Patterico's Pontifications

1/29/2014

What Mike Lee Should Have Said About Income Inequality

Filed under: General — Patterico @ 7:53 am

Confronted with Barack Obama’s jabbering about income inequality, Mike Lee took to the airwaves last night to declare that the horrible problem of inequality is Obama’s fault.

Mark Levin the other night highlighted a much more effective response to accusations of income inequality, from Margaret Thatcher. If you haven’t seen it before, it’s worth the minute of your time it takes to watch it:

What the honorable member is saying, is that he would rather the poor were poorer, provided the rich were less rich. . . . Yes, he would rather have the poor poorer, provided the rich were less rich.

That’s the response, Sen. Lee. That’s the response.

111 Responses to “What Mike Lee Should Have Said About Income Inequality”

  1. If you clicked on the video to watch, I personally recommend the extended version. The back and forth is just great. Thatcher really trounced the liberal logic.

    G (bbda88)

  2. The longer version is about 4 minutes and you guys can search for it. “Thatcher’s Last Stand Against Socialism”

    G (bbda88)

  3. Of course British politician Margaret Thatcher had rhetorical skills, brains and courage, just like the American politician, ummm,… err,… I’m thinking, I’m thinking, give me time…

    Fred Z (efcd4e)

  4. Back then (in the old days?!), Conservitive politicians like Thatcher & Reagan stood up for their ideals. Unlike the the current crop of “leaders” in congress who are gutless and worry what the NY Times and Wash Post might say about them.

    Worc1 (4e4ff5)

  5. All this talk about “income equality” excludes talk about “work quality” or “produce for society equality.” Who produces more for society, a guy who pushes a broom or the guy who runs a coffee shop empire?

    CrustyB (5a646c)

  6. Sen. Paul last night expressed a willingness to work with the President.

    Sen. Lee doubts that the President is willing to confront the real causes of the maladies he laments.

    At best, this is just dancing enmasked around an hideous reality. Ibn Dunham’s goal is chaos, want and distress. He wants his indentured servants destitute and abandoned to his care. He wants private charities bankrupted and shuttered.

    It is time to leave off recording and detailing his crimes and proceed to consequences.

    gary gulrud (e2cef3)

  7. There is simply no legitimate reason for anyone to be interested in the “income gap”. Nobody should know whether it is growing, shrinking, or staying steady, because no decent person would think it worth expending the effort, however minimal, to find out. A decent person is happy when anyone gets richer, and sad when anyone gets poorer, no matter who they are.

    In a capitalist system it is impossible for any person’s wealth to come at the expense of anyone else, so there’s no reason to be sad at any increase in anyone’s wealth, no matter who and no matter how much. If people are getting rich at other people’s expense, the only way that could possibly be happening is an unfree market; someone is distorting the market with force or fraud. And that someone is almost always in government, because it’s so much easier for people in government to do so than it is for criminals.

    Milhouse (b95258)

  8. There was a reason that one of the Ten Commandments was “Thou Shalt Not Covet”.

    Income gap talk is nothing but fueling the fires of covetousness and envy, often through use of deceit while at it.

    MD in Philly (f9371b)

  9. “In a capitalist system it is impossible for any person’s wealth to come at the expense of anyone else”

    Milhouse – Not strictly true.

    daleyrocks (bf33e9)

  10. methinks Milhouse is correct, except that we no longer live in a capitalist society so much as a crony capitalist one.

    with the government picking winners & losers, wealth *can*, and does, often come at the expense of others.

    http://cronychronicles.org/

    redc1c4 (abd49e)

  11. Living in Chicago, you can just walk down the street and find a business which owes its competitive advantage to its ability to grease some politicians’ palms. If the Treasury department were ever to apply RICO forfeiture of bribes to City of Chicago mayors, aldermen, and high-ranking City Hall flunkies, we’d balance the federal budget. Kelo? Kelo? (That’s where the government takes a property by eminent domain and gives it to a politically-connected private developer.) You can’t throw a rock in the Loop, and other places gentrified “developed” under Daley, without hitting a “Kelo property”. Or would you like to talk about the $154 million gift Chicago taxpayers made to the McCaskey family. Or as Obama would say, Bears Park.

    nk (dbc370)

  12. Comment by CrustyB (5a646c) — 1/29/2014 @ 9:05 am

    As someone who has had management experience in food-service, let me point out the valuable contribution by the person who “pushes a broom” in such an establishment. Without the guy/girl manning the dishwasher, nobody gets fed (eventually).
    But, your overall point is valid, and the point of the Progs is just so much claptrap.

    askeptic (b8ab92)

  13. Comment by MD in Philly (f9371b) — 1/29/2014 @ 10:20 am

    No use pointing out Biblical teachings to the Left, who denigrate all religions which have not demonstrated a propensity for cranial removal.

    askeptic (b8ab92)

  14. moar crony news

    http://stevengoddard.wordpress.com/2014/01/29/if-you-like-your-dark-ages-you-can-keep-your-dark-ages/

    includes a list of the larger “green energy” failures during Obumble’s first 4 years of failure.

    redc1c4 (abd49e)

  15. These are not failures, red, it is just that the wrong people were attempting to implement them.

    askeptic (b8ab92)

  16. “In a capitalist system it is impossible for any person’s wealth to come at the expense of anyone else”

    Milhouse – Not strictly true.

    I suppose there is honest error; even without force or fraud, a person might mistakenly enter a transaction that leaves him worse off, so the benefit the other person receives can be said to have come at his expense. Is that what you meant?

    Milhouse (b95258)

  17. with the government picking winners & losers, wealth *can*, and does, often come at the expense of others.

