Effects of Gambling on Economy

[The Dude]

I have been hearing recently from quite a few people how damaging casinos are for local economies, and how much they just make the poor poorer. My gut reaction (and experience from being in casinos) is that these statements are based on false assumptions.

Does anybody have any references to specific studies done on the effects of casinos on local economies? I would be very interested to read what the real numbers are. After all, if I'm going to challenge their assumptions, I have to admit the possibility that I might be wrong.

[The Dude]

Come now, somebody out there has to know of one, right? David, Mason, anybody?

[George Rice]

Try contacting a casino. I'm sure they can supply all kinds of studies, some of which may be unbiased. /images/graemlins/wink.gif

But seriously, casinos might have such studies. Also is areas where there was debate on the subject before allowing casinos, the relevant government agencies would have a record of such studies. Finally, try searching the web.

[Carlos]

A couple of ideas.

The best place to search for serious economic literature is a database called econlit. I'm sure it is accessible from almost any university library. If you're not an economist you probably won't be able to read through the articles but the first couple of pages will typically give you a brief summary.

Journal of Economic Literature has a lot of not too technical surveys of different branches of economics. They may have had one the economics of gamling.

There's a book called "The armchair Economist" by Steve Landsburg that tries to debunk some common misconceptions about economics. I can't remember but he may have a chapter on gambling.

Search on the internet.

Carlos

[Lori]

Found this link on the net, I have no idea if the guy knows his stuff or not, but he does provide a bibliography that might help and he appears to quote useful info.

Effects of Gambling (http://www.wowessays.com/dbase/af4/lvw90.shtml)

Lori

[eastbay]

[ QUOTE ]
Found this link on the net, I have no idea if the guy knows his stuff or not, but he does provide a bibliography that might help and he appears to quote useful info.

Effects of Gambling (http://www.wowessays.com/dbase/af4/lvw90.shtml)

Lori

[/ QUOTE ]

The first reference is from "U.S. Catholic", which appears to be some kind of journal. Some people might consider that a credible source, I suppose. But it wouldn't be at the top of my list for objective information about an activity long considered "sinful."

[Lori]

[ QUOTE ]
The first reference is from "U.S. Catholic", which appears to be some kind of journal. Some people might consider that a credible source, I suppose. But it wouldn't be at the top of my list for objective information about an activity long considered "sinful."



[/ QUOTE ]

Ah, but doesn't the Playboy reference cancel that out /images/graemlins/blush.gif

Some of the other references (The Economist) seem to be decent sources though.

Lori

[Ace-Korea]

The author wrote, "99% of compulsive gamblers commit crimes, and 100% of compulsive gamblers become physically abusive." How can he believe such a statement? It's just amazing to see what people believe no matter how ridiculous they sound. I wouldn't be surprised if most of surveys conducted are way off from the truth.

[Ace-Korea]

I believe it's the lower-class and upper-class who gamble the most, not the middle-class. (By the way, when I say 'upper-class' I mean people who are really up there; say the top 10% of the population.)

The lower-class gambles because they are more willing to take a risk than the middle-class or the upper-class. They don't have much to lose, and if they win, it will be relatively A LOT to them. Also, the lower-class is more likely to be superstitious and rely on luck too much, making them wanting to gamble.

The upper-class, on the other hand, has the LEAST marginal value for money. Bill Gates loses $100 in Las Vegas one night? Big deal. The upper-class is more likely to gamble for social/entertainment reasons.

But the middle-class, they don't gamble as much as the lower-class or the upper class. It's because their lives won't change much even they win some. At the same time, they don't have enough money to throw away at casinos. It's no wonder lawyers and doctors don't gamble.

So I guess it could be true that casinos take money away from the poor, but would casinos locate themselves in poor neighborhoods? I don't know.

Also, when the local economy is down, politicians seem to think that legalizing casinos is one way to bring the economy up.

I'm interested in other people's thoughts on this topic.

[Mike]

Can't help with real data. Common sense says any area has X spendable dollars in it by X number of people. All that changes is how the money is spent.

I think a local casino gives back much more than say Best Buy to the local economy.

[Nottom]

Have you looked at the average Vegas Tourist? They are mostly middle-class.

Of course a tourist who gambles is definately a lot different than a local, so your hypothesis might be quite true in that case.

[ACPlayer]

Try the following:

Go to www.google.com (http://www.google.com)
Search for "gambling impact"

You will see results from National Gambling Impact Commission and lots of other sites.

Good luck.

[The Dude]

For anybody else interested, I have found one study so far that is exactly what I'm looking for. It is very methodical and detailed and seems to have a balanced approach. It was conducted by the Australia Productivity Commission at the request of the government.
Read the 60 page summary here. (http://www.pc.gov.au/inquiry/gambling/finalreport/summary.pdf)

[adios]

I guess Nevada would be a bad example of gambling being bad for the community /images/graemlins/cool.gif.

[AmericanAirlines]

Hi Adios,
On a serious note... the entire gambling industry really does nothing but cause money to change hands (well after the building are all built etc. there's at least some value created there).

Vegas is different from "local casinos" in an important way.

Vegas is a tourist destination... thus money from outside the local economy is brought in. (In some sense all growing economies have to do this. Shuffling money around doesn't produce growth. Also, growth cannot continue forever... but that's another discussion on "how can we build an infinitely sustainable economic model?".)

In the local economy scenario, money will just be siphoned off to the richy riches that own the casinos.

The folks in Colorado recognized this and recently voted down a "slots at the race track" ammendment.

Sincerely,
AA

[AmericanAirlines]

Well, you've hit an important point in a sidewise manner.

The rich do what they want because the can afford to. The poor do what they want because they don't care.

Consider children and wedlock. Richie Riches have kids and divorce when they want because the can afford it. The poor have welfare.

That leaves us middles to fund the whole thing. The rich exploit the middle through profit on goods and profit on labor and tax structure. They set the prices for goods and salaries and have the most tax loopholes.

The poor exploit the middle through welfare and tax structure.

So that leaves the middle stuck with such concepts as "monogamy", "responsible spending and saving" etc. while the the other two groups party it up. The middle being brainwashed to be "responsible worker bees".

Taken from 1 10,000 ft view this is perfect. The richy riches setting the rules take from the middle and give some to the poor. That way the middles never get into the upper class and cause them trouble. And the lowers never get quite hungry enough to revolt.

Can you say, "mouse in a wheel"?

I knew that you could.

/images/graemlins/grin.gif

Sincerely,
AA

[The Dude]

AA,

I can't help myself but correct you on several points.

[ QUOTE ]
... the entire gambling industry really does nothing but cause money to change hands (well after the building are all built etc. there's at least some value created there).

[/ QUOTE ]
You're ignoring the entertainment value of gambling. If you're willing to say this about gambling, then you must say the same about movies, theatre, musical concerts, and other elements of the entertainment industry. Those who own the casinos generate wealth by providing a service to those willing to pay for it... in theory, that is. In reality, you can't put gambling in the same box as other forms of entertainment, because of its adverse affects on so many. But you cannot deny its entertainment value.

[ QUOTE ]
Richie Riches have kids and divorce when they want because the can afford it.

[/ QUOTE ]

You should read the book "The Millionaire Next Door." It is the largest and most comprehensive study ever done on millionaires in the U.S. Those whose net worth is over $1 million have significantly lower divorce rates than the rest of the population. So many of your assumptions about those with money will be shattered. I know mine were.

[ QUOTE ]
The rich exploit the middle through profit on goods and profit on labor and tax structure.

[/ QUOTE ]

So we should prevent rich people from employing others or putting mark-ups on products? Sounds like a good business model to me! /images/graemlins/confused.gif

[ QUOTE ]
They set the prices for goods and salaries and have the most tax loopholes.

[/ QUOTE ]

I used to work in sales for a tax firm. There are countless legal and legitimate tax reduction opportunities for middle and lower class Americans. The problem is we hardly ever take advantage of them. To say that middle class Americans are not able to qualify for tax breaks like the rich are is simply not true. In fact, the more money you make, the harder it is to keep your income tax expense at a reasonable percentage of your gross income.

Now, I'm not rich, nor do I have anything against taxing those who are. But your statements simply don't fit with the way things really are in this country. Sorry to burst your bubble.

