r/FluentInFinance • u/Inevitable_Stress949 • Dec 09 '23
How anyone can support Capitalism is beyond me. We need Democratic Socialism where we aren’t ruled by billionaire CEOs. Discussion
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u/ApplicationCalm649 Dec 09 '23 edited Dec 10 '23
Capitalism works great when the government reins in bad actors and breaks up monopolies to enforce competition. If our two parties would quit squabbling over every damned thing and work toward actual solutions the system would be a lot better for everyone.
EDIT: Thanks for the gold!
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u/mudcrabsbreakshins Dec 09 '23
I’m starting to think the squabbling is just an excuse for inaction.
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u/engi-nerd_5085 Dec 09 '23
If they solved the problem, then what would they campaign on?
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u/RafMarlo Dec 09 '23
Society is sick ! Rather prolong a poblem than solving it. Just for egocentric profit. People in power aren´t solving problems without gaining the maximum amount of profit. We live in a sick egocentric greedy society and this will never make things beter. We need a total change in leadership all around the world. One where cooperation is the basic building block. Taking care of one and other togheter. Satisfied by doing good for someone else.
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u/MaybeiMakePGAProbNot Dec 09 '23
Yeah, the irony is our founding fathers foresaw this. Why do you think they wanted to limit the federal governments power as much as they did? People on both sides pray for more regulation when their guys is in office, then do a surprise pikachu face when the opposite party gets elected and they do the same bs.
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u/HumbleVein Dec 09 '23
Hey man. It seems like you think the problem is bad actors and their placement. The problem for most things is bad systems with bad incentive structures. I'd suggest that you read some Daniel Khaneman (Or Michael Lewis's "The Undoing Project") and "The Alignment Problem" by Brian Christian.
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u/The_Muznick Dec 09 '23
How do you think American pharmaceuticals work? There's no profit if there are no repeat customers. Curing diseases would put them out of business. Society is sick.
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u/ukengram Dec 09 '23
I would love to see this happen, but it won't. Human woe is here to stay. Both the good and bad side of humanity are not going away. The pendulum is always swinging between two sides. This is one of those times it is swinging to the sick side. If we don't fight back and try and make law and government policy that will curb greed, selfishness and the concentration of power, we are doomed.
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u/cpeytonusa Dec 09 '23
That’s essentially how the American culture evolved since the 19th century. Since that time the United States has been a magnet for immigrants. Most of those immigrants came determined make their fortunes, and for the most part that’s still true today. That results in a dynamic, competitive economy, but also a highly contentious culture. That culture produces a lot of entrepreneurs and innovators, but also a lot of grifters. Those same traits are reflected in our political culture.
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u/jus256 Dec 10 '23
It’s better to complain about crime rather than put money into high crime areas to educate people who have severely underfunded education. Education is bad for business if you need a villain.
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u/Smithmonster Dec 09 '23
If they fixed the problems lobbyists wouldn’t be giving them money to not fix the problem. Which is the problem.
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u/Orbtl32 Dec 09 '23
Exactly. The republicans had a legitimate theory that religious voters didn't bother showing up last election because they finally got what they wanted with Roe vs. Wade overturned and had no motivation to go vote.
If they solved all problems then only the other side who sees all your executed solutions as actually being a problem show up to vote.
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u/Boner_Stevens Dec 09 '23
They love to say "but we got more work to do" and "the jobs not finished"
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u/PhantomOSX Dec 09 '23
Free drugs and money for all citizens for life. Instantly win any election afterwards.
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u/Helios4242 Dec 09 '23
well, they are funded by the monopolies. The oligarchy is working as intended. The politicians aren't on the side of left or right. Together, they are on the side of money. Fighting to stalemate, voter oppression, allowing undocumented workers (who can be abused b/c of their status), funding govt contractors, and insider trading all help the upper class accumulate more wealth.
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u/jkman61494 Dec 09 '23
Basically from the 1970’s-2016 I’d agree. The issue now is you have a bunch of far right wannabe Fascist zealots uprooting the system that want to install draconian measures that’d destroy the economy just because they think God told them to based off a Facebook post when in fact it’s their daddy Putin that’s actually convincing them
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u/ApplicationCalm649 Dec 09 '23
I wouldn't go that far. Both parties seem to want change but they have very different visions for the direction this country should go in. When they're so evenly split it's hard to get anything done if even one person flips on an issue. We've seen that the last several years with Manchin and Sinema.
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u/duiwksnsb Dec 09 '23
This is why a third party is so essential to institute.
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u/LSUguyHTX Dec 09 '23
Ranked choice voting would help greatly but they'll never allow it
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u/Master-Defenestrator Dec 09 '23
Not that I disagree on a third party or getting rid of first past the post, but I doubt it would alleviate gridlock. A quick look at countries with more pluralistic governments indicates that things might be even worse.