    That’s the whole point of government intervention.

    Milhouse (b95258)

  18. “methinks Milhouse is correct”

    redc1c4 – Good for you. Milhouse also believe labor has a negative value to businesses.

    methinks Milhouse needs to ponder his absolute statement awhile longer and consider revising and extending for none of the reasons mentioned in previous comments.

    daleyrocks (bf33e9)

  19. “Is that what you meant?”

    Milhouse – In a capitalist system businesses compete for customers. Businesses experience success and failure every day.

    Just take the very simple example of two restaurants in a small town competing for the same group of customers. One succeeds, the other goes belly up. The wealth of the owner of the successful restaurant is increased at the expense of the owner of the failed restaurant.

    You can find real world examples in most industries if you took the time to think and look.

    daleyrocks (bf33e9)

  20. Good for you. Milhouse also believe labor has a negative value to businesses.

    No, the cost of labor has a negative value to the employer. Any expense has a negative value to the person making the expense. That’s why it’s an expense. The reason people incur any expense is to obtain something even more valuable than what they are giving away. If they could get that value for less, or for free, then they wouldn’t spend what they do.

    Really, this is very simple. I’m astounded that you don’t understand it.

    Milhouse (b95258)

  21. “I’m astounded that you don’t understand it.”

    Milhouse – I’m astounded that you still can’t explain your negative value theory.

    daleyrocks (bf33e9)

  22. Just take the very simple example of two restaurants in a small town competing for the same group of customers. One succeeds, the other goes belly up. The wealth of the owner of the successful restaurant is increased at the expense of the owner of the failed restaurant.

    No, it is not. That is socialist talk. The failed restaurant did not own the customers who chose not to patronise it. It had no right to their custom. They are not slaves, and the money they did not spend at that restaurant belongs to them, not to the restaurant. The restaurant hoped that they would choose to patronise it; that hope was not fulfilled. The successful restaurant’s success came because the customers chose to eat there instead. It doesn’t matter why; the choice may have been completely random, or even stupid. But every dollar the successful restaurant makes comes from that, and not from its competitor. Thus its success did not come at anyone’s expense.

    Lots of things we hope for never happen. A farmer may sow a field and hope for rain; if the rain doesn’t come has he lost the crop he was expecting? No, he never had it. He has lost the seed he put in the ground, and the labour of doing so, and whatever he would have made by using his field for something else, but the crop he was expecting never came about, so he didn’t lose it. Meanwhile the farmer a county over where it rained is successful, but none of his success is attributable to the first farmer’s failure, or to anything the first farmer lost.

    Milhouse (b95258)

  23. All things being equal, the failed restaurateur has no one to blame but himself, as he failed to identify or connect with his market.

    askeptic (b8ab92)

  24. “I’m astounded that you don’t understand it.”

    Milhouse – I’m astounded that you still can’t explain your negative value theory.

    It’s not my theory, it’s common sense. Expense is negative; income is positive. A dollar out is bad; a dollar in is good. Haven’t you ever balanced a cheque book? People voluntarily give value away, not because they want to, but because they expect it to result in an even greater value coming in. That’s a trade-off; the good outweighs the bad. That doesn’t mean the bad is somehow good. The transaction as a whole is worthwhile, but it would be even better if the negative side were reduced or eliminated.

    Milhouse (b95258)

  25. All things being equal, the failed restaurateur has no one to blame but himself, as he failed to identify or connect with his market.

    Or he had bad luck. Maybe the market changed in ways he couldn’t have predicted. Or maybe what he had to sell was perfectly good, but the other fellow was just better. That doesn’t mean he can blame the other fellow, but he needn’t blame himself either. It could be that nobody is to blame, it just happened.

    Milhouse (b95258)

  26. “No, it is not. That is socialist talk. The failed restaurant did not own the customers who chose not to patronise it.”

    Milhouse – What kind of argument is that?

    Where did I claim either restaurant owned customers? Nowhere, that’s where. Have you ever heard of a target market?

    You’re just making stuff up again because you embarrassed yourself once again.

    You should stay away from threads about economics because it is clear you have no understanding of the subject.

    daleyrocks (bf33e9)

  27. Or the successful restaurant got the adjoining properties through a “Kelo” and built a 300-space parking lot, but the unsuccessful one did not.

    nk (dbc370)

  28. “It’s not my theory, it’s common sense. Expense is negative; income is positive.”

    Milhouse – Why would you spend money on something that had a negative value to you unless the government required you to?

    daleyrocks (bf33e9)

  29. Look, here is as simple as I can make it. I just went to the store and bought a widget for $10. The widget is worth $12 to me, i.e. I would have been willing to pay up to $12 for it. I got it for $10, so I am happy; I made a $2 profit. But daleyrocks seems to imagine that I made a $12 profit, or maybe even $22! He counts the $12 value I got as a positive, and he counts the $10 I spent as also a positive! That’s ridiculous. My profit is the value I got minus what I had to sacrifice in order to get it. If I had been able to get it for $6, then I would be better off than I am now; my profit would have been $4 higher. And if I could have persuaded the shopkeeper to give it to me for free, then I’d be ecstatic, because I’d get the value and not have to sacrifice anything. Daleyrocks seems to think that I’d be worse off, because the $10 I paid is a benefit to me. That’s silly.

    Milhouse (b95258)

  30. Milhouse – Why would you spend money on something that had a negative value to you unless the government required you to?

    Because I anticipate that it will result in my eventually gaining a positive value that’s greater than this negative.

