The Top 1% of Americans Have Taken $50 Trillion From the Bottom 90%

[Bomb#20]

Exactly the same applies. Firm A's decision to save comes simply at the expense of a deposit that would have otherwise gone to Firm B in payment for goods and services. As the BoE says "Saving does not by itself increase the deposits or ‘funds available’ for banks to lend."

"by itself". I.e., saving increases the deposits or funds available for banks to lend, in combination with some other processes.

The BoE paper states categorically that

- banks are not intermediaries between savers and borrowers.

By "states categorically", you're referring to the statement "banks do not act simply as intermediaries"? That is not a claim that they do not act as intermediaries. That's a claim that what they do is more complicated than acting "simply" as intermediaries. You seem to be making a habit of disregarding qualifiers.

- money lent by banks is new money created in the process of lending.

Yes. And that works, as you can see from Figure 2, because the borrower, in one and the same operation, lends the money back to the bank. This doesn't create a need for new deposits until the borrower withdraws the money. When that happens the bank draws down its reserves. Then the bank needs to borrow money to build its reserves back up. It can borrow from the central bank or from other banks, but that's expensive, so the preferred source is savers. So the bank is being, among other things, an intermediary between savers and borrowers in a complicated roundabout fashion.

The snippet you've quoted contradicts neither. I don't know why you think so, but I'd guess the common misconception that reserves are retained fractions of savers' deposits (which, TBF, they sound like).

Money is fungible. It makes no difference whether one thinks of reserves as a retained fraction of savers' deposits or as different money sourced from the central bank while thinking of deposits as destroyed money. It's a metaphysical distinction.

 

[Bomb#20]

...Everybody exploits everybody else; that's what happens in symbiotic relationships. It works because trading benefits both parties to a trade.

There are different ways to steal, just as there different ways to exploit and capitalize on vulnerability and need. To put it under one umbrella terms 'theft' does not necessarily describe or represent what is happening in business or the workplace when they set prices and wages.

Is that a fancy way to say "When my outgroup does it it's stealing; when my ingroup does it it's just hunky-dory"? All the ways of stealing involve one party being unwilling.

To say that workers can go to the competition is absurd when competitors offer no better deal for their workers.

In Australia all the companies pay the same and provide the same benefits and the same working conditions? That's not how it is in the U.S.

Unless they are in need of people with desirable skills, they have no incentive to offer better pay and conditions. It is in their interest to keep wage cost down.

And the way to keep wage cost down the furthest is to not have any employees. Yet they have employees. So evidently the companies are in need of people with desirable skills, and therefore have an incentive to offer better pay and conditions.

Joining unions is a way of getting a better deal. It is in the interest of workers to form strong unions and bargain collectively for better pay and conditions.

Yes, of course. A union is a group of producers coordinating their economic activities for mutual benefit, which is also what a corporation is. A healthy economy tends to accumulate a lot of such associations. It isn't stealing to bargain, and it isn't stealing to bargain skillfully, regardless of who does it; it's just people trying to get the best deal they can. When everybody tries to get good deals, good deals tend to accumulate in an economy.

Unfortunately union membership has eroded away, individual contracts replacing collective bargaining with hard won pay and conditions also eroding away.

Well then, give the double-standards a rest and go organize a union. That will do far more good for the workers than trumped-up theft charges against capitalism. If you convince people capitalism is theft, they might abolish it, and that won't be good for the workers. In case you didn't notice, independent trade unions abound in capitalist countries and are non-existent in socialist countries. Socialists always get rid of independent unions when they get the power to do it, for the same reason that if snake-oil salesmen took over the government they'd outlaw real doctors. The one and only time a socialist country decided to allow a real trade union to operate it ended up bringing down the entire Soviet empire.

 

[DBT]

The double standard lies in one party, the employer, holding all the cards.

The problem is a gross imbalance in power.

Unions were formed for this reason.

''Labour unions arose because there were many who found difficulty in accepting how “big business” was run; on the backs of the workers in the factories who saw very little in compensation. Along with less money, mechanized production of goods replaced household manufacturing, but these machines were difficult to use and could be dangerous to work with. Labour unions helped spread the balance of power more evenly so that labourers could bargain for more rights such as more pay and better working conditions.''

''The labor movement in the United States grew out of the need to protect the common interest of workers. For those in the industrial sector, organized labor unions fought for better wages, reasonable hours and safer working conditions. The labor movement led efforts to stop child labor, give health benefits and provide aid to workers who were injured or retired.''

