Let the campaign begin!

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Post by Yuri Yukuv Wed Sep 05, 2012 9:05 am

VivaStPauli wrote:
Also the whole "We built that!"-schtick is rather embarassing, considering that Obama clearly wasn't speaking of businesses that weren't built by individuals, but of infrastructure, in his whole quote. Specifically, he was talkling about bridges and roads.

Hey VivaStPauli,

I think this article from a central-left website (Slate) explains partly why "You didnt build that" is not going away, I have heard that argument before many times and I know what it conveys. Its deeply disturbing to anyone who has worked 7 day weeks at 10 hour days to get where they are. It also reeks of populism and class warfare. Maybe these are not important to you as many in europe are still rich because of money leftover from feudalism and/or government corruption, however in the US most of the richer individuals are innovative hardworking entrepreneurs like Steve Jobs, Sergey Brin, Ray Crock, Warren Buffet and Mitt Romney leader of Bain Capital through 15 years of constant over performance.

“You Didn’t Build That” Isn’t Going Away
It doesn’t matter what Obama meant. Here’s why.

The official theme of the GOP convention Wednesday night was "We Can Change That," but that didn’t stop several of the speakers from revisiting Tuesday’s theme, the base-rallying battle cry: “We Built It.” The message: The righteous exploitation of President Obama’s “You Didn’t Build That” gaffe isn’t going away.

Ever since the president stood before a crowd of supporters in Roanoke, Va., on July 13 and, while explaining why the wealthy should pay more in taxes, uttered the infamous words “If you've got a business—you didn't build that. Somebody else made that happen,” conservatives have hammered him for his disregard for small-business owners. And liberals have hammered back that Obama was taken out of context. To be fair, this is the full quote:

If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you've got a business—you didn't build that. Somebody else made that happen.

Obama supporters can complain all they want. They can argue that when he said “that,” he was talking about the roads and bridges, not the business itself. It doesn’t matter. And it’s pointless to blame Mitt Romney or the RNC or anyone else for taking it out of context. Here’s why.

Many moons ago, I spent a couple of years in a fiction-writing program at a local university. I never finished the novel I aspired to write, but I did learn some valuable lessons. The most important: “It doesn’t matter what you meant. What matters is what you conveyed.” In the context of class, that meant when we were sharing our work and listening to feedback, we couldn’t butt in and say that we’d meant something else. We needed to take ourselves out of our own head and try to understand what our readers had heard.

In the case of Obama’s Roanoke speech, conservatives everywhere heard, ”You don’t get credit for your hard work.” I agree with the Washington Post for giving the Romney campaign four Pinocchios for repeating the truncated quote ad nauseam. I wish Romney’s team would use the full version. Because even in its full glory, it would inspire largely the same reaction. The sentiment resonates with small-business owners—and it’s small-business owners who have been most vocal in their response to Obama’s comments, from the co-owner of an Iowa deli who good-naturedly catered an Obama campaign stop in a T-shirt saying, “Government didn’t build my business” to the hardware store owner who was a bit less gracious.

Conservatives suspect that President Obama sees government as the solution to everything. Only someone who thinks government is the answer would describe a stimulus program that cost at least $185,000 per job as successful. I can’t think of a starker difference between the liberal and conservative worldviews than the Life of Julia slide show. Liberals look at that video and see a woman aided by a social safety net. Conservatives look at it and are creeped out by the fact that liberals think the very-capable-seeming Julia can’t do anything without government help.

That same sentiment comes through in the “You Didn’t Build That” speech. Obama’s words contain an undertone that business owners are selfish, that they are ungrateful toward those teachers who helped them along the way. And that is where Obama’s misunderstanding of small business, real or perceived, shines through.

Quite apart from whatever taxes they pay, small-business owners are part of the very fabric of their communities. Someone has to run the pharmacy. Someone has to run the gas stations. Local businesses don’t send their profits back to Bentonville, Ark.; Minneapolis, Minn.; or Cupertino, Calif., but rather put them back into the community. The restaurant owner gets his produce and meat from local stores, the mechanic hires a local painter to spruce up his shop. They are the ones who not only give money to the athletic booster club and the PTA, but show up to help out at fundraisers. And if that teacher who helped them with their math homework stops by, the owner gives her a free oil change or an extra slice of pie for dessert.

The president’s comment implies that business owners are ignorant of all the benefits they get from government. And it makes Obama’s supporters look unaware of all that government gets out of businesses and how political decisions affect entrepreneurs. Ask a business owner if they feel like they get more out of the government than they give. Sure, it helps that the city paves the road that was there for 20 years before they opened their business, and maybe they are grateful for that new traffic light. They understand that the local police protect their livelihoods. On the other hand, do politicians not appreciate that business owners match every dollar their employees contribute to Social Security and Medicare? Do politicians not understand when they are patting themselves on the back for raising minimum wage that somewhere, some shop owner is reaching for the ulcer medication while he weighs whether to raise prices, cut back employee hours, or rethink his hours of operation?

