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Today the trend to greater equality of incomes which characterised the postwar period has been reversed. Inequality is now rising rapidly. Contrary to the rising-tide hypothesis, the rising tide has only lifted the large yachts, and many of the smaller boats have been left dashed on the rocks. This is partly because the extraordinary growth in top incomes has coincided with an economic slowdown.
The trickle-down notion— along with its theoretical justification, marginal productivity theory— needs urgent rethinking. That theory attempts both to explain inequality— why it occurs— and to justify it— why it would be beneficial for the economy as a whole. This essay looks critically at both claims. It argues in favour of alternative explanations of inequality, with particular reference to the theory of rent-seeking and to the influence of institutional and political factors, which have shaped labour markets and patterns of remuneration. And it shows that, far from being either necessary or good for economic growth, excessive inequality tends to lead to weaker economic performance. In light of this, it argues for a range of policies that would increase both equity and economic well-being.
Five minutes to midnight, marginal productivity theory "needs urgent rethinking."
[Wikipedia: Joseph Eugene Stiglitz is an American economist and a professor at Columbia University. He is a recipient of the Nobel Memorial Prize in Economic Sciences and the John Bates Clark Medal. He is a former senior vice president and chief economist of the World Bank and is a former member and chairman of the Council of Economic Advisers. --Ed.]
(Score: -1, Flamebait) by Anonymous Coward on Saturday July 29 2017, @02:25PM (8 children)
Camp A (the haves): The economy is fine because I have money. Lower my taxes. Fuck you, got mine!
Camp B (the have nots): The recession never ended. Where's my opportunity? Raise taxes and give me a New Deal.
Camp C (the bums): SOCIALISM NOW! GIMME BASIC INCOME! PAY ME NOT TO WORK!
(Score: 0) by Anonymous Coward on Saturday July 29 2017, @04:04PM (3 children)
PAY ME NOT TO WORK!
We pay farmers not the grow, so, why not? The rich don't have to work, why should we have to? There's plenty for everybody to live like kings. It's time to spread it around a bit. If you can't wipe your own ass, build a machine instead of using a slave.
(Score: 0) by Anonymous Coward on Saturday July 29 2017, @05:56PM (2 children)
Paying farmers not to grow - not quite how it works.
More to the point, we're sponsoring fallow land practices as an alternative to constantly driving every field as hard as we can, both for reasons of combating overproduction in response to incentives, and for reasons of conservation.
For myself, I'd drop the incentives as well as the counterincentives, but Big Ag doesn't agree.
(Score: 1, Insightful) by Anonymous Coward on Saturday July 29 2017, @08:08PM
yeah we got it, your stance is only camp A can live without working
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @04:27AM
On average, the free market will produce the correct amount of food.
That doesn't provide a safety margin for years with bad harvests. For safety, we need extra land ready-to-farm and extra land in production.
(Score: 2, Informative) by Anonymous Coward on Saturday July 29 2017, @04:36PM (3 children)
Non-productive, rent seeking parasites: The economy is fine, more H1B's and cut my taxes!
Productive middle and working class: We're producing all the wealth and paying through the nose for everything!
Welfare parasites: Socialism now, tax the rich! -- sent from my iPhone
(Score: 2, Interesting) by Anonymous Coward on Saturday July 29 2017, @10:32PM (2 children)
Here's Socialism:
The collective ownership of the means of production by The Workers.
(Notice that that is an OWNERSHIP thing; it doesn't need to involve government.)
Socialism now, tax the rich
What you are describing is Liberal Democracy (combined with the concentrated wealth of Capitalist Oligarchs).
While the billionaires' tax, [aquilafunds.com] "worked" from FDR up till Reagan, giving USA a significant level of stability, Socialists would prefer a different thing:
In contrast to inequality and redistribution, when everyone has a good job instead, working for himself, without a separate idle Ownership Class skimming off most of the profits, welfare/charity/handouts aren't necessary.
The gov't could stop subsidizing Capitalists--or at least stop subsidizing -only- Capitalists.
Italy has been seeding non-Capitalist businesses since 1985. [google.com]
(That's working very well in northern Italy.)
