Yahoo-Can Herman Cain Actually Win the GOP Nomination?

[Cseeman]

I am not sure where you are coming up with your economic theories but economics just does not work like that.

Second i said in my posting i do not believe anybody will be able to get rid of the income tax and we will end up with two sources of government tax

[Wei Wu Wei]

no it wont, not when every other tax is throw out the door except 2 (at a Federal Level) prices will at lest stay the same if not come down because they wont have to pass on all the other taxes.

You think prices are going to drop just because they don't need to be that high? lmao

The coca-cola company has been raising the price for their products for decades, slowly but surely. What you used to be able to get for a nickle, then a quarter, now costs 75 cents or more. Now, if it suddenly became cheaper to produce these products, do you think they will lower the cost back down to 25 cents? That's insane, they already know people are willing to pay 75 cents because they have been for a decade and their sales are just fine. All it will do is increase how much profit they make on each 75 cent sale.


There is a weird silly idea that businesses will simply lower prices the moment they have enough money to be able to, or even better, that employers will hire people simply because they have more cash on hand to work with.

[fettpett]

You think prices are going to drop just because they don't need to be that high? lmao

The coca-cola company has been raising the price for their products for decades, slowly but surely. What you used to be able to get for a nickle, then a quarter, now costs 75 cents or more. Now, if it suddenly became cheaper to produce these products, do you think they will lower the cost back down to 25 cents? That's insane, they already know people are willing to pay 75 cents because they have been for a decade and their sales are just fine. All it will do is increase how much profit they make on each 75 cent sale.


There is a weird silly idea that businesses will simply lower prices the moment they have enough money to be able to, or even better, that employers will hire people simply because they have more cash on hand to work with.

are you that stupid to figure out that the reason the price goes up is because the cost of doing business goes up, and the main reason those costs go up is due to taxation.

Now will the prices on EVERYTHING come down all at once? No. However prices will come down due to the pressure on them to do so from other competition.

[Starbuck]

It's very simple.

Mitt Romney will be the Republican nominee. That's just how it is..............

Breaking new is, Cain has placed first in Iowa polls. Hardly even been to the state, too.

This guy may re-write the book on how to run for President, and the answer to the original question appears to be 'yes, he can'. Don't know that he will, but evidently he can.
http://www.foxnews.com/politics/2011...register-poll/

[malloc]

Second a compsumption tax will slow down economic growth as validated by basic economic theory and two it also adds costs to business as now they have to maintain more records and become more burdened by government.

This isn't necessarily true, and hasn't been validated. It would drive down demand if and only if the total cost of ownership of new produced items increased above and beyond the level of income savings after income taxes. For instance, if you payed $400 a month in income taxes, and bought $1,000 a month in produced goods and that income tax were suddenly go away, it stands to reason that your consumption of goods might raise since that extra $400 was freed up. If the prices of the same amount of goods you used to buy for $1,000 only increased to $1,200 due to the tax, your consumption still might increase. If the price of those good increased to $1,400, your consumption would stay largely the same, but if they increased to $1,600 then your consumption would likely decrease causing the negative economic effects.

You think prices are going to drop just because they don't need to be that high? lmao

The coca-cola company has been raising the price for their products for decades, slowly but surely. What you used to be able to get for a nickle, then a quarter, now costs 75 cents or more. Now, if it suddenly became cheaper to produce these products, do you think they will lower the cost back down to 25 cents? That's insane, they already know people are willing to pay 75 cents because they have been for a decade and their sales are just fine. All it will do is increase how much profit they make on each 75 cent sale.

Well, I see my favorite chew toy hasn't gotten any smarter in my absence.

No, Wei, I don't think prices are going to drop because "they don't need to be that high". I think prices are going to drop because it is how capitalism functions. Now, think really hard, and try not to strain yourself. If the cost of production of soft drinks decreased, and Coca-Cola kept their prices high in order squeeze a higher profit margin, what do you think Pepsi would do? Now go back to feeling like a simpleton among your betters.

[RobJohnson]

It's very simple.

Everyone here (except maybe 2 or 3 libertarians) will go to the polls and vote for Romney.

Including you?

[txradioguy]

Explain?

Imagine the outrage and the charges of "RACIST!" if one of us had said the same thing about Obama in 2008.

[Wei Wu Wei]

are you that stupid to figure out that the reason the price goes up is because the cost of doing business goes up, and the main reason those costs go up is due to taxation.

Now will the prices on EVERYTHING come down all at once? No. However prices will come down due to the pressure on them to do so from other competition.

