What Is Game Theory?

While I'm still a bit new to the concept of Game Theory, the following is my understanding of Game Theory, in the context of economics. Hopefully this will help newcomers to the subject develop a better understanding of it ;)

Some background: I have been tracking the stock market for several years, but never had the capital to invest in it. If I did, I would have been able to retire from Google stock by now

because every prediction I made about the price of Google stock for the past 5 years has been correct

I have in the past 5 years set 7 price targets for them, and every single price target, they have reached when I said they would. I am extremely good at analysis and stock prediction, evaluating financial variables. if I wanted, I could easily become a stock analyst.
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Contrary to appearances, The discipline of stock analysis is not actually economic fortune telling, though many of the less prodigious economist may well be employing a high degree of fortune telling to compensate for their intellectual deficiencies. But when done correctly, the analysis of stocks, and of the economy generally, involves statistical evaluations based on information tracking. While perhaps to the average person this amounts to an educated guess,those more intimately  familiar with the variables involved are able to consistently make accurate predictions.

Part of why I personally don't have the money to invest into companies that I have accurately determined to be good investments, is because I have no interest in money. I only care about the analysis and valuation of entities, and making reliable predictions based on my analysis. For example, I know for a fact that Bitcoin will go up a lot in price. because even under the most pessimistic of economic projections, it will be profitable to mine, and at the current price, even to invest in.

This is exactly how game theory works. It's called game theory because every game has rules and variables that determine the outcome, and that model can be applied to every science and discipline that relies on knowledge of the rules, protocols, and variables of a system to succeed. Economies can only function if there is a consistency of protocols and rules of trade, reliable patterns for the prices of commodities and currencies, and variables that can be consistently tracked and predicted to a relatively high degree of precision. Those who can effectively utilize game theory to accurately determine lucrative economic investments, they are the gurus of the economic world.

Economic Globalization: The Real Reason for Corporate Tax Breaks

It's obvious at this point that the U.S. government isn't the one to blame for the corporations tax cuts-- the corporations themselves are. Although banks and investment firms are the most obvious targets (since they circulate the most money), large corporations of every industry has been lobbying for lower corporate taxes for the longest time.

If you think about it, the government wouldn't want to lower the taxes of companies, and especially not the taxes of large corporations and banks, as this is where the big money is at. Some conspiracy theorists attempt to show that politicians are either being paid huge bribes to support lower taxes and cuts for corporate entities, and/or have sizable investments in those companies to begin with. But all of the politicians in office put together don't have enough companies lobbying them to make up the bulk of U.S. corporations, so there's obviously a bigger force at work-- something that forces politicians to support big corporations no matter what their "special interests are"

That something is called "globalization", and it bring the capitalist plague to the corporate and government layers of things. Basically, it goes like this: "If you [the U.S. government] don't give us low taxes, we're [the corporations] going to another country to appreciates our business more." Large corporations are hitting the U.S. where it hurts-- they are threatening to leave the U.S. and go overseas, if the U.S. doesn't give them what they want. You can call it blackmail if you want, but corporations have more than enough leverage to pull it off.

The examiner has an interesting take on more recent events supporting this: http://www.examiner.com/finance-examiner-in-national/us-corporate-tax-rates-the-primary-cause-for-companies-moving-overseas

If you look at the rate of businesses leaving the U.S. to go overseas in the past 12 years, it's absolutely disgusting. (see the chart below, courtesy of wsj.com)

http://online.wsj.com/article/SB10001424052748704821704576270783611823972.html

If you compare tax breaks for corporations from the government over the same time period, you will see an increase in tax breaks for corporations that is consistently reactionary in nature. What we see here is a desperate attempt by the U.S. government to hold onto large corporations that are increasingly outsourcing their companies, and even transferring to other countries completely, to get better deals on their taxes than what the U.S. offers.

There are plenty of countries out there who are willing to offer far lower taxes than what we do-- in fact, almost all of them are, as the U.S. has the 2nd-highest corporate tax in the world. While many large corporations have indeed escaped the majority of this high tax rate, on paper they are paying this tax, and continue to levy for even more tax breaks on this premise, putting the U.S. government in a very diplomatically-weak position when it comes to tax legislation.

Sure the large corporations should be paying their dues. But due to the deadly combination of the free market and globalization, they don't have to. If the U.S. government threatens to raise taxes for corporations or close tax loopholes, the corporations will turn around and "remind" the government that they can always take their money elsewhere. So the U.S. government is given the choice of "less money", or "no money". Naturally, they take what they can get, and deal with all the political crap, because business is business.

The real problem then, is that we allowed these corporations to become this big to begin with. It's only significantly profitable for companies to outsource or have a foreign base, when corporations reach a certain critical mass. Small businesses, on the other hand, have little incentive to outsource or to move HQ to another country (due to the complications and expenses of exporting goods, not to mention the quality-of-life-in-another-country concerns). If America was more careful about preventing monopolies, and put more heavy emphasis on fostering small businesses, none of these problems would have ever happened.

So in the end, it's less about the problem of big government, and more about the threat of big money!