What caused all the supply chain bottlenecks? • Hacker News Board

Re: What caused all the supply chain bottlenecks?

#141

Post by DevKoala » Thu, Oct 28, 2021, 8:11 PM UTC

> Only founder led companies and family owned businesses can stand up to the immense pressure from the dogmas of modern finance.

> The proposed tax on unrealized capital gains will force founders to sell larger and larger pieces of their companies to pay the tax, until eventually they lose control of their businesses and turn them over to the Wall Street sharks to run their disastrous playbook.

I agree with this argument. Love him or hate him, with a tax on unrealized capital gains someone such as Elon Musk would not have been able to drive Tesla to profits thus forcing the automotive industry towards EV's. Moreover, we would have fallen behind decades in the space race.

Re: What caused all the supply chain bottlenecks?

#142

Post by tonyedgecombe » Thu, Oct 28, 2021, 8:12 PM UTC

015a wrote: post #118

evilotto wrote: post #33

He's right to point out that the obsession with RoE is a big part of the problem. He's wrong to suggest that the billionaire class and founders will solve the problem if we only trust them and let them keep their money. Founders have just as much incentive to optimize the excess out of the system, they just call it "disruptive innovation" by which they mean tweaking how the system works so that they can squeeze out p…

I think his statement is that founder (and family) led businesses are the only businesses capable of building the shock absorbers necessary to weather hundred-year storms; not that they always will. By comparison, committee-appointed CEOs rarely, if ever, will, because they cannot.

I was always under the impression that family run businesses tended to have poorer quality management.

Re: What caused all the supply chain bottlenecks?

#143

Post by Azsy » Thu, Oct 28, 2021, 8:13 PM UTC

The RoE analysis is decent, but it wouldn't be HN if every now and then someone really wants to sell the idea that your average business owner and your average S&P 500 business are all in this together with taxes as their enemy.

Taxes don't apply equally. Taxes are a good thing. Taxes can work.

Re: What caused all the supply chain bottlenecks?

#144

Post by analognoise » Thu, Oct 28, 2021, 8:13 PM UTC

bluetwo wrote: post #77

evilotto wrote: post #33

He's right to point out that the obsession with RoE is a big part of the problem. He's wrong to suggest that the billionaire class and founders will solve the problem if we only trust them and let them keep their money. Founders have just as much incentive to optimize the excess out of the system, they just call it "disruptive innovation" by which they mean tweaking how the system works so that they can squeeze out p…

I don't think he is talking about tech founders. I think he is talking about mom and pop businesses of all types. Tech founders are a different breed.

As they constantly and insufferably tell us.

Whether we believe them is another matter entirely.

Re: What caused all the supply chain bottlenecks?

#145

Post by joe_the_user » Thu, Oct 28, 2021, 8:17 PM UTC

cmenge wrote: post #82

mfer wrote: post #60

Earlier quoted context omitted.

> I don't know if a slight price increase in graphics cards is the key issue to worry about at this point. The price increase in graphics cards isn't related to this. GMs trouble selling cars because they don't have enough chips to finish off the cars is a problem related to the pandemic and planning like the posts on Twitter note. The lack of new cars available has driven up prices on used cars. This is all supply c…

> The US has now outsourced most of the production of goods to places in other countries. I think that is the point (or one of the points): it's not just logistics and spare capacity - it's a much more complex set of issues. This isn't something accounting practices or "less greed" would solve, as seems to be implied in the Twitter thread. Would you have voted for a party that spent $1b annually on mask manufacturing…

Would you have voted for a party that spent $1b annually on mask manufacturing subsidies for masks nobody even bought?

I would have voted for a party with a program of "bring the manufacture of strategically crucial items back to the US and make it robust". This seems like it would even be Republican "bread and butter" and I don't see why either party had an issue with it.

Re: What caused all the supply chain bottlenecks?

#146

Post by The_Beta » Thu, Oct 28, 2021, 8:18 PM UTC

015a wrote: post #118

evilotto wrote: post #33

He's right to point out that the obsession with RoE is a big part of the problem. He's wrong to suggest that the billionaire class and founders will solve the problem if we only trust them and let them keep their money. Founders have just as much incentive to optimize the excess out of the system, they just call it "disruptive innovation" by which they mean tweaking how the system works so that they can squeeze out p…

I think his statement is that founder (and family) led businesses are the only businesses capable of building the shock absorbers necessary to weather hundred-year storms; not that they always will. By comparison, committee-appointed CEOs rarely, if ever, will, because they cannot.

It's not that they cannot. They don't have an incentive to do it.

If I'm being paid for my performance while I'm a CEO, why would I spend money today (and hurt my performance today) to fix a problem that MIGHT affect the company in 20 years

Re: What caused all the supply chain bottlenecks?

