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December 21, 2014 at 1:39 AM in reply to: Interesting commentary on the Vegas economy (paging FlyerInHI) #781228
CA renter
ParticipantThat’s a great article. Not sure it’s specific to Las Vegas, though. Seems that “survival workers” in Vegas are better off, in general, than workers in other cities and states (depends very much on the region, of course).
Participant[quote=livinincali][quote=CA renter]
Absolutely! I want labor’s money out of politics, too; though fraud, waste, and abuse are more likely to happen between private contractors (among a host of other private interests) and public entities because the private stakeholders are less scrutinized and better protected than public employees. We can eliminate labor’s money just as soon as capital’s money is out (and every other special interest group’s money, too) — ALL OF IT. Until then, labor absolutely needs to have a seat at the table.[/quote]It’s too bad the the one paying the bills (the common taxpayer) doesn’t have a seat at the table. Whether the politician is beholden to special interests or public labor unions the result for the tax payer is the same. Take more from us to give to some special group. Whether your corporate special interest or public sector union, in my eyes you’re both greedy leeches.[/quote]
Actually, there are quite a few taxpayer advocacy groups who are very active in politics. Again, they are just one type of many stakeholder groups. People like Howard Jarvis might like to lower taxes for landlords (who didn’t need it, and who didn’t pass the savings on to renters, as Jarvis had assured before Prop 13’s passage), but they do so at the expense of all of the other stakeholder groups [edited to add]…including other taxpayers. Different types of taxpayers (income, VAT, sales, property, corporate/business, etc.) are also competing stakeholders. Even the different types of income taxpayers are competing stakeholders — earned vs. unearned income, and the differences between and among those types of incomes.
Too many people tend to forget that without taxes and the infrastructure they support, people would not be nearly as prosperous to begin with. So taxes support the infrastructure, and the infrastructure enables businesses and their employees to make money…a portion of which goes toward tax expenditures which create and maintain infrastructure which enables the businesses to thrive, etc., etc. It’s a symbiotic relationship, not a unilateral one.
Participant[quote=harvey][quote=CA renter]If the risks are limited, then the rewards should be limited as well.[/quote]
It’s pretty clear that your worldview is driven by a contempt for successful people.
But since, by your own declaration, you have all the answers, please explain to us how your solution to this non-problem would work.
Let’s start with a simple and familiar example:
Explain to us how Bill Gates’ reward should be limited.
This is a softball. Someone as smart as you should knock it out of the park.[/quote]
If a person wants to be protected by limited liability laws, and if they want to put other people’s money at risk, then their compensation should reflect that. IMO, the top pay of an owner/executive in a limited liability corporation should be tied to the compensation of the lowest-paid person at the company. One could also include the compensation and security of shareholders and creditors. There are many possible ways to go about balancing risks and rewards.
Participant[quote=poorgradstudent]Capital Gains should be taxed as regular income.[/quote]
Exactly.
Participant[quote=FlyerInHi]If you look back at history, the reason bankruptcy is constitutionally enshrined is because our Founders wanted to avoid “debt servitude” that was common in Europe and encourage a commercial republic. Debtors could have their debts discharged at the Federal level and start anew, without dealing with contradictory state laws.[/quote]
I understand the reasons behind bankruptcy laws, but think that they have become so warped that they are now abused on a regular basis. It’s one thing to enable a farmer to declare BK if a horrible drought wipes out everything he owns, or if someone becomes so ill that they cannot work and have tremendous medical bills to boot; but it’s totally unacceptable (IMO) to allow people who have simply overspent on all manner of vacations, real estate, jewelry, cars, fancy restaurants, etc. to still all of their creditors.
Participant[quote=harvey][quote=CA renter]I’m also greatly opposed to limited liability if there is no commensurate limit to the upside. [/quote]
You never cease to have strong opinions about things that you simply do not understand.[/quote]
This is particularly hilarious considering the fact that you constantly opine about things that you know little/nothing about, and you don’t even qualify it with an “IMO,” you make declarative statements as if your opinions were facts. You have yet to prove me wrong about something; no, your opinions and name-calling don’t count as proof of anything. It’s particularly humorous when the subject is something you *clearly* know nothing at all about. This is proven by the fact that you cannot find anything to back up most of your statements (you hate it when I “copy and post” data and links that back up what I’m saying, too! In your wacky world, opinions are more important than facts.), and your statements are so incredibly false and ridiculous that it appears you’re more troll than actual poster who wants to engage in genuine debate.
