Einherjar comments

Investors outside japan are buying yen to invest as the country is rebuilt after the tsunami. That pushes up the price of the yen. In a way you could say that equities and bonds of new construction are competing with traditional exports in the market for foreign currency, pushing the price of foreign currency down.

@lucabrisi

Self regulation refers to contractual conditions. An advocate for self regulation will argue, for instance, that it is not necessary for government to introduce regulations forcing anyone shorting a commodity to have a certain amount of capital on hand to cover potential losses, since the person entering into the contract in the long position can insist on such conditions himself. Usually exchanges guarantee trades made on them, (as in, they eat the loss if someone is unable to cover a short, the long still gets his money) and set their own conditions which short sellers must comply with. If a trader is unhappy with the conditions he can trade at another exchange.

One could also argue that regulations meant to protect minority shareholders are superfluous, as such conditions could be established by contract.

I have no idea where you get the idea that Haiti sports a freer market than Sweden, but I can assure you that you are wrong.

If you start with the premise that no one should be forced to participate in any interaction without their consent, you end up with a free market, and in most cases it is hard to argue with that premise. Of course there are some things which do not lend themselves to market solutions, natural monopolies line road networks for instance, but for most things I think people should be allowed to arrange themselves as they see fit provided they do not infringe on the rights of others in the process. Of course everyone would have to contribute to the enforcement of this principle. (police&military)

Perhaps it is more an indication of an (obviously) overpaid management that doesn't have a clue how to turn the skills and abilities of a workforce -- ie: human resources -- into high-value, high-quality products and services.

Of course, but the employees labor is only worth to an employer what said employer can make of it. If there were an ample supply of employers who could produce a lot of value with unskilled labor, then they would bid up the price of labor accordingly, and neither unemployment or low wages would be an issue.

When a bank goes under, it's not because of too many counting errors by tellers. But the low-level employees are the first to suffer while those responsible draw very large checks either for continued "service" or for separation. Such it is with organizations all across the board.

Banks are a bit of a special case, as they don't go under so much as get bailed out and lumber on. I have reforms In mind which would address this, but that is a major topic on it's own, and will have to wait for another time.

When stock market funds perform poorly, the brokers earn less commission, and when an analyst at a bank screws up, said analysts bonus takes a hit. The terms of bonuses and such are negotiated by these employees by themselves in the market by the way, no laws or collective bargaining were necessary in order to provide them with these benefits.

In a free market anyone who think they could offer these peoples employers better value for money are free to compete for their positions.

A free market works only when there is complete freedom of information and complete freedom from coercion.

A free market will work, sub-optimally, even when there are search-frictions. Freedom from coercion is is fulfilled, slavery has long since been abolished.

The worker is forced to sell his skills in order to survive, and the employer is not required to hire him at any given time -- and so can wait him out for the best deal.

There are multiple prospective employers competing for labor, and government is responsible for preventing the formation of cartels. People have to buy food to live, but there is still competition among providers of foodstuffs. The same holds for providers of employment.

Secondly, the worker is in near total dependence on the employer to provide to him the information that lets him know the true value of his work. It is therefore in the employer's interest to withhold as much of that information as possible, in order to exploit and therefore maximize his return from the human resource.

There are publicly available statistics on unemployment by worktype (don't know the english word) and region, as well as statistics on wages in various types of work. I would not be opposed to a public contribution to the publication of such statistics. Additionally said worker can access job-hunting websites, to see what various open positions are offering in order to get the lay of the land.

The best way for a market-type system to work in this scenario is to have the workers organized and represented by a party that is interested in ensuring that workers get the best possible deal. And who can provide the resources to wait out any employer who would want to use the human conditions of cold and hunger against the person trying to bargain for a position.

If workers try to organize a cartel, the government should step in and jail the ringleaders. If you think of something more like a career management agency, (which would for instance find and recommend higher paying positions to workers in exchange for a percentage of the salary increase over a period), I agree. Such an agency could also provide and/or recommend training and/or coursework which would help the employee find higher paying positions.

