Record Rise in Poverty Under Obama

[Limbo]

The number of available jobs in this country is not growing, but one thing that is definitely growing is the number of people living in poverty.

Thanks to Obama's bone headed policies and his constant bashing of virtually every part of the private sector (evil insurance companies, evil car companies, evil pharmaceutical companies, evil oil companies, evil banks, evil mortgage companies, evil stock traders,you get the picture), the economy is in a tail spin. No one (rightly) trusts him, and businesses are in a state of paralysis, wondering when they will become the next target of the Obama administration and the Demorats, having all their wealth sucked away through regulations and taxation.

See here for the full story:
US poverty on track to post record gain in 2009 (http://news.yahoo.com/s/ap/20100911/ap_on_bi_ge/us_poverty_in_america)

I knew the finger-pointer-in-chief would wreck the economy, but I didn't think it would be this fast or this severe. I'm sure 2010 will be just as bad as he is continuing on with the stupidity that got us to where we are today.

Ironically the worst increases in poverty have been among minority groups, especially African Americans, some of the most loyal Democratic voters out there.

[LedZap]

Don't worry ... He'll blame it on Bush.

[MrJim]

I read that yesterday, and I'm not the least bit surprised. Actually I figured it was worse than that - the 60's was, in general, a very strong economic period.

[Phoenix]

OHMAHJEEZ. A politician bashing the private sector yet not nationalising anything. FAIL.

EDIT: do not ask what the hell I mean by this post, because I'm still trying to figure it out.

[Limbo]

OHMAHJEEZ. A politician bashing the private sector yet not nationalising anything. FAIL.



Wait a minute, I thought you were all for "anarchistic" socialism where there is not some overly powerful central government that usurps control over everything and everyone?

[LedZap]

Wait a minute, I thought you were all for "anarchistic" socialism where there is not some overly powerful central government that usurps control over everything and everyone?

That was last week.

[Montanarchist]

This is hardy Obama's fault. A recession means a massive re-allocation of resources that cant be consumed, poverty has to increase.

[Rec]

Noone told you about the bail-out monies to the banks and Wall Street, eh???

[LedZap]

This is hardy Obama's fault. A recession means a massive re-allocation of resources that cant be consumed, poverty has to increase.

You didn't notice that as jobs were fading away , Obama spent a year ramming Obama care down our throats , instead of working to create jobs.

[Limbo]

Obama may not be at fault for starting of the recession, but he definitely is at fault for deepening and prolonging it.

[Montanarchist]

Noone told you about the bail-out monies to the banks and Wall Street, eh???I've read quite an extensive amount of papers about the bail out and wall street and my conclusion is this; that is how our economy works. Large, capitalist enterprises such as the banks and insurance companies at Wall Street are in the modern economy dependent on state support. With the the FDIC and Gramm-Leach-Bliley Act (and others of course) moral hazard is systemic. If Obama didn't bail them out and let the free market roar it would have fallen like the house of cards it really is. Obama has instead canallized the costs through the public sector. This is horribe financial planning for the govt. but it has done nothing to deepen or worsen the recession.

Obama's stimulus can be likened with treating symptoms of withdraw by shooting heroin. Not good, but it ends the symptoms.
You didn't notice that as jobs were fading away , Obama spent a year ramming Obama care down our throats , instead of working to create jobs. Jobs can't be created. No politician can put up a plan and make sure people have jobs in a prosperous economy.

Imagine you have two decks of cards. One contains jobs, the other contains workers. For the simplest jobs any card from the Worker deck will do, but most jobs require some level of competence. So a deck from the Workers deck have to match the card from the Job deck what matters skills, availability, preference etc. They find eachother based on the law of comparative advantage, guided through pricing. No govt. department is going to be abe to sit and match these cards one by one, it happens spontaenously through barganing on the market place. Second point; if there's supposed to be any real jobs in the Job deck, then the employers need to have a reason to create them, which requires investement, resources, capital, etc. all of which we do not have in a recession. The capital stock is in a state of temporary regression and is for growth purposes unusable.
Obama may not be at fault for starting of the recession, but he definitely is at fault for deepening and prolonging it. Not in any relevant manner. If anything he has postponed the real crash, and raised the stake sby betting the finances of the entire US govt.

