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Federal Reserve raises rates by 0.75%

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Re: Federal Reserve raises rates by 0.75%

#581

Post by jcalvinowens »

salawat wrote: post #514
jcalvinowens wrote: post #465

Earlier quoted context omitted.

> Cost of taxes just gets passed on to the consumer > It's priced in. That's just not true. It can only be true if you assume all sellers collude not to lower prices. In a free market, one seller might eat the tax, undercut the rest, and net more money at a lower profit margin by attracting business from competitors. That risk generally prevents taxes from being fully priced in.

Today I charge $5 to sell a widget. $4 to make the thing, get it to you, and pay all taxes inherent to all the jurisdictions involved in producing and selling the thing to you. Let's even assume I'm the most amazing business man, and I've trimmed the process down to the absolute minimum possible cost per unit by nailing every optimization under the sun. and $1 profit to come out ahead. Now. That $1 profit is totally…

The scenario you present is so oddly specific and contrived I don't really know how to respond to it.

The fact that you mention investment potential as a downside of eating the tax is really amusing to me: is it so hard to imagine a sustainable business that actually makes money? Pumping up the numbers to attract investors is not something that matters to a well established profitable business. Half the economy is small businesses, and the owners tend to be a lot more pragmatic than boardrooms.

> While I think you can cross your fingers and hope a bunch of people famous for being cutthroatly pragmatic will out of the goodness of their heart eat a tax for you...

You've completely missed the point. What I'm pointing out is that, sometimes, cutting prices is the cutthroaty pragmatic choice, because undercutting a competitor may net you more total money at a lower profit.

That moderates the effect of taxes, and prevents them from being fully priced in. Even if nobody actually does it, the risk that somebody might affects the market.

Demand for what you do/sell is what fundamentally limits how much money you make, not profit margin. Increasing demand enough can offset decreasing margin.

Arbitrary example: Walmart can absorb a local tax increase which other small local retailers can't because Walmart's tax burden is spread across many tax localities. They get more business and make more money. It isn't goodwill, it is rational.

Just look at tariffs we've seen in the past few years: did all prices instantly jump by the amount of the tariff? Nope.

Re: Federal Reserve raises rates by 0.75%

#582

Post by ericns »

millimeterman wrote: post #474
ericns wrote: post #445

Earlier quoted context omitted.

Hmmm, Moody's where do I remember that name from? Oh ya here it is - https://www.theguardian.com/business/2017/jan/14/moodys-864m... Economics is the lies told by some middle class assholes with a degree and/or credential that get paid just enough by upper class assholes to trick low class rubes.

> Economics is the lies told by some middle class assholes with a degree and/or credential that get paid just enough by upper class assholes to trick low class rubes. Why does nonsense like this get parroted so much? Economics is as much a science as any other social science. Which is to say that it's certainly imperfect and is subject to social problems surrounding science (e.g. the replication crisis), but it's sti…

It's parroted because it's make sense. Every 'imperfection' of an economists idea has led to further concentration of capital in the hands of incumbents. Many of these incumbents have already failed and only exist by way of heinous regulatory choices, only to be bailed out because economists said its better this way or things will be worse (take hostages much?).

My critique is that the short term is all that matters because accountability and culpability aren't available to institutions and individuals because they are too important. There is seemingly an infinite amount of labor arbitrage to make when you can make horrible medium/long term capital decisions that appear good because of short term market gains, all because the fix (govt bailout) is in.

Does you think capital has product value without the application of technology or labor? Why is the most important aspect of the equation the least valued?

Re: Federal Reserve raises rates by 0.75%

#583

Post by hackerfromthefu »

88913527 wrote: post #452
afterburner wrote: post #119

Earlier quoted context omitted.

The piecemeal approach ensures they avoid massive shocks and over-correction. The cure should not be worse than the disease.

Where was this thinking when it came to applying trillions of dollars in monetary policy? We're supposed to cautious with interest rate hikes, yet free with the money printer. Quite the double standard I'd say.

When you drive a car you don't use the accelerator and the brake in quite the same way ..

Re: Federal Reserve raises rates by 0.75%

#585

Post by millimeterman »

rrrrrrrrrrrryan wrote: post #577
millimeterman wrote: post #474

Earlier quoted context omitted.

> Economics is the lies told by some middle class assholes with a degree and/or credential that get paid just enough by upper class assholes to trick low class rubes. Why does nonsense like this get parroted so much? Economics is as much a science as any other social science. Which is to say that it's certainly imperfect and is subject to social problems surrounding science (e.g. the replication crisis), but it's sti…

Any economic thought a bit further left than left-of-center gets quickly deemed "not economics." Phrased differently, the field of economics dismisses any economic thought that doesn't serve the interests of capital and the people with the capital. I don't think people take an issue with economists' predictions as much as their prescriptions. Younger econ doctoral candidates would do well to spend some time hanging o…

> Any economic thought a bit further left than left-of-center gets quickly deemed "not economics."

I would encourage you to listen to actual economics experts and academics, not right-wing hacks dressed in economic cosplay. Despite their posturing, libertarians and free-market fundamentalists are just as divorced from economic reality as anyone else.