''The early labor movement was, however, inspired by more than the immediate job interest of its craft members. It harbored a conception of the just society, deriving from the Ricardian labor theory of value and from the republican ideals of the American Revolution, which fostered social equality, celebrated honest labor, and relied on an independent, virtuous citizenship. The transforming economic changes of industrial capitalism ran counter to labor’s vision. The result, as early labor leaders saw it, was to raise up “two distinct classes, the rich and the poor.”

Now, some claim that this is no longer relevant in this day and age, but they are wrong. Given the steady erosion of incomes and conditions, leave loading, penalty rates, casualization of the workforce, etc, the individual worker is in no position to alter this erosion of pay and conditions.

''Today, unions continue to serve the same purpose for which they were originally founded. CEO and executive compensation is skyrocketing, while the middle class suffers from layoffs, unemployment and stagnant wages.

What do Labor Unions Want?

Increasing wages
Raising the standard of living for the working class
Ensuring safe working conditions
Increasing benefits for both workers and their families

Workers Need Fair Treatment Today as Much as Ever

Employers are trying to shed responsibility for providing health insurance, good pension coverage, reasonable work hours and job safety protections. Additionally, companies are making workers' jobs and incomes less secure through downsizing, part-timing, contracting out and sending jobs off-shore.

As the nature of work changes, working people need the collective voice and bargaining power unions provide to keep employers from making the workplace look as it did in the early nineteenth century.''

 

[Canard DuJour]

"by itself". I.e., saving increases the deposits or funds available for banks to lend, in combination with some other processes.

Not that involve saving, i.e. forgoing consumption. Saving does not create savings. The words are similar and often conflated, but that confuses a flow and a stock variable, which aren't commensurable. As the BoE says, "when households choose to save more money in bank accounts, those deposits come simply at the expense of deposits that would have otherwise gone to companies in payment for goods and services."

Whether A pays B $100 for goods/services or forgoes the purchase and saves the $100, the total quantity of money in Banks A and B is exactly the same - as is the total quantity of reserves Banks A and B have in their accounts at the central bank. The difference is that B has less incentive to produce and if A saves, and would have to borrow that $100 at interest from Bank A in order to do so.

By "states categorically", you're referring to the statement "banks do not act simply as intermediaries"? That is not a claim that they do not act as intermediaries. That's a claim that what they do is more complicated than acting "simply" as intermediaries. You seem to be making a habit of disregarding qualifiers.

No, I refer to that snippet in context, which you seem to be making a habit of disregarding

- money lent by banks is new money created in the process of lending.

Yes. And that works, as you can see from Figure 2, because the borrower, in one and the same operation, lends the money back to the bank. This doesn't create a need for new deposits until the borrower withdraws the money. When that happens the bank draws down its reserves. Then the bank needs to borrow money to build its reserves back up. It can borrow from the central bank or from other banks, but that's expensive, so the preferred source is savers.

Near enough, but this is not some belated form of intermediation i.e. lending A's money to B, which what the term means in finance. The central bank requires commercial banks to have enough reserves in their accounts with the central bank to clear net interbank transactions on an average Tuesday. Any loans have already been made. If a bank attracts a new deposit, the central marks its reserve account up, but not one cent of that depositor's money is used for interbank settlement. Loren is not "correct that the money from customer deposits will go out to the suppliers and the workers". The purpose is for central bank to restrict the volume of money creation by commercial banks.

In fact, I should say was the purpose, because it isn't really a thing anymore. It basically stopped a decade ago when the central bank flooded the system with reserves in attempt to encourage lending, spending and production - i.e. to discourage saving - contrary to Loren's theory. Supposedly temporary at the time, it's now unlikely to be undone in the forseeable future.

So the bank is being, among other things, an intermediary between savers and borrowers in a complicated roundabout fashion.

Only in the trivial sense that banking operations inevitably involve both. It has nothing to do with saving, i.e. forgoing consumption, which does not create any additional deposits or reserves, but reduces lending opportunities by reducing demand for loans.

The snippet you've quoted contradicts neither. I don't know why you think so, but I'd guess the common misconception that reserves are retained fractions of savers' deposits (which, TBF, they sound like).

Money is fungible. It makes no difference whether one thinks of reserves as a retained fraction of savers' deposits or as different money sourced from the central bank while thinking of deposits as destroyed money. It's a metaphysical distinction.

