The Trump Economy

[RedDenver]

 

4 hours ago, Moiraine said:

If a company broke even every single year forever it'd be perfectly fine for whoever worked there.

Correct.

 

6 hours ago, BigRedBuster said:

Fir one thing, you have to reinvest in a business or it ceases to exist. Either that comes from outside investment or what’s called retained earnings. 

 

If if you don’t make money, nobody is going to invest and you have no retained earnings. 

 

This is concept is really that puzzling to you?

It's not puzzling to me at all, but you're not seeing what's obvious: a business can't go under if it always breaks even. "MUST make a profit" isn't required for staying in business.

 

However, investors want a return on their investment, which leads back to your post that I disagreed with to start this tangent:

On 11/29/2018 at 10:20 AM, BigRedBuster said:

 

Fixed one thing.

It's important to remember, these companies MUST make a profit. That isn't greed from the stock holders. If they don't make tough decisions that keep them making a profit, we end up with what we had in 2010 with them on the verge of going out of business and everyone losing jobs.

The stockholders want a ROI and executives at GM would start losing their jobs if the shareholders aren't happy with the profits. That's pretty much the definition of "greed from the stock holders".

[funhusker]

@RedDenver Who would "invest" in businesses if there wasn't some kind of return?  Should investors be put on payroll and become an expense to the company?  I guess I don't see how the system would work if companies just broke even.  If that were the case, I see only the super rich being able to start businesses because they are the only people that could round up the capital.

 

How would banks work?

[RedDenver]

12 minutes ago, funhusker said:

@RedDenver Who would "invest" in businesses if there wasn't some kind of return?  Should investors be put on payroll and become an expense to the company?  I guess I don't see how the system would work if companies just broke even.  If that were the case, I see only the super rich being able to start businesses because they are the only people that could round up the capital.

 

How would banks work?

Yes, you're actually making my point. It's the investors that drive the "need" to not only make a profit but maximize profit. My disagreement is with BRB's post that attempts to separate the investors/shareholders from the reason that GM is laying off workers and closing plants. GM is in no danger of going under and has made billions in profits for years - it's about maximizing profits, which is due to the greed of the shareholders. Right or wrong, that's just how the system works.

[funhusker]

3 minutes ago, RedDenver said:

Yes, you're actually making my point. It's the investors that drive the "need" to not only make a profit but maximize profit. My disagreement is with BRB's post that attempts to separate the investors/shareholders from the reason that GM is laying off workers and closing plants. GM is in no danger of going under and has made billions in profits for years - it's about maximizing profits, which is due to the greed of the shareholders. Right or wrong, that's just how the system works.

Maybe I should rephrase:  Who would be able to start businesses without the help of investors?  Definitely not poor people with great ideas...

 

And I do get the discussion you guys are having.  GM's decision is driven by profits (good or bad), but so is the local bowling alley when they are given a loan to resurface the lanes.  

[RedDenver]

Just now, funhusker said:

Maybe I should rephrase:  Who would be able to start businesses without the help of investors?  Definitely not poor people with great ideas...

Again, I'm not saying that businesses should or should not have investors, but rather that investors are the drivers for maximizing profits.

[funhusker]

Just now, RedDenver said:

Again, I'm not saying that businesses should or should not have investors, but rather that investors are the drivers for maximizing profits.

Does BRB disagree with that?  I don't see how anyone could.

 

 

[RedDenver]

13 hours ago, funhusker said:

Does BRB disagree with that?  I don't see how anyone could.

 

 

I'm guessing @BigRedBuster agrees with that but disagrees with the specifics of the GM firings and plant closings that were being discussed.

[RedDenver]

Fox Business Host Charles Payne Warns GM Layoffs Could Make Americans Turn to ‘Socialism’

Quote

 

“And again, it's not like they're in dire straits,” [Charles Payne] said. “Now, they're trying to get ahead of things, they want a big fat cash flow. But this is why, I think, capitalism in and of itself is in a lot of trouble in this country.”

“Because these companies keep posting record earnings and they keep firing people. They keep posting record earnings and they buying back billions of dollars of their own stock. The American public is going to get hip to this and my fear is that they're going to end up electing, not a Democratic Socialist, just a straight-up socialist because of these kind of shenanigans. They should have saw this coming a long time ago.”

 

 

There's a video in the article that shows the discussion on Fox Business. (I wasn't able to link the video directly or I'd have done that.)

[Landlord]

seems y'all are talking past each other a bit.

 

The point is that GM didn't need to lay off tens of thousands of workers. There was no necessity for that decision and they could/would have still been wildly profitable if they hadn't. 

 

They wanted to lay off all those people, because it makes the execs and shareholders richer. And of course, they get rich off of the misfortune of the poor/middle class who they kicked to the curb.

[BigRedBuster]

2 hours ago, Landlord said:

seems y'all are talking past each other a bit.

 

The point is that GM didn't need to lay off tens of thousands of workers. There was no necessity for that decision and they could/would have still been wildly profitable if they hadn't. 

 

They wanted to lay off all those people, because it makes the execs and shareholders richer. And of course, they get rich off of the misfortune of the poor/middle class who they kicked to the curb.

 

No, they aren't the only ones who benefit.

[Danny Bateman]

1 minute ago, BigRedBuster said:

 

 No, they aren't the only ones who benefit.

 

I mean, for sure the rest of us benefit if GM is able to make cheaper products and pass the savings on to consumers. But for the sake of the discussion it's pretty hard to overlook the dramatic regional economic effects of outsourcing a ton of jobs. We've got to be clear-eyed about ALL the effects of something as complex as this is.

 

The question that really interests me about all of this is whether Trump's policies (i.e., his trade wars) worked to prevent or encourage this type of move by GM.

[Landlord]

2 hours ago, BigRedBuster said:

 

No, they aren't the only ones who benefit.

 

 

I didn't say they are the only ones who benefit, only that them benefitting is the strongest drive and motivation for laying off so many people.

[StPaulHusker]

Just want to say that the point of starting a business is to make a profit.  If you don't have profits year over year, and just break even, you have nothing to reinvest into your company.  You can't grow.

 

If you are starting a business and the goal is to break even, then start a non-profit and follow those rules.

 

 

[BigRedBuster]

 

[commando]

but hey...it was worth it...right?