments" for massive profits. That's a fact that is apparently impossible for you to deal with. But then again, facts are clearly not your strong suit ... deludedCapitalist.

Only a value system based solely on MONEY could consider Staples, Dominios and other corporate mega-franchises that destroy local communities by undercutting local wages, sucking money out of local circulation, purveying low-quality (Dominos) or Chinese (Staples) products "success stories".

I pity you ...

[-] 0 points by smartcapitalist (143) 2 years ago

http://www1.unisg.ch/www/edis.nsf/SysLkpByIdentifier/3052/$FILE/dis3052.pdf

And keep your opinions on investments to yourself or reserve them for some stupid Occutard who would listen and get scandalized.

[-] 1 points by XaiverBuchsIV (508) 2 years ago

More misdirection ... still waiting for you to defend Bain's LBO's that left lenders hanging while they walked away with hundreds of millions ...

Profit at any cost! Can I attend your necktie party?

[-] -1 points by smartcapitalist (143) 2 years ago

I am not defending anything but unlike you I will not denounce anything just because it's more popular to do so without giving a damn about the details. Bain Capital is doing fine and no entity can survive and thrive without doing a good job and delivering value.

And frankly I hardly know much about their individual investments, if i ever need to learn about those I would but I dont need at the moment. I have other things to stuff in my head and those deals happened way before I got into finance, so it hardly interests me.

In your utter desperation you would want all rich people to just die and hand over to you their wealth. I can understand the mentality of your ilk.

As for my necktie party, if it comes to that, I would rather have my head severed than hanged.

[-] 2 points by BradB (2693) from Washington, DC 2 years ago

----> ".....I get my daily news digest from interns or juniors...."

and they get them from fox news ;)

[-] -1 points by smartcapitalist (143) 2 years ago

Not sure what news you watch but you seem to be awfully wanting in general knowledge.

[-] 1 points by BradB (2693) from Washington, DC 2 years ago

thank you... I do want general knowledge.

[-] 1 points by opensociety4us (914) from Norwalk, CT 2 years ago

"And the banks did receive tax payer money paid it back and with a total interest of over $40 billion."

Aside from the fact that the bailout continues to this day and will never be fully paid back, $40 bil in interest is hardly enough for the risk the taxpayer took and is continuing to take. The taxpayer should own these banks and have a claim on the profits as any owner would.

[-] 0 points by smartcapitalist (143) 2 years ago

Yeah I have heard that crap from you. Yes, you should own those banks, earn all the money from our hard work, have your own private jet, ah the dream. Dude, wake up. Do something other than whining and expecting others to give you handouts.

[-] 1 points by opensociety4us (914) from Norwalk, CT 2 years ago

When all is said and done, all you offer is sophistry.

For the risk they took, the taxpayer should own those entities. Anything less than ownership is the result of corruption.

[-] 0 points by smartcapitalist (143) 2 years ago

Could you please quantify the risk? Where do you think the investment (TARP) should have been on the efficient frontier? Would love to get your esteemed views on this

[-] 1 points by opensociety4us (914) from Norwalk, CT 2 years ago

Go ask Markowitz and his bogus Gaussian based models. I know a bad deal when I see one and a lot of other people do too.

[-] 0 points by smartcapitalist (143) 2 years ago

And I see you googled 'efficient frontier' and found Max Markowitz. Good riddance, you can use Google.

[-] 0 points by smartcapitalist (143) 2 years ago

Ah, you can just smell out bad trade. I see. There are only two kinds of people who can do that: geniuses and fools. I wonder, which one you are?

[-] 2 points by BradB (2693) from Washington, DC 2 years ago

----> ".....if you have a good enough idea you can either bootstrap or get seed funding ...."

true ... IF the idea creates enough profit... otherwise worthy ideas are left to whither in the dust...

however I also agree that "wealth gained through profit" is not necessarily a bad thing... it does provide income for the investors .. it provides income for our seniors who do have some savings to invest ..... the real only problem is it only includes a small percentage of the population ... it's not enough ..we need more opportunities ... especially now that global participation is expanding and taking place...

[-] -3 points by smartcapitalist (143) 2 years ago

If the idea does not create enough profit there is either of the two problem

  1. Bad execution
  2. Bad idea (society does not value that idea so much)
[-] 2 points by BradB (2693) from Washington, DC 2 years ago

that's BS... how many new technologies, ie energy, medicine .. etc ... can only find funding thru the universities.. simply because the profits do not realize quick enough for the investors ?

all adding to the cost of education...

and that's just one example

[-] -2 points by smartcapitalist (143) 2 years ago

Profits dont come because people dont want to buy. People dont want to buy because they think its not of much value or value to only a small segment of the society.

[-] 1 points by BradB (2693) from Washington, DC 2 years ago

I guess you don't get... it appears that all you see is "economic" profits...

where is social profits in your life ?... ie, well-being, good health, good infrastructure... art & culture... knowlegde & wisdom... relaxation & travel ... happiness .... ?

[-] -2 points by smartcapitalist (143) 2 years ago

If an entrepreneur wants to do some social good he/she can either fund it themselves, approach an NGO that is willing to fund or may be get the govt involved (though thats very unlikely to happen)

[-] 1 points by BradB (2693) from Washington, DC 2 years ago

hmmm... smartcapitalist, ;)

I didn't ask that... I asked, .... where is social profits in your life ?...

