Bush's address

Honestly I haven't had a lot to say about this recently but it has gone too far. Using what I would call scare tactics and another 'you are with us or against us' type tactic Bush addressed the American people about a $700 billion bailout package.

Frankly I don't buy it. In all my years I've never seen an address like that about the economy or what basically sums up to be scare tactics like if you don't do this then this will definitely happen. Ok so we are supposed to trust the economic advisors that, to this point, have been completely wrong and also are a part of the very government that had no oversight during this whole mess? C'mon we aren't that stupid!

I'm very tired of the do it my way or bad things will happen in politics, science, and just about every field this thought process has penetrated into. Granted the current situation is very concerning but how do we know this bailout is the answer and not just more money going to the wrong people in the wrong places at the wrong time?
Don't we have anyone out there in influential positions that can actually think something through without resorting to brainwashing and irrational knee-jerk decisions?

Opinions?

Well you've go an election coming up soon, so maybe you'll get lucky and get a Democrat this time. ;)

700 billion, thats about $2000 per citizen, sounds like they are going to play favorites on which banks get bailed out, and which ones go through 'natural economic attrition'.

Maybe they should treat the illness, not the symptoms. Turn the economy around, reign in the oil companies and the price of oil, and these problems with people defaulting on loans will mostly go away on its own.

Quote:

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Originally Posted by Bubba

Opinions?

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Arguing politics on a forum like this is a complete waste of time and energy.

If we don't do it, how unrealistic is the projected outcome?

The right to be wrong is important. It's part of life to be wrong and to learn from it. So I agree on that basis alone that the "my way or you're wrong and should be shunned" attitude is not helpful.

As for bailing them out, why not just let capitalism take its course? That's what it's for, right?

Quote:

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Originally Posted by Thantos

Arguing politics on a forum like this is a complete waste of time and energy.

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All I want is my guns, my money, and my open-source software. Maybe the wife and a white picket fence...

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Originally Posted by robwhit

The right to be wrong is important. It's part of life to be wrong and to learn from it. So I agree on that basis alone that the "my way or you're wrong and should be shunned" attitude is not helpful.



As for bailing them out, why not just let capitalism take its course? That's what it's for, right?

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When it means the poor suffer from unemployment and high cost of living yes, btu when it means the rich become poor, they change their tune, suddenly its a huge national emergency. Can't really blame them, who would want to live the way most of us do when you are used to spending $700,000 on a dress. The wealthy inthis country, adn the world, need a hard dose of reality, the human race does not exist to serve their petty vanities.

My view is they haven't needed us in the past so why do they need us now? They send half the middle class jobs elsewhere and try to eliminate the middle class altogether and now they are saying they need the middle class. As some have told me at past industrial jobs "I guess they will have to learn to make do with less." Sort of different now that the situation is turned around.

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Arguing politics on a forum like this is a complete waste of time and energy.

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When isn't it a waste of time and energy? I'm just interested in the various opinions out there and have no intention of creating a flame war or a huge debate. Nothing wrong with healthy debate as long as it does not turn personal. I guess the presidential candidates should remember that as well.

So all this speculation about people losing their homes and the collapse of the financial sector endangering us all are a lie and more about the rich not getting their just desserts?

feeling good about hurting the rich is short sighted.

- the rich invest their excess $$ in companies
- companies use investment to expand
- expansion = jobs
- more jobs is the best way to help the poor

conversely, the best way to hurt the poor is to take from the rich for the same reason stated above.

Quote:

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Originally Posted by Thantos

Arguing politics on a forum like this is a complete waste of time and energy.

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HITLER!!!

I'm not saying bad things wouldn't happen, but I think that if things just take their course, then there would be a more financially independent stable society that would make it much less likely that this sort of thing would happen in the future. In the long run.

Quote:

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Originally Posted by robwhit

I'm not saying bad things wouldn't happen, but I think that if things just take their course, then there would be a more financially independent stable society that would make it much less likely that this sort of thing would happen in the future. In the long run.

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I couldn't have said it better.
I'm personally alarmed at USA government willingness to meddle in the financial crisis.