-- OriginalOwner_ [soylentnews.org]
(Score: 0) by Anonymous Coward on Saturday July 29 2017, @10:49PM (1 child)
No shit Sherlock, perhaps you missed the conspicuous iphone reference?
(Score: 0) by Anonymous Coward on Saturday July 29 2017, @11:45PM
I note that you didn't specify whether the iPhone was second-hand or third-hand.
-- OriginalOwner_ [soylentnews.org]
(Score: 1, Interesting) by Anonymous Coward on Saturday July 29 2017, @02:37PM (23 children)
The problem is that fractional reserve banking means, that those with more capital, get more, cheaper credit. Those without capital, need to spend a disproportionate portion of their income on just surviving. The poor who can't get credit, are competing with the rich who can get credit, to buy a house. The bank tells the poor NO, and the rich YES. The poor man must now pay a disproportionate amount of their income on rent. That part is true. It is however the fault of government, which facilitates this through national currencies and banking regulation.
There should be free competition in currencies, and banking.
Stop subsidising the rich, by bailing out the banksters!
(Score: 3, Insightful) by kaszz on Saturday July 29 2017, @03:32PM (3 children)
Gold and Ethereum/Bitcoin ?
Plain foreign currency is also an option.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @01:23AM (2 children)
No, real money.
(Score: 2) by Immerman on Sunday July 30 2017, @12:42PM (1 child)
Bread and Land?
Pretty much everything more abstract than that is a legal fiction for the convenience of facilitating trade and skimming profits.
(Score: 2) by kaszz on Monday July 31 2017, @02:19PM
A tractor using vegetable oil can help turning land into bread. So it ought to have some value post-crash.
(Score: 0) by Anonymous Coward on Saturday July 29 2017, @05:13PM
Yes, the role of the federal reserve system is always ignored in discussions like this. Trickle down theory is not only used to justify tax policies, has the federal reserve ever given you new money? No they give it to a select few rich organizations and hope they loan it to you. I'm not even commenting on what is right/wrong here, just that the anti-trickle down proponents ignore the much bigger issue.
(Score: 5, Informative) by jmorris on Saturday July 29 2017, @07:30PM (16 children)
Stop calling it fractional reserve banking for a start, nobody understands what it is or why it might be bad. That is why I like Moldbug's "Maturity Transformation" phrasing. One you explain what it is, it is easy for them to see it as an outright con and that banks depend on it for their living.
Basically what banking actually is involves handwaving a loan into a deposit and the bank getting all the interest.
In honest banking you bring them 1,000 in whatever, USD, Euros, BTC, and they hold it. You write checks against it and they either give it to the people presenting the checks or simply change the ledger to credit it to that person's account if they also bank with them. Banks exchange chits between themselves and occasionally transfer physical (or now virtual in the case of BTC) assets to keep the books balanced. They make money charging fees for this service, but your money is always your money in every sense of the word since they are only the custodian of it. If you agree to deposit for a period of time, they issue a Certificate of Deposit (CD) specifying a rate of interest, this means they are free to use that money to issue a loan of the same period, hopefully at a higher rate of interest and thus earn a profit.
What actually happens is you put your money on the counter and they take it and give you a Terms of Service agreement that way down in the fine print nobody reads says you are loaning them the money at 0% interest renewed daily. They agree to redeem checks against your account or withdrawals to the best of their ability but are NOT obligated to give you your money on demand because you have agreed that it isn't your money anymore. They then loan that money out at non-zero rates for periods much longer than a day. That is the Maturity Transformation scam. They are waving a wand (bribing the law to ignore) and suddenly one day money is transformed into part of a thirty year mortgage. Lots more hand waving goes into hiding it, papering over the most obvious side effects and building a great pyramid of Doom that every once in a while always goes FOOM! They buy lines of credit between banks to cover short runs, the Federal Reserve stands ready to jump in and print money, the FDIC promises they will stand as the last line of defense, etc. But none of it would be required if they weren't committing the sin of lying in the first place. They made a thirty year loan with money they don't have and played the odds that only a "typical" percentage of depositors would close their accounts or suffer losses in their balances sufficient to expose the fact their money isn't really there.
