Town Supervisor says government workers are 'non-producing�'

[GG]

What is the exchange rate of that 50 cents relative to a basket of material goods and commodities? You're aware of those exchange rate between cents and coffee changing, correct? What coauses those changes?

 

 

Completely irrelevant to the conversation.

 

I'll ask again, and you specifically, how much intrinsic value does a barista add to a cup of coffee?

 

She adds as much value as your lazy ass gives up in not carrying around a coffeemaker to make your coffee on every single block in the country.

 

I wonder which economic school frowned upon market values that were above the intrinsic value of the produced goods?

 

Marcoeconomists don't because they disregard the individual human micro-transactions which make up the aggregate in favor of the aggregate itself. Micro-economists do, because it's all they pay attention to. The field itself is called praxeology.

 

And both are fields equally useless to the real world, because real people place value on intangible items that have value to them in order to pay the market price.

[OCinBuffalo]

IBM'S market cap is due largely to its services business and not hardware.

Hmm...since I literally lived that conversion as it happened:

first with IBM turning it's mainframe creators/supporters into mainframe de-comissioners...and that working,

and then, with 10ks of their people gaining field experience by default,

and then, seeing them start being contractors on, and then taking over our(Big 6) projects,

to beating out our elite groups, by throwing 10x the number of their people at a proposal, and winning projects as a result(like fighting the Chinese)

to finally buying our entire, world-wide consulting firm....

yeah...I'd say I saw some definite "wealth creation" from "services" happen at IBM.

 

Therefore....

/facepalm

 

Overvaluations of service sector businesses above their actual real capital commodity and real infrastructure holdings don't translate to wealth. Dollars aren't even wealth, they are fluctuating representations of wealth backed by nothing but the commoditization of future labor (debt). Tell me, how much is debt worth to you?

WTF is this?

 

IBM turned dudes who worked in cubes in IBM offices...into field people....and they went from being a cost center...to a revenue stream(@ $100-250/hr), practically overnight. So....again...WTF?

 

You sound like the assclowns I worked with later...who told us that our revenue had to be 80% product, 20% services...because "that's what Wall Street wants." But, that was a portal company...which means 80% of what we do, by definition, is integration work....which is services...morons.

 

Or...look at any successful open-source software firm...and what you say above is done. They are giving the product away for free...literally due to the services contracts they will score as a result. Given that...please explain how can those services possibly be "overvalued"?

 

Be sure to include "infrastructure holdings" and "real capital commodity" as well.

 

The above....is exactly how Wall Street destroyed so many good business models in the 90s...by trying to force them into a box they didn't belong in....because they couldn't understand that there was more than one box. That and they were too lazy to come up with measuring tools that weren't based solely on Microsoft. I mean, it's not like Oracle didn't start making more money from services, than product, in 199 F'ing 7.

 

But yeah...Wall Street is so much smarter than everbody else....ahem, after doing what they did with us, then went on and spread their genius to banking and real estate.

[GG]

 

But yeah...Wall Street is so much smarter than everbody else....ahem, after doing what they did with us, then went on and spread their genius to banking and real estate.

 

Don't blame Wall Street for a company's board of directors chasing higher multiples in a different line of business, Wall Street are the ultimate whores, they'll go where the money is. Because you know, servicing somebody doesn't create wealth.

[TakeYouToTasker]

You are confusing value with wealth. Wealth is a very narrowly defined term. Adam Smith best defined it in his An Inquiry into the Nature and Causes of the Wealth of Nations, as: the combination of materials, labour, land, and technology in such a way as to capture a value excess above the sum of the parts.

 

This has nothing at all to do with Wall Street. Wall Street is in agreement with you, which is why it flounders. Nor does it have anything to do with the exchange of currency for services, or the stock piling of that currency.

[Duck_dodgers007]

You are confusing value with wealth. Wealth is a very narrowly defined term. Adam Smith best defined it in his An Inquiry into the Nature and Causes of the Wealth of Nations, as: the combination of materials, labour, land, and technology in such a way as to capture a value excess above the sum of the parts.

 

This has nothing at all to do with Wall Street. Wall Street is in agreement with you, which is why it flounders. Nor does it have anything to do with the exchange of currency for services, or the stock piling of that currency.

 

You mean like service labor? Or did Adam Smith make an exception for that type of labor?