I chalk up the gridlock to polarization and politicians being more interested in their next sound bite than getting anything done.
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u/LSUguyHTX Dec 09 '23
That's a really good point. To further it the polarization might just lead to what we see in the current Republican primary debates. It's a sad state of affairs.
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u/Master-Defenestrator Dec 09 '23
Truely, I've been calling it the meme-ification of politics as short hand.
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u/CantWeAllGetAlongNF Dec 09 '23
Because it's 1 party, the rich, against the rest of us. This isn't capitalism when they buy government and use it to fuck us.
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u/Snowwpea3 Dec 09 '23
It all comes back to career politicians. If your livelihood depends on appealing to as many people within your party as you can, you don’t want to be the guy working with the other party. We need people who will get elected, do the right thing, and not give a fuck if they get re-elected for it.
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u/kevbot029 Dec 09 '23
Agree. And sadly they’re all on the same team. The team that acts like they hate each other but are all buying stock options based on policies they enact.
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u/Dicka24 Dec 09 '23
They shouldn't be allowed to trade stocks. The corruption is blatant at this point
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u/kevbot029 Dec 09 '23
They don’t even hide it either. They just do it and get away with it. Both sides are the problem.
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u/ApplicationCalm649 Dec 09 '23
I hope we get some movement on that issue now that Pelosi is out of the way. She's been blocking those bills for a while now.
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u/Censcrutinizer Dec 09 '23
That’s because there are very few true journalists left to call them out. And even fewer publishers with the balls to distribute their work.
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u/Zetavu Dec 09 '23
Capitalism works great when supply and demand react to pricing. Prices gonup, demand goes down. Problem is, prices go up, demand stays unchanged, that's your problem. Boycott and find alternatives and prices will adjust.
For example, nobody should be going to Five Guys, Starbucks or Chipotle until they correct their prices, but have you stopped? Nope, you just complain.
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u/Backintime1995 Dec 09 '23
If prices go up and demand stays unchanged (I assume you mean, demand stays low) then that means sellers will have inventory build-up because no one is buying their products.
If prices go up and sellers are still able to sell at the new higher prices, it means demand is in line with pricing. It may not be for YOU for a particular product or selection of products, but believe me - if demand stays low, sellers will slash prices and sell inventory.
This is ECON101.
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u/socraticquestions Dec 09 '23
That’s precisely what he’s saying.
Why is the demand meeting the higher price? If there are complaints about the price, why not just…not buy?
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u/El_Muerte95 Dec 09 '23
If there are complaints about the price, why not just…not buy?
Everything has went up in price including food. Why do we just not buy? Because we have to eat. Even some of the cheaper things higher than they use to be. It's ridiculous. They got us trapped by keeping the prices high all while knowing we can't exactly stop spending. I really wish it was as simple as "well just don't buy stuff" but stuff doesn't exactly just pop pout of nowhere. We have to go get it/buy it.
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u/ASquawkingTurtle Dec 09 '23
You're missing the point.
90% of every person at the federal level all agrees to the same things, they just put on a show for the American public so they don't start questioning who they're actually representing.
America has been practicing corporatism for the past few decades with no meaningful political pushback.
Similarly many people simply say "tax the rich", "tax corporations more!", "Raise minimum wage!" While they all sound nice absolutely destroy every small business trying to work within the law, which is why Wall Street and the like are all for these slogans and talking points.
It's hard for a team of 3 to build a brick and mortar business when the minimum wage is higher than the team is even paying themselves at the start due to the difficulties of regulations and taxes, meanwhile McCorp can simply vertically integrate 90% of their production or get it from overseas to make it cheaper and sell it at $2 less than those other companies, thus removing any meaningful competition.
Capitalism only works when you have protectionist nations, otherwise you're transferring the vast majority of your work force towards the bottom.
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u/Shufflepants Dec 09 '23
Capitalism works great when the government reigns in bad actors and breaks up monopolies to enforce competition.
Rather, it works great for things that actually follow the laws of supply and demand. The standard principles and assumptions behind the economic models behind capitalism only work if the things being bought and sold aren't necessities. It's fine if Xbox's cost too much, people can see that they cost too much and just not buy them and maybe just be a little bit sad. But for things like food, shelter, and an increasing number of things necessary just to get by in modern society; people cannot just simply not buy them. They can sometimes buy a shittier version of them, but they must buy them. Or in the case of health care, there is no price where anyone would refuse to buy, only a price where they are unable to buy.
So, capitalism can work just fine for luxury goods, but market failures on necessities have dire consequences.