    OK, my previous example was too simple. Let’s give another. I’m a farmer, and I spent $100 on seed, and then spent all week sowing it. All of that is an expense, and it’s a negative. At this moment I have thrown value out, and am worse off than I was before. The reason I did it is because I expect, God willing, that the crop will grow, and when I harvest it I will be able to sell it for more than I sacrificed now. The crop, when it comes, will be positive. That will not magically transform the expense I had now into a positive. On the contrary, the expense I had now will count against that future benefit, and negate a large part of it. If my total expense, including labor and waiting time, is $1000, and the crop sells for $1200, then my total benefit from the whole deal is only $200. If the crop sells for only $900, then I will have lost, and be worse off than if I was before. The seed and labor were and will remain forever a negative, and will never be a positive.

    Milhouse (b95258)

  31. The minute you exchanged a piece of your life, work, for that $10.00, a piece of paper with pretty drawings on it, you lost. I suppose you could fold it up and use it to cover a hole in your shoe. Or origami. Origami is nice. Otherwise, you’re operating at a real-life loss without somebody willing to give you something that’s of any use to you for it.

    nk (dbc370)

  32. This is basic stuff and not rocket science.

    Has Amazon contributed to the loss of wealth of the owners of brick and mortar book sellers such as Barnes & Noble and Borders?

    Has the emergence on online travel sites contributed to the demise of local travel agents?

    daleyrocks (bf33e9)

  33. The point is that the expense and the expected benefit are not the same thing; they’re not even directly related. It’s possible to expend and never benefit; it’s also possible to benefit without an expense. It’s not likely, but it’s possible, and that is enough to demonstrate that the two are separate events.

    Marxism says that the value of something comes from the labour that went into it, and thus the labor itself is valuable. That is what dalyrocks is arguing, and it’s wrong. The labor is an expense; the value of the expected benefit does not come from the labor, but from elsewhere. It would be every bit as valuable if it took less work to produce it, and it would be no more valuable if it took more work to produce it.

    Milhouse (b95258)

  34. Milhouse – You repurpose language like a socialist. If you are willing to pay for something it has value. It is that simple.

    A business is willing to pay a more highly qualified and potentially more efficient employee more than a less qualified hire because they bring more value to the business – NOT MORE NEGATIVE VALUE.

    daleyrocks (bf33e9)

  35. This is basic stuff and not rocket science.

    Has Amazon contributed to the loss of wealth of the owners of brick and mortar book sellers such as Barnes & Noble and Borders?

    Has the emergence on online travel sites contributed to the demise of local travel agents?

    Yes, it is basic stuff. Not a single dollar that Amazon makes comes at the expense of B&N. B&N did not own those dollars, and never had any right to them. It was hoping that customers would choose to give it those dollars, but it had no claim on them. So when Amazon offered them a better deal and they chose to go there instead, B&N lost nothing that it ever had. It did not incur an expense. The expenses that it did incur were not related to the customers’ choice to buy from Amazon; rather, those expenses were made independently, in the hope and expectation of that choice not happening.

    Milhouse (b95258)

  36. Manna fell only once. Marxism or not, it’s seldom you get something for nothing in this world. At the very least, you have to get up and go vote Democrat.

    nk (dbc370)

  37. “The point is that the expense and the expected benefit are not the same thing; they’re not even directly related.”

    Milhouse – The above statement illustrates your lack of understanding of capitalism perfectly. Perhaps you read it in a book somewhere, but in the real world, why would businesses, absent government interference, waste money on expenditures from which they do not expect to benefit.

    Pure crazy talk.

    Go back to the drawing board friend.

    daleyrocks (bf33e9)

  38. Daleyrocks, if I choose not to earn any money this year, and live on savings, Democrats say that I have cost the government money, i.e. the taxes that I will not be paying. Do you agree? I would think everyone on this site would say that was wrong, and that I didn’t cost the government anything, because the taxes I didn’t pay, on the money I didn’t earn, never belonged to the government in the first place, so how can it have lost anything? Its revenue is lower than it had hoped, but that is not a loss, it’s just a failure to profit. This is exactly the same. A failure to profit is not a loss.

    Milhouse (b95258)

  39. Milhouse, do you not understand what the phrase “all things being equal” means?

    askeptic (b8ab92)

  40. Milhouse is basically explaining double-entry bookkeeping.
    What he refers to as a “negative” is called a “credit” in accounting, and what he calls a “positive” is called a “debit”.
    A transaction involves at least two changes to two accounts; in the case of a sale, there are at least four accounts involved:
    The seller’s cash/bank account is debited (positive change).
    The seller’s stock of goods for sale is credited (negative change).
    The buyer’s cash/bank acccount is credited (negative change).
    The buyer’s stock of goods is debited (positive change).

    Ibidem (517ddd)

  41. in the real world, why would businesses, absent government interference, waste money on expenditures from which they do not expect to benefit.

    When did I claim they would? Of course they expect the expenditures to result, eventually, in benefit. But the expenditures themselves are a loss, and what they buy is often also a loss, because it’s worthless to them; they buy it because they expect that it will result, in the future, in a benefit.

    Milhouse (b95258)

  42. “Yes, it is basic stuff. Not a single dollar that Amazon makes comes at the expense of B&N. B&N did not own those dollars, and never had any right to them.”

    Milhouse – What is wrong with you? Are you a communist?

    Nobody has claimed Borders or Barnes & Noble owned customers. The relevant question is whether their market share of book sales declined. Since both chains declared bankruptcy I believe the answer is unquestionably yes and that the wealth of the chains’ owners was substantially wiped out.

    daleyrocks (bf33e9)

  43. Ibidem, what you say is true, but it’s more than that. The stock of goods for sale is an asset on paper, but in fact it’s often worthless to the owner; he buys it not because he wants it but because he expects that others want it, and he will be able to sell it to them. From his point of view, until the goods are sold they are an expense, not an asset.

