This series will deal with the rise and fall of businesses, the role of profits and losses, and big business and government, among some other topics I may decide to throw in and other relevant topics that others would like to discuss.
*This one is in the works still.
Politics and the Economy, Series III: Industry and Commerce
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smockers83
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smockers83
- Posts: 3889
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Re: Politics and the Economy, Series III: Industry and Commerce (smockers83)
Sorry for the delay, as some of you may know, I have been without a computer for awhile. Still am and am mooching off other people as I can. I'm hoping to get this one finished this weekend.
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gingerbredman
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Re: Politics and the Economy, Series III: Industry and Commerce (smockers83)
I'd like to read.. yeah the govt is only helping the prominent banks and therefore partly owning them and having hearsay over the customers ultimately, which the govt will likely use to try and control us, the people, by controlling our money, which is our survival -_-^. Don't forget about the 'thing' going on in Huarez. Jeez, I don't want to think about the stuff going on nowadays..
Actually, probably shouldn't write about the Huarez deal, to be safe..
Actually, probably shouldn't write about the Huarez deal, to be safe..
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telcoman
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Re: Politics and the Economy, Series III: Industry and Commerce (smockers83)
Some here have a bias against the New York Times but I thought this piece appearing this morning was a good one.
http://www.nytimes.com/2009/03...?_r=1
Does it really make sense to tear people apart who are trying to fix a problem for $1 a year?
Is being president of the United States really worth the $250k that he is paid?
Damm, I hope this bailout works?
I don't think letting AIG fail is worth the risk of a worldwide economic and financial collapse. The economic mistakes that were made after WW1 led us into the depression and into WWll. Hopefully that will not happen again.
Telcoman
http://www.nytimes.com/2009/03...?_r=1
Does it really make sense to tear people apart who are trying to fix a problem for $1 a year?
Is being president of the United States really worth the $250k that he is paid?
Damm, I hope this bailout works?
I don't think letting AIG fail is worth the risk of a worldwide economic and financial collapse. The economic mistakes that were made after WW1 led us into the depression and into WWll. Hopefully that will not happen again.
Telcoman
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gingerbredman
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Re: Politics and the Economy, Series III: Industry and Commerce (telcoman)
I just don't see how by giving only giant financial corporations funding how that will ever help us, if anything people will probably just get into debt even further..
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telcoman
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Re: Politics and the Economy, Series III: Industry and Commerce (gingerbredman)
Don't worry, be happy and show some optimism.gingerbredman wrote:I just don't see how by giving only giant financial corporations funding how that will ever help us, if anything people will probably just get into debt even further..
http://online.wsj.com/article/....html
Tim Geithner has things under control
Telcoman
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smockers83
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Re: Politics and the Economy, Series III: Industry and Commerce (smockers83)
Alright, this is long over due as this one is a little harder and longer without being boring, redundant, and stupidly obvious. I have also decided to throw in business cycle theory as well. Nothing like some good economics with a good beer.
We'll start with the rise and fall of business.
Simply put, the rise and fall of business is due to the scarcity of knowledge, a business' ability and willingness to adapt and understand the changes going on in it's market. Knowledge is probably the most scarce thing in an economy regardless of what kind of economic system is in place. If a company is capable and willing to make changes and adapt to changes happening in it's market, it can reap in profits. However, if a company is incapable of changing or doesn't understand the changes, it can incur huge losses and ultimately the company's demise. With that said, let's look at the different kinds of changes that can occur.
Social ChangesIn the early 20th century, the largest retail chain in the world existed, called A&P, which was a grocery chain. At it's peak, it had the largest number of stores of any company in the world prior and since. Today, A&P is such a small fraction of it's size during it's glory days. In the early 20th century and through the 50s, the A&P chain was able to be so successful because it's business model was much more efficient than any other grocery chain out there. The efficiencies that they had allowed them to capitalize in sales through lower prices than the competition. In the 50s though, the US saw the widespread increased use and affordability of the automobile, which led to suburbia.
