Re: a consistent position?

["Henry C.K. Liu" <hliu@xxxxxxxxxxxxxx>]

John O'Donnell wrote:

> "Henry C.K. Liu" wrote:
>
> <<SNIP>>
>
> > No, that is the classic neo-liberal argument.  If return on capital is
> > regulated to a 15% ceiling,
>
> Another of those so often stated simplistic remedies. Not to
> put to fine a point on the obvious -- Who determines what is
> capital?

You obviously have no experience in finance in emerging markets.  Capital is
a very clearly defined term and administrative expense is not discretionary.

>
>
> This just presents an excuse to furnish offices with
> expensive fine art and other necessary adornments to
> increase the "capital" subject to the 15% return.

You are been watching too many movies.  Even old time insurance companies
have been moving away from that. You will not see a single painting in any
GE Capital offices.  It is computer screens and fax machines.  Read Jack
Welch's book.

> Placing
> the legitimacy of superfluous expenses that earn such
> returns can, of course, be subject to "approval" by an
> oversight committee but that just expands the field for
> corruption.
>
> Let markets determine profit and LOSS and such foolishness
> becomes mot.
>

The market does not determine profit or loss. Management strategy and
corporate accounting do.   But few economists understand that.  Even the SEC
raised the issue a couple of years ago.
Many government put ceiling profit on foreign jt. venture projects on
energy, infrastructure. communication. Even in the US many utilities has
profit ceiling tied into the monopoly status.
Talking about being simplistic.
Henry C.K. Liu