[OCinBuffalo]

Don't blame Wall Street for a company's board of directors chasing higher multiples in a different line of business, Wall Street are the ultimate whores, they'll go where the money is. Because you know, servicing somebody doesn't create wealth.

Dude...I will admit...with our "board of directors" mostly being family members, flower-shop owners/angel investors and other people that also had no business in my business...it's tough.

 

But the problem back then was: Wall Street analysts were absolutely throwing their weight around, and intimidating everybody who dared do something that wasn't the Microsoft model, and none of us knew we could challenge them. We were far too eager to please(that's not a mistake I've repeated).

 

That is the history. There will be no wriggling out of it.

[TakeYouToTasker]

You mean like service labor? Or did Adam Smith make an exception for that type of labor?

All labor that creates a product with a greater inherent value than the sum of it's parts. It would serve you well to understand things within their context, especially when the context is only two sentences long. I ask again, what inherent value does a barista add to a cup of coffee. Does that coffee's commodity value increase because of his/her efforts?

 

Don't blame Wall Street for a company's board of directors chasing higher multiples in a different line of business, Wall Street are the ultimate whores, they'll go where the money is. Because you know, servicing somebody doesn't create wealth.

Again, Value and Currency Capital are not the same thing as wealth. We opperate in a service based economy, which is one of the major reasons we're failing. Edited August 22, 2012 by TakeYouToTasker

[Duck_dodgers007]

All labor that creates a product with a greater inherent value than the sum of it's parts. It would serve you well to understand things within their context, especially when the context is only two sentences long. I ask again, what inherent value does a barista add to a cup of coffee. Does that coffee's commodity value increase because of his/her efforts?

 

Your question is completely nonsense. The barista adds value to the business that sells the coffee. Perhaps coffee consumpution goes down if the people that only want it in a shop can't get it with servers available, so the value of the commodity drops. Or maybe the barista buys coffee himself with the wages earned from serving.

[OCinBuffalo]

You are confusing value with wealth. Wealth is a very narrowly defined term. Adam Smith best defined it in his An Inquiry into the Nature and Causes of the Wealth of Nations, as: the combination of materials, labour, land, and technology in such a way as to capture a value excess above the sum of the parts.

 

This has nothing at all to do with Wall Street. Wall Street is in agreement with you, which is why it flounders. Nor does it have anything to do with the exchange of currency for services, or the stock piling of that currency.

Go back and re-read the "Evolution of IBM. By OCinBuffalo" above.

 

Do you not see how they created wealth? Simplest explanation: Wealth is owning the gold mine, not the gold.

 

By converting their people into "consultants"...(not really, and is there anything more uncomfortable to the eyes...than seeing a tightass IBM guy trying to go business casual? )

 

...they created the gold mine, that could suddenly keep churning out that $100-250/hr billable gold hours.

 

That...was...weath...creation. They took people that cost them money as part of a product total cost...and turned them into a endless revenue torrent, forget stream....via SERVICES...and services alone.

 

The Wall Street stuff is just fluff....designed to be an affront to GG.....because I can ...and he will always respond

Edited August 22, 2012 by OCinBuffalo

[TakeYouToTasker]

Your question is completely nonsense.

Stop trying to argue, and instead take a step back and try to understand.

 

The barista adds value to the business that sells the coffee.

So, were the business to be liquidated in a bankrupsy proceeding the value of the coffee commodity is increased because the barista worked there? Again, value is not the same as wealth. Wealth is created by labor only when the the inherent value of the combination of that labor and materials exceeds the inherent value of the two as seperate. (take notes, inherent is a very important word in this sentence)

 

Perhaps coffee consumpution goes down if the people that only want it in a shop can't get it with servers available, so the value of the commodity drops.

No. Scarcity of resources creates value, but this has absolutely nothing to do with the topic at hand.

 

Or maybe the barista buys coffee himself with the wages earned from serving.

Transfer of currency has nothing at all to do with the creation of wealth.

 

Go back and re-read the "Evolution of IBM. By OCinBuffalo" above.

 

Do you not see how they created wealth? Simplest explanation: Wealth is owning the gold mine, not the gold.

 

By converting their people into "consultants"...(not really, and is there anything more uncomfortable to the eyes...than seeing a tightass IBM guy trying to go business casual? )

 

...they created the gold mine, that could suddenly keep churning out that $100-250/hr billable gold hours.

 

That...was...weath...creation. They took people that cost them money as part of a product total cost...and turned them into a endless revenue torrent, forget stream....via SERVICES...and services alone.