[clovenhoof]

No, that's not quite right. There's another variable in the mix that gambling affects in a positive way -- velocity, or the speed at which money is transfered from one person to another. While there's only X amount of dollars to be spent, the presence of gambling provides an extra outlet for spending that separates some people from their money who otherwise would have saved it, or spent it on something that sends it into the economy at a slower rate, like paying off a mortgage or investing in a GIC or something.

Gambling also results in far more money going "back" into the economy than, say, Best Buy, because a big chunk of bets waged get transfered to other players, who win (at least temporarily). I believe there's little dispute that gambling winnings are generally treated like windfalls, and get spent on stuff that the person wouldn't have bought in a more responsible manner (like, saving it, then spending it once enough money to buy the widescreen tv has been accumulated.)

'hoof

[The Dude]

Good point! The number of times money changes hands in a year does affect the growth of the economy. I had not considered that, but you are definately right.

[Copernicus]

[ QUOTE ]


Taken from 1 10,000 ft view this is perfect. The richy riches setting the rules take from the middle and give some to the poor. That way the middles never get into the upper class and cause them trouble. And the lowers never get quite hungry enough to revolt.

Can you say, "mouse in a wheel"?



[/ QUOTE ]

Should you change your name to "Marxist Airlines"? Sure you should. On your way to an economics lesson.

[J.R.]

Many contend GDP = Money supply times velocity.

[J.R.]

Please don't open this pandora's box, I have been down this road before, and this one is quite persistent.

[adios]

Hi AA,

First of all in a free market system, consummers are presumed to act in their rational self interest. Second of all in a free market system, both parties in an economic transaction are presumed to benefit. The casino owners benefit by making money and the gamblers overall gain excitement and fun from their gambling. Casino owners pay taxes too. Do they sell lottery tickets in Colorado?

adios

[AmericanAirlines]

Hi AndrewP,
Hate to say it, but your societal brainwashing is showing. Surprising for a poker player. But then a lot of folks in here sound like you. AndyFox comes to mind at once.

I guess you could call the gambling industry entertainment. The industry does. In fact they call it "Gaming".

I think Benny Binion said, "The only real *gambling* game is poker." But not sure there.

Yes I do lump Hollywood, and especially Pro Sports in this category as well. Come on, what's the intrinsic value of Tiger Woods holing a putt vrs. what a surgeon does? About nothing far as I can see. The PGA tour is just an engineered spectacle to cause money to change hands. Not to worry, if I could be a celeb, I would be. They have life by the a$$ compared to the working classes.

I have read "The Millionaire Next Door". Though that group is well off, that's not who I mean by Richie Riches. I mean the Jupiter Island, Wall Street, Donald Trump, Hollywood Celeb types. They can move in and out of marraiges at will because they can afford to.

However, if there divorce rate is less... it just proves out that money helps to make relationships more interesting, now doesn't it? All that "money doesn't matter" stuff is just pattently false up to a point. (E.g. money ultimately wouldn't make up for spousal abuse. However, I did hear one woman say... "well he doesn't treat me too well... but he is an osteopathic surgeon". So don't ever sit there and believe Wealth does not equal greater Social and Behavioral Freedom. Because *it does*.

Ah that old business model thing. Profit, etc.

What we should do is build an economic system where everyone can live as the rich do, and let no one be another's "master"...er ah... "boss" or "slave"...er ah... "employee".

About the tax thing. The problem is... the rich have the money to hire people to know the tax breaks.

Seems to me the system should be so straight forward that I don't need a specialist to find my tax breaks. How about a flat tax? Sound good to me.

But then the Tax Biz is another one of those profit making games perpetrated by those who benefit from it.

Sorry to "burst your bubble"... but you are supporting the status quo... which absolutely, inarguably has been tilted toward the Richie Riches from at least the time of he Founding Fathers.

"We can't have a true Democracy because the poor would vote all the money out of the Treasury"... Remember that quote.

Gotta keep them stupid masses under control, right? "Tyranny of the Masses" and all that, you know.

Now let's get back to how "profit" is a rip off for the buyer.

So how does profit lead to problems? Well actually it's the "profit motive".

As Machiavelli pointed out... the need to provision is such that we never know how much is enough... so we do so endlessly. When two folks doing the same colide... War. Perhaps this is what's called Greed. And perhaps it's biologically ordained.

Reduced to modern terms this is chasing profit. Which is codified as money.

We all believe we have a right to a "net profit". In other words we are entitled to more than put into something when we sell it.

But let's reduce that back to barter. That's the equivalient of saying "Hey I'll give you 1 loaf of bread for 1.5 loaves of bread."

Essentially it's absurd.

So you say... "But I'm a bread wholesaler... I have to profit."

The other guy says "Yeah Right".

So going back to money... The "fair price" for something is *exactly the cost to bring it to market". Any excess beyond that is a ripoff to the buyer. (The idea of fair price is essentially embodied in the Black-Scholes concept for option pricing. It essentially seeks to establish the price for an option where neither buyer nor seller profits over the long run. So the game in Options trading is to make the *other guy* overpay for his side of the trade... and thus "make a profit".)

But since "Everyone has to profit" we get into a never ending cycle of trying to create "growth" along with numbers games like "inflation".

But think about it... When the whole world is selling as much as it can to everyone possible... where do we grow to next? Do we sell stuff to the green men on Mars? Do we continue to burnt the planet out?

I think you can see where that leads.

Consider this.
I believe there are three basics states for groups of people to be in. Only two of which will everyone not be attacking each other. Further, that profit is a kindling factor.

1. Overarching Survival Threat to Everyone
2. Machiavellian Society (The world as it is now.
3. Everyone has more than enough and thier own space.

Let me illustrate with a thought experiment...

Imagine a row boat... it's leaking... the nearest island is on the horizion... and there are 3 Arabs and 3 Jews in it. It's surrounded by hungry sharks. No one survives unless everyon rows and everyone bails water.

Do you think anyone will care who's a Jew and who's an Arab??? No way. Everyone pulls together. So this is state 1.

Now they successfully row to the island.

Imagine there are two possible islands scenarios they happen on.

Scenario 1. The island is only big enough to support 4 of the 6 people. How do you think they will decide who dies? Simple the Jews will side with Jew, the Arab will side with Arab and fighting will ensue.... Survival of the Fitest... the ends justifies the means. Rising and falling... literally in this case, living or dieing depends on skill and force.

This is state 2. Machiavelianism. Funny how "The Prince" was written as an interim solution... but everyone thinks its the long term manual for life!!! This is modern life.
Everyone trying to take a bite out of each other's financial a$$. Markets... trading... Profit... blah blah blah. The richy riches have us all running like mice in wheels... so *they* can live the good life. What about the other 99%??? Why do we put up with it anyway?

Scenario 2. The Island is big enough to support 20 people! There's more than enough space or everyone to have thier own corner... everyone is figuratively rich in coconuts and oranges....

So what happens. They get together in the middle of the Island and party every so often. Everyone is fat and happy.... Everyone can live like the rich.

This is state 3... and what we should be shooting for.

So the big problem is... How do we create State 3 for everyone.

Capitalism can't do it. Communism can't either.

Seems we need an entirely new way to manage the planet.

But to build such a world... many existing powerful people would have to be toppled. Think they're going to let you? Think thier brainwashed soldiers are going to let you?

Like the line in apocalypse now... "You are a clerk sent by shopkeepers to collect the bill". In essence the military is the strong right arm of the rich!

But "what?" you say? Well... think about it. The president is commander in chief. The money elects the president.... See???

And they don't pay much for those soldiers do they? Some recieve food stamps. See... it's cheeper to motivate with ideas like "patriotism", "Jehaad", "70 virgins when you get to heaven","The jewish homeland" and other such concepts.

Ultimately life is a material process and thus resource allocation is the name of the game.

How elect to do that will determine the outcome of things.

Whenever there's a group that thinks it's getting the short end of the stick, it may be willing to have a revolution.

Except perhaps the working class in the USA. Seems we've been brainwashed to accept the dictates of our economic elite pretty much. Oh we hem and haw a little... but we still went into Iraq at Bush's say so didn't we... and he's both a third generation politician... and Oilman!

What more need to be said?

/images/graemlins/smirk.gif
Sincerely,
AA

[The Dude]

AA, Thanks for explaining your thoughts. You did clarify a couple of misunderstandings (who you meant by Richie Riches, for example), but for the most part I still disagree. But that's okay. That's democracy. I'm glad you shared.

