>> ^rottenseed:

Why do people shop at Walmart? Because it's cheap.
Why is it cheap? Low manufacturing costs, bulk purchase power, low wages and sub-par benefits
What happens if they increase wages/benefits? It won't be as cheap any longer
What will happen to Walmart? They'll have to downsize
What will happen to people that work at Walmart? Many will be laid-off or have hours cut.

This tug-of-war cannot be won by anybody working at Walmart. I'm sorry, I know in many cases people feel it's the only way they get work, and I am very happy that these are people willing to work rather than collect welfare without even trying, but there is no win for those employees (other than the rare case that one of them moves up the ladder).

It's sad really...

I know some say the solution is for Walmart to cut their profits, but as a publicly traded company they have a duty to maximize profit for their shareholders (see the downfall of facebook). Unionizing would drive the price up, but again Walmart has to make money and a union might lead to the potential of a mass exodus of employees which would mean a huge loss. The only chink in the armor here is that their jobs aren't very skilled. Meaning, anybody that wants a job can pretty much do it

I think the only real solution is consumer-side. Don't shop at Walmart, drive them out of existence, and give these small-business owners the ability to flourish again.

It's hard to disagree with much of this. But, being the intense competitor I am, I'll try.

Actually, there's only a couple of relatively small points.

First, Walmart is publicly traded, but it's wholly controlled by the Walton family...if they decide to pay livable wages and to change the culture of worker abuse, it can be changed. There is no conflict with any duty to maximize profits. Unless you're an investment bank, there really is no such duty. Even if there was, it's not unreasonable to consider a move like investing in your employee relationships to be a long-term method of maximizing profits. Especially when public sympathy for the company has been dropping for years.

Second, they used to operate on a much lower margin, they sold mostly made-in-the-USA products, and somehow still managed to make enough money to become huge. So it seems like they -could- share a tiny portion of the profits with those who make the stores run. Costco manages to pay significantly better and offer most of its employees insurance, and yet still be competitive.

If they don't stop offloading their employment costs onto the rest of us (remember that less than half of the employees at Walmart have health insurance, even now), society is well within its rights to charge them for the welfare the company gets, one way or another. It's probably better for the company to offer at least minimal cooperation with a union than to be at the mercy of public perception.

But overall, you're probably still right.

Why do people shop at Walmart? Because it's cheap.
Why is it cheap? Low manufacturing costs, bulk purchase power, low wages and sub-par benefits
What happens if they increase wages/benefits? It won't be as cheap any longer
What will happen to Walmart? They'll have to downsize
What will happen to people that work at Walmart? Many will be laid-off or have hours cut.



This tug-of-war cannot be won by anybody working at Walmart. I'm sorry, I know in many cases people feel it's the only way they get work, and I am very happy that these are people willing to work rather than collect welfare without even trying, but there is no win for those employees (other than the rare case that one of them moves up the ladder).



It's sad really...



I know some say the solution is for Walmart to cut their profits, but as a publicly traded company they have a duty to maximize profit for their shareholders (see the downfall of facebook). Unionizing would drive the price up, but again Walmart has to make money and a union might lead to the potential of a mass exodus of employees which would mean a huge loss. The only chink in the armor here is that their jobs aren't very skilled. Meaning, anybody that wants a job can pretty much do it



I think the only real solution is consumer-side. Don't shop at Walmart, drive them out of existence, and give these small-business owners the ability to flourish again.

@renatojj Apologies for the late reply, have been running for work and it doesnt look like that will stop

True that some countries may have less cooperation, though is that dependent on the economic system used or something else? For instance, East Germany had 100% employment and a very active economy, more so then west Germany in some regards. It was ofc run top down with little choice and politically biased, but I am not sure if that lessons the amount of economic transactions, ie cooperation. I guess it comes down to what you define as cooperation.

BTW "those criticisms of the depletion of finite natural resources consists of the economic Law of Diminishing Returns, opportunity cost, and scarcity in economics" -- I never understood what they mean with that. Even if the resource cost goes up strongly due to scarcity it doesnt mean that that resource can be replaced by something else, or that the higher cost (than the original cost of the scarce resource) of the replacement can be born by its consumers.