Also supporting the scam is the entire accounting industry. If bank deposits had to be accounted for as loans (at zero interest) instead of counting as cash equivalents it would quickly induce depositors to seek out banks that actually deposited funds. But because the accountants agree to count it as a cash equivalent money deposited undergoes "credit expansion" in that we count our "deposited" thousand as ours, the bank counts it as "theirs" when they loan it back out so there are now 2,000 circulating and doing productive work where once there was only 1,000. This causes inflation of course, reducing the buying power of all 2,000 circulating. Now imagine the case where your 1,000 is transformed into a loan to a small business. In this case the bank simply adds it to that person's account... where it instantly becomes available for retransformation. And the pyramid rises.
What you call "fractional reserve banking" is nothing more than the government imposing rules to limit the practice to levels that reduce the incidence of failed banks enough to keep confidence in the system. Once you understand that outright fraud is involved you can be a pure capitalist and still support ending the practice.
(Score: 2) by Whoever on Saturday July 29 2017, @08:06PM (8 children)
While we are banning fractional reserve banking, we should go back to the gold standard. Don't worry about the impact on the economy, though, I'm sure we will all get used to being poor quickly enough.
(Score: 0) by Anonymous Coward on Saturday July 29 2017, @08:19PM
The gold standard sounds like a much better plan then the fed printing money and giving it to Goldman-Sacks. They have not figured out how to print gold...yet!
(Score: 2) by jmorris on Saturday July 29 2017, @08:31PM (6 children)
So where is the error in what I wrote? Do you support fraud? Or do you simply attack reflexively?
Maturity Transformation is the primary driver of the boom, bust "business cycle" in that it creates a lot of phantom money that causes misallocation of resources leading to a "correction" in the form of a recession, where the excess assets are written down. Is it your position that boom, bust cycles make us wealthier?
As for the gold standard, I'm a lot less absolute on that these days, if banking were fixed there wouldn't be much difference. We wouldn't really need the FED, for example. And right now hard money would be fatal as inflation is the only possible path to "repaying" the debts every Western government has run up trying to maintain a welfare state. People loaned governments money both sides should have realized could never be repaid so both sides are going to end up eating their share of it one way or another. high but short of hyperinflation rates of Inflation is the traditional way that doesn't involve a total collapse and war. No matter how, this is going to hurt but stupid is supposed to hurt so we learn not to be stupid.
(Score: 1) by Zobeid Zuma on Saturday July 29 2017, @08:54PM (5 children)
What I disagree with is your language characterizing the system as a scam, a fraud, and claiming that there's some conspiracy to hide all of this from the public. The basic way that banks work (fractional reserve banking) is no secret to anyone who didn't sleep through their classes in school. The expansion of the money supply through loans is something you can get (and in a lot more depth) from Macro Economics 101.
Throwing around loaded terms like "scam" and "fraud" and "pyramid of doom" is not the same as making a rational argument. It demonstrates that you don't like the system -- yeah, we get that -- but it doesn't tell us when or how you think it's going to fail or how some possible alternative would work out better.
(Score: 2) by jmorris on Saturday July 29 2017, @09:32PM (3 children)
I don't like lies. Loaning money you don't in fact have is a lie. There is no other word that applies, and if anyone who isn't part of the banking industry does it they lock you up for it. Those books you speak of take pains to gloss over that uncomfortable reality.
If you loan money you actually have possession of, it is a good thing and makes everyone better off in the long run. But when a bank loans money it doesn't actually own, it always ends up badly. Adding multiple layers of obfuscation over that basic crime delays the day of reckoning at the expense of making the eventual settling of accounts a greater economic bust.
The fact people often fail to see the problem usually stems from a more basic problem, a failure to understand what money is. This is of course intentional on the part of the Powers That Be, who benefit greatly from the current system.
(Score: 3, Insightful) by aristarchus on Sunday July 30 2017, @11:10AM (2 children)
For someone who doesn't like lies, jmorris, you certainly tell a lot. Or do you think they are not because you actually believe this batshit crazy info-wars stuff?
