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Economics Without Greed

Discussion in 'Economics, Business, and Taxes' started by georgephillip, Nov 12, 2015.

  1. Lukey

    Lukey Senator

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    I thought they did that already with Dodd Frank. That's the problem with the specificity of over regulation - it creates a presumption of innocence as long as the regulations don't address the very specific violations as drawn up by the bureaucrats. And simply creates less and less opportunities for wider dispersion of wealth as the businesses must get bigger and bigger to cope with the regulatory morass.
     
  2. SW48

    SW48 Administrator Staff Member Supporting Member

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    Isn't the stock market the only way for a countries economy to truly grow fast enough for population growth while allowing its people to continue to improve their quality of life?
     
  3. Woolleybugger

    Woolleybugger Mayor

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    I think that is the sales pitch, not sure if it is true though. Tell me again what the stock market does after a company does an IPO?
     
  4. Woolleybugger

    Woolleybugger Mayor

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    This makes no sense at all. In essence you are saying that a law creates more opportunities to cheat or get around it which may be true of a bad or poorly written law but not a tough, soundly written law with tough penalties. Let's face it, we are talking about the legal status of principals within a corporation being held personally accountable. This was somewhat addressed in Sarbanes but not for Wall Street. Their books are so complicated no one understands them.
     
    • Like Like x 1
  5. SW48

    SW48 Administrator Staff Member Supporting Member

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    The reason they go public is to be able to sell off stock and raise capital instantly.
     
  6. Wahbooz

    Wahbooz Governor

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    Sarbanes Oxley? All SOX was is a restatement of a fundamental accounting principle which was stated in a FASB statement back in the 1970's, which was intended to protect shareholders and the general public from accounting errors and fraudulent practices.
     
  7. Wahbooz

    Wahbooz Governor

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    I could go even a step further. The AICPA had no legal power, by law, to punish accounting firms which did not adhere to GAAP, Generally Accepted Accounting Principles, or GAAS, Generally Accepted Auditing Standards. It is a violation of accounting and auditing standards for the same firm to do the accounting, and then do certified audits. But until SOX there was no way of stopping a firm from doing both.

    SOX's requirements for record keeping created a greater trust, from investors, because a company became transparent, and there was no concern from overstatement of financial security. I could go even further, but that's ok.
     
    • Informative Informative x 1
  8. georgephillip

    georgephillip Governor

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    "rentier
    play
    noun ren·tier \räⁿ-ˈtyā\
    Definition of rentier
    Popularity: Bottom 40% of words
    1. : a person who lives on income from property or securities"
    http://www.merriam-webster.com/dictionary/rentier

    "The great reversal of classical Industrial Era reform ideology to regulate or tax away rentier income occurred after World War I.

    Bankers came to see their major market to be real estate, mineral rights, and monopolies.

    "Lending mainly to finance the purchase and sale of rent extracting opportunities in these sectors, banks lent against what buyers of land, mines and monopolies could squeeze out of their rent-extracting 'tollbooth' opportunities.

    "The effect was to pry away the land rent and natural resource rent that classical economists expected to serve as the natural tax base.

    "In industry, Wall Street became the 'mother of trusts,' creating mergers into monopolies as vehicles to extract monopoly rent.

    "Precisely because a 'free lunch' (rent) was free – if governments did not tax it away – speculators and other buyers sought to borrow to buy such rent-extracting privileges.

    "Instead of a classical free market ideal in which rent was paid as taxes, the free lunch was financialized – that is, capitalized into bank loans, to be paid out as interest or dividends.

    "Banks gained at the expense of the tax collector.

    "By 2012, over 60 percent of the value of today’s homes in the United States is owed to creditors, so that most rental value is paid as interest to banks, not to the community."
    http://store.counterpunch.org/wp-content/uploads/2015/08/Killing-The-Host_PDF_V7.pdf

    If the tax collector is a victim of the "free market" and popular morality blames victims for going into debt, should debtors imagine "that general prosperity depends on paying bankers and making bondholders rich--a veritable Stockholm Syndrome in which debtors identify with their financial captors?"
     
  9. Lukey

    Lukey Senator

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    That is absurd!

    “As we approach the 13th anniversary of the Sarbanes-Oxley Act, compliance remains dynamic and complicated to master for most companies,” Brian Christensen, an executive vice president with Protiviti, said in a news release.

    http://ww2.cfo.com/auditing/2015/05/sox-compliance-getting-costly/
     
  10. Lukey

    Lukey Senator

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    That is exactly what I am saying!

    http://www.bloomberg.com/news/artic...e-impossible-to-prosecute-white-collar-crime-
     
  11. Woolleybugger

    Woolleybugger Mayor

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    OK...then after they do it, what purpose does trading have for that same company?
     
