Heavy Lifting - thoughts and web finds by an economist
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Thursday, October 23, 2008
Could you imagine a dialogue like this in a movie today? We won't see anything like this until (or if) Atlas Shrugged is ever produced.
Amen. Everything you see is profits. The "consumer profits" the industrialist refers to is what economists call "consumer surplus." It is a tremendously underappreciated aspect of transactions because most people treat transactions as a zero-sum game from the point of view of the consumer. The truth is that our consumer surplus is enormous, both on an individual and national level. For all the goodies we get from the private sector all the private sector requires is an average 9% pre-tax profit and an average post-tax profit of approximately 5%. Five cents on the dollar to give us plasma televisions, cell phones, automobiles, food, and everything else we enjoy.
To denigrate private business in film, politics, and especially policy, is shameful.
Is there corporate malfeasance? Of course, and that is what the civil and criminal justice system should be used to prosecute. Rather, the "court of public opinion" is used to justify the seizure of profits and income. On the other hand, the amount of benefit we as a society receive from private individuals earning a profit is enormous.
Here's another one from "Other People's Money"
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