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Re: OWS

Postby Tavish » Mon Oct 31, 2011 3:56 pm

John Kramer wrote:
Tavish wrote:I don't think it changes the dynamic much at all. People know they shouldn't take a loan they can't afford the same as they know they shouldn't drive while drunk or smoking cigarettes will eventually kill them or eating fast food all the time will make them fat.


I thought it was people were not smart enough, they trusted the banks to tell them what they could and could not afford. Wasn't it you who said that the idiots didn't think banks would give them the loans if they couldn't afford them? I could be mistaken, but I thought you said that. Now they are smart enough, they just did something stupid anyway? That contradiction confuses me. Which is it?

There isn't a contradiction in saying that people are smart enough to know they shouldn't take a loan they can't afford but will do it anyways. What I did say was that in the past the banks protected people (mainly via government regulation) from their own inability to either say no or to realize that they are wanting something they can't afford.

I've never heard someone blame someone else for them driving drunk. We don't smile, pat them on the head, and tell them they did nothing wrong.

Smoking is a dumb situation since the courts have deemed people too stupid to know better. Really dumb decision on the part of the courts. As to fast food, nothing wrong with that if people exercise.

Maybe I'm not articulating the point very well because you are not even close to it. I'll give a an extremely straightforward try at it and if we are at the same spot I will just assume we are talking about completely different things and move on.

I really give absolutely nothing about who OWS is blaming, or who you blame, or who I blame, or who anyone in the world blames for the crisis. It really means nothing in the grand scheme of things and is pretty much only useful to help get the next politician elected. What I do think is important is what can be done to prevent it from happening again, or at least the best steps that can be taken in order to minimize the impact these sorts of downs will have. Of course to try and find solutions you have to look at what went wrong that involves playing the blame game.

You keep saying "its the people, its the people" which is great and I have agreed over and over that they played a role in this. You said you want them to be educated in order to make better decisions, I say better education doesn't make much of a difference at all. I see them as the control group in the hundreds of tests we could do to improve the economy. They are going to be stupid, greedy, and/or impulsive no matter how much you educate them. Hence the reference to drunk driving, smoking, and fast food. I would definitely be interested in hearing examples of when an influx of education alone about a subject did help eliminate (even greatly reduce) a self-destructive behavior from people. I haven't thought real deep on the subject, but haven't had any luck so far. Maybe I'm too much of a cynic, I don't think I have crossed over to misanthropy.


No the percentage didn't increase. There is the same or even lower percentage of idiots out there. It's not semantics, it is part of the very essence of the point. The economy can survive just fine with the current percentage of idiots. It doesn't do well when we hand those idiots a loaded gun and hope they don't shoot themselves or us.


So how do banks know what people can and cannot afford when they've never known that answer?

Why didn't banks fall into this great crisis a long time ago? Banks don't have to know what people can really afford or what they can't. They do have to have some semblance of restraint though (whether through their own volition or via regulations).

The way to fix it is to guarantee zero bailouts and get the government out of the banks, not deeper into controlling them. The government opened their wallet as soon as they pressured banks to give more loans.

Unfortunately zero bailouts simply ins't much of an option with the current design. If the institutions are allowed to grow large enough to create a systematic risk, then there is not much of a choice but to bail them out again the next time they fail. The damage that would be done by a second Great Depression far outweighs the damage done by further bailouts, so much so that even if you are only creating a small chance of avoiding a true meltdown it is worth the bailout. We won't always be so "lucky" that a World War will come around and save us from a depression again.
What do you have in mind as far as pulling the government out of banks? Dissolving the FED, cutting all ties to the GSEs, removing other some specific regulation, or something else entirely? I know that the CRA seems to be what most conservatives love to target but there is fairly solid proof out there that lenders were more than willing to make these loans even when they weren't affected by the "quota".

If you've paid off a ton of debt and not incurred any new debt, I could argue that you're better off now. But if you lost on 401K, investments, etc, then I can see how you'd say you're no better off than you were 10 years ago. I don't fully agree, but I can see what you're saying.

I've incurred new debt, just not by choice. The debt was probably a blessing in disguise (and its pretty hard to say my wife getting breast cancer is any sort of blessing no matter the circumstances). Without that happening I likely would have followed nearly every piece of financial advise I had at the time that involved refinancing the house. Had I done that then likely I would be in the same financial state I am in right, except minus the house and the equity I have built up in it (which isn't that much considering the drop in FMV). Which is to say I would be completely screwed, instead of only somewhat.

I can definitely understand being upset, but I'm just not sure why you're faulting the banks. Because they insured themselves?

Banks are what I would consider to be the best starting point for reform. They did what probably any business would do in that position, they took the best advantage they could see in order to make as much profit as possible with as little risk to themselves as possible. I don't fault them for making money how they did, I just don't think that it is in the best interests of anyone except the banks for them to be able to continue to do so in the future and there isn't any reason for them to stop of their own volition.
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Re: OWS

Postby John Kramer » Mon Oct 31, 2011 4:32 pm

The Artful Dodger wrote:Not necessarily. I hacked around with building computers and reverse-engineering software in my teenage years, but my school wouldn't give me credit on that when computer courses weren't a significant part of the curriculum.