@yabits:

When last I checked, the pharmaceutical industry was not facing anything close to extinction. The current arrangement benefits everyone involved and so should be maintained.

It would go extinct of price controls were introduced or patent law repealed. I should probably not have used past tense when describing what the effects of such a policy would have been. I'll be more careful with my language in the future.

I actually agree that the current system should be maintained, but I thought you were arguing for the introduction of price controls.

Nowhere in your lengthy reply did you address the main point: That pharmaceutical companies depend upon taxpayer-funded basic research, which is much longer term and higher risk (in terms of payoff) than the companies would be willing to take on themselves.

I did address it. Taxpayers benefit by being offered the option of buying the drugs at all, and by being offered the option of buying them in a competitive market once the patent expires. A patent expires 20 years after the patent application is made, which works out to about 10 years after the drug appears on the market.

The results of non-military taxpayer funded research are released into the public domain for anyone to leverage free of charge, based on the idea that society as a whole will benefit from this. I guess you could try to charge for it, but I don't think it would be a successful business-model, and you would undermine the argument for taxpayer funding of such research. Many industries benefit from public research, not just pharma, and in the end consumers benefit from the introduction of products that would otherwise not have been developed.

Since "we the people" provide an essential component of what Pharma turns into applied research, a representative of taxpayers/consumers needs to be at the table just in case the Pharma company tries to overlook or forget that fact. Pharmaceutical companies are well compensated for what they do; they are not entitled to the benefits of taxpayer-funded research for nothing.

Pharmaceuticals merely have to comply with the conditions set for the use of such research, and there aren't any. If you don't like that you can argue for changing the laws concerning publication of publicly funded research. You could also argue for the elimination of public funding for such research.

Preventing the price-gouging that often occurs with monopolies is a key function of government.

I agree.

Enabling the proprietor of a patent to charge monopoly prices for any product which uses the discovery described in the patent, by prohibiting others from producing such products without first purchasing a license from the patent holder, is another key function of government.

Patent law was written to introduce monopolies where none existed in order to allow for monopoly pricing to take place. Try to understand why this is necessary for commercial research to be viable.

@lucabrasi In industrial revolution Britain conditions were what they were because of the relative scarcity of skill and capital, conditions actually improved over what had been the case prior to the industrial revolution. You didn't have millions flocking to the cities because they were worse off then they used to be.

In America during the Great Depression salaries as well as the products were subject to price controls. The prices specified were so high that the amount of gold in circulation was only sufficient to keep three quarters of the people included in the economy.

In India now, economic conditions are rapidly improving. It will take a while for India to reach capital saturation due to it's huge population, so unskilled labor is likely to be cheap there for a long time still, but the price of various kinds of skilled labor is already rising fast in response to high demand. Do you imagine introducing and enforcing a minimum wage of $8 an hour in India today would lead to anything other than mass unemployment and famine?

Also I suggest you read up on what self-regulation is before you mock it. It has nothing to do with the topic at hand, and you look like an idiot for misusing the term.

An employer reaping the benefits of the increasing skills and knowledge of an employee who is working full time for many weeks or months is an expropriation by that employer of the employee's delivered value.

This is the crux of the issue isn't it? I don't believe every employee necessarily deliver a minimum wages worth of value. If they all did, they wouldn't have as much trouble finding employment at that wage.

It is also the case that compensation could com in other forms than money. In the example of me working at a political action comity for instance, I would certainly find the position rewarding in other ways than the monetary compensation. One case I've heard of where this phenomenon was in effect was a business that decided to get rid of a number of apprenticeship positions because they wouldn't make sense for them at the minimum wage, in spite of the fact that they had plenty of applicants that wanted the positions and thought they were a valuable opportunity. Are those people better off washing dishes at minimum wage if they can even land such a job?

It would be wiser in my opinion to let the market set the price of labor. If an employee is capable of delivering more value than his employer will compensate him for, let him strike a better deal with some other employer.