Some people realized and understood the implications of this large social change. People with automobiles could now travel farther, could carry more groceries, and could also stock up more than they used to with the increased use and affordability of refrigeration units and freezers. While A&P kept its thousands and thousands neighborhood stores, other grocery chains and new chains consolidated into more or less of how we view grocery chains today. With these social changes and the ability to consolidate stores, this introduced a whole new level of efficiency into the market and lowered costs of bringing goods to consumers. This allowed other and new chains to become more competitive than A&P, which was resistant to change, and sell at lower prices. Nor did A&P follow the money into sunbelt states such as California. These chains found it much more efficient to check out one person buying $50 worth of groceries than 10 people buying $5 worth like A&P did. This knowledge and understanding of the knowledge lead to the rise of new successful chains and the severe reduction in size of A&P.
Other companies, such as Wards and Sears didn't start out as department stores as we now know/knew them. Montgomery Wards as it was known before being just Wards, was a mail order retail business. They capitalized on the efficiency of having a huge warehouse of goods and selling directly to consumers, whom the majority still lived in rural communities. This allowed them to sell at lower prices than stores in these communities and Montgomery Wards grew into the nation's largest retailer. Sears also started out as a mail order company. In 1920, it was seen in statistics that the population was now moving into urban areas, as now more people lived in the cities than rural communities. A man at Montgomery Wards recognized this and proposed to upper management that they now open stores in the cities instead of relying on the mail order system. Wards fired him for not sticking to company policy and he then moved to Sears and tried to convince management there to do the same. Sears moved on the opportunity and became very successful with their stores.
J.C. Penney had the same insight when he started his store before Sears or Wards did. By 1920, he grew is chain to more than 300 stores and to more than 1000 by the end of the decade and became a huge problem to the mail order giants of Montgomery Wards and Sears because his model was even more efficient than theirs was with the social changes taking place.
Woods, the man from Wards who went to Sears, convinced them and followed Penney's model. Montgomery Ward was the last of the three to implement the new business model and was never able to regain their top retailer designation and is now no longer existent. Sam Walton was a clerk in a Penney's store and learned the business from the ground up and then used that knowledge to begin his own, now known as Wal-Mart, which has more sales than Penney's and Sears combined.
J.C. Penney grew up in poverty much worse than many of those on welfare today, yet he had the insight that those of the giants in Montgomery Wards and Sears did not, and his insight prevailed among some of the richest men of his time. His insight led to huge profits for him and huge losses to the other two companies as he was able to undersell them, only to have the other two companies buckle and imitate his model in order to become profitable again.
Economic ChangesOne of the biggest economic changes of our time is the credit/debit card. In the 50s and 60s, department stores such as Bloomingdale's and Macy's refused to accept credit cards for payment even though millions of people in NYC had these cards. Smaller stores accepted this form of payment and had huge success with it, which only led to Bloomingdale's and Macy's to accept them as payment in order to bring back customers and profits. Now, these and other large department stores issue their own cards and in 2003, there were more purchases made by credit card than cash for the first time. That same year, Fortune reported that some companies made more profits from their store-issued credit cards than from actual sales. Sears made more than half of its profits from credit cards and the now-bankrupt Circuit City made all of its profits on its credit cards.
Technological ChangesEastman Kodak was the world leader in the photographic company for decades. However, technology introduced new competitors. With the advent of digital cameras from traditional film camera producers such as Nikon, Canon, and Minolta, we also saw Samsung and Sony enter the photography industry. At the same time as this new technology became more and more accepted by consumers, by 2000, film cameras began to decline and digital cameras outsold film cameras by 2003. The sudden change from film to a digital format left Kodak scrambling to make the switch, which has put it on the back burner in the consumer photography market.
That's it for now as it's getting late and it is pretty basic, common sense stuff, and to be honest, is quite boring for me. Up next is the role of profits and losses.