Also, I'm sure there were plenty of underachievers in school who were quite smart but didn't put on total effort in pursuing good grades first and foremost. I should know, I was one of them. To me, the schools are geared towards optimization, particularly for kids to excel in standardized testing, and less on the experiential aspect; this M.O. didn't appeal to my interest when I was matriculating. Schools have probably changed over the last decade-plus to enrich the learning experience as one that's engaging and dynamic (technology has played a role), but the one thing that probably hasn't changed is the narrow focus on getting kids to prepare for standardized and AP tests.


I wasn't worried about what the school would give credit for and what they wouldn't, I was merely saying that kids can get whatever education they want online. Be it help with math, all the way to advanced engineering. The opportunity is right there, all they have to do is want it enough to grab it.

True, a ton of kids could care less about grades. But ace the tests, and the actual report card grades aren't that meaningful. Had a buddy like that. B/C student on paper, but blew up the tests and could go anywhere he wanted for college. No clue where he ended up going, but the collegiate world was his oyster.

As to real world experience, forget school credits, cash in! Start at the bottom and work your way up to owning a business that does whatever it is you know. Piece of cake!

Theoretically, the kids have the opportunity in that there's no one to say "Oi, you can't go to school because your folks don't have enough money". Whether or not kids across the socioeconomic spectrum are on a level playing field is another question.

The talented, hard-working kids from less affluent neighborhoods still need the right conditions or environment for them to realize their talent. Otherwise, they risk that talent to go to waste, even if their work ethic is sorted. Said kids could likely be held back by classmates who have a harder time understanding the subject matter and it could be that the schools don't have the adequate avenues for academic advancement as opposed to other schools (i.e. honors/AP).


What do you mean by right conditions and environment? I can't even guess as to what you mean by that one, so help please.

So what if the school doesn't have an advanced class, there's a good chance the student already learned the info. I did, and that was pre-internet days. The only thing an advanced high school credit does is look good on a report card. Otherwise, it's rather useless. Just a number on paper. If someone knows the information, regardless of if they got a high school credit for it or not, it will show on the tests. The tests get one into college, and the rest is history (if we're talking about college as the key to success anyway, which I don't agree with, but again that's a different conversation for a different day).

What I meant by selection bias of success stories, was the prototypical rags-to-riches success stories of those people who with a combination of hard work, talent, opportunity, and luck had catapulted themselves up more than one social class to get to where they are presently. The occurrences of said success stories are nowhere near impossible, but that doesn't necessarily mean they happen frequently enough to say they'll ring true for most.


Agreed, but that's because most don't want it bad enough. For those that do, nothing will hold them back.

OK, story time... My parents were both immigrants. They came from a working-class upbringing, but they were also well educated and climbed to middle-class status in their respective countries of origin (Spain and Japan). So, when my parents came to the States, it was a matter of finding the opportunities, knowing that their backgrounds and qualifications met the requirements. My father was a lawyer in Spain and practiced law in the States. My mother was originally a teacher in the old country, but when she came to the States, she found work as an executive secretary and was in line for a promotion an executive VP job until she quit to raise me. Both of them grabbed a foothold in America in the 1970's, when social mobility wasn't nearly as difficult back then. Incidentally, back then, America had arguably the best education system in the world and this was a time before executive pay didn't skyrocket to the disproportionate levels they are today. By the time I was born and when my mother quit, we were still an upper middle-class family and my upbringing reflected that new status, even though my parents raised me with traditional working-class values: strong work ethic, frugality, a deep disdain for wastefulness, and so on.

Point is, I don't see being poor being equated to having no chance at all. It just entails less chance of getting ahead. So much of the power in upward social mobility comes from education and there was a time when children in America could look forward to being afforded the same standard of education, for this was all the poor and middle classes had to improve their lot in society. However, the inequality has gotten to the point where the opportunities are harder to come by for those at the bottom.

As to why foreigners come to America, they still carry the perception of the American Dream, many of whom don't fully appreciate how difficult life is until they come here. As a matter of fact, many of my relatives on Pop's side who reside in Spain don't want to live in the States because they see it as a less family-oriented, less carefree place to live. (I honestly don't blame them.) On a grander scale, the effect of globalization is a big part to play as to why foreign money comes into America, for much the same reason investors want to invest in India and China: market size and potential. It's lucrative opportunity for businesses to set up shop in America, the Eurozone, Asia, etc. for various reasons.

What I think is most overblown perception in America is the idea that America as a whole enjoys the highest standard of living compared to the rest of the world. That's not really true because in countries with a more egalitarian spread (and dare I say, more socialist) such as Norway, Sweden, and Canada to name a few, tend to have less socioeconomic disparity in opportunity than in the States. When wealth is more evenly spread, then the availability of opportunity is more distributed for all. That's not to say those countries have very rich and very poor because they do, but they do have less obscene numbers of very poor and very rich compared to the States.