The way to raise the price of unskilled labor is to either increase the demand for it, or to decrease the supply of it, for instance by training/educating some unskilled labor into skilled labor, or reducing the influx of new unskilled labor.

@yabits

You are not making any sense. How does regulating a price for a product "expropriate" capital? Where does the capital that has been "expropriated" show up? The government certainly hasn't taken it.

Pharmaceutical companies have invested for years in researching diseases and developing treatments. In doing so they have accumulated valuable information, which they hold the title to. This information is invested capital, and they made the investments hoping that they would result in marketable treatments which could be sold to recover the invested capital and yield a return on investment.

When the government fixes the price of these treatments, it prohibits the companies from monetizing their intelectual property, and the capital is thus lost to them. Under such conditions commercial pharmaceutical research is not viable, and will not occur.

The expropriated capital shows up as a temporary subsidy for treatments that have already been developed, and are being sold at prices which do not allow development costs to be covered. The government has "redistributed the wealth", and in doing so has killed an important industry.

The vast majority of developments in the pharmaceutical industry have only come after billions of dollars spent by "we the people" on years of basic research that none of the companies involved would ever attempt on their own -- since the payback periods are far too long for them to risk their own capital. For most drugs companies, the cost of advertising outweighs the cost of their own research -- since they are able to depend as much they do on taxpayer-funded basic research.

Pharmaceutical companies rely on patents to protect their rights to the treatments they develop, and these patents expire after 20 years. Usually it takes around 10 years from a patent is filed until a treatment is fully developed and certified, so that it can be marketed. That leaves the Pharmaceutical company with a 10 year monopoly on the product, in which to recover their costs associated both with that treatment, and with treatments that didn't work out. During these 10 years they charge a lot more per additional unit sold than it costs them to produce each additional unit, since development costs do not scale with the volume of sales. Because of this high profit margin per unit sold advertising becomes very lucrative (an advertisement only has to move a few additional units to recover its cost), and pharmaceuticals spend a lot of money on it. So it isn't that development costs are negligible, it's that advertisement budgets are huge.

The money spent on advertising finds it's way through cable channels and publications to fund the generation of content that people value, so it isn't entirely lost to society.

Once the patent expires the intellectual property it represents falls into the public domain, and a competitive market for producing the treatment is established.

What you are proposing is that the "American working people" take on the chin twice: paying for basic research and paying through the nose for products produced out of that basic research. That government should impose pricing restrictions on the final product which enables the average "working people" to keep more money in their pockets rather than hand it over to drug companies seems like a very beneficial return on the public's investment.

They benefit from that basic research by having access to treatments at all that would otherwise never have been developed, and by being able to access them in a competitive market roughly 10 years after they are certified for sale. Contrary to your apparent conviction Pharmaceutical companies are not so fiendishly profitable that they would take price-caps during this 10-year period in stride.

10 years ago was the turn of the century, I remember the turn of the century, we had a lot of pharmaceutical treatments back then. Nearly all of those treatments can now be acquired from any provider that bothers to produce it, as their patents have expired, and any that haven't are set to expire in the immediate future. Why does 10 years of monopoly pricing on new products seem unreasonable to you as a price of having the treatments developed at all?

But yabits, if it's ok to pay volunteers less than minimum wage one time, shouldn't it also be legal to pay them less than minimum wage a second time, and a third? And if so, why shouldn't it be legal to pay people less than minimum wage over extended periods, so long as they in fact volunteer for the position (i.e. work voluntarily)? I might want to quasi volunteer for a think-tank or political action group, and charge less than minimum wage for it, why shouldn't I be allowed to do that?

The fact in Denmark is that the workforce is better educated and more skilled than the american workforce, and so the price of unskilled labor is bid up due to business demand and supply constraints. The price of unskilled labor in the US is kept down by an inexhaustible supply of illegal immigrants, and minimum wage laws merely prevent law abiding unskilled workers from working.

Four years for using your right to free speech. Ridiculous. More than a rapist and same as a black on black murder.

It is a bit harsh, yes, but the second half of the quote is the most ridiculous part. It is insane for rapists and murderers to be sentenced to four years or less.

