The Great Gatsby
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The Great Gatsby vs Atlas Shrugged vs The Grapes of Wrath
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Joshua wrote: "The issue of borrowing money to invest abroad is trickier."It can be tricky or it can be very simple.
I am a former "Big 4" CPA/auditor and Cash Manager for one of the early mega-multinationals. We were in 68 countries and our bankers included JPM; Brown Brothers, Harriman; Citi; Deuchebank; Dresdner Bank; BofA; and regionals such as CINB and Republic National.
When a consumer deposits money in say, Citibank, Citi upstreams it through their holding company and it ends up in our bank account as a draw against our credit line. (Once a credit line is established, this kind of transaction can be done in a day.) We can then push it overseas to any of our 68 subsidiaries. Using trade credit, we could lead and lag intra-consortia payments for up to six months without charging a penny's interest. Using a technique called multilateral netting, we could maximize flows into (or out of) any given currency or country. These are considered commercial transactions, not capital investments that are subject to strict guidelines and time delays.
Blink and it's done, but we typically cleared payments only once a month.
We were a significant portion of some small countries' balance of payments transfers.
When an American bank lends to an American multinational, consumer deposits can be recycled overseas in this way by a multinational and used to finance the export of American jobs. We just happened to be early perpetrators.
Joshua wrote: "Matthew,Wholly agree. I'm sorry if that wasn't clear, I am trying to be somewhat brief. I think fighting globalization is a lost cause, as it will likely happen one way or the other like indust..."
On that, we agree too. Speaking on behalf of Canadians, we are often annoyed by the fact that we find ourselves in the pickle of not being able to consider hiking taxes on the rich or getting rid of corporate incentives and tax cuts. The reason, naturally, is that we fear that if entrepreneurs and businesses feel they are being pinched, they were merely relocate south.
We already experience a serious issue with the whole "brain drain", thanks to Canadian professionals and businesses being in high demand in the US and generally able to find better pay and lower taxes. Granted, this situation rarely lasts, with complaints about litigiousness, racism, violence and the high cost of health care being the more common. But it's easy enough for companies to provide these people with health insurance and corporate housing to make sure they are shielded from this.
Nevertheless, if there were a common tax code, common economic legislation, common labor laws, and similar rules on banking, we wouldn't have to worry so much about losing our skilled people for years at a time.
Matthew,Funny you mention Canada, cause that is where I currently reside; Toronto. The cost of living here is much much higher than when I lived in NYC outside of rent (a big part no doubt). Part of it is higher taxes to pay the entitlements (health care), part of it is protectionism. Can that be considered crony capitalism?
The brain drain is a real phenomena, and has served the US well for many decades. Its part of the "american dream".
Monty J: I don't know if I would say chinese people support communism as much as its the status quo. Who was it that said "Greed is good"? The penalty however for going against the establishment can be quite severe.
It´s never so simple. We are assumuming that if an American company invests in a factory in China or Chile or Mexico that it is with the SOLE intent to produce goods for return to the USA at a much lower cost than what it would be produced here. But that is only part of the picture. The other part is that if Dupont opens up a paint factory in Chile it is also with the purpose of selling paint in Chile. There are no shipping charges other than the cost of trucking the paint from one Chilean city to another. Ari Onassis´s empire doesn´t get a cargo cut.
Recent economic reports have augured well for the return of some industry to the USA. With labor costs rising in the Pacific Rim countries, it will be too expensive to produce there for some items and ship back to the USA. Also when you factor in item refund policies under product warranty, you have to factor in an additional shipping expense for the host corporation.
Geoffrey wrote: "With labor costs rising in the Pacific Rim countries, it will be too expensive to produce there for some items and ship back to the USA."Labor cost is part of it, but so is customer service and freight, which is highly sensitive to the cost of fuel/oil. As oil prices go up it eats into the labor cost differential.
I and others I know refuse to talk to customer service agents who have a bad phone connection and who so badly mangle the English language they are hardly understandable. Just ask to speak to someone else.
Capital will always flow toward low input costs, all things being equal.
Another swing factor is safety. The main reason we have such an enormous military budget is for fleets and bases to protect "American interests" abroad. And most of these ungrateful freeloaders don't pay enough taxes to pay for it.