Spain and Japan, interesting combination. So middle class to upper middle class. How about Habib that owns the Quick-E-Mart? Stereotypical I know, but actually is what I was referring to with foreign owned businesses. How many people come here with nothing, and I mean nothing, yet build and own a successful business? Tons! Some of course are the small Quick-E-Mart type of business, others are quite huge. I used Habib a minute ago simply because I toured a manufacturing plant last week that does 8 figures in business each year making siding (veneer/aluminum/etc) for houses and it is already looking into evolving and changing the business to produce either wind turbines or solar panels. Owner of the business is named Habib and he joked I wouldn't be able to pronounce his last name (and he was right). Came here with nothing, a stowaway on a cruise liner, yet look at where he is at now. Legal citizen with a business that does more than $10 million a year. And he's not alone. At all.

Interestingly enough, those I talk to that are successful always talk about how easy stuff is here and how much opportunity is available. The ones that aren't successful talk about how much easier things are "back home", which always makes things interesting when both sides are from the same country. I like to get the two sides together and watch as one waffles on their stance.

Question: You know a lot more about socialism than I do, so how do countries that practice socialism keep the successful motivated? I can't see it working here. If you take away the incentive to be successful (money), most people won't even bother trying to succeed. Plus this is a really lazy country. A ton of people would love to sit around in their house, on the internet/video games, jumbo televisions, eating McDonalds, and letting everyone else pay for it.

Tavish wrote:There isn't a contradiction in saying that people are smart enough to know they shouldn't take a loan they can't afford but will do it anyways. What I did say was that in the past the banks protected people (mainly via government regulation) from their own inability to either say no or to realize that they are wanting something they can't afford.


Ok, I get it now. I just disagree that we need to protect people from themselves. Especially when banks have never known what people can and cannot afford.

Maybe I'm not articulating the point very well because you are not even close to it. I'll give a an extremely straightforward try at it and if we are at the same spot I will just assume we are talking about completely different things and move on.

I really give absolutely nothing about who OWS is blaming, or who you blame, or who I blame, or who anyone in the world blames for the crisis. It really means nothing in the grand scheme of things and is pretty much only useful to help get the next politician elected. What I do think is important is what can be done to prevent it from happening again, or at least the best steps that can be taken in order to minimize the impact these sorts of downs will have. Of course to try and find solutions you have to look at what went wrong that involves playing the blame game.

You keep saying "its the people, its the people" which is great and I have agreed over and over that they played a role in this. You said you want them to be educated in order to make better decisions, I say better education doesn't make much of a difference at all. I see them as the control group in the hundreds of tests we could do to improve the economy. They are going to be stupid, greedy, and/or impulsive no matter how much you educate them. Hence the reference to drunk driving, smoking, and fast food. I would definitely be interested in hearing examples of when an influx of education alone about a subject did help eliminate (even greatly reduce) a self-destructive behavior from people. I haven't thought real deep on the subject, but haven't had any luck so far. Maybe I'm too much of a cynic, I don't think I have crossed over to misanthropy.


We do care where the blame should be, because that's how to fix the problem. If you blame the banks, you want them regulated more. If you blame the government, you want them to fix it. If you blame the people, you want to educate them. The entire thing is about where the biggest part of the "blame pie" lies, and then fixing that problem. Test subjects are great, but when the test subjects greatly outweigh everyone else, that's a takeover. That's why we are where we are. Idiot percentage got too high. There were other contributing factors (bank greed, government sticking their nose where it doesn't belong, etc), but the biggest piece of the blame pie is on the idiots that overspent.

How far has the percentage of smokers dropped just in the last few years? Educating people doesn't help, at all? Would you rather discuss the growing number of billions being spent each year on diets, healthy food, weight loss programs, exercise equipment, etc? Obviously I disagree with your stand that educating idiots doesn't do any good. Smoking is the big one for me, the percentage of smokers is dropping, and dropping fast. And not because they are all dying (haha).

Why didn't banks fall into this great crisis a long time ago? Banks don't have to know what people can really afford or what they can't. They do have to have some semblance of restraint though (whether through their own volition or via regulations).


Because the average American is not nearly as smart or responsible as they used to be, and they expect to be given more than ever. It's always someone else's fault or responsibility nowadays. It wasn't that way in the past. Has zero to do with the banks, it is all about the change in people.

Unfortunately zero bailouts simply ins't much of an option with the current design. If the institutions are allowed to grow large enough to create a systematic risk, then there is not much of a choice but to bail them out again the next time they fail. The damage that would be done by a second Great Depression far outweighs the damage done by further bailouts, so much so that even if you are only creating a small chance of avoiding a true meltdown it is worth the bailout. We won't always be so "lucky" that a World War will come around and save us from a depression again.
What do you have in mind as far as pulling the government out of banks? Dissolving the FED, cutting all ties to the GSEs, removing other some specific regulation, or something else entirely? I know that the CRA seems to be what most conservatives love to target but there is fairly solid proof out there that lenders were more than willing to make these loans even when they weren't affected by the "quota".


True, the design now includes bailouts. It shouldn't include bailouts, but that door was opened and now we're stuck.

Not sure it is possible to pull the government out of banks at this point, but like with all businesses, I believe they should be allowed to fail if they cannot survive on their own.

I've incurred new debt, just not by choice. The debt was probably a blessing in disguise (and its pretty hard to say my wife getting breast cancer is any sort of blessing no matter the circumstances). Without that happening I likely would have followed nearly every piece of financial advise I had at the time that involved refinancing the house. Had I done that then likely I would be in the same financial state I am in right, except minus the house and the equity I have built up in it (which isn't that much considering the drop in FMV). Which is to say I would be completely screwed, instead of only somewhat.