By Friday morning, crews will be tearing down the GOP convention stage and those crazy screens and banners that hung throughout the Tampa Bay Times Forum. We’ll have forgotten “We Can Change That” and “We Believe in America.” But every day for the next two months, business owners will pull on T-shirts and hang signs on their stores that say “I Built This.” Go ahead, try telling them what their president “meant.”

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Post by RedOranje Wed Sep 05, 2012 9:18 pm

Obama politicising things? It was the Republicans in Congress that's refused many of his moderate proposals and it's that's forced Obama to steadily play more toward the extreme end of the Democratic spectrum. Obama's campaign, and early Presidency were built around moderate policies and attempting to bridge the gap between the parties. Republicans refused to work with him, destroying that avenue of policy making though, and leaving Obama with only one option... playing to the far left.

So yes, the economic efforts haven't been as successful as many hoped/believed they would be, but that's not something you can lay completely at his feet. Fact is, the Republicans have done as much as anyone to sabotage the efforts specifically to give them a better chance in this election. The pitfall of the two-party system... a moderate Politician ends up being forced to one side or left to hang on his own. So congrats on that, the Republicans and Democrats can share the blame equally on this one.
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Post by Amar Thu Sep 06, 2012 4:27 am

All bow down to the People's Champ, Bill Clinton :bow:
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Post by Jonathan28 Thu Sep 06, 2012 11:47 am

Bill Clinton :bow:

We are not worthy
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Post by VivaStPauli Thu Sep 06, 2012 12:07 pm

Yuri Yukuv wrote:
Hey VivaStPauli,

I think this article from a central-left website (Slate) explains partly why "You didnt build that" is not going away, I have heard that argument before many times and I know what it conveys.

I read that article, and I got the point it makes, but that doesn't make it any more true. And here's what's disturbing to me, it is what immideatly follows in your statement, where you completely gloss over the fact that we both know, what the President actually said, yet you continue to assume he meant, what Republicans want him to have said.

Its deeply disturbing to anyone who has worked 7 day weeks at 10 hour days to get where they are.

Why? What he said isn't. What you want him to have said is. But that's not his fault. He can only be blamed for what he said, not what you guys want to hear. And what's so offensive? To remind business executives that they used roads?

And let's not forget the much broader point: tens of millions of people work 7 day weeks with 10 hour shifts and still didn't get anywhere.

It also reeks of populism and class warfare.

Why? It just doesn't. Not what he actually said. I get that you don't want "big government", but surely you still want infrastructure to exist.

Maybe these are not important to you as many in europe are still rich because of money leftover from feudalism and/or government corruption

What is it with the right-wing fetish of painting Europe as some kind of medieval backwater? The Feudal system has been dismantled in most European countries about as long, if not longer, than the US has been independet from Britain. I mean, sure, I study at a over 600 year old university, my place of work has been open since the 1130s, and the house I live in was built in the late 18th century, but that doesn't mean we're still ruled by Kaiser Friedrich.

The problem of things being "left over" is perfectly valid for the US too. Why do you think you have dynasties? The Kennedys, Bushes, Kerrys and Romneys are rich as f*ck. Mitt Romney didn't achieve what he did because he's so very very smart, he did it because his f*cking rich dad paid his way through the ivy league, and set him up with a nice startup bundle.

Give me 10 million and I'll make 20 million out of them as well. Getting that first million is the hard part.

Also, you need a swift history lesson about what class warfare actually is. A bit of socially aware economics like all of Europe has doesn't turn you into Communist Russia, class warfare is what happened during the rise of Lenin and Mao, not raising taxes to make education cheaper for the middle class.

however in the US most of the richer individuals are innovative hardworking entrepreneurs like Steve Jobs, Sergey Brin, Ray Crock, Warren Buffet and Mitt Romney leader of Bain Capital through 15 years of constant over performance.

That's just crap. Yes, people like Jobs, or Gates, for that matter, built something from basically nothing, but same as in Europe, most of your super-rich people inherited a nice super-rich starter packet from their parents, and built on that success. Just look at dimwits like Trump, who has managed to bankrupt a f*cking Casino - if he didn't have daddy, that guy wouldn't even be fit to flip burgers.


The funny thing is, that in economic upward mobility, as in the chance of poor people to become rich, the US rank well below all those "socialist" European states. Germany, where I live, isn't doing too well in that regard as well, but we're still miles ahead.

You know where the dishwasher-to-millionaire story is most likely to happen? Scandinavia. As in that Scandinavia that has the biggest government spending on social security nets.

