LookieNoNookie
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Joined: 8/9/2008
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ORIGINAL: joether
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ORIGINAL: LookieNoNookie
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ORIGINAL: joether
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ORIGINAL: LookieNoNookie
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ORIGINAL: DomKen
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ORIGINAL: DesideriScuri
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ORIGINAL: DomKen
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ORIGINAL: DomKen
And all those businesses will fail because profits in a healthy economy should be razor thin. Deflation is always a disaster. Imagining otherwise ignores both economic theory and history.
And, you are wrong. Profits don't have to be "razor thin." Profits should be healthy enough to lure people into supplying the market, but not so high as to lure too many suppliers, leading to oversupply and resource misallocation.
"Imagining otherwise ignores both economic theory and history."
If the profit margin on any item is higher than a couple of percent then, in the theoretical free market, other competitors will move in and under cut prices until that razor thin margin is achieved. That's how people who understand economics knows that at its very most basic heart the US economy is corrupt and has been since sometime in the early 80's when the idea of a 2% profit margin became unacceptable to the investment class.
Your definition of "razor thin" and an entrepreneur's definition of "razor thin" may vary.
Why aren't there more competitors coming in to undercut prices? What is preventing them?
And, just so we're on the same page, you don't get to define what the proper level of profit is for someone else. You are more than welcome to do that for yourself. But, when it's someone else taking risks and making the effort, that someone else gets to define for him or herself, what the proper level of profits is.
Hundreds of years of free market behavior defines what an appropriate profit margin is. Only since the US economy was fundamentally corrupted has that changed. It's a major reason why the economy has never recovered from the 70's stagflation.
Excellent! What is an appropriate profit margin, then?
Before the 70's it was 1 to 2%. It seems an appropriate margin.
Spoken by a man who has no concept of business of investment.
If we don't do 17% net annually, that was a bad year.
These two are talking about 'profit margin' and NOT 'business investment' (a totally different concept in business). Do try to keep up with the conversation.....
I was talking about (net) profit margin (please do your best to keep up).
(I'm fairly confident....for those those who were paying attention....that wasn't too incredibly unclear).
Oh I was keeping up just fine. You did NOT mention NET PROFIT MARGIN, did you? No. You stated "If we don't do 17% net annually, that was a bad year." This implies a business investment after the fact of the actual profit margin. You were not clear, and therefore, have no reason to bitch at others. We are not mind readers....
Actually, what I said was "If we don't do 17% net annually, that was a bad year."
For those who run businesses, that's a fairly clear statement.
I'm sorry it wasn't clear to you.
(It seems unbelievably clear to anyone with an IQ above a paper cut).
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