Loaning money they don't have? Um, are you an idiot? If the Fed says they have it, they have it. That is what money is, you know. It has no, let me repeat this, no intrinsic value. Money is worth nothing, unless it functions in an economy as a means of exchange. So if you have money, and you hoard it like I know you do, it is in fact not your money because it is not really money. You, oh simplistic jmorris, do not understand money. Moldy Goldbug does not understand money.
Are you one of those idiots who thought that Obama could not just order the Mint to create a One Trillion Dollar Platinum coin, and deposit it in the Fed, because there is not a trillion dollars worth of platinum available? Or that such a coin would be too big to move? (Never bothered the Yappese!)
And since you do not understand money, you do not understand economy, you do not understand value, and you do not understand hard work. Good day, jmorris!!
(Score: 0) by Anonymous Coward on Wednesday August 02 2017, @09:19AM (1 child)
loaning money they don't have is the essence of fractional reserve banking
If I want to loan you a 100 dollars I need to have a 100 dollars
If a fractional reserve bank wants to loan you a 100 dollars they only need to have 5 dollars (or whatever % the fractional reserve part is currently mandated at), yet they get to charge interest as if they had a 100 dollars
this is fraud no mather how you spin it
(Score: 2) by aristarchus on Wednesday August 02 2017, @05:00PM
Yes, the concept is rather easy to understand. But evidently you fail to grasp what money is. Money does not exist as a natural object, and thus it cannot be something one simply "has" or not. You are reifying money, and possibly even, one suspects, deifying it.
Money is created by a relationship between humans. Thus is the Fed makes a loan, even on a factional basis, the loan itself creates the relationship that is "money". In economic theory this is sometimes referred to as M1, and further relations based on this loan multiply money, creating what economists call M2, M3, etc.
There is nothing surprising if the first step seems to create money out of "nothing". Unless you are a "conservative" who pines for the gold standard, because you are incapable of abstract thought and think that money has to be a commodity that embodies value intrinsically. But about commodities, um, those only have value relationally, some one has to want to buy your gold, or it too would not exist.
(Score: 1, Insightful) by Anonymous Coward on Saturday July 29 2017, @10:29PM
It's a ponzi scheme. There can never be enough money in circulation to repay the interest on the loans without more deposits (more money creation). How exactly is it not a giant scam?
(Score: 2) by linuxrocks123 on Saturday July 29 2017, @08:55PM (5 children)
You actually give a fairly accurate account here of how fractional reserve banking works. The only really incorrect detail is that the reserve ratio requirement is to limit the velocity of money, not to reduce bank failures. Your analysis of these facts, however, is deeply flawed.
First, there's no fraud involved here. I know precisely how fractional reserve banking works, and I have bank accounts. No one is defrauding me, and, if others have an incorrect idea of how banks work, that's their own fault for not paying attention in high school and also never paying attention to that one scene in It's A Wonderful Life. Fractional reserve banking isn't like a Ponzi scam, where there's no real value underlying the nominal value of the shares. In fractional reserve banking, the balance sheets still balance; it's just that part of the balance is illiquid. We want it to be that way, because we want investment in the future to be part of the economy.
Second, you present this system as obviously horrible and unsound, but it's not. It's no more unsound than oversubscribing broadband Internet. The system works on the assumption that most people aren't going to take all their money out of their checking accounts every day, and, in practice, they don't. Your alternative -- only allow lending on CDs, and charge fees to administer checking accounts -- is abysmally inefficient and ineffective in comparison to the system we have now.
Most people don't want to sign up for 30-year CDs, though they will sign up for 30-year mortgages, so you've effectively reduced credit to almost zero. Interest rates would skyrocket and investment would plummet as the credit potential of everyone's collected checking and savings accounts sat unused. Breaking a CD would be impossible in your scheme, too, which would cause unnecessary liquidity problems for individuals. So you've not only destroyed most of the nation's credit, but also shifted the liquidity risk for what's left of it from businesses that are able to handle it to individuals that are not. Every part of your idea is horrible.
And there's no reason for coming up with it in the first place. We all accept oversubscription, "in practice", and "good enough" as valid principles for networking and networking protocols, as well as other areas of computing, like UUIDs and file hashing. Well, "good enough" is good enough for banks' liquidity management as well.