 

The Wall Street stuff is just fluff....designed to be an affront to GG.....because I can ...and he will always respond

IMB's wealth isn't real. It's earnings are real. It's value is real. But it's wealth? That's all on paper. (for the most part) Service value is entirely predicated on an excess of labor and capital resources. When the economy goes into decline, the service sectors are the ones that are hurt first. They have nothing (not litterally) of commodity or infrastructure value that they own. They don't own the labor of their employees, which is all they are selling.

[GG]

All labor that creates a product with a greater inherent value than the sum of it's parts. It would serve you well to understand things within their context, especially when the context is only two sentences long. I ask again, what inherent value does a barista add to a cup of coffee. Does that coffee's commodity value increase because of his/her efforts?

 

Again, Value and Currency Capital are not the same thing as wealth. We opperate in a service based economy, which is one of the major reasons we're failing.

 

WTF, currency capital? Are you kidding me? US failing?

 

Wealth is simply your net worth at the time you need it. In simplest terms, it's your health and ability to acquire what you need when you need it. It's an asinine academic discussion to pretend that there is no intangible value in any product, because throughout history of man, people assigned different values to what economists presume is a commodity. You like to think of the world as inputs of labor and commodities to create a product which provides its intrinsic value, whatever that is. But that analysis totally discounts scarcity of time, nor the quality or reputation of the creator. ie not all works are created equal, and people always have and always will pay a premium for that intangible.

 

Let me guess, you favor US reverting to a gold standard, because a yellow rock has an instrinsic value but a greenish piece of paper doesn't?

[ExiledInIllinois]

...and service jobs consume wealth rather than create it.

 

St. Ronald Reagan, the son of an alcoholic shoe salesman from Tampico, Illinois is rolling over in his grave.

 

But wait a second... Isn't sales where it is at when it comes to wealth and financial independence?

Edited August 22, 2012 by ExiledInIllinois

[OCinBuffalo]

IMB's wealth isn't real. It's earnings are real. It's value is real. But it's wealth? That's all on paper. (for the most part) Service value is entirely predicated on an excess of labor and capital resources. When the economy goes into decline, the service sectors are the ones that are hurt first. They have nothing (not litterally) of commodity or infrastructure value that they own. They don't own the labor of their employees, which is all they are selling.

IBM's ability to consistently derive revenue out of an non-consumable, never mind renewable, asset...based on 1 premise "they are IBM, and they're HUGE!"...isn't wealth?

 

You are completely ignoring what IBM could have also done: lay everybody off and try to make their whole business about Thinkpads, and very high end machines. Then, the labor of the employees would have been comparitively worthless. Sure, they all could have started little firms on their own, but none of that would even approach the success of what IBM was able to do with their "legions".

 

That's the point here: you are looking at each person as a line item/payroll entry. That's not right at all. IF that's all they were, IBM would NEVER have been able to make the moves they made.

 

The point is: the whole WAS greater than the sum of the parts....and the difference between those two #s...that's the "wealth". You could arbitrarily add 2k people and take away 2k people and there would be no difference, even though different labor was being sold, because of the value of the "mob" that was IBM. We're talknig intrinsic value here...derived from sheer #s of people...and of course, the ability to manage those people.

 

It was the big blue machine...that's what made client's sign off...because "hey I can have 100 people here tomorrow, just to focus on that one issue".

 

You can't do that in a vaccuum either. Each one of those people had to buy into the vision, and start learning what life on the road is like.

 

Now, the wealth is the inherent value in: they are bigger, stronger and and all bought in....that's not labor...that's an asset, unless you are seriously abstraction- challenged.

[TakeYouToTasker]

Wealth is simply your net worth at the time you need it. In simplest terms, it's your health and ability to acquire what you need when you need it. It's an asinine academic discussion to pretend that there is no intangible value in any product, because throughout history of man, people assigned different values to what economists presume is a commodity. You like to think of the world as inputs of labor and commodities to create a product which provides its intrinsic value, whatever that is.

You can substitute your own personal view of the world for reality any time you'd like, but it doesn't make you correct. The entire world, every human action or inaction, every decision, every preference, every single thing you do is an micro-economic input of value, labor, and commodities; and brings to bear the reality that human beings are not fungible. Praxeology, as employed by Austrian School Economics, is nothing more and nothing less than the behavioral science of exchange. How people make transactions, why they make transactions, and trying to figure out how the complex system develops from the bottom up.