25% unemployment (or more (almost certainly more)) will be a reality in a short while, no matter which president we would have chosen.

[MrJim]

Most people (with at least a small understanding of economics) would agree that we avoided a massive and wipespread banking disaster because of the FDIC. That's what it was created for, to prevent a 1930's scenario that would wipe out bank accounts and grind the economy to a halt.

The contention surrounds the double-standard that allows a bank to make years of bad (and sometimes unethical) decisions and have the slate wiped clean as if tomorrow is just another day, yet if a consumer makes bad decisions (or just falls into some bad luck) they're screwed.

Fall behind and you lose your house, you get sued by creditors and their collections agencies, your insurance premium goes up, it's difficult to find a place to live or a car to drive, and you might even lose your job or not be able to find another one because companies run credit checks for employment. Meanwhile, the banks are still shipping jobs to India, refusing to grant loans, and all bad consumer debt is still on their books. Then of course we had the multimillion dollar bonuses for their executives make the headlines, sinced they deserved our taxpayer money for doing such a great job, of course.

The handling of the situation was just a terrible deal for consumers, that's all there is to it. What's worse, other businesses such as GM and Chrysler wised up to the 'too big to fail' theory and got their piece of the pie, leaving us to wonder who's next to get billions while America suffers. Allowing failures could have been worse, but we'll never know. As it stands, we're getting the message, it's okay to screw up but only if it's on a multi-billion dollar scale.


Jobs can't be created. No politician can put up a plan and make sure people have jobs in a prosperous economy.

Jobs can be created, just not in the way that the jobless (and workers who worry about their job security) are dillusional enough to expect. Currently, all businesses are in their sweet spot in terms of staff. There is no large-scale expansion right now because expectations of the near future are too low. Without expansion, everyone loses. Even if small businesses see the opportunity to expand, loans are hard to come by because the bailout has failed to fuel lending as was intended.

Job creation will depend on future expectations and that's all there is to it. As it stands, taxes are set to rise beginning January 1, and loans are not on the rise.


Imagine you have two decks of cards. One contains jobs, the other contains workers. For the simplest jobs any card from the Worker deck will do, but most jobs require some level of competence. So a deck from the Workers deck have to match the card from the Job deck what matters skills, availability, preference etc. They find eachother based on the law of comparative advantage, guided through pricing. No govt. department is going to be abe to sit and match these cards one by one, it happens spontaenously through barganing on the market place. Second point; if there's supposed to be any real jobs in the Job deck, then the employers need to have a reason to create them, which requires investement, resources, capital, etc. all of which we do not have in a recession. The capital stock is in a state of temporary regression and is for growth purposes unusable. Not in any relevant manner. If anything he has postponed the real crash, and raised the stake sby betting the finances of the entire US govt.

I like your concept of the deck of cards here. What you're really describing is structural unemployment without a 'next big thing' in our near future to balance out obsolete and redundant skill sets. There are so many marginally educated workers with unspecialized skill sets like: typing xx WPM, answering the phone, filing paperwork, etc., that it's going to be very difficult to find work for them; there are just too many others like them.


25% unemployment (or more (almost certainly more)) will be a reality in a short while, no matter which president we would have chosen.

Time will tell. Once we get the tax uncertainty out of the way in November, we'll get the bigger picture from a hiring perspective. Note that the more reliable unemployment rate that includes marginally attached, underemployed, etc., is already around 18%.

[Limbo]

This is horribe financial planning for the govt. but it has done nothing to deepen or worsen the recession.


I'm not arguing that some parts of the bail out were not necessary and I've already stated that before. However, all his other stupid policies have without a doubt deepened and worsened the recession. He obviously is of the mindset that the government should be extremely active in redistributing wealth to create some kind of phony equality and setting up a system where people get paid more than their skills are really worth. In your card analogy, he is meddling with both decks. A governments role should be as a catalyst for the jobs deck by creating an environment where the brightest among us can create innovative products and services, and then help with the employees deck by making the necessary training and education available to ensure a ready supply of workers with skills that match the jobs.