Economists in the US actually skew significantly Democrat[1] and surveys of economists on various topics generally show left-of-center leanings[2]. It's worth noting though that the political leaning of an economist need not indicate the quality of their research and plenty of good results have come from economists with atypical views.

1. https://onlinelibrary.wiley.com/doi/10.1111/j.1536-7150.2007...

2. https://www.igmchicago.org/igm-economic-experts-panel/

Re: Federal Reserve raises rates by 0.75%

#586

Post by millimeterman »

ericns wrote: post #582
millimeterman wrote: post #474

Earlier quoted context omitted.

> Economics is the lies told by some middle class assholes with a degree and/or credential that get paid just enough by upper class assholes to trick low class rubes. Why does nonsense like this get parroted so much? Economics is as much a science as any other social science. Which is to say that it's certainly imperfect and is subject to social problems surrounding science (e.g. the replication crisis), but it's sti…

It's parroted because it's make sense. Every 'imperfection' of an economists idea has led to further concentration of capital in the hands of incumbents. Many of these incumbents have already failed and only exist by way of heinous regulatory choices, only to be bailed out because economists said its better this way or things will be worse (take hostages much?). My critique is that the short term is all that matters…

> It's parroted because it's make sense. Every 'imperfection' of an economists idea has led to further concentration of capital in the hands of incumbents.

Has it? Are you talking about actual economics research or conservative politics wrapping itself in free market fundamentalism disguised as economics? It's understandable but endlessly frustrating how politics has convinced the public that economics is a bunch of libertarian nonsense.

In reality, economists actually skew significantly left of center (by US standards): https://onlinelibrary.wiley.com/doi/10.1111/j.1536-7150.2007...

Re: Federal Reserve raises rates by 0.75%

#587

Post by Valakas_ »

swat535 wrote: post #559
Valakas_ wrote: post #547

Earlier quoted context omitted.

Because after 30 years of paying rent... you own nothing. After 30 years of paying a mortgage... you own land and a building.

OP said that they don't view housing as an investment thus owning the "land" should absolutely not matter. They might as well rent if its cheaper.

AFAIK an investment is when you put money into something expecting it to increase in value.

Buying a house just so that at the end you own it is not an investment, that's just a purchase with a loan.

Re: Federal Reserve raises rates by 0.75%

#588

Post by cbozeman »

Barrin92 wrote: post #337
Seanambers wrote: post #298

Earlier quoted context omitted.

In Norway the state is rich. The people not so much. Best way for Norwegians to feel rich is to travel abroad.

Norway's state oil&gas revenue pays and subsidizes pensions, tuition free education and healthcare while actually growing rather than shrinking most of the time. Unless your definition of feeling rich is the government buying you a lambo I'd feel very rich in Norway based on services provided at no or little cost alone.

Do you have more than me?

Then you're rich and I'm not.

This is how almost every single human being alive right now or alive in the past thinks. I have a lifelong friend who through a combination of luck, hard work, and being a legitimate genius is now wealthy ($10,000,000+ net worth and climbing).

However, he and his wife insist they are not 'rich'.

If you own a penthouse in a 30 story condominium and a lake house on the Great Lakes and haven't flown less than first / business class in the past 10 years, you're rich by any nation's standard.

Re: Federal Reserve raises rates by 0.75%

#589

Post by mbfg »

nemo44x wrote: post #381
JaimeThompson wrote: post #330

Earlier quoted context omitted.

>75% of the country contributes nearly nothing but complaints. Only if you ignore sales tax, car tax, property taxes, and other such taxes. The top 10% typically included major corporations but without a source I don't know if the percentage you use does.

Sales tax, property tax, fees, etc are a rounding error essentially and are local. At a Federal level they are meaningless. Saying that I'd be all for a Federal sales tax of 20% if we could nearly eliminate income taxes.

A much higher percentage of what poor people buy is necessities compared to their salaries. They have much less choice as to buy or not. If a rich person were to buy at the rate a poor person does, it would be almost completely on frivolity. Sales taxes, imo, are especially targeted at the poor.

Re: Federal Reserve raises rates by 0.75%

#590

Post by infra_ »

jmyeet wrote: post #315
whiplash451 wrote: post #292

Earlier quoted context omitted.

The Norway example is really annoying. It keeps coming back as an example to follow, when everybody knows it is a complete outlier that cannot be reproduced elsewhere. Norway is sitting on a gigantic pile of offshore gas that it uses to generate massive profits that go into a huge fund they don't know what to do with, all of that for a 5M population that drowns into social programs. There is literally no country in t…

The US government only takes a 12.5% royalty on profits from oil and gas extraction on public land [1]. Norway has a petroleum tax of 27% and a special tax of 51% for a total of 78% [2] in comparison. While we would generate less tax revenue per capita than Norway would, that's not the point. The point is the state should take a much larger share of the profits of extracting natural resources that state owns. [1]: ht…

The royalty rate is on production, not profits. The government takes 12.5% of all produced oil and has the right to the revenues. This is a much more burdensome tax than a tax on profits in that the government gets paid before the oil company, even if the oil company loses money on their investments. That’s why it’s not taxed at standard corporate tax rates.
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