Wage earners are subsidizing corporate freeloaders to export their jobs. And I doubt the ones voting Republican will ever wise up that the people they're voting for are shafting them all the way to their Swiss bank accounts.
Joshua wrote: "Matthew,Funny you mention Canada, cause that is where I currently reside; Toronto. The cost of living here is much much higher than when I lived in NYC outside of rent (a big part no doubt). Pa..."
I wasn't aware Canada had any protectionist measures in place. Certainly not since NAFTA.
Matthew wrote: "Nevertheless, if there were a common tax code, common economic legislation, common labor laws, and similar rules on banking, we wouldn't have to worry so much about losing our skilled people for years at a time. ."
On the surface it sounds ideal, but NAFTA, BAFTA and TPP are engineered by multinational corporations whose first allegiance is to their shareholders, not the common good. They have an irresistible obsession with ever-increasing profits, and governments and taxes are either obstacles or tools to this end. No matter what is initially agreed, they have proven time and again throughout history to have an insatiable hunger for more and more profits, even if their workers are begging for assistance. Walmart is living proof of this.
The farther government is from the people, the less responsive it is to those governed and the more vulnerable the people are to exploitation by the narcissistic wealthy elite who always, ALWAYS seek more and more profits.
Never forget this. It is the prime law of socioeconomic nature.
How can anyone take a discussion seriously that begins with, "I've not finished 'Atlas Shrugged'..."?
Troy wrote: "How can anyone take a discussion seriously that begins with, "I've not finished 'Atlas Shrugged'..."?"Troy, that's a good point. Half way through "Gone Girl" I would have given it five stars. Then the whole thing fell apart for me, as the second half was implausible. I'm currently reading "War and Peace" and I've read only about 150 pages, and so far there have been dinner parties and not much else, it's not what I expected at all.
Matthew wrote: "I wasn't aware Canada had any protectionist measures in place. Certainly not since NAFTA. "I didn't think so either until I moved here. Not outright, but in practical ways there are. Non-Canadian airlines (other than CA, WJ, Porter) can't originate from Canadian airports to ensure US airlines can't compete and as a result Canada Air's fares are quite a bit higher than comparable fares in the states. Pearson has the highest taxes and fees of any airport in the world (its a convenient airport though).
When Verizon tried to enter Canada to compete with the Oligopoly that is Bell/Rogers, the telecom giants ran radio ads that denigrated competition and Verizon decided it wasn't worth the political turmoil and backed out. To compare services, when I was in NYC area, I had Verizon FIOS and have Rogers here. Verizon was about 40% of the cost of Rogers, offered about 3 times as many channels and channels that you want without extra fees, was super reliable unlike Rogers and the internet speeds (despite me having hybrid 150 fiber) were about 3x as fast; enough to be quite noticeable. Customer service from Verizon was a bit worse than Rogers, but not egregiously so.
Those are two examples, but it occurs to me almost daily how much more Canadians have to pay even before taxes because of the shelter Canadian companies afford from competition from the US through technicalities and hurdles and such.
Oh, and should I even start on the LCBO, Beer store?!
Troy wrote: "How can anyone take a discussion seriously that begins with, "I've not finished 'Atlas Shrugged'..."?"Its not so much what's in it, but what's been done with it that's alarming. But the writing's so bad, Jesus, how can anyone actually wade through this, ...this monkey tripe.
Joshua wrote: "Oh, and should I even start on the LCBO, Beer store?!"By all means, one of my favorite operations and one that has provided me with hours worth of inebriation ;) But I can imagine what you would say, they levy taxes on American or out-of-province products in order to ensure that Ontario beers and liquors are sold primarily.
Monty J wrote: "Troy wrote: "How can anyone take a discussion seriously that begins with, "I've not finished 'Atlas Shrugged'..."?"Its not so much what's in it, but what's been done with it that's alarming. But..."
Monty, I've always said that Atlas Shrugged is the most pretentious soap opera ever written. I love it, but one of the reasons I love it because it has to be the most pretentious novel ever written. Now, back to War and Peace for me, as Rand may indeed have a competitor in the "pretentious" category.
NAFTA has been a serious bugaboo here in Mexico. Trade between Canada and MX didn't seriously increase as its result, but trade between the US and MX did. Regardless, Mexico's expectation was that it would become an economic superpower with the deal, far in excess of what actually happened. As a creator of cheaply made products of rather poor quality, today's professional class here laments China's displacement of what was supposed to be Mexico's economic future. The range of emotions is from annoyance to extreme anger.