Best Wishes,
Drew

[eastbay]

[ QUOTE ]
What we should do is build an economic system where everyone can live as the rich do, and let no one be another's "master"...er ah... "boss" or "slave"...er ah... "employee".
/images/graemlins/smirk.gif
Sincerely,
AA



[/ QUOTE ]

Except that this is a fundamental contradiction. If everyone is "rich," who is going to deliver your pizza? And if you can't get a pizza delivered, you're not very rich, are you?

Poverty is a requirement for the existence of wealth, by any reasonable defintion of the terms.

[AmericanAirlines]

Only if you believe

(net worth of the world) divided by (number of people)

is a number smaller than "wealthy".

Most problems of this sort could be solved by technology or done without.

However, if only the rich can own the currently wealthy can own the technology, or a profit must be extracted from it, we'll never get there because that will cause the accumulation that causes a lopsided distribution of "wealth" or perhaps the materials wealth represents.

I mean seriously, what says anyone owns anything? Only one's ability to defend that ownership.

As stated earlier, since the leaders are often also in control of militaries, that means the worker bees are sh!t outta luck.

/images/graemlins/tongue.gif

Again I find people in here defending the upper echelon. Guess there must be more upper echelon folks in here than I think, or more folks who just don't feel like they are the grist for the mill of those folks.

Sincerely,
AA

[AmericanAirlines]

"That's Democracy"

I feel compelled to point out we're not a Democracy. We're a republic.

I think you mean "That's free speech".

/images/graemlins/smile.gif

Sincerely,
AA

[AmericanAirlines]

Hi Adios,
They sell lottery tickets in Colorado and have casinos as well.

Interesting legal twist to it though. No +EV Video Poker or other games are allowed. "Presumably" because the gov't doesn't want to lose the potential tax revenues. So much for Gov't being on the little guy's side on that one.

Your mistake is all those "presumes".

Ok let's say I presume as you do, that market prices reflect market wisdom. And the market price represents all that is known at that point in time. A common statement about securities markets (which I think has been shown to be false as of late... Enron etc.)

Every time I say, "The presence of blacks causes property values to drop" Andyfox says... "Oh that's not the blacks fault... that's the fault of people like you! (meaning me)"

So which is it? The all knowing market is correct? Blacks make an area less desirable? Or is market economics wrong?

Sincerely,
AA

P.S. I tend to think everyone in this forum should see game with -EV's as not something to engage in. So why would anyone in here see casinos that spread such games as an economic positive rather than a cash siphon?

Casinos that spead poker on the other hand serve the same role as the NYSE. Providing a place to engage in the activity where some oversight and structure are in place. Granted I think the NYSE is -EV for a lot of people and thus more like a casino that doesn't spread +EV games.

But, in the end I'd not play "back room" poker. To much chance of problems IMHO.

/images/graemlins/frown.gif

[DanS]

[ QUOTE ]

Except that this is a fundamental contradiction. If everyone is "rich," who is going to deliver your pizza? And if you can't get a pizza delivered, you're not very rich, are you?

Poverty is a requirement for the existence of wealth, by any reasonable defintion of the terms.


[/ QUOTE ]

I think you're on the right track here. I'm not sure poverty, however it may be defined, is a condition for wealth to exist. It's certainly possible, uhh, theoretically, that everyone could have a *reasonable* standard of living, with some having more than others. I think what it comes down to the fact that there's a scarcity of *any* good, which is a fundamental priniciple of economics.

And if you live in the East Bay, who the hell wants pizza delivered? I'd rather go pick up a pie from Zachary's or LoCoco's anyway. /images/graemlins/grin.gif /images/graemlins/smirk.gif

Dan

[Copernicus]

[ QUOTE ]
Hi AndrewP,
Hate to say it, but your societal brainwashing is showing. Surprising for a poker player. But then a lot of folks in here sound like you. AndyFox comes to mind at once. It is more likely that the one who argues irrationally is the one that is brainwashed.

I guess you could call the gambling industry entertainment. The industry does. In fact they call it "Gaming".

I think Benny Binion said, "The only real *gambling* game is poker." But not sure there.

Yes I do lump Hollywood, and especially Pro Sports in this category as well. Come on, what's the intrinsic value of Tiger Woods holing a putt vrs. what a surgeon does? About nothing far as I can see. The PGA tour is just an engineered spectacle to cause money to change hands. Not to worry, if I could be a celeb, I would be. They have life by the a$$ compared to the working classes. Who ever said that sports aren't entertainment? Whats your point?

I have read "The Millionaire Next Door". Though that group is well off, that's not who I mean by Richie Riches. I mean the Jupiter Island, Wall Street, Donald Trump, Hollywood Celeb types. They can move in and out of marraiges at will because they can afford to.

However, if there divorce rate is less... it just proves out that money helps to make relationships more interesting, now doesn't it? All that "money doesn't matter" stuff is just pattently false up to a point. (E.g. money ultimately wouldn't make up for spousal abuse. However, I did hear one woman say... "well he doesn't treat me too well... but he is an osteopathic surgeon". So don't ever sit there and believe Wealth does not equal greater Social and Behavioral Freedom. Because *it does*. You take claim to wealth as being the enabler of both divorce and longevity of marriage. Sorry, you cant have it both ways.

Ah that old business model thing. Profit, etc.

What we should do is build an economic system where everyone can live as the rich do, and let no one be another's "master"...er ah... "boss" or "slave"...er ah... "employee".

About the tax thing. The problem is... the rich have the money to hire people to know the tax breaks.

Seems to me the system should be so straight forward that I don't need a specialist to find my tax breaks. How about a flat tax? Sound good to me. If a true flat tax sounds good to you, then you are promoting the destruction of the middle class...actually not a surprise that you would like that, so maybe you do understand why. The largest single tax break there is goes to the middle class, and you don't need a lawyer to claim it. The mortgage interest deduction disproportionately favors the middle class, far outweighing all other tax breaks combined. In turn housing drives a huge portion of the economy, and represents the greatest single depository of individual wealth. A flat tax without a mortgage tax deduction would increase the burden on the middle class and reduce it for the wealthy. It would cause foreclosures and plummeting housing prices as the increase in carrying costs drive the middle class toward bankruptcy. If I have to explain how that ripples through the entire economy than you are even more clueless than you appear.

But then the Tax Biz is another one of those profit making games perpetrated by those who benefit from it.

Sorry to "burst your bubble"... but you are supporting the status quo... which absolutely, inarguably has been tilted toward the Richie Riches from at least the time of he Founding Fathers. So, who says the status quo isnt the closest thing to "perfect" as is currently feasible? Just because its there doesnt make it wrong.

"We can't have a true Democracy because the poor would vote all the money out of the Treasury"... Remember that quote.

Gotta keep them stupid masses under control, right? "Tyranny of the Masses" and all that, you know.

Now let's get back to how "profit" is a rip off for the buyer.

So how does profit lead to problems? Well actually it's the "profit motive".

As Machiavelli pointed out... the need to provision is such that we never know how much is enough... so we do so endlessly. When two folks doing the same colide... War. Perhaps this is what's called Greed. And perhaps it's biologically ordained.

Reduced to modern terms this is chasing profit. Which is codified as money.

We all believe we have a right to a "net profit". In other words we are entitled to more than put into something when we sell it.

But let's reduce that back to barter. That's the equivalient of saying "Hey I'll give you 1 loaf of bread for 1.5 loaves of bread."

Essentially it's absurd.

So you say... "But I'm a bread wholesaler... I have to profit."

The other guy says "Yeah Right".

So going back to money... The "fair price" for something is *exactly the cost to bring it to market". Any excess beyond that is a ripoff to the buyer. (The idea of fair price is essentially embodied in the Black-Scholes concept for option pricing. It essentially seeks to establish the price for an option where neither buyer nor seller profits over the long run. So the game in Options trading is to make the *other guy* overpay for his side of the trade... and thus "make a profit".)

But since "Everyone has to profit" we get into a never ending cycle of trying to create "growth" along with numbers games like "inflation".

But think about it... When the whole world is selling as much as it can to everyone possible... where do we grow to next? Do we sell stuff to the green men on Mars? Do we continue to burnt the planet out?