They are operationally completely different, and central bank reserves (which are the only kind of reserves) are not fungible with other forms of money except under strict central bank control.

 

[Loren Pechtel]

You can choose to buy Twinkies or not regardless of their cost. There is a choice. If they are too expensive, consumers stop buying. Earning a living is an entirely different matter.

So, let them eat cake? Because people have to eat.

You can eat other things, workers can work for other employers. Either it's theft or it isn't, you can't apply it on only one side.

You may have missed the point.

You just don't like that we are pointing out the other side of the same coin.

 

[DBT]

You may have missed the point.

You just don't like that we are pointing out the other side of the same coin.

Not really. It has been pointed out that going to work for another company is not an option for many workers.

Employers tend not to compete to see who can offer workers a higher rate, because it's in their own interest to keep wage cost down.

So going to another company is not likely to secure a better deal in income.

That is the point you guys ignore.

 

[Loren Pechtel]

You may have missed the point.

You just don't like that we are pointing out the other side of the same coin.

Not really. It has been pointed out that going to work for another company is not an option for many workers.

Employers tend not to compete to see who can offer workers a higher rate, because it's in their own interest to keep wage cost down.

So going to another company is not likely to secure a better deal in income.

That is the point you guys ignore.

There usually is a small range, the companies with the higher standards for employees pay a bit more to attract them. (Note that this does not apply at the bottom where minimum wage whacks the end of the curve.) You're a good worker, go to one of the good companies and make more. You're not a good worker, up your skills!

 

[DBT]

Not really. It has been pointed out that going to work for another company is not an option for many workers.

Employers tend not to compete to see who can offer workers a higher rate, because it's in their own interest to keep wage cost down.

So going to another company is not likely to secure a better deal in income.

That is the point you guys ignore.

There usually is a small range, the companies with the higher standards for employees pay a bit more to attract them. (Note that this does not apply at the bottom where minimum wage whacks the end of the curve.) You're a good worker, go to one of the good companies and make more. You're not a good worker, up your skills!

It's not necessarily that workers lack skills, but as individuals they do not have bargaining power. Especially if an employer has a pool of applicants to draw from and no inclination or incentive to raise wages.

It is collective bargaining that goes some way in balancing the power difference between the employer and workers.

 

[Loren Pechtel]

Not really. It has been pointed out that going to work for another company is not an option for many workers.

Employers tend not to compete to see who can offer workers a higher rate, because it's in their own interest to keep wage cost down.

So going to another company is not likely to secure a better deal in income.

That is the point you guys ignore.

There usually is a small range, the companies with the higher standards for employees pay a bit more to attract them. (Note that this does not apply at the bottom where minimum wage whacks the end of the curve.) You're a good worker, go to one of the good companies and make more. You're not a good worker, up your skills!

It's not necessarily that workers lack skills, but as individuals they do not have bargaining power. Especially if an employer has a pool of applicants to draw from and no inclination or incentive to raise wages.

It is collective bargaining that goes some way in balancing the power difference between the employer and workers.

When you go with the collective bargaining route you tend to destroy the company in the long run unless there are major barriers to entry. That's why unionization is at such a low level--the unions ate their companies.

 

[ZiprHead]

It's not necessarily that workers lack skills, but as individuals they do not have bargaining power. Especially if an employer has a pool of applicants to draw from and no inclination or incentive to raise wages.

It is collective bargaining that goes some way in balancing the power difference between the employer and workers.

When you go with the collective bargaining route you tend to destroy the company in the long run unless there are major barriers to entry. That's why unionization is at such a low level--the unions ate their companies.

Now it's the companies eating the employees.

 

[DBT]

It's not necessarily that workers lack skills, but as individuals they do not have bargaining power. Especially if an employer has a pool of applicants to draw from and no inclination or incentive to raise wages.

It is collective bargaining that goes some way in balancing the power difference between the employer and workers.

When you go with the collective bargaining route you tend to destroy the company in the long run unless there are major barriers to entry. That's why unionization is at such a low level--the unions ate their companies.

Not really, there were excessive demands. Both sides act in their own interest. Now it's happening in favour of the rich on a Grand Scale. A middle ground needs to be established. That unionism achieved higher pay and better conditions for its members shows that it works. That workers can get a better deal collectively.

 

[Loren Pechtel]

It's not necessarily that workers lack skills, but as individuals they do not have bargaining power. Especially if an employer has a pool of applicants to draw from and no inclination or incentive to raise wages.