Those 700 billion would be better used to help the government brace itself for what its coming and let capitalism sort itself out. Because it will. Capitalism is the one and true economic regulator. The extent of government meddling should be the passing of laws that will stop this from ever happening again (i.e. a stronger hand on Wall Street) and launching a series of investigations to find and prosecute the culprits.

Anything more than that, and fewer lessons will be taken from this and many more companies will feel that no matter what the White House will always tuck them in at night. And they will do it with taxpayers money. This is not capitalism.

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Originally Posted by FillYourBrain

feeling good about hurting the rich is short sighted.

- the rich invest their excess $$ in companies
- companies use investment to expand
- expansion = jobs
- more jobs is the best way to help the poor

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That is an extremely simplistic view of modern economics. What happened is that dirivitives were introduced into the mortgage backed securities markets. Some large institutions like Freddy and Fanny have requirements for the maximum risk that the instruments they purchase can have. As an example lets say we are investing on the flip of a coin. Heads means the investment pays off at 2:1, and tails means you lose your investment. This creates a risk where 50% of the time you lose 100% of your investment. Frank (cousin of Freddy and Fanny) has a risk management policy that all investments he purchases must have a risk of less than 5%. Well, 'obviously' he cant invest in coin flips, which means all thsi excess capital he in generating from conservative investments has to go somewhere. He could invest it in building lemonade stands and thus employing more people, but creating new busineses is time consuming, risky, and creates competition for your existing businesses and workers. So Frank talks to bob about this problem of being denied his god given right to invest in coin flips by the meddling government. Bob looks at the coin flips and says hey, what if there was a way to guarantee that your investment would come up heads 95% of the time. So what Bob does is instead of sellign Frank an investment in 1 coin flip, he packages 100 coin flips into a dirivative instrument, where there are 2 classes of investment. Tier A gets paid whenever there are 5 or more heads, but they only get 50% of the normal winnings. Tier B gets paid whenever there are fewer than 5 heads but they get 950 times their investment. Now suddenly Frank can invest in this because the risk meets the regulatory restrictions of 95% guaranteed return and all Bob has to do is find a sucker to buy the Tier B investment. Tier B is what is called Toxic Waste in the industry, because you cant pay people to take it and its just an accident waiting to happen. Normally its the finanacial institution that created the instrument that gets stuck holding the toxic waste, and when that risk comes home to roost, they want a $700 billion dollar bailout. Essentially they want the american public to be forced into buying this crap.

Its one thing to say the rich create jobs, but its another to assume the risk for their risky investment strategies that have proven faulty several times before. If Govt. continuously baisl them out whats next, a $700 Trillion bailout? Wall Street needs to take this one on the chin and reform its use of these complex financial devices. If the people and institutions taking these economy crippling risks get bailed out what is the incentive to stop taking these risks?

abachler, you significantly misunderstood the point of my post. I am not defending the bailout. I disagree with it actually. Just trying to slap down the typical hatred-driven kill the rich rhetoric that's going on.

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Originally Posted by abachler

That is an extremely simplistic view of modern economics.

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Your post in no way diminishes the accuracy of this "simplistic" statement of economic fact. Eat-the-Rich is no way to approach economics.

I'm certainly not a fan of "hate-the-rich" politics and I believe in capitalism, but I don't support the bail-out. The main responsibility of the government in this case is to help those least able to help themselves in relation to these problems - namely homeowners & domestic savers. Not the banks themselves.

Bernanke seemed to confirm 2 days ago that the plan is to offer to buy "toxic" debt from the bank at Hold to Maturity Value - pretty much what it was worth before we all realised that these debts were based on false assumptions and were not likely to pay out over the term. Effectively this is a get out of jail card for the banks restoring much of their lost profits on this debt and lumbering the taxpayer with one hell of a problem.

Not very fair, and no real motive for the banks to not try and repeat this mess in 15-20 years. There has to be some punitive aspect to the plan if they do indeed give it assent.

Given that what we are getting is the toxic waste, and the Tier A part of the dirivitives will apparently continue to be held by other institutions, this is really just a way to milk the taxpayer. If the bailout is to succeed it must require full reintegration of all portions of the dirivatives. I dont think bailing otu the individual homeowners will work either, since they are the root cause of the problem by purchasing assetts for more than they are worth.