I am sorry to hear about your wife. I hope all is going as well as possible and I will say a prayer for you both tonight. I wish both of you my best.

Banks are what I would consider to be the best starting point for reform. They did what probably any business would do in that position, they took the best advantage they could see in order to make as much profit as possible with as little risk to themselves as possible. I don't fault them for making money how they did, I just don't think that it is in the best interests of anyone except the banks for them to be able to continue to do so in the future and there isn't any reason for them to stop of their own volition.


So private business should look out for the people, instead of what they were built to do (make money)? Have you petitioned for the cigarette companies to voluntarily shut down? The beer companies? Fast food industry? Casinos? 99% of businesses don't give a rat's patoot about the American public, they are built to make money. You want 99% of businesses to shut down and start caring for the people, or is it just the banks that you think should throw away their business and instead, worry about taking care of adults who cannot take care of themselves?
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Re: OWS

Postby Tavish » Mon Oct 31, 2011 5:23 pm

John Kramer wrote:There were other contributing factors (bank greed, government sticking their nose where it doesn't belong, etc), but the biggest piece of the blame pie is on the idiots that overspent.

Assuming that the people were the biggest problem, it looks like we are in disagreement over if you can fix that part.

How far has the percentage of smokers dropped just in the last few years? Educating people doesn't help, at all? Would you rather discuss the growing number of billions being spent each year on diets, healthy food, weight loss programs, exercise equipment, etc? Obviously I disagree with your stand that educating idiots doesn't do any good. Smoking is the big one for me, the percentage of smokers is dropping, and dropping fast. And not because they are all dying (haha).

But there is so much more that went into that "education". The sin tax is remarkably higher now than it was before, there is much higher regulation on how companies can market their products, public smoking bans have greatly increased the benefits to stop smoking, there are bigger punishments for stores that sell to minors, and on and on. And after all the time, money and effort the number of smokers has dropped from 34% in the 70s to 21% today. 21% of Americans choose to smoke even though it costs roughly 700% more now for a pack a cigarettes, has a major affect on the cost of your insurance, is no longer acceptable to do in most public places, and least of all will kill you.

Education certainly helps, but it isn't going to be nearly enough to make any worthwhile change.

Not sure it is possible to pull the government out of banks at this point, but like with all businesses, I believe they should be allowed to fail if they cannot survive on their own.

I agree, but how will we get to that point? Assuming the answer isn't education ;-), is there other options than either self-volition or government regulation?

So private business should look out for the people, instead of what they were built to do (make money)?

No, private businesses should attempt to make money. Private businesses should not be allowed to make money at the cost of the greater economy. It isn't like tighter regulation is some strategy that just hurts the banks bottom line. It is something that would also hurt a great deal of regular people and the idiots as well. But I haven't heard of any other viable solution that would help the long-term solidity of the economy.
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Re: OWS

Postby John Kramer » Mon Oct 31, 2011 6:02 pm

Tavish wrote:Assuming that the people were the biggest problem, it looks like we are in disagreement over if you can fix that part.


We're in a disagreement over how much of a difference can be made. Not a huge deal, it's cool.

But there is so much more that went into that "education". The sin tax is remarkably higher now than it was before, there is much higher regulation on how companies can market their products, public smoking bans have greatly increased the benefits to stop smoking, there are bigger punishments for stores that sell to minors, and on and on. And after all the time, money and effort the number of smokers has dropped from 34% in the 70s to 21% today. 21% of Americans choose to smoke even though it costs roughly 700% more now for a pack a cigarettes, has a major affect on the cost of your insurance, is no longer acceptable to do in most public places, and least of all will kill you.

Education certainly helps, but it isn't going to be nearly enough to make any worthwhile change.


True, there were other factors on top of the education. The cost is the big one, but still, more than a 33% drop in the smoking rate is pretty good isn't it? 1 in 3 used to smoke, now it's 1 in 5 and still dropping. I think that's a pretty good dent in the percentage.

I agree, but how will we get to that point? Assuming the answer isn't education ;-), is there other options than either self-volition or government regulation?


Not sure the government being more involved is the way to go unless a clear-cut path out is also in the plans. Get involved, show them how it is done, then step back and let them sink or swim on their own. Something like that might work, but I have my doubts. The government isn't exactly running like a well-oiled machine and they don't exactly have a decent track record when it comes to showing how to run a successful business, so for them to "teach" anything is a scary thought.

No, private businesses should attempt to make money. Private businesses should not be allowed to make money at the cost of the greater economy. It isn't like tighter regulation is some strategy that just hurts the banks bottom line. It is something that would also hurt a great deal of regular people and the idiots as well. But I haven't heard of any other viable solution that would help the long-term solidity of the economy.


All businesses make money at the expense of the greater economy. The entire country would be better off if we could buy all products and services at cost, wouldn't we?