(Score: 2, Troll) by jmorris on Saturday July 29 2017, @10:17PM (4 children)
It's A Wonderful Life is the perfect example. Because it is a movie it all worked out to a happy ending, but the history books are littered with examples where everyone didn't live happily ever after. But at least he was honest in that he wasn't claiming to be a bank. A Savings and Loan explicitly is loaning out people's SAVINGS. They acted like a bank though, which is what lead to the customers thinking they could take their money out when it looked like the thing was about to fail and Jimmy Stewart giving them, and the audience, a civics lesson on how the thing actually works.
The fraud is when you transform the maturity on loans to improperly create phantom money. It is stealing, no matter how many times you get away with it. And sooner or later reality makes you pay for your sins. Bernie Madoff got away with his scheme for a long time, everything was great right up until it wasn't. Our economies do exactly the same thing under fractional reserve, they hum right along right up until they don't. Like clockwork we keep going through boom and bust cycles. We inflate bubbles until they pop. Fake money.
You claim that our economy would collapse without it, these belief sare entirely unfounded. There is demand for home mortgages so there would be mortgages. Look at the current situation, there is literally trillions of dollars chasing around the world looking for a landing spot. Not finding any returns in bonds it is flooding into the stock market, real estate, etc and creating bubbles. Everybody knows it is a bubble being inflated yet we seem powerless to avert the impending disaster. Why? Now imagine a sane banking system. To sell those mortgages they would have to sell bonds/CDs in equal volume paying interest rates sufficient to sell them, which would then set the rate the home buyers paid at a point or two higher. Suddenly the market would rebalance to accept a crapload of money moving from the bubbles into bonds and CDs Of course on one level we already have this process running, we call them mortgage backed securities.
Without fractional reserve, all loans would have to be matched with an investment of money on the same maturity scale to pass auditor muster. The accounts would have to balance across time. That is the scam, they are unbalancing the books on the time axis with no mechanism to keep it from spiraling out of control except the inevitable bank crisis. Since a little cheating is so good, they keep going until it explodes because why wouldn't they? What do you think drives the derivatives market? Trying to leverage ever higher returns out of the same exploit. BOOM! Sooner or later, BOOM and the longer it gets pushed back the bigger the BOOM! Because eventually math wins. Math always wins.
Why? It is a financial instrument. It can be sold for whatever the market will bear, happens every day in the bond markets. The price is driven by the future payout value and the risk of the issuer actually delivering on the promise.
Your example of oversubscribed ISPs is making MY case, you are just too blind to see it. It is the same class of lie. If they were honest and sold a line as 100mps max speed with a base charge plus a x/GB usage rate and a given reliability rating it would be honest. But both sides seem to prefer the lie because they are convinced they can get the government to give them all of the good parts and prevent them from suffering the negative consequences. The providers like being able to call it "unlimited" safe in the knowledge MOST customers won't hit the cap and advertising a per GB charge scares customers, while avoiding building out the massive network that would be required to deliver the promised performance. Better to just drive off the few super pigs who threaten the network's viability. Customers want to run Netflix in HD on every screen in their home 24/7 or run bittorrent without paying what that sort of bandwidth should cost. Eventually the inherent conflict between the two groups will explode into chaos and reality will have to win.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @12:43AM (2 children)
Say goodbye to homeloans then. Nobody would lock their savings away for 30 years just so someone else can borrow it for a mortgage. Credit would come to a grinding halt. You think that's a good thing, but think again when no business can expand, no new idea can be capitalised. I suppose you will tell us insurance is a lie too.
How will ISP's build out their solid gold networks so that every little old lady checking her email can have the same data pipes as the household streaming hd netflicks 24/7 just in case. Evren though it will never be used. How totally ineficient, doubly so when there is no credit and the ISP can only expand via profits, as if there will be any of those left either.
You need banks to manage the different time horizons between buyers and sellers of money. Set a safe margin of reserves and away you go. It's only a problem if the banks get too greedy and bribe politicians into reducing those margins so they can make even more money. That's why we had a big crash. Risk need to be priced correctly, but that price isn't infinity like your claiming.
