Thanks for sharing, friend! Many here enthusiastically agree with you and I’m certainly one of them. And we must always remember that Lenin said (or was it Stalin?), “The purpose of socialism is to usher in communism.”
I actually agree with you. Like a lot of things, socialism sounds great in theory but it doesn’t actually work. Socialism always fails. We all know why – it provides no incentives for anyone to innovate and strive to do better, and the government cannot centrally command a market. Genuine pricing signals are required.
Free market capitalism also inevitably fails. The best example from history is the United States which failed around 1970-71 (when it hit Peak Oil and completely coincidentally (wink-wink) ended the gold standard as its trade deficit ramped up). What it has morphed into now is about as far as you can get from socialism and when I hear people criticize the current system as being socialist I just think that they don’t understand what they’re talking about and they certainly don’t understand what socialism is. While this isn’t free market capitalism, it is the inevitable end result of free market capitalism.
Just because socialism doesn’t work doesn’t mean that capitalism does. There is a saying something like, “Capitalism’s vice is unequal sharing of wealth. Socialism’s vice is equal sharing of poverty”.
Capitalism doesn’t work because wealth inevitably concentrates which sends the middle class into poverty unless the economy exponentially grows and “creates” new wealth, and everyone here should understand where that wealth really comes from. When the economy can no longer grow due to resource constraints the system falls apart and corruption runs rampant.
Interesting how the US and Russia are now so very similar. They started from polar opposites but now have become the same: an oligarchy of a few very wealthy elites who control the markets and siphon wealth from the masses who are struggling to get by.
What’s your solution?
Earning money off your money is not ‘unearned.’ If I have money that I’ve either inherited or earned, and I invest it in builing an apartment building, which then creates housing for people and earns profit for me, how is that unearned money? If I have money set aside for retirement and I invest in the market, and I make a return on my investment, how is that unearned? Investing in the market does not deprive the working people of their wages, on the contrary, it helps the company to grow so that it can employ more people and serve more of the market or cummunity.
Money is inanimate. It’s not going to choose to invest itself. A person has to take their money and intelligently and actively do something with it. The act of being smart with your money and investing it in something that will earn more money does not make the result ‘unearned.’ Keep in mind, investing carries risk, and not all money invested earns a return. Many ventures fail, many stocks crash.
If I have the same money I would have built an apartment complex with, yet I instead go waste it at the casino, is that somehow better than if I built something with it, or invested it to make more money?
Please explain how investing for a return of profit, or investing in the market is harming the working man. The working man is going to make his wages, and no part of my investment profit is withheld from his paycheck, so how do you figure that smart money management is harmful to the working man?
We are so similar, in fact, that I think we should be allies, not set against each other.
I don’t have a solution, other than to return to a more free market than we have. And to make sure my family is prepared, come what may. I don’t think we’re meant to find perfection or paradise on this earth, so I don’t expect to find the perfect system for government or money. All we can do it seek out and correct the obvious problems where we are allowed to do so.
If I had to choose a perfect system, I’d go back to before we had kings and follow the commandments of the Lord. It’s when we asked for corrupt human leadership that we ushered in many of these failings. Humanity will always default to taking the easiest path, and to taking advantage of any loophole that can be found. As long as we’re under human leadership, things will be far from perfect. If human decency were common across the board we wouldn’t have these problems, but we live in a far from perfect world.
“Please explain how investing for a return of profit, or investing in the market is harming the working man. The working man is going to make his wages, and no part of my investment profit is withheld from his paycheck, so how do you figure that smart money management is harmful to the working man?”
Oh but it does, I feel it in my soul. Those who are rich, savvy, and make their money by manipulating and gaming the system are not so innocent and benign as you portray them to be. Computers placed strategically so they can gain fractions of a second in order to give someone an advantage, algorithims to game the system, stock buy backs, shipping jobs over seas, replacing jobs with robots in order to make bigger profits. There is a humongous difference between a carpenter and a trader using the most high-tech, insider information to enrich their pocket-book. I know I am not very articulate in this area but when my taxes on a days work which is PHYSICAL labor are higher that the rich persons gaming and manipulations no argument on earth is going to convince me they “earned” that money.