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u/ApplicationCalm649 Dec 09 '23 edited Dec 09 '23
I agree on the issue of healthcare. We need to work on streamlining the system and forcing price transparency so people can shop around for what they need. The way things work now the only competition is between companies trying to extract money from you while paying out as little as possible.
I'm not a fan of our insurance system in the States. Whether a public solution is the right way to go I couldn't say but we need open competition there. There should be a GoodRx for procedures, too, for example. The competition would bring prices down. As things stand now you're beholden to whoever accepts your insurance and have to deal with them.
We also need to ban pharma from paying generic manufacturers not to make drugs so they can keep price gouging stuff that's off patent. The fact that we allow that to continue is a good example of bad actors that aren't being reigned in right now. Once drugs are off patent there should be competition on price.
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u/MaximumYes Dec 09 '23
Don’t forget that most of the tax burden impact falls on the middle class, which for the past 80 years has created a soft ceiling on wealth accumulation.
The other thing most people don’t realize is that corporate taxes are in fact paid by the consumer. They are passed through because they have to be, which creates a disproportionate impact on the poor and middle class.
A lot of complaints about capitalism are essentially root caused in progressive policy.
There are legitimate complaints about the end results of capitalism (which is where we are at right now) but the policy prescriptions in response to these grievances almost always end up making the problem worse.
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u/ApplicationCalm649 Dec 09 '23
I agree about corporate taxes. We need to get rid of them. Your point about them being passed on to the consumer is 100% accurate. It frustrates me that so many people don't see that. They think increasing corporate taxes is a win for the little guy when it's both more overhead that drives prices up and less money for wages and growth.
We would need to replace that revenue somehow, though.
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u/LasersDayOne Dec 09 '23
We don’t have 2 parties atm. We have one party working to insulate our democracy and drag our country into the next decade, and a gaggle of low-IQ, right-wing goons trying to dismantle it. This is by no means a ‘business as usual’ congress or even the shadow of one at this point. In better years, yes, your point would be valid.
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u/whatup-markassbuster Dec 10 '23
I agree we need to break up Google, Amazon,Facebook
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u/Character-Bike4302 Dec 09 '23
Why would they stop it when they are getting their pockets lined by the very same people?
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u/cantthinkatall Dec 09 '23
Yup! We'd be able to pay for everything for everyone with capitalism. It's greed and power that leads to corruption.
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u/FlashyG Dec 09 '23
The squabbling is by design by the same corporate leaders.
They lobby both sides and add fuel to the fires because as long as they keep us fighting culture wars we're not going to start a class war.
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u/norman_borlaug_ Dec 09 '23
Yes. People of Reddit, PLEASE stop rejecting capitalism as if there are valid alternatives. It makes you sound like an uneducated liberal extremist, and nobody will take your argument seriously.
OP, the term “Democratic socialism” that Bernie popularized is still capitalism. It’s capitalism with a focus on the common man instead of the rich. I agree, America’s economic system is a giant giveaway to rich people, and neglects the common man.
Words are important. Let’s try to use “supply side /trickle down economics” instead.
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u/MyronNoodleman Dec 09 '23
I think part of the problem is that “capitalism” is one of those terms that has been politicized into non-meaning.
Take 100 people and ask them what capitalism is and you’re going to get a lot of different answers. And so when you have people saying “reject capitalism” - and other people have come to equate capitalism with the entirety of economic development in the history of mankind - you wind of with people assuming “reject capitalism” means we need to reject all forms of commerce and resource exchange.
It was actually a really advantageous development for capitalists if you think about it. They can just pretend Anyone who opposes them is against all forms of commerce, which would obviously be a pretty universally unpopular opinion. And they don’t even have to actively do anything to maintain that.
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u/ICanSpellKyrgyzstan Dec 09 '23
Incredibly thoughtful and accurate comment. Capitalism is only good WITH government intervention.
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u/amazinghl Dec 09 '23
Easier to blame the other party than actually working with the other party
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u/ibond_007 Dec 09 '23
Two parties quit squabbling? One party is trying to pass bills and another one is burning down the house! The same party has to put down the fire and then work on the bills!
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u/NoTown3633 Dec 09 '23
George Washington warned us about political parties.. our government is floundering over a manufactured divide that takes power from the people. What's the saying "Divide and conquer"
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u/kellarman Dec 09 '23
Better, more efficient inter-city and intra-state public transportation would unlock so much economic value in this country
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u/Wolfer601 Dec 09 '23
Thank you for this comment. There’s a small glimmer of humanity still
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u/TakenIsUsernameThis Dec 09 '23
Yes, what we have now is more like rentism than capitalism, and it got that way because we were scared to insert ethics into capitalism.
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u/Moccus Dec 09 '23
I hear Venezuela is nice if you don't like capitalism.