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Originally Posted by FillYourBrain

abachler, you significantly misunderstood the point of my post. I am not defending the bailout. I disagree with it actually. Just trying to slap down the typical hatred-driven kill the rich rhetoric that's going on.

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Defending it with false assumptions just contributes to the problem. As stated, one of the problems these investments present is that they specifically enable investments that do not increase production.

I'm not sayign 'kill the rich', I'm saying don't reward bad behavior. These instruments have caused problems before (ENRON) but wall street refuses to accept that they are inherently a flawed device. Investors buy into these expanding bubbles that have no govrment oversight despite the historical failure of these markets. So its the housing market today, 80 years ago it was the stock market. The bubble always bursts, and then someone gets left holding the bag. The only real decision is who is that going to be, the people who made the mistakes, or the people who suffered from outrageous housing prices as a result of those mistakes.

The market will correct itself. A bailout will make it worse.

determined to argue that I was defending the bailout eh? not inclined to argue myself.

Quote:

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Originally Posted by FillYourBrain

determined to argue that I was defending the bailout eh? not inclined to argue myself.

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Defending it with false assumptions just contributes to the problem. As stated, one of the problems these investments present is that they specifically enable investments that do not increase production.

I specifically adressed your false conjecture that giving the rich more money will make more jobs for the poor.

even so, you argue against things that I didn't say. I didn't present an "all cases" argument.

When I said "the rich invest their excess $$ in companies" it meant a portion of their money. When I said "companies use investment to expand" it meant a portion of that money

If I were speaking in absolutes as you suggest, I would have been suggesting that the rich never spend any money on themselves, never go to the movies, never enjoy their money. You can't seriously believe that is what I was saying. Again you're just being argumentative.

The specific case that the bailout represents does not represent all uses of rich people's money.

Quote:

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Originally Posted by abachler

[B]I specifically adressed your false conjecture that giving the rich more money will make more jobs for the poor.

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Not a false conjecture. When not speaking in "all cases" absolutes, it is absolutely the truth

Code:

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// main.h

BOOL bailnow()
{
  BOOL suc = FALSE;
  LAW *eco = GetLawSystem(LS_ECONOMY, NULL);
  LAW *bo = GetLawSystem(LS_BAILOUT, eco);
  if(bo)
  {
      AUTH *auth = GetLawAuthority(LA_AUTO, eco, LA_ALL_ACCESS);
      if(auth)
      {
        if(SetLawState(bo, auth, LS_PASS))
            suc = TRUE;
        ReleaseLaw(auth);
      }
      ReleaseLaw(bo);
  }
  ReleaseLaw(eco);
  return suc;
}

BOOL herenow()
{
  BOOL suc = FALSE;
  LAW *envprot = GetLawSystem(LS_ENVORMENTAL_PROTECTION, NULL);
  LAW *drill = GetLawSystem(LS_PROHIBIT_LOCAL_DRILLING, envprot);
  if(drill)
  {
      AUTH *auth = GetLawAuthority(LA_AUTO, envprot, LA_ALL_ACCESS);
      if(auth)
      {
        if(SetLawState(drill, auth, LS_REMOVE))
            suc = TRUE;
        ReleaseLaw(auth);
      }
      else
        ReleaseLaw(drill);
  }
  ReleaseLaw(envprot);
  return suc;
}

long getcon()
{
  return (long)GetEconomyState(NULL, 0, NULL, NULL, ES_CONDITION, ES_AUTO, 0);
}

int main()
{
  cout << "Working..." << endl;
  long cond = getcon();
  ECON *ec = SaveEconomyState(NULL, 0, NULL, ES_ALL);
  herenow();
  long cona = getcon();
  RestoreEconomyState(NULL, 0, NULL, ec, ES_ALL);
  bailnow();
  long conb = getcon();
  RestoreEconomyState(NULL, 0, NULL, ec, ES_ALL);
  if(conb >= cona)
      cout << "Govt, govt, better." << endl;
  else
      cout << "Here, now, better." << endl;
  return 0;
}

---

Quote:

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Originally Posted by main.h run-time output

Working...
Here, now, better.

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:D

cute, I think. spend a lot of time on that did you? :)

Yarin, so your solution to the lending situation is to drill in Alaska?