It is collective bargaining that goes some way in balancing the power difference between the employer and workers.

When you go with the collective bargaining route you tend to destroy the company in the long run unless there are major barriers to entry. That's why unionization is at such a low level--the unions ate their companies.

Not really, there were excessive demands. Both sides act in their own interest. Now it's happening in favour of the rich on a Grand Scale. A middle ground needs to be established. That unionism achieved higher pay and better conditions for its members shows that it works. That workers can get a better deal collectively.

Until their jobs disappear. We want something sustainable for the long run.

 

[ZiprHead]

Not really, there were excessive demands. Both sides act in their own interest. Now it's happening in favour of the rich on a Grand Scale. A middle ground needs to be established. That unionism achieved higher pay and better conditions for its members shows that it works. That workers can get a better deal collectively.

Until their jobs disappear. We want something sustainable for the long run.

Can you provide an idea of what that might be?

 

[Loren Pechtel]

Not really, there were excessive demands. Both sides act in their own interest. Now it's happening in favour of the rich on a Grand Scale. A middle ground needs to be established. That unionism achieved higher pay and better conditions for its members shows that it works. That workers can get a better deal collectively.

Until their jobs disappear. We want something sustainable for the long run.

Can you provide an idea of what that might be?

It's not a system that permits extortion.

 

[DBT]

Can you provide an idea of what that might be?

It's not a system that permits extortion.

Never mind exploitation and profiting from cheap labour.

 

[Loren Pechtel]

Can you provide an idea of what that might be?

It's not a system that permits extortion.

Never mind exploitation and profiting from cheap labour.

Which doesn't change the fact that the union approach destroys the companies and thus the jobs. You persist in thinking that if you can magically get rid of bad jobs there will be plenty of good jobs--when the reality is you're throwing people into unemployment.

 

[ZiprHead]

Can you provide an idea of what that might be?

It's not a system that permits extortion.

Extortion occurs in the employer/worker relationship all the time. Take it or leave it, leave and you don't eat.

 

[DBT]

Never mind exploitation and profiting from cheap labour.

Which doesn't change the fact that the union approach destroys the companies and thus the jobs. You persist in thinking that if you can magically get rid of bad jobs there will be plenty of good jobs--when the reality is you're throwing people into unemployment.

Which companies? How many?

You need to cite cases, including percentage, where it was specifically the union that destroyed companies.

Meanwhile the rich have gotten richer and their wealth continues to grow. This, while workers are not getting the market value of the wealth they help to generate through their labour.

That is what you conveniently overlook.

 

[Harry Bosch]

Never mind exploitation and profiting from cheap labour.

Which doesn't change the fact that the union approach destroys the companies and thus the jobs. You persist in thinking that if you can magically get rid of bad jobs there will be plenty of good jobs--when the reality is you're throwing people into unemployment.

Which companies? How many?

You need to cite cases, including percentage, where it was specifically the union that destroyed companies.

Meanwhile the rich have gotten richer and their wealth continues to grow. This, while workers are not getting the market value of the wealth they help to generate through their labour.

That is what you conveniently overlook.

DBT: if getting rich is the goal, I hate to point out the obvious, but a person will never get rich working for someone else. If a person works hard, develops their trade, and becomes very valuable to their employer, they can command a great wage. And if they live frugally, and invest well, they can achieve a very comfortable life. But you'll never get rich. If your goal is to become rich (which is overrated) simply identify a service or product that people want; start a company; work 80 hours a week, grow your RE. Growing equity in your company and then selling at the right point is how most self made people get rich.

 

[ZiprHead]

Which companies? How many?

You need to cite cases, including percentage, where it was specifically the union that destroyed companies.

Meanwhile the rich have gotten richer and their wealth continues to grow. This, while workers are not getting the market value of the wealth they help to generate through their labour.

That is what you conveniently overlook.

DBT: if getting rich is the goal, I hate to point out the obvious, but a person will never get rich working for someone else. If a person works hard, develops their trade, and becomes very valuable to their employer, they can command a great wage. And if they live frugally, and invest well, they can achieve a very comfortable life. But you'll never get rich. If your goal is to become rich (which is overrated) simply identify a service or product that people want; start a company; work 80 hours a week, grow your RE. Growing equity in your company and then selling at the right point is how most self made people get rich.

Way to miss the point, dude.