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Do the rich need Americans?

blogs.wsj.com

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Re: Do the rich need Americans?

#11

Post by geebee »

The editorial hinted at an answer...

"The American wealthy benefit greatly from the country’s legal system and business transparency, not to mention its armed forces."

I guess you'd agree or disagree to the extent that you believe the US military, government, and courts are required to maintain a safe, stable world where trade can take place unabated enough to allow the rise of a global elite. It's not just the US, of course - you could also ask if the haven of Monaco could survive without the military strength of nearby european powers.

Re: Do the rich need Americans?

#12

Post by Alex3917 »

yummyfajitas wrote: post #3
CWuestefeld wrote: post #2

Late last year, the U.S. economy experienced a surprising decoupling. As stocks boomed, the wealthy bounced back. Isn't this completely predictable? When the government invests hundreds of billions of dollars into the market, by way of dumping money into the financial and automobile industries, and that money's source is loans backed by the people-at-large, then of course this is happening. The government is transfer…

by way of dumping money into the financial and automobile industries, Um, the UAW bailout didn't benefit the rich much. Most bondholders/etc took a haircut. The primary beneficiaries were the upper middle class UAW workers/nonworkers (they didn't take a haircut).

The whole reason the UAW is broke is that in the 60s the rich promised the workers future money they didn't have so that they could take more money out of the company. How exactly is that an example of the rich losing money?

Re: Do the rich need Americans?

#13

Post by Florin_Andrei »

CWuestefeld wrote: post #2

Late last year, the U.S. economy experienced a surprising decoupling. As stocks boomed, the wealthy bounced back. Isn't this completely predictable? When the government invests hundreds of billions of dollars into the market, by way of dumping money into the financial and automobile industries, and that money's source is loans backed by the people-at-large, then of course this is happening. The government is transfer…

> Anybody who believes that the government (not just the GOP but the Democrats as well) is working for the little guy, is a sucker.

Correct. It's the big corporations, out of the goodness of their hearts, that accomplish this generous task.

Re: Do the rich need Americans?

#14

Post by hammock »

geebee wrote: post #11

The editorial hinted at an answer... "The American wealthy benefit greatly from the country’s legal system and business transparency, not to mention its armed forces." I guess you'd agree or disagree to the extent that you believe the US military, government, and courts are required to maintain a safe, stable world where trade can take place unabated enough to allow the rise of a global elite. It's not just the US, o…

Actually IPOs are at an all-time low in the US (Facebook is the new model); so much for the "transparency" argument. Additionally, big business is almost unanimously using pre-dispute arbitration clauses now, so much of the action happens independent of US courts.

Re: Do the rich need Americans?

#15

Post by wnoise »

ldayley wrote: post #7

This article makes good points, but it fails to raise alarms for me. Knowledge has few national boundaries (and largely shouldn't), why should capital?

Labor in general has large national boundaries. These are lowered slightly for knowledge workers.

Re: Do the rich need Americans?

#16

Post by yummyfajitas »

Alex3917 wrote: post #12
yummyfajitas wrote: post #3

Earlier quoted context omitted.

by way of dumping money into the financial and automobile industries, Um, the UAW bailout didn't benefit the rich much. Most bondholders/etc took a haircut. The primary beneficiaries were the upper middle class UAW workers/nonworkers (they didn't take a haircut).

The whole reason the UAW is broke is that in the 60s the rich promised the workers future money they didn't have so that they could take more money out of the company. How exactly is that an example of the rich losing money?

What I was responding to: "When the government invests hundreds of billions of dollars into the market, by way of dumping money into the financial and automobile industries,..."

CWuestfield and I were discussing actions taken by the government during the bailout, not a business plan the UAW and GM entered into in the 60's.

During the bailout, the administration funneled billions of taxpayer dollars (many of which were paid by people earning less than UAW employees) to the UAW. In the process, they also screwed over bondholders (and ignored the rule of law) who had a legitimate claim to part of the proceeds of GM's liquidation.

That's an example of the government screwing over the rich (and middle class) for the benefit of the upper middle class.

Re: Do the rich need Americans?

#17

Post by Kadin »

hammock wrote: post #14
geebee wrote: post #11

The editorial hinted at an answer... "The American wealthy benefit greatly from the country’s legal system and business transparency, not to mention its armed forces." I guess you'd agree or disagree to the extent that you believe the US military, government, and courts are required to maintain a safe, stable world where trade can take place unabated enough to allow the rise of a global elite. It's not just the US, o…

Actually IPOs are at an all-time low in the US (Facebook is the new model); so much for the "transparency" argument. Additionally, big business is almost unanimously using pre-dispute arbitration clauses now, so much of the action happens independent of US courts.

I think you make a good point, but you still need a legal and court system in order to enforce the arbitration clauses; they build on the legal system but don't replace it. If you didn't have the underlying court system, there wouldn't be a way to hold parties to decisions made in binding arbitration that they didn't like.

Re: Do the rich need Americans?

#19

Post by Alex3917 »

yummyfajitas wrote: post #16
Alex3917 wrote: post #12

Earlier quoted context omitted.

The whole reason the UAW is broke is that in the 60s the rich promised the workers future money they didn't have so that they could take more money out of the company. How exactly is that an example of the rich losing money?

What I was responding to: "When the government invests hundreds of billions of dollars into the market, by way of dumping money into the financial and automobile industries,..." CWuestfield and I were discussing actions taken by the government during the bailout, not a business plan the UAW and GM entered into in the 60's. During the bailout, the administration funneled billions of taxpayer dollars (many of which wer…

"CWuestfield and I were discussing actions taken by the government during the bailout, not a business plan the UAW and GM entered into in the 60's."

Yeah, but the reason the bondholders were unhappy (as anamax said) is that it officially sanctions this sort of malfeasance, and therefore makes the bond market more risky.

Re: Do the rich need Americans?

#20

Post by geebee »

hammock wrote: post #14
geebee wrote: post #11

The editorial hinted at an answer... "The American wealthy benefit greatly from the country’s legal system and business transparency, not to mention its armed forces." I guess you'd agree or disagree to the extent that you believe the US military, government, and courts are required to maintain a safe, stable world where trade can take place unabated enough to allow the rise of a global elite. It's not just the US, o…

Actually IPOs are at an all-time low in the US (Facebook is the new model); so much for the "transparency" argument. Additionally, big business is almost unanimously using pre-dispute arbitration clauses now, so much of the action happens independent of US courts.

This definitely weakens the transparency argument, though I wouldn't go so far as to say it eliminates it.

The problem is, it can actually be very difficult to evaluate the contribution of the courts and the military to the stabilization of international trade. A resident of Monaco could certainly stump me by asking "well, if the US or French military is so essential for my protection, then who is it who would be attacking me?"

I suppose I could try to come up with an answer (probably easier during the cold war), but the unsatisfying response is "who knows, but a rueful glance through history suggests it would probably be someone."

You probably believe that the rich need the US and allied military to the extend to which you agree with that answer. Same kind of goes for the courts - rather than point to a particular need fulfilled, a lot of people would say that without a system for resolving crimes, torts and even contracts, a modern economy simply couldn't exist.

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