Crony capitalism may be cannibalizing productive capitalism in the U.S. • Hacker News Board

Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.

#251

Post by candiodari » Sun, Jun 25, 2017, 1:00 AM UTC

Spooky23 wrote: post #246

harryh wrote: post #202

Earlier quoted context omitted.

While wealth is more concentrated in the US, access to capital is probably at an all time high. Interest rates on loans are tiny and equity markets have never been deeper.

That's not really true at all. Many companies, especially medium sized businesses are starved for capital as banks are consolidated and are largely out of many types of lending. I had a friend who ran a successful manufacturing company who was forced to shut down production... not because of competition or cost but because of the inability to get working capital. As the regional banks in our region got swallowed up,…

You and the parent post are both right. There's just 2 things:

1) we regulated that banks have access to capital (ie. we created the FED that will loan almost unlimited amounts to them. And of course we bailed out "too-big-to-fail")

2) we outlawed that banks loan money to anyone but the government, or very big companies. After all, since they always lost the money, we've imposed more and more rules about who they can lend to. (always lost it, I might add, by lending it to government or big companies when we're talking large amounts, but that is conveniently ignored of course).

Of course who they can lend it to means effectively not you or me.

Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.

#252

Post by candiodari » Sun, Jun 25, 2017, 1:10 AM UTC

i386 wrote: post #222

harryh wrote: post #145

Earlier quoted context omitted.

- There is plenty of free capital in the economy. More than ever really. To the point that the "capital glut" is a regular topic of discussion in economic news. - I don't know how old you are but both Clinton and Obama significantly increased taxes on the rich. Federal tax receipts as a % of GDP are fairly constant going back to WW2. https://fred.stlouisfed.org/series/FYFRGDA188S

Increasing taxes does very little without closing loopholes for minimization.

Unfortunately the big loophole that matters is essentially "allow international trade". I doubt even you want to give that one up.

Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.

#253

Post by candiodari » Sun, Jun 25, 2017, 1:11 AM UTC

narrator wrote: post #140

zackmorris wrote: post #39

I think the great problem of our time is that the challenges get easier to solve every day but we mostly spend our time making rent. And not the kind of rent mentioned in the article - just plain old fashioned too-much-month-not-enough-money kind of rent. When we’re desperate, we grovel and do whatever work we need to to survive. This is akin to how researchers spend inordinate amounts of time applying for grants rat…

A lot of that tax money goes to pay interest payments on government bonds which are owned by the rent collector class. The more money the government borrows to pay for health care and such, the more money the rent collectors make. They've effectively hijacked the progressive impulse to create a way for their vast wealth to earn interest. The regular bond markets would never be able to soak up such enormous amounts of…

If you call pensioners "the rent collection class" (which to an extent is true), then yes. But pension funds are the big owners of government bonds.

Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.

#254

Post by candiodari » Sun, Jun 25, 2017, 1:36 AM UTC

HarryHirsch wrote: post #151

theseatoms wrote: post #98

Earlier quoted context omitted.

Yes. Macroeconomics is secular theology. The global economy is so vast and interconnected that basically none of the theory can be scientifically tested.

Apparently at Renaissance Technologies they love hiring astronomers because as an astronomer you are used to modelling systems that are completely beyond human scale based on data from observations that cannot be repeated. No one would argue that astronomy isn't a science. Traditional university macroeconomics is a different beast. Comparison with astrology is apt.

It might have something to do with that the education for being an astronomer starts with years of postgraduate pure mathematics ...

Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.

#255

Post by candiodari » Sun, Jun 25, 2017, 1:37 AM UTC

cestith wrote: post #138

BFatts wrote: post #108

Earlier quoted context omitted.

Software isn't protected by patents - it's just IP laws as well. You can't patent software in general. Maybe the look and feel of your product, but not the functionality.

In the US methods of doing things can be patented. That includes software. Look up MP3, LZW compression, or perhaps IBM's 2100 algorithm patents over the fifteen years from 2001 to 2016. It's being narrowed, but it still exists. Until rather recently many courts would recognize "do well understood process X, but on a computer" as patentable. http://blogs.gartner.com/doug-laney/patents-for-algorithms-h... https://news…

Maybe it's just me, but as far as my experience goes, the App store and Google Play, and to a much lesser extent Steam have done much, much more killing my ability to make a profit on software than patents ever have.

Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.

#256

Post by candiodari » Sun, Jun 25, 2017, 1:58 AM UTC

saas_sam wrote: post #37

It's interesting to me how this article frames crony capitalism as a use or abuse of government by corporations, almost as if the government is a victim. But it's the government that has all of the power in this context. There's something to be said for corporate money influencing elections, but even there it's elected officials who are deciding on policies after getting there, and if they are making decisions based…

What is more worrying is that all the suggestions in this article are that either government needs to grow, or "just needs to change". More tax. And generally more.

