Originally posted by: WhipperSnapper
Originally posted by: halikWell unless we're talking about products that are completely price-inelastic, those lower costs of productions have to, in turn, lead to lower prices (assuming our regulators work and there is some sort of competition). People bitch about walmart for example, but at the same time they enjoy that they can buy stuff there for significantly less (lower income people are the biggest benefactors).
The problem is that you can't just look at the front-end costs but also need to consider the invisible and conveniently ignored back-end costs.
First off, those "cheap" goods are being paid for at the cost of having a huge trade deficit and an imbalance of trade, resulting in a transfer of our nation's hard assets (real estate, business assets) to foreigners (why would they use the money to pay for American-produced goods and services when they can get them cheaper from someplace else?). As a general principle and in terms of the big picture, you can't consume more than your produce but our nation is attempting to do just that.
Secondly, you have to ask whether the lower prices for goods and services are lower than or equal to the amount of wage depression. If the price of being able to buy shoes for 25% less than what they would otherwise cost is to have your wages cut by 40% then what's the point? Are the businesses pocketing the cost savings or passing them on to consumers?
Moreover, we have to ask whether the massive invisible social costs are worth the alleged benefits. Is having more unemployment, underemployment, and lower wages worth the supposed cost savings?
As for your second point, it's only natural that not everyone ends up making it - if we all had million dollars in the bank, would it change anything?
My point is that in an ideal, 100% efficient market, many of the people who are "making the money" might make far less money as a result of competition from other qualified people. Employers often overlook a great many perfectly capable and qualified candidates as a result of various forms of discrimination (age discrimination, discrimination against people who were involuntarily-out-of-the-field for a given length of time, etc.) and much of the hiring is this country is based on cronyism.
The fact that government won't tax your at 100% after you make X dollars serves as an incentive, otherwise none of us would have any drive to succeed.
Oh, I agree. I've never advocated a 100% tax; that would be ridiculous. However, an increase in taxes on the upper classes probably won't have much of an affect on the incentive to keep working.