(Score: 2) by deimtee on Sunday July 30 2017, @01:58AM (1 child)
Back about 40 years ago, the price of an average house and land was about 3 to 5 times the annual average income. People took out 25 year mortgages, but many saved, worked hard and paid them off in 10 or less. You can actually make realistic 10 year plans.
Now a house costs 10 to 15 times the avarage income, it's worse than that even because inequality has increased and the 'average income' is skewed high.
So now it's take out a 30 year mortgage and work really hard and struggle to maybe pay it off in 25. Why is that better? Do you like having all the peasants in debt slavery?
And who can make realistic 30 year plans? When you were 20 did you have your life planned all the way out to 50, with no surprises?
If you cough while drinking cheap red wine it really cleans out your sinuses.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @03:11AM
Yes back about 40 years ago, we had fractional reserve banking, and people took out 25 year mortgages even though nobody took out 25 year savings accounts in order to loan them the money. Who is going to build all the new houses if no one can borrow any money to pay for them? Rent seeking and double incomes becoming more common is the reasons for the increase, not fractional reserve banking.
If the rent seeking capitalists who buy up all the properties and pay less tax via capital gains were taxed the same as workers earning wages, they would find somewhere more productive to park their money. People who wanted to live in houses could buy them instead.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @11:16AM
"Daddy, Ms. Knickerbocker says that every time a bell rings, jmorris gets his wings ripped off, again."
"That's right, Zuzu, that's right."
FIN
(Score: 2) by kaszz on Monday July 31 2017, @02:38PM
What is your suggestion to not having to compete with bank inflated buyers in the property market? And to grow earned money while not being subject to crashes?
If some can print money and others have to work hard for them. That will not be an equal playing field.
(Score: 2) by Jeremiah Cornelius on Sunday July 30 2017, @04:19PM
Wealth and poverty are functions more of POLICY than individual responsibility or worth, as evaluated through prejudiced systems of "character" or "morals".
You're betting on the pantomime horse...
(Score: 0, Troll) by The Mighty Buzzard on Saturday July 29 2017, @02:41PM (51 children)
Someone from the strongest bastion of socialist ideals in the nation (higher ed institutes) is saying capitalism is bad? Say it ain't so!
My rights don't end where your fear begins.
(Score: -1, Flamebait) by VLM on Saturday July 29 2017, @02:53PM
Traditionally, triple parentheses. Although I'm sure the demographics are just a coincidence.
(Score: 0) by Anonymous Coward on Saturday July 29 2017, @03:17PM (1 child)
And someone who has theirs and cares not for anyone else points it out.
(Score: -1, Flamebait) by Anonymous Coward on Saturday July 29 2017, @03:24PM
Look how successful Niggery Uzzard is. White crackers want to be him. You jealous bro?
(Score: 1, Funny) by Anonymous Coward on Saturday July 29 2017, @03:38PM
Don't worry, you will be economically equalized with the select multiculturals and they will compensated for unearned income, with your income. It's a strength! ;^)
(Score: 5, Touché) by Phoenix666 on Saturday July 29 2017, @03:50PM (26 children)
I'm afraid in this case you can't dismiss a guy with the credentials he has with a zinger. It's like either one of us calling Stephen Hawking a moron; yeah, we could say that but it would have all the snap of a limp noodle. In fact it would rebound on us as the inadequate ones.
So come up with a better counter. You can.
Washington DC delenda est.
(Score: 4, Insightful) by Ethanol-fueled on Saturday July 29 2017, @04:00PM (7 children)
Economists are pretty much practitioners of voodoo. You could argue the same about mathematicians, but at least mathematicians have a solid foundation based on repeatable, verifiable results.
Economics is based on a foundation of pop psychology with some sociology, opinion, personal politics, and adolescent-level algebra. Some people sprinkle a little higher-level math on top to make it appear to be more credible, but as the old saying goes, "garbage in, garbage out*."
* Also, the machine processing the garbage is itself garbage
(Score: 1, Touché) by Anonymous Coward on Saturday July 29 2017, @04:11PM (3 children)
So what's your alternative? Actual voodoo? Just give up and not even think about economics?