I'm not in banking or affiliated with them in any way, so I could care less about their profits. My concern is government having so much control that they are telling people what they can and cannot do, when the banks (who specialize in money) have never known what people can and cannot afford, and the banks have a much better idea than the government when it comes to that. I understand people in general are far less responsible than they used to be, and the banks have now adjusted. Credit is tighter and harder to get right now. Yet the government is yelling for them to start lending more, make credit easier to get, etc. (at the behest of the idiots). The exact problem that got us into this mess. The same government you want to be more involved. I just think it's a bad idea all the way around. History is trying to repeat itself in a very short time. Idiots scream, government puts pressure, banks lend, overextension takes over, bubble pops. Yet here we are looking at the exact same thing again. The difference is the banks are the ones currently saying "no", and that isn't how it should be. The government should not be stupid enough to go through this again, and the idiots should be educated to their mistake and their responsibility for this mess. The banks have learned their lesson. Time for the idiots and the government to learn too.
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Re: OWS

Postby The Artful Dodger » Mon Oct 31, 2011 6:49 pm

John Kramer wrote:What do you mean by right conditions and environment? I can't even guess as to what you mean by that one, so help please.


Simply put, people still need nurture as much as they do their own natural talents to succeed. This entails being instructed by quality teachers, being surrounded and influenced by quality mentors and peers, being part of an environment that breeds success in general. It's no surprise that more affluent kids are immersed in such an enriching environment than those kids who live in less affluent areas.

John Kramer wrote:So what if the school doesn't have an advanced class, there's a good chance the student already learned the info. I did, and that was pre-internet days. The only thing an advanced high school credit does is look good on a report card. Otherwise, it's rather useless. Just a number on paper. If someone knows the information, regardless of if they got a high school credit for it or not, it will show on the tests. The tests get one into college, and the rest is history (if we're talking about college as the key to success anyway, which I don't agree with, but again that's a different conversation for a different day).


Think of college admission as like say, what the Bowl Championship Series is to American college football. The BCS tends to favor teams who play in power conferences and have had the most success against the best competition. Undefeated mid-majors will probably rank well but aren't given as much weight as those teams who have overcome a more difficult strength of schedule.

Many colleges will probably give more weight to someone who earned a 3.5 cumultative GPA on mostly AP/honors courses at a relatively well-regarded school than one who came up with a 4.0 GPA at a relatively less regarded school and didn't participate in half as many AP/honors courses. There are of course, more factors to consider when evaluating students, like standardized tests, personal essays, and extracurricular activities. Point is, a good education usually begets the path to better quality education, to better networking with people in positions who could be of most help, and to a better career. Sure, graduating valedictorian from your high school class is meaningless 10 years after the fact, but it would have likely been a stepping stone to access greater opportunity and a wider range of it later on in life. Saying that, if the kids at the bottom aren't getting the kind of enriching opportunities as those at the top to begin with, odds overcoming limited opportunities at proverbial basecamp are greater than those higher up the ladder.

Learning on your own time takes on less relevance to schools and employers, unless that leisurely education had been put into good use into projects which can be better objectively quantified. For instance, I probably would overlook the fact you learned and coded in a certain programming language for one year, if I didn't see any body of proof that you did something with the knowledge (in the form of a program). This in a way, is what will hold the Internet from being the end-all, be-all universal educational platform; a lack of universal accreditation and evaluation.

John Kramer wrote:
What I meant by selection bias of success stories, was the prototypical rags-to-riches success stories of those people who with a combination of hard work, talent, opportunity, and luck had catapulted themselves up more than one social class to get to where they are presently. The occurrences of said success stories are nowhere near impossible, but that doesn't necessarily mean they happen frequently enough to say they'll ring true for most.


Agreed, but that's because most don't want it bad enough. For those that do, nothing will hold them back.


Not necessarily. Your business could fail and it wouldn't be for lack of desire and effort. You couldn't get into Stanford, despite your best qualifications and an uncompromising work ethic. The solution to failure doesn't really lie in trying harder and not quitting, but in being resourceful especially on limited resources like borrowed time.

John Kramer wrote:How about Habib that owns the Quick-E-Mart? Stereotypical I know, but actually is what I was referring to with foreign owned businesses. How many people come here with nothing, and I mean nothing, yet build and own a successful business? Tons! Some of course are the small Quick-E-Mart type of business, others are quite huge. I used Habib a minute ago simply because I toured a manufacturing plant last week that does 8 figures in business each year making siding (veneer/aluminum/etc) for houses and it is already looking into evolving and changing the business to produce either wind turbines or solar panels. Owner of the business is named Habib and he joked I wouldn't be able to pronounce his last name (and he was right). Came here with nothing, a stowaway on a cruise liner, yet look at where he is at now. Legal citizen with a business that does more than $10 million a year. And he's not alone. At all.


Stories such as those are usually the exception to the rule. There are tons of others who failed miserably or earned sub-par returns or just broke even, and those cases tend to be closer to the majority.

The ones who overcome all the odds tend to be those who excelled because they were 1) resourceful with what they had and 2) they happened to get into business with great timing. Work ethic can only go so far and even a combination of smarts, work ethic, opportunity, and luck can only only take you so far. You still need resourcefulness and timing on your side, as well as great people to help out too.

