Not terribly high… Walmart is the largest retailer in the world — you can’t get that kind of scale from welfare alone.

Moreover, Walmart locations are typically in the suburbs, unreachable by public transportation. Those on welfare are far more likely to live in the cities.

Finally, from anecdotal evidence, it would appear to me that most shoppers at Walmart are working-class. Many, of course, are elderly. Shall we shower hate on them too?

Must be nice to live in your world where all that is beneath you…

Those layers under your hoodie you keep revealing are truly amazing. Your latest words accuse all of western civilization, imputing all of the errors, transgressions and exploitation of colonialism to capitalism.

Capitalism, like a gun, is a tool. It is man, in all his imperfection, that is responsible for what happens when a tool is misused.

You hate Walmart, obese people (particularly if they’re poor and filling up their carts there). America, to you, is an image distorted as in a Fun House mirror; a “dog eat dog” decadent society where “consumers” are part of the elite mysteriously disenfranchised whose very citizenship has been “erased”. This image is laughable gibberish.

But you finally tip your hand. You speculate on how “…America must be…”. You DON’T KNOW! You’re not from here! Now I understand the “set” of your “mind”.

DO share with us the blissful socialist paradise in which you choose to live!

“I love the mental simplicity of those who only see a faucet full on or full off and none of the infinite interim options.”

Mental simplicity is something you seem to apply readily with your reductive view of capitalism for example.

“You dance back and forth from one extreme to another, seeing only injustice and none of all that is right in America.”

I would characterize it as providing much needed context to your simplistic view of things. You make sweeping statements about what capitalism is and how American capitalism has improved the lot of entire world over the last six decades but you obviously fail to take in the perspective of the actual ENTIRE world, the history, the exploitation, the abuses and the many populations that were also negatively affected. Surely some eggs were cracked making that omelet no? A one way armchair view of the world and history. Pick and choose what suits.

“You are the human equivalent of the dog that would bite the hand that feeds it.”

Strawman. I also noticed you had nothing to say about how socialism has prodded capitalism along in America all these years.
What percent of sales at Wal-Mart (soon to be a global monopoly) do you suppose come from welfare checks?

“But it would be a waste of my time to try to explain to one blinded by hate that which is beautiful.”

Seeing one-third of American adults in a state of obesity walking around sounds like tremendous progress. Yes, watching obese people fill up their carts at Wal-Marts across America must be quite a beautiful site.

American capitalism has come to mean dog eat dog. The culture has become decadent, one that espouses consumption as the way to a better life. Consumers and investors have drowned out democracy and erased the citizen. You have a dysfunctional government that hasn’t served the people, only its paymasters, for quite some time. Most assuredly I agree with you that politicians need their “feet held to the fire”. The consumerist culture however is what also enables them. it is a vicious cycle.

I would excuse no ones failure, especially not the government. It was Bush who gutted the SEC and regulatory power with it. The government has allowed the financial crooks, the corporations and Wall Street to run amok. You can go back to Reagan especially where much of these roots lie as well. Bill Clinton went on to complete the deregulatory Reagan dream and unleashed the banking industry. Bush’s appointment to the Supreme Court would go on to help the Courts ruling which effectively stated that corporations are people and money is speech, only corrupting the electoral process further. I doubt government can be fixed without removing the money from politics.

Capitalism without democracy is dog eat dog.

I love the mental simplicity of those who only see a faucet full on or full off and none of the infinite interim options.

You dance back and forth from one extreme to another, seeing only injustice and none of all that is right in America. You are the human equivalent of the dog that would bite the hand that feeds it.

Just as our representatives in Washington have utterly failed to notice and reign in the excesses of the financial sector and effects of globalization on the American work place, you would excuse THEIR failure as unreasonable expectations on the part of “we, the people”? Well, maybe we need to convey our expectations more clearly.

Our individual existence as “boss” or “worker” or “bureaucrat” or student” do not define us as individuals. In most cases these are but are but way points along life as we mature. So individual incentive and dedication are NOT synonymous with a “dog eat dog” society.

Individual success is more lasting and fulfilling if there is also collective success. What we have in common is our individual existence as a citizen of this country, and all that this means. But it would be a waste of my time to try to explain to one blinded by hate that which is beautiful.

“…you presume to tell me how to think. I shall forego the considerable pleasure of an uncensored response to such presumption and just say “Yes, I can”.”