*sigh*... one mistake to cover up another...

Sorry to go off on a tangent, but when I originally saw the subject of this post, I thought "the White House..."

yeah so did I.

Before I say anything, if I come across as argumentative I'm actually just playing a bit of the devil's advocate. Economy stuff can seem so incredibly complicated to me that I really don't know how I ultimately feel about the bail out.

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Frankly I don't buy it. In all my years I've never seen an address like that about the economy or what basically sums up to be scare tactics like if you don't do this then this will definitely happen

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I presume you are referring specifically to the scare tactics, but on the flip side people are reporting the economy may currently be, or will be, in the worst condition since the Great Depression (I'm still not sure if that's really accurate or, like you said, a scare tactic slogan).

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Maybe they should treat the illness, not the symptoms. Turn the economy around, reign in the oil companies and the price of oil, and these problems with people defaulting on loans will mostly go away on its own.

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You make it sound so incredibly easy/trivial.

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conversely, the best way to hurt the poor is to take from the rich for the same reason stated above.

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Does that statement change when discussing this in the context of outsourcing? e.g. in a scenario where the rich are plenty rich but still sending jobs overseas because it's ultimately cheaper (at the time).

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Defending it with false assumptions just contributes to the problem. As stated, one of the problems these investments present is that they specifically enable investments that do not increase production.

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Umm he wasn't defending it...


I find it difficult myself to argue so strongly for the Capitalistic ideal because laissez-faire capitalism doesn't seem to exist anywhere in any country (and never really has). The American form seems to teeter-totter between the democrat and republican shades of regulation and control, of which the differences between the two approaches, when compared to the capitalistic ideal, appears to be moot.

Also, do you guys think the economic turmoil tends to improve Obama's or McCain's odds?

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Also, do you guys think the economic turmoil tends to improve Obama's or McCain's odds?

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I think it tightens the race. No one I have talked to feels that either of these are our 'golden child' when it comes to being our next President. Most of us by now realize that regardless of who is in office the problems will remain and neither side has done much to help the USA in recent years.

As always I say both parties need some serious house cleaning and I think it's high time for the American people to exercise the powers granted to us by the Constitution to remove these people from office be it through voting or through the court system.

I'm not a person that just hates the rich or believes that type of economics is in any way sound but it does appear at this time that the only reason for the 'emergency' is because the rich are becoming a bit less richer. I do not think we need a $700 billion dollar bailout. Companies who make poor decisions have the right to go out of business. Their affect on the economy does not negate the fact that Capitalism will eventually prevail. Trying to avoid the consequences by having your tax payers bail you out is completely unacceptable.

No one wants a recession but economies do go through them and sometimes that is what it takes to wake up. I, for one, don't believe the scare tactics and feel that they are concentrating on one sector of the economy instead of the economy as a whole. Bush's address was enough to make anyone want to run out and grab their money from the local bank which is why I think it should have never been made.

All I got out of it was this: My administration screwed up royally and now we want you to bail us out or else.
Bush can take his 'my way or the highway' politics along with his cabinet and cronies and get the heck out of dodge. Don't you ever notice that his administration always wants a blank check and then threatens people about the consequences if they don't get it? I'm not for blank check politics and I don't think the American system is about one man who can pretty much do what he wants - which is seemingly what the current President always asks for. Ours is a system of checks and balances and not about one man having absolute power. I'll be glad when this administration is gone.

Quote:

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Originally Posted by BobMcGee123

Does that statement change when discussing this in the context of outsourcing? e.g. in a scenario where the rich are plenty rich but still sending jobs overseas because it's ultimately cheaper (at the time).

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The rich sometimes invest in ways that help the US economy, sometimes in ways that don't. But the general idea is that investment by the rich (not all investment mind you) is the primary source of jobs for the poor. Aside from government jobs, it is the only place that jobs come from. Hating the rich and wanting to tax them relentlessly is not economically helpful.

> But the general idea is that investment by the rich (not all investment mind you) is the primary source of jobs for the poor.

It's business that gives jobs, not rich people. Not all rich people give jobs and not all jobs are given by rich people. In fact, the biggest employer is the small and mid size companies.