Obama's stimulus can be likened with treating symptoms of withdraw by shooting heroin. Not good, but it ends the symptoms.Jobs can't be created. No politician can put up a plan and make sure people have jobs in a prosperous economy.


Obama is redistributing wealth away from the very people who create jobs. He wants to confiscate wealth from the most productive, creative and entrepreneurial members of society and transfer it to government bureaucrats so that they can dole it out to whoever they want based mostly on political and ideological factors.This has never worked to build a strong robust economy and it won't work now.



25% unemployment (or more (almost certainly more)) will be a reality in a short while, no matter which president we would have chosen.

This will never happen if we can get rid of the people currently running the country.

[MrJim]

A governments role should be as a catalyst for the jobs deck by creating an environment where the brightest among us can create innovative products and services, and then help with the employees deck by making the necessary training and education available to ensure a ready supply of workers with skills that match the jobs.

The overall education & careers picture is catastrophic. Once upon a time, there were plenty of low-skilled, living-wage jobs available, and a college education was for a privileged few. Now that low-skilled labor is available overseas at a fraction of the cost, college education is the standard for most of today's typical, living-wage jobs. The price tag of a valuable degree is similar to that of a house. Is it any wonder that the working class is behind?

[Limbo]

The overall education & careers picture is catastrophic. Once upon a time, there were plenty of low-skilled, living-wage jobs available, and a college education was for a privileged few. Now that low-skilled labor is available overseas at a fraction of the cost, college education is the standard for most of today's typical, living-wage jobs. The price tag of a valuable degree is similar to that of a house. Is it any wonder that the working class is behind?

Your degree might cost you as much as a house if you go to an ivy league school, but there are plenty of educational opportunities out there that are not that expensive, the main problem is there are no jobs available when you graduate. I have no problem with the government having a hand in making sure appropriate training and education is available.

You forgot one other important factor, and that is illegal immigration. That has killed off millions of opportunities for working class Americans and artificially depressed wages. Construction, landscaping, pool maintenance, house painting, road work, etc., etc., are all jobs that can't be sent overseas.

[MrJim]

Your degree might cost you as much as a house if you go to an ivy league school, but there are plenty of educational opportunities out there that are not that expensive, the main problem is there are no jobs available when you graduate. I have no problem with the government having a hand in making sure appropriate training and education is available.

Yes, the sad reality that there are not very many opportunities available for anyone right now, not even college graduates. It goes to show where higher education is failing us. It is very difficult to pay back those student loans because post-college wages are not rising proportionally to the rising cost of tuition. It is also an unforgivable debt that can never be erased.

Of course, a college degree is not an entitlement and should not be treated as such. Unfortunately, without one, employment options are limited to very low-paying jobs most of the time.


You forgot one other important factor, and that is illegal immigration. That has killed off millions of opportunities for working class Americans and artificially depressed wages. Construction, landscaping, pool maintenance, house painting, road work, etc., etc., are all jobs that can't be sent overseas.

I can tell that I've been sick... I rarely ever leave this part out when I describe what's wrong with our economy. In the low-skill arena, what can't be shipped overseas comes to us, thanks to our southern neighbor.

[Montanarchist]

You forgot one other important factor, and that is illegal immigration. That has killed off millions of opportunities for working class Americans and artificially depressed wages. Construction, landscaping, pool maintenance, house painting, road work, etc., etc., are all jobs that can't be sent overseas.If the wages reflect the supply and demand on the job market they're by definition not artifically depressed.

[Limbo]

If the wages reflect the supply and demand on the job market they're by definition not artifically depressed.

Yeah, true enough monty. What I should have said is depressing pay in those areas where there are a lot of illegals working, especially since many work under the table and employers don't have to pay the normal payroll taxes for them.

[hitekredneck]

what nobody is mentioning is the saddening lack of manufacturing in our country....between OSHA, unions, and the IRS we've managed to ship a vast majority of our manufacturing overseas...until we start producing more goods we will continue to be a service-oriented economy which i do not feel is sustainable.

