Craytonic

I am actually one of them, but this is a pretty esoteric question. Wealth is defined by the cumlative value we assign to our things. For the most part these things do not have inherent value, but rather derived value based on a range of determinants including desireability, scarcity, useability etc..

Take a cigarette for example. The component pieces of the cigarette (Paper, cotton, tobacco, glue etc..) each have a 'value' i.e., as commodites onto themselves they are tradeable and can be exchanged for currency goods or services. The value of those commodities is defined in the open market through supply and demand dynamics. Simalarly, the finished product the cigarette also carries value. In fact the value of the cigarette exceeds the accumulated value of each of the component parts...if it did not, the cigarette manufacturer would not turn a profit. So if the value of the final product exceeds the accumulated value of the component pieces (sum is greater than the parts), and no one is getting ripped off, where did that value come from? It was CREATED during the manufacturing process. Karl Marx referred to this as the Value Added principle.

So we have established that value can be created on a microeconmic basis, but does that necessarily mean that wealth can be created on a Global scale? This is as much a philosophical question as it is an economcs one. We use currency as an index to measure weath. At some point in our past, the US dollar was directly tied to the world's supply of gold, and the worlds other major currencies were assigned fixed values against the dollar. As as result, the world's supply of currency was fixed so one could argue the world's accumulated wealth was fixed. We may have had increasing choices with respect to how to spend, save, invest, etc... this wealth, but those choices were in competition with each other. But it is not so simple now. Currencies are not fixed in value, and the gold standard no longer exists. Still, I think a strict monetarist can argue that the world's weath is indeed fixed... we only have so many things we can exchange for other things, or if we add more things the value of the other things decline. ... In theory it seems to make sense, but in practice it seems kind of counter-intuitive to me. I just cannot figure out why. But I am working on it.

Ok I'm impressed, good post. Somehow you two seem to be mixing value, wealth, and money but I don't have the schooling on the terms to explain it Will think on it through the day; this has definitely been a good discussion.

You raised enough cane that they are "willing to add you" (not "want to add you" or "you deserve it," but "willing") because you felt left out, not being in the initial cut. Poor baby. Like the two year screaming loudly in the store for her mother to give her some candy. People can read the thread at RWI and decide for themselves.

Wow I definitely felt something move below the belt when I saw that pic.

I hate that whole guilt thing too, as it makes out capitalism is evil, which it isn't in my view.

However, you're mistaking my discussion about wealth for a discussion about money.

Ok this one isn't going to go any where, you are talking about money not wealth, as I addressed in the part of my post you didn't quote.

Here's the thing: Money does not exist; bear with me, answers like 'then give me all yours' will be treated with the disdain they deserve. Money is trust, faith and force. I have a tenner in my pocket and you accept that for goodsandorservices (Thank you, Anyanka) believing that when you pass it on to the next person they will accept it at a fixed value. I have faith in the currency and it's backed by force, meaning if someone tries to claim my cash as theirs, it will be defended by force, usually from the government that authorises the issuing the notes. When the faith and trust go, you get a crash, much like Germany before the 2nd world war. Resources the day before the crash were the exact same, and everyone had just a day's more food in the cupboard and a day's food in their bellies. Did the wealth disappear or did people simply stop believing in it?

I really think you are talking about money there....?

Sorry, I think when you admit you can destroy it the rest of it falls a part. That would mean, assuming any wealth has been destroyed since man walked the earth, there is less wealth now than when we lived in caves (since none could be created). I don't buy it.

Yeah that makes it easier for you to pick the flea pit hotels and burger bars...eh..nothing like saving a buck here and there........Cata...sorry Cray...!

Oh, poor baby, you are just in a tizzy since you didn't get listed as 5*; I'll ignore it. I did chuckle while I read your cry-baby rant @ RWI. Safe to say you were not listed for a reason. Don't get yourself too worked up over it; if you keep complaining they will probably list you just so you will shut your big fat mouth!

Wealth is like thermodynamics: You can't create energy or wealth out of nothing: All you can do is take it from somewhere or even somewhen.

Ok couldn't resist one more because this is an easy one. You can't create or destroy _energy_. You set off an atomic bomb and you have not created or destroyed energy; it has just changed forms (law of thermodynamics, although I am a tad rusty there).

You set of that atomic bomb in a big city (God forbid), you just destroyed a [censored] load of wealth (I don't think you can say the cars, buildings, art, etc were not wealth with a straight face and they were certainly destroyed).