We'll start with the rise and fall of business.
Simply put, the rise and fall of business is due to the scarcity of knowledge, a business' ability and willingness to adapt and understand the changes going on in it's market. Knowledge is probably the most scarce thing in an economy regardless of what kind of economic system is in place. If a company is capable and willing to make changes and adapt to changes happening in it's market, it can reap in profits. However, if a company is incapable of changing or doesn't understand the changes, it can incur huge losses and ultimately the company's demise. With that said, let's look at the different kinds of changes that can occur.
Social ChangesIn the early 20th century, the largest retail chain in the world existed, called A&P, which was a grocery chain. At it's peak, it had the largest number of stores of any company in the world prior and since. Today, A&P is such a small fraction of it's size during it's glory days. In the early 20th century and through the 50s, the A&P chain was able to be so successful because it's business model was much more efficient than any other grocery chain out there. The efficiencies that they had allowed them to capitalize in sales through lower prices than the competition. In the 50s though, the US saw the widespread increased use and affordability of the automobile, which led to suburbia.
Some people realized and understood the implications of this large social change. People with automobiles could now travel farther, could carry more groceries, and could also stock up more than they used to with the increased use and affordability of refrigeration units and freezers. While A&P kept its thousands and thousands neighborhood stores, other grocery chains and new chains consolidated into more or less of how we view grocery chains today. With these social changes and the ability to consolidate stores, this introduced a whole new level of efficiency into the market and lowered costs of bringing goods to consumers. This allowed other and new chains to become more competitive than A&P, which was resistant to change, and sell at lower prices. Nor did A&P follow the money into sunbelt states such as California. These chains found it much more efficient to check out one person buying $50 worth of groceries than 10 people buying $5 worth like A&P did. This knowledge and understanding of the knowledge lead to the rise of new successful chains and the severe reduction in size of A&P.
Other companies, such as Wards and Sears didn't start out as department stores as we now know/knew them. Montgomery Wards as it was known before being just Wards, was a mail order retail business. They capitalized on the efficiency of having a huge warehouse of goods and selling directly to consumers, whom the majority still lived in rural communities. This allowed them to sell at lower prices than stores in these communities and Montgomery Wards grew into the nation's largest retailer. Sears also started out as a mail order company. In 1920, it was seen in statistics that the population was now moving into urban areas, as now more people lived in the cities than rural communities. A man at Montgomery Wards recognized this and proposed to upper management that they now open stores in the cities instead of relying on the mail order system. Wards fired him for not sticking to company policy and he then moved to Sears and tried to convince management there to do the same. Sears moved on the opportunity and became very successful with their stores.
J.C. Penney had the same insight when he started his store before Sears or Wards did. By 1920, he grew is chain to more than 300 stores and to more than 1000 by the end of the decade and became a huge problem to the mail order giants of Montgomery Wards and Sears because his model was even more efficient than theirs was with the social changes taking place.
Woods, the man from Wards who went to Sears, convinced them and followed Penney's model. Montgomery Ward was the last of the three to implement the new business model and was never able to regain their top retailer designation and is now no longer existent. Sam Walton was a clerk in a Penney's store and learned the business from the ground up and then used that knowledge to begin his own, now known as Wal-Mart, which has more sales than Penney's and Sears combined.
J.C. Penney grew up in poverty much worse than many of those on welfare today, yet he had the insight that those of the giants in Montgomery Wards and Sears did not, and his insight prevailed among some of the richest men of his time. His insight led to huge profits for him and huge losses to the other two companies as he was able to undersell them, only to have the other two companies buckle and imitate his model in order to become profitable again.
