Getting Greedy to destroy America

NYT Dealbook column by Andrew Ross Sorkin, there is no link to this column.

fair usage snippet:

This morning, the heads of the nation’s seven largest banks are in Washington for two days of testimony, starting in the House. More than a decade after bank C.E.O.s were in the hot seat during the financial crisis, many of the same issues remain.

JPMorgan Chase, Bank of America and Citigroup are bigger than ever, with nearly $10 trillion in assets between them — about 50 percent more than five years ago. Jamie Dimon of JPMorgan, according to his written testimony, plans to say that regulations have made banks play it too safe with capital requirements, putting them at a disadvantage against foreign competitors. (Reality check: China’s largest bank, ICBC, made $2 billion in profit in its last fiscal year. JPMorgan, the largest in the U.S., made $48 billion.)

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This morning, the heads of the nation’s seven largest banks are in Washington for two days of testimony, starting in the House. More than a decade after bank C.E.O.s were in the hot seat during the financial crisis, many of the same issues remain.

Did they list the same issues that remain?

DB2

regulations have made banks play it too safe with capital requirements, putting them at a disadvantage against foreign competitors.

That has been the whine on bubblevision forever: “burdensom, intrusive, big gummit regulation” infringes their right to be the financial center of the universe.

Steve

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DB2,

The only issues are the run on Kleenex on Wall Street.

But - other things are afoot.

Great policies during Covid - incentivized people to not work. And they learned they kinda like it and that they’ll only work if it’s more worth it. Hence - labor shortage - higher wages- more inflation - higher rates - and well, a bit of ‘excitement’ for the sainted “S&P 500”.

Then while it’s hardly complete, or even mature, and still susceptible to dirty tactics, divide and conquer, etc - - witness budding unions at Starbucks and Amazon - both corporations headed by “fair minded” entities and staffed by workers with “great ideals”. Mind you they objected to unions tooth and nail, curious that. BUT - in a few instances, unions have been formed and subsequently - in Starbucks case - NON union stores will quickly given things like raises, less job functions - and - the option for customers to TIP on credit card because, well, we know how that demographic absolutely loves paying tips.

Today, see Home Depot in Philly. Nothing is done - but 274 associates are trying to unionize.

Perhaps, just in time for many entering retirement…

An era is started where as some here say: Shareholders, have to share.

Wait till the union aspirants find out that 100% of their income is FICA taxable - but some poor sap earning $137,000 can pay ZERO from that point until $400k. (Haven’t seen many posts decrying that factoi, go figure)

The true miracle would be is if workers in Mexico, China, India etc look across the ponds and think “hmmm, why not us. This $3 a day to make their $200 shoes is getting old”.

Who knows? Fairness might take hold.

And it’ll leave “15 an hour” proposals on the boulevard of broken dreams.

Great policies during Covid - incentivized people to not work. And they learned they kinda like it and that they’ll only work if it’s more worth it. Hence - labor shortage - higher wages- more inflation - higher rates - and well, a bit of ‘excitement’ for the sainted “S&P 500”.

That is not how any of that added up.

I could bet my bottom dollar you’d be saying workers are lazy even if there was no pandemic.

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MULTIPLE posts from me advocating much higher wages and levels of unionization.

Not to worry though, slowly, the bottom dollar is being shared - from the shareholder, to the worker.

Trends, looking good

“MULTIPLE posts from me advocating much higher wages and levels of unionization.”

Unions tend to bloat the cost/price of everything.

Worse, federal mandates requiring ‘union wages’ essentially eliminates competition, as everyone bids within a $1, having to pay the exact same wages for projects that could be done for 1/3rd less by really competitive bidder with no ‘union wage’ provision.