No, I do not think they created wealth. These are great innovations that make life easier, but they do not create wealth.

Here's the thing: Money does not exist; bear with me, answers like 'then give me all yours' will be treated with the disdain they deserve. Money is trust, faith and force. I have a tenner in my pocket and you accept that for goodsandorservices (Thank you, Anyanka) believing that when you pass it on to the next person they will accept it at a fixed value. I have faith in the currency and it's backed by force, meaning if someone tries to claim my cash as theirs, it will be defended by force, usually from the government that authorises the issuing the notes. When the faith and trust go, you get a crash, much like Germany before the 2nd world war. Resources the day before the crash were the exact same, and everyone had just a day's more food in the cupboard and a day's food in their bellies. Did the wealth disappear or did people simply stop believing in it?

Wealth is like thermodynamics: You can't create energy or wealth out of nothing: All you can do is take it from somewhere or even somewhen.

This is an idiological school that came around basically to guilt rich, capitalist countries and say they were "stealing" from the third world; I really don't believe it for a minute but if we get into this one we will be _way_ of topic.

I think it is sufficient to point out that you made an arument about "currency," which is no longer backed by gold and is just something people put value in - it thus changes value. We were talking about wealth, which can also be different things like planes, trains, and automobile. You can print as much monopoly money as you want and it will be worthless. You start curning out some semiconductors from sand and you are doing a very different thing (you are creating something that has value *in and of itself*, cash money just has the value we assign to it.).

bottom line: you aren't talking about wealth.

Great examples of where the management are major, major shareholders. That's an entirely different microwave of hot-dogs.

I knew that when I listed them but no one had differentiated their argument between minority/majority shareholders. HP-Compaq merger is similar, but arguably it was the long-term shareholder (families that started it) that got screwed in the name of long term gains. (although I personally didn't like that merger either).

Surely, however, once a dealer has passed probation, surely they're a five-star?

Usually star systems have different levels...

@ luckyyy, I doubt he would ever be "5*"

I haven't made up my mind, but I think it is a good deal and hope they keep it meaningful... there ARE differences in the dealers and if they just put the first one to whine/[censored] (which has already begun) on the list as well it becomes meaningless... I hope the have the balls and stick to what they started. I think it is a positive thing for noobs - when I travel to a new city the * ranking for hotels is helpful... same for restaurants... why not dealers?

The way you guys talk about corporations I am surprised any of them last more than ten years.... Plenty have been around much longer.... You think the guys at Google and micro$oft are not thinking "long term strategy"?

No one wants to be the next Ken Lay... problems happen but they are usually market corrections, wake up calls, bad apples - we do live in a less than perfect world.

Just curious, do you not think the introduction of the personal computer -- or the automobile or airplane or watch -- created wealth? How about inventions that increased agricultural output or reduced disease?

What he said...

If I take something you think is worthless (say silicone) and make microchip out of it that is suddenly worth something to you, I would say that I "created" wealth. You may call it something different but it is just playing semantics. I don't think calling it wealth redistribution passes the "straight face" test.

I couldn't tell the difference in person.

Those executives created _no_ shareholder value ( nonexistent asset is not shareholder value). What they did was trying to keep their own jobs and appease their huge egos. People is any walk of life can fall victim to pressure and there will be a few bad apples. Furthermore, there are just as many examples of shareholders getting screwed out of great short-term, real, profits for the "long-term outlook" of the company.

Bottom line is there will always be notable failures in anything that naysayers can point at and say "Look! Look!" but I think you would be hard pressed to tell me the corp. governance system has not created a ridiculous amount of wealth. Big picture boys, don't lose sight of the forest for the tree that fell over in it.

I certainly would not want a system where there was no "pressure" to turn a profit. That is how parents raise children, not how investors spend their money.

Those are nice things, but I can't see where a duty to pursue them would be derived from. Imposing any thing else on the corp is basically telling the owners to go screw themselves; such outside ording is probably a bad idea (the late and great Milton Freedman would certainly argue against it).

They do try very hard to survive (and a lot of time shareholders get screwed) because the board of directors does not want to loose its sweet job and if they can keep a merger they don't like from happening the won't let it (many ways to do this). Now this may just be the board trying to survive, but it indirectly keeps the corp alive as well. The paramount merger, or even better the time-warner merger, are classic examples.