More tax, of course, will worsen this problem as government spending on large companies only is exactly the problem.

Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.

#257

Post by candiodari » Sun, Jun 25, 2017, 2:20 AM UTC

Spooky23 wrote: post #247

harryh wrote: post #212

Earlier quoted context omitted.

That is definitely one of the big mysteries of the modern era. Personally I subscribe to the hypothesis that we're just running out of low-hanging fruit. As humans developed better knowledge of biology, chemistry & physics there were a whole host of relatively easy to invent items from the steam engine, to antibiotics to air travel to the transistor and modern electronics. These were world changing. But now we're mos…

My guess is that we're turning everything into little services and few people understand the big picture. By squeezing pennies out of lots of things, we miss the dollars that could make positive change. Look at corporate IT as The gold standard of fail. We design complex systems to allow them to be sourced out (is ITIL/ITSM), and then are surprised when we have built a monstrosity that doesn't really work. You see th…

What about the other elephant in the room ? We appear to be in a second demographic transition. This time instead of going from high birthrates to low, we're going from replacement birthrates to shrinking population.

This then results in the need for increased scale, increased productivity, and indeed, the need for innovation disappearing altogether.

Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.

#258

Post by xiaoma » Sun, Jun 25, 2017, 6:13 AM UTC

balls187 wrote: post #164

xiaoma wrote: post #56

Earlier quoted context omitted.

Since you seem knowledgeable about this, what is the amount of credit card debt available to the median American above what they already carry?

Above what they carry is irrelevant. American's can get themselves on average up to 5-7k of debt[1], it's reasonable assumption that if one was determined, they could get $10k in credit. https://www.valuepenguin.com/average-credit-card-debt

I can say from first-hand experience a few years ago that your assumption—which you presented as fact—is false.

Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.

#259

Post by sharemywin » Thu, Jun 29, 2017, 12:50 PM UTC

bostonscott wrote: post #203

sharemywin wrote: post #184

Earlier quoted context omitted.

1. Competition drives down prices and profits. 2. Restated, monopolies earn more short term profits than companies in a competitive market. 3. stock investors look to maximize short term profits. 4. stock investors are offering a premium for monopolistic companies. 5. The stock market is rewarding this behavior without government intervention. "starving the beast" will just feed another beast.

1. Half true. Competition drives down prices, but not necessarily profits. For example, you can lower your prices using innovation, by achieving economies of scale, etc. 2. Over long-term, probably true. In short-term, not true. Often monopolies are formed and initially sustained by keeping prices aggressively low. 3. If you said stock investors look to maximize profits, i'd agree. Short-term? Not necessarily. Value…

I'm not arguing that bad government regulations and rules don't create monopolies, but monopolies are also created through natural means and that still doesn't change my general premise.

stock investors are offering a premium for monopolistic companies and rational companies management will combine companies to eventually become a monopoly to maximize profits and stockholder value.

My basic argument is the only reason companies don't more aggressively try to become monopolies is because government regulation(anti-trust laws) deter it.

Am I arguing for more corporate welfare absolutely not. Am I arguing for more regulation generally no. more effective regulation yes. More enforcement of current regulation yes. Both of which require more qualified effective people, which usually involves investment.

For having such a good understanding of market economic your solution is a little half baked.

The problem with this country everyone wants more or less taxes when the focus should be on more effective, transparent use of the countries funds.

There are somethings you can't just throw money at and it will fix it. Well, that's true in the negative as well.

Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.

#260

Post by bostonscott » Thu, Jul 06, 2017, 12:01 AM UTC

sharemywin wrote: post #259

bostonscott wrote: post #203

Earlier quoted context omitted.

1. Half true. Competition drives down prices, but not necessarily profits. For example, you can lower your prices using innovation, by achieving economies of scale, etc. 2. Over long-term, probably true. In short-term, not true. Often monopolies are formed and initially sustained by keeping prices aggressively low. 3. If you said stock investors look to maximize profits, i'd agree. Short-term? Not necessarily. Value…

I'm not arguing that bad government regulations and rules don't create monopolies, but monopolies are also created through natural means and that still doesn't change my general premise. stock investors are offering a premium for monopolistic companies and rational companies management will combine companies to eventually become a monopoly to maximize profits and stockholder value. My basic argument is the only reaso…

Can you provide an example of such a monopoly, that you contend has been created through "natural means?"

It's a sincere question. I can't think of a single example.