Corporations see monster profits, those under the poverty line not so much

Yeah, all profits are uncharacteristic since most companies don't make them.

There are a couple of not-so-subtle, stupid, judgements of value and cause and effect that you've inserted into this thread without openly making them so that they could be scrutinized and exposed for their fallacious nature.

First of all, corporations have government sponsored grants of monopoly privilege because of the regulations on them. Wal-Mart, for instance, has been agitating for an increase in the minimum wage. Why should they bother? They already pay most, if not all, of their employees more than the minimum wage.

It's because the minimum wage is just compulsory unemployment for those whose labor is worth less than the minimum wage. Just as such a minimum price on any cheap good would ban the sale of such a good and coercively redistribute wealth towards the sellers of other goods, so it does with banning cheap labor. Wal-Mart can then claim they're philanthropists, and other companies are faced with producing less, laying off works, employing them at more peak hours, keeping them employed and paying more while Wal-Mart and other big companies don't, raising prices, or replacing their labor with cheaper capital goods.

Another major reason for corporations getting so rich-and this one is a legitimately immoral reason-is the Federal Reserve and government sponsored fractional reserve banking. In printing up fiat money and loaning out such money to companies at no cost to themselves, they coercively redistribute wealth away from everyone else.

For instance, say the Fed buys $1 million in assets by purchasing a building. The Fed creates a demand deposit out of nothing, counterfeiting the money. They create $1 million right there. They give the money to the company, who have more purchasing power while having produced nothing and while savings have not increased. Nothing productive has been added to back these paper notes.

Why do you think private counterfeiting is illegal? Because it tampers with the government's revenues. And yet, the government can counterfeit untold trillions, creating business cycles and recessions.

The $1 million given to the company in my hypothetical example then have increased purchasing power which is just a one shot benefit. It's the illusion of savings. Some of it goes into a bank, which then can fraudulently loan out 90% of what's deposited to them to someone else while still allowing the depositor to redeem it any time they like, and the Fed will bail them out by creating more money out of thin air to do so if they have to.

That money is loaned out to (typically) a company, or most of it. Then some of that gets spent, and some of it put in a bank, which further pyramids the money and can loan out 90% of it, and so on until the money gets to the last people in an economy.

Finally, when it gets to them, the illusory benefits are gone. The increased purchasing power and price increases of inflation have stopped giving benefits. As a ratio to goods, everyone finally realizes that money has just increased. Their money has less command over goods than before. Businesses started in the boom on the illusory profits (such as those created in the last year because of Bernanke's inflation). They fire people, typically the least productive ones-the very ones you're bitching about. They have to abandon unsustainable lines of production.

Less money goes to firms when people realize their purchasing power is less, and then they have less money to put into banks, which then have less to loan out. The process snowballs in such a recession, but this is a curative one which purges the economy of malinvestment.

Blame the government monopoly on banking for giving such huge winfalls to companies that didn't deserve it. Of course, the poorest people are further hurt by inflation, since when inflation occurs as the ratio of money to goods increases, those living on fixed incomes, pensions, and savings get their purchasing power hurt the most. It is only fitting that they're at least stand to benefit (relatively) when the deflation occurs.

But since money isn't created all at once, but is constantly created, we have constant malinvestment and the covering up of such investment because of the illusory profits and savings of companies, since the Fed and banks constantly are inflating the money supply.

Here's an article that came out just today on this process:

http://www.mises.org/story/2476

Get the government out of money and banking altogether to take away the true profiteering, and you'd end this mess. It's Wall Street bankers that lobbied for this fraudulent system in the first place, along with the government, that wanted to pay for its wars without taxing, but by easily printing up money. War is a racket and a huge welfare system for the firms that work with the government because of this. Banking is a racket, but because of government. What's necessary is to get these government obstacles off people's backs.

In their capacity as mere corporations, these companies get profits because they maintain a good reputation among clients and provide people with what they want. That's what, on a market, at least, profits are a measure of.

For profits serve as the basis for setting prices, costs of production, and what goods to sell. This is because entrepreneurs are necessarily future oriented. They set prices based on estimations of future profits, which they get by capitalizing on some market where other entrepreneurs underestimate the valuations of consumers. It is on this basis that they set prices, and in turn set costs of production.

Profit being their bottom line, they have to estimate what people want or go under. At least, without the regulatory and cartel privileges they get against competition. But that would mean horrifying liberals at the possibility of respecting private property and freedom, conservatives over ending the racket on murderous war, and all statists at the thought of not having hegemony over corporations as long as they have good intentions.

Now, about the statistics you've cited. Read Gene Epstein's Econospinning for a simple, apolitical explanation of them. For one thing, the poor you're talking about aren't the same poor as a previous statistic would show. If you were to track the same poor people over time, the vast majority of them get out of poverty. As more people move out of poverty, and more people in the middle class move into the upper class, a snapshot of data will only tell you a concrete ratio at the time of each class to each other. And, as this trend continues, more people move out of both the lower and middle class and into the upper class.

It does not comment upon itself. It does not tell you what the relevant causal forces which preceded it were. It doesn't tell you whether it happened because of corporations, for instance, or in spite of them and because of government. Or, if they have anything to do with each other. I agree there's a lot of coercive redistribution of wealth away from the poor. But that's the government's fault and its regulations, which simultaneously act as monopoly grants of privilege, coercively redistributing wealth towards those companies that can afford them.

If you want full employment and mobility up the economic ladder, you have to remove all those obstacles. But that entails an intellectually honest look at causation, not empirical outcomes.

Here's two articles on the same topic, the latter of which was written by myself.

http://www.lewrockwell.com/paul/paul370.html

http://www.strike-the-root.com/62/mike/mike9.html

Nobody reads your posts, Angelo Mike.

Yeah, without having read the posts, I still feel comfortable telling Mike to fuck right back off.

Ooh, the intellectual midgets can't refute a consistent explanation of economics.

If we read it we could.

How's life at mom's house, oh Great Wizard of Econ 241?

Yep, so long as those wonderful creations from God called corporations keep making money (and even more than before), then all is right in the world!

Why is it so hard to see that just because companies (and by extension their executives and major stockholders) are doing fine, doesn't mean everyone in the community is doing so well?

"Why should I blow it now? I've got a year of college to finish, and it's free since my dad works there."
-Angelo Mike

I love that thread like I love my illegitimate kids - I visit it once a month.

See, Mike, if you hadn't blown all your credibility, and then a whole bunch of credibility you didn't have to boot, there might have been something to discuss here.

By the way, I followed the daisy chain of links back to your Rotten Tomatoes blog, and to hell with your political writings: 4/10 for Casino Royale? How's that crack taste?

He'd still have that hurdle of being a blowhard and a dullard.