Now you say something very interesting: I agree with you that capitalism isnt always about ever-increasing competitiveness, in practice. In cases where you have competition, you get ever-increasing competitiveness. (This is in theory what all capitalism strives for) In cases where you do not have competition you dont. That is exactly what we are talking about. Free market philosophy assumes there is always near perfect competition right? How else would the market balance itself if there is no competition? Would you agree that free markets only work where there is competition?

Lets see when we have competition:

"competition is proportional to the difference between supply and demand" That doesnt sound right. If there is large demand and little supply (the difference is big), there is little competition as all suppliers will overcharge like hell as they will be able to sell anything they can manufacturer anyway. If there is large supply and little demand there can be competition, though usually this results in companies leaving the market until you have: If the supply and demand are about equal, you SOMETIMES have competition that keeps things in balance. Or you can have a monopoly for whatever reason and that market has again little to no competition. In other words, in no single scenario is competition guaranteed. Actually, there is good reason to assume markets move to monopolies naturally in all cases. In a market that is turning from early adopters to mass market, there is always focus on economies of scale. Companies need to get bigger to make sure they have the lowest cost price (best competitive edge) and to keep their shareholders happy as they demand growth to make their investments worth more. Bigger companies means fewer companies on the long run, as the market is always limited. This means companies will take over other companies until only a handful remain. Voila. Actually, if it werent for (anti-free market) anti-monopoly rules lots of markets would only have 1 company left. That company would be so big it would be impossible for a new entry to push them out of the market or even get a foothold unless the market itself crumbles because a newer range of products exist that make the old one obsolete. Again, without rules governing economies, things just go bust.

Which was what happened in the derivatives market. It was a completely deregulated market that was exploding itself as there were no rules governing it. When it did explode (ie when the free market failed) there were 2 options left: Let all banks fail or bail them out. Think of the consequences of following your recommendation: If 1 bank fails, it will pull the others down with it as they are all strongly interconnected. As banks are key in the economical world, the entire system would collapse. The amount of devastation would be huge, would probably kill the entire system. Now, you can argue that would be good for us, as we could build a fully new system. But before we would get there, there would be years if not decades of nightmares.
I agree with you that the fall of the derivatives market should never have happened in the first place which is exactly the reason to not follow free markets.

Above clarifies a bit my way of thinking: for many of these markets (be it banks or utilities or employment) the consequences of letting that market fail are just too big. If you have the guts to follow free markets to the end, it might work (isnt proven though) but you come to a point where you destabilize your country in such a manner that things like revolts and all kind of nastiness are highly possible and even likely. That is not progress, that is barbarianism.

You mention yourself that there are practically no free markets anywhere. You say that is because they havent been tried. I say that they have been tried again and again but never last.

>> ^lantern53:

If a person has no job, they cannot afford to go to a casino, which employs hundreds. Since Sheldon thinks that Romney will create more jobs then Obama and more people will be able to go to the casino, and since Sheldon has actual business experience, unlike Barack Obama, I think it will follow that Sheldon is more likely to know what he is doing.
Go Sheldon! Go Jobs!


so you are saying most businessmen and ceo's are more interested in creating jobs than making profits/bonuses? what color is the sky in your world? and shareholders too are more interested in jobs created than return on investment, right? and a consumer economy can exist without a growing middle class, with a decent amount of disposable income?

i really like, "the more people the casino employs, the more people can go to the casino" point... really a proponent of debt slavery aren't you? lol

i'm sure you also believe in sustainable unlimited growth markets, and that the USA is #1 too

Personally, I don't believe that Taco Bell did create the initial hoax. I think they just heard about it and someone leapt at the PR possibility.

Again, my point of view:
* I quite like the act itself
* I don't mind that they do things like this for publicity
* I just cringe at people honestly believing that Taco Bell is nice for doing this. As I said, nice would have been to do this without telling everyone else how nice they are.
* So yeah, I don't have issue with companies doing things like this for publicity. They're stunts, stunts are fine, a bunch of people got some tacos. I just hate to see people get completely sucked into thinking 'Awww, look how nice that Taco Bell is... I'll go and eat at the PepsiCo company store now because they're nice'.

No need for everyone to get so shitty at me for thinking like that, sheesh.