So the Tea Party is a tool for special interests is it?

Have you forgotten that we were the ones that put a stop to the earmark scam, by which representatives would direct no-bid contracts on lucrative terms to donors, aquaintances, pet projects and key constituencies? Isn't that a strike against special interests?

And how can the Tea Party be a tool for stakeholders in military R&D when we are pushing cuts which will undoubtedly have to affect military R&D, and aquisitions of developed weapons-systems?

Protecting the property rights of pharmaseuticals, so that it remains profitable to develop new and improve old medical technology is in the interests of 'American working people'. Expropriating the capital invested in these companies by regulating the price of their product such that they can not recuperate development costs is akin to eating the seed corn, and is not in the interests of anyone who will live for another 20 years or longer.

And yes we want to roll back the assault on the energy industry, including coal, fracking for natural gas, deep sea drilling, shale oil extraction, drilling in the ANWR, etc. This is not a special interest, but would unleash economic growth which would benefit everyone, and the taxes levied on these activities could be put towards reducing the deficit.

The Lefts sacret 'green energy' cow on the other hand subsists mostly on public subsidies, and benefits no one but the people on board that particular gravy train. it also funnels a lot of money, which it sources from the government, into lobbying for more government subsidies.

All in all it is absurd for the Left to accuse the Tea Party of being too cosy with special interests while they:

bail out entire companies/industries to save the sources of their campaign funding. suspends the rule of law to tip the outcome of banckruptsy proceedings in the favour of their paymasters and favoured constituents. exempt favoured companies (by issuing wavers) from having to comply with the laws and regulations that apply to their competitors. and so forth.

Yabits:

Intended by whom

Intended by the authors and ammenders of the constitution.

Yabits:

Most Tea Party members would like to totally abolish Social Security. When you claim they want "reform," isn't is just the kind of reform that would ultimately end the program? Therefore, isn't there more than a little bit of dishonesty in the claim that the Tea Party just wants to reform it as if to shore it up and make it a better program?

None of what I said is dishonest.

Most of us would prefer to have people save for retirement on their own, either voluntarily or through mandatory contributions as in Chile, this is true. We would also, in such a case, like a transitional program to avoid leaving people who counted on the current program in untenable situations. (though benefits would be less than currently projected)

This doesn't detract from my point, which was that we would gladly work with Obama to alter the program so long as the changes were ones we approved of, ones which limited its scope and outlays for instance, or ones which delegated authority to states. Paul Ryans medicare reform proposal is for instance not what we would prefer in an ideal world, but we back it as it is better than the likely alternatives.

We are willing to settle for less than our policy ideals, at least provisionally, so long as we make progress towards them. The accusation that our objections are merely obstructionist, and not grounded in principles and policy preferences, is unfounded.

Yabits:

to hold up a routine bill that merely allocates the funds for monies that Congress has already agreed to spend,

Did Congress agree to the Entitlement outlays as well, or were those 'off limits' in negotiations concerning an overdue budget neglected by democratic super-majorities in all branches? At any rate, the rank and file tea partier never agreed to the current spending level, and will use all available political levers to curtail it. This is not hypocritical.

Naturally, the Republicans blame all this on President Obama. They are too dishonest to apportion a share of the responsiblity on themselves.

Tea partiers ascribe a lot of blame to the bush-era republican establishment, that is what the wave of primary challenges was all about, or do you forget that many of the tea party congressmen were elected by unseating republican incumbents?

BlueWitch:

It's terrible that many people around the world try to blame me and the new generation for what happened.

Would you mind recounting some of these experiences? I know the Chinese still hold grudges, fanned by their government to distract from its own abuses, and that the Korean left bashes Japan to establish their credentials as patriots whenever they are accused of treason for cuddling North Korea. I am aware of the phenomenon, but I thought it was confined to east asia.

This is just out of curiosity, I am not calling you a liar or anything.

Wanna blame someone? Blame our government, harass them until the update the history books with the truth.