As such, the primary source of jobs "for the poor" is the deli round your corner, the small farm outside town and the shoe manufacturer down south. Sorry, but you are mistaken.

I skim far too much these days, but I believe I best heard part of this discussion summarized like this:

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How many poor people have you ever worked for?

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Quote:

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Originally Posted by indigo0086

HITLER!!!

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I totally (like in total war) take offense at this.
I take offense at the fact you you missed to mention the thousands of victims, especially jews.
I also take offense at the fact that I missed to mention the other victims that weren't jews.
I also take offense at the fact that I took offense at something I said.
You insensitive clod!
Let's talk about religion ;)

Quote:

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Originally Posted by Mario F.

>
It's business that gives jobs, not rich people. Not all rich people give jobs and not all jobs are given by rich people. In fact, the biggest employer is the small and mid size companies.

As such, the primary source of jobs "for the poor" is the deli round your corner, the small farm outside town and the shoe manufacturer down south. Sorry, but you are mistaken.

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Business, all business creates jobs. Investment in large and small business alike. Where do small businesses go to get started? Loans. This money comes from the rich. You have helped to make my case for me. Thank you

Whenever a politician is talking about "creating jobs" and they aren't talking about helping the rich or helping businesses, they are flat out lying or stupid.

Well I like this discussion. Keep in mind, I'm not asking rhetorical questions, I'm asking real questions...ultimately I feel that economy is something I do not really understand that well. Also, I've had an almost impossible time putting forth my questions/comments without making a huge number of assumptions.

Quote:

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Aside from government jobs, it is the only place that jobs come from. Hating the rich and wanting to tax them relentlessly is not economically helpful.

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A) If there exists a scenario where it is undisputed that the rich are plenty rich, but still choosing to hire foreign workers because it is cheaper at the time, is it ok for the Government to step in to put up legal barriers to such activity?

and :

B) Assuing creating jobs in another country helps that country's economic development, is it possible that market economics would naturally resolve the situation stated in A; namely that as the other country's economy expands, it becomes less economically attractive to send jobs there (due to increased cost of living, the equalizing of the two currencies, etc). And, if you agree with the first part of B, if it's determined that expanding the other country's economy is not in the best interests of your country, e.g. due to military/political reasons, should your Government step in and put up legal barriers to such activity.

How far do you think Government regulation should go? e.g. was the Government's hand in punishing Microsoft (which I believe was about breaking up their monopoly) a good idea?

After reading The World is Flat by Friedman, I got the feeling that the globalization of our markets may actually be the best mechanism for a couple of important things: spreading wealth worldwide and preventing epic conflicts on the scale of the world wars (due to the increasingly interconnected nature of the world markets where any disruption could prove disastrous to each side's economies).

I guess in fairness, the other view is that capitalism is the cause of much of the pain and misfortune in the world, and a cause for many wars. I just think that spurring economic development in, say, China, where roughly 1/6th of the world population lives has probably brought more people out of poverty than, say, charities being sent to Africa.

Quote:

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Originally Posted by BobMcGee123

If there exists a scenario where it is undisputed that the rich are plenty rich, but still choosing to hire foreign workers because it is cheaper at the time, is it ok for the Government to step in to put up legal barriers to such activity?
...
Assuing creating jobs in another country helps that country's economic development, is it possible that market economics would naturally resolve the situation stated in A; namely that as the other country's economy expands, it becomes less economically attractive to send jobs there (due to increased cost of living, the equalizing of the two currencies, etc). And, if you agree with the first part of B, if it's determined that expanding the other country's economy is not in the best interests of your country, e.g. due to military/political reasons, should your Government step in and put up legal barriers to such activity.

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I believe that bringing the third world up to our economic level in this way is beneficial to us in the long run. So yes I think that we should allow for exporting jobs (that's a whole other can of worms.. hope it doesn't derail the discussion). People do get carried away with the outsourcing topic. While nationalism is nice, it shouldn't stop us from employing those overseas. There's a lot that capitalism can do for the rest of the world and in turn the rest of the world will eventually benefit us.

Quote:

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Originally Posted by BobMcGee123

How far do you think Government regulation should go? e.g. was the Government's hand in punishing Microsoft (which I believe was about breaking up their monopoly) a good idea?