[quote=harvey]If companies were not limited liability, then shareholders (including CalPERS) would be on the hook for the debts of every company they invest in. If someone purchases a stock, they could lose more than what they paid for it. Please explain how that would be a good thing.
Anybody who lends money to a limited liability company knows the rules and risks. If they don’t like the risks, they don’t lend. It’s that simple. The system works, it has worked for centuries.
And why would you want to limit the upside of an investment? What would happen when a company reaches this artificial upside limit? It just stops?
Sorry folks, we’d like to make the iPhone you want but Apple can’t do any more hiring because it’s not fair that Apple is successful…
This Marxist planned economy fantasy of yours is just nonsense.[/quote]
There is no reason for risks to be divorced from rewards. None. The fact that you suggest that they should be is indicative of your ignorance. What would happen if we didn’t have limited liability? People would be more careful about where they invest their money, and speculation would be reduced dramatically — which is a good thing. It should be incumbent upon the shareholders (and executives and other responsible employees) to do their due diligence and make wise — and responsible — choices; why should creditors be the only ones responsible for knowing what they’re getting into?
It would also dramatically reduce the careless risks taken by those who put profit above all else — risks that, under our current system, are born by those who often have no say in the decisions that cause so many of these economic and environmental and legal problems (like cars that catch on fire, or accelerate for no reason; or when mortgages and their derivatives blow up the economic system; or when pollutants are pumped into potable water sources…). If people knew they could be held personally responsible for these things, I can assure you that they would make far better decisions. More than anything, this should pertain to the major decision makers (who are often the largest individual shareholders) more than it does to the average individual stock investor, IMO. The decision makers should have the greatest liability.
And your reading comprehension problem rears its ugly head, yet again. I’ve never said that limited liability shouldn’t exist at all, just that the rewards and risks should be balanced. If the risks are limited, then the rewards should be limited as well. And I’m referring to the broader concept of limited liability, too, not just where debt and creditors are concerned. Liability for tort actions — and who is responsible for insurance and legal defense costs of an individual officer/executive/shareholder — also fall under this umbrella. Limit the liability, limit the rewards.
[quote=harvey][quote]And costs can be dramatically reduced if we eliminate the corruption that exists between private entities and the govt.[/quote]
Excellent! You are in favor of eliminating collective bargaining for public-sector unions.[/quote]
Absolutely! I want labor’s money out of politics, too; though fraud, waste, and abuse are more likely to happen between private contractors (among a host of other private interests) and public entities because the private stakeholders are less scrutinized and better protected than public employees. We can eliminate labor’s money just as soon as capital’s money is out (and every other special interest group’s money, too) — ALL OF IT. Until then, labor absolutely needs to have a seat at the table.
December 18, 2014 at 11:31 PM in reply to: OT: Portable Air Conditioner for a room vs. Central air to save money? #781195ParticipantThere are also ductless/mini-split air conditioners that are supposed to be very quiet and efficient. They’re more expensive to purchase, but might save you more money over the years. Just depends on how long you’re planning to stay in the same place and what you’re looking for as far as comfort, style, and cost to both buy/install the system and to run it.
We’re probably going to get one for our bedroom so that we don’t have to cool the whole house when we just want the room cool for sleeping.
Participant[quote=FlyerInHi]CAr, you often bitterly complain about double standards between how businesses operate and how individuals are expected to behave.
Yes, for businesses and their lawyers especially bankruptcy is foreseeable. That’s why business people form corporations so that their personal wealth is insulated.
Individuals, and municipalities should seek bankruptcy whenever best to protect standards of living. Why live on macaroni and cheese just to pay the creditors? That’s pretty stupid, IMO.
For municipalities, why cut services to the core where citizens have to pay taxes and have little services while creditors are paid in full?[/quote]
I’m not in favor of double standards here, either. I think that BK should be the very last possible option for both individuals and corporations/govt entites, and it should only be available once all of the relevant parties have given up everything they might have gained by their irresponsible and reckless behavior.
