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Ahh, Cletus is confused again.. Here is a very real scenario I'm going through right now..
I'm loaning a company $3M to allow them to get through the economic crisis.. I'm taking their real estate and equipment as collateral and by doing this, tis will allow 110 employees to continue to have a job..
How is this investment NOT productive if the result is saving the productivity of these individuals and $10M a year in sales?
Am I an Entrepreneur, or a "renter"?
the word is "rentier", not renter.
you may be propping up something that is macroeconomically productive, or something that is a waste to society, it really depends on how the company generates revenue.
but to be clear i'm not an arbiter of what constitutes productive investment and malinvestment. i couldn't tell you which camp your current venture falls into.
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Yes Cletus, greed is good.. in fact greed is fantastic.. I'll be greedy and make a profit off of this companies economic hardship without guilt
i have no problem with that. i recognize there will be greedy individuals out there in a capitalist society and that this can be a good thing or a bad thing.
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because if its not for my greed.. They wouldnt have jobs..
I question this, though. This is just hubris.
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Your utopia ideas doesnt work in the real world.
My ideas haven't been tried. My ideas aren't really on the radar for the bulk of politicians.
Ownership of land these days is a dubious reward. In America, at least. In general I dont see it getting better for a decade. There is no incentive.
That's not really what i'm getting at ...
we should be able to have a functional economy with a declining real estate market. A slowdown in private credit should not render us helpless. something is fundamentally wrong with our economy , which is driven by speculative private debt bubbles generated by the Federal Reserve and encouraged by the tax code. We reward stupidity and nonsense.
housing is just the symptom of the disease. the disease is Fed money going toward unproductive crap (consumer items, commodities gambling) via the banking system, and a desperate need for ever-increasing debt growth.
you may be propping up something that is macroeconomically productive, or something that is a waste to society, it really depends on how the company generates revenue.
If people are paying them for a service, then those individuals decide if its a waste or not.. NOT YOU.. How they generates revenues is immaterial to the discussion, because people employed IS NOT A WASTE..
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Originally Posted by Cletus Awreetus-Awrightus
but to be clear i'm not an arbiter of what constitutes productive investment and malinvestment.
Thats correct.. I AM.. its MY MONEY... You can determine whats productive with YOURS..
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Originally Posted by Cletus Awreetus-Awrightus
i have no problem with that. i recognize there will be greedy individuals out there in a capitalist society and that this can be a good thing or a bad thing.
Greed is NEVER bad in a capitalistic socity, THEFT is, and theft is a crime.
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Originally Posted by Cletus Awreetus-Awrightus
My ideas haven't been tried. My ideas aren't really on the radar for the bulk of politicians.
Ownership of land these days is a dubious reward. In America, at least. In general I dont see it getting better for a decade. There is no incentive.
There are people moving in droves to renting and they aren't interested anymore in owning and upkeep. There's nothing wrong with taking land and providing what people want or the profit motive that is involved with that.
It should ebb and flow. It should reach a saturation point where everyone that wants to rent is. It should also reach a point where the market has too many homes on the markets and their prices drop. At that point people start weighing if they want to rent or own, again.
The real money comes from owning both rentals, land, spec homes, older homes and hotels/motels. Then you just adjust accordingly to what's cheap in the market by investing there. You adjust accordingly to what's in most demand by assessing if selling is worthwhile. Most of all you don't be a floozy with your money and you learn that patience is what counts.
we should be able to have a functional economy with a declining real estate market. A slowdown in private credit should not render us helpless. something is fundamentally wrong with our economy , which is driven by speculative private debt bubbles generated by the Federal Reserve and encouraged by the tax code. We reward stupidity and nonsense.
You cant have a functioning economy with a declining real estate because real estate prices are a result of the economy, not the cause of it.. And individuals like us saving hundreds of jobs isnt stupiity nor is it nonsense.. The real estate is a mechanism to allow productivity, which then creates a strong economy which boosts real estate.
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Originally Posted by Cletus Awreetus-Awrightus
housing is just the symptom of the disease. the disease is Fed money going toward unproductive crap (consumer items, commodities gambling) via the banking system, and a desperate need for ever-increasing debt growth.
No, the increasing demand for unproductive crap is due to the ever increasing debt. Without debts, there wouldnt be a demand to pay it off, and without jobs, that debt increases substantially. Its cheaper to build what you call unproductive crap than it is to pay people not to build it..
Not building generates deficits, building creates surpluses and reduces demands that cant be met. You couldnt have it more backwards if you were posting this nonsense on purpose.
we should be able to have a functional economy with a declining real estate market. A slowdown in private credit should not render us helpless. something is fundamentally wrong with our economy , which is driven by speculative private debt bubbles generated by the Federal Reserve and encouraged by the tax code. We reward stupidity and nonsense.
housing is just the symptom of the disease. the disease is Fed money going toward unproductive crap (consumer items, commodities gambling) via the banking system, and a desperate need for ever-increasing debt growth.
Oh I agree, not sure if the Fed should be abolished but clearly there needs to be a a system of policing it with legislation...problem is the law takes longer to write and is always "de-facto" after the Geithners and Paulsons and Congress have gotten away with murder...
do you think Elizabeth Warren has some good ideas? i have read about her issues with the financial markets, and reigning them in...
Problem with tax code is tax attys make a mint writing and legislating new loopholes every year.
this is fine, i don't begrudge you for exploiting opportunities, but it doesn't make a compelling argument for future policy.
its not broken its capitalism. EVERYONE benefits.. I challenge you to name ONE person who wont..
This is where your argument falls flat on its face.. you dont like people like me who "exploits" opportuntities to create wealth, but you fail to acknowledge that I cant create wealth without generating wealth for others as well. In this example, I'll be creating wealth for 110 families by keeping them employed, and that must drive you crazy..
You cant have a functioning economy with a declining real estate because real estate prices are a result of the economy, not the cause of it..
That (the bolded part) is how things should be. That's not how things really are, not in the current screwed up system we have.
In reality , housing drives the economy. People take out mortgages, that money is created out of thin air, inflates the price of housing, which adds inflation into the general economy.
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And individuals like us saving hundreds of jobs isnt stupiity nor is it nonsense.. The real estate is a mechanism to allow productivity, which then creates a strong economy which boosts real estate.
houses people can afford might be considered a productive endeavor. we're way past that, though, into the territory of volume overhang and malinvestment, and propping up the book value of crap mortgage assets that have long died.
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No, the increasing demand for unproductive crap is due to the ever increasing debt. Without debts, there wouldnt be a demand to pay it off, an without jobs, that debt increases substantially.
i agree with this.
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Its cheaper to build what you call unproductive crap than it is to pay people not to build it..Not building gerates deficits, building creates surpluses and reduces demands that cant be met.
or we could just have policy that doesn't encourage something unproductive.
this might, in the long term, free up resources for things that are actually productive.
Last edited by Cletus Awreetus-Awrightus; 12-08-2011 at 05:17 PM..
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its not broken its capitalism. EVERYONE benefits.. I challenge you to name ONE person who wont.. 
