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Member (Idle past 1436 days) Posts: 20714 From: the other end of the sidewalk Joined: |
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Author | Topic: American Budget Cuts | |||||||||||||||||||||||
crashfrog Member (Idle past 1498 days) Posts: 19762 From: Silver Spring, MD Joined: |
Which is why it should be the private sector which is generally not in control of laws and such rather than the public sector which happily and easily regulates and commandeers those things at their whim. Well, no. It should be the public sector who is in charge of the laws and in charge of breaking monopolies and preventing regulatory capture, not the private sector who is in charge of the laws which they then use to establish regulatory monopolies and rents, which is what we have in the United States. The private sector has a profit motive to gain control of legislature, not to increase competition and drive down prices.
Except that everyone working at the company gets paid and all the investors get their expected return on investment. That's not a response to the dilemma I posted.
This is complete and utter bullshit. No, it's complete and utter truth. For a health insurance company, premiums are income and health care expenditures are costs. Therefore, maximizing profit - which is income minus costs - means maximizing premiums and minimizing costs. That means increased premiums, establishing a client base consisting only of the healthiest, most affluent clients, and generally denying medical care or cancelling coverage where contractually permissible. It's the "adverse selection" problem - people generally need either no medical care, or need an expensive amount of it. Most people who make claims have not paid premiums in excess of their claims (otherwise they'd just have used a savings account.) Therefore the most profitable way to run a health insurance company is to collect premiums from people who never get sick.
Building a hospital and employing highly educated and trained medical professionals at great cost and then having them stand around doing fuck-all is the least profitable way to operate. No, it's the most profitable, because the marginal costs of providing medical care - pharmaceuticals dispensed, bandages used, bedpans cleaned - are larger than the marginal costs of paying doctors to stand around and do nothing - coffee and magazines, basically - and then bill insurance companies or the government for it.
You seem to be denying that there is a market for effective schools Right. There is no market for effective schools; there's only a market for selective schools. That's why all of the measurable benefit in for-profit private secondary and primary schools is in the admission process; after students are admitted, the educational improvement at private schools is no different than at public schools. The only measurable "benefit" to a private school education is as a market signal that you were "good enough" to pass a more selective admissions filter.
"Failing" in what way? "Failing" in that prisoners are subject to abuse and neglect. Failing in that prisoners escape instead of not escaping. Failing in that prisoners are not rehabilitated. The profit basis in running a private prison is in informing the government that a certain number of beds are filled, not in actually having prisoners in those beds, or being fed, or living in a safe and clean environment. Since private prisons aren't actually paid for any of that, they have no reason to do so.
oh wait, if its a public sector job there *are* no competitors are there? Why not? The government runs the Post Office, and then there are at least three private-sector competitors that deliver less efficient, less effective service at about ten times the price. (Don't know how they stay in business, honestly. Probably huge government subsidies - another example of the private sector's profit motive working directly against efficiency.)
Right, because the one organization that gets the largest chunk of your paycheck isn't a government. They earned it, and I get to tell them how to spend it. Funny - my landlord keeps neglecting to ask me how to spend those huge rent checks I keep writing every month. That seems a lot less efficient, frankly.
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crashfrog Member (Idle past 1498 days) Posts: 19762 From: Silver Spring, MD Joined: |
But do you think this would effect the quality of the CEO your company can attract, considering the competition it faces in the market? What's your evidence that there's such a thing as "quality" of a CEO? Is there any evidence that Steve Ballmer is a "lower quality" of CEO - by an entire order of magnitude? - than W. James McNerney? Is there any evidence that EADS, the manufacturer of Airbus airplanes and Boeing's major European competitor, is a much worse-managed company? This chart seems to indicate otherwise: It's clear that enormous CEO salaries are nothing but an enormous inefficiency created by the private sector's profit motive. Perhaps if Boeing didn't need to pay wasteful enormous CEO salaries, they could direct that capital to improving aircraft reliability, something Airbus has clearly been able to do.
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Phage0070 Inactive Member |
crashfrog writes: The private sector has a profit motive to gain control of legislature, not to increase competition and drive down prices. So does the public sector.
crashfrog writes: Except that everyone working at the company gets paid and all the investors get their expected return on investment. That's not a response to the dilemma I posted. You didn't post a dilemma.
crashfrog writes: For a health insurance company, premiums are income and health care expenditures are costs. Therefore, maximizing profit - which is income minus costs - means maximizing premiums and minimizing costs. That means increased premiums, establishing a client base consisting only of the healthiest, most affluent clients, and generally denying medical care or cancelling coverage where contractually permissible. Yes, but it also means providing payouts when required. If they didn't they wouldn't be offering an attractive insurance plan; who is going to buy a policy with high premiums and no payout? Competition forces those companies to provide the best balance between payouts and premium; the profit margin on most plans is quite small. You do recognize that there needs to be a balance between payouts and premium, right?