And a final prayer on the issue of socialism:

America has to get over themselves. McCarthy is f*cking dead, and should stay dead. The West's problem with the Eastern block never was their socialist views on the economy, it was that they were aggressive, expansive dictatorships.
Lack of freedom is the problem, not the overabundance of social security.

Socialism isn't inherintly bad, dictatorship is. Just look at the Nazis. They were as right-wing, and corporatist as it gets. They loved Big Business. The problem was that it was a genocidal dictatorship. Same with Russia. Who gives a shit about their attitude towards the working class if they suppress free speech, fill their gulags with dissidents and try to establish satellite states everywhere?

Seriously, the right needs to get those deluded talking points off the table and start to act like grown ups.

For me, as a Politics major, and with a rudimentary grasp of world history, the Republican speeches make me cringe. Try formulating a thesis from the base of fact for once, instead of bending the facts to match your agenda.
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Post by kiranr Thu Sep 06, 2012 1:07 pm


Socialism isn't inherently bad, but the way it is implemented in many countries is as bad as it gets.

Ad being a capitalist does not mean loving big businesses. Favouring a few big businesses is as anti-liberal as it gets.
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Post by VivaStPauli Thu Sep 06, 2012 1:49 pm

I agree, but that's not the point.

Allowing same-sex marriage would be a traditionally conservative right-wing thing to do. It's limiting the Governments influence on private life. How in hell fundamentalist Christianity got such a stranglehold on the party of small government is beyond me.

Yes, Reagan, but come on, it's still ridiculous. Republicans should be the party legalizing gay marriage and pot, Democrats should be the party raising taxes and spending. Yet nobody spent bigger than Bush, and the whole love affair between economic liberalism and Christian fundamentalism is just too utterly bizarre.
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Post by Guest Thu Sep 06, 2012 2:18 pm

Top notch speech, only Bill Clinton can pull it off, class act indeed. truly captivating speech in support of Democratic administration and Obama while showing respect for republicans...

Personally I think Obama deserve a chance to stay for another 4 years. totally understandable that republican supporters have been not happy with Obama's work and things haven't gone well as he had promised, but i m pretty sure democrats aren't happy either. it takes time.
Obama inherited such a economic mess that previous administration left, that Clinton was damn right that no president could have put America back to map in such a short space of time.
I hope Americans give a good think about it, and give chance to Obama and another 4 years to run under Democratic administration.
otherwise i just have a bad feeling that should Romney win, things would go back to worse it was 4 years ago, even worse.

In my lifetime, I have seen a good America under democratic administration than a republic one.

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Post by Senor Penguin Thu Sep 06, 2012 2:44 pm

Who gives a flip about Clinton? What Viva said should have been addressed to America instead. :bow:

The part about social mobility is what I've always wanted republicans to realize. They're too ideologically driven and stubborn to realize it though. As Clinton summarized: "It turns out that advancing equal opportunity and economic empowerment is both morally right and good economics. Why? Because poverty, discrimination, and ignorance restrict growth."

I don't even like Clinton but he got that right. As soon as people realize this we'll all be much better off.

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Post by VivaStPauli Thu Sep 06, 2012 3:05 pm

The thing is that poor Americans think they'll be rich Americans soon, that's why they vote for tax breaks for the rich. But the American dream is a lie, social mobility is the lowest (or close to the lowest) among the industrialized nations.

If people were properly educated, they'd be looking more about their starting positions, instead of dreaming about what champagne they'll have at the finish line.
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Post by kiranr Thu Sep 06, 2012 3:07 pm

VivaStPauli wrote:I agree, but that's not the point.

Allowing same-sex marriage would be a traditionally conservative right-wing thing to do. It's limiting the Governments influence on private life. How in hell fundamentalist Christianity got such a stranglehold on the party of small government is beyond me.

Yes, Reagan, but come on, it's still ridiculous. Republicans should be the party legalizing gay marriage and pot, Democrats should be the party raising taxes and spending. Yet nobody spent bigger than Bush, and the whole love affair between economic liberalism and Christian fundamentalism is just too utterly bizarre.

I agree. It is bizzare. It is a somewhat similar situation in India where the so-called right wing is influenced by fundamental hinduism. I think tugging on religious stings is a way of pandering to people's emotions to create a vote bank for oneself.

Nevertheless, it is very hard these days to see politicians act according to their belief system.
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Post by RealGunner Thu Sep 06, 2012 3:32 pm

Viva :bow:

Fantastic post :bow:
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Post by McLewis Thu Sep 06, 2012 5:29 pm

Totally agree with what Massachusetts Governor Deval Patrick said on Tuesday:

Democrats have to grow a damn backbone ffs.