Lets watch the movie The Big Short and then someone can explain to me how no-one got hurt and the working man isn’t affected by the markets and the rich are enguenious. Perhaps I misunderstood the movie.
Someone please help me out here.
AKGrannyWGrit
AKGrannyWGrit, I’m sorry, but you lost me at “I feel it in my soul.” I don’t trust people’s feelings to be the rational basis for truth. I have to question even my own feelings on many issues, so it’s nothing personal against you.
Swampmama, you lost me at the word “lost”. Most of what GrannyWG said was checkable fact, including possibly the conclusion (depending on what points the film raises).
So when you say “lost me”, you let me know that you are discounting everything else, all the logic, on the weight of her having a feeling different than yours.
A better reply would discount the feeling, then go for the meat of her comment.
Just a comment on rational discourse and dialogue, trying to keep things to a valid level.
Please resume your conversation.
ignore
Swampmama3 wrote:
1. Earning money off your money is not 'unearned.'
"Unearned income" is how the IRS refers to it. "Earned income" is what they consider money received as a result of work or a job. Both terms are accurate and revealing.
2. If I have money that I’ve either inherited or earned, and I invest it in builing an apartment building, which then creates housing for people and earns profit for me, how is that unearned money?
Believe that is how the IRS categorizes it (rental income, anyway). Providing housing is more beneficial to others than buying stock and collecting dividends, and being a landlord certainly involves work. That is why I said “for the most part” and specified “dividends and stock price increases”, as I don’t consider landlord income to be unearned or undeserving. It should be pointed out there are slumlords, however, who abuse and endanger tenants by cutting corners in the name of increasing profits (an inherent fault of capitalism). The recent fire in Trump Tower is an example, where sprinklers were not installed in order to save money and someone died as a result.
3. If I have money set aside for retirement and I invest in the market, and I make a return on my investment, how is that unearned? Investing in the market does not deprive the working people of their wages, on the contrary, it helps the company to grow so that it can employ more people and serve more of the market or cummunity.
Again, a distinction made by the IRS, one I’ll argue is valid. Your return is dependent on the labor of employees, and the more their compensation is cut, the greater your return. The idea that “investing” in companies leads to growth and increased employment maybe once upon a time worked in the early stages of a corporation’s formation, but it clearly doesn’t play out these days. If anything, the opposite is true. For decades, meeting shareholder demands has led to reduced benefits, pay cuts, and offshoring of jobs. Keep in mind the overwhelming majority of shares are held by the top .1%. Also, most stock transactions bypass the companies involved. “Investors” only care about a company for the return it provides, and won’t hesitate to dump it as soon as a better investment appears.
4. Keep in mind, investing carries risk, and not all money invested earns a return. Many ventures fail, many stocks crash.
Without question, and the best justification for getting a return on investment. Far better than the false notion of spurring innovation, employment and prosperity.
5. Please explain how investing for a return of profit, or investing in the market is harming the working man. The working man is going to make his wages, and no part of my investment profit is withheld from his paycheck, so how do you figure that smart money management is harmful to the working man?
Mostly addressed above (#3). For clarification, a large part of your investment profit is in effect withheld from the working person’s paycheck. I.e., instead of profits being shared among those who generated them, they are being distributed to you and other shareholders. If you’re inclined to say that’s the way the system works, I would agree and argue that is why the system has to be changed.
The big question–one that rarely gets asked or discussed–is how is it fair that the wealthy get to live off the money made off their money while working people live off their paychecks? Assuming the .1%'s wealth was honestly and deservedly earned (highly questionable, as compensation has gotten completely out of whack…is it even possible to do $100s of millions, or billions of $ worth of work? Not to mention those who inherited it. ), how can it be justified that they get to live like royalty without spending any of the money they “earned”, instead living off the money their money makes? A person who works every week has to save up to buy a kayak, while the uber rich buy yachts with their dividend checks. As if this weren’t crazy enough, we tax unearned income at lower rates than earned income!!!