Those are nice things, but I can't see where a duty to pursue them would be derived from. Imposing any thing else on the corp is basically telling the owners to go screw themselves; such outside ording is probably a bad idea (the late and great Milton Freedman would certainly argue against it).

They do try very hard to survive (and a lot of time shareholders get screwed) because the board of directors does not want to loose its sweet job and if they can keep a merger they don't like from happening the won't let it (many ways to do this). Now this may just be the board trying to survive, but it indirectly keeps the corp alive as well. The paramount merger, or even better the time-warner merger, are classic examples.

Just out of curiosity - you have twice mentioned companies having some other goal than the enrichment of their shareholders. Could you elaborate a little on what you think those goals should be and where the duty would be derived from.

US Companies are allowed to give to charity to some extent and do other altruistic things.

BTW I hate those ferrari pams too. (but Panerai doesn't owe me any duty, fiduciary or otherwise, so what can I say )

Pug: Sorry I am not following you (what are you saying should be the mark of success?). Here in the US the ultimate power of the corp. rests in the board of directors, who have a fiduciary duty to the investors. However the board is given a wide latitude of protection in its choices under the business judgment rule. The board's ultimate duty is to the shareholders because it is _their_ company (corps are basically fictitious people). It used to be they would want dividends but for various reasons (mainly tax) those typically are not paid out so now it is more value of the investment (share price). Things are a little different in Germany where the workers have some say, but I don't really know about any other countries. There are also a bunch of cool ways to keep control in the hands of a select few and completely out of the normal shareholder (a la google).

I know exactly what you mean about shareholders caring about returns, not success off the company. This is why in a hostile takeover the new majority shareholder will sometimes chop up the whole company and liquidate it, or liquidate all but a portion of it (and make lots of $ in the process). Instant profit great for shareholders taking the profit, bad for the company itself since it is dissolved.

Without writing a novel, the reason the ultimate power is in the board under incorporation statutes (who can of course be voted out), is that they tend to look out more for the company, but ultimately they have a fiduciary duty to their shareholders. BUT, the business judgment rule allows they a wide lattitude to basically skirt short term goals for long term profits and do all other sorts of interesting things. This is why shareholders of huge corps. do not vote democracy style on business decisions.

It is really a question of perspective. It may be a stupid way from the individual business' perspective (i.e. getting chopped up and sold off and ceasing to exist). BUT, the business only exists to make money for the shareholders, so this is not a bad thing since the shareholders ultimately have more $.

Not familiar w/ the rolex history and your long term argument but it has to be either they were going to chop the company up or shareholders wanted Rolex to do something stupid (make quartz or something)

The way I am reading your comments is that putting shareholders first is a bad way to run a company because that could lead to the company being dissolved/sold off for the profit of the shareholders. However, since it is the shareholders company, they should be able to dissolve it and take the profit.

If you are arguing shareholders are collectively stupid and should not run a company, this is the reason for the business judgment rule. It is the board of directors job to decide what is best (quartz v. mechanical or nice merge or not), not the shareholders. As long as they don't do several bad things, the board is entitled to make the decision and ignore shareholders (although they can be voted out at the next shareholder meeting). This allows some decent long-term planning to go on that is often _horrible_ for shareholders in the short term (the Paramount - Time merger is the _classic_ example of this, be sure to google it if you aren't familiar because shareholders got screwed. There are many others in merger contexts where shareholders got screwed out of a big premium on their shares and they could not punish the board for it).

Sorry for the long-winded reply; I somewhat meandered since I was unclear on your point.

"Willingness to change is a strength, even if it means plunging part of the company into total confusion for a while." Jack Welch

Look, I get it. I realize it may appear that I advocate Change for Change's sake alone.. in fact I do not. I do however believe that what sometimes appears to be change for changes sake's alone is most often something much more than that. The preception is created by people (ion the receiving end) who are resistant to change, or by people (on the sending side) who are poor communicators.

I work for a huge world class global financial institution. Within my LOB we reorg every 2-4 years even when we are in a high performance mode. Some people would perceive this as change for the sake of change alone. Others would suggest that this is the hallmark of a dynamic organization which is constantly trying to stay fresh and circulate new blood. Even with my my career, i try to change jobs within my company every 2-5 years, even if it means making a lateral move. Again, some people may perceive this as change for change's sake, I look at it as trying to stay fresh and re-invent myself. The point is that change for change's sake is seldom that at all. There is almost always a more concrete objective... it is just that not always understood.