I think you can see where that leads. There are so many incorrect statements and non sequiters above that its not worth responding to each one. The essential problem with all of it is that you incorrectly define "fair price" to suit your incorrect cost/benefit analysis. "Fair price" is what someone is willing to pay for something, period. The excess of that price over the simple cost of inputs, which is your definition of "profit" does not correctly reflect the exchange...it is not 1 1/2 loaves for 1 loaf. When a party is willing to pay more than the cost of inputs it is because they themselves do not have the education, expertise, technology, time or some other resource to produce that product themselves from the same inputs. "Profit" is the compensation for investment, whether it is a surgeons investment in his education, or General Motors investment in robotics. There can never be "unfair" profit unless a monopoly exists for an indispensible product or service, or there is regulation to artificially support prices.

Consider this.
I believe there are three basics states for groups of people to be in. Only two of which will everyone not be attacking each other. Further, that profit is a kindling factor.

1. Overarching Survival Threat to Everyone
2. Machiavellian Society (The world as it is now.
3. Everyone has more than enough and thier own space.

Let me illustrate with a thought experiment...

Imagine a row boat... it's leaking... the nearest island is on the horizion... and there are 3 Arabs and 3 Jews in it. It's surrounded by hungry sharks. No one survives unless everyon rows and everyone bails water.

Do you think anyone will care who's a Jew and who's an Arab??? No way. Everyone pulls together. So this is state 1.

Now they successfully row to the island.

Imagine there are two possible islands scenarios they happen on.

Scenario 1. The island is only big enough to support 4 of the 6 people. How do you think they will decide who dies? Simple the Jews will side with Jew, the Arab will side with Arab and fighting will ensue.... Survival of the Fitest... the ends justifies the means. Rising and falling... literally in this case, living or dieing depends on skill and force.

This is state 2. Machiavelianism. Funny how "The Prince" was written as an interim solution... but everyone thinks its the long term manual for life!!! This is modern life.
Everyone trying to take a bite out of each other's financial a$$. Markets... trading... Profit... blah blah blah. The richy riches have us all running like mice in wheels... so *they* can live the good life. What about the other 99%??? Why do we put up with it anyway? If you feel like a mouse in a wheel that is your fault for not finding the way off it. It is a voluntary state of being that can be remedied by prudent investment.

Scenario 2. The Island is big enough to support 20 people! There's more than enough space or everyone to have thier own corner... everyone is figuratively rich in coconuts and oranges....

So what happens. They get together in the middle of the Island and party every so often. Everyone is fat and happy.... Everyone can live like the rich. That can only be a temporary state. At some point consumption will outstrip natures ability to replenish the party supplies. At that point cultivation/production becomes necessary, and it is the enterprising and ambitious that will dominate. As they invest their time and resources a market will be established leading to some economic structure. Capitalism has proven to be the most capable and fair structure.

This is state 3... and what we should be shooting for.

So the big problem is... How do we create State 3 for everyone.

Capitalism can't do it. Communism can't either.

Seems we need an entirely new way to manage the planet.

But to build such a world... many existing powerful people would have to be toppled. Think they're going to let you? Think thier brainwashed soldiers are going to let you?

Like the line in apocalypse now... "You are a clerk sent by shopkeepers to collect the bill". In essence the military is the strong right arm of the rich!

But "what?" you say? Well... think about it. The president is commander in chief. The money elects the president.... See???

And they don't pay much for those soldiers do they? Some recieve food stamps. See... it's cheeper to motivate with ideas like "patriotism", "Jehaad", "70 virgins when you get to heaven","The jewish homeland" and other such concepts. your military/political analysis is even more naive than you economic analysis, if thats possible.

Ultimately life is a material process and thus resource allocation is the name of the game. One of the few correct things youve said

How elect to do that will determine the outcome of things.

Whenever there's a group that thinks it's getting the short end of the stick, it may be willing to have a revolution.

Except perhaps the working class in the USA. Seems we've been brainwashed to accept the dictates of our economic elite pretty much. Oh we hem and haw a little... but we still went into Iraq at Bush's say so didn't we... and he's both a third generation politician... and Oilman!

What more need to be said? what more? how about facts for rhetoric, and logic instead of whining?

/images/graemlins/smirk.gif
Sincerely,
AA



[/ QUOTE ]

[harboral]

Got to disagree with your idea - statement - that "doctors and lawyers don't gamble". Sorry - my experience in casino operations tells me that you are dead wrong. Trust me, they gamble. As for your statement that the middle class does not gamble as much as the lower or upper class, I don't have any statistics in front of me, but in Nevada there is a substantial amount of money spent by those with a family income of $40k to $80K - a lot of money used for "entertainment - recreational gaming".

[eastbay]

[ QUOTE ]
Only if you believe

(net worth of the world) divided by (number of people)

is a number smaller than "wealthy".


[/ QUOTE ]

Completely irrelevant calculation. The value of a "dollar" would not remain constant before and after the leveling transaction. It would be profoundly altered.

[ QUOTE ]


Again I find people in here defending the upper echelon. Guess there must be more upper echelon folks in here than I think, or more folks who just don't feel like they are the grist for the mill of those folks.

Sincerely,
AA

[/ QUOTE ]

I am not defending anybody. I am simply facing reality, even when it seems unpleasant.

[CrisBrown]

Hi eastbay,

Would you at least concede that someone who is performing a job which society deems "essential" ought to be able to live on the income from that job?

Classic example: your grocery checkout clerk. You insist that there be one, as do I. We both want to be able to pay for our food and get on with our lives. If there's only one clerk on duty and a line that stretches back to the meat department, we're both going to be grumbling that they ought to do something about this. So we both consider that clerk to be performing an essential function in society.

But a grocery checkout clerk can't support him/herself, and certainly not a family, on the income from that job. So we insist that someone do that job -- we deem that job to be "essential" -- but we're only willing to pay a sub-living wage for that job.

That's not saying everyone should be paid the same. It's simply saying that anyone who contributes something society deems "essential" ought to be able to afford the essentials of life....

Cris

[Diplomat]

One argument that often comes up in these debates, but what I think is missing here, is the potential damage that gambling can have on the society that it exists within. Although not always true, some have argued that the introduction of a casino into a given community can be connected with a rise in particular types of illegal activities, such as prostitution and drug use.

If this is true, there may be a negative impact on the economy of a given community because of these side effects, even if the math about whether or not gambling disrupts a particular economy shows no disruption to that economy. Just a thought.

Oh, and about lawyers and doctors not gambling -- we most certianly do. /images/graemlins/laugh.gif

-Diplomat

[eastbay]

[ QUOTE ]
Hi eastbay,

Would you at least concede that someone who is performing a job which society deems "essential" ought to be able to live on the income from that job?


[/ QUOTE ]

No, not necessarily.

[ QUOTE ]

Classic example: your grocery checkout clerk. You insist that there be one, as do I. We both want to be able to pay for our food and get on with our lives. If there's only one clerk on duty and a line that stretches back to the meat department, we're both going to be grumbling that they ought to do something about this. So we both consider that clerk to be performing an essential function in society.

But a grocery checkout clerk can't support him/herself, and certainly not a family, on the income from that job.


[/ QUOTE ]

All points granted. But if there are enough kids or partially supported people needing summer or part-time work to go around for grocery clerks, who cares that it doesn't support a family or function as a sustainable career? What's the negative societal consequence? I can't think of any.

[clovenhoof]

The economy (like us lawyers) is amoral. It does not distinguish between a sale of a $10 book, the placing of a $10 bet, or the purchase of a $10 rock of crack, except to the extent that the distribution of the underlying costs differs.

The introduction of casinos and other gambling establishments (as well as any other business that leads to big fluctuations in cash transfers) ALWAYS lead to a rise in activities such as prostitution and the sale of drugs, legal and illegal. But as far as the economy is concerned, that's a good thing. However what is good for the economy is often not good for society.

Consider a very extreme example: a casino owned by a conglomerate of sociopaths. (No, that's not the extreme part.) Let's say they adopt a policy of murdering a limited number of well-off middle-aged middle-managers in their sleep. The net effect would be a boon for the economy. The death of anybody results in the expenditure of money for burial, etc., that otherwise would have waited until the guy died at his expected age of 75 (or whatever it is). The death of somebody with assets results in a distribution of those assets, usually to people who need to spend at least some of the new wealth that previously was being hoarded. The premature (and unexpected) removal of an employee from the workplace requires the company to allocate resources to retraining and replacement with no corresponding output, which benefits the economy.