John Kramer wrote:Question: You know a lot more about socialism than I do, so how do countries that practice socialism keep the successful motivated? I can't see it working here. If you take away the incentive to be successful (money), most people won't even bother trying to succeed. Plus this is a really lazy country. A ton of people would love to sit around in their house, on the internet/video games, jumbo televisions, eating McDonalds, and letting everyone else pay for it.


First, we have to understand that the definition of socialism can be somewhat misleading because it's a catch-all term for certain characteristics associated with socialism. When most Americans think of socialism, they tend to think of something resembling Communism or Stalinism, which are really just two forms of socialism when there are other different kinds. The countries with the highest standard of living tend to be social democracies in which the people have a say in government, have their individualist freedoms intact, and can still engage in free market activities, but egalitarianism tends to be society's biggest priority and that goal is achieved mostly by government redistributing wealth.

I think the most significant reason as to why those policies work in those countries and not in America is because of the way taxes are perceived in the public eye. In America, taxes are deemed to be burdensome. For the most part, America is still looking through Reaganomics-tinted lenses: tax breaks for the wealthiest individuals, corporations, and businesses are seen as vital to prosperity. Social services in America tend to be of more disappointing quality than what could be purchased from privately held firms. This is why Americans in general believe taxes are relatively unproductive and inefficient.

In places like Norway, Sweden, Canada, etc., taxes are looked at as an investment. Residents in these countries tend to think they'll spend big on education and healthcare anyway and that it's best for government to address those needs, so that they won't get priced out of what they believe are essential goods for themselves as individuals and for society in general. Unlike America, the social services paid for by high taxes tend to be of high quality, to the point that in some countries, higher education is free for all no matter their income and academic level (Norway and Germany immediately come to mind). Family leave and unemployment payments tend to be on the very generous side.

I'm not sure what you mean by keeping the successful motivated, but in these social democracies, it can be easy to get too comfortable from taking risks. The obstacles that say, Scandinavian countries, face when starting businesses don't necessarily come as a result of taxes weighing them down; most people are well compensated to pay nearly 50% of their income to government. No, the big obstacle is that it's too comfortable being an employee, and with the kinds of benefits they receive, who wouldn't be too comfortable. Still, some of these countries have a higher entrepreneur per capita rate than the States, despite the perception of the States being the best place to further entrepreneurship. Personally, I believe America is better suited at entrepreneurship because of the sheer market opportunity, a precedent of success, and the acceptance of a risk-taking culture. However, high-growth startup hubs are emerging elsewhere in the world: India, China, and even in the staunchest European social democracies, neither of which need to emulate the American model to have a successful model which is more applicable to those nations.
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Re: OWS

Postby Dan Lambskin » Mon Oct 31, 2011 9:45 pm

can we declare a winner yet?
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Re: OWS

Postby John Kramer » Mon Oct 31, 2011 9:46 pm

The Artful Dodger wrote:Simply put, people still need nurture as much as they do their own natural talents to succeed. This entails being instructed by quality teachers, being surrounded and influenced by quality mentors and peers, being part of an environment that breeds success in general. It's no surprise that more affluent kids are immersed in such an enriching environment than those kids who live in less affluent areas.


I can't really disagree with any of that.

Think of college admission as like say, what the Bowl Championship Series is to American college football. The BCS tends to favor teams who play in power conferences and have had the most success against the best competition. Undefeated mid-majors will probably rank well but aren't given as much weight as those teams who have overcome a more difficult strength of schedule.

Many colleges will probably give more weight to someone who earned a 3.5 cumultative GPA on mostly AP/honors courses at a relatively well-regarded school than one who came up with a 4.0 GPA at a relatively less regarded school and didn't participate in half as many AP/honors courses. There are of course, more factors to consider when evaluating students, like standardized tests, personal essays, and extracurricular activities. Point is, a good education usually begets the path to better quality education, to better networking with people in positions who could be of most help, and to a better career. Sure, graduating valedictorian from your high school class is meaningless 10 years after the fact, but it would have likely been a stepping stone to access greater opportunity and a wider range of it later on in life. Saying that, if the kids at the bottom aren't getting the kind of enriching opportunities as those at the top to begin with, odds overcoming limited opportunities at proverbial basecamp are greater than those higher up the ladder.

Learning on your own time takes on less relevance to schools and employers, unless that leisurely education had been put into good use into projects which can be better objectively quantified. For instance, I probably would overlook the fact you learned and coded in a certain programming language for one year, if I didn't see any body of proof that you did something with the knowledge (in the form of a program). This in a way, is what will hold the Internet from being the end-all, be-all universal educational platform; a lack of universal accreditation and evaluation.


Not sure what it is like now, but the SAT's were the be-all end-all back in my day. Shoot the moon on it and colleges begged you to come there. Extracurriculars were nice and report card grades were nice (sports success was a bonus), but the SAT was the "big" thing back then. If someone had a bad SAT score, they could still overcome it, but that was the big measuring stick in my day. With the internet, anyone can get a big SAT score. I get what you're saying about the "weights" of grades, I fully understand that, and agree with it. But toss a big fat SAT score on top of the 4.0 at a "piddly" school, and that kid is going to college, guaranteed.