>> ^speechless:

>> ^chilaxe:

Yes, everybody alive knows Taco Bell did this because they had incentive to do so.
As far as I can tell, you're agreeing this was a nicer way for them to achieve their business obligations to their shareholders instead of flushing the money down the toilet in a TV commercial, and you want to encourage companies in this direction, but you can't quite bring yourself to say it.

No, I'm saying I believe this was a deception crafted entirely by taco bell. The "hoax" was initiated by taco bell and they responded to their own hoax.
It's sort of like punching someone in the face while they're asleep and then rushing to their aid with a bandage. They didn't see you punch. And now you're the hero for helping.

>> ^chilaxe:


Yes, everybody alive knows Taco Bell did this because they had incentive to do so.
As far as I can tell, you're agreeing this was a nicer way for them to achieve their business obligations to their shareholders instead of flushing the money down the toilet in a TV commercial, and you want to encourage companies in this direction, but you can't quite bring yourself to say it.


No, I'm saying I believe this was a deception crafted entirely by taco bell. The "hoax" was initiated by taco bell and they responded to their own hoax.

It's sort of like punching someone in the face while they're asleep and then rushing to their aid with a bandage. They didn't see you punch. And now you're the hero for helping.

>> ^speechless:

>> ^chilaxe:
@seltar
Definitely. We'd rather businesses spend their advertising budget (they need this; they're a business) on doing cool things in the world than on spending millions creating some TV commercial.

In all fairness, I think spoco's point was that this was created as a commercial. In other words, a completely staged event. I'm inclined to agree.


Yes, everybody alive knows Taco Bell did this because they had incentive to do so.

As far as I can tell, you're agreeing this was a nicer way for them to achieve their business obligations to their shareholders instead of flushing the money down the toilet in a TV commercial, and you want to encourage companies in this direction, but you can't quite bring yourself to say it.

Comparing a classroom setting to our economy is a poor analogy, if you work hard in class you can usually get a decent grade, unlike money, grades aren't a finite resource, you do work that deserves an A and you get an A. It doesn't cost the teacher anything to give one and most likely they feel better giving A's than F's, it means they're doing a good job after all (provided the grading is honest to begin with). In the workplace however it's the exact opposite, a person may work hard and do great work for their employer, but giving more money to employee's means less money for CEO's and shareholders as well as lower profit margins all around and according to current social dogma CEO's and investors are the really important people, everyone else is just a replaceable cog.
This video is so full of bullshit that I swear I could hear the sound of cows mooing in the background.

@bmacs27

I am all for good lending practices, but what is happening now goes beyond that. I know of several instances of developers having signed leases from investment grade tenants (large pharmaceutical companies , retailers etc.)who have had significant challenges obtaining financing, even with putting up 40% equity.

At the end of the day the fewer 'good' projects that get done means fewer jobs that are created, both on a temporary (construction) and permanent basis.

I am not on the development side so I don't have first hand experience with the above.

I don't disagree that speculative real estate developments should have trouble getting financing, but that isn't the only kind of product being effected by the new standards.

My take on Jamie Dimon is he isn't Bill Gates. He is a banker and he wants to make money for his company and his shareholders. So did Steve Jobs. I don't fault him for looking out for his interests and I don't fault those who seek to restrain them reasonably. I don't view him as a hero or a demon. He is just a banker - and he seems to be a very 'good' one.

@bmacs27

I am completely on board with good legislation and I do think there is too much capital concentration in the financial sector.


Compensation wise I don't care what the banks want to compensate their employees. It's up to their boards, shareholders, and the market to decide that.

A more major concern for me is are we facing an oligopoly in banking? With smaller community banks being squeezed out that could become a real issue. At present I think most banks still have to be pretty competitive to make it, but that could change.

As I said in an earlier post, "Make the rules simple, make them fair, and enforce them effectively."

Glass Steagall, from what I understand, was a pretty good Act. It clearly divided commercial banks and security trading firms. Sounds like a good idea. That said I don't believe I'm very knowledgeable about the issue - and there seems to be a lot of debate about whether it would have prevented the collapse we experienced anyway.

What bothered me about this video and its subsequent commentary was the complete lack of reason. It is all emotion - much of it violent - about a company and a man most of the posters seem to know little about.

>> ^deathcow:

Well, where I work, the CEO formed the company and now has 1700 people working for him. How much is that worth?