Coca-cola only has a small handful of competitors in the US. All of these companies are charging the same high prices, and they know people are going to pay these prices because they already do.

If it becomes cheaper to produce the drinks, they will simply be making more money, who is going to be the first to cut their prices?

Because of such a small group of competition and even a sense of brand loyalty, no one is going to cut their prices out of necessity. If someone really likes Coca-cola, they aren't suddenly going to switch to Pepsi because it is 5 or 10 cents cheaper. It would take a larger price cut to make people switch, and that large price cut is going to come along with a profit slice.

This is the type of thing that works in 18th century theory, when the market is still dominated by small businesses, but that's not how things are today. President Bush has giving very large tax cuts to wealthy "producers", and President Obama has extended them, 10 years later, what prices do you see that are lower than they were in 2000?

[Wei Wu Wei]

Well, I see my favorite chew toy hasn't gotten any smarter in my absence.

No, Wei, I don't think prices are going to drop because "they don't need to be that high". I think prices are going to drop because it is how capitalism functions. Now, think really hard, and try not to strain yourself. If the cost of production of soft drinks decreased, and Coca-Cola kept their prices high in order squeeze a higher profit margin, what do you think Pepsi would do? Now go back to feeling like a simpleton among your betters.

They will also keep their prices high in order to squeeze a higher profit margin.

They will do some math, and estimate how people more sales they will get from lowering their prices, and compare that to the loss of revenue they will get. If they think they will end up with higher profits overall, they would drop the price.

You have to remember that consumers aren't purely utilitarian, and other factors come into play when they are deciding what they are going to purchase. If people made their decisions purely on price, they'd all shop at thrift stores, no one would enter high priced clothing stores, and all the food they get would be store-brand generics.

That's simply not the case, in large part because of a sense of brand loyalty, in very large part because advertising has them identifying with their products and associating brand names to personal qualities and lifestyle attributes. People don't buy things because it's the economically practical thing to buy, they buy them because buying that says something about their personality, or reflects the lifestyle they want to live, or because of many complex advertising mechanisms that they aren't even aware of, or even simply because they just feel they've always enjoyed X and that's just how it is. Look at how people argue over Ford vs Chevy or sometimes Dodge. If that's the brand of truck they've been buying for 20 years that's the brand of truck they're going to buy next. Simple as that, it doesn't matter if the Dodge is 8 thousand dollars cheaper, they already know their brand.

Another example is apple products. People buy apple products in large part because they identify with the symbols and images produced by their marketing team. They view Apple as a signifier for the lifestyle they want to live. MAny of them have a sense of brand loyalty because they've been using apple products for decades. Apple doesn't have to lower their prices to compete with Dell, because they already know their costumer base will pay outrageous prices for their products. They make their prodcuts using chinese slave labor, their working conditions are so terrible they have to install suicide nets around their factories to keep people from leaping out of the windows to their deaths. They are making these products very cheaply, so their profit margins are very high. They don't need to lower their prices to compete with other computer manufacturers.

So if a company already has a loyal costumer base, and effective advertising, having a competitor drop their prices by a nickle or a dime isn't going to cost them many costumers. If both competitors have loyal costumer bases (like Coca Cola and Pesi do), neither one is going to be "forced" by the other to drop their prices, because neither one is going to see a benefit from dropping their prices first.

[fettpett]

Coca-cola only has a small handful of competitors in the US. All of these companies are charging the same high prices, and they know people are going to pay these prices because they already do.

If it becomes cheaper to produce the drinks, they will simply be making more money, who is going to be the first to cut their prices?

Because of such a small group of competition and even a sense of brand loyalty, no one is going to cut their prices out of necessity. If someone really likes Coca-cola, they aren't suddenly going to switch to Pepsi because it is 5 or 10 cents cheaper. It would take a larger price cut to make people switch, and that large price cut is going to come along with a profit slice.

This is the type of thing that works in 18th century theory, when the market is still dominated by small businesses, but that's not how things are today. President Bush has giving very large tax cuts to wealthy "producers", and President Obama has extended them, 10 years later, what prices do you see that are lower than they were in 2000?

Dude, Coke may only have Pepsi, Dr Pepper Snapple Group, and a couple other Major competitors, but if one or both of the companies drastically cut prices (around a $0.25 a 2 litter), then Coke will as well.

You're completely ignoring the fact that if the US went to a consumption tax, ALL OTHER TAXES on new products are gone, except for State Taxes. That alone will drive down their cost and make their products cheaper.