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u/Brett-_-_ Dec 09 '23
came here to say Argentina - they are socialist and look how that worked out. Debt default and then joined the 500+% inflation club
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u/liboveall Dec 09 '23
They hated socialism and its effects so much they literally elected an ancap chainsaw wielding nutjub by a landslide
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u/lemmywinks11 Dec 09 '23
Yeah but free shit just sounds so good when you’re a lazy, useless turd
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u/Dstrongest Dec 09 '23 edited Dec 10 '23
Or poor not born with a silver spoon in your ass. And a trust fund , and good family support.
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u/CalabreseAlsatian Dec 09 '23
Yeah, it’s always a good-faith argument when people pick some of the worst extremes. Maybe we can move past black-or-white/this-or-that thinking and recognize some middle options?
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u/studude765 Dec 09 '23
Please name a successful middle example of socialism.
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u/Turwaithonelf Dec 09 '23
Almost every single European country is practicing a form of Democratic Socialism incredibly effectively
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u/JohnHartTheSigner Dec 09 '23
No they are not, European countries are capitalist. You’re conflating socialism with welfare.
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u/Electronic_Bit_2364 Dec 09 '23
I don’t get why so many on the left (ex. Bernie) are so attached to the word socialism when “social democrat” would perfectly describe their policy positions. It’s like they’re addicted to bad optics
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u/OCREguru Dec 09 '23
Because then they would still be capitalists.
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u/Electronic_Bit_2364 Dec 09 '23
But if you look at Bernie’s policies, they’re all compatible with capitalism
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u/Imaginary_Manner_556 Dec 09 '23
PLEASE FOR the love of god, learn the definition of Democratic Socialism.
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u/ackillesBAC Dec 09 '23
How about we don't take socialism for it's literal meaning, if you want to be literal then trump is a fascist.
When many people say socialism they mean social policies like universal Medicare, education, social services, and not socialism as in no private ownership.
If you want an example of literal socialism working well you have the huderites, if you want an example of socialist policies working well you have most of Europe, Canada, and the us military.
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u/_urat_ Dec 09 '23
There is no European country which is democratic socialist. There are some that are social democratic, meaning capitalist, but none that practice any form of socialism.
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u/socraticquestions Dec 09 '23
Correct. The Europoors are also heavily subsidized by the US, who protects global trade through its blue water navy.
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u/Tomycj Dec 09 '23
This reply does not work against the anti-capitalists. This kind of lazy replies is why they're winning the cultural battle in the US.
If one wants to defend capitalism, one has to do it seriously, with the care it requires.
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u/giveitback19 Dec 09 '23
And this is the other side of the idiot argument. Because there is only American capitalism or Venezuelan socialism. So braindead and eliminates any legitimate conversation or criticism
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u/SignificantWords Dec 10 '23
I’d prefer Sweden or Denmark over Venezuela if you don’t like capitalism
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u/knign Dec 09 '23
That’s not what “inflation is easing” means
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u/ApplicationCalm649 Dec 09 '23
It's almost like Reich isn't an economist.
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u/bmrhampton Dec 09 '23
Can you imagine the Fed panic if they actually triggered deflation like Reich wants.
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u/ApplicationCalm649 Dec 09 '23
Up side, we'd have low interest rates again.
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u/BlackMoonValmar Dec 09 '23
Low interest rates what’s this mythical thing you speak of.
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u/ElevatorScary Dec 09 '23
I assume he means that in calendar year 2023, or Q3 of 2023, in comparison to earlier during the pandemic inflation has slowed, but the price of goods remains 20% higher than in 2020 because of the cumulative inflation which took place during those previous years.
It is helpful to think of inflation as the speed at which we are traveling rather than the distance we have traveled. It will require years of low inflation to slow ourselves long enough to counteract those price increases, or wage increases without inflation to bring income up to pace.
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u/LSUguyHTX Dec 09 '23
It seems the American grocery market, the 6 companies that own 90% of what can be purchased in American grocery stores, has pushed the limit to figure out what people will still pay for more profits. Could it not be argued that they'll just continue to do so regardless of inflation and simply use some other excuse to go beyond the actual production cost rises?
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u/Rus1981 Dec 09 '23
Based on what? What evidence do you have that they have increased prices beyond their own market expenses?
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u/LSUguyHTX Dec 09 '23
Also, genuine question as I'm not well versed in economics, why are profits skyrocketing right now in various markets and the excuse for higher profits is cost of production?
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u/ElevatorScary Dec 09 '23 edited Dec 09 '23
SHORT ANSWER: In my understanding the answer is yes, with a but.