Of course, it’s the consumer and tax payer that fund all the bloat, and the union slush funds corrupt the political system as well.

t

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t’s last post is a mixture of truths and falsehoods. As a unionized (as well as a non-union) government contractor, this is how I would interpret things:

t: Unions tend to bloat the cost/price of everything.
J: True

t: Worse, federal mandates requiring ‘union wages’ essentially eliminates competition,
J: Not exactly true. All can compete - including non-union contractors as long as they pay their personnel working on that project union wages

t: as everyone bids within a $1, having to pay the exact same wages for projects
J: Just because everyone is paying the same wages doesn’t mean they have the same cost of material, overhead, productivity of that labor, perception of appropriate markup, ability to efficiently do the job, visualization of the best way to do the project etc. With 20 bids, you may have 20 different prices which may differ dramatically

t: that could be done for 1/3rd less by really competitive bidder with no ‘union wage’ provision.
J: Could be pretty close as the difference in labor compensation (wages plus benefits) can cause union per/hour labor costs to be double non-union, but material and equipment costs are generally similar (sometimes non-union contractors don’t use unionized Teamster drivers and can save some transportation costs).

t: Of course, it’s the consumer and tax payer that fund all the bloat, and the union slush funds corrupt the political system as well.

J: Of course the taxpayer will pay more for a prevailing rate (union) job than if non-union contractors could pay their workers their normal wages and bid accordingly. “Slush funds” and other illegal payments are not solely the province of unions - in fact are more likely associated with contractors. Where the unions excel is in providing (or withholding) votes to/from politicians who support or object to them.

Jeff

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By the way, my previous post had to do specifically with construction contracts which states (not the federal government) mandate to be done paying “prevailing wage”.

On commodity contracts, such as GSA awards, while “trade compliant” (US, UK, EU, Israel, Switzerland, Japan, etc. comply) product is required, Chinese product, for example, is not permissible. Some Japanese manufactures provide two sets of the same product - one for retail purposes (made in China) and the other for sale to the US government (manufactured in Japan - which costs them more to build, but which have to be sold at the same price).

The procurement laws differ from state to state and with the federal government which explains why their are “specialist” contractors in each state who understand the nuances of that state’s four hundred page long contracts and can answer bids with thousand page proposals which comply.

Jeff

t,

Just “using” most Americans so that you save a buck destroys the American economy.

Besides if you want a product it must be worth something. If you want to be cheap with honest people you end up with far more corruption. We saw that in 2016.

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Unions tend to bloat the cost/price of everything.

Don’t you just hate it when you have to pay more for something just because some worker wants to earn a good living.

The nerve.

AW

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*Unions tend to bloat the cost/price of everything.*tele

So do profits. It’s like a tax

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And someone can point out to them that 100% of their income is counted when (eventually) calculating their Social Security pension… but the higher their income, the smaller that incremental benefit gets while the FICA tax rate remains the same up to $137K - after which both the tax and the boost to Social Security pension drop to zero.

You know, kind of like how if the grocer doesn’t give you filet mignon you don’t have to pay for it.

People are aware of the tax structure on income under $137k. Or 145k whatever it is right now. But feel powerless to change it. It is a very regressive tax. Scrapping the plan as a favor to Wall Street would bankrupt this nation on the other side of time. Because Wall Street is completely reckless with other people’s money and only eats steak. It is bad enough the investment bankers take 1% of the economy every year.

How is it a regressive tax?

Up to $137K(?), the higher your earned income the less each additional dollar increases your Social Security pension - but the “contribution” rate to fund that pension remains the same.

That’s progressive.

Above $137K, and for other forms of income, there is no “contribution” and there is no increase in benefit. What’s a fair price to charge someone when you are offering them precisely zero in exchange?

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Warrl, You need to Google the definitions of regressive v progressive taxation. Your definitions are wrong. Read on the topic if you care about the topic.

So making wealthier folks pay more for the same benefit is regressive?

Gee, our income tax does that too, but it’s described as progressive.

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AW: Don’t you just hate it when you have to pay more for something just because some worker wants to earn a good living.

So we are supposed to pay for something based on the needs of the person(s) who produced it and not on the value of the item?

And if a celebrity cook prepares a great dish we pay less because s/he doesn’t need the money as much?

Mike

Mike,

Over the 1981 to 2020 period the baby boomers decided that they were good with outright using people for as little as possible.

The millennials have other ideas about that. The millennials on balance want a better economy than the baby boomers failures. Cant hold success against the next generation. Does not matter what you think their value is individually or collectively, it is not up to us at all for much longer. The millennials out number us and give a fig.