patrick.net

errc says

Why do I have to be angry at anything

Good. When you said jagoff, then I assumed you were angry at him. I agree-better to be happy.

errc says

The union workers I know are the ones that stand on a factory line, watching a machine do all the work, and when the scabs come in and do their jobs for half the wages, nobody skips a beat

Just curious--where do these people work?

It is not a monopoly game. You cannot print money in that game.

Money and debt is the same thing nowadays.

Just curious--where do these people work?

Armstrong world industries
Kunzlers
J&J

Look, I know people get all worked up over the topic, but as someone who has labored back breaking work my entire life, and have had these friends (who are no more jagoffs then myself) get a taste of real work, they'll admit that its absolutely a racket. My friend at armstrong would say how uncomfortable he felt when he started because he was used to working, and they told him not to make them look bad(the union workers). When the plant locked the union workers out, and replaced them with 12/hr no bennies scabs, production kept moving right along

What's fair is fair, if I'm going to bitch about those that seek economic rent for their personal benefit, then the union worker, while minute in comparison, is participating

Honest Abe says

Secondly demand doesn't decrease because other people have money

Of course it does. In order to have demand, one must have the means to buy the product.

"Demand is the want or desire to possess a good or service with the necessary goods, services, or financial instruments necessary to make a legal transaction for those goods or services."

So, when 1 person has all the money instead of 100, demand obviously goes down.

From a WSJ article discussing the shortage of skilled workers:
Mr. Madden of Group One offers $18 to $30 an hour for fire-alarm technicians and $16 to $22 an hour for security-alarm technicians, depending on their experience and skills...Over the past two years, there have been about 10 instances where prospective hires with no skills asked Mr. Madden for a job. He provided them with a low-level burglar-alarm manual, he says, and asked them to come back and show they could operate the alarm panel. "None have come back," he says.

EBGuy says

From a WSJ article discussing the shortage of skilled workers:
Mr. Madden of Group One offers $18 to $30 an hour for fire-alarm technicians and $16 to $22 an hour for security-alarm technicians, depending on their experience and skills...Over the past two years, there have been about 10 instances where prospective hires with no skills asked Mr. Madden for a job. He provided them with a low-level burglar-alarm manual, he says, and asked them to come back and show they could operate the alarm panel. "None have come back," he says.

Sounds to me that he needs to train people.

xrpb11a says

Rich people create jobs in R&D, where there is no demand, but lots of risk. Demand will be a byproduct of a successful R&D project.

Not really. People invest in R&D to develop products to cater to unmet demand. Pure research (fundamental) is usually funded by the government because "rich" people won't.

xrpb11a says

Rich people will not invest in R&D if their funding is threatened by excessive taxation

Huh? I don't get this theory. So, rich people would rather make 0 by not investing as opposed to making 70% of something large (profits from the development)?? How do you figure?

xrpb11a says

Demand is decreasing because rich people have all the money and are holding on to it due to being threatened with tax increases, both hidden and public, coupled with not enough tax benefits to mitigate the risks investing in R&D.

The risks of investing in R&D are rewarded with profits, not tax benefits. You invest to make money, not save on your taxes.

That entire post is just one huge rationalization. You know that it's BS but it's all you can come up with.

Wealth may be zero sum but currency certainly is not.

Blue collar workers are also suffering from environmental regulations. Are you willing to compromise those?

Wealth disparity is not a bad thing. We are NOT communists.

Construction of one large yacht employs hundreds of people for a few years.

I do think we need a safety net.

Again, having too much newly created money changing hands will turn us into Zimbabwee. It is now the best of all possible world. I don't like it but what can we do?

We may have to agree to disagree.

Precisely. Thanks for agreeing.

BTW, I was not addressing "government funding". I was addressing "private company R&D funding"

tatupu70 says

xrpb11a says

Rich people create jobs in R&D, where there is no demand, but lots of risk. Demand will be a byproduct of a successful R&D project.

Not really. People invest in R&D to develop products to cater to unmet demand. Pure research (fundamental) is usually funded by the government because "rich" people won't.

Yes.

http://pragcap.com/the-5-trillion-corporate-cash-hoard

tatupu70 says

xrpb11a says

Rich people will not invest in R&D if their funding is threatened by excessive taxation

Huh? I don't get this theory. So, rich people would rather make 0 by not investing as opposed to making 70% of something large (profits from the development)?? How do you figure?

But if you are sitting on the sidelines with 5 trillion, not investing for whatever reason, additional tax writeoffs can push you into putting some of that cash into play...Look at the 100% writeoff for capital equipment purchases ..