Thank you for stating the obvious which also reinforces my point about picking and choosing. Remarking about “lavish spending” without giving proper focus and attention to the system that underwrote it is gross negligence.

Again, where would capitalism be if socialism wasn’t there to bail it out and push it along? Try and see the entire system and how it works not just cherry pick parts of it and underline nice sounding ideals that seem to exist mostly on paper.

It’s not just the financial sector, corporations have run amok as well and they take advantage of socialist policies, excuse me, subsidies to their benefit all the time. Do you think it’s only the lazy that benefit from welfare? What do they spend their welfare checks on? Remove welfare in America and suddenly supermarkets would take a serious hit.

I can only imagine how much sales at Wal-Mart would fall. I think it’s safe to assume a great majority of Wal-Mart shoppers and workers are on welfare and state benefits. Good thing so many of those useless items sold and consumed are produced in China. Let’s cheer capitalism here for a moment, in this vacuum where only cheap goods matter, disregarding the consumption and where those products are made and in what conditions. Good thing prices are so low at Wal-Mart I mean the workers and shoppers tend to be poor so they need ‘deals’ on even the most basic necessities. Quite the catch-22.

How about cell phone companies? Everybody has a smartphone and data plan these days, even if you’re on welfare.
This is the gross irony of those who are quick to call out the welfare system. They completely disregrad the welfare that capitalism itself runs on, bankers and corporations.

It takes money to make money and corporations get massive subsidies all the time which get taken from the US taxpayer. They also seem to find a way to avoid paying taxes. They have their cake and eat it all the time. They protect the bottom line at all costs. Western capitalism has become a world that revolves around consumers and investors. Democracy and its citizens seemed to have disappeared.

Again, you can pick and choose and of course think how you want, doesn’t mean that’s been the reality for 7 billion people and should be.

With much of your latest comment I wholeheartedly agree.

I would even consider legislation as a “legitimate solution” to the flow of money in a given society. An axiom I believe strongly in is that any society is an incredibly complex reflection of it’s tax “system”.

As you change what is taxed or not taxed and how much you change society, for better or worse, or both in different areas. So I feel I must hasten to appropriately clarify such “consideration”.

Just as disconnecting the governor on an internal combustion engine can both improve efficiency or allow the engine to destroy itself, to redefine and refine our existing society from what it is, warts and all, into what we would have it be by rewriting our tax system from “scratch” would require the political will to come to consensus as to what our society should be and then “intelligent regulation” to bring that about. Only once we know what society we want do we know what it will cost. What we want and what we can afford will naturally vary with the “times”, both good and bad.

If we but look closely at how our present tax code and unionized bureaucrats run our FAA, Department of Homeland Security, etc., and the regulations they enforce or do not enforce just in the limited areas of immigration, ethanol, lead removal and aviation policies (which have all but killed private aviation in this country), “ intelligent regulation” would seem an oxymoron.

I’m enough of an optimist to believe it need not always be so if “we, the people” get rid of government unions so that we can establish appropriate duty and power to govern our bureaucrats on the basis of efficiency and accountability. I’m NOT saying this would be easy, but only worth a good faith effort to accomplish.

You’re absolutely correct that “We don’t train enough people for the relevant jobs and we don’t incentivize investment.” But the REAL problem is that neither “status quo” is going to change until specifically and intelligently addressed by our “representatives”! WE have to hold THEIR “feet to the fire”, and we don’t.

The idea that money being saved by individuals or businesses with lots of income is being re-invested in the economy via banks is one of the conventional wisdoms that have reality flying in their faces. Massive deficit spending causes inflation? Yes, usually. But not now, there is no economy with the ability to inflict that kind of penalty on us. There are enough jobs out there if people are willing to take them. Yeah, but are employers willing to hire just anybody, when it’s a buyer’s market?

“If you put it in a financial institution at interest then, traditionally, it gets loaned out again and again and thus creates economic activity.” If the money is being lent to finance a leveraged buyout, it creates no economic activity, just a shuffling of paper.

Nobody is suggesting that we legislate what companies do with their money, just that we adjust the tax system so they don’t idle their money.

And to your last comment that makes insinuations about regulations: I have started or invested in more than a dozen (mostly technology) start-ups in the last 12 years or so, and none of them have been hampered in any way by regulations. The two biggest obstacles they have faced have been a shortage of talent and risk capital. We don’t train enough people for the relevant jobs and we don’t incentivize investment.