 

But that analysis totally discounts scarcity of time, nor the quality or reputation of the creator. ie not all works are created equal, and people always have and always will pay a premium for that intangible.

Opportunity costs are an integral part of any micro-economic analysis; however the second part of your sentence is incorrect, in part. The reputation of the creator and the quality of is work generaly means than he will have a higher instance of exchange than his competitors. As well, his work may indeed be more valuable. This is no intangible, however. This speaks precisely to my earlier point about the combination of resources resulting in an increase of inherent value.

 

Let me guess, you favor US reverting to a gold standard, because a yellow rock has an instrinsic value but a greenish piece of paper doesn't?

I'm not exactly advocating a gold standard. However, the shift to fiat currency doesn't shift us to a non-commodity money; it simply changes what the commodity in question is. Rothbard and Hayek knew this, as did Malthus and a whole bunch of classical German economists; hence, the Labor Theory of Value exists. Das Kapital speaks to this precisely.

 

Money is not currency. Currency is simply a place marker for real money. Even fiat currencies, which have no tangible backing, are merely markers for real money in our economy. The Monetarist and Keynesian notion that currency is money, and therefore capital, is demonstrably false, as Argentina and Zimbabwe have shown us with their recent hyper-inflation driven currency meltdowns completely disproving the money/currency equivalence you seem to be arguing exists.

 

IBM's ability to consistently derive revenue out of an non-consumable, never mind renewable, asset...based on 1 premise "they are IBM, and they're HUGE!"...isn't wealth?

 

You are completely ignoring what IBM could have also done: lay everybody off and try to make their whole business about Thinkpads, and very high end machines. Then, the labor of the employees would have been comparitively worthless. Sure, they all could have started little firms on their own, but none of that would even approach the success of what IBM was able to do with their "legions".

 

That's the point here: you are looking at each person as a line item/payroll entry. That's not right at all. IF that's all they were, IBM would NEVER have been able to make the moves they made.

 

The point is: the whole WAS greater than the sum of the parts....and the difference between those two #s...that's the "wealth". You could arbitrarily add 2k people and take away 2k people and there would be no difference, even though different labor was being sold, because of the value of the "mob" that was IBM. We're talknig intrinsic value here...derived from sheer #s of people...and of course, the ability to manage those people.

 

It was the big blue machine...that's what made client's sign off...because "hey I can have 100 people here tomorrow, just to focus on that one issue".

 

You can't do that in a vaccuum either. Each one of those people had to buy into the vision, and start learning what life on the road is like.

 

Now, the wealth is the inherent value in: they are bigger, stronger and and all bought in....that's not labor...that's an asset, unless you are seriously abstraction- challenged.

You're misunderstanding. IMB makes currency hand over fist, but it doesn't create wealth.

 

I'll try approaching this from another direction: Do you know what commodity our fiat dollar is backed by?

Edited August 22, 2012 by TakeYouToTasker

[GG]

It's been a while since we've had an Austian school acolyte. It never gets old. Let me guess, they predicted the subprime meltdown back in the '30s?

 

Like how you make the leap to fiat currency, when you started talking about wealth, and then predictably turned the discussion into an Austrian School treatise. Utterly predictable, and equally tiresome.

 

PS - IBM absolutely creates wealth that is incremental to the intrinsic value of its workers' output. It's called IBM on the Big Board. Investors then use that currency (note it's not backed by the US government or any other fiat printing press) to invest in other places and create more wealth. You may not think that the paper wealth is real, but tell that to all the guys drinking it up in the Hamptons, South Beach and Malibu right now.

Edited August 22, 2012 by GG

[OCinBuffalo]

No, it is you who is misunderstanding. 60k field people, working at 1k companies...is nowhere near the same as all working at 1.

 

The ability to say "we have 60k people in the US alone", creates a unique, intrinsic value, and is very often the ONLY means by which they win deals.

 

It's not merely re-selling labor. That's what everybody else, who isn't IBM, does.

 

The service organization is constant, renewable source of revenue, no different than a gold mine. And, just like a gold mine, the only way it loses its value, is if the resource becomes depleted. If they were to lose 40% of their people tomorrow, that's wealth...gone.

[TakeYouToTasker]

It's been a while since we've had an Austian school acolyte. It never gets old. Let me guess, they predicted the subprime meltdown back in the '30s?