It did, however, cement Mexico's economy with its role of assembler of electronic products. The US would produce the parts, ship them to Guadalajara and other centers of production for assembly and then on to either the Mexican market or back to the US. Oil is the same. The Azteca oil, drilled in the Gulf off the coast of eastern MX, would get shipped to Galveston for refining and then either sold to the gringos or back to MX.
The real crisis however came about with the limitations of agricultural products. NAFTA opened up the Mexican market to US exports, particularly of corn, the main staple of Mexican diet. Many subsistence farmers, beneficiaries of President Cardenas's land reforms during the 30's couldn't subsist against the superior corn at lower cost coming in from the US. The solutions for many was to emigrate to the US, part of the reason for the 11.5 million living illegally in the US at this time.
Agriculture is the hot button on a lot of global trade debates. The pacific rim trade deal is hung up on Japan's unwillingness to let us ship them agriculture products.
Joshua wrote: "Agriculture is the hot button on a lot of global trade debates. The pacific rim trade deal is hung up on Japan's unwillingness to let us ship them agriculture products."Good for Japan. They're smart enough to protect their farmers, not throw them under the bus the way Mexico did theirs.
Mkfs wrote: "In the Fountainhead and Atlas Shrugged, Ayn Rand portrayed her capitalists as "doers": entrepreneurs and producers whose leadership (not labor!) results in goods or infrastructure (railroads, metal..."On the contrary - the book aims to show you can be somebody, starting now, no matter who and where you are. Remember the chapter where they are kids? :)
Todor wrote: "Mkfs wrote: "In the Fountainhead and Atlas Shrugged, Ayn Rand portrayed her capitalists as "doers": entrepreneurs and producers whose leadership (not labor!) results in goods or infrastructure (rai..."No individual can begin to match the power of a group. Teamwork is the answer. Individual incentives are useful, but organizing around a superstar is the riskiest approach.
Investors demand a management TEAM, no matter what the technology one person may have invented.
An Officer and a Gentleman is a good rebuttal to Atlas. As is Top Gun. In both cases, the hero redeemed himself by helping his teammates or classmates.
Atlas is a formula for destruction because it creates a class divide, glorifying the privileged few while denigrating the weaker and less fortunate, as did the fascists in World War. II.
If Rand wanted to prepare America for totalitarian control she couldn't have written a better text for it.
Joshua wrote: "Agriculture is the hot button on a lot of global trade debates. The pacific rim trade deal is hung up on Japan's unwillingness to let us ship them agriculture products."I recall years ago that the ruling political party depended on the rice farmers to maintain dominant power and the Japanese would not allow rice importation to any extent. This was 30 years ago and rice, the main staple of the Japanese diet,was priced at $10 per pound.
Geoffrey wrote: "I recall years ago that the ruling political party depended on the rice farmers to maintain dominant power and the Japanese would not allow rice importation to any extent. This was 30 years ago and rice, the main staple of the Japanese diet,was priced at $10 per pound."I remember this well. I was in agribusiness at the time and it made headlines in California, which is the largest rice exporter in the world, supplying 80% of South Korea's rice. Korea balked at our high prices and California rice growers were stuck with unsold crop and more to harvest.
Reagan fast-tracked a bill through Congress gaving tax credits to real estate moguls with empty buildings who would make them available for storing rice. Huge belly-dumper trucks started showing up next door with portable conveyors.
The rodent population exploded. We had to call the exterminator.
This is what Republicans call: "Free Market" capitalism. Government handouts for the wealthy. But hey, welfare for the poor? Forget it.
Monty J wrote: "Matthew wrote: "Nevertheless, if there were a common tax code, common economic legislation, common labor laws, and similar rules on banking, we wouldn't have to worry so much about losing our skill..."I certainly know what you mean I agree to a point; that multinationals want boundaries erased so as to maximize access - and hence, profits. But the long-term effect hasn't been one of detriment, its been one of benefit. As I said to Joshua, I wholeheartedly believe that this was accidental, but the historic trend is actually encouraging.