[MrJim]

what nobody is mentioning is the saddening lack of manufacturing in our country....between OSHA, unions, and the IRS we've managed to ship a vast majority of our manufacturing overseas...until we start producing more goods we will continue to be a service-oriented economy which i do not feel is sustainable.

Manufacturing was mainly what I was getting at with 'low-skilled jobs' - NOT that all manufacturing requires little skill, but because we used to produce in America without college graduates for entry level positions.

[Montanarchist]

I'm not arguing that some parts of the bail out were not necessary and I've already stated that before. However, all his other stupid policies have without a doubt deepened and worsened the recession. He obviously is of the mindset that the government should be extremely active in redistributing wealth to create some kind of phony equality and setting up a system where people get paid more than their skills are really worth. In your card analogy, he is meddling with both decks. A governments role should be as a catalyst for the jobs deck by creating an environment where the brightest among us can create innovative products and services, and then help with the employees deck by making the necessary training and education available to ensure a ready supply of workers with skills that match the jobs.

Obama is redistributing wealth away from the very people who create jobs. He wants to confiscate wealth from the most productive, creative and entrepreneurial members of society and transfer it to government bureaucrats so that they can dole it out to whoever they want based mostly on political and ideological factors.This has never worked to build a strong robust economy and it won't work now.

This will never happen if we can get rid of the people currently running the country.You're treating the recession as if it's a disease which has to be cures. It's not. A recession means progress. It's good liken it to symptoms of withdraw. Whatever it is that causes malinvestment, once the capital stock is too corrupted economic growth has to come to an abrupt halt and then regress untill all the malinvestments have been cleansed out. It recalculates the available resources and is then ready to grow.

If we want to create jobs we first have to destroy the existing ones. That's dynamic efficiency. Obama (or anyone else) would be able to prevent this from happening, no matter how hard they try.

[yee-haw]

.

If we want to create jobs we first have to destroy the existing ones. That's dynamic efficiency. Obama (or anyone else) would be able to prevent this from happening, no matter how hard they try.
What in the name of forrest gump is that supposed to mean monty?
Why would you destroy the existing ones and how is that efficient, Put you right back in the same boat would'nt it?

[Limbo]

If we want to create jobs we first have to destroy the existing ones. That's dynamic efficiency. Obama (or anyone else) would be able to prevent this from happening, no matter how hard they try.

Well, if Obama's goal is to destroy jobs, he's doing a damn good job of it.

[yee-haw]

Well, if Obama's goal is to destroy jobs, he's doing a damn good job of it.

That aint no fucking lie... what about the creation of new ones though?

[Limbo]

That aint no fucking lie... what about the creation of new ones though?

The IRS is hiring tens of thousands of new tax collectors to enforce the provisions of Obamacare and audit more people. Yay!

[LedZap]

Yeah , also a nice move that could be aimed at inflating the nation's employment numbers.

[Montanarchist]

What in the name of forrest gump is that supposed to mean monty?
Why would you destroy the existing ones and how is that efficient, Put you right back in the same boat would'nt it?I shall calrify.

Economic activity is sustainable patterns of specialization and trade. Economic activity in and of itself is no good. If capital consumption exceeds capital creation, or resources are being misallocated there will not be any sustainable patterns emerging. Any economic order that stems from this will necessarily have to collapse.

If people are employed in unsustainable patters they have to lose their jobs if the economy should have any real chance of recovering at any point in the future.

[yee-haw]

I shall calrify.

Economic activity is sustainable patterns of specialization and trade. Economic activity in and of itself is no good. If capital consumption exceeds capital creation, or resources are being misallocated there will not be any sustainable patterns emerging. Any economic order that stems from this will necessarily have to collapse.

If people are employed in unsustainable patters they have to lose their jobs if the economy should have any real chance of recovering at any point in the future.

I see, So basically you're saying things are going the way they have to in order for recovery already?
And anything further to create at this point is a lost effort?

More or less this is a pattern and we have to endure rather than establish at this point, Am i on track or no?

