New study/experiment. Uber conservatives now get a diagnosis?

[Undertoad]

Alright. The secret is, the people he hires are in the same marketplace that the peas are. As much as we hate to think this is true, it's simply fact.

These decisions are not really made by the CEO. As much as the CEO wants to charge $5 per can - because he'll make $4.55 per can - there is no grocer in the world charging that. As much as he wants to sell the cans for 30 cents - because he'll sell more - the decision is not up to him, because at that price point it actually costs the grocer 15 cents per can. He can run it as a special to show off a low price... but only for a while.

The owner has the ability to take a smaller chunk. But so does every single other owner, and so the owner faces the same problem in pricing himself as his faces in pricing the peas.

He especially faces it when pricing labor. In the grocery business, labor costs are the bulk of the costs, aside from the price of goods sold. So as much as he wants to, if he pays $20/hour for checkers, he will go out of business because he won't have any money left. If he chooses to give smaller salaries to management, he'll get worse managers because his competition will get the good managers. His managers will leave to work for the competition. If he chooses to bring in inferior goods to take a bigger chunk per item sold, he'll lose business to quality.

One grocer can't change this system. All 100 grocers in the area might be able to - until some other chain comes to the area and runs it back. All 10,000 grocers in the country may be able to - until an alternative to grocers comes around. If there is a big gap between prices and cost of goods sold, you can bet that it will. Because the business has a built-in profit margin in the single digits, smaller than the average businesses out there. The rules of the market are clearly defined.

You can say that the market for CEOs is confused, that the CEOs make too much because boards don't understand that more people can do that job than the 1000 people vying for Fortune 500 company CEO positions. The boards don't agree with you.

You can say that the market for business owners is confused because too many owners take too much out of their businesses. But starting most businesses, especially those with employees, requires a buy-in of six figures and a rather complete understanding of the market and the profession. You can say, well people should be better owners, and on that we agree. But that problem doesn't lie in the rather forced economic revisionism you seem to espouse. Force labor and wage changes and you will just find the same owners making stupider decisions.

[Spexxvet]

Originally Posted by Undertoad

....He especially faces it when pricing labor. In the grocery business, labor costs are the bulk of the costs, aside from the price of goods sold. So as much as he wants to, if he pays $20/hour for checkers, he will go out of business because he won't have any money left. If he chooses to give smaller salaries to management, he'll get worse managers because his competition will get the good managers. His managers will leave to work for the competition. If he chooses to bring in inferior goods to take a bigger chunk per item sold, he'll lose business to quality.
...
You can say that the market for CEOs is confused, that the CEOs make too much because boards don't understand that more people can do that job than the 1000 people vying for Fortune 500 company CEO positions. The boards don't agree with you.

You can say that the market for business owners is confused because too many owners take too much out of their businesses. But starting most businesses, especially those with employees, requires a buy-in of six figures and a rather complete understanding of the market and the profession. You can say, well people should be better owners, and on that we agree. But that problem doesn't lie in the rather forced economic revisionism you seem to espouse. Force labor and wage changes and you will just find the same owners making stupider decisions.

What I'm saying is that when, or if you prefer "if" the CEO, the managers, even the cashiers have enough, they should stop accumulating wealth. My guess is that nobody in your explanation feels that they have enough. There will be planty of people who never have enough.

[Undertoad]

Originally Posted by Spexxvet

What I'm saying is that when, or if you prefer "if" the CEO, the managers, even the cashiers have enough, they should stop accumulating wealth. My guess is that nobody in your explanation feels that they have enough. There will be planty of people who never have enough.

That's what you're saying NOW, not what you were arguing in #181, which is what my posts lead back to and what I'm talking about.

[Spexxvet]

Originally Posted by Undertoad

That's what you're saying NOW, not what you were arguing in #181, which is what my posts lead back to and what I'm talking about.

In #181, I gave an illustration to justify my point that if a CEO or owner accepts less, poverty and welfare can be reduced. How is that substantially different than what I just said?