We’ve been fed this narrative about how the .1% are job creators and the most successful members of society, and as such shouldn’t be penalized by high taxes. We should instead be talking about how the working class are wealth enablers (enabling those at the top to acquire such vast wealth) and the sense of entitlement among the .1%, expecting to live off unearned income and buying politicians to game tax laws in their favor.
At 1/2 cent or 1 cent per stock trade, per share. This only affects the constant manipulative trading to any extent, and it would go along way to take care of our national debt.
AKGrannyWGrit, I’m sorry, but you lost me at “I feel it in my soul.” I don’t trust people’s feelings to be the rational basis for truth. I have to question even my own feelings on many issues, so it’s nothing personal against you.
Okay so you discount my post because you discount my “feelings” Let me provide the following video as evidence to support my feelings of frustration to unfairness, indifference and apathy.
As I am not as articulate as many of my fellow PP members to support my argument and position please re-read posts 46 thru 50.
AKGrannyWGrit
At the core - ideally - capital represents people who don’t spend all they make, while labor represents those who do spend all they make. “Those who care about saving” vs “those who don’t care as much.” Ideally. Capital also takes risk, while labor does not. Without capital and its willingness to take risk, there would be very little creation. Without labor, nothing would get done. Both are necessary. My mom was a saver. Over her lifetime, she accumulated capital. Following in her footsteps, so did I.
As always the answer isn’t “capital should win” or “labor should win” - ideally there should be a balance in sharing the rewards of production between labor and capital, assuming we want relative stability in society.
When labor gets too strong (read: socialism) and takes too large a share of the rewards, capital flees - either out of the country, or into hiding.
When capital gets too strong (i.e. globalism) and takes too large a share of the rewards, labor gets upset and brings about political changes - socialism, communism, Donald Trump, etc.
If we worry now about socialism coming to the US, understand that it is happening because capital has had free run of the place for the past 25 years. Labor has not had a voice since the Democrats turned into Social-Justice-flavored-Republicans back in 1992, tipping the political scales inexorably towards Capital.
There’s even more complexity, though; centralized Monopoly Capital stamps out Small Business Capital wherever possible - creating more wage slaves and eliminating competition. An example: US corporate megafarms, via NAFTA, kill off family farms in Mexico. Amazon is another case in point.
Our current vehicle for facilitating the rise of Monopoly Capital is the Corporation. Corporations are structurally sociopathic. Here’s an article that really resonates with me, that suggests corporations are actually Artificial Intelligence constructs that have already taken over the world:
https://www.counterpunch.org/2017/12/01/ai-has-already-taken-over-its-called-the-corporation/ Corporations, just like a potential runaway AI, have no intrinsic interest in human welfare. They are legal constructions: abstract entities designed with the ultimate goal of maximizing financial returns for their investors above all else. If corporations were in fact real persons, they would be sociopaths, completely lacking the ability for empathy that is a crucial element of normal human behavior. Unlike humans, however, corporations are theoretically immortal, cannot be put in prison, and the larger multinationals are not constrained by the laws of any individual country.And of course I'm ignoring - for the sake of this discussion - how central banks have betrayed people like me and my mom by printing money. But that's for another time.
mntnhousepermi Wrote:“insulate the rim joist area with cut out blocks of ThermaMax insulation and spray foam”
FWIW: Its not a good idea to insulate the RIM boards with Rigid Foam and Spray foam, as it will allow moisture to accomulate, causing Rot and Mold growth. Since the Rim/Sill plates are in contact with the Foundation, which can wick moisture up into the lumber can cause excessive moisture build up. RIM boards should only be insulated with moisture permible insulation like Fiberglass or mineral Wool. Read on Building Science or some other home builder resource site.
mntnhousepermi Wrote:“Other retrofit items depend on the location, because of where I live, I found a used, modern, very low emmission wood stove ( it has a catalytic converter) to replace the old one here.”