If it's too hard for you to understand you can just go back to your mathematics instead, leave the real thinking to the grown ups.
(Score: 0) by Anonymous Coward on Saturday July 29 2017, @07:54PM (2 children)
Everything we've done is wrong, but we can't consider alternatives - we must keep doing what we know as a historical fact is wrong!
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @12:46AM (1 child)
The fucking article itself shows that people are thinking about alternatives. Everything we have tried so far is a bit wrong. So lets try nothing and hope without any evidence it will be right?
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @04:48AM
Welcome to SN
(Score: 3, Interesting) by HiThere on Saturday July 29 2017, @04:53PM
The reason economics is so bad is that models are always based on what will benefit some particular collection of people. Experimentation in this area is difficult, and generally requires lots of political support...so it needs to be designed to please the people who authorize it...and it results are usually ignored.
The only way to do real economics is to test your models of past events...but even doing that rigorously is quite difficult. Even getting the data to validate against uncontaminated by political bias (at the time the data was generated) is quite difficult. And every government figures the results they collect differently....e.g., how do you measure unemployment? There isn't even a consistent measure from decade to decade.
The economists deserve a lot of the blame heaped on them, but an equal amount should go to the politicians who intentionally tamper with the data.
Javascript is what you use to allow unknown third parties to run software you have no idea about on your computer.
(Score: 0) by Anonymous Coward on Saturday July 29 2017, @11:52PM (1 child)
The stupidity is strong in this one.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @06:46AM
He actually has somewhat of a point. The field of economics is wholly unscientific and its predictive powers are very poor.
(Score: 1, Interesting) by Anonymous Coward on Saturday July 29 2017, @06:07PM
OK, how about I dismiss him because he's not even giving an adequate reflection of the current understanding of neoclassical economics.
I'm not even a neoclassicist, and I can tell he's building a strawman. Nary an investigation of friction in the market and the causes of those frictions - at best some rather hand-waving discussion of artificially created monopolies.
If I were his editor, here are some of the remarks I would have added:
1) inadequate investigation of counterarguments. Neoclassicists have spoken about friction in the market and money illusion for a long time now; address those points or you're building a strawman.
2) You're not adequately examining the reshaping of the market in terms of higher productivity coming at the expense of employability of the broad population owing to ancillary expenses of retaining labour. This is a perfect example of a more interventionist policy reducing employment and prompting arguably inefficient capital investment. If you can't investigate and dispense with this, you're missing a key countervailing proposition.
3) While you call out things like rising housing stock values, you don't quantify those or differentiate the condition of productive capital stock, nor invested/uninvested financial resources.
4) You don't account for rising standards of living, or lowering costs of parity in standard of living compared with 1950. This has been a massive boon to a wide range of the population, and you don't cover it when considering relative or absolute standing.
There is more, but that alone is enough to render it pretty bad.
(Score: 4, Insightful) by jmorris on Saturday July 29 2017, @06:49PM (6 children)
Yes we can. For example most of what Hawking babbles about these days has nothing to do with his specialty. This is a very common pattern where an expert in a narrow field gains fame and then begins attempting to transfer it to fields they have no more expertise in than most other knowledgeable laymen... which is what Hawking is when he goes outside theoretical astrophysics.
We can ignore Stiglitz because he is from a school of political economics that we know is a dead end. It has been literally tried a hundred or more times now on every continent other than Antarctica and failed. It usually accumulates a large body count at some point in the failing. It isn't failing because of the "wrong people", it isn't failing because of nefarious dark forces, it isn't failing by random chance, it is failing because it does not work. Anyone still following it is either hopelessly deluded or Evil, pushing it for ulterior motives of political power knowing full well the expense in human suffering.
The only economics that isn't utter garbage is Mises in Human Action, since he uses no fake math to obscure an agenda, arguing only from logic derived from first principles. Economics is a solved problem. What we lack is a political system that can allow the solution. Authoritarian political systems must, by definition, forbid the individual decision making and initiative needed to make a free market work and all we have as an alternative is Republics that seem to quickly decay into universal franchise Democracy and then to Socialism... which is authoritarian and incompatible with free markets. And that is the rise and fall of every society since we discovered fire.