When Obama had the "super-majority" meaning the Democrats had control over both the House and Senate as well as the White House, the GOP were non-factors. They had no power whatsoever to do anything, and yet the Democrats basically caved on everything the GOP challenged them on, with the exception of the Stimulus. The GOP were essentially shouting from sidelines anything and everything to derail the Democratic focus and for some ridiculous reason, the Democrats kept listening to them, Obama chief among them. If he wins a 2nd term, I expect to see that stop, as partisan as that sounds. The GOP have no interest in working with the Dems. It's tragic that Obama and the top Dem leaders realized this far too late.

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Post by RedOranje Thu Sep 06, 2012 7:39 pm

The had plenty of power in committees and influence. And the Democrats are far from a single, unified body, as they range from far left to moderate, whereas at that time the Republicans were united in their goal of blocking legislation. As such the Democrats were generally representing their core beliefs and constituents an thus not necessarily just voting along party lines.

When bills did make it out of committee (which the Republicans were very good at blocking) they then had to appeal to either a very, very broad range of Dems or somehow get a few Republicans who were voting purely along party lines on board.



Why everyone always feels the need to simplify things like that I'll never, ever understand.
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Post by Yuri Yukuv Thu Sep 06, 2012 8:02 pm

Hello Viva, RO and McLewis

You all make good poins and I will adress them tomorrow as I have little time today.

I will leave you with these three videos however to help you understand where I am coming from:


Daniel Hannan on difference between Europe and US



Milton freedom on role of government



Daniel Hannan on the new road of serfdom (Minute 4)
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Post by RedOranje Thu Sep 06, 2012 11:12 pm

Serfdom? I'm sorry, but that just invalidates everything there. Absolutely ludicrous.
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Post by Yuri Yukuv Thu Sep 06, 2012 11:33 pm

RedOranje wrote:Serfdom? I'm sorry, but that just invalidates everything there. Absolutely ludicrous.

How so?

Can you please elaborate?
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Post by RedOranje Fri Sep 07, 2012 1:17 am

The inclusion of the term "Serfs" and reference of any type of institution akin to it in the US is nothing more than hyperbolic rhetoric with absolutely no basis in fact. It's lazy pandering and fear mongering and those resorting to that are quite frankly not worth the time it takes to listen to their propaganda.
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Post by RedOranje Sat Sep 08, 2012 12:22 am



Ryan.
Ripped.
To.
Shreds.



Screw the current candidates, let's just amend the Constitution and re-elect Bill!





Seriously though, Clinton provided more actual (and factual) information about the Republican platform than the Republicans did, and he blew their rhetoric apart.
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Post by VivaStPauli Sat Sep 08, 2012 2:03 am

Clinton killed. Also, it's been a while since an American politician based his or her speech on facts and provided proper examples for their conclusions.

Almost sounded European there. :p
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Post by McLewis Sat Sep 08, 2012 3:17 am

Big shout to John Kerry too. Destroyed Romney on his lack of foreign policy.

"Sarah Palin said she could see Russia from Alaska. Mitt Romney talks like he's only seen Russia by watching Rocky IV."

:bow:
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Post by Guest Sat Sep 08, 2012 9:33 am

RedOranje wrote:

Ryan.
Ripped.
To.
Shreds.



Screw the current candidates, let's just amend the Constitution and re-elect Bill!





Seriously though, Clinton provided more actual (and factual) information about the Republican platform than the Republicans did, and he blew their rhetoric apart.

:bow:

if bill were ever to run for presidency he would have won for sure.

Bill...miles>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>..Obama>Romney

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Post by Yuri Yukuv Sat Sep 08, 2012 10:26 am

I had a huge reply to this but I got logged out and it was erased anyways here it goes Sad


I read that article, and I got the point it makes, but that doesn't make it any more true. And here's what's disturbing to me, it is what immideatly follows in your statement, where you completely gloss over the fact that we both know, what the President actually said, yet you continue to assume he meant, what Republicans want him to have said.

Weve heard this argument before numerous times, we know what is implied and what the meaning is. This resonated with many voters because what is happening on the ground matches the conveyed meaning. Weve seen both sides take words which were said or even not said out of context, one example is the Obama campaign attacking romney on "Let detroit go bankrupt" while he never said that rather it was a heading by an NYT editor. They have also tricked the public into thinking that the managed bankruptcy romney was calling for is liquidation while in fact it is almost the exact same thing that they have done to save GM. Another is that the Romney would increase the deficit through decreasing taxes, this is simply not true as many have said that it is a revenue neutral plan as revenue will be funded through expanding base of taxable income. There is currently USD 4 Trillion held by US corporates and banks which would generate that income, they arent right now because they Obamas increased regulation and taxes will increase risks.




Why? What he said isn't. What you want him to have said is. But that's not his fault. He can only be blamed for what he said, not what you guys want to hear. And what's so offensive? To remind business executives that they used roads?