One might even go so far as to argue that things such as drunk driving and the elimination of any and all gun controls are really great for the economy, precisely because of their particular toll on society. As attractive as that may be to our politicians, however, I don't think we have much to worry about -- even THEY realize that killing the electorate has a negative EV at election time.

'hoof

[CrisBrown]

Hiya eastbay,

<<All points granted. But if there are enough kids or partially supported people needing summer or part-time work to go around for grocery clerks, who cares that it doesn't support a family or function as a sustainable career? What's the negative societal consequence? I can't think of any.>>

If there are enough "real" jobs in a community to provide an adequate pool of "pin money" employees (i.e.: those who don't need to support themselves and/or their families), I agree.

But if the "real" jobs dry up, there's a definite societal cost to having established essential jobs as "pin money" positions. You have families with no parent at home most of the time, as both mom and dad are working a couple of "pin money" jobs to make ends meet. "Pin money" jobs usually don't carry any benefits, so the family has no health insurance. You have a family that's one serious illness away from losing a car -- or a home! -- and possibly even ending up on welfare.

Again, I'm not suggesting that everyone should receive the same pay no matter what their contribution to society. I'm simply saying that people who devote 35-40 hours a week to a job which society considers "essential" ought to be able to afford the essentials of life: food, shelter, clothing, transportation (public or otherwise), and health care.

Cris

[Ace-Korea]

I guess you're right about Nevada. But what about in local casinos in forty-some other states? (I'm asking b/c I really have no idea...)

All I know is that the riches will gamble with thousands of dollars, if not more, whereas the middle class would not gamble with that kind of money. So the middle class might be the first in line in number of visitors, but if you count the amount of money spent, the upper class probably has it. Also, there are more people in the middle class than in the lower/upper classes, which should be taken into account. Still, I don't have any data for my reasonings, which is the reason I wanted other people's opinions on the matter. Perhaps someone could hire an economist for a comprehensive report? Lol.

[jgraeffe]

no, it's true -- everyone j-walks in atlantic city!

[brad]

do u think the state lotteries are good for the(ir) economy?

[Copernicus]

[ QUOTE ]
Hi eastbay,

Would you at least concede that someone who is performing a job which society deems "essential" ought to be able to live on the income from that job?

Cris

[/ QUOTE ]

Grocery checkout clerks are no longer essential, with automated check out aisles. Even if they were not replaceable by machines that doesnt entitle them to a "living wage" for that level of work. The job can easily be filled by second income earners, retirees, students, etc. who do not require a "living wage" to support their families.

[AmericanAirlines]

Hi Eastbay,
I'd say I'm facing the unpleasant reality. That the table has been tilted by the rich for the rich. Mainly by the families that got big during the early industrial revolution.

However, whenever I suggest that just maybe the game is rigged and that there must be a better way, everyones feathers seem to get ruffled and lots of defenses of capitalism... often laced somehow with the idea that "democracy = capitalism" ... seem to emerge.

Yet, as I see it, any thinking person who's worked hard most of thier life and still stuck in middle-classdom or worse can easily see that the BS we've been fed most of our lives is just that BS.

Recent Wall Street debacles should serve to illustrate the point nicely.

Don't get me wrong, I'd like to be mega-rich too. Obviously.

But show me one fast way to do that, that at the same time doesn't involve cheating, game playing, @ss kissing, doesn't suck etc. and doesn't involve luck. I.E. you can plan on it working.

Sincerely,
AA

[AmericanAirlines]

Hi Copernicus,
Something to keep in mind. The last century was the century of capitalism, markets, etc. It was also one of the bloodiest there has ever been. I think there has to be a better way.

That said...


1. "You take claim to wealth as being the enabler of both divorce and longevity of marriage. Sorry, you cant have it both ways."

A. Yes you can. It enables one who wants to leave to not have to worry about the cost to one's life style. On the other hand, if you have $$$, the ladies are less likely to dump you for someone who does!

/images/graemlins/grin.gif

2. " The mortgage interest deduction disproportionately favors the middle class, far outweighing all other tax breaks combined."

A: Perhaps as a whole it may favor the middle class. But to any given individual worker bee I doubt it.

Were it not for the number of people who' retirement account is basically thier house, I'd say housing prices *need* to plumet. Having to pay 30 years for a pile of bricks is rediculous. Everyone but the owner makes a ton of money, except for the inflationary effect.

But then that's a numbers game no matter how you slice it. And it still favors the rich (inflation that is). Since the rich own the most assets that inflate on a per person basis (perhaps not collectively... but then again maybe... I keep reading the 1% or whatever hold xx% percent of the total wealth.

Just ask Allen Greenspan... When employment is too high... "Oh that's inflationary... gotta 'cool down' the economy". Read that... when the workers can apply financial pressure to the rich.. THAT'S inflationary.

But when the things the wealthy hold the most of or sell... "That's 'capital appreciation'.

Please learn to see past the word games... please!

/images/graemlins/frown.gif

3. "So, who says the status quo isnt the closest thing to "perfect" as is currently feasible? Just because its there doesnt make it wrong."

A: Me and all the other worker bees that are fed up.

4."There are so many incorrect statements and non sequiters above that its not worth responding to each one. The essential problem with all of it is that you incorrectly define "fair price" to suit your incorrect cost/benefit analysis. "Fair price" is what someone is willing to pay for something, period. The excess of that price over the simple cost of inputs, which is your definition of "profit" does not correctly reflect the exchange...it is not 1 1/2 loaves for 1 loaf. When a party is willing to pay more than the cost of inputs it is because they themselves do not have the education, expertise, technology, time or some other resource to produce that product themselves from the same inputs. "Profit" is the compensation for investment, whether it is a surgeons investment in his education, or General Motors investment in robotics. There can never be "unfair" profit unless a monopoly exists for an indispensible product or service, or there is regulation to artificially support prices."

A: Boy I'll tell ya... you really did suck up all that B-School stuff didn't ya! You're just wrong. The loaf of bread illustration is 100% on the money in a reductionist sense.

It's because you and a bazillion other's can't see this fair price illustration (unless of course you're an options trader or insurance actuarial) that we'll eventually burn the planet out because of *your* point of view's dependance on constant "growth".

Sorry guy. The material mass of the world is relatively constant.

5. "If you feel like a mouse in a wheel that is your fault for not finding the way off it. It is a voluntary state of being that can be remedied by prudent investment. "

A: This is just BS. I lived for 10 years in one room. Saved. Invested. Got a high tech degree. The 90's wiped it all out. And I didn't have a dime in the market either.

The megatrends nailed me to a cross essentially. As it did many many others.

And the megatrends are created by our "leaders". Essentially our richie riches.

6. "At some point consumption will outstrip natures ability to replenish the party supplies. At that point cultivation/production becomes necessary, and it is the enterprising and ambitious that will dominate. As they invest their time and resources a market will be established leading to some economic structure. Capitalism has proven to be the most capable and fair structure."

A: You've just accepted one of my tenents. That the earth is a limited pile of matter.

Sound to me like you're a social darwinist.

So given that... If I kill my next door neighbor and say... "This stuff is now mine"... is that OK?

7. "what more? how about facts for rhetoric, and logic instead of whining? "

A: You're just a pompous @ss. Sounds like you were born into some money or perhaps bought off on the status quo. Perhaps you're in sales?

Far as I can see you can't see beyond what you've been schooled to believe. I see no evidence of thinking on your part. Just parroting of rhetoric. And you call yourself "Copernicus"?

How'd that happen?

/images/graemlins/confused.gif

Sincerely,
AA

[AmericanAirlines]

Hi Chris,
Thank god, one thinking person in the pack!

Sincerely,
AA

[AmericanAirlines]

Perhaps... just maybe... technology should be used to replace all the grunt jobs and people shouldn't work except were absolutely neccesary.

Then we should build a utopia and all enjoy our few decades on the planet.

Rather than make our old folks do menial work! Ya think?

Sincerely,
AA

[AmericanAirlines]

Hi DanS,
So tell me is East Bay an wealthy area or a more modest one?

Just curious as I don't follow the reference.

Sincerely,
AA

[eastbay]

[ QUOTE ]
Hi Eastbay,
I'd say I'm facing the unpleasant reality. That the table has been tilted by the rich for the rich. Mainly by the families that got big during the early industrial revolution.