[Montanarchist]

I see, So basically you're saying things are going the way they have to in order for recovery already?
And anything further to create at this point is a lost effort?

More or less this is a pattern and we have to endure rather than establish at this point, Am i on track or no?Yes, that's right. An key concept in economics is production-possibility frontier (http://en.wikipedia.org/wiki/Production-possibility_frontier). All choices have an opportunity cost, to diverge from it is impossible. If capital is being directed beyond the frontier then it will be consumed for no purpose.

As for creation though (even though this is a minor detail) it is precisely the creative part that destroys (http://en.wikipedia.org/wiki/Creative_destruction) old, unsustainable systems. The innovative enterpriser, the entrepreneur is the driving force of the market.

[yee-haw]

Yes, that's right. An key concept in economics is production-possibility frontier (http://en.wikipedia.org/wiki/Production-possibility_frontier). All choices have an opportunity cost, to diverge from it is impossible. If capital is being directed beyond the frontier then it will be consumed for no purpose.

As for creation though (even though this is a minor detail) it is precisely the creative part that destroys (http://en.wikipedia.org/wiki/Creative_destruction) old, unsustainable systems. The innovative enterpriser, the entrepreneur is the driving force of the market.


Interesting... I got ya now, Thanks for the explaning and clearing that up.

[MrJim]

If we want to create jobs we first have to destroy the existing ones. That's dynamic efficiency. Obama (or anyone else) would be able to prevent this from happening, no matter how hard they try.

This would be assuming that all of the jobs that were eliminated during the recession were obsolete and/or redundant, even in a normal growth economy. Some of them were - those that couldn't survive the collapse of their industries - but consumer fear and the resulting nosedive in spending caused most of the job losses in the service sector, the driver of the American economy.

[Montanarchist]

This would be assuming that all of the jobs that were eliminated during the recession were obsolete and/or redundant, even in a normal growth economy. Some of them were - those that couldn't survive the collapse of their industries - but consumer fear and the resulting nosedive in spending caused most of the job losses in the service sector, the driver of the American economy.I don't think that's a necessary assumption. The jobs eliminated during the recesssion are eliminated because of the recaclculation of the capital structure. The jobs may very well have been of good use in a normal growth economy, but if the capital godds to support them have been consumed we can't sustain them.

Really, it's hard to speak of "obsolete and/ or redentant" jobs. Economic activity is as is said made up by sustainable patters of spcecialization and trade. exactly what people specialize in and what is being traded or even how they do it is not exactly relevant. It's the part about sustainability I wish to put emphasis on.

[hitekredneck]

funny. monty....i work in the energy field here in colo, and the biggest reason for our "slowdown" is a plethora of new drilling regs coupled with outrageous fees and taxes...which has driven most of this type of work from west co to pens and north dakota...while not being able to directly blame the bammer for this slowdown, the cause CAN be found in his type of liberal policy-making

[Montanarchist]

funny. monty....i work in the energy field here in colo, and the biggest reason for our "slowdown" is a plethora of new drilling regs coupled with outrageous fees and taxes...which has driven most of this type of work from west co to pens and north dakota...while not being able to directly blame the bammer for this slowdown, the cause CAN be found in his type of liberal policy-makingI wouldn't disagree with you on that.

[hitekredneck]

I wouldn't disagree with you on that.

good...because i do believe that jobs could be created through a corporate tax holiday for say, five years or so for corporations willing to build manufacturing plants in our country...the losses in tax revenue would be offset by higher employment numbers, leading to more payroll taxes as well as local spending in those areas...that's one way, and if a redneck like me can figure this out, you'ld think a genious (need a rolling eyes smiley here) like our beloved leader would be able to

[MrJim]

good...because i do believe that jobs could be created through a corporate tax holiday for say, five years or so for corporations willing to build manufacturing plants in our country...the losses in tax revenue would be offset by higher employment numbers, leading to more payroll taxes as well as local spending in those areas...that's one way, and if a redneck like me can figure this out, you'ld think a genious (need a rolling eyes smiley here) like our beloved leader would be able to

Good idea; or cut taxes significantly for domestic manufacturers and create new taxes for the outshorers.

