Owl 69/70/75
Just an old rugby coach
Posts: 80,655
Joined: Sep 2005
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I Root For: RiceBathChelsea
Location: Montgomery, TX
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RE: Our decadent society
(03-10-2020 11:11 AM)JRsec Wrote: (03-10-2020 07:27 AM)Owl 69/70/75 Wrote: There is a term used in Australia, "tallest daisy syndrome," referring to the feeling that anyone who has achieved greater success and wealth has done so by taking from the rest, and needs to be cut down to the same size as everyone else. In a closed system, perhaps the only way to achieve wealth is to steal it. But an open loop system allows for the creation of wealth, and all benefit.
Take a transaction with WalMart, since the Waltons seem to be favorite whipping boys of the left. Say WalMart is selling a bar of soap for $2. You want the soap more than you want $2, and WalMart wants your $2 more than they want to keep the soap. So you buy the soap and the Waltons got richer, but you are better off too.
If we are to improve as a society, we have to value innovation and entrepreneurship. That means that we have to embrace the concept that is you build a better mousetrap, then it is entirely appropriate for you to experience financial gains as a result. Otherwise, people lose interest in trying to build better mousetraps.
I have often said that I would never want to live in Utopia. Why not? Because in that society, no innovation or improvement would ever happen.
The assumption of your first paragraph is an aberration of perspective. When business was contained just within the U.S. opening markets made it appear to be true. But now that trade is global we are finding just how closed of a system that is too.
Your Walmart illustration leaves me flat as well. When Sam Walton was alive and the goods were made in the U.S. and his chain of stores thrived because of sound employee / employer relationships the image of the company was built. When it became a major corporation and Sam died and they discovered they could make more with overseas sweatshops making nails and screws, and clothing and shoes, and cheaper soap, and when they discovered that via the lobby they could get a 50% reduction on local property tax to locate a store, and get to keep the state's portion of the sales tax in order to build their buildings, then it became a matter of power and not better or cheaper soap. They cleared all of their normal overhead in locating courtesy of the taxpayers of the state, who never lent their approval which was merely bought at the state level through campaign donations. Then Wal Mart could sell that bar of soap made overseas and in a building they didn't pay for, and on property they only paid half the taxes on, while local private business men who had to buy their own buildings and pay the full measure of sales taxes, and who didn't have sweat shops overseas to make cheaper soap, had to try to compete with a 13 point disadvantage for actually paying their taxes and supporting our ways of life.
And because Walmart did it, Home Depot, Lowes, Bed Bath and Beyond and every other big box chain learned to do it as well and because of that the citizens of the communities in which the stores are located all paid more in property taxes to support the emergency services and schools that were once supported by private business. So in the end that damn bar of soap cost the consumer far more than they ever realized. And as these companies got larger and more profitable they bought power at the Federal level and what once looked like an open market just became a global market that was just as closed as the national market once was and the lobby money instead of merely corrupting state representatives started corrupting Federal representatives and to the point that the common man in the local community no longer has a voice in state or Federal government.
And the Tech and Defense industries dwarf in their positions and power the Walmarts of the world.
And that sir isn't just syllogism, but the damned reality of that $2 bar of soap. And it is the real life conclusion of a lousy analogy.
With respect to the bolded part, is it WalMart's fault for taking advantage of that situation, or is it the fault of whoever created that situation? As Peter Zeehan notes, at Bretton Woods we bribed up an alliance to win the Cold War by promising the rest of the world easy access to our markets (without reciprocation) and protection of their supply chains, courtesy of the US Navy (the only fleet left afloat in 1945), in exchange for their agreement to do whatever we told them to fight the Cold War. That paradigm worked well for about 45 years--both US and our allies experienced significant economic growth and relative peace. It had some flaws--the Royal Navy's adherence to our direction that they become an ASW force in the GIUK gap left them ill prepared for the Falklands--but they muddled through there, and on the whole it was very successful. Only problem, it worked too well, and when the Berlin Wall came down, we didn't have a plan B. We had built a foreign policy based upon security instead of economic concerns, so we sacrificed a lot on the economic side to beat the Russkis, but that wasn't well designed to work after events of 1989-94 or so.
Ross Perot was wrong on a lot, but he nailed a few things. In the post-Cold-War, economic power was going to become more important than military power, and we needed to adopt some measures to increase our economic power. We haven't migrated to a new paradigm yet. We can't match the labor costs of a number of third world countries. But they can't match the productivity of US workers, and if we oriented our education system to place more emphasis on vocational skills, that gap would shift even more in our favor.
There are places that pay starvation wages and don't observe much in the way of environmental and workers safety regulations. We still have to compete with those places, but not by doing what they do. We have to maximize the benefits of what we do. We have the largest market in the world, and we can broaden that with trade agreements. We can implement a comprehensive welfare safety net, which reduces the risk to innovators and entrepreneurs and also reduces or eliminates a major health care cost to US businesses, but if we pay for it by overtaxing the "rich" (and I would define overtaxing as significantly higher than worldwide rates) we are simply going to drive away the very investment, growth, and jobs that we want. We can have the best trained work force (and that is vocational training, not everybody going to universities), and make up for cost with productivity. We can have the best infrastructure. We can have more favorable tax laws. We can implement a consumption tax that acts as a tariff on imports and a subsidy on exports. Those are things that we can do to make ourselves more competitive and seriously grow our economy even more.
I disagree with Perot on NAFTA. He was actually a big free trade proponent. He spent a ton of money and called in a bunch of favors to get the area around Alliance Airport (north of Fort Worth, near the NASCAR track) declared a free trade zone. Problem was that NAFTA greatly reduced the economic advantage of Alliance, so he opposed it.
(This post was last modified: 03-10-2020 12:38 PM by Owl 69/70/75.)
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