[/ QUOTE ]

However, whenever I suggest that just maybe the game is rigged and that there must be a better way, everyones feathers seem to get ruffled and lots of defenses of capitalism... often laced somehow with the idea that "democracy = capitalism" ... seem to emerge.

Yet, as I see it, any thinking person who's worked hard most of thier life and still stuck in middle-classdom or worse can easily see that the BS we've been fed most of our lives is just that BS.

Recent Wall Street debacles should serve to illustrate the point nicely.

Don't get me wrong, I'd like to be mega-rich too. Obviously.

But show me one fast way to do that, that at the same time doesn't involve cheating, game playing, @ss kissing, doesn't suck etc. and doesn't involve luck. I.E. you can plan on it working.

Sincerely,
AA

[/ QUOTE ]

I'm not mega-rich, FWIW.

I never defended capitalism in my posts, although I think facets of it are defensible as long as there are tempering factors in a socio-economic system. Capitalism as religion or value system seems clearly disastrous to me.

I don't have any easy answers for you, although I consider your "doesn't suck" and "I won't kiss ass" (para-)phrases as red flags.

* Don't work hard, work smart
* Significant results in most any endeavor require teamwork and teamwork requires being a soldier before being the general, by analogy. This isn't necessarily "ass kissing".
* Nothing worth having in this world doesn't require a lot of hard work, which often sucks when viewed in the small. Keeping eyes on the large can temper the suckiness of it all.

Trying to get mega-rich is a good way to stay broke. Try to get a little more than you've got now, if you can find legitimate reasons to need it. You quite possibly don't need it, btw.

That's all my philosophizin' I've got in me right now. Good luck with everything.

[Roy Munson]

[Roy Munson]

"Don't get me wrong, I'd like to be mega-rich, too."

Why would you aspire to join a group of people that you so clearly loathe?

[LikesToLose]

[ QUOTE ]
Perhaps... just maybe... technology should be used to replace all the grunt jobs and people shouldn't work except were absolutely neccesary.

Then we should build a utopia and all enjoy our few decades on the planet.

Rather than make our old folks do menial work! Ya think?

Sincerely,
AA

[/ QUOTE ]

This may be the dumbest thing I've ever read. I can feel my IQ dropping just from quoting it.

Let me ask you this: What makes you think we haven't already achieved this state of utopia?

I know you don't feel like you live in a utopia. It feels like you have almost nothing, but compared to much of the world, we are all FILTHY rich. What, you have heat, 1 family in most homes, and food? Air conditioning? Color TV and cable for people on welfare?

In your little fantasy world, who would make the robots to replace the workers and how much money should they cost? Or are they just donated? If it is donated, why would anyone work at the robot factory or any of its suppliers. Running factory machines and mining the metal is someone's hobby? Who decides who has to work at the few 'absolutely neccesary' jobs and who sits on their ass all day? What does the worker get for his/her contribution and who pays for it?

How would it be decided who got what robot? I would rather have one that is at most 4 years old to do the lawn work for me. Others will have to make due with my used ones. I think that's fair. How old of a car do you drive?

The problem with your utopia world is that the earth's resources and the production capabilty of the world has limits, while human desire does not have any such problems. We want more than what we have. We all want to be the Joneses that everyone is trying to keep us with instead of the other way around. Since there is no possible way that everyone can every need satisfied, there has to be a method to determine who gets what. Capitalism, while not perfect, is the best known method to do that.

Gotta go now, but more fun later, I'm sure.
Mark

[AmericanAirlines]

But everyone has to want it and actively pursue it.

As long as folks run around saying "It can't be done"... well... it won't be!

/images/graemlins/grin.gif

But, problem is, how are you going to convince the few at the top (that we all seem to listen to) to change things for the better of all when they are already getting the best of it.

Well, I doubt talk will work. So we're back to waiting for an overarching crisis to occur wherein wealth doesn't mean anything, or revolting.

/images/graemlins/frown.gif

I do believe it was something called the "Liberal Management Reform" wherein Western leaders realized they had to figure out just how much wealth to let flow downward to avoid a revolt. Seems here in the US that our leaders are pretty darn good at walking that line. Compare to Russia where the leaders weren't so good at it and many revolutions based around economic theories have occured.

I'm simply saying we should task our leaders with taking us the majority where we really want to go (long happy unencumbered lives, etc.) instead of where thier egos want us to go. (And we seem to follow. Are we a bunch of lemmings or what?)

Sincerely,
AA

[Roy Munson]

With 6 billion people, give or take 1 or 2, you will likely have about 6 billion different ideas as to what constitutes "Utopia".

The world in which we live is chaotic and any attempts to plan or force order and structure are more than likely to create further chaos.

Accept, enjoy and revel in the random nature of life. We are all going to die soon anyway, even the ultra wealthy.

[AmericanAirlines]

Hi EastBay,
Well... much of what you say is true. And years ago at a teamwork get together for United Technologies (Circa 1994) I said that one ought to start at the bottom and work up to know the business inside and out. (Parallel to your soldier/general concept).

But, look at how it really goes (in business and even in the military). Shave @sses are at the top. That'd be academy grads in military and Harvard/Wharton/Yalies in Corp. USA.

In corp. USA actually many top dogs are Mckinsey Consulting or Boston Consulting alumni. Both of which, of course, recruit from the Ivy League set. Heck McKinsey even has a Web Page aimed at recruiting just Harvard grads!

So working up is (IMHO) patented working class dogma. And a waste of one's life in most cases. To bad so many of us are taught that idea by working class adults around us when we are kids.

The point of my para-phrases is to point out that I'm not interested in political methodologies and game playing. To me the whole point of becoming rich is to never have to be a subordinate to anyone else's game. So if wanting to maintain one's dignity along the way is a red flag, Oh well... guess I'm out of luck there.

So essentially I threw those terms out to head off certain suggestions.

To me "teamwork" is a red flag. And truly false in corp. USA. After all salaries are not equal among team members nor are they adjusted on a team basis. Each paycheck is cut to an individual.

"Teamwork" to me is something told to the underlings.

Realize I've spent most of my life in Fort. 500's and seen the fads come and go. Six Sigma to Matrix organizations, etc.

Personally mega-rich doesn't really interest me nearly so much as getting to my personal ideal of freedom, without compromises.

That ideal is, "An upper middle class lifestyle without having to work."

In other words a self sustaining cash flow sufficient to live well, provide for your favorite lady and kids... and have time freedom to pursue your own interests unfettered.

I don't think that's greedy. And I really believe we could engineer things so it could be reached at an earlier age by everyone.

I mean, consider this. The usual rhetoric is that productivity has increased many-fold. OK great, then why does it now take two incomes to buy a nice house, for 30 years... rather than one half of one income?

Could it be because the system is rigged by those at the top to funnel the benefits of the increased productivity upwards? While at the same time the cost of living relative to income continues to increase at a rate that salaries don't keep up with?

Personally I think so, as that is what I see whenever I look at anything financial, from salaries to interest rate changes to the Wall Street.

Sincerely,
AA

[AmericanAirlines]

Yes mark, I admit there are problems to resolve.

As for the neccesary work. Simple, everyone takes a turn for a period of thier lives. Medical problems excepted of course. Can't ask granny to toss boxes around on a loading doc.

The idea being to reduce the amount of life anyone spends working on the neccesities, thus freeing up the rest for higher (or lower) pursuits rather than wasting our lives making the rich richer.

Who decides. Everyone. True democracy. Everyone votes on every issue.

I agree, greed is a problem factor. As I've said in many places, everyone would have to come up a level in terms of thier thinking processes.

So true, capitalism is the best experiment to date for people as they are.

But, if everyone keeps thinking as they currently do, well then the current problems will continue. Simple as that.

Geez, the A-bomb has been around for half a century now. You'd think we'd all step back and realize it's time to manage the planet responsibly.

As for having already achieved Utopia... wake up, I mean seriously wake up. Ask the parent of any kid killed in an armed conflict if they believe that.

Anyway, bottom line is, we can do it. Truth is though, we won't until folks stop accepting the current dogma.

Sincerely,
AA

[AmericanAirlines]

Hi Roy,
Actually I tend to think Utopia would be where each person has his own little separate space and rules pretty much just say where one entity has crossed another.

In essence a complete power deadlock. No masters, no slaves.

Granted there are some details there to work out.

But it can be done.