    What we’re really talking about, though, is labor, which even in accounting terms is not an asset. It’s merely something that can be used to create assets later.

    Milhouse (b95258)

  44. “When did I claim they would?”

    Milhouse – See immediately below. Try to keep track of your circular arguments please.

    “The point is that the expense and the expected benefit are not the same thing; they’re not even directly related.”

    daleyrocks (bf33e9)

  45. Daleyrocks, you are the Marxist here. If you agree that B&N did not own the customers, then they can’t have lost them. You can’t lose what you don’t have. “Market share” is an abstraction. They didn’t lose any of the sales they made last year; they just failed to repeat them this year. That’s not a loss, it’s a failure to profit. Last year the customers chose to shop at B&N, this year they chose not to. Why they chose not to is irrelevant. It could be Amazon, or it could be that they suddenly lost interest in books; from B&N’s viewpoint it’s the same. B&N incurred expenses in the hope and expectation that the customers would come, and they didn’t. Bad luck. But none of the dollars Amazon made came out of B&N’s pocket.

    Milhouse (b95258)

  46. daleyrocks:
    Milhouse is saying (and I agree) that “their market share of books declined” is NOT equivalent to “they lost wealth”.
    That equation is the premise of the zero-sum logic used to argue for a command economy.

    Ibidem (517ddd)

  47. “When did I claim they would?”

    Milhouse – See immediately below. Try to keep track of your circular arguments please.

    “The point is that the expense and the expected benefit are not the same thing; they’re not even directly related.”

    That’s right, they’re not. They’re independent events. Each can happen without the other. How does that mean the business doesn’t expect the expense to indirectly result in the benefit?

    Milhouse (b95258)

  48. “Milhouse is basically explaining double-entry bookkeeping.”

    Ibidem – We’ve been through this argument before. The problem he has is his attribution of “negative value” to labor. He does not understand that “Work in Process” or “Finished Goods”, which may include substantial labor components reside on the balance sheet as assets or positive values until the goods are sold, even though the labor (negative value in his mind) may already have been paid for.

    daleyrocks (bf33e9)

  49. Daleyrocks, when I buy seed and put it in the ground to rot, is that worth anything to me? Of course not. I can’t do anything with it. And yet I spent good money on it, and I wasn’t stupid to do so. I did it not because the seed is valuable to me, quite the contrary, but because I expect that all of this will eventually result in crops growing, and that I will be able to harvest them, and that customers will appear who want them, and that they will choose to give me money in exchange for them, and that this money will be more than what I just sacrificed. All of these hopes and dreams may not eventuate. And if they don’t it will not be my fault or anyone else’s. I have no right to the profit I hope for. But I expect it to come, and am willing to sacrifice a good deal in that expectation.

    Milhouse (b95258)

  50. He does not understand that “Work in Process” or “Finished Goods”, which may include substantial labor components reside on the balance sheet as assets or positive values until the goods are sold, even though the labor (negative value in his mind) may already have been paid for.

    I already explained this above, at 12:50. Inventory is an asset in bookkeeping terms, but that is just a fiction for convenience. From the owner’s point of view, unless the inventory is something that he has a use for, it’s not an asset, it’s an expense. If all he can do with it is sell it, then it’s worth nothing to him; it’s those future sales that he values, and he holds the inventory merely as a means to achieve them.

    Milhouse (b95258)

  51. And if he can’t even sell it, because it’s merely a precursor to some future saleable good, then it’s not even an asset in that sense.

    Milhouse (b95258)

  52. Milhouse could be the Poster Child for why Harry Truman sought out one-armed economists.

    askeptic (b8ab92)

  53. “Milhouse is saying (and I agree) that “their market share of books declined” is NOT equivalent to “they lost wealth”.
    That equation is the premise of the zero-sum logic used to argue for a command economy.”

    Ibidem – I completely disagree. A command economy would encompass this crazy idea he dreamed up that customers are owned by individual businesses. I have no idea where he dreamed that up.

    Instead, define the market as retail, mail order and electronic sale and distribution of books. I have had two Borders and one Barnes and Nobles close to me close in the past four years and the only remaining chain store of any size nearby is one Barnes & Noble. I now probably do 80% of my book purchasing online, whereas four years ago it was less than 50%.

    Real world.

    daleyrocks (bf33e9)

  54. “And if he can’t even sell it, because it’s merely a precursor to some future saleable good, then it’s not even an asset in that sense.”

    Milhouse – Talk to Ibidem. You don’t understand Accounting 101.

    daleyrocks (bf33e9)

  55. “Daleyrocks, when I buy seed and put it in the ground to rot, is that worth anything to me?”

    The Russian communist roots come out!

    daleyrocks (bf33e9)

  56. One more thing: “Work in Process” or “Finished Goods” do not include “substantial labor components”. The labor that has been expended on them is gone; it is not a component of the goods themselves. It didn’t literally “go into” them, it isn’t hiding somewhere inside them, it’s history. They are more valuable because of it, but it does not exist.

    Milhouse (b95258)

  57. “Milhouse could be the Poster Child for why Harry Truman sought out one-armed economists.”

    askeptic – He makes Obama look like an economic genius.

    daleyrocks (bf33e9)

  58. Ibidem – I completely disagree. A command economy would encompass this crazy idea he dreamed up that customers are owned by individual businesses. I have no idea where he dreamed that up.