  12. SW48

    SW48 Administrator Staff Member Supporting Member

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    They can buy back stock. They can use it to give bonuses to employees. It can grow and split so they can use it to buy other companies.

    The stock market allows companies and the economies to grow at multiples rather than singularly. Its the only way a modern country with huge populations growth can maintain its lifestyle.
     
  13. The Sage of Main Street

    The Sage of Main Street Governor

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    Equity Is Iniquity

    Premature expansion, instant gratification for the owner only, short-term thinking. Instead of booming into a bubble, they should grow gradually through re-investing profits and taking out loans.
     
  14. Wahbooz

    Wahbooz Governor

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    So. Who is he? If it is complicated, then they have people who are not capable of providing that service. Any CPA worth his fees can set up compliance for a company, and once that is done there should be no problem. But then people love to hide the truth about financial stability. Example.... ENRON.

    I'm curious. Do you even know what the AICPA is, or FASB statements? If you did, you'd know that the principles in SOX have been required for decades. They were standard statements when I was in college, and that was 40 years ago.
     
    Last edited: Feb 12, 2016
  15. Wahbooz

    Wahbooz Governor

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    And did you read the entire article?

    There was also a notable increase in large organizations with significant or moderate plans to automate more IT processes and controls. In 2014, 40% of large company respondents reported having significant or moderate automation plans; this year, 58% describe their automation plans as significant.


    While costs may be higher, survey respondents. especially those from large companies, seem to feel SOX compliance has improved significantly or moderately the relability of their financial reporting.


    “Although the way [SOX] is adhered to, audited, and regulated continues to change, most companies are investing in the resources and intelligence necessary to adapt to these changes in an effective and cost-efficient manner,” the report concludes.


    “And more and more organizations are focused on driving long-term value out of their SOX compliance efforts.”


    Automation changes will bring down costs, and full compliance will undoubtedly make certified audits less costly. And I will say it again, SOX will stop companies from using the same firm that does their general accounting to do certified audits, which is compliant with GAAS, and will get rid of the conflict of interest which has corrupted a number of companies.
     
  16. Lukey

    Lukey Senator

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    Yeah, like the ACA was going to bring the cost of healthcare down. Did YOU read the whole thing?

    Sixty-seven percent of the 460 audit executives and professionals polled by the global consulting firm Protiviti reported an increase in the hours that their organization dedicated last year to addressing SOX compliance. More than half indicated that those hours had increased by at least 16%.

    It was a poll of rentiers BY rentiers. Of course they are going to put a positive spin on it. They are the ones the trillions in compliance costs have gone to over the past 13 years. Why is it every pro-big government argument ends up being built as flimsy as wet generic brand tissue paper? What is important in that piece is the findings of complexity and costs - not the "benefits" accruing to the auditing personnel and consulting firms!!!
     
  17. Lukey

    Lukey Senator

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    LOL! That's precisely the point! Creating work for CPAs and consultants does exactly NOTHING to improve our economy's competitiveness. As for Enron, there weren't any secrets there.

    Screen Shot 2016-02-13 at 6.27.05 AM.

    If the principles in SOX have been "required for decades" a) why did the law need to be passed and b) why have the compliance costs skyrocketed audit fees?
     
  18. Wahbooz

    Wahbooz Governor

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    Because assholes, possibly like you, didn't care what the GAAP and the GAAS said about accounting standards, or auditing standards. Passing a law put teeth into the requirements for generally accepted principles.

    No secrets with ENRON??? They hid the truth from investors, which is what a number of companies have done in the past.

    What the fucks the use.
     
  19. Wahbooz

    Wahbooz Governor

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    I'm really glad to know we should just let companies [Unwelcome language removed] their books all they want, and CPA's are only into compliance to standards, because they're out to get rich. Wow, that would have saved me a whooolllleeee lot of years of schooling.

    Now can everybody see what is wrong with a run away capitalist society?
     
  20. georgephillip

    georgephillip Governor

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    "6. Mainstream policy pretends that economies are able to pay their debts without reducing their living standards or losing property.

    "But debts grow exponentially faster than the economy’s ability to pay as interest accrues and is recycled (while new bank credit is created electronically).

    "The 'magic of compound interest' doubles and redoubles savings and debt balances by purely mathematical laws that are independent of the economy’s ability to produce and pay.

    "Economies become more debt-leveraged as claims for payment are concentrated in the hands of the One Percent."
    http://store.counterpunch.org/wp-content/uploads/2015/08/Killing-The-Host_PDF_V7.pdf(xxii)
     

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