Sincerely,
AA

P.S. It is *because* we are going to die that we should fix it. Life is short. Why not solve the problems so the remaining part can be enjoyed problem free?

[AmericanAirlines]

Well,
In a word, freedom. Freedom from the dictates and judgement of others. To own my own life totally and completely. No strings attached.

I don't loathe thier lifestyle situation.

Just that they continue to engineer things so it's not as easy for the rest of us to get there!

And of course no one enjoys being in second class citizen status. Which is essentially what working/middle class is.

Sincerely,
AA

[Roy Munson]

The reason why it takes two incomes to support a family can be summed up in one word, TAXES.

At the end of the year my wife and I pay half our income in federal, state, local, property, sales and corporate taxes that are passed on to us in the cost of goods sold.

Luckily online poker income is relatively easy to hide.

[eastbay]

[ QUOTE ]
Hi EastBay,
Well... much of what you say is true. And years ago at a teamwork get together for United Technologies (Circa 1994) I said that one ought to start at the bottom and work up to know the business inside and out. (Parallel to your soldier/general concept).

But, look at how it really goes (in business and even in the military). Shave @sses are at the top. That'd be academy grads in military and Harvard/Wharton/Yalies in Corp. USA.


[/ QUOTE ]

If you really believe that, there's your answer right there. Get the degree.

[ QUOTE ]

In corp. USA actually many top dogs are Mckinsey Consulting or Boston Consulting alumni. Both of which, of course, recruit from the Ivy League set. Heck McKinsey even has a Web Page aimed at recruiting just Harvard grads!

So working up is (IMHO) patented working class dogma. And a waste of one's life in most cases. To bad so many of us are taught that idea by working class adults around us when we are kids.

The point of my para-phrases is to point out that I'm not interested in political methodologies and game playing. To me the whole point of becoming rich is to never have to be a subordinate to anyone else's game. So if wanting to maintain one's dignity along the way is a red flag, Oh well... guess I'm out of luck there.


[/ QUOTE ]

Different people have different ideas about what constitutes maintenance of dignity. For some, pulling over for "the man" for a busted taillight is an insufferable indignity. I don't relate to that idea of "dignity."

I'm not saying you're at that end of the spectrum; just food for thought about what dignity is.

[ QUOTE ]

So essentially I threw those terms out to head off certain suggestions.

To me "teamwork" is a red flag. And truly false in corp. USA. After all salaries are not equal among team members nor are they adjusted on a team basis. Each paycheck is cut to an individual.


[/ QUOTE ]

And hopefully according to value of that individual.

[ QUOTE ]

"Teamwork" to me is something told to the underlings.

Realize I've spent most of my life in Fort. 500's and seen the fads come and go. Six Sigma to Matrix organizations, etc.

Personally mega-rich doesn't really interest me nearly so much as getting to my personal ideal of freedom, without compromises.

That ideal is, "An upper middle class lifestyle without having to work."


[/ QUOTE ]

Well I think that's nuts. Someone who doesn't work is a drain on a society and should be ashamed of themselves, IMO.

[ QUOTE ]

In other words a self sustaining cash flow sufficient to live well, provide for your favorite lady and kids... and have time freedom to pursue your own interests unfettered.


[/ QUOTE ]

Unrealistic, selfish pipe dream. You gotta give to get, or you're the one pulling a fast one. IMO.

[eastbay]

[ QUOTE ]
OK great, then why does it now take two incomes to buy a nice house, for 30 years... rather than one half of one income?

Could it be because the system is rigged by those at the top to funnel the benefits of the increased productivity upwards?


[/ QUOTE ]

More likely it's the usual principle of pricing at what the market will bear. And what the market will bear today is two-income price levels. I think that's pretty simple and pretty clear.

[LikesToLose]

You admit there are problems to solve? Like what, human nature?

The problem with your whole philosophy is that you don't see yourself as greedy, but you are. You want to have an "upper middle class" livestyle, without having to work the majority of your life. I put upper middle class as around $80k per year, maybe your expectations differ some, but let's just use this as an example. The US average household income is about $42k per year and that includes the huge incomes generated by the ultra wealthy. How do we acheive $42k? In general, people dedicate themselves to a productive career that has a high expected return, money being only 1 of the measures of return. They work overtime, they get an education, they show up to work on time, all the time, earn promotions and move up. They also find other ways to generate income other than being an employee, like starting a business of some sort, investing time, energy and money into 'passive income streams'. In short the average of $42k is achieved by an average dedication and talent.

To reach upper middle class income of approximately twice the average, it requires above average investment of dedication and talent, or another way, is that to get above average returns, one must generate above average results. A network technician makes more money and has more interesting work than a grocery bagger because her has invested more effort in learning his trade and has more talent to invest in his career. In many cases, 30, 40 even 50 years of dedication are devoted to a given profession to earn the current average.

Real estate investing would be another great example. It offers great rewards and is capable of generating this passive income stream. Some sort of asset building enterprise such as this would allow you to build an income of the upper middle class without having to work in a shorter period of time than working. Perhaps as little as the 10 year period of which you speak.

What will it take to get there? Let's see: Education in successful real estate investing, tenent management, local city ordinances, taxes, accounting, household repair. Experience: You must become an expert in all of these facets of the business and only time will and learning from mistakes will make you an expert. Time: You will have to devote additional time to the business, outside of a normal job. It is not uncommon for small business owners to spend 100+ hours a week working for themselves. In real estate, you may have to fix a leaky water line immediately to avoid a $4,000 repair job on the floor support. Risk: You are putting a $100k property into the hands of someone who doesn't have enough responsibility to keep a good credit score. There is an element of risk there I think.

Now lets get back to your ideals of communism, where everybody is able to achieve an income of twice the average, only by taking their turn doing some work. I would love to work for 10 years, not really have to dedicate anything but my time and achieve the same results. That would be great. Maybe I could bag groceries for a while, or work on the loading docks, then when I'm thirty, I can retire and pull down $80k a year retirement for the rest of my life.

The problem is that in order to have the things I have today, someone had to take a risk, start a business, build my car, my lawn tractor, my backup generator, my kids Christmas presents, wife's spa days, etc, etc, etc. All the [censored] I buy that makes me upper middle class. But nobody is putting forth any sort of above average effort, because like me, why would you take any risk or devote anything extra? Who is going to open a hardware store, a spa, start a factory, make the toys. There is no reward. After ten years, or twenty, or however long you dedicate yourself to a pursuit, you get the same thing as if you dedicated the minimum. What about doctors? They study for about 12 years post high school before they actually become doctors. If you choose to be a doctor, do you have to work your whole life or 22 years, because your schooling isn't considered working? Or do you just study for 10 years, and retire and we have no doctors?

Which all leads (at great length) to the fact that we couldn't achieve today's average income of $42, with the current extrordinary, lifelong effort that we put in. To acheive $80k household income with 10 years of minimum effort is not some lie by the ultra rich to keep you working, it is basic fact. Who is going to produce the stuff that you want with your upper middle class income? And if you can't buy the same stuff you can today with $80k, are you still upper-middle class?

Foreigners? What, the Chinese don't deserve to live in your utopia and you expect peace? This can't be right because that would turn them into the slaves and there would be revolt and war. So now we have to take the world average salary of 59 cents per year (Just making that number up) and give everyone double the American standard of living. That's great, except that the US has about 5% of the populate and uses about 30% of the earth's resources. Perhaps there is some math that I'm not aware of, but this doesn't seem possible.

There are no robots or current technology that can solve these problems. If you want to imagine a magical solution that we can mine all the resources we need from astroids and that a robot can be invented and produced for pennies that will handle the grunt work and allow everyone to live very high on the hog for nothing, then take a look at the industial sector, all the way back to industrial revolution. This is the biggest area of productivity increases from automation ever, IMO and 'greed' messes it all up.

Let's focus specifically on clothes. Clothes used to be made from wool sheared from the family sheep by dad and woven by mom. People generally had only a couple sets of clothes that they wore every day. If they were lucky, they had a nice set of clothes for Sunday church. Now, along comes automation and the farmer sells his wool to the factory and buys clothes. But of course, the owner of the factory needs to charge more for the clothes than he pays for the wool because he has to pay for the machines and the people that run them and he of course has to eat, too. So the farmer raises more sheep that wool he uses and the wife doesn't have to make clothes anymore, so now, she helps raise sheep. But the net effect some people work in the factory, some people raise sheep and some people are out of work because clothes are being made more efficiently and there is not enough demand for wool for everyone to raise more sheep.