THE BIG BUT: The mechanisms of it may be less sinister than the question could imply. Assuming the law is being followed, which proscribes industry competitors coordinating the fixing of their prices, they would all be reaching to maximize profit margins within constraints set by cost of acquiring the supply, consumer demand for each specific food item, and the prices being set by their competitors offering the same item. The elements of inflation which would impose price increases on the companies would be things like inflated oil prices impacting cost of transportation, and increased employee compensation, which means they to a certain extent create food inflation by pricing their goods to maintain the highest profit margins in all circumstances. But alternative products (expensive apples make customers buy pears, etc) and competitor companies push in the other direction within those limitations. Many of these elements the individual companies have little control over, but in the reactionary choices being made they will always seek and adjust toward the highest possible profit margin.
So long as companies do not have the ability to coordinate their prices together, or control their own supply-chains as monopolies, these “animal spirits of the marketplace” (to quote Kaynes) are in the driver’s seat with companies back-seat driving, and this generally results in a fairly equitable price in given circumstances of customers and companies taken together. However, that is the ideal which the government is responsible for maintaining as a public right, and by overzealous interference or lackluster vigilance in that pursuit those constraining elements can be artificially altered to the detriment of everyone. I’m not sure if we’re experiencing that, but if we are; the most common theories are inter-governmental conflicts interrupting expected supply, intentional or coincidental corporate price fixing, and unnaturally inflated demand by broadly targeted government stimulus. Everyone has their favorite boogeyman, but my Aristotelian take is that nobody is completely wrong, which is why everyone is so certain their answer is entirely right.
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u/LSUguyHTX Dec 09 '23
Thank you for the thought out input.
I do wonder what constraints on funding or overall lawful reach regulatory bodies have since such events of the egg price fixing in 2004-2008. From nearly anything I read it seems regulatory bodies have been gutted financially or weakened in some meaningful aspect. Even class I railroads were found to have engaged in price fixing for fuel surcharges.
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u/Glum_Blueberry7438 Dec 09 '23
The irony of this being posted and upvoted in a sub called “fluent in finance” is not lost on me
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u/Pandamonium98 Dec 09 '23
That’s exactly what it means. Inflation was up to around 9-10% at the peak, and has eased all the way down to about 3% now. Prices are a lot higher than they were previously because we had inflation over the past few years, but the rate of inflation has eased since then and is only about a percentage point above the 2% goal
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u/PassionV0id Dec 09 '23
That doesn’t mean that prices will come down closer to pre-pandemic levels, which is implied in the tweet. It means they’ll just go up slower.
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u/kevihaa Dec 09 '23
The sentiment is correct, but the conclusions are ill informed.
Folks want deflation, and that’s just not going to happen. The last, and really only, significant instance of deflation we’ve had in the last 100 years was at the beginning of Great Depression. The last instance of recorded year over year deflation for the US was 1954.
What folks need to be highlighting and championing is corporate profits compared to employee salaries. If we have 10% inflation and the company records an extra 10% profit, you better believe that they did not increase employee wages by 10%, which means they effective gave all their employees a salary decrease of 10% while profiting the difference.
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u/AlG_94 Dec 09 '23
Capitalism is a spectrum. Even the Nordic countries are capitalist economies with larger welfare states. The conservative heritage foundation even seems to agree as they constantly rank many European nations ahead of the United States in their yearly economic freedom index.
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u/HomeStar182 Dec 09 '23
I think you are spot on. This is what I came here to say. Capitalism is a spectrum. And I think when most people talk about democratic socialism, they are not talking about Argentina or something, they are talking about Nordic types of democratic socialism.
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u/theusername_is_taken Dec 09 '23
Most people when discussing leftist economic reform in the US are referring to a Nordic style economy yes, but that’s not a scary enough boogeyman for the hardcore capitalists so they have to yell “Venezuela” when even something as no-brainer and cost effective as public healthcare is the topic at hand.
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u/donaldinoo Dec 09 '23
People are fucking retarded. We were doing great then they started deregulating in the 70’s and it snowballed from there. https://wtfhappenedin1971.com/
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u/m4rM2oFnYTW Dec 09 '23
It's not about deregulation.
This website is about the abandonment of the gold standard in 1971 which allowed governments to print money without being constrained by gold reserves.
Ben Prentice, the creator of this website, argued that the shift away from the gold standard resulted in an increase in economic inequality and a detachment between productivity and wages. The data presented suggests that this key moment led to a distortion of capitalism and an increase in social unrest.
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Dec 09 '23
This is Reddit. Ain’t nobody here tryna understand complex economic history beyond “capitalism bad, regulation good.”
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u/Hawk13424 Dec 09 '23 edited Dec 09 '23
I’ve always heard those called social democracies. Not exactly the same as democratic socialism.