Very little inflation in recent years, which is perhaps part of the problem. When inflation averages 3% to 4% annually, people have a strong incentive to find something to do with their money. When it is averaging under 2%, they are far more willing to wait and watch.

Hopefully inflation will pick up a little? Doesn’t need to be double digits, just enough to keep things moving.

And yes, we need retraining in addition to investment. The new economy will not look like the old economy. (When has it ever?) Read about the Luddites — we’re seeing something of that these days, for similar reasons.

You and I differ somewhat in how we see the world, but you present your perspective clearly and honestly. Your facts and conclusions appear credible and worthy of respect. In that context, here’s my “take” of your latest:

I agree there is “room for improvement” in the current “unemployment/underemployment/discoura ged rate”. Unfortunately, I don’t believe the current situation being so much that the current labor force is under-utilized, but that it is increasingly redundant.

The country’s problem is that buggy-whip makers need to be retrained in the transition from a production economy into an information society. The unfortunate reality is that it is quicker and cheaper to find the people capable of doing that which needs doing by training the young and tech-savvy; and yet those who would hire them patiently wait for a hopelessly outmoded educational system to provide them fully “employment-ready”.

There are going to be people “left behind” by this transition for whom there is no place, and it will be up to each to find a need and fill it. I would be quite willing to act as a paid consultant to the more promising for a percentage of the wages they receive in a position I get them into, just as the employment bureaus of years past did. As to the rest of the problems, first there must be acceptance that each exists before it can or will be resolved.

Is my opinion that your “sideline money” is invested merely blind faith? I would prefer to regard it as “common sense”. There is inflation in America that erodes the purchasing power of dollars in a mattress relentlessly. So you “put it out” for security so no one comes to your house to steal it.

If you put it in a financial institution at interest then, traditionally, it gets loaned out again and again and thus creates economic activity. Banks have been increasingly reluctant to do that and when they pay out 1% or less, the financial pressure for them to do so is inconsequential in a historic sense. I agree with you that’s a HUGE problem, but the ideas to fix it must come from those more familiar with alternatives within the financial system than I.

That does not happen with gold, because the number of dollars one receives when gold is sold typically is proportional to “real” inflation. But gold does not “grow” as dollars do when “invested”. You don’t “invest” gold, you hoard it. Gold is the “dead end” inactive money “on the sidelines” that concerns you. In America the amount of wealth locked up in gold is, proportionally, pocket change.

I don’t know how much of the “cash hoard” Apple is purportedly sitting on is in this country and how much is not and will not be. There is a fine line in legislating what people (or corporations) can and cannot do with THEIR money because feet and couriers are always faster than bureaucrats in keeping it out of the teeth of regulatory control.

I do my best to think logically and reason with an open mind. I consider many different points of view, and at my advanced age few are “new” to the extent of not having considered before and accepted or rejected.

By saying: “…you don’t get to pick and choose the good parts of capitalism and ignore and redefine what the ugly parts of capitalism have wrought to suit your worldview…” you presume to tell me how to think. I shall forego the considerable pleasure of an uncensored response to such presumption and just say “Yes, I can”.

You seem unaware that the human brain easily “overloads” and so to handle complex thoughts or tasks it is necessary to split them into elements of a size possible to handle. Thus solving a complex problem is a matter of reducing it to a series of more simple ones and addressing those in perceived sequence or priority of importance or benefit from solution.

Therefore I believe American capitalism to be largely responsible for the success of this country, such as it has been in the past, is today, and will be in the future; but, like religion, can be perverted. It is a tool, like the sledge hammer, which can be used to build the railroad or destroy the locomotive. How a tool is used is a matter of skill and personal choice and with each comes responsibility for the result, good or bad.

We are affected by our day-to-day reality. If we swim in a clear stream a bit of water in the mouth or nose is little problem, but if we swim in sewage that is not the case. While I would not have voted to establish Social Security or Medicare or Medicaid or Part D coverage, when my participation was mandated I contributed and legitimately expect the “bargain made” to be kept. My opposition is philosophical and not moral.

There are many like me who expect honesty from a government that, at times seems incapable of that. So long as government serves us (or perpetuates such myth) we shall attempt to compel good faith functions when and as we can.