crashfrog writes: It's the "adverse selection" problem - people generally need either no medical care, or need an expensive amount of it. Most people who make claims have not paid premiums in excess of their claims (otherwise they'd just have used a savings account.) Therefore the most profitable way to run a health insurance company is to collect premiums from people who never get sick. And thats why the whole "insurance" thing works. You are paying a fee to cover risk. People who are healthy and present little risk can demand low rates. On the other hand you can also be profitable by insuring the riskier unhealthy people by simply demanding appropriately higher premiums to account for the risk. In fact this is more profitable on a per-customer rate because the same profit percentage is applied to a larger premium.
crashfrog writes: No, it's the most profitable, because the marginal costs of providing medical care - pharmaceuticals dispensed, bandages used, bedpans cleaned - are larger than the marginal costs of paying doctors to stand around and do nothing - coffee and magazines, basically - and then bill insurance companies or the government for it. This might be surprising to you, but nobody's insurance company is going to pay out on a policy where the policy holder didn't receive treatment. And doesn't mentioning billing the government for subsidies just shoot your argument in the foot? Thats the government just throwing money away.
crashfrog writes: The only measurable "benefit" to a private school education is as a market signal that you were "good enough" to pass a more selective admissions filter. So you are saying colleges have no demand or benefit? Or does something inherently change when you cross an arbitrary threshold?
crashfrog writes: The profit basis in running a private prison is in informing the government that a certain number of beds are filled, not in actually having prisoners in those beds, or being fed, or living in a safe and clean environment. Since private prisons aren't actually paid for any of that, they have no reason to do so. So you are arguing that the government does a crappy job of ensuring they get the service they are employing people to perform. You know crashfrog, the way this is supposed to work is you try to support your position and I try to argue against it, not the other way around. Maybe I should just sit back and let you tear yourself apart here.
crashfrog writes: Why not? The government runs the Post Office, and then there are at least three private-sector competitors that deliver less efficient, less effective service at about ten times the price. (Don't know how they stay in business, honestly. Probably huge government subsidies - another example of the private sector's profit motive working directly against efficiency.) I'll keep that in mind the next time I decide to open up my private courthouse. Also those competitors to the Post Office stay in business despite having much higher prices simply because they provide a higher quality of service. The Post Office is being slowly out-competed even despite its governmental connections.
crashfrog writes: They earned it, and I get to tell them how to spend it. Funny, I thought you earned your paycheck.
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Taq Member Posts: 10085 Joined: Member Rating: 5.6 |
A corporation is simply an organization of workers which is tailored to certain types of investment. A corporation is an organization that hires and fires workers in order to make money. Compare this to a public organization that is formed on the idea of benefitting the public without needing to make as much money as possible. For example, do you really think that health insurance companies care about your health? Well, they don't. They care about their profits, even if that means denying medical care to their customers. If you are a worker I would think twice about the idea that a corporation has your best interests at heart.
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Taq Member Posts: 10085 Joined: Member Rating: 5.6 |
Basically you are arguing that the CEO working to run a corporation isn't really "working". Is the CEO working 100 times harder than the employee making 1/100th of the CEO's salary?
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Phage0070 Inactive Member |
Taq writes: If you are a worker I would think twice about the idea that a corporation has your best interests at heart. If you are a worker you would be a fool to think a corporation has your best interests at heart, and the same goes for a customer. Its the worker or customer's responsibility to have their own best interests at heart; to go to the best job they can get and buy the best product they can find at the lowest cost. Its this heartless approach by the consumer and worker that allow the whole balance to work. More efficient companies cause investors jump ship to the better company, pilfer workers from their ranks, and customers switch without a second thought. Compare this to a public organization formed on the idea of benefiting the public. Do you think it might be a little naive to assume that it has *your* best interests at heart? What if they seem to be pandering more to the sickly people who consume a lot of medical care rather than to you? What options do you have for an organization thats more attractive to you? None.
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Taq Member Posts: 10085 Joined: Member Rating: 5.6 |
If you are a worker you would be a fool to think a corporation has your best interests at heart, and the same goes for a customer. Its the worker or customer's responsibility to have their own best interests at heart; to go to the best job they can get and buy the best product they can find at the lowest cost. Then the workers and customers should work toward creating public systems that answer to their needs, correct? If we had our best interests at heart we would work towards public, single payer health care, right?