In my opinion using indoor wood stoves & furnances are a bad idea because your breathing in air that have combustion products no matter how well sealed it is. You still need to open the stove to add wood. And there is also the Ash to deal with. Plus if there is a problem (carless, have young children, pets) you could burn down your home. Ideally an outdoor wood boiler would be the better option. All the combusable products & ash remain outside, and there is little risk to burning down your home, unless the Outdoor boiler is right next to your home.
mntnhousepermi Wrote: “I dont know why you think people have to spend so much money to energy retrofit, there are many very, very effective measures that are very cheap”
It was in context of a Net Zero home. You never be able to retrofit an older home for Net Zero or Near Net Zero witout completely gutting it, and having to spend money to gut it and rebuild it back up.
mntnhousepermi Wrote: “I also have DHW, a closed loop system with heat transfer at the tank. It is a thermosyphon system, no pump, the hot water panels are lower than the tank ( we raised the tank 2 ft on a wooden platform, the panels are on the ground, leaning against the deck ( deck is 3ft or so from the ground)”
The issues I am aware of with Solar Thermal for DHW & Hydronic heating is (1) stagnation in the summer when the water gets too hot. Either you need to shade the panels or drain the system to avoid problems if you cannot regulate the loop temperature. (2) during the winter panels need to be kept clear of snow, and also must be perodically cleaned to avoid decreases in efficiency. If you want to use Hydronic Solar heating, the only option is to use Hydronic radiant heating or low temperature radiators. Both are not cheap to replace baseboard heating. I suppose in a force airsystem it would work, but the blower would have to run more often to work with the lower temperature heat source so there may not be an much of an energy savings. Ideally Solar Hydronic heating needs a thermal mass, Like a concrete slab or Gypcrete pour so that it can regulate the heat during the night. Heat accumulates in the slab during the day and gives off heat during the night.
The majority of people have zero techical skills and would be solely reliant on the installer to design and install the system correctly. This can be difficult, if tying the Solar Thermal system into pre-existing HeatingDHW systems. Most homes might are not in a position to mount the panels on the ground (ie Neighbors homestreesfront yard is south facing) so if they go on the roof, then it becomes difficult to cleaninspectmaintain the panels (as well as address stagnation). If the system relies on a pump to avoid sagnation and power goes out? It it gets too hot it will break down the Glycol antifreeze cause problems (clogging decreased efficiency, damaging the pump, etc) They also may not have a place to install the buffer tank (presuming Ranch with slab foundation with tiny Utilty room that is already fully occupied).
A lot of the stuff you stated suggesting a DIY is not applicable for the average America family that has little to know DIY skills. They call in people do it because they don’t know how. Often they also get ripped off by seek the lowest bidder, who cuts corners or doesn’t bother to read the Manufacturers installation manual.
mntnhousepermi Wrote: “The newer batteries do not and the new batteries can be run down to nothing without degradation.”
Sorry, but that is incorrect. Even newer battery chemistries such as lithium-Ion or LiFePO batteries will degrade faster with deep discharging, but they can tolerate it better than Lead Acid batteries.
I think you presume everyone has a DIY and understand basic electricity, They do not. Most will believe they can run an electric clothes dryer, Dishwasher, AC or other high load devices on an 5KW inverter (at the same time!).
Also there are other issues, such as people that live in multi-family homes, or cannot burn wood due to neighborhood association policies, or local laws.
TechGuy wrote:
mntnhousepermi Wrote:"insulate the rim joist area with cut out blocks of ThermaMax insulation and spray foam"
FWIW: Its not a good idea to insulate the RIM boards with Rigid Foam and Spray foam, as it will allow moisture to accomulate, causing Rot and Mold growth. Since the Rim/Sill plates are in contact with the Foundation, which can wick moisture up into the lumber can cause excessive moisture build up. RIM boards should only be insulated with moisture permible insulation like Fiberglass or mineral Wool. Read on Building Science or some other home builder resource site.