Obama to Propose Tax Write-Off for Business
NY Times ^ | 9/7/10 | Jackie Calmes
Posted on Tue Sep 07 2010 10:31:47 GMT-0700 (Pacific Daylight Time) by Nachum

(Excerpt) Read more at nytimes.com ...

tatupu70 says

The risks of investing in R&D are rewarded with profits, not tax benefits. You invest to make money, not save on your taxes.

most of us, anyway....

Peter P says

Wealth disparity is not a bad thing. We are NOT communists.

errc says

The union workers I know are the ones that stand on a factory line, watching a machine do all the work,

Those jobs both union and non union are pretty scarce in the USA. Most of CAT workers are highly skilled and not easy to replace. Still....

CAT had a huge strike some years back in Illinois centered in Peoria the union was the UAW. CAT won, the union caved. CAT knows how to win concessions, and because of that has no need to go non union. They are , particularly in this economy holding the best hand. Contrary to what many think, being a union company that hires skilled workers does have advantages for the company. Not the least is a pool of skilled workers that are immediately available to the company so one can gear up production or gear down production without concern as to labor, of course it all depends on the terms of the contract. But this is huge in some businesses. Most of the really stupid "featherbedding" in union contracts is long gone, and that's to the good. The reality today is unions, because of the general economic conditions their own stupidity and weakness have given the "companies" the upper hand. Some companies choose to keep their workers happy by being reasonable in their negotiations others such as CAT dont give a shit.

xrpb11a says

http://pragcap.com/the-5-trillion-corporate-cash-hoard

The facts are right, your explanation is what is wrong. They aren't investing because there is no demand. Noone can afford to buy things so there's no reason to make them.

xrpb11a says

BTW, I was not addressing "government funding". I was addressing "private company R&D funding

I understand and I was pointing out that companies don't fund pure research. They fund product development.

Ruki says

Uh, no. Your views on the matter won't change things because it doesn't involve you. It involved Caterpillar's investors and workers.

Uh, yes. As an owner of Caterpillar, if I can convince other owners of Caterpillar then it will.

Ruki says

Again, another liberal who arrogantly feels he knows what is best for others and even displays more arrogance in assuming he should actually effect said others.

Yes, how dare I think that children shouldn't work in sweatshops. Or that we should strive to have a healthy economy where people can work and support a family. Where there is a rule of law.

How about you go to Somalia-I hear you can do whatever you want there.

Ruki says

Well, you see...a man and a women get together...but some irrational Patlib fools actually think new customers are delivered by storks instead...

Once again Shrek misses the boat. A customer must have the means to buy... or else he's not a customer

There is no demand for products that have not been invented yet.
There was no demand for the ipad prior to its development.
The demand was created by the product, which was unique.
it's called "Research and Development"

tatupu70 says

xrpb11a says

http://pragcap.com/the-5-trillion-corporate-cash-hoard

The facts are right, your explanation is what is wrong. They aren't investing because there is no demand. Noone can afford to buy things so there's no reason to make them.

which was the basis of my post.

tatupu70 says

xrpb11a says

BTW, I was not addressing "government funding". I was addressing "private company R&D funding

I understand and I was pointing out that companies don't fund pure research. They fund product development.

xrpb11a says

There is no demand for products that have not been invented yet.
There was no demand for the ipad prior to its development.
The demand was created by the product, which was unique.
it's called "Research and Development"

Sure there was. All you had to do was ask someone if they would pay $xx for a tablet computer with apps, etc. The demand is there even before the product exists. That's why companies do focus groups-to get a handle on demand.

xrpb11a says

which was the basis of my post.

Then we agree--companies spend money to develop products to cater to unmet demand. If there is no unmet demand, as now, then companies don't invest.

The problem is that there isn't enough unmet demand right now.

Well, a tiny iota of 'demand' may be generated by the focus groups, which may represent 0.000001% of the target audience. Note this is not necessarily an accurate assessment of what actual demand may be.

Actual 'Demand' is generated when development
* is around 90% complete and
* the concept has been validated
* Pre-production advertising is put in place
* Commercial production may or may not have been initiated.

This is the end of the "R&D" stage, where investor dollars are at most risk.

tatupu70 says

xrpb11a says

There is no demand for products that have not been invented yet.

There was no demand for the ipad prior to its development.

The demand was created by the product, which was unique.

it's called "Research and Development"

Sure there was. All you had to do was ask someone if they would pay $xx for a tablet computer with apps, etc. The demand is there even before the product exists. That's why companies do focus groups-to get a handle on demand.

"Demand" cannot be accurately verified until R&D has deemed the product feasible to manufacture, and pre-production advertising has begun.