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Phage0070 Inactive Member |
Taq writes: Basically you are arguing that the CEO working to run a corporation isn't really "working". Is the CEO working 100 times harder than the employee making 1/100th of the CEO's salary? Why would how hard an employee is working be at all relevant? The question is, does the CEO's work at the company provide 100 times the benefit to the company than the average worker? In most cases it is those decisions which are making or breaking the success of the company with billions of dollars riding on them being good ones. And if they didn't pay as much could they get the same quality of work? Someone can dedicate 12 hours a day of backbreaking labor digging ditches by hand for a company and never make the money that a skilled worker can make with a few clever keystrokes. The skilled worker is going to be compensated more than the first and for good reason. We don't reward based on effort; are you still in kindergarten?
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Phage0070 Inactive Member |
Taq writes: Then the workers and customers should work toward creating public systems that answer to their needs, correct? If we had our best interests at heart we would work towards public, single payer health care, right? No, we would cultivate a private sector free market that allows us to select a healthcare package which fits our needs. This allows specialization, the core of civilization, to flourish. We all need to eat. We all need to have shelter. We all have some needs, but in addition to variation within those needs we have others which are unique. Rather than having everyone constantly working to construct one super solution to every possible food supply need, shelter need, clothing need, etc... just let each person do whatever they do best. It might be working in a nail salon, or growing wheat, or telephone tech-support. Then they can turn around and pick the best fit for them personally from the wide array of options in a private sector free market.
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Taq Member Posts: 10085 Joined: Member Rating: 5.6 |
Why would how hard an employee is working be at all relevant? You are the one going on and on about effeciency. Perhaps you can figure this one out all on your own? It would seem to me that the need for profit takes all of the effeciency out of the corporate model.
The question is, does the CEO's work at the company provide 100 times the benefit to the company than the average worker? In most cases it is those decisions which are making or breaking the success of the company with billions of dollars riding on them being good ones. And if they didn't pay as much could they get the same quality of work? Of course, the benefit you speak of is profit, not a benefit for society in general. So who is benefitting the most from massive defense spending? It isn't Rosie the Riveter. It's the corporations and the fat cats that run them. They are the ones profitting. If we reduce defense spending what could we do with that money? Start a real health care system in this country that actually benefits sick people instead of lining the pockets of CEO's and fat cat investors. A lot of good could be done with this money instead of supplying yachts to CEO's whose money is directly related to denying people money for medical care.
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Phage0070 Inactive Member |
Taq writes: It would seem to me that the need for profit takes all of the effeciency out of the corporate model. Yet you don't seem to be able to articulate exactly how or why.
Taq writes: Of course, the benefit you speak of is profit, not a benefit for society in general. Sure. Why do you go to work in the morning, for personal profit or the benefit of society?
Taq writes: So who is benefitting the most from massive defense spending? It isn't Rosie the Riveter. It's the corporations and the fat cats that run them. Corporations with investors. Investors like Rosie the Riveter's grandmother. Are you saying those investors are not part of society?
Taq writes: ...instead of lining the pockets of CEO's and fat cat investors. I think you are! You begrudge the wealthy of their money and the ability to use it to make more money for themselves! Now that your motivation has been bared, don't you feel silly for ranting against greed? It seems to be your driving force.
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cavediver Member (Idle past 3674 days) Posts: 4129 From: UK Joined: |
This chart seems to indicate otherwise: Statistically insignificant would be generous. Misleading statistical bullshit would probably be more accurate. That said, I guess it is refreshing to have a yank suggesting that Airbus is "safer" than Boeing!!
Perhaps if Boeing didn't need to pay wasteful enormous CEO salaries, they could direct that capital to improving aircraft reliability Yep, because total CEO compensation utterly dwarfs Boeing's total expenditure on aircraft safety and reliability... or maybe not. If there's one thing worse than right-wing stupidity, it's left-wing hyperbole. Edited by cavediver, : No reason given.
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cavediver Member (Idle past 3674 days) Posts: 4129 From: UK Joined: |
It would seem to me that the need for profit takes all of the effeciency out of the corporate model. What???? Is this now the "let's be utterly ignorant of micro-economics" thread?
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Taq Member Posts: 10085 Joined: Member Rating: 5.6 |
What???? Is this now the "let's be utterly ignorant of micro-economics" thread? Are you saying that a corporation with top heavy salaries is more effecient than a corporation that pays everyone the same wage?
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Taq Member Posts: 10085 Joined: Member Rating: 5.6 |
Sure. Why do you go to work in the morning, for personal profit or the benefit of society? Actually, the latter. If it was about profit I wouldn't have chosen to be a scientist.
Corporations with investors. Investors like Rosie the Riveter's grandmother. Are you saying those investors are not part of society? How does the massing of wealth in a minority of society help the society over all?
I think you are! You begrudge the wealthy of their money and the ability to use it to make more money for themselves! I begrudge the fact that this is done on the backs of the middle class. Do you think it is moral for a health insurance CEO to buy yachts with money gained by denying medical coverage to a 5 year old with leukemia?
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