[Flint]

This is worse than the time I got stuck defending my Plane on a Treadmill position; which I think finally settled on:

Originally Posted by paraphrase

...there is no correct answer because the question is worded wrong...

Boy, that was embarrassing!. . . ha ha ha

[Undertoad]

Originally Posted by Spexxvet

In #181, I gave an illustration to justify my point that if a CEO or owner accepts less, poverty and welfare can be reduced. How is that substantially different than what I just said?

#181 talked about the CEO changing the wage structure. Now you're talking about everyone accepting less. I guess we went off track when the peas were too patronizing...

...that "intellectually dishonest" label applies here as well.

[Spexxvet]

Originally Posted by Undertoad

Gosh. In this deeply fractured society, it is now an option to believe that the other side is not just incorrect, not just wrong, not even just stupid, but actually broken.
….

To that list I guess we have to add

Originally Posted by Undertoad

..."intellectually dishonest" … as well.

I’ve been pretty consistent throughout.

Originally Posted by Spexxvet

And it's the people making gobs of money at the top end

I’ll be more specific and change that to “have enough”

Originally Posted by Spexxvet

that are taking away the ability to increase wages at the bottom end. There is a limited amount of wealth in the system - what goes to one person is no longer available to go to someone else.

I’ll stand by that.

Originally Posted by Spexxvet

The bottom line is this - if individuals were doing a good enough job caring for those in need, the government would not have to provide for them at all. So, just like communism, your idea has failed.
…

Originally Posted by Spexxvet

And I'm saying there would be less need for charities and "government programs" if more of that went to the front line, lower paid employees, who are generating the income, and can't afford stocks. If you pay bottom-rung employees more, there would be more incentive to get off welfare - you said as much, yourself.

So take it up with Bruce, too.

Originally Posted by Spexxvet

The rich folks should not keep as much.

Once they have enough.

Originally Posted by Spexxvet

They can pay their employees more, improve the employees working conditions, hire more employees, lower the price of their product/service, improve its value without raising the price, etc. Any of these things would help to get people off of welfare, or no longer need the help of charities.

They can even give to charities, creating jobs for the charities. Maybe the charity can train people on the welfare rolls, and those folks can then get jobs. What a concept!

Originally Posted by Spexxvet

Simplified illustration:
A - Your company generates $1,000,000 in sales. As Bruce said, the CEO decides who is worth what amount and who gets how much. He keeps $500,000 for himself. He pays each of his 3 executive vice presidents $100,000. That leaves $200,000 to split among the 50 front-line revenue-generating employees.

B - Your company generates $1,000,000 in sales. As Bruce said, the CEO decides who is worth what amount and who gets how much. He keeps $100,000 for himself. He pays each of his 3 executive vice presidents $50,000. That leaves $750,000 to split among the 50 front-line revenue-generating employees.
…
Eventually, if the disparity between rich and poor continues to increase, the climate will be similar to 1917 Russia and 1789 France.
…

Originally Posted by Spexxvet

Let's call him "the owner", so that we can say he has total power over his compnay. He could raise the price of peas. On the other hand, he could be satisfied with keeping 25% or 50% of his possible take. What's so wrong about making $100,000, if it means that you'll get better performance and loyalty from your employees, or sell more units, or whatever?

This is like the board game Risk. Have you ever played? Let's say you control Noth America. You could put 20 armies each on Greenland, Alaska, and Mexico, and 1 army on each of the other countries, or you could put 10 armies on Greenland, Alaska, and Mexico, and 2-4 armies on the rest of the coutries. Which makes for a more secure continent?