    You are the one who believes this. Otherwise you could not claim that a business can lose them, or that when they take their custom elsewhere the new place has gained them at the first place’s expense.

    Instead, define the market as retail, mail order and electronic sale and distribution of books. I have had two Borders and one Barnes and Nobles close to me close in the past four years and the only remaining chain store of any size nearby is one Barnes & Noble. I now probably do 80% of my book purchasing online, whereas four years ago it was less than 50%.

    How does any of this demonstrate your alleged point? This is a sad story for B&N and Borders, and a happy story for online sellers, but how have the latter’s profits come at the former’s expense? That can only be if the physical stores owned their customers, which you’ve just agreed they don’t. So what have they lost? What have the online sellers taken from them?

    Milhouse (b95258)

  59. “Daleyrocks, when I buy seed and put it in the ground to rot, is that worth anything to me?”

    The Russian communist roots come out!

    Huh? Now you’re just babbling.

    Milhouse (b95258)

  60. daleyrocks: if that is correct, then I agree with you on that one point. But you are still misrepresenting/misunderstanding him, and I still think it would be wrong to say that wealth was transferred from B&N to Amazon.

    Milhouse:
    An expected value is still value–even if you do not get exactly what you expected.

    Ibidem (517ddd)

  61. So today was Helicopter Ben’s swan song, the Fed is taking the next step from QE enhancement, curbing monetization from $85 then $75 now $65 Billion per month.

    The public explanation is “the economy is improving and further need for QE is diminishing”. Which is arrant nonsense.(H/T to the proprietor)

    QE wasn’t working, has long ago reached the point of diminishing returns and has run to the end of its feasibility in any event.

    Unfortunately the consequent contraction in the free money pump means crashing economies that cannot feed themselves without foreign investment.

    Over the near term US Treasuries are a really crappy purchase–Choombaracka opinion notwithstanding–because everything is a bad risk. Keeping your money in the bank is a bad risk, you’re not being paid interest and the government knows its there.

    People with a few nickels to their name will be piling in making them worthless. Until which time everyone admits they are worthless.

    gary gulrud (e2cef3)

  62. Milhouse:
    An expected value is still value–even if you do not get exactly what you expected.

    It’s only value when it’s realised. Right now it’s nothing to you. You can’t do anything with it. In bookkeeping terms it’s an asset; it shows up on the asset column. But in reality it’s worthless now; the reason you paid for it and hold it is because you expect that it will produce something valuable, something that doesn’t exist now but is likely to emerge later.

    Milhouse (b95258)

  63. daleyrocks: As I understand it, Milhouse is arguing that the equivalence between “B&N’s market share of books declined” and “B&N lost wealth” makes no sense unless you assume that the market itself was the property of B&N.

    Ibidem (517ddd)

  64. “You are the one who believes this.”

    Milhouse – Sorry, you are just unbelievably obtuse about the way the world works. Make a pie chart year after year dividing up the book market as I have defined it and look at overall size and then the market share of the various participants if you have trouble visualizing these concepts.

    “How does any of this demonstrate your alleged point? This is a sad story for B&N and Borders, and a happy story for online sellers, but how have the latter’s profits come at the former’s expense?”

    Do you seriously believe that customers shifting to online sellers such as Amazon did not contribute to the bankruptcy of Borders and Barnes & Noble and thus a decline in the wealth of the owners of the chains. Please, please tell me you are not that ignorant or stubborn.

    daleyrocks (bf33e9)

  65. “daleyrocks: As I understand it, Milhouse is arguing that the equivalence between “B&N’s market share of books declined” and “B&N lost wealth” makes no sense unless you assume that the market itself was the property of B&N.”

    Ibidem – I have no idea what those arguments mean unless some higher power is somehow allocating customers between businesses by force, which clearly does not happen without government interference in a capitalist system. It is a meaningless argument to me in spite of his claims that I am advancing it.

    He has problems conceptualizing ideas and applying them to the real world.

    daleyrocks (bf33e9)

  66. Down to $65B/month?
    OMG, there is going to be a Depression in the Hamptons this Summer.

    askeptic (b8ab92)

  67. well, this thread went south in a hurry…

    we just can’t have nice things here. 8-)

    redc1c4 (abd49e)

  68. Milhouse – Sorry, you are just unbelievably obtuse about the way the world works. Make a pie chart year after year dividing up the book market as I have defined it and look at overall size and then the market share of the various participants if you have trouble visualizing these concepts.

    Daleyrocks, this only makes sense if you believe that if someone makes a sale this year they are entitled by Divine right to repeat that sale every year thereafter. And that is obvious nonsense. The fact that you made a sale yesterday doesn’t entitle you to make another one today. Each sale is independent, and you either make it or you don’t.

    “Market share” is meaningless, except as a way of setting yourself a goal for the future. If you sell 1000 units in 2013, what difference does it make whether other people sold 100 similar units or 1,000,000 or 1,000,000,000? Your situation remains the same regardless. The only relevance the size of the market has to you is when planning for the future. You can project (i.e. guess), based on the past, what demand will be like in the future, and set yourself a goal for how many sales you would like to make. That’s no guarantee that you will make them. And if you don’t you have not lost anything, you have merely failed to gain something you never had.

    Ibidem – I have no idea what those arguments mean unless some higher power is somehow allocating customers between businesses by force, which clearly does not happen without government interference in a capitalist system.

    Wrong. The whole point of capitalism is that customers are not allocated. Each instance of a customer choosing where to shop is an independent decision, made by that customer alone. There is no aggregate, no body of customers, and there is nobody telling them what to do. Some of them choose to give you their business, some don’t, and you should be grateful when they do rather than hurt when they don’t, because none of them owe you anything.

