| Socialist Finds 14 Flaws in Capitalism and Seeks Help to Fix Them; Mish 14 Point Rebuttal Posted: 19 Oct 2015 11:26 PM PDT Those looking for a big laugh can find one in Philip Kotler's Huffington Post article entitled Fix Capitalism - Join Us!Kotler says "The economic system is failing to deliver rising living standards for most Americans. Most of the gains from higher productivity are going to the rich. The middle class is getting smaller, the wages of the working class are lower in real terms than in the 1980s, and the really poor continue to constitute 15% of our citizens." On his website FixCaptalism.Com Kotler notes 14 shortcomings of capitalism but says "there may be more". 14 Alleged Shortcomings- Proposes little or no solution to persistent poverty
- Generates a growing level of income inequality
- Fails to pay a living wage to billions of workers
- Not enough human jobs in the face of growing automation
- Doesn't charge businesses with the full social costs of their activities
- Exploits the environment and natural resources in the absence of regulation
- Creates business cycles and economic instability
- Emphasizes individualism and self-interest at the expense of community and the commons
- Encourages high consumer debt and leads to a growing financially-driven rather than producer-driven economy
- Lets politicians and business interests collaborate to subvert the economic interests of the majority of citizens
- Favors short-run profit planning over long-run investment planning
- Should have regulations regarding product quality, safety, truth in advertising, and anti-competitive behavior
- Tends to focus narrowly on GDP growth
- Needs to bring social values, well being and happiness into the market equation.
Kotler's list is so preposterous, I hardly know where to start. So let's just go down the list one by one. Mish 14 Point Rebuttal - It is capitalism that is responsible for improved standards of living over the decades.
- The Fed and government bureaucrats, not capitalism is behind growing income inequality. That said, some degree of inequality is not only a good thing but a very necessary thing. People need to be rewarded for bringing new ideas to the market. Successful new ideas raise the standards of living of everyone, and income inequality creates the very incentive to market new ideas.
- The inflationary policies of central bank planners is the primary reason people do not make a "living wage".
- Throughout history people feared automation. Yet every technological advance created new jobs. One reason for the acceleration of job losses now are the very "living wage" proposals espoused by those like Kotler that price humans out of jobs.
- It's not the role of businesses, nor should it be, to be concerned with undefinable "social costs".
- It's not capitalism that fails to charge businesses for pollution costs, but rather governments.
- It is beyond idiotic to propose capitalism causes economic instability. It is governments and central banks that cause economic instability.
- With his concern about "community commons", one can easily see Kotler is a dyed-in-the-wool socialist. The problem with socialism is, it does not work and never will.
- Capitalism does not encourage high consumer debt. The Fed and central banks do, in the inane belief debt drives the economy.
- Capitalism does not let "politicians and business interests collaborate to subvert the economic interests of the majority of citizens". Rather corrupt politicians willing to do anything to get reelected are the problem.
- Capitalism does not favor short-run profit planning, but tax laws might.
- In point 12, Kotler argues in favor of "anti-competition". Competition is the very essence of improved products and rising standards of living.
- Capitalism does not focus on GDP at all. Misguided economists, politicians, and central banks do.
- Pray tell, whose "social values" do we need to consider? Mine? Yours, ISIS? Kotler's? Personally, I do not want some jackass or set of government jackasses, deciding what is socially right or wrong.
Save Us from Socialists!Philip Kotler is the S.C. Johnson & Son Distinguished Professor of International Marketing at the Northwestern University Kellogg School of Management in Chicago. Having completed my 14 point rebuttal, it is pretty clear Kotler has no idea what capitalism really is or the advances it has created. He attributes problems to capitalism that are in reality caused by central banks and government bureaucrats. Kotler wants to " save capitalism from itself." The irony is capitalism does indeed need to be saved, not from itself, but from economically illiterate socialists like Kotler. Rather than fixing capitalism, I suggest we actually try capitalism in lieu of Fed foolishness, government foolishness, and socialist foolishness. Mike "Mish" Shedlock |
| Rio Tinto's Pilbara Mines Totally Driverless, Controlled 746 Miles Away Posted: 19 Oct 2015 06:06 PM PDT The first two mines in the world to start moving all of their iron ore using fully remote-controlled trucks have just gone online in Western Australia's Pilbara. Mining giant Rio Tinto is running pits at its Yandicoogina and Nammuldi mine sites, with workers controlling the driverless trucks largely from an operations centre in Perth, 1,200 kilometres away.
Josh Bennett manages the mining operations at Yandicoogina mine north west of Newman and is closely involved with running 22 driverless trucks on the site.