In truth, the school has correctly predicted every downturn.

 

Like how you make the leap to fiat currency, when you started talking about wealth, and then predictably turned the discussion into an Austrian School treatise. Utterly predictable, and equally tiresome.

There was no leap to the concept of a fiat currency; when discussing wealth as we are, the two are inextricably linked. I would have hoped that you'd be willing to have a discussion, but your reflexive regression to handwaving and Ad Hom attacks speaks volumes about your inability to defend your positions.

 

Instead of pouting like a child, and running home with your football, lets hear some of your critiques.

 

No, it is you who is misunderstanding. 60k field people, working at 1k companies...is nowhere near the same as all working at 1.

 

The ability to say "we have 60k people in the US alone", creates a unique, intrinsic value, and is very often the ONLY means by which they win deals.

 

It's not merely re-selling labor. That's what everybody else, who isn't IBM, does.

 

The service organization is constant, renewable source of revenue, no different than a gold mine. And, just like a gold mine, the only way it loses its value, is if the resource becomes depleted. If they were to lose 40% of their people tomorrow, that's wealth...gone.

This speaks to providing better value of service leading to more opportunities of exchange. This does not create wealth. It creates the best opportunity to provide services. I'll ask again: do you know what commodity our currency is backed by?

[GG]

In truth, the school has correctly predicted every downturn.

 

There was no leap to the concept of a fiat currency; when discussing wealth as we are, the two are inextricably linked. I would have hoped that you'd be willing to have a discussion, but your reflexive regression to handwaving and Ad Hom attacks speaks volumes about your inability to defend your positions.

 

Instead of pouting like a child, and running home with your football, lets hear some of your critiques.

 

Yes, retreat into your textbook self, because the textbook won't talk back to you.

 

People are trying to have a discussion with you. But just like every Austrian School drone, you can't accept the fact that the school is utterly wrong about the gold standard & fiat currency, and a lot of other things, especially interest rates' impact.

 

And about predicting every downturn, that's a funny claim that someone 70 years ago predicted a collapse of an industry that's only been in existence for the last 25 years. Perhaps you can educate me why we're not due for another real estate bubble when interest rates are a fraction of what they were in 2001, when the Austrians "predicted" the collapse of the real estate market.

[TakeYouToTasker]

Yes, retreat into your textbook self, because the textbook won't talk back to you.

 

People are trying to have a discussion with you. But just like every Austrian School drone, you can't accept the fact that the school is utterly wrong about the gold standard & fiat currency, and a lot of other things, especially interest rates' impact.

No, I'm attempting to have a discussion with you; but rather than respond intellegently to the things I've written in good faith and even tone, you immediatly resort to ad hom attacks and handwave away 400 years of classical economic theory. If that's your idea of a discussion, you're a blind fool.

 

And about predicting every downturn, that's a funny claim that someone 70 years ago predicted a collapse of an industry that's only been in existence for the last 25 years. Perhaps you can educate me why we're not due for another real estate bubble when interest rates are a fraction of what they were in 2001, when the Austrians "predicted" the collapse of the real estate market.

You are aware that the Austrian school never went away, and has kept working, correct? No, nevermind. I'll assume you didn't know rather than accuse you of creating one of the worst strawmen I've ever witnessed. As to that particular bubble? We're still dead in the middle of the collapse, as the malinvestment was propped up rather than being allowed to liquidate. Edited August 23, 2012 by TakeYouToTasker

[OCinBuffalo]

It's not backed by any commodity other than trust, ultimately, if you want to call trust a commodity. But that's the point, isn't it? You can look at the intrinsic value of a dollar, as being no different than that of gold, silver, etc....and why? Because of the inherent value of the US, as a whole.

 

The dollar is now a representation of the US economic strength...however defined.

 

Or....I wonder how those clowns who were spreading the "the Euro will replace the dollar as the currency of choice" and "reserve currency status of US dollar in jeopardy are doing....

 

...now that the Euro itself may not be around this time next year.

 

Edit:

 

Oh....and when the 60k thing...is making firms be unwilling to look at better skilled, more knowledgeable and even specialists in the project being proposed? Then it's the only thing. That's the exact opposite of "better value of service". The nature of the organization itself creates the ability to close those deals....not the actual value of the service provided.....or the future expectations of the value of that service.

Edited August 22, 2012 by OCinBuffalo