In article k.net, "Dwight
Stewart" writes:

"Ryan, KC8PMX" wrote:

So.... basically, one way or another people have to
pay for it, be it in higher service/product costs or
paying in taxes for a government program.

Let me start by saying I don't have all the answers either, Ryan. However,
it is fairly easy to see where some of the biggest problems are. The most
obvious is corporate profits today.

Hold on a sec, Dwight. "Corporate profits" are the basis of any capitalist
system. Without 'em, our economy collapses.

Product quality is dropping (plastics),

In some areas, yes. But people still buy the products!

wages are relatively stagnated, product prices certainly haven't dropped
much, but corporate profits have went through the roof.

How much corporate profit is excessive? If a company is worth $1 billion, and
their profit is $100 million, that's a 10% return on investment. Is that
excessive? Who decides?

Perhaps a mechanism
to reel in or put a cap on corporate profits is the answer. How to do that
is the ten thousand dollar question (or, in this case, trillion dollar
question).

But without the details it's a moot point. Suppose a company has a string of
bad years and then a good year - should their profits in the good year be
confiscated and a blind eye turned towards the bad years?

I'm somewhat radical, so I prefer the outright purge method - a
cap on product price increases for several years and an immediate increase
in overall wages (with caps on immigration or other negative factors
effecting workers).

Price controls were tried in the late '60s and early '70s to "Whip Infaltion
Now". Didn't work in the long term.

This will drive some marginal companies out of business
(the purge) and will slow down the economy sharply.

At the very least. And the political and economic backlash will be
overwhelming.

But, over a several year
period, more streamlined companies will eventually replace those put out of
business and the economy will recover. At that point, the cap on product
prices can be reduced, letting competition once again drive the market.

Except that it may not be the most "streamlined" companies who survive.

The second most obvious is the concentration of marketplaces. So, if the
above isn't acceptable, perhaps this is the place to look. What I'm talking
about here is larger corporations gobbling up whole market segments, driving
smaller companies out of business. Lets take an example. Wal-Mart moves into
a town offering a wide range of products. Of course, the new store doesn't
offer a wide selection in any department, but it does carry the basics in
each department - just enough to take away what local businesses call their
bread-and-butter products (the products stores depend on to pay employees,
rent, and so on). As that happens, local stores are forced to depend on the
sale of high end products where sales are far less predictable. The
inevitable result is that many smaller stores simply collapse. And this
isn't just happening in the retail industry. It is happening in many
industries (publishing, news, entertainment, manufacturing, transportation,
and so on).

Because the *market* (people who make the buying decisions) go to the Wal Mart
instead of the local stores. That's where the real problem lies - people who do
not think about the long-term economic results of their actions.

The next most obvious is credit. In many markets, high prices are
supported only by massive credit activity. For example, the automobile
market. Prices have climbed sharply mainly because credit is much easier to
get, in much higher amounts, than just a few decades ago. Put a regulatory
cap on credit in this market and prices have to drop if companies want to
sell cars.

Do you know this for a fact? Car price increases also reflect the enormous
investment in engineering and tooling to build cars using the latest
technology. Remember when most cars fell apart before reaching 10 years or
100,000 miles?

Of course, the same is true for other markets (home construction,
consumer goods, and so on).

As long as people are willing to pay the prices, the markets are driven that
way. Supply and demand.

What about people trying to get started as homeowners? Raising the price of
credit makes it impossible for them to buy a first house.

Some months back I refinanced the mortgage on this place. Took more than 5
years off the ultimate payback date *and* reduced my monthly payment by a few
$$. Was that a good thing or a bad thing for me to do?

The biggest danger to this solution is the
tendency for companies to pass on any initial losses to consumers (lower
quality products) and their own employees. The first will correct itself
over time, but the second requires additional labor protections (wage
increases, a cap on immigration, and efforts to prevent companies from
moving overseas).

Import duties.

Like I said, I certainly don't have all the answers. Even some of the
problems are elusive. However, it is clear that even minor regulatory
modifications, not massive government programs, can have a dramatic impact.
The idea offered in the first paragraph also has the advantage of keeping
product prices down for consumers. The idea in the second paragraph requires
more effort, but offers greater returns over a longer period of time. The
idea in the third paragraph offers the most benefits, but will have the most
negative impact on consumers in the short term. For a truly robust economy,
perhaps parts of all three should be considered.

But you also have to consider that the companies will find ways around such
limitations. If the govt. is going to seize my "excess" profits, I simply won't
have any - I'll set up deferred-compensation programs for myself and other
bigwigs, buy down debt and buy back stock, do massive capital programs that
*reduce* employment, invest in things to carry my company over the lean years
to come, etc.

The big changes have to come from ordinary folks becoming educated and deciding
how to spend their money. It's "voting with your wallet" and it's done every
day.

73 de Jim, N2EY