Mr Bennett said the two pits are the largest of their kind in the world.
"What we have done is map out our entire mine and put that into a system and the system then works out how to manoeuvre the trucks through the mine."
The company is now operating 69 driverless trucks across its mines at Yandicoogina, Nammuldi and Hope Downs 4.
The trucks can run 24 hours a day, 365 days a year, without a driver who needs bathroom or lunch breaks, which has industry insiders estimating each truck can save around 500 work hours a year.
Mr Bennett said the technology takes away dangerous jobs while also slashing operating costs.
"We have taken away a very high risk role, where employees are exposed to fatigue," he said.
Rio plans to fully automate its trains by the middle of next year once the Office of Rail Safety includes the technology in its safety guidelines. Let's be honest. This is not about reducing fatigue or taking away dangerous jobs. This is about slashing costs. Truck drivers in remote locations are very expensive. Now a single person hundreds or even thousands of miles away can monitor multiple trucks, replacing many much more expensive drivers in one fell swoop. And the same thing is going to happen to millions of interstate truck driving jobs in the US. Taxi and Uber drivers will vanish as well in the 2020-2025 time frame. Mike "Mish" Shedlock |
| Anti-Immigration Party Wins Swiss Election Posted: 19 Oct 2015 10:11 AM PDT Fears over waves of millions of Syrian refugees flooding Europe have spread to Switzerland. In a huge swing to the right, the Anti-Immigration SVP Party Wins Swiss Election. The right-wing, anti-immigration Swiss People's Party (SVP) has won Switzerland's parliamentary election with a record 29.4% of the vote.
Its victory translates into 11 extra seats, giving it 65 out of the total 200 in the lower house. SVP leader Toni Brunner can now forge a majority with other right-wing parties.
Europe's migrant crisis boosted support for the SVP, commentators say - though Switzerland is taking in far fewer migrants than Germany.
The right-wing liberal FDP also got an electoral boost, coming third.
Swiss media are speaking of a "Rechtsrutsch" - a "slide to the right" - because the SVP, FDP and some small right-wing parties can now command a majority in the National Council (lower house).
No such slide has occurred yet in the 46-seat upper house (Council of States), as a second round of voting is required in many cantons.
The SVP won the 2011 vote with 26.6%, becoming the largest party, but now it has made further gains.
"The vote was clear. The people are worried about mass migration to Europe," said SVP leader Toni Brunner.
The SVP spearheaded the Swiss drive to impose immigration quotas, which got the green light in a February 2014 referendum. But it contradicts the EU's freedom of movement principle, which Switzerland had earlier agreed to respect.
The EU has until January 2017 to resolve the dispute with Switzerland - after that the Swiss government must make the quotas law.
Switzerland has pledged to participate in the EU's controversial scheme to relocate 120,000 refugees from Italy and Greece, but it is not yet clear how many the Swiss will accept.
The SVP is sceptical about Switzerland's many bilateral agreements with the EU, telling voters that the country is better off remaining outside the 28-nation bloc. SolutionThe only thing that can stop this refugee crisis are strict border controls coupled with policy changes. The EU brought this crisis upon itself by offering free food, free shelter, and free services to economic as opposed to political refugees. Mike "Mish" Shedlock |
| Homebuilder Confidence Soars to Highest Level in 10 Years Despite Falling Traffic; Unwarranted Optimism? Posted: 19 Oct 2015 09:19 AM PDT Yahoo Finance says Whoa! Homebuilders Feeling Happiest in 10 Years. I am not sure they are the "happiest" in 10 years, but they are the most confident. Sentiment jumped 3 points in October to a level of 64 on the National Association of Home Builders/Wells Fargo Housing Market Index. Anything above 50 is considered positive sentiment. The index stood at 54 last October.
"The fact that builder confidence has held in the 60s since June is proof that the single-family housing market is making lasting gains as more serious buyers come forward," said NAHB Chairman Tom Woods, a homebuilder from Blue Springs, Missouri.
Of the index's three components, two saw gains in October.
Sales expectations in the next six months rose 7 points to 75, while current sales conditions rose 3 points to 70. Buyer traffic, however, didn't move, sitting at 47— the only component still in negative territory. Unwarranted Optimism?As with manufacturing six-month look-ahead expectations that have been ridiculously overoptimistic for at least a year, I suspect the same thing applies to home builders. The one stat that matters most, prospective buyer traffic, is actually negative. So why the optimism? Are builders are simply trying to hype up the price of their stocks? Mike "Mish" Shedlock |
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