I dont understand why you are lumping me with other people, I have my own views and I dont consider myself partisan I do not say that because I think it is cool but because I support different issues with both parties.

There is nothing wrong with roads but when you are using that money in order to reallocate resources to things such as solyndra and at the same time you are increasing taxes and regulations on business owners there sure is a problem.

Can I ask you, would it not be just as true if we said that the roads were built by business people who have created taxable and taxable profits? Lets remember that in this country business came before government.

And let's not forget the much broader point: tens of millions of people work 7 day weeks with 10 hour shifts and still didn't get anywhere.

If they work hard and have the talent to make it we should make sure that they are able to do, not point fingers when they do. We need to support people to become richer and not vilify and punish them.


Why? It just doesn't. Not what he actually said. I get that you don't want "big government", but surely you still want infrastructure to exist.

Obama has repeatedly targeted the upper classes of American society after his efforts to reshape the US economy faltered its by no coincidence that these attacks begun at same time.

What is it with the right-wing fetish of painting Europe as some kind of medieval backwater? The Feudal system has been dismantled in most European countries about as long, if not longer, than the US has been independet from Britain. I mean, sure, I study at a over 600 year old university, my place of work has been open since the 1130s, and the house I live in was built in the late 18th century, but that doesn't mean we're still ruled by Kaiser Friedrich.

The problem of things being "left over" is perfectly valid for the US too. Why do you think you have dynasties? The Kennedys, Bushes, Kerrys and Romneys are rich as f*ck. Mitt Romney didn't achieve what he did because he's so very very smart, he did it because his f*cking rich dad paid his way through the ivy league, and set him up with a nice startup bundle.

Give me 10 million and I'll make 20 million out of them as well. Getting that first million is the hard part.

Also, you need a swift history lesson about what class warfare actually is. A bit of socially aware economics like all of Europe has doesn't turn you into Communist Russia, class warfare is what happened during the rise of Lenin and Mao, not raising taxes to make education cheaper for the middle class.

I worked as an investment analyst in the US east for two years and then I was moved to the London office. I saw very different types of clients, for example one in london was receiving GBP +100 Million/Annum through leasehold of properties owned by his ancestors in the 17th century. Knew anothet client which owned an estate next a major italian city which was almost as big as quarter of the city, he made alot of business for himself through his ability to go around the system for permits and the such.

This happens less in the US because our taxes, regulations, credit system and other economic/cultural factors make barriers to entry very small. The competitiveness is out of this world. If you are at the top you need to work very hard to keep at the top.

With regards to what you said about Mitt Romney could you deal me what you know about him and the Romney family in general?

Could you also clarify why you said that you dont think that Obama will win a landslide because he is black (really half black)? He did win in a landslide last time around and got the biggest amount of votes out of any american president in history.

That's just crap. Yes, people like Jobs, or Gates, for that matter, built something from basically nothing, but same as in Europe, most of your super-rich people inherited a nice super-rich starter packet from their parents, and built on that success. Just look at dimwits like Trump, who has managed to bankrupt a f*cking Casino - if he didn't have daddy, that guy wouldn't even be fit to flip burgers.


The funny thing is, that in economic upward mobility, as in the chance of poor people to become rich, the US rank well below all those "socialist" European states. Germany, where I live, isn't doing too well in that regard as well, but we're still miles ahead.

You know where the dishwasher-to-millionaire story is most likely to happen? Scandinavia. As in that Scandinavia that has the biggest government spending on social security nets.

There is alot of problem when comparing social mobility in the US to Norway, Denmark or even Germany. In the US there are many states which are as big as these countries, they have different economies and even different prices and so on. It is unfair to place someone who earns US Dollar 40,000/Annum in NYC at the same economic strata as someone in Nebraska. There is also bigger difference in after tax income between americans, this results in same income increase by a Scandanavian/German putting them at a higher economic strata (which is more enginereed to be diamond shaped) than someone in the US. Another is the fact that there is more cultural and religious minorities in the US which have problems in making a better for themselves some examples include the children of illegal alients, amish peoples and other closed religions.

However if we look at it another way we can see that the US offers a good life for those who take it. For example in the US if you finish highschool, get married after you are 21 and do not have children outside of wedlock your chances of entering the lowest strata is 2%.

I do believe that there should be better education in the US and that is why I think Romney is a better candidate, his record on that in Mass is great as the state was catapulted into first place.

And a final prayer on the issue of socialism:

America has to get over themselves. McCarthy is f*cking dead, and should stay dead. The West's problem with the Eastern block never was their socialist views on the economy, it was that they were aggressive, expansive dictatorships.
Lack of freedom is the problem, not the overabundance of social security.