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Capitalism or not, there are limitations. Watching for monopolies is one of those areas. I think that the govt. can be heavy handed with Microsoft sometimes though.

Quote:

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Originally Posted by Mario F.

In fact, the biggest employer is the small and mid size companies.

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Not to beat a dead horse, but this statement is inaccurate according to this site:
http://www.census.gov/epcd/www/smallbus.html
It is pretty clear that employment is spread fairly well across all business sizes.

Even so, it doesn't matter because nearly ALL business is driven by investment. Investment is a function of people with money trying to make more money (sounds so evil doesn't it?). But that is where jobs come from.

Quote:

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that's a whole other can of worms.. hope it doesn't derail the discussion

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True, my bad.

Any books on economics that you'd suggest? I'm not interested in reading something that necessarily argues for or against a particular kind of economic system, rather just something to help understand how economics works. Like I said, I read 'The World is Flat' by friedman, which has helped understanding globalization, but when I go to read about all of the cause/effect relationships of, say, the proposed bailout, I quickly get lost.

dunno. people rave about the Undercover Economist and Freakonomics. Haven't read them myself. I read a couple of Jim Cramer's books though. I like him, but he's more of a stock market guy than an overall economist. And he's a bit less serious.

Quote:

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Originally Posted by FillYourBrain

Not to beat a dead horse, but this statement is inaccurate according to this site:
http://www.census.gov/epcd/www/smallbus.html
It is pretty clear that employment is spread fairly well across all business sizes.

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Do beat the dead horse since we are apparently and irrevocably not going back to discuss the initial subject.

So... erm... where did you see what you say you saw? Because everything in that census says the contrary of your the-rich-save-the-world rethoric:

Do look at table 2c again and fill me in with what you don't understand in those numbers. Also do the math on table 2a. And for good measure compare the growth rates between tables 2a and 2b.

Please, don't let a Portuguese tard teach you how to read an american census.

2c doesn't say what you think it says. It shows the percentage of the firms in each category, not the percentage of people. It is comparable to the "firms" column of 2a and 2b. Not helpful for discussion.

The "paid employees" column is the one that's relevant here as the discussion is about what type of company employs more, not how many of those types of company there are. Of course there are less large companies!

The cutoff point is approximately at the 500 employee mark. Half of employed people are in companies above that size, half below.

Quote:

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Originally Posted by Mario F.

Portuguese tard

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You said it

Quote:

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Originally Posted by Mario F.

...everything in that census says the contrary of your the-rich-save-the-world rethoric...

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the concept of business expansion coming from investment does not depend on the large/small business comparison.

Quote:

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Originally Posted by FillYourBrain

Not to beat a dead horse, but this statement is inaccurate according to this site:
http://www.census.gov/epcd/www/smallbus.html
It is pretty clear that employment is spread fairly well across all business sizes.

Even so, it doesn't matter because nearly ALL business is driven by investment. Investment is a function of people with money trying to make more money (sounds so evil doesn't it?). But that is where jobs come from.

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Sorry to flog the horse yet again, but I just so happen to have a recently published business textbook.

Quote:

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Small Business versus Big Business

The Small Business Administration (SBA) defines a small business as one that is independently owned and operated, and is not dominant in its field of operation, and meets certain standards of size in terms of employees or annual receipts [ ... ]. A small business is considered "small" only in relation to other businesses in its industry. A wholesaler may sell up tp $22 million and still be considered a small business by the SBA. In manufacturing, a plant can have 1,500 employees and still be considered small. [21] Lets look at some interesting statistics about small businesses: [22]

• There are over 20 million full- and part-time home-based businesses in the United States.
• Nearly 750,000 tax paying employee-hiring businesses are started every year.
• Small businesses create over 75 percent of the new jobs in the United States.
• Of all nonfarm businesses in the United States, almost 97 percent are considered small by SBA standards.
• Small businesses account for more than 50 percent of the gross domestic product (GDP).
  [ ... ]
• About 80 percent of Americans find their first jobs in small businesses.

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The text agrees with Mario.