Economic ChangesOne of the biggest economic changes of our time is the credit/debit card. In the 50s and 60s, department stores such as Bloomingdale's and Macy's refused to accept credit cards for payment even though millions of people in NYC had these cards. Smaller stores accepted this form of payment and had huge success with it, which only led to Bloomingdale's and Macy's to accept them as payment in order to bring back customers and profits. Now, these and other large department stores issue their own cards and in 2003, there were more purchases made by credit card than cash for the first time. That same year, Fortune reported that some companies made more profits from their store-issued credit cards than from actual sales. Sears made more than half of its profits from credit cards and the now-bankrupt Circuit City made all of its profits on its credit cards.
Technological ChangesEastman Kodak was the world leader in the photographic company for decades. However, technology introduced new competitors. With the advent of digital cameras from traditional film camera producers such as Nikon, Canon, and Minolta, we also saw Samsung and Sony enter the photography industry. At the same time as this new technology became more and more accepted by consumers, by 2000, film cameras began to decline and digital cameras outsold film cameras by 2003. The sudden change from film to a digital format left Kodak scrambling to make the switch, which has put it on the back burner in the consumer photography market.
That's it for now as it's getting late and it is pretty basic, common sense stuff, and to be honest, is quite boring for me. Up next is the role of profits and losses.
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gingerbredman
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Re: Politics and the Economy, Series III: Industry and Commerce (smockers83)
Good stuff man, keep on keepin' on.
What about some thoughts on immigrations (legal/illegal) impact in this current time of economical uncertainty? :? I only see it as so:
Money's tighter, foreign labor is cheaper= foreign laborers= job loss
Construction will always be in high demand as population is always increasing by means of reproduction or immigration, but you know the saying "Give the fool an inch and he will take a mile". I know this is hurting us hard-working tax-paying citizens, and it's only helping the big corporate giants, with the government's approval of allowing the huge influx of immigrants to the US. Well that might have been NAFTA I don't quite remember.. but look now, have you seen the news? A captured Mexican cartel member claims the cartels have spread out all over the US. The killings are massive in number and horrendous in manner, to say the least. There's so much disorder behind the curtains it's practically almost a .. I don't even know the word. People have to stop leaving all the decisions to one ole guy, I'm not saying do something now, just prevent the wrong things from happening, and getting worse.
*It's sad, it's all a fulfillment of the Bible, and Obama is just fulfilling it to the fullest of his abilities it seems..
What about some thoughts on immigrations (legal/illegal) impact in this current time of economical uncertainty? :? I only see it as so:
Money's tighter, foreign labor is cheaper= foreign laborers= job loss
Construction will always be in high demand as population is always increasing by means of reproduction or immigration, but you know the saying "Give the fool an inch and he will take a mile". I know this is hurting us hard-working tax-paying citizens, and it's only helping the big corporate giants, with the government's approval of allowing the huge influx of immigrants to the US. Well that might have been NAFTA I don't quite remember.. but look now, have you seen the news? A captured Mexican cartel member claims the cartels have spread out all over the US. The killings are massive in number and horrendous in manner, to say the least. There's so much disorder behind the curtains it's practically almost a .. I don't even know the word. People have to stop leaving all the decisions to one ole guy, I'm not saying do something now, just prevent the wrong things from happening, and getting worse.
*It's sad, it's all a fulfillment of the Bible, and Obama is just fulfilling it to the fullest of his abilities it seems..
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smockers83
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Re: Politics and the Economy, Series III: Industry and Commerce (gingerbredman)
In regards to immigration, in short, it's not going to have a huge impact. Labor as capital is one of the slowest moving forms of capital. People have to move and that takes a lot of time for an immigrant, even the illegal ones. They then have to get settled in the US and then find a job, which takes even more time. On top of that, if a company is having to cut jobs in order to save money, they're going to cut jobs completely and not hire someone cheaper. Further, most companies obey the labor laws so if illegals are getting jobs, they aren't necessarily jobs that would be taken away from US residents.
If you find this interesting, I would suggest that you find the first two of the series. Feel free to ask questions and comment on those as well.
If you find this interesting, I would suggest that you find the first two of the series. Feel free to ask questions and comment on those as well.