Japan is a democracy, so its people are somewhat accountable for the actions of its government. Not individually of course, but in aggregate they do elect the people who set education policy.

I have not read a thing about the church of England about the riots or who they suppot in the next US race. Anyone?

Err, could you clarify the question?

TumbleDry:

If Japan and China wants to keep the US as their economic locomotive, they kind of have to.

If you continue to extend credit to someone who will not be able to pay you back, in order to sell stuff to him, you are in reality only giving away stuff.

Laguna:

The vast majority of t-bills are held by private institutions, and whatever mix of investments they choose is their business; the government has no say in the matter.

The Japanese central bank holds a significant amount of treasuries, I agree that private investors are accountable for their own investments.

In a sane world the Japanese would float the yen freely, prohibit the central bank from intervening in the currency market, and sell off most of its foreign exchange holdings.

Yabits:

The truth is that few things express hatred for America as clearly as wanting to destroy its full faith and credit -- which the Republicans did when they held up a routine vote on the debt ceiling. They held the entire nation hostage to their demands.

No one in the tea party has advocated default. Many have advocated for demanding tougher cuts in exchange for raising the debt ceiling, for instance by passing the "Cut Cap and Balance"-bill only, and telling the democrats to take it or leave it. Even if it didn't pass in time that wouldn't have automatically triggered default, instead it would have been up to the treasury (which answers to Obama) to decide which federal outlays would have to be cut, and revenues are sufficient to cover debt service, the immediate war effort, and some entitlement outlays.

The only one who has threatened to default is Obama, who threatened to veto any increase in the debt ceiling which would be insufficient to last until after the next election, while simultaneously maintaining that this would lead to default, implying that he would instruct treasury not to prioritize debt service over other expenses.

So the Tea Party never threatened to default over their principled convictions, Obama threatened to default over political advantage. Spin that if you can.

@ Yabits

The goal of the Tea Party is to scale back a federal government that has grown far larger and more intrusive than it was ever intended to be. In particular they are looking to scale back its outlays. Noone in the tea party would be unwilling to work with Obama to this end, by for instance repealing obamacare, reforming social security and medicare, and dissolving the NLRB.

You may not agree with this agenda, but you should at least concede that we are driven by convictions and not by childish petulance. Failure to do so only makes you look unreasonable, not us.

(full disclosure: I am Norwegian not American, but follow international news and, being a libertarian, sympathize with the limited government platform of the tea party)

Super Lib:

Mr Buffett explained that, like many top earners, his income came entirely from investments rather than from employment, which are subject to lower taxes in the US.

He said last year he paid an effective tax rate of 17.4%, less than the 33% to 41% paid by the employees in his office.

That doesn't include the corporate tax paid on corporate profits (which comes out of the companies resulting appreciation) or the dividend tax (ditto). We could easily tax your salary at 17.4 % as well, and collect the same money by instead taxing your employers payroll outlays, but as it would come out of the same transaction it wouldn't change your take home pay.

How can it be the greater good if everyone is sacrificing? In reality it is always a case of some people sacrificing for the good of others, or the sacrifices are either meaningless or fictional.

We shouldn't be complaining about hypocrisy on the part of the Japanese just because their media isn't as oversensitive with regard to topics sensitive in foreign countries as some Japanese think foreign media should be with regard to topics sensitive in Japan. This will always be the case with every country, and I have no doubt these oversensitive Japanese people call us hypocrites whenever the opportunity presents itself by contrasting our media with the reaction of some of us on threads like these.

It would make more sense for us to actually formulate a position on the issue that isn't inconsistent and thus hypocritical, my position is that people generally need to lighten up. These objections to any mention of Hitler ever being made without a summary of his crimes to go with it betray an insecurity with regard to the perception of the man that is, in my opinion, completely unwarranted. As another poster mentioned earlier Hitler and Nazis are shorthand for evil, and any fretting about portrayals of non-damning sides of the man are completely unwarranted so long as Godwins Law remains in effect. At least unless they also include positive portrayals of his more damnable policies and propaganda.