[MrJim]

The same thing goes for the IT industry that offshores white-collar work, companies that insource workers with H1B Visas, etc., anyone who helps perpetuate unethical trade imbalances. It sounds harsh, but options are limited at this point.

[Limbo]

good...because i do believe that jobs could be created through a corporate tax holiday for say, five years or so for corporations willing to build manufacturing plants in our country...the losses in tax revenue would be offset by higher employment numbers, leading to more payroll taxes as well as local spending in those areas...that's one way, and if a redneck like me can figure this out, you'ld think a genious (need a rolling eyes smiley here) like our beloved leader would be able to

While I think it would work, the idea of cutting taxes like that (especially capital gains taxes which I think would have the biggest impact) is an anathema to the Demorats. They want the wealth to flow through their hands so they have control of it and therefore can control people and tell them what to do and how to live their lives. The elites figure they are so much smarter than the rest of us and we can't be trusted... you know the story.

[MrJim]

When my job was outsourced, what the company did was contract with an outsourcing company in Britain. The new workers were not on our company's payrolls, rather they were employed through an Indian company whose services were purchased through the British company and the final service package was purchased by ours.

I'm not sure if manufacturers operate the same way; I only have my first-hand experience to offer. If so, an effective tax on offshored labor would potentially be a tariff on foreign imports (a foreign labor 'package'), which would appear to kill two birds with one stone - however, a foreign company such as the British firm in my example would bear the brunt of the tariff rather than the country which actually sources the work, which would create the demand for reciprocal tariffs on our exports. It can be done, but it's tricky. Any suggestions?

[Limbo]

It can be done, but it's tricky. Any suggestions?

Yeah, forget about it. http://smileys.chitchat247.com/smilies/laugh_16.gif Don't get me wrong, I know the feeling since I've been outsourced out of a job twice myself. I ended up starting my own business so that won't happen. I don't make as much as I used to and I have to rely on my wife's healthcare, but the freedom of working for yourself is just awesome.

But back to your question, capital is very mobile these days. Also technology has shrunk the world with cheap data and voice making it viable to have people working anywhere on the planet pretty much. I just don't see how you can fight it with punitive taxation/tariffs without making the problem worse.

Having said that, one negative of outsourcing is people hate it when they get stuck on the phone talking to non-native English speakers, and many companies are finding out outsourcing isn't as cheap or great as they were told. Some are moving jobs back.

One other thing is that we need to free up innovators in this country to create new kinds of opportunities. The wealth creation and jobs will come as they always do from the private sector.

[Montanarchist]

good...because i do believe that jobs could be created through a corporate tax holiday for say, five years or so for corporations willing to build manufacturing plants in our country...the losses in tax revenue would be offset by higher employment numbers, leading to more payroll taxes as well as local spending in those areas...that's one way, and if a redneck like me can figure this out, you'ld think a genious (need a rolling eyes smiley here) like our beloved leader would be able toIt would do the trick to create employment, but otherwise it would concentrate more wealth in the corporate class than it spreads to the general population by making them exempt. What would allow for new opportunities - as far as stable wealth creation and wealth sharing goes - would be to abolish intellectual property and/or get rid of corporations as separate legal entities. Innovation and economic development could flourish when there's no particular barrier for production.

[MrJim]

I could see getting rid of corporations as legal entities, but why abolish intellectual property? Do that and there is no incentive to create.