#147

Post by dragonwriter » Thu, Oct 28, 2021, 8:19 PM UTC

DevKoala wrote: post #141

> Only founder led companies and family owned businesses can stand up to the immense pressure from the dogmas of modern finance. > The proposed tax on unrealized capital gains will force founders to sell larger and larger pieces of their companies to pay the tax, until eventually they lose control of their businesses and turn them over to the Wall Street sharks to run their disastrous playbook. I agree with this argu…

> Love him or hate him, with a tax on capital gains someone such as Elon Musk would not have been able to drive Tesla to profits thus forcing the automotive industry towards EV's.

Yes he would have. One, because there is a tax on capital gains, and he did; you probably mean an unrealized capital gains tax, but... Two, it is quite possible (and explicitly a motivation of the proposed law, so impossible for any honest critic to overlook) to borrow against public tradable assets, and if they are gaining value fast enough that a 20% tax on unrealized gains would significantly erode your holdings you can do so at interest rates far below the value growth, essentially without limit (that's how people fund lavish lifestyles without taxes on unrealized gains already), so he would be able to use that method to pay taxes without any dilution of ownership.

Re: What caused all the supply chain bottlenecks?

#148

Post by bobdosherman » Thu, Oct 28, 2021, 8:19 PM UTC

evilotto wrote: post #33

He's right to point out that the obsession with RoE is a big part of the problem. He's wrong to suggest that the billionaire class and founders will solve the problem if we only trust them and let them keep their money. Founders have just as much incentive to optimize the excess out of the system, they just call it "disruptive innovation" by which they mean tweaking how the system works so that they can squeeze out p…

If I estimate a model to predict an anomaly using data that never has any realized anomalies, how well will that model do out-of-sample? While framing this as a bad unrestricted ROE maximization problem is a nice simplification, it's not clear that having everyone move to a restricted ROE maximization subject to keeping assets large enough to insure against some unforecastable shock is welfare enhancing. That could be a lot of wasted insurance.

I will give him credit for cleverly spinning this logic all into a pitch to kill the unrealized cap gains tax proposal!

Re: What caused all the supply chain bottlenecks?

#149

Post by acdha » Thu, Oct 28, 2021, 8:19 PM UTC

JPKab wrote: post #93

evilotto wrote: post #33

He's right to point out that the obsession with RoE is a big part of the problem. He's wrong to suggest that the billionaire class and founders will solve the problem if we only trust them and let them keep their money. Founders have just as much incentive to optimize the excess out of the system, they just call it "disruptive innovation" by which they mean tweaking how the system works so that they can squeeze out p…

The obsession with RoE is really just a major form of efficiency. Having things sitting around unused is a huge reason that US car companies got their asses handed to them by Toyota and their TQM/LEAN system they developed. People writing articles like this forget that it's not just Wall Street, but competitors who created the huge pressures for adopting JIT inventory systems. There's also the consumer. Are you willi…

> Having things sitting around unused is a huge reason that US car companies got their asses handed to them by Toyota and their TQM/LEAN system they developed.

It didn’t help but I think that’s more of a symptom of building shoddy products: part of why inventory backed up is that Detroit was producing cars which simply weren’t as good. Toyota didn’t have a shortage of demand, and neither did Saturn. If you make shoddy, poor-handling gas guzzlers, yes, you’ll underperform on sales. That doesn’t meant the only option is less inventory.

Re: What caused all the supply chain bottlenecks?

#150

Post by whatever1 » Thu, Oct 28, 2021, 8:20 PM UTC

jollybean wrote: post #133

whatever1 wrote: post #56

Earlier quoted context omitted.

“cause reduced private ownership of large companies, resulting in a reduced ability to handle 100-year flood events.” How the market speculation on the value of a company can affect its resiliency ? If tomorrow everyone sold Apple stock for 1 cent, why would Apple the company care ? Same revenue, same costs. Give me a break with the importance of the stock casino.

The assumption that stock prices don't matter, because company ABC doesn't necessarily depend on it 'for now' - is just wrong I'm afraid. If Apple crashed to 1 cent it would gut the entire market. Even just that crash alone, the amount of money wiped out, retiree savings etc., other companies would be valued lower and then the mass selloff would crush them as well. Apple may not need to 'raise money now' but it very…

One of the two is true:

1) The market value of a company is true, aka the owners of this company must be taxed for the real value growth in their portfolio (since it constitutes income), even if they do not sell

2) It’s a casino, a share is just a ticket that may worth nothing or a billion. In that case we don’t need tax protections. The owners of the tickets must be taxed only when they cash out. The governments should actively disincentivize gambling into this and ensure the pensions of its citizens by funding public projects and enabling future growth.

You cannot have it both ways.