I don't know if your company is private (all of the profits belongs to the owner), or public (everything belongs to the shareholders--and the originator has the money from selling the company--or stocks).

The corporations Thom is talking about are huge--probably multinational--corporations which are run by a Board of Directors. These boards are comprised of people who are either: CEO's themselves, related to CEO's, married to CEO's, or--at least--belong to the same country club as all the CEO's. The incestuous nature of the corporate structure which we are dealing with now is so bad--and the interconnections so intertwined--that no one corporation is going to knock the top tier salaries down. That would eventually mean that their own income would go down significantly. It is in the interests of the board members (note: not the shareholders, or the company) to keep top salaries very high.

Hold it. The title says, "salary," but the data he is showing is "pay."

There is a difference. Salary is what you get as described in the first commenter's post. Granted, salaries are in the millions for these executives, but a large large amount of their earnings is in bonuses and stocks from said companies that shareholders (i.e., a board) typically vote on.

With that said and the state of the stock market from today compared to 1980, yes it's no wonder why executive pay is 380x the average worker's pay; the average worker does not invest as much or get stocks/bonuses from said company.

If I owned stocks in a company that over paid it's CEO by a gross margin like this, I'd be pissed!
Why should I invest in a company that would piss my profit away on the CEO?

Cenk is right, The decision maker is worth more pay. He makes the life or death decisions that affect the company and the jobs of the employees. But don't let it get out of control.

-One-million per year ($83,333/month or $69,444/week) is lots.
-Two-million($166,666/month or $41,666/week), maybe.
-Five-million per year ($416,666/month, $104,166/week), it starts to get out of hand.

-At 55-million per year ($4,583,333/month, 1,145,833/week), it is pure absurdity. That's just robbing and bankrupting.

If a company is making that kind of profit off the backs of it's employees, then it should be setting up better benefits for their employees, profit sharing programs, and re-investing back into the company by creating new products and services (R&D). Those new developments would create new industry, jobs and in turn profit - not to mention returns to the shareholders.

@Porksandwich all good points. There is corruption and a lot of collusion between government and corporations. Can we consider the possibility that this collusion happens mostly because the role of government is not well defined, because the economy is a grey area, because businesses covet the power politicians have?

I don't see churches fighting over privileges with politicians, not since a clear separation of church and state was established.

I don't see big media networks fighting over censorship rights with politicians, because freedom of speech mostly outlaws censorship by the government.

Do you see where I'm getting at?

The businesses that hold a monopoly, most of the time, hold it because of regulation. If you remove the regulation, you remove the obstacles for competition. The business might still hold the monopoly even for a long while, maybe decades, but any dissatisfaction by consumers is an opportunity for competitors to step in, slowly pushing the monopoly to be more efficient or risk being toppled.

If we dial back regulation, that doesn't mean there won't be any regulation, that the industry will only answer to itself. Regulation will come from consumers, clients, advertisers, consumer groups, unions, shareholders, and competitors. Didn't GoDaddy pay dearly for supporting SOPA? That's a great example of society punishing a business for an unpopular decision.

Besides, we can't consider it unfair for a business to establish a monopoly or a cartel, if we're ok with workers forming a union. That's a double standard because, in essence, they're basically the same thing. I don't judge either to be good or bad, fair or unfair, it's all part of the market and the right for people to freely associate.

You are absolutely right when you say people are held to more standards than just making money, but who establishes those standards? Are there laws dictating that we shouldn't be dicks, that we should never take advantage of others or "negatively impact people"? Those aren't laws, it's social pressure and your reputation that ****regulate**** you to act as a better person.

Let society and people hold businesses to better standards, not laws and politicians.

Everything but private businesses, right?



Well, officers of public companies are (or should be) held to account by their board, their shareholders, and the market. Those are the people with interests at stake. The reason why public spending is held to such standards is because every taxpayer (and citizen) has interests at stake.

Conversely, there is not much good reason to hold a private business accountable for spending. If you have a lemonade stand and you want to spend all your profits on candy, then that's really up to you. If you're mad that your boss spends all the company money on candy (or lets the secretary do so), work somewhere else.

To be clear, I don't like how the US handled the bailouts of private enterprises because it blurs these lines. But that's a generally separate issue.