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20. Re: Evening Legal Briefs Nov 16, 2012, 12:08 Beamer
RollinThundr wrote on Nov 16, 2012, 10:57:
InBlack wrote on Nov 16, 2012, 10:48:
This election has shown how easily the liberal democrats have been able to influence the minorities, less educated and poor in this country by telling them that they are all victims by tapping into the very core of human emotions - envy & covetousness. Manipulating them that the successful have cheated them out of what should be rightfully theirs, and that the rich not only owes them a living, but a living in the manner of their choosing.

Welcome to Capitalism 101. How does wealth accumulation work exactly do you think? In a finite closed system how do you 'acquire' wealth?? What exactly is wealth?? You argue with Beamer but do you even have any clear concept of the fundemantal principles you are talking about?

Person A finishes high school and gets a college degree in a field of their choice and a career based on whatever field. Saves money, is personally responsible and does not rack up credit card debt.
Person B Drops out of highschool, has 4 different kids by 4 different fathers and lives off the taxpayers on welfare and section 8 housing.

You tell me which of the two will go on to acquire wealth. If you picked the person who is personally responsible for themselves and works hard to make a life for THEMSELF you were right.

This is a strawman. Person A is unlikely to get much wealth, but he expects quite a bit. Person B is really not even a part of this equation.

Stop fixating on Person B. Fixate on Person A. He's likely to come out of school and have trouble finding a job. Why? Because no one is hiring. Why is that?
1) Because it's more cost effective to send jobs overseas
2) Because the older employees aren't retiring, because they have no wealth to retire on
3) Because the company wants a higher margin, which means trimming G&A, which means running bare and asking employees to work "smarter" (i.e., harder) rather than bring people on
4) Because nearly every company has slashed and destroyed any training programs, and has no interest in bringing on those without experience (i.e., new grads)

So Person A graduates with giant loans, which made Albert Lord a millionaire 300 times over, and made the head of the college a millionaire many times over, but he cannot find a job.

When he finds a job he'll be paid less than he wants for it. He'll have little room to grow, because companies aren't thrilled about giving promotions these days, nor are they thrilled about raises. He may have a great idea to start his own company, but banks aren't giving capital, and he can't borrow from his parents because they're so focused on retiring without a nest egg.

What happened? Why is this going on?
See, when Reagan cut the top marginal tax bracket (I'm never sure you know what "marginal tax bracket" means) he allowed those that already have wealth to earn infinitely more wealth. Previously they were essentially capped at a certain amount. When the top marginal tax rate was 94% on anything over 1 million dollars per year, that meant that a guy earning 1.2 million dollars took home that million but only 12,000 of that final 200,000. So there was no real incentive for him to be paid that money. Instead the company would put that money elsewhere, typically in other salaries. It wasn't a problem to employ too many people if your company was profitable, because there were only so many places for those profits to go.

Reagan changed that. Now that guy at the top could keep the vast bulk of that 200,000. So could his neighbor, only his neighbor was keeping 500,000. So the first guy increased what he made. It became an arms race of keeping up with the Joneses. No one was a bad person, they were being rewarded for hard work and doing what their peers did.

Now cutting costs made a difference, because cut costs could result in high bonuses. Need to cut costs? Reduce the average raise your company gives that year. You cut 1% off the bottom line, so now you get a 1 million dollar bonus. Or reduce hiring, and get a bonus. Or drastically cut costs by sending jobs overseas. Get a bonus.

All of these massive cost cuts are done so that savings go in the pockets of the few. You have the management team getting huge bonuses for cutting costs, but these huge bonuses are part of the costs! You have the board getting huge bonuses. And you have, of course, the shareholders getting the stock price going up. You'll say something dumb, like "so people should buy stock!" but ~94% of all stock is held by 20% of all Americans. Again, the few. And most of those Americans have a paltry amount, like Person A's parents, who have invested as well as their Merill Lynch broker told them, mostly ignoring them because their half a million account is peanuts, and they're struggling to figure out how to make it last the final 20 years of their lives.

But that CEO that offered them an early retirement to cut some costs in the company, he got a $20MM bonus that year. He did something good, he cut costs, it doesn't make him evil. But he's incentivized to do things that greatly damage the middle class.

Some people here get furious when lawyers do a class action lawsuit and almost all of the reward goes into the lawyers pockets. But they think it's fine for a CEO to cut $50MM of salary and take a $20MM bonus for it. Why? Because he worked hard? So did those employees, and so did those class action attorneys.

But the bottom line is people like you focus so much on your Person B, but you ignore the fact that Person A is the one we should be talking about, and he's the one being screwed. You think Obama is the one screwing him, but you've never said how. How is Obama screwing him? What's screwing him is the current culture of companies cutting costs as much as possible to earn as much as possible to put that money in the hands of as few as possible.

Lastly, you dolt, it takes money to make money. People always, always forget this. If you are born with a large inheritance you're much more likely to leave one. Look at Trump - no real skills, has been bankrupt many times over, but he's super wealthy. Why? He was born that way. He got into real estate. Real estate is an easy game when you have money, but an impossible one when you do not. Just think of any economic based video game you've had, we'll use Drug Wars because everyone had it on their TI-82. When you start with $5 in your pocket it's difficult. You buy $5 of Ludes in NYC and sell it for $5.50 in SF. Fantastic, you made a 10% profit, but you're still poor. Later in the game, though, you're rich, so when you buy $5MM in Ludes in Atlanta and sell it for $5.5MM in Detroit it's the same profit, but having $500,000 is much, much nicer. You didn't work harder, you didn't work smarter, you just started with a much larger pool. That's reality. And, for that reason, the wealthy will almost always stay wealthy and the non-wealthy will almost always stay that way. If a guy that is born with $5,000 manages to increase his net worth 4000% over the course of his life he will leave $20,000 to his kids and everyone will shrug him off. If a guy is born with $5MM and increases his net worth 4000% he'll leave his kids $200MM and everyone will laud him as a genius.

You've never worked in a large corporation, have you? Or even a small one? And you've never managed people, have you? And you've never been involved in a discussion about cutting jobs, have you? (On that note, neither have all the people claiming the 1% is evil. When you're doing something that strengthens the company, you feel you're doing good. It may be bad for the economy, and bad for the individuals, but you think you're doing good. This is true even about stupid crap like always-on DRM, which people think is designed to screw consumers but is actually groups of people not quite able to see an entire picture and just seeing benefits, not detriments, but doing so innocently and with good intentions.)

This comment was edited on Nov 16, 2012, 12:17.
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