Why do certain liberals dislike the idea of profit?

Not sure what you're talking about when you say "the finance industry". Can you be more specific and explain why it can end up providing a disservice to society?

 

Just a few examples:

1) By speculating (gambling) instead of investing, mostly with other people's money.
2) By colluding with employers to provide the highest cost retirement plans to employees, while leaving the employee no choice as to what service provider to pick.
3) By sucking out money from the stock market through high-frequency, computerized trading, which the regular investor can't do. Thus, return for regular investors is reduced.
4) By maximizing profits for "financial advisers" through neglecting the fiduciary standard.

 

careful.... Liberals don't hate profit.... they hate when YOU have profit and they don't.

 

It is zero sum. If the whole pie grows by 2% in a year but the slice of the pie controlled by the wealthy grows by 5% in that year, the only place they could get the additional 3% is to take it from the Middle Class and Poor.

 

Yes. I am still outraged.

 

The financial sector; banks, securities brokers and insurance companies, basically. When greed can't be regulated or managed, the economy crashes. We all bear some responsibility, but those at the top are most responsible.

 

In a free society, all of these industries perform desired services.

Now granted, government regulations have cause them to be unstable, but that's the government's fault. In a free society, without such government meddling and with a strong system of contract law, customers would not allow them to reach such a point of instability.

I place the blame on government meddling.

 

Actually, they love profits, and so did Karl Marx. They love to take them.

 

No, businesses in the financial sector have the same objective as other businesses - to make a profit on the sale of their products.

Your notion of who is a producer is warped. A house or a car is a product, but so is everything else sold - ideas, medical cures, service guarantees, a flight on an airline, a peach - and money.

 

How to you have strong contract law without government meddling? In fact, government is a NECESSITY to enforce law. Without enforcement, laws mean nothing. Thus, your premise of strong law without government is mutually exclusive.

 

The meddling to which I was referring is such things as: unit banking laws, legal tender laws, the federal reserve act, the confiscation of gold by FDR, deposit insurance, fiat money, and bank bailouts. This is the meddling that has brought us to the era of too big to fail.

 

No, what is best for an individual is to be constantly proving to the current or future employer that a different job description and compensation package is warranted.

We use free market capitalism to determine value and allocate resources. So, when you say "do what is right" you have to recognize that you are asking for something that is entirely outside of our whole economic system - in fact, a whole new definition of what is "right".

But, I do agree with you. I just think we need to find ways to tune our current system rather than depending on each individual employer to come up with the idea that they should be disregarding free market economics - the system that their whole business is based on.

So, for example, there is room for minimum wage improvement, profit sharing, tax distribution changes, etc. Each has a down side, so I'd suggest we should do a little in each of several areas.

 

Maybe I'm not being clear. Yes, a loan is a product, but the act of granting a loan does not produce anything. When you buy or sell a stock (other than an IPO), all that occurs is money changing hands. Nothing gets produced. This is the nature of finance. It's absolutely necessary, but it is not a productive sector of the economy.

 

then the same applies to the employer... they should constantly be showing they are working for the employee

it goes both ways.....

one is doing it for money, the other for labor

if either tries to do as little as possible it hurts both, if enough of either do the same, it hurts society.....

.

 

I just don't agree with that idea at all.

Buying and selling money is just as valid a business as is buying and selling steel, buying and selling medical advice, or buying and selling toasters.

Are you Muslim? Muslims disagree on religious grounds, believing that paying more than a dollar for one dollar is wrong.

 

I agree!

The problem is, though, that automation and offshoring have tilted the playing field so much in favor of the employers that they can afford to treat employees like dirt and pay them below poverty wages without consequences.

Of course, when every employer does it, then aggregate demand goes down, as is currently happening in our economy. Thus, indirectly the "job creators" are hurting themselves by paying rock-bottom wages, because people can't afford to buy their products.

 

Buying and selling steel and toasters does not involve privilege while buying, selling and creating money does. If counterfeiting were not illegal then you would be correct, but it is, and that makes you wrong. The whole financial sector is wrapped in privilege and that privilege is what makes the profits obscenely high. It currently takes over $12 million and friends in high places in order to secure a banking charter. That does a whole lot to weed out the competition … that is what privilege does.

 

And?

Try out your logic on Walmart, which has a good bottom line. They follow employment law. They follow free market capitalism. They do a little to avoid bad press that might hurt their bottom line.

You want these employees to be treated more fairly, I'm pretty sure. So, what's your suggestion?

 

No. Nobody raised the issue of regulation and restrictions in the financial sector.

And, that issue is irrelevant to whether the financial sector is a collection of businesses that sell products - which the are.

If you want to talk about the range of nonsense that goes on in that sector, I'm totally in favor.

 

You seem to be misunderstanding me. Money isn't a product in the strict sense. It's a medium of exchange. It represents a product. Yes, there are many financial tools used including interest and the multiplier effect, but these serve to facilitate production, they really aren't productive in themselves. It is the entreprenuer who uses finance that is productive, or not.

 

There's a difference between being a product and being productive. I'm speaking in the most basic economic terms. When I deposit money in a bank, that money represents something I produced. When the bank lends that money to an entreprenuer, he is using my saved production to facilitate his own production. The bank is just a middle man. Yes, this is a service, but this service itself does not create wealth. It is me, who has already created wealth, and the entreprenuer who create wealth.

 

Then why didn't you lend your money directly to the entrepreneur? Why did you involve the bank if it wasn't necessary?

 

Money is a product that you can buy. I bought a bunch with which I paid for my first house - a house that was owned by me from the time of closing, when I handed over the money I had bought.

Whether one or more of the parties in these two transactions was "productive" hits me as a strange question. Those who sold me the money did so as a profit making business. The real estate agent was selling advice and facilitation as a product, my lawyer was selling advice as a business, the seller was a private party, but could have been a real estate holding company that made money by buying and selling properties. The bank sold money. They used to add advice, too, but today they don't care.

What is your measure for productivity?

 

Funny thing is that liberals do more to promote wealth disparity by their social programs. Why should average Americans save and invest in order to take part in the profits of production. They have unemployment welfare, welfare, SS/Medicare. Why would they need emergency funds and personal investments? So, the wealthy keep investing and most Americans keep being serfs.

 

According to you then, the average american is not saving? You think the average american is going to rely solely on gov't for all things that require savings?
How many americans are average?
Can the average american afford to save?
With savings interest rates near zero, what is the motivation to save? Not everyone can put savings away and not get instant access to it.

http://www.mybudget360.com/how-much-do-americans-earn-what-is-the-average-us-income/
According to these stats it doesn't seem like much is left over to save. Wages have been fairly flat for decades.