Socialism isn't inherintly bad, dictatorship is. Just look at the Nazis. They were as right-wing, and corporatist as it gets. They loved Big Business. The problem was that it was a genocidal dictatorship. Same with Russia. Who gives a shit about their attitude towards the working class if they suppress free speech, fill their gulags with dissidents and try to establish satellite states everywhere?

Seriously, the right needs to get those deluded talking points off the table and start to act like grown ups.

For me, as a Politics major, and with a rudimentary grasp of world history, the Republican speeches make me cringe. Try formulating a thesis from the base of fact for once, instead of bending the facts to match your agenda.

I do not think you understand for most capitalists republicans (not the party but the ideal of the governing system) we beleive in the market place and the rule of law, this is as opposed to the statist system with the rule of men.


Nazi germany was a government investment driven economy with help of national corporations, very similiar to what china has done in the past ten years and not in anyway similiar to what was done by the US. It was a statist system which was ruled by men.

I am simply not convinced by the European model even though I have lived in Europe for 6+ years. There are things that we could copy however.

Your own country germany operates in the freest market of all (global trade) as well as the rest of northern europe, in Denmark for example there is the freest labor market in the world (many argue freeir than the US).

However in general the european economy has proven to be uncompetitive and the european consumer has grown weaker and weaker over time.



Let the campaign begin! - Page 2 World-share-of-gdp

Its interesting because if you look at Romneys and Steve Job's grievances about the US economy they seem to be very similar:

-The united states is not business friendly anymore, especially with that 37.5% or so corporate tax
-The united states has too many regulations which hamper investment and move it to china
-The united states needs an uprooting of the education system and that the teachers union is very big determent to that, there needs to be more merit based reward and choice.

finally ill leave you with this economist article on entrepreneurship in the US


The United States of Entrepreneurs
America still leads the world

Mar 12th 2009 | from the print edition

FOR all its current economic woes, America remains a beacon of entrepreneurialism. Between 1996 and 2004 it created an average of 550,000 small businesses every month. Many of those small businesses rapidly grow big. The world's largest company, Wal-Mart, was founded in 1962 and did not go public until a decade later; multi-million dollar companies such as Google and Facebook barely existed a decade ago.

America was the first country, in the late 1970s, to ditch managerial capitalism for the entrepreneurial variety. After the second world war J.K. Galbraith was still convinced that the modern corporation had replaced “the entrepreneur as the directing force of the enterprise with management”. Big business and big labour worked with big government to deliver predictable economic growth. But as that growth turned into stagflation, an army of innovators, particularly in the computer and finance industries, exposed the shortcomings of the old industrial corporation and launched a wave of entrepreneurship.

America has found the transition to a more entrepreneurial economy easier than its competitors because entrepreneurialism is so deeply rooted in its history. It was founded and then settled by innovators and risk-takers who were willing to sacrifice old certainties for new opportunities. American schoolchildren are raised on stories about inventors such as Benjamin Franklin and Thomas Edison. Entrepreneurs such as Andrew Carnegie and Henry Ford are celebrated in monuments all over the place. One of the country's most popular television programmes, currently being recycled as a film, features the USS Enterprise boldly going where no man had gone before.

If anything, America's infatuation with entrepreneurialism has deepened further of late. People like Bill Gates and Steve Jobs have all the upsides of Carnegie and Ford without the downsides—the useful products and the open-handed philanthropy without the sweatshops and the massacres. Preachers style themselves as pastorpreneurs. Business books sell in their millions. “When I was in college, guys usually pretended they were in a band,” comments one observer. “Now they pretend they are in a start-up.”

Advantage America

American companies have an unusual freedom to hire and fire workers, and American citizens have an unusual belief that, for all their recent travails, their fate still lies in their own hands. They are comfortable with the risk-taking that is at the heart of entrepreneurialism. The rewards for success can be huge—Google's Mr Brin was a billionaire by the time he was 30—and the punishments for failure are often trivial. In some countries bankruptcy spells social death. In America, particularly in Silicon Valley, it is a badge of honour.

America also has several structural advantages when it comes to entrepreneurship. The first is the world's most mature venture-capital industry. America's first venture fund, the American Research and Development Corporation, was founded in 1946; today the industry has an unrivalled mixture of resources, expertise and customers. Highland Capital Partners receives about 10,000 plausible business plans a year, conducts about 1,000 meetings followed by 400 company visits and ends up making 10-20 investments a year, all of which are guaranteed to receive an enormous amount of time and expertise. IHS Global Insight, a consultancy, calculates that in 2005 companies that were once backed by venture capitalists accounted for nearly 17% of America's GDP and 9% of private-sector employment.

