Economics: Rich People and Leverage?

[Patranus]

Rich people only have leverage because of the "progressive" interpretation of the commerce clause.

If the government wasn't in the business of picking winners and losers in the marketplace, then no amount of money donated to a campaign would make a difference.

 

[soccerballtux]

dunno why it has to be one way or the other. There's no denying that could be better options than excessive greediness for motivations for running an economy. (anti-republican statement).

There's also no denying that this same greediness drives politicians' thirsts for more power, and that this is a bad thing as well. (anti-liberal statement).

The liberals seem willing to overlook the government issue in favor of smiting the greedy businessmen. The republicans / conservatives / libertarians seem to be in favor of smiting the intrusive forms of government like cap and tax under the pretense that the market will sort out the greedy companies that don't perform. Meh. I think both are going to bite us this time. The only real way out is corporations run for the benefit of the employee, not for the benefit of the corporation. The only way to do this is to convince the company owners it's more important to take care of your employees than it is to maintain profits at 10%. Only way to get there is a paradigm shift in thinking. There's no logic to "better for the employee" though on the micro scale. Meaningful change can most effectively come from outside the realm of logic-- from "faith" that you and I are what matter, and that taking care of each other is more desirable than profit.

 

[piasabird]

So Soros must be one of those evil rich people.

 

[Abwx]

good post, also you have good english sir.

Thank you , that s some welcomed relief, as in
another thread i was told that i do frequent mispellings,
wich is indeed, on my own words , true...
Good continuation, sir..

 

[lothar]

Ok, here is a hypothetical example:
Say I have millions and millions of dollars and decide that I want to buy all of the housing in a particular area. After I do that, I want to charge very high prices, because my housing is all that is available in the area.

What would prevent someone from doing something like this? Isn't that a perfect example of how wealthier people have more leverage over "normal" people?

Your scenario outlined has nothing to do with leverage.

 

[Abwx]

Rich people only have leverage because of the "progressive" interpretation of the commerce clause.

It s worse than that...
When i did a MS degree in (capitalist) economy, i was not told
the whole story...

The system as it exist is the most amazing sleight of hand
in human history.

When a firm ask us to do some work for a salary,
it s only when the job is done and sold to a third
party that the firm can pay us our wages.

Money doesn t exist, or rather, it doesn t exist prior
to the work as it s this one that will materialize it,
so money is in fact the mean to render us slave
of our own work, as incredible as it sound..

If tomorow we no more accept money as payement,
then the rich will suddenly become poorer than
we are since we , we have at least a formal
training to produce wealth..

I wont elaborate, but take as granted that the so
called human rights are the rights of the BOURGEOIS class.

We, common people are only the counterpart that makes
their virtual wealth becomming real since we accept a
promise to do the job in exchange of worthless paper
that is in fact a little part of our future job...

In short, we are the slaves that are the necessary
tools to materialize their so called richness...

 

[JD50]

Anarchist420 has finally met his match.

 

[Zebo]

Rich people only have leverage because of the "progressive" interpretation of the commerce clause.

If the government wasn't in the business of picking winners and losers in the marketplace, then no amount of money donated to a campaign would make a difference.

not really. back in the days before the fed you only got loans (eg leverage) if you came from right families.

if there is one universal truth I've noticed in studying history is rich get richer no matter what form of government from communism to despotism to democracy. revolutions break that up. but it's unavoidable due to leverage.It's not about what you do or what you make it's about what you control. control that multiplies until it suffocates.

 

[Steeplerot]

It s worse than that...
When i did a MS degree in (capitalist) economy, i was not told
the whole story...

The system as it exist is the most amazing sleight of hand
in human history.

DUN DUN DUUUUUUUUNN!! Get ready for it:

I wont elaborate

I bet

but take as granted

Of course internet dude!

In short, we are the slaves that are the necessary
tools to materialize their so called richness...

I thought you were still in custody Jared Laughner? Let me guess, Foxnews paid your bail to be a commentator?

 

[Abwx]

I thought you were still in custody Jared Laughner? Let me guess, Foxnews paid your bail to be a commentator?

Faux News employee ???....
Are you serious ?...

 

[PeshakJang]

Faux News employee ???....
Are you serious ?...

This is his serious face.

 

[Abwx]

This is his serious face.

English is not my first language, so i have trouble understanding,
but it seems that the guy is branding me an extreme right agitator.
Could this be possible ?..Generaly i m rather reffered as a hardcore
leftist, although i do not agree on this classification as well..