With anything where something is judged, there will always be a top and a bottom. Doesn't matter how equal anything is, some will succeed, some will be in the middle, and some will fail. There are always winners and losers, and that includes the game of life. So yeah, someone at the bottom of their class is basically screwed. But they don't have anyone to blame other than themselves as far as I am concerned. We're beyond the time of excuses.

I agree that generally I care less what someone learned on their own time. Put that knowledge to use and show me something. Shouldn't be too tough if they did learn whatever it is. I don't need someone to tell me you can code if you show me you can code. Mostly I was talking about general learning up to the end of high school though, which results in better grades and better test scores. The car example wasn't the best one, just one that I could type up while talking on the phone and holding 2 IM discussions at the same time. Haha.

Not necessarily. Your business could fail and it wouldn't be for lack of desire and effort. You couldn't get into Stanford, despite your best qualifications and an uncompromising work ethic. The solution to failure doesn't really lie in trying harder and not quitting, but in being resourceful especially on limited resources like borrowed time.


There's always a reason for any failure, just a matter of being able to figure it out. Quite a few variables, but being able to figure out the problem does show solid intelligence as well. Time is definitely a wasted resource. Quite a few kids waste time and by the time they realize they need to straighten out and show what they can do, it is too late. I see that quite often. Makes me sad.

Stories such as those are usually the exception to the rule. There are tons of others who failed miserably or earned sub-par returns or just broke even, and those cases tend to be closer to the majority.

The ones who overcome all the odds tend to be those who excelled because they were 1) resourceful with what they had and 2) they happened to get into business with great timing. Work ethic can only go so far and even a combination of smarts, work ethic, opportunity, and luck can only only take you so far. You still need resourcefulness and timing on your side, as well as great people to help out too.


There's nothing wrong with breaking even. Tons of people would open their own businesses if they thought they could make enough to live on. Not be rich or anywhere close to it, just enough to be middle class. They would of course strive to do better, but paying their way is still fine and a very attainable goal. Sounds to me like you find the middle class to be unacceptable? I might be reading that wrong, but it sure seems like disdain for sub-par returns or breaking even. Quite a few people out there are happy to run their own business and be able to pocket a measly $25-$35K a year from it. But it sounds to me that if someone isn't making 6 figures a year and still growing towards millions per year, they are a failure in your eyes. Hopefully I'm misunderstanding it and it just came across wrong to me, because they are certainly successful and not a failure.

First, we have to understand that the definition of socialism can be somewhat misleading because it's a catch-all term for certain characteristics associated with socialism. When most Americans think of socialism, they tend to think of something resembling Communism or Stalinism, which are really just two forms of socialism when there are other different kinds. The countries with the highest standard of living tend to be social democracies in which the people have a say in government, have their individualist freedoms intact, and can still engage in free market activities, but egalitarianism tends to be society's biggest priority and that goal is achieved mostly by government redistributing wealth.

I think the most significant reason as to why those policies work in those countries and not in America is because of the way taxes are perceived in the public eye. In America, taxes are deemed to be burdensome. For the most part, America is still looking through Reaganomics-tinted lenses: tax breaks for the wealthiest individuals, corporations, and businesses are seen as vital to prosperity. Social services in America tend to be of more disappointing quality than what could be purchased from privately held firms. This is why Americans in general believe taxes are relatively unproductive and inefficient.

In places like Norway, Sweden, Canada, etc., taxes are looked at as an investment. Residents in these countries tend to think they'll spend big on education and healthcare anyway and that it's best for government to address those needs, so that they won't get priced out of what they believe are essential goods for themselves as individuals and for society in general. Unlike America, the social services paid for by high taxes tend to be of high quality, to the point that in some countries, higher education is free for all no matter their income and academic level (Norway and Germany immediately come to mind). Family leave and unemployment payments tend to be on the very generous side.

I'm not sure what you mean by keeping the successful motivated, but in these social democracies, it can be easy to get too comfortable from taking risks. The obstacles that say, Scandinavian countries, face when starting businesses don't necessarily come as a result of taxes weighing them down; most people are well compensated to pay nearly 50% of their income to government. No, the big obstacle is that it's too comfortable being an employee, and with the kinds of benefits they receive, who wouldn't be too comfortable. Still, some of these countries have a higher entrepreneur per capita rate than the States, despite the perception of the States being the best place to further entrepreneurship. Personally, I believe America is better suited at entrepreneurship because of the sheer market opportunity, a precedent of success, and the acceptance of a risk-taking culture. However, high-growth startup hubs are emerging elsewhere in the world: India, China, and even in the staunchest European social democracies, neither of which need to emulate the American model to have a successful model which is more applicable to those nations.


Good stuff, thanks! Lots of stuff for me to think about and chew on.

Yeah, taxes are definitely considered a bad thing here. It is because the government wastes so much of the money. If the people "really" had any say-so in the matter of where their money got spent, it wouldn't be so bad. If people saw their money being spent efficiently and in ways to help the country, it wouldn't be so bad. But generally speaking, all we see is waste. Of course that isn't really what is going on, but at the same time there is a ton of fat that could be trimmed and used a whole heckuva lot better.