The second advantage is a tradition of close relations between universities and industry. America's universities are economic engines rather than ivory towers, with proliferating science parks, technology offices, business incubators and venture funds. Stanford University gained around $200m in stock when Google went public. It is so keen on promoting entrepreneurship that it has created a monopoly-like game to teach its professors how to become entrepreneurs. About half of the start-ups in the Valley have their roots in the university.

The third advantage is an immigration policy that, historically, has been fairly open. Vivek Wadhwa, of Duke University, notes that 52% of Silicon Valley start-ups were founded by immigrants, up from around a quarter ten years ago. In all, a quarter of America's science and technology start-ups, generating $52 billion and employing 450,000 people, have had somebody born abroad as either their CEO or their chief technology officer. In 2006 foreign nationals were named as inventors or co-inventors in a quarter of American patent applications, up from 7.6% in 1998.

Amar Bhidé, of Columbia University, suggests a fourth reason for America's entrepreneurial success—“venturesome consumers”. Americans are unusually willing to try new products of all sorts, even if it means teaching themselves new skills and eating into their savings; they are also unusually willing to pester manufacturers to improve their products. Apple sold half a million iPhones in its first weekend.

America faces numerous threats to this remarkable entrepreneurial ecology. The legal system can be burdensome, even destructive. One of the biggest new problems comes from “patent trolls”—lawyers who bring cases against companies for violating this or that trumped-up patent. Because the tax system is so complicated, many companies have to devote a lot of time and ingenuity to filling out tax forms that could be better spent on doing business. And the combination of the terrorist attacks on America on September 11th 2001 and rising xenophobia is making the country less open to immigrants.

Today more than 1m people are waiting in line to be granted legal status as permanent residents. Yet only 85,000 visas a year are allocated to the sort of skilled workers the economy needs, and there are caps of 10,000 on the number of visas available for applicants from any one country, so the wait for people from countries with the largest populations, such as India and China, is close to six years.

Yet despite these problems, America plays a vital role in spreading the culture of entrepreneurialism around the world. People the world over admire its ability to produce world-changing entrepreneurs, such as Bill Gates, wealth-creating universities, such as Harvard and Stanford, and world-beating clusters, such as Silicon Valley. Simon Cook, of DFJ Esprit, a venture-capital company, argues that Silicon Valley's most successful export is not Google or Apple but the idea of Silicon Valley itself.

Foreigners who were educated in America's great universities have helped to spread the gospel of entrepreneurialism. Two of Europe's leading evangelists, Sir Ronald Cohen and Bert Twaalfhoven, were both products of HBS. Chinese and Indian entrepreneurs, who cut their teeth in Stanford and Silicon Valley, are now returning home in ever larger numbers, determined to recreate Silicon Valley's magic in Bangalore or Shanghai.

America is putting hard financial muscle behind this soft power. The Kauffman Foundation spends about $90m a year, from assets of about $2.1 billion, to make the case for entrepreneurialism, supporting academic research, training would-be entrepreneurs and sponsoring “Global Entrepreneurship Week”, which last year involved 75 countries. Goldman Sachs is spending $100m over the next five years to promote entrepreneurialism among women in the developing world, particularly through management education.

Old Europe

The other two of the world's three biggest developed economies—the EU and Japan—are far less entrepreneurial. The number of innovative entrepreneurs in Germany, for instance, is less than half that in America, according to the Global Entrepreneurship Monitor (GEM), a joint venture between the London Business School and Babson College. And far fewer start-ups in those countries become big businesses. Janez Potocnik, the EU commissioner for science and research, points out that only 5% of European companies created from scratch since 1980 have made it into the list of the 1,000 biggest EU companies by market capitalisation. The equivalent figure for America is 22%.

This reflects different cultural attitudes. Europeans have less to gain from taking business risks, thanks to higher tax rates, and more to lose, thanks to more punitive attitudes to bankruptcy (German law, for example, prevents anyone who has ever been bankrupt from becoming a CEO). When Denis Payre was thinking about leaving a safe job in Oracle to start a company in the late 1980s, his French friends gave him ten reasons to stay put whereas his American friends gave him ten reasons to get on his bike. In January last year Mr Payre's start-up, Business Objects, was sold to Germany's SAP for €4.8 billion.

European egalitarianism, too, militates against entrepreneurialism: the EU is much more interested in promoting small businesses in general than in fostering high-growth companies. The Europeans' appetite for time off does not help. Workers are guaranteed a minimum of four weeks' holidays a year whereas Americans' vacations are much less certain. Europeans are also much more suspicious of business. According to a Eurobarometer poll, 42% of them think that entrepreneurs exploit other people's work, compared with 26% of Americans.

These cultural problems are reinforced by structural ones. The European market remains much more fragmented than the American one: entrepreneurs have to grapple with a patchwork of legal codes and an expensive and time-consuming patent system. In many countries the tax system and the labour laws discourage companies from growing above a certain size. A depressing number of European universities remain suspicious of industry, subsisting on declining state subsidies but still unwilling to embrace the private sector.