Mr. Rothkopf’s impressive credentials merely suggest his opinion(s) worthy of consideration. Acceptance is another matter entirely. Your link did not convince me that further time invested researching him worthwhile.

A “blacklist” of those I do not waste time reading or listening to would include the likes of Jimmy Carter, the most recent Illinois ex-governor and Mullah Omar. It’s neither formal nor long and I don’t dwell on such things.

Depends on precisely the statistic you are looking at. Overall labor force participation rate (age 16+) is under 64% and still dropping. Ten years ago it was pushing 67%. Of those, 8% are unemployed. A decade ago it was under 5%.

The unemployment/underemployment/discouraged rate is likely around 20%. I won’t push the exact number, but it is clearly higher than it was a decade ago. There is clearly room for improvement. And you can’t optimize PRODUCTION while the labor force is under-utilized.

“issues of literacy, language proficiency, math proficiency, criminal background, drug use, obesity, attitude, and physical condition”

Ahh…. The ugly myth of the “worthless individual”. Instead of making excuses why they can’t do anything of value, why don’t you use your imagination to figure out what they might do? A decade ago they found employment. Why not today?

“I believe it is invested at interest somewhere very safe from which it thence springs forth into commerce with all associated and beneficial economic effects.”

Is this opinion merely blind faith? The money supply is historically high, yet GDP has been essentially flat. That suggests to me that the velocity of the money supply is down — in other words the money is NOT “springing forth into commerce”. Do you have any suggestions for convincing it to do so?

“The moment those vaults open, however, they will all open in a heartbeat.”

Maybe true, but leaving the vaults closed isn’t any better a solution. I agree there is a fine line — the Fed needs to crack them open, then act quickly to mop up the extra cash injections from the past few years before the flood gets out of control. This isn’t the Weimar Republic, or at least it doesn’t need to be.

A rose by any other name…

I’m sorry but you don’t get to pick and choose the good parts of capitalism and ignore and redefine what the ugly parts of capitalism have wrought to suit your worldview.

As for ‘socialism’, well social programs are successfully placed into practice in some form in countries all over the world. Perhaps you would like to see social programs like Social Security and Medicare get eliminated in America? Privatized perhaps and left to be handled and manipulated by the ‘financial vermin’? Or perhaps like the many Tea Party members or ignorant FOx News viewers who also throw around words like socialism but don’t want to see social security or medicare touched. After all, many of them are on the former and require the latter.

You don’t get to pick and choose.

Oh, it may surprise you to believe that I am not a socialist. Or an anarachist and I mean really, it’s 2012, not the Red Scare.

“I write my own opinions. Right or wrong, they are genuine originals.”

So I take it you did not find David Rothkopf to be too ‘red’ and he will remain off your blacklist?

A rose by any other name…

It may surprise you that I believe the McMansion “bubble” was deliberately inflated by an unholy alliance between the financial “system” and our government’s “guarantees” to seduce many, many unsophisticated people who earlier could NOT have qualified for mortgages on the homes they bought to “sign on the dotted line”.

The tax incentives of home ownership had a “second, bigger bounce” effect on our economy as they fueled more and more “bigger fools” to speculate in a housing market overheated and ready to fall. Even if these people WERE motivated by personal greed, they deserved better from their own government.

Personally I would like to see our “financial industry” put under a really bright light in public to see who the vermin are that allowed the housing bubble to build and burst even if many of those unemployed by the process were ones who could not have secured jobs in construction during “normal” times. And yes, I’d like to see indictments, prosecutions and jail time for the culpable.

Government hacks bailing out financial criminals is NOT socialism bailing out capitalism. It is a system gone mad without purpose or restraint.

I write my own opinions. Right or wrong, they are genuine originals. I’m proud of America but I’m not proud of some Americans. Remember Enron? And I have YET to listen to FOX news.

“Your nom de plume marks you as an anarchist and your words a socialist.”

I find your remarks quite amusing. Those words by the way were written by a fellow ‘anarchist’ and ‘socialist’ named David Rothkopf (followup post). You can read more about that commie/red here:

http://en.wikipedia.org/wiki/David_Rothk opf

From what I can gather, your remark is not that surprising. Your rather defensive, wild deduction and reasoning in general seems to come from a viewpoint that is stuck in the past and lacking present real world context. Anarchist? Socialist? Oh I see, dirty word is it, socialism. Except of course when you’re bailing out the financial industry to the tune of billions. Where would capitalism be if socialism wasn’t there to bail it out? Your rah, rah cheering and nationalistic tone does not help your case at all by the way. That hubris is quite familiar though. You betcha.