    Milhouse (b95258)

  69. Do you seriously believe that customers shifting to online sellers such as Amazon did not contribute to the bankruptcy of Borders and Barnes & Noble and thus a decline in the wealth of the owners of the chains.

    Yes, I seriously believe that. Their bankruptcy resulted not from this “shift”, but from the expenses they made in the hope that it wouldn’t happen. The “shift” didn’t cost them a penny; it merely meant that their hopes for income didn’t materialise. My failure to win the lottery is not a loss; it’s a failure to gain. Ditto when someone doesn’t give me a birthday present.

    Second, the “shift” itself is not real; it’s a useful abstraction, but you are imagining that it’s something that really happened, and it isn’t. No customers literally moved from B&N to Amazon; they were not in B&N in the first place. All that happened is that 2013′s customers made different choices than 2012′s customers did. There was no reason they should have made the same choices. Each choice is independent, and that is what you are not getting. What you had for dinner last week does not dictate what you will have today.

    Milhouse (b95258)

  70. I know about books. I used to sell them. The market changed long before Amazon came along. The biggest part was the book publishers raising prices and squeezing both the customer base and the operating margin for the stores. Borders and B&N hung on the longest by diversifying with music, videos, coffee shops, toys, reading rooms, etc.. If Amazon took advantage of anything, it was the old customers who just wanted a book.

    I remember trying to order a book from Kroch’s & Brentano’s, Chicago’s “The Book Store”. I got a prissy clerk, who after three weeks (and I had call him) told me the book wasn’t in yet. I never went back. I didn’t do special orders, but there was a store smaller than mine two miles away that would order anything from Books in Print. I’d go there and I’d refer customers there for Westerns and Fantasy/Sci-Fi. It’s gone now because the neighborhood was redeveloped and there’s a fresh market with a parking lot there. Maybe it could have afforded the move, but what about the goodwill (location). There’s a bank where my store was. Meh. Markets are complex, and it’s not as simple as building a better mousetrap.

    nk (dbc370)

  71. And on the lighter side, poor people line up for food stamps, richer people buy a first class airline ticket. http://www.myfoxdc.com/story/24573541/man-uses-one-first-class-ticket-to-get-free-airline-lounge-meals-for-a-year#axzz2rpVIQqUs

    nk (dbc370)

  72. nk, it seems that both parties to that deal believed they received adequate value in that exchange.
    Don’t you just hate Capitalists?

    askeptic (b8ab92)

  73. Milhouse goin’ Dr. Wu on us with his pretzel logic

    Colonel Haiku (969ecf)

  74. Seriously, could Bill O’Reilly be a bigger asshole than he is these days?

    Colonel Haiku (969ecf)

  75. A little frontrunning il Douche:

    http://www.zerohedge.com/news/2014-01-29/ira-confiscation-its-happening

    The Federal reserve will have maybe $4 Trillion of 10-year Treasuries on their books at year’s end.

    Now they’ll probably just hold these notes to maturity, they will not be worth what they earn, but the problem is they need a buyer to stand in for them to buy new issues.

    Those bonds and notes will be worth even less. Better than buying Spanish or Greek debt, certainly but at some point all these sovereigns will pay about 20 cents on the dollar. You’ll just be last to get paid.

    gary gulrud (e2cef3)

  76. A rhetorical question, and it’s not even Sunday yet,

    narciso (3fec35)

  77. Oh, boy. The Nikkei and Hang Seng are cratering, after days of losses, at the open.

    Worser tomorrows.

    gary gulrud (e2cef3)

  78. Someone else noticed.

    http://www.zerohedge.com/news/2014-01-29/carnage-continues-asia-china-pmi-confirms-contraction-deepening

    A second Chinese shadow bank trust worth about $4 Billion, eight times the last bust, has failed.

    gary gulrud (e2cef3)

  79. Well th British pound, and the German mark were behaving in a similar way in the summer of 1914,
    nothing much. . .scratch that,

    narciso (3fec35)

  80. 80. Clairvoyant much?

    http://hotair.com/archives/2014/01/29/iea-their-gap-with-u-s-energy-prices-is-likely-to-hurt-europe-for-at-least-20-years/

    Not that we make anything anymore to export, but our rich used to buy European goodies.

    gary gulrud (e2cef3)

  81. GA Governor and Atlanta Mayor are doing their best Ray Nagin jiggle.

    gary gulrud (e2cef3)

  82. Yes, he would rather have the poor poorer, provided the rich were less rich.

    Closely related to that are all the liberals who’d rather have the rich pay more in taxes than the poor pay less. Or I’m referring to the various talking heads of the left who love to grumble about rich folks not paying more to the IRS while being rather indifferent to — if not oddly quiet about — all the struggling schlubs of society who pay too much to the federal government, much less to state government, much less to local government.

    I recall sparring with a “limousine liberal” regarding this about 2 years ago. He expressed indignation about wealthy people not being forced to pay more to Uncle Sam. I retorted, “how will their paying more necessarily allow me to pay less!? Instead of griping about the income tax the way that Warren Buffett does, why not direct your resentment towards all the modest- or middle-income folks who have to pay way too much to the US Treasury??!!”

    Mark (534100)

  83. #9

    I agree
    Since when did promoting covetousness become virtuous?