Now, this would be fine, except for 'greed'. For some reason, people want newer clothes. They want different sets of cloths. Follow this increase of efficiency to today. We now have closets full of clothes for every member of the family and people keep buying more and more. If people were satisfied with what they had, we would all still were very durable, wool tunics like they did in medieval times. I want better clothes than that and so do you.

I also apparently need 2 cars and three tvs, a cell phone, 3 VCR's and 2 DVD players, a Playstation, hot tub, etc, etc, etc. Is it that people can't afford a house on 1 income or that they can't afford all other crap that didn't exist before 1950?

No increase in productivity will ever lead to your utopia, because human desire has no real limits. You say 'upper middle class' lifestyle. That means that you can buy or do almosts anything you really want to. What you really want is to be one of the ultra rich and have no finacial limits placed on you, but you don't want to have to work for it. So to make yourself feel better and superior to capitalist pigs, of welfare cheats who want to government to buy them cable and a color tv, you invent this utopia and it is everybody else buying into the myth of capitalism that prevents you from having what you think you are entitled to. We are all fighting for a slice of a limited pie, except you want to magically make the pie 1000 times bigger and split it equally.

Have a great day
Mark

PS: True democracy is as scary as pure capitalism.

[AmericanAirlines]

Hi Mark,
A bit pressed for time at the minute... some unproductive sort smashed up my car to try to steal gifts that weren't in there. But I'll get back.

Anyway, quickly, communism is *not* my ideal. But niether is the current system. I admit, I don't know what the answer is, but this isn't it.

I have worked. And D@MNED hard. If that weren't the case I would say calling me a whiner would be true, but it isn't.

Problem is there's not correlation between work and reward as you seem to state. It's a crock. Any celebrity or old money decendent is a good example. Hell, the garbage man works harder than Britney Spears or Micheal Jackson, true?

Anyway, when I get time I'll respond. But it seems clear to me that maybe you worked hard and *did* get the expected rewards and so are perhaps not as bitter as I am.

Sincerely,
AA

P.S. Yes, I agree, greed is the root of the problem. No I do not agree that I am greedy given what some people have.

I do appreciate the detail of your response.

[AmericanAirlines]

Hi Eastbay,
I agree. And think it may be one of the things that's flawed about "market will bear" pricing, from some perspectives.

It was a rhetorical question designed to get folks to see that the results of productity gains and longer work weeks has not been recieved by those doing the actual work.


Sincerely,
AA

[AmericanAirlines]

Hi Eastbay,
I have a Comp Sci. degree. But not from MIT or a "big name" school. I think we realize that's a game.

I don't believe paychecks are really cut to the value of the individual. Consider... what does a CEO really do?

As for not working. Theoretically, ownership of the correct assets should make it possible. Granted, I do see your point, and some philosophers think rewards should be based solely on work done, and not assets.

In any event, since I believe that productivity gains have been siphoned upwards and that if the gains of productivity were spread evently, we could all retire many years sooner... the idea that I've already paid my dues... but not recieved the rewards... supports that idea of being done with working.

That's my primary gripe if it isn't clear. That I (and many others) have paid the dues... but been denied the membership. And *that* is a systemic problem.

Gotta run right now.

Sincerely,
AA

[LikesToLose]

AA:

Sorry to hear about your car getting broke into. I once had an old (even at the time) analog cell phone stolen from my car. I left it on the seat in a downtown parking garage, because they give away better phones than that piece of garbage. Didn't care about the phone but the smashed glass all over the inside was a major pain.

Let me respond to your points then I'll try moving the discussion to a different tact.

I think that you are talking about the ideals of communism, large scale communnal living. Communism strives to create abundance for all, shared equally. A worker's paradise. "From each according to his abilities, to each according to their needs." While these are the ideals of communism, the implementation changes drastically. Someone has to make the decision of who has what ability and who has what need. Attempting to do it democratically doesn't work because in a democracy, everyone votes for their own good instead of the common good.

There have been numorous attempts to make your utopian ideals a reality besides the rise of communism. There were like 150 different utopian communities around the 1700-1800's. Most were religiously based and created by immigrants from Europe who were being persecuted. They came for the (relative) freedom to be left alone in America. None of them seemed to have the concept of less work, but they all became economically unsustainable in the long run due to lack economic incentive creating stagnation in a world of improvement. The world got more efficient and had better lifestyles, so the people rebelled.

Then you have the hippy communes of the 60-70's. I think most broke up when they ran out of pot /images/graemlins/shocked.gif

I think the best example of a working commune would be monestaries and whatever that place nuns go. Certainly not the upper middle class lifestyle, and definitly lifelong work. Plus, it relies on the outside world to support them and could not exist without the donations of the faithful.

In short: Your ideal has been attempted to be implemented and has failed many, many times. Your ideal, would be wonderful. I would love to live in the world you envision. I would be happy if the whole world had food, clean water, shelter, basic medical care and a basic education. I just don't see it as a possibility because in order to give something to A, you have to take it from B. B had to create that something. It doesn't just exist. B will not create the same level of 'something' if you take it all away from him. When you take food from B to give to A, the total amount of food available decreases and no one is better off. This is proved every day by China, North Korea, and even Russia is struggling to get out of it's mess.

The correlation to reward is not work, but value created. I could easily argue that Britney Spears creates the value that she receives. Entertainment seems out of wack, but Britney Spears or Micheal Jackson create a small amount of value for a very large amount of people with a single album or concert. Hence the huge rewards they get. The garbage man may work harder, but he only creates value for 1 household at a time.

However the relationship between value created and reward is not a direct 1 to 1 relationship. Heirs of large fortunes did nothing to create the value, but lottery winners didn't do anything to create the rewards they receive either. In your case, you may not have received the reward you feel you created. I am assuming that you worked hard as a computer tech, anaylst, engineer or something and the company that you worked for downsided you. The problem is that even though you worked hard, you weren't able to create value, because the company you worked for wasn't able to turn your work into money. Not your fault, if that is the case. I was fortunate to leave a computer networking consulting company in '97 and moved to a company that didn't have any real layoffs. So there is an element of luck in the system. In the long run, assets (your labor) will be moved from unproductive work to productive work and the overall productivity of the world will increase because of your job loss. Not that that makes it any easier on you and you have my sympathies.

Now, I have been able to see vicariously the risks of leaving my economic future in the hands of a corporation. Not that I am bitter, but I don't see the path to a comfortable retirement as working for a big company and investing in my 401k. Once the baby boomers start to retire and the stock market plunges and stays down, people will be just as bitter as all those who had pensions at large corporations that went under in the 80's. I think working for a paycheck, no matter how good a check, and counting on stock investments is one of the riskiest financial paths today.

What is a worker bee to do? The answer is certainly not to envision a utopian world and be bitter that the real world isn't more like the utopian ideal. That is not the path to a comfortable, upper middle class lifestyle. It seems more like refusing to play the game because the referee made a bad call. Your situation will not improve until you decide that you are going to make it improve and learn how to do it. Failure is part of the process. It is what tells you that you are on the wrong path somehow.

*Don't try to buy an answer.* There are lots of traps out there to avoid. Want to hear about my option trading and market timing that spent a ton of money on 'education' only to lose more trading? How about gumball machines and tax protesting? How about selling gumball machines to others who want to work at home? (I couldn't lie well enough to sell them). I've got over $40k in mistakes right there.

Things I am trying to pursue (in addition to working 40+):
Poker for profit (Buy a book and study hard)
Real Estate investing (Free internet stuff and the library. NO CARLTON SHEETS )
My wife does 'World of Products' $25 bucks for the startup kit and catalogs + lots of work to get a customer base.
I also know where I can buy 'skill stop' slot machines for $150 each in quantities of 100. They sell on the internet for $250+. That needs a lot of upfront money and dedication with no guarantees.
Find your own niche

The system as it is tends to reward those who create value and it is in your best interest to find ways to create more value than working for a paycheck. Like the entertainer, you can set up a system that creates value for lots of people at the same time and multiply your rewards many fold. I don't have an answer to say "Here, do this and get rich." Anyone who is selling a system to get rich, is probably getting rich by selling the system instead of using it.

I do wish you the best
Mark