The comparison I believe I used was the industrial revolution. During its earliest phase, it was for the benefit of the few over the many. Factory owners employed workers at subsistence wages, forced them to work 14 hour days and made record profits. Meanwhile, the machinery they produced had an impact on the countryside and led to things like the Enclosure Movement, where small farmers were forced out by large land owners and moved into the city, thus providing more workers and perpetuating a rotten cycle.
But the long-term effect was twofold: bigger cities and more working poor led to the formation of unions and worker parties demanding reform. Western governments were slow to respond but did so because they couldn't abide so many city-dwellers becoming agitated and restless, not to mention the riots and crackdowns.
Meanwhile, industrialists realized that the only way they could ever expand was to make consumers out of more people, leading to shorter hours and better pay, which led to an overall increase in wealth, health and well-being amongst workers, and the largest expansion in the middle class a generation later.
When it comes to free trade and globalization, a similar pattern is emerging. Dropping tariff barriers and increasing international trade meant that companies like WalMart, Apple, Nike, etc., could reap the benefits of cheap labor and resource markets. But a focus on poor conditions and unethical behavior is leading to reform, and higher employment in developing nations has led to economic booms in China, India, and now, Subsaharan-Africa.
At the current pace, these regions will overtake the west in terms of GDP in a few decades. China and India are expected to be the major economic powers of the 2020's and 30's, and the second half of this century is believed to go to Africa, which will be the only continent growing while the rest of us stagnate.
And its all due to a bunch of greedy capitalists who believed their own rhetoric about free trade. Score one for irony, I guess?
Joshua wrote: "Agriculture is the hot button on a lot of global trade debates. The pacific rim trade deal is hung up on Japan's unwillingness to let us ship them agriculture products."Speaking of agricultural products, one of West Africa's greatest concerns is farm subsidies in the EU. One of the main reasons they can't export their produce to Europe is because of protectionism, which in turn means they have an overabundance of food, leading to devaluation. And this, at the same time that many parts of the region are experiencing malnutrition. Bitter irony!
Monty J wrote: "Geoffrey wrote: "I recall years ago that the ruling political party depended on the rice farmers to maintain dominant power and the Japanese would not allow rice importation to any extent. This was..."It so true, isn't it? Giving money to the rich is apparently "economic stimulus", but welfare for poor families is an excuse to be lazy and breed more. Putting aside the issue of multi-billion dollar bailouts and subsidies for big oil, did you know that state and local governments in the US provide $40–50 billion annually in economic development incentives? And let's not forget farm subsidies that overwhelmingly go into the pockets of major agribusiness. It's corporate welfare, by any measure.
Hear ye, hear ye, Matthew.
Matthew wrote: "Western governments were slow to respond but did so because they couldn't abide so many city-dwellers becoming agitated and restless, not to mention the riots and crackdowns."The problem is nothing got done until blood was shed. And it was the blood of the poor, not the industrialists.
It's a shame, but things will have to get really bad before people are willing to shed blood again. And blood is what it will take. (Actually, it's being shed already, as cops kill unarmed young blacks, causing blacks to riot--dress rehearsals for what may be coming.)
The other problem is that when we do deals like the Trans-Pacific Partnership with barbarian countries like China and Saudi Arabia, we give up the ability to protect our own workers. Inhumane treatment is standard in countries like Bangladesh, China and Dubai.
Western industrialists and merchants have proven throughout history a whorish eagerness to sell out civilized values for gold, going back to British slave trading, the Boer wars, the Opium Wars and beyond.
Nothing has changed. Everyone watches Downton Abbey and thinks British aristocrats are sweet and lovely people.
Matthew wrote: "...welfare for poor families is an excuse to be lazy and breed more."That's pure right-wing propaganda. No one wants to be jobless and have to ask for assistance.
Intelligent assistance has proven itself time and again. Denmark has the highest happiness index of any country. Taxes are high and everything gets paid for. And no one that I know of has ever met a lazy Dane. Quite the contrary, in my case. I've had business relationships with three and all were mad with energy to get ahead.
RK Rowling wrote her first Harry Potter novel on welfare.
Intelligent welfare programs have roadmaps to getting back on your feet. Every economist knows that Welfare money is a high velocity government expenditure that ripples through the local economy instead of getting sucked away to Swiss bank accounts as happens with tax breaks for the rich.
