01-08-2010, 08:00 PM
I m not sure that is an appropriate indicator. When I flew here the plane was half empty. If I had known that then there would have been more room in the negotiated price of the ticket. But then again I ve never flown into Santiago because it wasnt an international airport the last time I was here. Maybe in POP or SDQ the planes are packed. Now when you mention the recent events of "the underwear bomber" I d expect prices to go down as people would feel less inclined to deal with the hassle of security regulations... I predict that pretty soon everyone will have to fly naked robed only in a hospital gown and paper slippers.
Originally Posted by mamiroja
01-08-2010, 08:26 PM
Many (to not say all) of those small businesses are highly inefficient. The inefficiency is present in everything from the use of labor to (in the case of colmados) perishable products being sold in inferior quality due to mishandling, costs of goods are much higher and in smaller quantities, the list goes on.
Originally Posted by cobraboy
The elimination of these inefficient businesses will allow the more efficient one's to expand. The result will be an increase in productivity at all levels, including the new employment positions that will be created. Greater productivity creates more wealth. Plus, expansion of efficient businesses not only creates more jobs, it also reduces inefficient use of labor; not to mention the overall lower prices/better quality products the population at large will receive.
I'm in favor of eliminating these small inefficient businesses, simply for being inefficient. Bad use of resources in an economy that can't afford to waste anything, IMO.
01-08-2010, 08:29 PM
01-08-2010, 09:06 PM
I disagree, most of these "inefficient business" are self-proprietors who are working with the capital they have available. Give me a thousand dollars and I ll make my living room into a hair salon. Or I ll buy a freezer and make it into a colmado. Or I ll buy a washing machine and an ironing board and I ll make it into a lavanderia. These people are just trying to get ahead. You say if they cant pay the taxes let them burn and then more prosperous and more efficient enterprises will come into play. Maybe. Or maybe the lack of competition will raise the prices of goods and services provided? Maybe the wages will remain stagnant or decrease because now that the "inefficient small businesses" have been displaced there is an excess of workforce supply? Maybe that wage stagnation could affect the long term profitability of the more productive enterprise? And why would it use labor more efficiently? There is a surplus. They could use it less efficiently and there will still be a surplus of labor receiving substandard wages, so why bother?
Originally Posted by NALs
I dont see how the resources are being underutilized by small businesses no matter how "inefficient". As I see this country there are more productive things that could be done to create and solidify a middle class that has nothing to do with "inefficient small businesses". If anything, I think if there were access to capital as in a microloan it might stir the small business to unify their resources or start cooperatives or industrial concerns, like post war Japan.
I think there will clearly be a hardship when they computerize the tax collection system because most people dont make enough to live on on a cash basis, now there will be deductions? Itemized computerized deductions? Oh man!
01-08-2010, 09:19 PM
Much of the small business in the DR...and other Third World countries (not that the DR is TW)...is what I'd call "Desperation Capitalism". Folks who need income but there are no jobs. So they have to create their own, inefficient and all.
And if driven out of business will be unemployed. And the "surviving" businesses will charge higher prices...for taxes. Their customers will also suffer.
All for what? More SUV's? Increased $$$ for political parties? Mistresses? More graft and corruption? More gubmint employees in patronage positions?
Sorry, I see little upside on cracking down on taxes. All it does is spread misery and fuel corruption.
01-08-2010, 09:23 PM
It's not anecdotal when banking regulators hold up a divestiture because of pressure from the DoJ because that bank didn't agressively seek loans in communities known to have poor credit risks.
Originally Posted by RacerX
THE primary reason the family chose to sell was BECAUSE of the pressure from the Feds to SEEK loans that would not hold up to proper and historical underwriting scrutiny.
01-08-2010, 09:59 PM
So you are in favour of Walmart big box stores and against the local small business person who can't complete with the economy of scale of a company that has as higher cash reserve than many countries.?
Originally Posted by NALs
01-08-2010, 11:24 PM
Another interpretation would be that the feds forced them out because of a pattern and practice of red-lining. They were denying or restricting access to capital in neighborhoods that were deemed to be unfavorable because of demographic construction. What does that mean? It means that the people who live in certain zip codes are denied the opportunity to invest their own neighborhood giving it a chance to succeed. By redlining the neighborhood you have doomed the inhabitants to a life of despair because there is no capital available to sustain, improve and stabilize the neighborhood. Now at this point nothing is considered acceptable in that zone. No BID, SBA, Home improvement, home purchases, nor home equity loans are available because the bank doesnt want to underwrite the loan. In one respect banks lose money because they play roulette with their own money overinflating the value of real estate. And on the other hand they undervalue entire neighborhoods or cities based solely on demographic constitution. So unless you are dealing in large amounts of cash nothing gets done. The people who live there have been deemed worthless and not worth the investment in their own community. And that is how ghettos are made.
Originally Posted by cobraboy
And cobra we still havent talked about the impending implosion in the Commercial Real Estate Market.
01-08-2010, 11:30 PM
Dont forget a better distribution network and the ability to buy in bulk.
Originally Posted by bob saunders
01-08-2010, 11:43 PM
Interesting read for the weekend. I love this magazine, one of my small obsessions.
Japan's two lost decades: An end to the Japanese lesson | The Economist
P.S. Bob~ I never said Greed was a philosphy, I said it was a fact of capitalisim. Besides, I'm not a bitter socialist, I have accepted that Capitalism is atop of the food chain...
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