I'm not sure if I agree that investment is one of the most important stakeholders in all business the way that you say they are, either. I've learned that small businesses and sole-proprietors alike don't necessarily need huge piles of money to start operation. For example, I could start a word processing service right now with zero investment. Success is another story but the fact remains.

[21] Gwendolyn Bounds, "SBA Reconsiders What Small Means," The Wall Street Journal, March 25, 2005, and "Small Businesses," Business Wire, June 2, 2005.
[22] Martin Wolk, "Snall Business Having Big Impact on Jobs," MSNBC Interactive, August 2005; U.S. Census Bureau; and SBA Office of Advocacy.

Excerpted from Understanding Business, Eighth Edition from McGraw-Hill.

Quote:

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Originally Posted by citizen

The text agrees with Mario.

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Read closer. The only thing that seems that it does is the following: "Small businesses create over 75 percent of the new jobs in the United States." It says 75% of the new jobs. This is the important piece. Jobs in small business are volatile because of the relatively low success rate of the businesses. The goal is to have more jobs at a given point in time, not just create and destroy frequently. Therefore what may seem to contradict the census bureau, does not. But even if it did contradict, probably a safe bet to go with the census bureau on this one :)

Quote:

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Originally Posted by citizen

I've learned that small businesses and sole-proprietors alike don't necessarily need huge piles of money to start operation. For example, I could start a word processing service right now with zero investment.

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This is important! You can in fact create some business with low to zero investment. But how can they grow? The answer is reinvested profit. Internal or external investment are the same principle. If you want to slow the economy, take that profit away from them or take away external investment dollars. Either one has similar effect.

Quote:

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Originally Posted by FillYourBrain

Read closer. The only thing that seems that it does is the following: "Small businesses create over 75 percent of the new jobs in the United States." It says 75% of the new jobs. This is the important piece. Jobs in small business are volatile because of the relatively low success rate of the businesses.

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All right, but just to let you know, "the relatively low success rate of the businesses" may itself be a faulty statistic. The text also mentions that one of the reasons the rates reported were much higher in the past because the Small Businesses Administration counted changes in forms of ownership (taking on partners or incorporating for example) as a loss. I could look it up if you want, but about 18 percent of small businesses fail, according to modern statistics collection. Hardly "volatile".

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This is important! You can in fact create some business with low to zero investment. But how can they grow? The answer is reinvested profit. Internal or external investment are the same principle. If you want to slow the economy, take that profit away from them or take away external investment dollars. Either one has similar effect.

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True enough.

Anyway, if that changes your opinion about the importance of small business as an employer, then great. I think a telling statistic is that so many of them are considered small.

Lack of small business importance wasn't part of my argument in the least. This is getting to be a long thread but my statements haven't strayed from:

The rich invest much of their excess, often in business. Business uses investment for expansion. That's where jobs come from. Hurting the rich results in hurting the poor.

All of this in response to several statements that condemn the rich and want to punish them.

I can agree with that, then. For some reason I took your comments to mean that we were dependent on banks and limited liability investors were the lone source for venture capital, as if the rich were somehow merely allowing the poor to start businesses as an act of charity. But that isn't true, and not what you meant. So hopefully we at least cleared up that issue.

no worries mate!

Well Capitalism is working and cleaning house. WaMu collapsed today but was acquired by Jp Morgan Chase. This entire crisis is changing the face of the banking industry. What seems very different in this crisis is that some banks are actually in very good positions since they do not have a large share of toxic assets. Only those who dabbled a lot in the now toxic assets seems to be hurting for cash. But Capitalism means that there is another bank to step up and will be in a better position to shoulder the debt and that is exactly what is happening. Bank of America and JP Morgan Chase are becoming very very big banks almost overnight.

I will get fearful when we see banks that do not have toxic assets begin to crumble under the weight of those who do. So far that does not seem to be happening.

It is unfortunate that so many have to lose their jobs because of the actions of a select few. I'm not sure we have hit rock bottom yet in this crisis but after it has passed we should see a very different job and credit climate.

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Originally Posted by Bubba

It is unfortunate that so many have to lose their jobs because of the actions of a select few.

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And according to a recent news on TV, of which administrators have earned bonuses on the last 2 years that go well over the proposed 700 billion dollars.