It's hilarious, the way Broken-record Boehner replays the same tune, again and again. The Republican answer to every problem is to reduce taxes for the wealthy.
Welfare also cushions the impact of recurrent economic disasters endemic to free-market capitalism.
Capitalists like to brag about what a great country America is while hiding the ugly truth of slums and poverty growing at an increasing rate. So-called socialist countries like Germany and Denmark laugh at us.
Matthew: "Putting aside the issue of multi-billion dollar bailouts and subsidies for big oil, did you know that state and local governments in the US provide $40–50 billion annually in economic development incentives? And let's not forget farm subsidies that overwhelmingly go into the pockets of major agribusiness. It's corporate welfare, by any measure."
The American people seem deaf to the giant sucking sound Ross Perot predicted for NAFTA. The wave frequency is so low and has been going on so long that people are conditioned to it. It's like the sound of traffic on the freeway, people don't even notice.
Farm subsidies and Big Oil subsidies like the Depletion Allowance have become Corporate Entitlements. In the same budget bill, the GOP congress will shovel money at the wealthy and whine at Social Security and Medicare as "entitlements."
America is regressing so fast it won't be long before you can't tell the difference between El Paso and Juarez. There'll be open sewers on both sides of the Rio Grande, not just in Juarez, where 30% of the 1.5 million people have outdoor plumbing. (Don't bother checking. You won't find that statistic on Wikipedia. I spent over a month in El Paso in 2000. The sewer problem there was well-known. You could see the sewer trenches from El Paso with binoculars.)
Monty J wrote: "Matthew wrote: "...welfare for poor families is an excuse to be lazy and breed more."That's pure right-wing propaganda. No one wants to be jobless and have to ask for assistance.
Intelligent as..."
You don't need to tell me, I was agreeing with you. To a point anyway. I agree that the US is facing regression and could very well collapse if it doesn't get out of the political tailspin it finds itself in - which is rightly blamed on fringe mindset of the GOP and spinelessness of Democrats. Still, I maintain that things are getting much better worldwide today than in any previous century.
For instance, while unemployment, recession and austerity measures have become common in the developed world in the past 30 years, the situation is different in the developing world. In the past 20 years, global poverty has been cut in half. In 1990, 43% of the population of developing countries lived in extreme poverty (under $1.25 a day), which was roughly 1.9 billion people. By 2000, that was down by full third to 29%, about 1.3 billion, and by 2010 it was 21%, or 1.2 billion.
Much of that is due to economic growth in the developed world coupled with smart national policies and investment in social programs. Everybody knows about China, India and Brazil, which according to the Human Development Report are set to overtake the combined GDP of the US, the UK, France, Germany, Italy and Canada by 2020. But there's also the "Rise of the South" which identifies 40 other economies that are growing immensely.
These include Indonesia, Mexico, Bangladesh, Tanzania, Yemen, Pakistan, Afghanistan, Thailand, Kenya, Senegal, the Philippines, Nigeria, and a host of other African, Asian and South American countries that we think of chronically poor. And the growth is being felt at all levels, not just by the richest.
One of the biggest expansions has been in Sub-Saharan Africa, which is second only to India and China right now in terms of eliminating poverty and the creation of a new middle class of people, who are in turn creating new jobs because their existence has boosted the demand for goods and services. And by 2050, when India and China are expected to have leveled off, they are still expected to be growing.
I also remember reading a statistic that said that in the past 30 years, growth in the developing nations of the world surpassed that of the previous 300 years. This not only was the final nail in the coffin of how "colonization and imperialism were good things", it also showed that the old divide between East and West, and North and South is narrowing. After 2050, its even expected that all continents will have achieved a sort of economic balance, instead of the polarized world we've known for the past few centuries.
To say that nothing's changed is just plain inaccurate. And, if I may be so bold, I'd even venture that being negative and gloomy in our outlook is an example of "first world problems". We should be more optimistic, seeing as how life is getting better and going to keep better for people other than ourselves.
Joshua wrote: "Matthew,Funny you mention Canada, cause that is where I currently reside; Toronto. The cost of living here is much much higher than when I lived in NYC outside of rent (a big part no doubt). Pa..."
I forgot to notice one point you mentioned, so I'm late in responding, sorry. The point being that the brain-drain has served the US well. This is certainly true, except that there's some holes in it that often get overlooked.