50% in taxes is insane, there's no way I'd ever live anywhere that required me to give them that much of the money I earned. But that's what I was getting at. If success comes at a 50% tax rate, I'll pass thanks. There are graduated tax brackets in socialism, yes? If so, then that's what I was getting at. The more you make, the bigger the percentage. Here in America it's the same, but the rate jacks aren't that bad and the cap isn't that bad. 50%? That country is out of its mind! Why would anyone want to be successful enough to have to cut that check?
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Re: OWS

Postby Tavish » Mon Oct 31, 2011 11:22 pm

John Kramer wrote:
Tavish wrote:Assuming that the people were the biggest problem, it looks like we are in disagreement over if you can fix that part.


We're in a disagreement over how much of a difference can be made. Not a huge deal, it's cool.

No biggie at all. Actually I think we are pretty darn close on everything else though. At least a lot closer than we appeared to be a few pages back Which is great, now I don't feel like I am completely off my rocker. :)

Education certainly helps, but it isn't going to be nearly enough to make any worthwhile change.


True, there were other factors on top of the education. The cost is the big one, but still, more than a 33% drop in the smoking rate is pretty good isn't it? 1 in 3 used to smoke, now it's 1 in 5 and still dropping. I think that's a pretty good dent in the percentage.

Definitely a big improvement. As the older generations die off where the habit was much more acceptable and ingrained into the culture I would expect there to be a massive decline. I would love to think that the same "bad-habit-breaking" over time would work with people when it came to their own finances but I'm fairly skeptical.

Not sure the government being more involved is the way to go unless a clear-cut path out is also in the plans. Get involved, show them how it is done, then step back and let them sink or swim on their own. Something like that might work, but I have my doubts. The government isn't exactly running like a well-oiled machine and they don't exactly have a decent track record when it comes to showing how to run a successful business, so for them to "teach" anything is a scary thought.

I feel the same way and am much more in favor of "sunset" regulations that have to be renewed at set intervals. Regulation that is required right now to get the economy back on track may not be needed or may need to be altered in the near future. The economy is ever-changing so should the regulation that keeps it balanced.

The downside for me is that I tend to see the US as a borderline corporate oligarchy so that would mean that the corporations would have to basically pass regulation against themselves which seems very doubtful. At the very least the measures wouldn't be passed without extreme concessions that could likely result in trading one problem for another. It is going to take a fairly radical change from both the electorate (something that more education can definitely improve) and the politicians.

No, private businesses should attempt to make money. Private businesses should not be allowed to make money at the cost of the greater economy. It isn't like tighter regulation is some strategy that just hurts the banks bottom line. It is something that would also hurt a great deal of regular people and the idiots as well. But I haven't heard of any other viable solution that would help the long-term solidity of the economy.


All businesses make money at the expense of the greater economy. The entire country would be better off if we could buy all products and services at cost, wouldn't we?

Absolutely not, that would lead to complete stagnation of the economy. Making profits is the only way to grow the economy. It all comes back around to the bailouts that we both agree were a necessary evil and the need to prevent that type of situation from playing out again. If banks were making a normal profit that were growing the economy, if they were providing people with value then we very likely wouldn't be having this conversation. The banks would not have made a profit from the service or value they provided to the economy without the bailouts, they would have been bankrupt and out of business.

Credit is tighter and harder to get right now. Yet the government is yelling for them to start lending more, make credit easier to get, etc. (at the behest of the idiots).

I wouldn't read too much into the government yelling for more lending right now. I would mark that up as politicians being politicians and pandering to voters with the "well we have tried, its not our fault". So many businesses (banks included) are over-leveraged right now there is a much lower demand for loans. People and businesses are trying to pay down debt right now, not take on more debt. Lower consumer spending, lower product demand, low confidence in the economy, a bubble that is still settling, and all the other fun stuff that goes with a recession all add up to fewer loans.
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Re: OWS

Postby Tavish » Mon Oct 31, 2011 11:30 pm

John Kramer wrote:50% in taxes is insane, there's no way I'd ever live anywhere that required me to give them that much of the money I earned. But that's what I was getting at. If success comes at a 50% tax rate, I'll pass thanks. There are graduated tax brackets in socialism, yes? If so, then that's what I was getting at. The more you make, the bigger the percentage. Here in America it's the same, but the rate jacks aren't that bad and the cap isn't that bad. 50%? That country is out of its mind! Why would anyone want to be successful enough to have to cut that check?

The US had an income tax rate over 80% for 25 years (reaching as high as 95%) and a corporate tax rate over 50% for half of that time and that was during some of the biggest years of growth in the nations history. Of course as with everything it wasn't exactly so cut and dry. No one actually paid 80% income tax due to all the tax breaks and write-offs, and the period of growth had a lot more to do with basically the entire European and Asian economy being blown to bits by WWII leaving the US basically unscathed.
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Re: OWS

Postby Skin Blues » Tue Nov 01, 2011 12:01 am

I'd rather pay 50% tax on $120K and at the same time get great health care and education than pay 10% tax on $75K and have to pay for my health care and education on top of that out of pocket (and I'm the lucky one that can actually afford it). So how crazy are those people, really? And it's not 50% up here in Canadia anyway, but still, even if it was would it be worse? Look at quality of life, not just dollar signs. The US is full of miserable, fat, lazy, people but at least they don't pay a lot of taxes. Hooray!
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