Therefore, companies do invest in products on the drawing board, having no actual demand, risking capital on an idea which may or may not come to fruition.

This negates the bolded section below....

tatupu70 says

xrpb11a says

which was the basis of my post.

Then we agree--companies spend money to develop products to cater to unmet demand. If there is no unmet demand, as now, then companies don't invest.

The problem is that there isn't enough unmet demand right now.

Peter P says

Construction of one large yacht employs hundreds of people for a few years.

This is a very silly thing to argue.

For one, for the same money these workers could have been employed creating more usable wealth for more people rather than that "one large" personal luxury watercraft.

At the end of the day, luxury spending removes wealth from the economy.

10 $20,000 Hyundais is a higher quality of life compared to 1 $200,000 Maserati.

Also, what's happening with these big-ticket items is that the labor component is seeing very little of the sales money.

For a $200,000 luxury car, the labor might get $20,000 while $100,000 remains with the factory owner. The money just went from one capitalist pocket to the other.

People who can't see this basic reality scare me.

Poop Deck says

Despite record profits Caterpillar pushes 6 year pay and pension freeze

thats one way to avoid future lay offs..

Delurking says

For one, for the same money these workers could have been employed creating more usable wealth for more people rather than that "one large" personal luxury watercraft.

True.

xrpb11a says

Well, a tiny iota of 'demand' may be generated by the focus groups

The focus groups don't generate demand, they just give the company an idea of how much demand already exists. It's like taking a poll.

xrpb11a says

Therefore, companies do invest in products on the drawing board, having no actual demand, risking capital on an idea which may or may not come to fruition.

No--again, the demand is already there. The company is trying to create a product that caters to that demand.

The focus groups are exposed to the idea of a product. Some of them like the idea so much they want it, budget for it if the product pans out, and become part of the "demand". a "tiny iota" of demand, but nonetheless, demand.

tatupu70 says

xrpb11a says

Well, a tiny iota of 'demand' may be generated by the focus groups

The focus groups don't generate demand, they just give the company an idea of how much demand already exists. It's like taking a poll.

My definition of "demand" is different than yours.

"Demand" for me means that there are actual customers that have put down a deposit for something that is in the Pre-production or production stage.
They have put their money where their mouth is.

I would call your version "Projected Demand".

tatupu70 says

xrpb11a says

Therefore, companies do invest in products on the drawing board, having no actual demand, risking capital on an idea which may or may not come to fruition.

No--again, the demand is already there. The company is trying to create a product that caters to that demand.

xrpb11a says

The focus groups are exposed to the idea of a product. Some of them like the idea so much they want it, budget for it if the product pans out, and become part of the "demand". a "tiny iota" of demand, but nonetheless, demand.

I think you are confused about the definition of demand.

xrpb11a says

"Demand" for me means that there are actual customers that have put down a deposit for something that is in the Pre-production or production stage.
They have put their money where their mouth is.

That's not the correct definition of demand. A quick google search yields the following. Obviously exact definitions vary, but none require someone to pay to be considered part of demand.

"Definition: Demand is the want or desire to possess a good or service with the necessary goods, services, or financial instruments necessary to make a legal transaction for those goods or services."

"The desire to possess a commodity or make use of a service, combined with the ability to purchase it."

As a business owner, I do not calculate "demand" based on "wants or desires".
That is "projected demand" to me.
I like my version better than Googles..I'll stick with that.

tatupu70 says

That's not the correct definition of demand. A quick google search yields the following. Obviously exact definitions vary, but none require someone to pay to be considered part of demand.

"Definition: Demand is the want or desire to possess a good or service with the necessary goods, services, or financial instruments necessary to make a legal transaction for those goods or services."

"The desire to possess a commodity or make use of a service, combined with the ability to purchase it."

xrpb11a says

As a business owner, I do not calculate "demand" based on "wants or desires".
That is "projected demand" to me.
I like my version better than Googles..I'll stick with that.

Obviously, as a business owner you are most concerned with actual sales. And not so much with abstract concepts like demand. Which is completely understandable. But the definitions of demand that I have provided are correct so when we are talking about big picture economic concepts, you need to keep that in mind...

I understand where you are coming from.
In my position i need to separate it into "Actual" or "Projected".

tatupu70 says

xrpb11a says

As a business owner, I do not calculate "demand" based on "wants or desires".
That is "projected demand" to me.
I like my version better than Googles..I'll stick with that.

Obviously, as a business owner you are most concerned with actual sales. And not so much with abstract concepts like demand. Which is completely understandable. But the definitions of demand that I have provided are correct so when we are talking about big picture economic concepts, you need to keep that in mind...