First, you might ask what batteries I have ? Since they are none of the 3 you mentioned ! ( They are Aquion Energy, AHI, which are not hurt by deep discharges, look it up. The only part that eventually degrades is the synthetic cotton fiber that seperates the anode and cathode, in theory these could be rebuilt)
Rim joist insulation, what I did is what is recommended. The foam is what is recommended. Anecdotally, and it has been years, under my house is immensely drier than when it was vented and had exposed, bare (wet) dirt. Here is a half-second search link for rim joist insulating, as an example http://www.finehomebuilding.com/2013/09/12/insulating-rim-joists
I never advocated to people retrofitting to a net zero house. Never the less, an awful lot can be done cheaply and even DIY that can make a huge difference, hence my link to the half project as an example of the types of projects. Did you look at what DIYer’s are doing ? I never said others should do what I did here, but the most common, cheap, DIY things to be done that I mentioned are air sealing (caulking), attic radiant barrier, etc…, thermal curtains, taking care when replacing/remodeling to make the house better thermally.
Best pump if cant thermosyphon solar hot water is to have a DC pump, connected to its own, tiny, dedicated solar panel, pumps when sun shines. I suppose if you had a large snow load area, some one might want drain down and just not use in the winter ! An example from my house is not meant to be what everyone would want to do. The reason I mentioned my solar is that you specifically asked me what solar I could have that didnt need to be fiddled with so I told you. The DHW panels here get hot in the summer ! I dont mess with them, and they do fine. I do not have 2 hot water tanks, there are a few ways to do heat transfer and keep just one hot water tank when room is an issue. Other systems have evacuated tubes that store the water. Despite your scepticism, many people have solar hot water and do not mess with it or do anything. I know people like this with panels or evacuated tubes, on the roof.
Wood stoves are not for everyone, it depends where you live, I said that is what people do where I live, other places would look to heat in other ways. Your fears of wood stoves are unfounded. They are airtight wood stoves, the fire is contained. I would not want an outside wood boiler ! That would use an awful lot of wood, alot of wasted heat. And, I would have to go outside to add wood. I have asthma and chemical sensitivites, and have no problem with opening a door to add wood. I guess you just arent familiar with it, when you open the door, smoke does not come out, it still goes up the stove pipe, and the door is quickly closed again. It is not a problem. No pets or children are hurt. babies and toddlers do not touch it, they are shown it is hot, and they dont. Everyone here heats with wood. It is a great heat. The only way you could burn down your house, is by rank stupidity, by leaning something flammable against the stove itself. Any child old enough to be left alone knows better. If you have a thoughtless kid, dont leave them alone witht he stove going, turn on the backup heat. So, it is at the same risk as people burning down their houses by other means, like cooking stove fires, candles, cigarettes, etc… possible, but you need to do something stupid.
I find it interesting that there are hard lines drawn, and that it seems people are placed wholly on one side of the line or the other. Davefairtex sums it up very well in calling it people who spend all they make, vs. people who don’t spend all they make. Neither of those ideas requires you to be rich or poor.
I come from a family of labor. My father, my mother, my husband. I can’t claim myself in that because before my marriage, we mutually decided that one of us would stay home with the kids so they wouldn’t have to endure the soullessness of daycare facilities. My husband, having the greater physical potential, took to the workforce. In the early years, we spent more than we earned and went into debt. I’m not a complete idiot. I can learn. I observed this and turned things around through money management.
So we are both labor and capital, now. My husband works extremely hard for his paycheck, and has been hospitalized three times because he nearly killed himself doing so. I take it as my solemn task to honor his labor by investing our modest savings into things which will earn a return, or at least not be lost by inflation and fiat currency manipulation. I understand both sides.
But to say that any part of our income is unearned, when I manage to save a little and set it aside in things which might bring a return, is absurd. Just because a person does not spend every penny and sets some aside for the future, does not make their planning, their labor, or their dollars ‘unearned.’ It does not make my husband’s wages subject to confiscation by those who do not have the foresight to live within their means and plan for the future. I cannot condone socialism.
Duplicate
… is that we DO have such extensive socialism, that a huge portion of investment income is likely to be unearned in the very sense SM speaks of.
The investment scene is ridled with theft and embezzlement; the tax scene is filled with governments that falsify (in my own city, where state law requires assessments to be 100% fair market value, the city assesses 1/16 acre properties AS IF they were 1/3 acre, then gives a 28% discount off that, resulting in an assessment at 400%fmv. That’s one strategy of many.) The government pension scene is ridled with fraud in all directions.
When there is such disconnect, then yes, unearned is probable a good phrase to use. Let me try it another way.