The only possible exception to this would be for individuals who are hit with huge medical costs, or some other unforeseen catastrophic event (death, disability, etc.)
I’m also greatly opposed to limited liability if there is no commensurate limit to the upside. Risks and rewards should always be balanced (real personal risks, gambling with other people’s money does not constitute risk, BTW) .
And costs can be dramatically reduced if we eliminate the corruption that exists between private entities and the govt. We do not necessarily need to reduce services dramatically. While some govt entities are run very well, others are drowning in corruption.
Participant[quote=livinincali][quote=CA renter]
Also, bankruptcy is NOT foreseeable in most cases. If it were, most lenders wouldn’t make these loans.If people thought that the credit market was “tight” during the financial crisis, I can assure you that it would be even worse if we were to follow Brian’s advice.[/quote]
I’m pretty sure most of the underwriters during the housing crisis could see bankruptcy and default when they were loaning people 700K when they made 50K annual income. It’s just that they could risk shift it to somebody else with Credit Default Swaps. Credit should be tight, there’s no good reason for loose credit standards except that it helps inflate the costs of things. How much would college cost if you could declare bankruptcy and get rid of student loans? It wouldn’t be nearly as expensive as it is because nobody would be loaning 100K to a liberal arts major anymore.[/quote]
We’re very much in agreement about credit standards — credit should never be loose, and borrowers/lenders should never be encouraged to behave in irresponsible ways.
While I agree that the underwriters *should have known* about the default risks with those mortgages, they were encouraged by people up the chain of command to keep their mouths shut and process the loans. It’s this type of corruption that needs to be stopped. They did it because they knew they could rely on being bailed out (by the Fed, taxpayers, etc.); they knew it.
ParticipantWe disagree very strongly about that, scaredy. What Brian’s proposing would absolutely mean that contracts are meaningless. Most contracts relate to transactions of some sort (feel free to correct me here, as you’re the attorney), and saying that one party doesn’t have the obligation to fulfill their end of the deal, or that it should be easy for them to get out of it, makes the contract meaningless.
Also, bankruptcy is NOT foreseeable in most cases. If it were, most lenders wouldn’t make these loans.
If people thought that the credit market was “tight” during the financial crisis, I can assure you that it would be even worse if we were to follow Brian’s advice.
Participant[quote=FlyerInHi]Yes, people should be encouraged to renegotiate their debts and preserve their standards of living.
When it comes to cities in financial difficulty, the right thing to do is not to keep on paying creditors. You have to preserve good services to protect the future of the city.[/quote]
That depends very much on which side you’re on (creditor or debtor). If contracts no longer mean anything, what does that do to an economy and society?
Participant[quote=FlyerInHi]I don’t know why citizens are so averse to their cities going BK. Bankruptcy is actually a good thing because it forces unions and creditors to negotiate, or have a solution forced on them.
When politicians talk about “finding ways to avoid bankruptcy”, it’s a euphemism for more taxes and less services for ordinary citizens.[/quote]
The same could be said for the general population — that people should not try to avoid filing for BK. Having been on the creditor side of a BK case (fought hard and won a settlement, but the very long process was hell), I can say for a fact that the BK scam works wonders for the deadbeats who file. Do you think it’s a good idea to promote BK for individuals? Any possible negative outcomes that you can see?
ParticipantYes, all/most stakeholder groups will get hit in a BK case. My point was that the unions agreed to the cuts. Union workers understand that they have to give sometimes, and they’ve been doing so throughout the recession; their objection is to the vilification of labor and the ridiculous propaganda going around suggesting that labor should be the only, or primary, stakeholder group to take a hit.
Participant“DETROIT – Workers and retirees approved pension cuts in Detroit’s bankruptcy by a landslide, the city reported Monday, a crucial step to emerging from the largest municipal insolvency in U.S. history.”
…“General retirees would get a 4.5 percent pension cut and lose annual inflation adjustments. They accepted the changes with 73 percent of ballots in favor. Retired police officers and firefighters would lose only a portion of their annual cost-of-living raise. More than 80 percent in that class voted “yes.”‘
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