Yes but the confusion Welch referred to has a purpose; I never said change for a reason was bad. I do corp. law so I am familiar with your work; as you said there is a purpose for those changes, those are all situations where the purpose is relatively concrete.

I think we are just quibbling over words at this point...

@ Pug: Not a stupid way to run a business if you are the shareholder... and the corp. does belong to them so the duty of care is to them. Seriously though the BoD gets a good deal of lattitude legally under the business judgment rule and the board IS allowed to consider other factors to a limited extent. Could they be voted out? Yes, but that does not happen much. Obviously laws in your country may vary.

Looks good... perhaps add some prices.

I don't think I could ever stand before a board of directors and tell them I wanted to "shake things up" because i want an "unpredictable" outcome. That would get me fired and acting on it might be a violation of their fiduciary duty to their shareholders, getting them sued if the unpredictable outcome was a bad result (try telling shareholders "oops, we had no idea what the outcome would be"). If I gave them a cost/benefit and risk analysis and explained how this meant more money in their pocket, they would do it (and if it tanked it is still legally protected under the business judgment rule). But, your milage may vary.

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Indeed I was. But more broadly speaking, I agree with Pug's perspective on how people embrace sameness and reject any idea that is different from what they are used to. Not just in politics but throughout society. I hear it all the time at work.. this is how we've always done it... well, so what? People should be open to new ideas and new ways of doing things... I mean I get your tree example, but if nobody ever ate the fruit from tree no. 2, we would have a horribly boring diet. As a society we are too afraid to try something and fail.. I just think that experimentation and curiosity lead to invention and discovery

The idea is you can eat whichever fruit you want, its just a cost/benefit analysis of the risk of dying v. benefit of finding a new food source. i.e. lets say there is a problem on tree #2 making it less attractive and you have a new need... this makes you more likely to try the other tree. Same thing happens in politics, people switch when they think it is worth their while.

You would swith trees for a reason, you would not just switch for the sake of switching. You may switch because you think boredom of diet outweighs the risk of death/problems from the other tree. whatever. the point being there is a reason behind the switch. Switching just for the sake of switching would be... darwinian.

I think you are missing my point and pug got it. There is really no reason to get caught up in politics, it just swings back and forth.

While there is logic to your statement about change, I think the willingness for people to accept change.. ANY change is an indictment on just how bad people believe things really are, and how poorly they believe th country is being managed and how dissatisfied everyone is with the current course and speed. Let's face it... for the most part, people are usually resistant to change... this type of reaction is a barometer ... it shows just how desperate the electorate really is. Because at length, the democratic congress did not receive an electoral mandate.. rather, this was a rejection of the current government.

I wasn't talking about the recent US election, although it appears you are.

I do agree with you that people are usually resistant to change, it makes evolutionary sense. For instance, why eat from tree #1 which might kill you when you know the fruit on tree #2 will not? That said, it proves only that people are resistant to change, not that change is always good. My point is that it can be good or bad.

Pug: The Amish? Quick-witted but not sure it is an argument. The opposite reply isthe Nazis/Fascists/Stalin or or any other reactionary (i.e. driven by change) government... The Amish may ride in buggies but they don't kill too many people with them. I think those of us in the middle of the change/no change continum are the happiest. I am very leery of using the "Nazi" argument and feel like it is a cheap one but here it does seem appropriate. Obviously there are some "change" based governments that have turned out differently, but while we are naming examples...

Funny fact: the "conservatives" use to be the "crazy liberals" way back in the day. Its just a pendulum that swings both ways gentlemen... when it gets too high on one side it swings all the way back to the other - most people get too caught up in the day to day to see that big picture.

Interesting. My eye was drawn to the cut marks quickly as well, but if you fix those it would be spot on!

Just my .02; given that you have never had a card before I doubt you will ever carry a balance from month-to-month (I don't) so ignore the APR, you will not pay interest if you pay it off each month.

I have a visa cash-back card; i get 1-3% cash back on every purchase I make. I would recommend you look into something similar, I never really think about it but after a year or so it is a nice little egg (it adds up) to blow on the lady in you life.

... and the opposite of Progressive is Conservative.

Yes, I get it, and I don't understand how fear of change and belief in something because "that's the way we always dun it" can be seen as a positive stance.

I think the same could be said of change for the sake of change itself.

There is no correlation between something changing and it getting better. Things can and do change for the worse as well. I'm not advocating one or the other in this post, but that people seem to get too hung up on the change/no change issue.