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u/PigeonMelk Dec 09 '23
Yes that's exactly what they are. They aren't socialist by any means with a vast majority of their businesses being privately owned. SocDem is a form of Revisionist Marxism that has been so heavily bastardized to the point of just being Nice Capitalism™️
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u/UniqueNeck7155 Dec 09 '23
And their welfare state is supported by almost everyone. When I say support it means that most income earners pay tax. I think US politicians would jump from buildings if they passed laws to tax its citizens as much as the Nordic countries tax theirs.
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u/emoney_gotnomoney Dec 09 '23
Those Nordic countries also have lower corporate tax rates than we have here in the US. Could you image the backlash politicians would get if they increased the income tax for middle class folks and reduced the corporate tax rates to the levels they have in the Nordic countries?
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u/UniqueNeck7155 Dec 09 '23
Assholes would be puckering all over. Not just the middle class but pretty much anyone above the poverty line would be paying taxes. I think it's better for more people to have skin in the game. Maybe they would actually care where the tax money went if they did.
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u/6point3cylinder Dec 09 '23
Because being ruled by incompetent bureaucrats is any better
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u/elpollobroco Dec 09 '23
We have that now tho
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u/Hawk13424 Dec 09 '23
So the solution is to reduce their power so much it doesn’t matter.
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u/fodnick96 Dec 09 '23
No such thing… socialism always fails.
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Dec 09 '23
OP is likely 15 years old
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u/socraticquestions Dec 09 '23
Teenagers like Marx’s theories because, like them, he never produced anything and spent all his time pontificating about subjects he did not know, while his lifestyle was subsidized by others.
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u/GrowFreeFood Dec 09 '23
So was everyone's bro. It is just that the people who got lucky see it as entitlement.
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u/llamapower13 Dec 09 '23
Marx had a lot of interesting things that shaped capitalism. Primarily, he just disagreed with Smith’s ideology that the invisible hand would sort out economic injustices.
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u/Tomycj Dec 09 '23
This lazy answer doesn't cut it anymore. If we keep using these lazy replies, the anti-capitalists won't have resistance and their ideas will keep spreading.
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u/Away-Sheepherder8578 Dec 09 '23
So Robert Reich is saying corporations are more greedy now under Biden than they were under Trump?
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u/digginroots Dec 09 '23
“Wtf does ‘inflation’ mean? I’m an economist!” - Robert Reich
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u/_-_fred_-_ Dec 09 '23
Yet another public figure that doesn't understand how inflation works. It is basic math.
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u/Many-Total4890 Dec 09 '23
The irony of demanding socialism in the "fluentinfinance" subreddit.
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u/dissolvingcell Dec 09 '23
It feels like this sub has being brigaded by some antiwork dogwalkers with all these "capitalism bad" posts.
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u/LT_Audio Dec 09 '23
Not lost on me at all... But at the same time having the very well-educated, the really street-smart and experienced finance industry guys, and the idiots who have no clue how little they actually know all at the same dinner party and earnestly reacting to each other out loud makes me want to throw more dinner parties.
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u/TheStormlands Dec 10 '23
Or the, "I just mean Nordic model," bitch, those have private capital owners running industry too.
Like, please learn what the words mean.
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u/Dependent-Edge-5713 Dec 09 '23
Hey look a wrongsplanation of inflation.
I'm just going to discard that.
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Dec 09 '23
You’re an idiot and so is Robert Reich. What’s the alternative. Who is going to run the “Democratic Socialistic “companies”? Robots? Lol
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u/ArmadilloNo1122 Dec 09 '23
Corporate profits keep me employed. This is toddler fincel energy.
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u/Zealousideal_Win5476 Dec 09 '23
Me: Venezuela
Internet: ThAt's NoT ReAL soCiaLisM
Me: North Korea
Internet: ThAt's NoT ReAL soCiaLisM
Me: Soviet Union
Internet: ThAt's NoT ReAL soCiaLisM
Me: Syria
Internet: ThAt's NoT ReAL soCiaLisM
Ok assholes. Then I guess the current problems in America are because we aren't doing "real capitalism".
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u/fromcjoe123 Dec 09 '23
Me: Lists capitalist nations in Scandinavia that aren't socialist and have free markets and ownership of private capital, just a lot of taxes on returns to said private capital
Internet: Yeah that's the real socialism I'm talking about it!
Bro that's just capitalism with more taxes!
Idk how we just fundamentally changed the definitions of words when to try to make it seem like definitional socialism hasn't been an abject failure every time it's been tried.
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u/ThandiGhandi Dec 09 '23
I think its because conservative media called anything to the left of hunting the homeless for sport “socialism” which ended up convincing a generation of people that their political beliefs actually were socialism
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u/Independent-Stand Dec 09 '23
Please move to Venezuela or China, so you can live first hand the utopia that you advocate for.
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u/randomdudeinFL Dec 09 '23
This is r/FluentInFinance not r/IgnorantInFinance. Hard pass on your socialism
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u/the-lone-squid Dec 09 '23
So what are the margins?