The bible has a reference to an ancient saying, “the laborer is worth his wage”.
In fact, the laborer has been almost completely separated from his wage, and that separation has been used to fund the entire system. A relative of mine once said, “you think we shouldn’t do things this way; you probabny also think we shouldn’t have had slaves. But we couldn’t have had the economic development and the standard of living that we had back then without slaves, and we cannot have the standard of living we want now without doing things this way.”
For her, it was a justification of the system; for me it was a condemnation.
As long as that remains true, that the laborer is separated from his wages, I’m going to say that the moral foundation of investment through the labor of others is nonexistent. It isn’t the investor’s fault always, but there it is. I guess if you want a moral investment, you’d do what I call “internalize”.
davefairtex wrote:
At the core - ideally - capital represents people who don't spend all they make, while labor represents those who do spend all they make. "Those who care about saving" vs "those who don't care as much." Ideally. Capital also takes risk, while labor does not. Without capital and its willingness to take risk, there would be very little creation. Without labor, nothing would get done. Both are necessary. My mom was a saver. Over her lifetime, she accumulated capital. Following in her footsteps, so did I.
As always the answer isn't "capital should win" or "labor should win" - ideally there should be a balance in sharing the rewards of production between labor and capital, assuming we want relative stability in society.So let’s say the population stopped growing. Does that mean nothing changes forever-more? I don’t think so. Unless of course everyone is happy exactly where they are, doing exactly what they’ve always done. Which doesn’t sound like the human society I know.
New ideas, new creations of thought are always coming forth. Some good, some terrible. Capital (or savings) is what enables these new ideas to be realized, and prospective ROI is what helps us sift the wheat from the chaff.
If you prevent, through some mechanism, the reward going to capital, you also eliminate the possibility of anything new and potentially valuable to society from being created. Even something as mundane (for some of us) like new music, art, fashion, or entertainment wouldn’t happen without ROI.
Generally speaking, the discipline of ROI makes sure that only useful ideas are created - and stick around. People paying for something is a real-time voting system that says, “I like this product or service so much that I’m willing to sacrifice some of my stored energy to obtain it.” Votes are cheap - stored energy is not.
And if there is no (ROI) reward for the creator, then they will not be motivated to take the risk to bring the new idea to market. There are exceptions (open source software is one example), but by and large, people are motivated to take risk by the prospect of reward.
It all goes back to the capuchin monkeys. “If I don’t get any reward for putting my energy into this new thing, why would I bother?”
Of course there flaws with this system, as we’ve talked about in detail elsewhere, but even a no-growth society needs ROI for new creations to appear. No-growth is not the same thing as no-change.
I’m also going to observe that people like novelty. That must be a pro-survival element put in place by our biology. Certainly it supports the drive to create, without which life and society would be pretty boring. I suspect, even if you artificially suppressed ROI for new things through some top-down mechanism, it would sneak in through the back door, given the human desire to both create and receive new and interesting things.
I fully agree. I’m not saying there isn’t a need for capital investments in an economy. What I’m wondering about is the implications of the profit made from capital investment in a non-growing economy. And whether a steady state economy can function with a private sector like we have today that is fully driven by profit from capital investment.
For example, let’s pretend that I invent a new phone that can project holographic videos. It costs the same as a regular phone does today. Everyone wants one and I make 4 billion dollars. My capital investment in R&D and manufacturing it paid off.
A steady state economy by definition does not have a growing money supply nor total wealth to be allocated. Therefore, the rest of the economy is now $4 billion poorer. I would not agree that people are now wealthier because they can project holograms. It’s just a gimmick. Real wealth would be measured by Shadowstats methods, and it would not be growing. In addition, I also made apple and Samsung go bankrupt so all those wealthy people have nothing.
With half the economy making profit from capital investment, this by definition would make the remaining economy poorer in a steady state economy. How would that work? True, my $4 billion profit is an excessive example, but 1 million people making $4000 profit would have the same effect.
Traditionally, we are told that the profit created by capital investment represents new wealth creation, via economic growth. This new wealth adds to the pool of existing wealth. But not so in a steady state economy.