I believe if you see that you have some you enjoy... then you might start seeing how capitalism can be improved to include them

[-] -2 points by smartcapitalist (143) 2 years ago

I enjoy getting some sleep, being with my loved ones, listening to music and cooking

[-] 2 points by BradB (2693) from Washington, DC 2 years ago

cool... me too ;).... I just find it hard to sleep sometimes when I see so many homeless on the streets of America... let alone the rest of the world... I think we can do better... and we should be able to do under a capitalistic system... it's obviously not working that well as is... so we need to fix something ... ;)

[-] 1 points by FriendlyObserverB (1871) 2 years ago

A large portion of capitalism is working fine .. just a small correction would help . A simple cap on sales profits between points of buy and sell would change the outcome of capitalism wonderfully !The bottom would revive simply by preventing the profit seekers from skimming the "cream off the top "

[-] 1 points by BradB (2693) from Washington, DC 2 years ago

smartcapitalist, says, During my undergrad I really thought I would end be able to end poverty someday ..

Nothing can stop an idea whose time has come... ;)

[-] 0 points by smartcapitalist (143) 2 years ago

During my undergrad I really thought I would end be able to end poverty someday .. haha...

[-] 1 points by beautifulworld (21611) 2 years ago

How do you have time for any of these things when you work so many hours?

[-] -1 points by smartcapitalist (143) 2 years ago

That's why I relish sleep when I get it :)

[-] 1 points by XaiverBuchsIV (508) 2 years ago

If the idea does not create enough profit then it is not funded. The "merit" of the idea is not based on anything other than financial return.

In fact revolutionary technologies are often bought up and shelved in order to protect the profit structure of existing technologies.

[-] -1 points by smartcapitalist (143) 2 years ago

Since you are an Occutard, I would have to point it out: The merit of the idea (along with it's execution) determines it's financial return.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

how much is enough profit ? thats an oxy moron isn't it ? enough profit ?

[-] 0 points by smartcapitalist (143) 2 years ago

Good you ask. And no it's not an oxymoron unless of course you are an OWS moron. The bare minimum percentage profit for a business would be somewhere around the average profit margin of the industry/sector that business is operating in and there is no limit to the maximum profit.

Hence min(enough profit margin) = industy profit margin - ϵ where ϵ is at least an order of magnitude smaller that 'industry profit margin)

[-] 1 points by beautifulworld (21611) 2 years ago

Fair enough about the ideas, but technically, any work put in to coming up with those ideas is labor. And, you can have all the ideas you want, you still need some capital to work with that labor (your ideas).

I don't think inheriting wealth is a sin either, it's just a sin when you don't have to pay taxes on it when it is astronomical.

No doubt you will have something to leave your kids. I hope you do. : )

[-] -1 points by smartcapitalist (143) 2 years ago

Define astronomical. for the impoverished kid in Africa or India, $10k is astronomical. For the American kid of parents earning $50k a month, a inheritance of a few millions may be astronomical. For the millionaire's daughter, a few billion dollars would be astronomical.

No way can you define these things. Parents have the right to leave as much or as little for their kids as they desire.

[-] 2 points by beautifulworld (21611) 2 years ago

No. Astronomical inheritances should be taxed. I don't know what the cut off should be. Maybe $3 million. It would be rather high.

And, oh, that's a weak argument trying to compare impoverished people around the world to the U.S. I'm not buying it. I'm comparing American to American. If we can work on the income disparity at home first then, maybe, just maybe, we can work on it around the world. Let's hope.

[-] 2 points by FriendlyObserverB (1871) 2 years ago

In a fair system there wouldn't be astronomical wealth..

[-] 1 points by beautifulworld (21611) 2 years ago

Well, but we're letting them have their wealth, right? We're saying not to limit that, so.....

[-] 1 points by FriendlyObserverB (1871) 2 years ago

I knew you would say that .. ..if you propose to tax their astronomical inheritance than were not really letting them have their wealth .unlimited I think we both agree there should be limits .. although I propose a profit limit you propose a tax .. but in a sense they still have no limit because their accumulation is unlimited .. its not like a ceiling we are imposing on them .. fair ?

[-] 1 points by beautifulworld (21611) 2 years ago

Exactly. No ceiling. Just fairness.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

.. I think we are looking at a very similiar target .. we are both considering improving the impoverished while allowing for potentially unlimited wealth.

[-] -1 points by smartcapitalist (143) 2 years ago

I did compare American to American. The point is, 'astronomical' is subjective

[-] 1 points by beautifulworld (21611) 2 years ago

astronomical [ˌæstrəˈnɒmɪkəl], astronomic adj 1. enormously large; immense

So, some multiple of say, an average net worth. Maybe it could also depend on how many people are inheriting. So, if a person leaves a legacy of $10 million to just one person, they pay more tax then if it was to be divided up among, say, four people.

[-] 1 points by FriendlyObserverB (1871) 2 years ago

wealth gained through profit vs wealth earned through hard work ? if you can't see the difference than I can't explain it to you.

[-] -2 points by asauti (-113) from Port Orchard, WA 2 years ago