[hitekredneck]

It would do the trick to create employment, but otherwise it would concentrate more wealth in the corporate class than it spreads to the general population by making them exempt. What would allow for new opportunities - as far as stable wealth creation and wealth sharing goes - would be to abolish intellectual property and/or get rid of corporations as separate legal entities. Innovation and economic development could flourish when there's no particular barrier for production.

think about it, monty...not only do you have the manufacturing plant, you have a plethora of small businesses supporting the plant as well as the surrounding neighborhood, such as cafe's and eateries, bars, and suppliers to the plant itself. i would possibly extend the tax holiday if the money went straight to R&D for product innovation, if you know what i mean

[Montanarchist]

I could see getting rid of corporations as legal entities, but why abolish intellectual property? Do that and there is no incentive to create.Over all IP is used mainly to concentrate capital and really destroy innovation more than it helps. Murray Rothbard puts forth the problems of patent law quite well:

"The man who has not bought a machine and who arrives at the same invention independently, will, on the free market, be perfectly able to use and sell his invention. Patents prevent a man from using his invention even though all the property is his and he has not stolen the invention, either explicitly or implicitly, from the first inventor. Patents, therefore, are grants of exclusive monopoly privilege by the State and are invasions of property rights on the market." [Man, Economy and the State p. 655]

He also states that the competitive advantage we're supposed to gain from patents is matched by the competitive advantage of simply being first with a new invention. The difference is that with patents further innovation is prevented. In part because innovation based on previous patents is prevented and in part because a patent holder does not have an incentive to innovate as long as he can profit from his patent for the rest of his life.

And looking at the empirics of it;

1) most scientists in R&D departments do not hold patent rights to their own inventions, they sign those over to their employer as a condition of employment. ( SOURCE: p. 118 (http://multiworldindia.org/wp-content/uploads/2010/05/Recolonization1.pdf) )
2) Italy did not recognize IP in the pharmaceutical industry until the 70s, as a result Valium and Librium could be sold for a 40th of the price in Italy compared to Britain.( Source: p. 124 (http://multiworldindia.org/wp-content/uploads/2010/05/Recolonization1.pdf) )
3) Innovation is never cited as the main driving force behind innovation by corporations.

"Interestingly, the results of several studies have shown that the majority of industries do not consider patents to be very important assets. In a study published by Richard Levin in 1987,(26) firms in 130 lines of business reported that patents were the least important means of securing competitive advantages from new products.(27) These industries placed a higher value on business strategies like secrecy, being first with an innovation, the ability to move quickly down the learning curve, and sales or service efforts. In fact, 80 percent viewed investments in complementary sales and service efforts as a highly effective strategy for capturing a competitive edge from their research and development activities.(28)" (Source: Hearings on Global and Innovation-Based Competition (http://www.ftc.gov/speeches/other/speech37.shtm) )

The only real exception found was in pharmaceutical indstries, but this is dubious, mainly because the R&D departments of pharmaceutical corporations are highly subsidized by govt.

All things considered, protecting IP is to exclude others from profiting of certain ideas, to concentrate capital and to control prices, not to spurr innovation. The simple action of breaking IP laws is not detremental to anyone.
http://ninapaley.com/mimiandeunice/wp-content/uploads/2010/07/ME_103-640x199.png

[Limbo]

The laws for IP are definitely out of whack in the U.S., and it is true, they are often used to stifle competition more than anything. This is especially true with software patents. Remember when RIM was bilked out of 100's of millions of dollars by patent trolls who abused the system by having a judge slap an injunction forcing RIM to shut down their operations while the patents were looked at? Of course RIM had to pay up even though the patents were bogus.

Going to the other extreme and getting rid of IP altogether would kill off a lot of legitimate R & D. Why would you spend 100's of millions of $'s developing a new drug or product that will just be copied by your competitors for free?

[Montanarchist]

Going to the other extreme and getting rid of IP altogether would kill off a lot of legitimate R & D. Why would you spend 100's of millions of $'s developing a new drug or product that will just be copied by your competitors for free?In theory this is assumes that the product can only be profitable under an IP regime. The capital and labor employed in a different legal framework would produce different results.

The reputation advantage of being the first mover is worth considering as well. As far as I recall a non-patented drug could maintain a 30% market share that way (i'll try and dig up a source for that).

[Limbo]

In theory this is assumes that the product can only be profitable under an IP regime. The capital and labor employed in a different legal framework would produce different results.


What kind of legal framework did you have in mind?

[Montanarchist]

What kind of legal framework did you have in mind?One that does not protect IP of course.

There's no point in doing your best to be profitable when IP is not recognized if IP is recognized. It's all about incentives.