Originally Posted by Spexxvet

That's what happens now - you get inflation. I'm talking about a whole new way of behaving. One where greed and selfishness take a back seat to what best for the whole - economy, nation, world, species - whatever. I'm not saying that that the owner has to give up all his income, he just needs to accept somewhat less, so that others can have somewhat more. You may say that it'll never happen, that people are naturally self-interested, and won't give up any of their loot (Clod and Lookout are fighting pretty hard). Maybe I'm naive, but I see this as a win/win solution to the problem of the shrinking middle class, the welfare system, and the high taxes resulting from the welfare system. "The owner" can continue with the status quo, and continue the system of "government extortion", and the bitching that goes with it, or he can embrace an entirely new mindset, where his voluntary actions change the system.

Annecdote: My father-in-law owned a plumbing business. He compensted his employees at a higher level than he needed to. He took care of hs guys. He could have paid them as little as he could, and replace them when they got fed up and left. He could have closed up shop, if a union was voted in, and opened up down the street under a different name, without the union. He could have allowed a union to come in, and charged his customers more. But he chose to put less in his pocket.

Originally Posted by Spexxvet

…
I'm not asking anyone to accept less if they don't have enough. Don't you think there's a point where you will have enough? If you reach that point, will you just keep accumulating wealth? The little I know of you tells me that when you get enough, you'll retire and spend your life playing guitar and following Bob Weir's tour.

No. When you have enough, let others have some of what you could choose to accumulate.


That doesn't make any sense to me. You have a choice of working at a job, and not making enough, or going into business for yourself, and making enough, and you would choose to not make enough?
...

Originally Posted by Spexxvet

Turn your business over to your child? Sell it? Work for free, because you love the job and want to keep your people employed? Work and give the money to charity? Think outside the box, LJ.

Originally Posted by Spexxvet

What I'm saying is that when, or if you prefer "if" the CEO, the managers, even the cashiers have enough, they should stop accumulating wealth. My guess is that nobody in your explanation feels that they have enough. There will be planty of people who never have enough.

Originally Posted by Spexxvet

In #181, I gave an illustration to justify my point that if a CEO or owner accepts less, poverty and welfare can be reduced. How is that substantially different than what I just said?

Originally Posted by Undertoad

#181 talked about the CEO changing the wage structure. Now you're talking about everyone accepting less. I guess we went off track when the peas were too patronizing...….

I think you’re being nit-picky here, UT.

I threw out a bunch of options. Are you trying to say that my theory is incorrect because you think there’s an inconsistency between “CEO changing the pay structure” and “everyone accepting less” (which would, in fact, be a change in pay structure – think union give-backs)????

Sounds like a straw man argument.

[Undertoad]

Originally Posted by Spexxvet

I threw out a bunch of options. Are you trying to say that my theory is incorrect because you think there’s an inconsistency between “CEO changing the pay structure” and “everyone accepting less” (which would, in fact, be a change in pay structure – think union give-backs)????

There is a very fucking huge and very fucking obvious difference between a "CEO changing a pay structure" and "everyone accepting less";

What I was trying to walk you through was why the CEO can't necessarily change the structure the way you posted in #181, just like he can't change the price of a can of peas, because market forces regulate everything;

And by the way, if you want to go anecdotal, I'm speaking as a former business owner whose business failed quickly, largely because I paid too highly for people;

It would have done me more good, and the world more good, if I'd figured out how to build my business without overpaying them;

And it would have been better for them not to have temporarily high-paying employment followed by sudden failure;

Because I could only pay those people for about a year before I experienced total business collapse and utter personal financial ruin.

[Urbane Guerrilla]

Originally Posted by Spexxvet

I’ve been pretty consistent throughout.

That in itself is no argument for your intellectual honesty, though. Tw is also pretty consistent throughout, and no one accords that dealer in half-truths a reputation for integrity.

Originally Posted by Spexxvet

I’ll be more specific and change that to “have enough[.]”

This kind of economic argument is a nonstarter, though: no two people economically independent each of the other would likely have either quite agree with the other's assessment of what is enough for themselves, and they'd be reluctant to assess "enough" for the other party. A program intended to determine "enough" is merely stillborn -- everyone subject to it would recognize it as completely arbitrary and resent its inevitable strictures. Do it the way it's done now and be content.