For one, the Canadian professionals who leave Canada to pursue jobs in the US rarely stay. In fact, I read stats that said up to 80% of those doctors, lawyers, and other skilled professionals left the US after 1-5 years, citing problems like the litigious nature of their work environment, racism, violence and crime.
Corporate housing and company-provided insurance allowed them to sidesteps the issues of higher crime rates and more expensive health care, but after a few years, these other issues intruded on their lives and they chose to leave.
Two, the brain drain was largely a 1990's problem, due to the fact that the US was showing extensive economic growth in this period, particularly in the tech industry. After the IT Bubble of 2001, this slowed considerably, and during the next few years under the Bush Administration, Canada got a massive influx of people from the US. Canada is also currently attracting an unprecedented number of skilled laborers from the US and elsewhere.
And three, Canada has always made up for the brain-drain with immigration. While up to 50% of university graduates are seeking jobs in the states, more than that number are entering Canada from abroad, seeking post-secondary education and jobs that require university degrees, for which they are already qualified.
The problema is certainly acute for the USA from my standpoint of view. I live here in southern Mexico close to the seventh wonder and my university students can´t even get to the US to visit Disneyworld. Mine are language majors, future teachers of English,French and Maya in the school systems here in MX.But for their 20´s they want to adventure out. Several are in france, either taking their masters or working as governesses and au pairs. A few are headed for Canada. None are interested in the USA, not because of disinterest but because immigration is making it so difficult. So the potential of having native Spanish speakers relocated to the USA and teaching our kids Spanish in an era of extreme globalization-why the US is simply doing a disservice to itself with its ridiculously extreme quotas.
It will be our long term lost.
Greg wrote: "Aaron wrote: "Holy good shit, contrasting Atlas with Gastby? Why?"Aaron, that's the first thing I thought when I saw this discussion heading. I'm reading through the comments to find out how oth..."
Since I posted that, the discussion has got deep as hell, and I'd have to read up to remark on all that, if I can understand it enough to remark. My surprise was that the two books are so different in terms of form, style, goals, setting, characters, length, and just about anything else you can think of, except, I guess, that capitalism sort of features in both. Well, in Atlas it introduces itself and then punches you in the nose, while in Gatsby it slinks around the cocktail party and slips you a mickey.
The two come from completely different places. I can't imagine Fitzgerald sacrificing a note of music to make clearer some point about economic systems, and I can't imagine Rand employing even a double-entendre if she thought it would in any way hamper her plodding philosophy.
Well, Aaron, you successfully contrasted the two exactly as the original poster solicited.
Aaron wrote: "Greg wrote: "Aaron wrote: "Holy good shit, contrasting Atlas with Gastby? Why?"Aaron, that's the first thing I thought when I saw this discussion heading. I'm reading through the comments to fin..."
It's true isn't it? Rand employed no subtlety whatsoever in Atlas when it came to her views, expressed so loudly in a multi-multi-page diatribe by John Galt about how the rich don't need the poor. What I always thought was stupid about this was just how hypocritical it seemed. Sure, the wealthy of society like to style themselves as the "producers" who create wealth for others to enjoy.
Putting aside the obvious self-serving nature of this logic, or the very-well documented historical tendency of the rich to hoard said wealth, there's the little issue of how such wealth is generated. No producer ever succeeded without a labor force to create the products they make, a service industry to market them, or a mass of consumers to buy them.
Then there's the role played by the huge armies of advertisers, middle managers, accountants, lawyers, bankers and skilled professionals who make sure that these interests are represented, defended and secured. What are the "producers" without this army of people who generate and protect this wealth for them? They are either a person with an idea and no way to profit from it, or kids with money and nothing to do.
In truth, I think the book missed the mark so widely that it was comical. Atlas "shrugging" would have been exemplified by the workers, middle-class and skilled professionals all going on strike and declaring that they weren't coming back until the wealthiest learned to pay their taxes, respect their workforces, and stop being such selfish assholes. All THIS story showed was the people who depend on Atlas the most telling him they didn't need him.
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In a word, "yes," because the Chinese people support communism. Globalization blurs the lines of national interest and it's underlying values. Why have something called "America" and "free enterprise" if American companies are going to subsidize communism/totalitarian rule by sourcing a huge % of their products in China and other such countries?