You seem to have quite a reductive view of capitalism and how the world works at large.

You make mention of the ‘lavish benefits’ but you don’t seem to take into account how capitalism underwrote this sytem which is rather ridiculous. Let me repeat, rather ridiculous. You choose only to see half the picture. Not surprising from somone who is quick to throw around words like socialist and anarchist. A bit too much FOX News perhaps?

As though capitalism is nice and simple that can do no wrong. The ends simply justify the means in your worldview. Should we bother with context at all?

America deserves praise and it deserves criticism. America more than any other nation DEFINED CONSUMPTION as a way of life. One third of all American Adults are obese. Just walk into any Wal-Mart and you see those figures come to life. That’s some quality of life right there.

Your nom de plume seems to be in the ballpark.

As for the money on the sidelines, this article published a couple days ago says the S&P500 firms have over $1 trillion in cash ( http://in.reuters.com/article/2012/01/30  /investing-kingcash-idINDEE80T04N201201 30) If it’s being lent out, it’s to the government, in the form of treasuries and other safe debt. Companies like Apple can’t “invest” it elsewhere, the CFOs would be asking for a lawsuit if they lost any of it in investments (Apple does invest a small portion of their hoard in suppliers, but that’s only to ensure they enough material at a good price. They still have almost $100 billion in cash that’s not being lent out or used otherwise).

We’re not sending trillions to shore up the European banking system. They’re pretty much on their own, although the ECB could act like the Fed did in 2009, which did end the downward spiral of the economy that was fueled by the credit crisis. We should care what happens to their economy, though, for if it collapses, our economy will take a huge hit, not to mention we will have to deal with all the political instability it will cause.

There are four currencies with enough liquidity to challenge the dollar as the reserve currency, but three of the underlying economies have worse debt issues than the US (GB, Japan, and the EU), and the fourth (China) ties its currency to the dollar. There is no one to hold the US accountable for deficit spending. We are forced into this corner because our currency is artificially higher than it should be, making it difficult for us to compete with lower cost nations. We get priced out of markets solely because the dollar is too valuable. In normal times, when we respond to a trade deficit with a budget deficit, the dollar would lose value, and allow American products to be more competitive, but these are not normal times.

We’re in no way approaching the Weimar Republic, it’s not even close. Inflation is nowhere near an issue; and without deficit spending, deflation would be a bigger concern. China (and the rest of the creditor nations) have way too many dollars, so they have incentive to make sure it doesn’t crash. And even without inflation in the U.S., we have seen pensions getting wiped out, as companies go bankrupt (like when a leveraged buy-out burdens a formerly profitable company with so much debt, it goes under and takes retirement plans with it). That said, I would welcome a 20% haircut on the dollar, it might actually re-open some factories here.

The deficit spending that has occurred in the last 3 years has been an emergency; when businesses spend less, they lay people off, and there’s a downward spiral. A free market economy with no government-financed adjustments is driven by positive feedback loops; when the economy is growing, profits are re-invested and companies hire more people, but when it is shrinking, they cut back on spending and lay off workers, which leads to more decreases in spending and increased unemployment. Without an injection to offset the decrease in private sector spending, the economy will shrink.

There is a solution, as those who have read my comments will skip because they have read it before (and it’s why TFF calls me an optimist): increase tax rates and provide a tax credit for investing in capital expenses, R&D, education, health care, new construction, increased hiring – investing in new ventures. Those with profits who don’t re-invest will pay higher taxes; those who invest will pay lower taxes. We need to make sure money is continuously being re-circulated back into the economy. Use it or lose it, and if people use their money, the government won’t need to step in, and will see tax revenues rise; if they don’t use their profits, they pay more in taxers, and the government covers its bills. Well, more of them, anyway.

I’m beyond frustration. I don’t see the system working, but I think it can be fixed. A free market system is based on positive feedback, which is fuel for instability and chaos. The positive feedback loops need to be attenuated (meaning less of the output gets fed back to the input) and dampened (meaning the rate at which it gets fed back is slowed down), to minimize the damage they cause, and they need to be offset with negative feedback (you take too much wealth out of circulation, you pay more in taxes). That’s the tweaking of the economy you need.