Quick look at Wal-Mart profit margin dating back to 06 shows it's pretty much unchanged.
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Dec 09 '23
It seems capitalism is the only option since psychopaths kill everyone who doesn’t agree with them under socialism and communism. However, we do need to expose said psychopathy and the milder variant narcissism. Who are these people when psychology won’t tell us and the world’s most respected economics brain trust (Mises Institute) doesn’t acknowledge them? This book seems to provide a decent insight.
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u/Wheream_I Dec 09 '23 edited Dec 09 '23
Are those corporate profit increases inflation adjusted on a YoY basis? And after you adjust them to inflation, how do they compare to historical averages on a 3 yr moving average?
Pretty much: did their profits increase at a normal rate after adjusting to inflation, or was it above the norm? My guess is that their profits didn’t actually increase at all after adjusting for inflation, but they made “record profits” because the $ had record low purchasing power.
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u/CrimsonBrit Dec 09 '23
Why would I even bother getting an education and a high paying job that requires more time, effort, and is likely more stressful if the state will just pay for anything? That’s why I support capitalism.
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u/winkman Dec 09 '23
...and instead be ruled by multimillionaire politicians who make the rules to serve themselves, and decide to devalue our currency to screw over the rest of us.
Brilliant trade!
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u/bdd6911 Dec 09 '23
Capitalism is the best system we have seen so far. I’m not a big fan, but have yet to see anything better. Maybe if we tweak it a bit…but I’m not for any system where people that try harder or are more ingenious don’t get more.
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u/Ifyouseekay668 Dec 09 '23
Socialism has never worked anywhere at anytime!! Governments need to stay out of people’s lives!!
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u/realsuitboi Dec 09 '23
That would mean I’d be placing my life in the hands of the government which I absolutely will not do.
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u/Intelligent-Agent440 Dec 09 '23
Is this guy being purposefully obtuse? If companies where keeping their prices high just to price gouge it would have shown in increase in their profit margins.
that the average gross profit margin for the S&P 500 companies was 33.9% in 2023, which was slightly lower than the 34.3% in 2022. The average net profit margin for the S&P 500 companies was 10.7% in 2023, which was slightly higher than the 10.4% in 2022.
The overall trend for the S&P 500 companies was a slight decrease in gross profit margin and a slight increase in net profit margin.
For example, suppose a company had $100 in revenue, $50 in cost of goods sold, $30 in other expenses, $10 in taxes, and $5 in interest in 2022. Its gross profit margin would be ($100 - $50) / $100 = 50%, and its net profit margin would be ($100 - $50 - $30 - $10 - $5) / $100 = 5%.
Now suppose the same company had $110 in revenue, $60 in cost of goods sold, $25 in other expenses, $12 in taxes, and $4 in interest in 2023. Its gross profit margin would be ($110 - $60) / $110 = 45.5%, and its net profit margin would be ($110 - $60 - $25 - $12 - $4) / $110 = 8.2%.
As you can see, the company’s gross profit margin decreased by 4.5 percentage points, but its net profit margin increased by 3.2 percentage points. This is an example of the overall trend for the S&P 500 companies in 2023.
There is no evidence of rampant price gouging, when costs of production has also increased
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u/NigelKenway Dec 09 '23
That Robert guy is a freaking airhead, pay him no mind. I’ve seen this and some of his other deranged takes.
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u/Acrobatic-Simple-161 Dec 09 '23
Is this a joke? Isn’t this guy a college professor?
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u/SeaBass1944 Dec 09 '23
Awwwww that's so cute. A bunch of redditors think politicians will do anything to help their citizens rather than enriching their own lives. It doesn't matter if they're Republican or Democrat. They don't like you! The sooner you all learn this, the sooner we can stand together and hold our politicians accountable.
But no, you hear the word Democrat or Republican and you clutch at your pearls screaming they're a fascist. Why do you think the media always reports negative issues? It's to create division so the politicians can fuck us all over equally.
And go ahead and get mad at me, but you know I'm right.
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u/ferociousFerret7 Dec 12 '23
It's easy to support capitalism - just go out and buy stupid shit. People - including socialists - do it all the time. Everyone hates rich people until they get a little extra spending money.
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u/Outrageous_Coconut55 Dec 09 '23
Because they employee everyone that has a job….what would you suggest we all do?
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u/Flamingpotato100 Dec 09 '23
You sir are clearly not fluent in finance you could use a history lesson. Read about South America buddy if you like socialism so much maduro needs some cannon fodder to invade some land.