    So the nice government people will take money from the evil rich, spend a bunch of it on themselves, and then parse out whatever is left over to those the government has qualified as poor.
    Somehow there is never enough….

    steveg (794291)

  84. Has anybody seen Milhouse and Sammy together in the same place and the same time?

    daleyrocks (bf33e9)

  85. i did nothing the whole day to address income inequality not even a little

    i guess I was just feeling a little overwhelmed by it all

    happyfeet (8ce051)

  86. Has anyone seen daleyrocks when he wasn’t drunk?

    Milhouse (b95258)

  87. Oooh, pretzels…

    Milhouse (b95258)

  88. … Meanwhile, back at the original thread… @37 has a point.

    I heard a clip from the SotU (I opted to watch House Hunters instead) where Dear Leader went on about people who work hard, hold full-time jobs and such should not live in poverty. How does that jibe with a plan that skims working people’s money to give cash and bennies to those who do not work hard, many of whom will not make the effort to even finish high school.

    Oh. And that medical program that has employers scrambling to eliminate full-time jobs in favor of part-time ones in an effort to control upcoming government mandated costs. So much for those people working full-time.

    Do they not see any of this from where they sit?

    gramps, the original (64b8ca)

  89. This entire blog post speaks volumes about the cocooned nature of the Internet’s and talk radio’s conservative and putatively conservative chattering classes.

    The whole “income inequality” meme by the Dems is a bait and switch. It’s the abortion of economic issues. The Dems want Republicans discussing it. It relates directly to racial, gender and socioeconomic issues and thus by definition automatically is a Catch-22 for Republicans. Republicans on this issue can’t win for losing. Plus the Thatcher approach doesn’t resonate with our dumbed down populace and electorate. If you understand and appreciate Thatcher’s comments, and politically are rational too, you already vote Republican. The 3rd-generation welfare case in Philly, however, and the feminist nutcase who just graduated from Barnard, won’t be able to connect the dots.

    The real answer on this issue simply is to ignore the issue. You can’t win elections as a Republican discussing income inequality. The only winning issues for Republicans are taxes, law & order, business regulations, foreign policy, job creation and public school choices with vouchers. That’s it. Everything else is self-defeating, especially social and social-related issues.

    Lastly, while it’s easy to criticize the likes of Mike Lee ultimately it’s pointless, like critiquing the way the 3rd-string quarterback practices before a game. Nobody of consequence on Main Street ever has heard of Mike Lee and there are concrete reasons why small state senators don’t ever amount to anything other than small state senators. National politics is a giant ocean. Low population, low density states, on the other hand, are small fish bowls.

    Lawrence Westlake (48fb95)

  90. Mr Westlake raises some reasonable points, not that it isn’t fun for the polarized politics junkies to explain to eachother what we already know.

    I hope we aren’t past the point of no return on culture and education, and that a point like ‘if we all get more equal shares of a much smaller pie we lose’ can get through thick skulls, but I think we are past that point.

    Someone much, much smarter than I am must plan some kind of amazing education overhaul to change that.

    Dustin (303dca)

  91. I suppose its not that slutty flight attendants have risen in our esteem so much as everyone else’s has receded.

    http://www.breitbart.com/Big-Government/2014/01/29/Poll-Sarah-Palin-Has-Highest-Favorability-Rating-Among-GOP-Primary-Voters

    gary gulrud (e2cef3)

  92. Well, Dustin, I don’t think I’m going to change the world by commenting here or anywhere else on the internet. It’s fun to talk about these things and to hear others’ views.

    nk (dbc370)

  93. 90. In the age of the internets a two pronged option does exist, one which will not parade to victory but is certain to stir the pot.

    For elections of national visibility just abandon the majors. At this point what difference could it possibly make?

    Two push harder in fly-over country for secessions.

    gary gulrud (e2cef3)

  94. I kinda think I’m changing the world about as successfully as its changing me.

    gary gulrud (e2cef3)

  95. Canary in the coal mine:

    http://wattsupwiththat.com/2014/01/28/el-nino-sea-monitoring-system-may-fail-half-dead-already/

    Data retrieval is passé, we’ll just interpolate.

    gary gulrud (e2cef3)

  96. The argument between Milhouse and Daleyrocks is fascinating.
    Amazon didn’t take the customers from B&N, the customers simply took advantage of a new technology. Did Henry Ford take customers from buggy whip makers? Or did he simply provide a newer, better technology? Oh yes, and because of that new technology, people buy books from Amazon, who haven’t been inside a bookstore in years. AND the idea that anyone who gains something, must have taken it from someone else – IOW, stasis, zero sum – is at the heart of Socialism/Communism. OTOH, creative destruction – Amazon puts brick and mortar stores out of business, or Ford makes the village blacksmith a nonentity – is the heart of Capitalism.

    Mike Giles (760480)

  97. I want to apologize to everyone for the threadjack yesterday caused by my misguided attempt to explain to Milhouse that competition is a feature and not a bug of capitalism. With a capitalist economic system businesses should be free to succeed and others free to fail. In fact they succeed for all sorts of reasons, price, innovation, superior products or service, better business models, among others, and fail for the opposite reasons. When they compete in they same market space, businesses often succeed at the expense of competitors unless it is a rapidly growing space, since nobody owns the customers. That is the very nature of capitalism.

    daleyrocks (bf33e9)

  98. Comment by Mike Giles (760480) — 1/30/2014 @ 8:28 am

    AND the idea that anyone who gains something, must have taken it from someone else – IOW, stasis, zero sum

    The confusion here is caused, I think, because on a microeconomic scale, somebody getting somebody to buy something is, in effect, taking money away from whatever the customer would have spent the money on instead.

