Balderdash! Inflation and risk do not round to zero for wage income - wage income for the most part is NOT indexed to inflation and is certainly NOT guaranteed.
You do not owe future taxes on wages based on inflation, capital does. This difference is separately meaningful in both economics and policy. If you do not understand the distinction then you will always be confused by capital tax policy globally, not just in the US.
Whether or not your wages increase with inflation is an unrelated discussion.
That capital gains is not adjusted for inflation, so if you buy something and it keeps its inflation adjusted value and then you sell it, you have to pay capital gains tax as if that inflation was your profits.
As for risk, if you buy something, then you go bankrupt so you lose it all, the state doesn't pay you the negative capital gains tax from your losses. That is the risk part that workers never have to deal with, there is no such thing as negative salary but negative capital gains happens all the time. You can't cancel out those losses if you didn't make profits elsewhere.
This reads like a re-telling of Atlas Shrugged, dressed up for the 21st century but the causality runs from lack of government spending throughout the decades after the Great Financial Crisis. The EU deliberately chose to starve itself of government spending while the US swore off austerity after a very short period. The net result is a debt-to-GDP ratio for the EU around 89% while the US is at about 124%. So for all the clutching pearls about innovation and anti-capitalism, it really comes down to whether the state is prepared to inject demand into the economy via deficits - the US decided it was OK and the EU (mostly Germany) stubbornly stick to their "Schwarz Null" policy of balanced budgets.
Contrary to this thread, the EU needs more productive investment from governments, not less. And while we are it, the dystopian hellhole that the megacap growth tech companies have created in the US (and dominate valuations for the broad US indices) is something the EU should pat itself on the back for having missed.
That is NOT what Coase was about - his proposition was that if you have well defined property rights, the parties would transact and price out any negative externalities efficiently, without govt. intervention. In this case, the bodies of water are owned by the public, polluters need to pay the public an amount equivalent to the harm caused by the pollution.
We are saying the same thing. I'm not saying polluters have a countervailing right to utilize all public resources! That would be a crazy thing to say; obviously, we have laws against various forms of pollution.
"His proposition was that if you have well defined property rights, the parties would transact and price out any negative externalities efficiently without government intervention"
Typical crock of shit thinking from economics. Assumes perfect future prediction combined with absolute awareness of all activity occurring at the molecular level, perfect attribution and ability to rewind time to determine causality/responsibility, that people are generally respectful of the law.
And above all, assumes that economics will price the value of human life (to say nothing of non-human life with emphasis on the word "nothing") as anything but "zero".
The obvious extension to this is that FLoridians have no right to a sustained future existence of humanity. All that remains is to determine how fast capitalism can consume humans and the environment into fictitious unicorn horn currency until nihilism triumphs and we pass into the void.
Like the tree falling in the forest, what is the monetary value of all human bank accounts when all humans that would observe the value of the bank account value are dead?
Here's a more fleshed out version: https://en.wikipedia.org/wiki/Coase_theorem. He did acknowledge things like transactions costs etc., which like in can-opener fashion, is typically assumed away by mainstream economists.
With regard to your comment, and since we are on the subject of style, I would rephrase "... only contend on two things" as "... only differ on two things". While it is grammatically correct, it feels awkward.
Well, particularly in a subthread on Strunk & White, one should write "...differ on only two points" or "...contest only two points."
It's not that we ONLY contest these points (we may also, e.g., state them or rephrase them). It's that we contest ONLY these two (and no others). See the antepenultimate example of Rule II.16, "Keep related words together."
Why does “I contend” feel awkward to you? It is more specific than “I differ” because that could also mean that the author physically differs, which is awkward, while “contend” is specifically used for disagreement on some topic? Does “I contend”
maybe has a ring to it of being scholastic/pretentious? (Also non-native English, just curious)
I think the trouble in the phrase is that “contend” has an active sense to it whereas “on” creates a more passive tone. Your solution is to swap to a more passive phrasing, but the alternative is also available.
I don't think this is what you meant to say - have a partial understanding of something is not the same thing as intuition which is more like a "gut feeling".
You've totally missed the point of the article - the failure is not idiosyncratic to any one CEO or to an individual manager's failure, it's the result of incentives that put these kinds of CEOs in charge, who then single-mindedly work towards a particular goal - please short-term shareholders. It is very much a theme.
Also partly the success of large companies is often down to IP, most commonly patents.
The timeline of expiry of these patents and the cutting of what appears to be non directly profitable activity of science/r+d can run 30+ years.
The bigger the pipeline, the longer the demise, potentially.
Jack Welch got rid of the 1% who achieved expected results in unexpected ways, but these people were the innovators that gave the company its life blood.
Immelt inherited a bad deal with an engineering company that had turned to making financial transactions to generate pseudo wealth, rather than innovative ideas. Maybe could have done more, or differently, but Jack Welch well and truly started the spiral with a short sightedness that prevented him from seeing the horizon, distant though it was.
In the west especially, people of purported financial management skills rarely are able to see past the next annual report, partly because that is how they are trained and partly because shareholders have too much power.
As recently as Dave Packards day the employee was catered to before the shareholder - I don't believe HP would have ever contemplated a dividend in the same year as lay-offs, but now the unsecured creditors, the shareholders dominate managements concerns.
The system is as much to blame as the individuals and has created perverse incentives that are a slippery slope to climb back up from.
Andy Grove didn't run Intel the way Paul Otellini did - Boeing had CEOs too before the current crop - it's not just modern capitalism, it's this perverse mutation we seem to have birthed over the last 2 decades or so. That's the theme.