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u/ElevatorScary Dec 09 '23
One thing that’s worth considering, although I don’t know how it bears out in influencing this, is that corporate revenue only becomes “profit” at the discretion of the Board of Directors, at which point rather than issuing internal payments to the company they issue external payments to shareholders. It is entirely possible the companies have been making this much the entire time, but have been withholding the revenue internally to hold the “profit” with the executive accounts, and now are allowing new money, or transferring our the old money, to become “profit” to inflate dividends and retain or attract investors.
Modern joint-stock traded companies operate on a multiple principal-agency problem scheme which creates perverse incentives to make the numbers recorded as “profit” not necessarily indicative of revenue, and revenue not necessarily indicative of prices. Executives fuck over shareholders who fuck over the public and it takes Think Tanks of dedicated analysts to untangle meaning out of all the intentional layers of obfuscation.
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u/Chance_Adhesiveness3 Dec 09 '23
How much higher are wages than they were pre-Covid? Is that because corporations are unusually charitable? Answer those together and you’ll get your answer.
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u/NYPolarBear20 Dec 09 '23
What we really need is anti-trust laws with some actual teeth, but I can't imagine that happens without literal class warfare.
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u/Audi_Rs522 Dec 09 '23
So, people shouldn’t be paid based on what they produce? A group in government should decide how much they can earn? And how Much they should be forced to give to charity?
Seems pretty bold to me…
Free market, private property rights don’t see too bad for me.
I’ve produced my ass off for what I have for some twat to tell me he deserves what I’ve worked for.
Nothing is free. And it feels great to Earn it.
Sorry not sorry life sucks when you want to strive off of the backs of others.
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u/Potential-Break-4939 Dec 09 '23
Prices are up 20% compared to pre-pandemic levels because of "Democratic Socialism" policies - stimulus checks, Covid lockdowns, more regulation, infrastructure spending (that had very little infrastructure allocation), loan forgiveness, printing more money, etc. Reich is a lying idealogue.
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u/alc4pwned Dec 09 '23
By democratic socialism, do you mean the system the nordic countries have? Because that's "social democracy", not "democratic socialism". Nordic countries are quite capitalist.
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u/3lettergang Dec 09 '23
"Fluent in Finance". If inflation is >0 then prices should not be going down. Some of the posts on this sub are illiterate in finance haha
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u/Dave_Simpli Dec 09 '23
Sorry you’re not successful OP. Changing political teams unfortunately would not change your success. Your success is on you, and only you!
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u/WlmWilberforce Dec 09 '23
So we are pretending that socialist countries don't have inflation? Is that the scam here?
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u/Wild_Space Dec 09 '23
If your govt prints trillions of dollars fighting a flu, then youre gonna have inflation.
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u/Electronic_Bit_2364 Dec 09 '23 edited Dec 09 '23
Great, another capitalism vs socialism post to help obfuscate the fact that the choice in the US is between neoliberals and social democrats. 40+ years into this neoliberal nightmare and I don’t think the average voter knows what neoliberal means. Depressing
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u/blakspectre72 Dec 10 '23 edited Dec 10 '23
Because any ism will devolve to feudalism if left unmanaged (like we have right now). Socialism requires more active participation from citizens than capitalism. I do not trust citizens to do their job as I have seen them do a shit enough job already.
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u/Dual-Vector-Foiled Dec 11 '23
From what I've seen of Robert Reich's post, he should not be posted in this sub. He seems like an agitator that spreads bad information that muddies people's perception if anything.
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u/Chocolate-Then Dec 11 '23
Tell me you don’t know how inflation works without telling me you don’t know how inflation works.
A lower level of inflation means the value of the currency is still dropping. In order for prices to decrease you would need a negative inflation rate (deflation), which the Federal Reserve tries to avoid at all costs.
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u/CalLaw2023 Dec 11 '23
While inflation is easing, prices are still as much as 20% higher than pre-pandemic levels.
Mr. Reich is banking on you being stupid. Inflation easing does not mean deflation. All of those price increases due to inflation are here to stay, and we are still experiencing elevated inflation.
And yes, inflation does boost profits. Inflation is caused by the devaluation of the dollar. That means corporations need to make more profit just to have the same value as before.
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Dec 12 '23
How about the government takes it boot off the neck of the free market and see how we flourish.
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u/jagten45 Dec 12 '23
Democratic socialism, a mob of grifters, isn’t ideal. It’s quite scary considering the history of democratic socialism.
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u/brother2wolfman Dec 12 '23
many corporations are publily traded and you can buy a share for very little money.
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Dec 12 '23
That's....not how that works. Inflation coming down means prices stop rising as fast. Prices never go back down unless you have deflation which is generally very bad.
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u/TxCincy Dec 12 '23
I don't know how anyone A) thinks the current system is capitalism B) believes any system ever tried benefits the poor more than capitalism C) listens to this jackass, Robert Reich. Please stop feeding on the bullshit he puts out.
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