    (It’s more complicated than that – there’s not spending the money, too, or spending money that would oherwise stay in someone’s pocket)

    But on a macroeconomic scale, it’s not true at all that someone making more money is causing somebody else to make less.

    The money supply can and does go up. And it goes up because people are involved in the economy, selling things, or whatever.

    The economy has to be viewed as a circle. And somebody doing something new inserts himself or herself into the circle.

    Everyone there before, on average, makes the same amount of money as before.

    Sammy Finkelman (8b8667)

  99. “But on a macroeconomic scale, it’s not true at all that someone making more money is causing somebody else to make less.”

    Sammy – Nobody here has claimed the above. That is the progressive argument.

    daleyrocks (bf33e9)

  100. My mind is still boggling that Sammy Finkelman has commented in less lines on *this* post than almost any other commenter that posted …

    ‘Tain’t nacheral !

    Alastor (a134e0)

  101. my misguided attempt to explain to Milhouse that competition is a feature and not a bug of capitalism.

    Indeed it is. Are you now pretending I ever denied this?!

    With a capitalist economic system businesses should be free to succeed and others free to fail. In fact they succeed for all sorts of reasons, price, innovation, superior products or service, better business models, among others, and fail for the opposite reasons.

    Exactly. This is exactly what I was saying and you were arguing against.

    When they compete in they same market space, businesses often succeed at the expense of competitors unless it is a rapidly growing space

    And that is exactly backwards. Are you drunk again, or just stupid?

    since nobody owns the customers

    Oh, so now you agree with me? And yet just half a sentence ago you persisted in your error, which you now contradict! Your entire argument yesterday was based on the premise that the failed competitors owned the customers, and the successful businesses stole them. If you admit that customers don’t belong to anyone, then how can the failed businesses have lost them? They never had them in the first place. You contradict yourself in the space of a single sentence, without even noticing.

    Milhouse (b95258)

  102. The confusion here is caused, I think, because on a microeconomic scale, somebody getting somebody to buy something is, in effect, taking money away from whatever the customer would have spent the money on instead.

    No, she is not. The money never belonged to the other vendor in the first place. You cannot say the customer would bought this instead; you can only idly speculate that she might have. She might have done anything, but until she decided what to do with her money it belonged to her and her alone, and not to either business. So when she decided to spend it on A rather than B, A gained but B lost nothing. This is not some arcane theory, it’s obvious common sense that no intelligent person can dispute.

    Milhouse (b95258)


  103. But on a macroeconomic scale, it’s not true at all that someone making more money is causing somebody else to make less.”

    Sammy – Nobody here has claimed the above. That is the progressive argument.

    Daleyrocks, that is exactly what you claimed, and spent the whole thread defending. Don’t pretend otherwise now.

    Milhouse (b95258)

  104. From the Risk Factors section on page 30 of the 4/27/13 Barnes & Noble Inc. Form 10-K:

    Intense competition from traditional retail sources, the Internet and suppliers of digital content and hardware may adversely affect Barnes &
    Noble’s businesses.

    The book business is highly competitive in every channel in which Barnes & Noble operates. Barnes & Noble retail stores compete primarily on the quality of the shopping and store
    experience and the price and availability of products. The importance of price varies
    depending on the competitor, with some of Barnes &
    Noble’s competitors engaging in significant discounting and other promotional activities.
    NOOK competes primarily with other eBook readers on functionality, consumer appeal, availability of digital content and price. Barnes & Noble competes with large bookstores including Books
    -A-Million and smaller format bookstores. It faces
    competition from many online businesses, notably Amazon.com and Apple. Increases in consumer spending via the Internet may significantly affect its ability to generate sales in Barnes & Noble retail stores. Barnes & Noble also faces competition from mass merchandisers, such as Costco, Target and Wal-Mart……….

    daleyrocks (bf33e9)

  105. “Daleyrocks, that is exactly what you claimed, and spent the whole thread defending. Don’t pretend otherwise now.”

    Milhouse – Try again Nimrod. If the pie (economy) is static, rearranging the size of slices can cause pain. If the pie is growing, everybody can gain.

    This is not as hard as you keep trying to make it.

    daleyrocks (bf33e9)

  106. What a woman!

    Bets (c101cb)

  107. Milhouse – Try again Nimrod. If the pie (economy) is static, rearranging the size of slices can cause pain. If the pie is growing, everybody can gain.

    Idiot. There is no pie. There is an infinite stream of cookies, that show up one at a time, and each time a die is rolled to see who gets it. Just because today you got five cookies is no reason to suppose that you will get another five tomorrow. Maybe tomorrow you’ll get eight, or maybe you won’t get any.

    Milhouse (b95258)

  108. From the Risk Factors section on page 30 of the 4/27/13 Barnes & Noble Inc. Form 10-K:

    blah blah blah

    What is this supposed to prove, idiot? Where does it say that anyone stole their customers? They hoped to make so many sales, and they made a lot fewer. So sad for them. But the sales they didn’t make never belonged to them. They didn’t lose them, they never had them in the first place.

    Milhouse (b95258)

  109. Milhouse – Why do you keep repeating the same things?

    daleyrocks (bf33e9)

  110. People would rather go to concerts (and give money to rock and rap stars) than listen to a recital at a church or a school.

    People would rather watch films (and hand money to movie stars in the process) than watch a play at a school or a community center.

    People would rather watch professional sports at a stadium (and give money to sports stars in the process) rather than watch being played in a public park.

    This Sunday, the Super Bowl will be on, and as a result, there will be millions of dollars transferred from the middle and lower classes to sports stars. Is anyone going to boycott the Super Bowl in the name of equality?

    Michael Ejercito (906585)


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