The European venture-capital industry, too, is less developed than the American one (significantly, in many countries it is called “risk” capital rather than “venture” capital). In 2005, for example, European venture capitalists invested €12.7 billion in Europe whereas American venture capitalists invested €17.4 billion in America. America has at least 50 times as many “angel” investors as Europe, thanks to the taxman's greater forbearance.

Yet for all its structural and cultural problems, Europe has started to change, not least because America's venture capitalists have recently started to export their model. In the 1990s Silicon Valley's moneybags believed that they should invest “no further than 20 miles from their offices”, but lately the Valley's finest have been establishing offices in Asia and Europe. This is partly because they recognise that technological breakthroughs are being made in many more places, but partly also because they believe that applying American methods to new economies can start a torrent of entrepreneurial creativity.

Between 2003 and 2006 European venture-capital investment grew by an average of 23% a year, compared with just 0.3% a year in America. Indeed, three European countries, Denmark, Sweden and Britain, have bigger venture-capital industries, in relation to the size of their economies, than America. Venture-capital-backed start-ups have produced more than 100 “exits” (stockmarket flotations or sales to established companies) worth more than $100m since 2004. Tele Atlas, a Dutch mapping outfit, was recently bought by TomTom for $4.3 billion.

The success of Skype, which pioneered internet-based telephone calls, was a striking example of the new European entrepreneurialism. The company was started by a Swede and a Dane who contracted out much of their work to computer programmers in Estonia. In 2005 they sold it to eBay for $2.6 billion.

Several European universities have become high-tech hubs. Britain's Cambridge, for example, has spawned more than 3,000 companies and created more than 200 millionaires in the university. The accession of ten eastern European countries to the EU has also tapped into an internal European supply of scientists and technologists who are willing to work for a small fraction of the cost of their pampered western neighbours.

Slowcoach Japan

The Japanese can hardly be accused of aversion to long hours. Big Japanese companies have an impressive record of incremental improvement, particularly in the electronics business. But for the most part the Japanese have been less successful than the Europeans at adapting to entrepreneurial capitalism. The latest GEM global report gives Japan the lowest score for entrepreneurship of any big country, placing it joint bottom with Greece. The brightest people want to work for large companies, with which the big banks work hand in glove, or for the government. Risk capital is rare. Bankruptcy is severely punished. And the small-business sector is wrapped in cotton wool, encouraging “replicative” rather than “innovative” behaviour. Over the past quarter-century the rate at which Japan has been creating new businesses has been only one-third to half that in America.
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Post by Yuri Yukuv Sat Sep 08, 2012 10:37 am

RedOranje wrote:The inclusion of the term "Serfs" and reference of any type of institution akin to it in the US is nothing more than hyperbolic rhetoric with absolutely no basis in fact. It's lazy pandering and fear mongering and those resorting to that are quite frankly not worth the time it takes to listen to their propaganda.

The title of the book is an ode to Hayek's The road to serfdom which itself was inspired by Alexis de Tocqueville's The road to servitude. Hayek (who is an economist from Austria) basically talks about the german nazism and the role of democracy, socialism, republicanism, free market and central planning. What these mean to each other and how they have effected each other.

If you are not convinced we can discuss, if still not then thats fine and we can agree to disagree or if you want we wont discuss at all. But just brushing off something because of the title seems unfair to me.
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Post by RealGunner Sat Sep 08, 2012 12:54 pm

Yuri, Make sure you copy the post just in case cause if it takes more than 10-15 minute to write since sometimes it automatically logs you off for some reason
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Post by McLewis Mon Sep 10, 2012 11:50 pm

Mitt Romney flipped-flopped 4 times when asked if he'd completely repeal the ACA or if he would keep some of it, including the bit about pre-existing conditions. That's gotta be a record Laughing

That's the Mitt Romney I was waiting to see. Paul Ryan joined right in on the flip-flopping and got roasted by anchors on multiple news networks, with his interview with CBS being the worst of the bunch. Romney has also lost 5 points in the polls to Obama. It's also said that the Romney campaign fear losing Ohio and have been campaigning there furiously. Disastrous day for Romney/Ryan.

-----------------

Conversely, the weekend as well as today couldn't have gone better for Obama, who is enjoying a 6 point bump in the polls after the convention. He also out-fundraised Romney for the first time in the election. He nailed Romney repeatedly on his campaign's refusal to pick a stance on healthcare as well as reveal details as to what he's going to cut in the national budget.

Obama can do very little wrong at the moment, despite the poor jobs numbers that came out last Friday. The fact that he's now leading Romney outright after such a bad report says wonders about Romney's failure to win over voters.


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