 

[PeshakJang]

English is not my first language, so i have trouble understanding,
but it seems that the guy is branding me an extreme right agitator.
Could this be possible ?..Generaly i m rather reffered as a hardcore
leftist, although i do not agree on this classification as well..

He's our resident token communist. He just gets so confused about his own irrational ideologies, that he can't recognize others who are just as crazy as he is. Especially when talk good you don't.

 

[soccerballtux]

English is not my first language, so i have trouble understanding,
but it seems that the guy is branding me an extreme right agitator.
Could this be possible ?..Generaly i m rather reffered as a hardcore
leftist, although i do not agree on this classification as well..

put it in your sig that you're learning english and that it's not your first language, people don't usually make fun of folks who are trying.
You may have some spelling issues but your grammar is almost spot on and for that I am impressed .

 

[billdotson]

All this thread was was a simplified example of how people with immense wealth can use their wealth to potentially increase their wealth, power and influence. I'm sure that in the United States that if someone bought all the property in a small town that there would eventually be some sort of anti-trust litigation, but I am sure for at least a short period of time people would suffer because of it. Like others have said, people with great wealth can further increase their wealth and power through other, more subversive ways.

For the people in this thread that are railing against the free market capitalist system please take a look at countries that follow communism (China) or democratic socialism (Europe). In the case of Communism you have very few, if any rights. In democratic socialism, you have some rights, but you are taxed to the limits to provide services to society that you make not agree with.

It is important to remember that the United States economy isn't as "free" as you would like to think. There are so many regulations, a wildly confusing tax code (often with unfair tax breaks and subsidies to those that don't need them), government/corporate collusion, government meddling in economic incentives (housing loans and the housing market anyone?) that it really isn't fair to look at the United States as the prime example of free market capitalism. Also, it must be remembered that free market capitalism isn't intended to exist without regulations. Instead of no regulations at all, the regulations present in an ideal free market capitalist economy would have only one purpose: to facilitate free trade. That is why monopolies are seen as bad even in free market economies. As far as I know, the founding fathers weren't particularly fond of giant, powerful corporations (here is something related to that: http://blogs.hbr.org/fox/2010/04/what-the-founding-fathers-real.html) The Founding Fathers definitely hated companies like the British East India Company, that is for sure.

 

[NoWhereM]

Ok, here is a hypothetical example:
Say I have millions and millions of dollars and decide that I want to buy all of the housing in a particular area. After I do that, I want to charge very high prices, because my housing is all that is available in the area.

What would prevent someone from doing something like this? Isn't that a perfect example of how wealthier people have more leverage over "normal" people?

Nothing, though generally to make it really profitable you need to own whatever industry the local community relies on for employment as well.

http://en.wikipedia.org/wiki/Company_town

 

[Craig234]

Immense wealth *does* give people huge advantage in making more money, often in ways that are 'unfair', or about monopoly. But I don't think this is a good example.

First, there's no 'leverage' here really. Leverage is getting multiplier effects for a dollar.

For example, if your broker lets you buy stock not just with the money you have, but allows you to buy $2 or $3 or $10 per dollar in your account, betting that you won't lose too much and can repay, you can invest much more money, and make far more money - if you make money. Wall Street firms do the same, making investments risking money in amounts much more than they have.

In recent years, they have successfully lobbied to get the government to relax restrictions and allow them to have more leverage - which causes risk to the economy. FDR set up a lot of financial regulation that limited the abuses by investors and banks that could be very profitable for them but hurt the country. The last 30 years have been an attack by the financial industry on the regulations that have played a big part in the increasing financial crises (and Wall Street's taking 40% of all profit in the economy rather than the normal 10-15%.) As they make more money, they can lobby more.

While your specific example doesn't fit what happens, you are right that big money does have a lot of ways to help the rich, e.g., 'Barrier to entry' was mentioned above.

 

[dmcowen674]

A lot of the 1% ers in the U.S. post here in P&N

Today is an article of just how much they hate the country

They called it "Off the charts"

4-8-2011

http://news.yahoo.com/s/yblog_thelo...uX2hlYWRsaW5lX2xpc3QEc2xrA29mZi10aGUtY2hhcg--

Off-the-charts income gains for super-rich



The bottom 90 percent have seen their income rise only by a tiny fraction of total growth, while income for the richest 1 percent has exploded by upwards of 275 percent.

One can argue about why this is happening. Some say it's the result of a decline in workers' bargaining power as labor unions have weakened, while others blame the rise of offshoring and outsourcing.

The already super-rich have vastly increased their share of the pie--at the expense of everyone else.