(Score: 1, Insightful) by Anonymous Coward on Saturday July 29 2017, @09:53PM (1 child)
So is trickle-down. And shock doctrine. And Keynesianism. And all the others actually, because if there is one working great somewhere on this planet, tell me, I'd like to move over there.
Most of it is para-psychological voodoo using unrealistic hypothesis and scenario, one of them being that Humans are perfectly predictable and rational creatures. So if by "solved problem" you mean "we should just burn the whole thing and restart from scratch", yeah, maybe.
Uh? Republic, democracy and socialism are three independent axes. One cannot "decay" (whatever that was suppose to mean, but I guess it was a judgment of value on your behalf) into another.
And yes, Hawking should stick to astrophysics.
(Score: 2) by jmorris on Saturday July 29 2017, @10:48PM
No, that is the sperg libertarians. A society made only them might actually approximate "perfectly rational" enough to work. But humans aren't like that and Mises doesn't make the mistake of believing they are. Go read the book, economics IS a solved problem. Our politics is what we still don't know how to do. All of the proposed political systems have obvious flaws and when put into practice they fail exactly like they can be predicted to do. So we keep rotating through the same cycles.
Anonymous Conservative is probably on the right track defining the base problem but how we use that knowledge to build a better political system to resist the cycle is still an open problem.
(Score: 1) by Prune on Sunday July 30 2017, @04:13AM (2 children)
Here's something your precious Mises didn't know: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1773169 [ssrn.com]
(Score: 2) by jmorris on Sunday July 30 2017, @04:58AM
According to Mises, bringing advanced math to the subject of economics means you don't understand the problem. When was the last time you saw someone using so much as a calculator when making an buying decision? Yes it happens, but not enough to matter. Most economic decisions are "Do I want THIS more than THAT" and it isn't usually something that can be quantified with advanced math. Even billion dollar decisions more often than not end up turning on things that math can't accurately capture. Math is a tool, nothing more; some humans will use it in their decision making and some won't and if no two tax accountants can agree on what you owe the tax collector, good luck applying math to determine which house you should buy. That is why his book is called Human Action and not Economic Calculus or How to Model Economic Behavior. It helps if you actually read the books before burning (if only rhetorically) them, it works a lot better that way.
Humans are well adapted to operate in an environment where perfect information isn't possible. In fact, even if such information were possible and made available to them, many wouldn't use it. A system of economics for humans must account for these things.
(Score: 2) by jmorris on Sunday July 30 2017, @05:02AM
Damn, forgot the zinger. I'm pretty sure that is the paper that does put finished to Socialism / Communism since those ARE dependent on a single central authority being able to possess complete knowledge. But no, not even with a super computer beyond our current tech is such knowledge possible in real time. Any intellect or group of them short of divine must fail. So when somebody proposes Socialism as the answer, the critical question from Ghostbusters should be used, "Are you a God?"
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @11:22AM
Conversely, outside of Bizzarro world:
Amazing how many are trying to argue with jmorris as if they were debating a rational person. All this effort will be in vain. It is like trying to explain "recusal" to Trump. Just ain't gonna happen.
(Score: 0) by Anonymous Coward on Saturday July 29 2017, @08:21PM
Stephan Hawking is a moron. He's done some interesting work with that blackhole radiation business, but his field is cosmology, not all that different from economics - i.e., observational studies, experimental (and therefore verifiable) studies. More importantly, much of the recent BS he spews out puts him closer to Trump than Einstein.
(Score: 0, Troll) by The Mighty Buzzard on Saturday July 29 2017, @09:58PM (6 children)
Yes, I most certainly can. Everyone in the entire tech field except HR guys know the precise value of credentials: zero.
My rights don't end where your fear begins.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @03:21AM (2 children)
So your experience as an economist (clearly zero) + your special snowflake gut feelings, is better than an actual economist working and studying the economy?
So, knowing more about it than him, why have you still failed to offer any insight or anything at all for that matter?
(Score: 2) by The Mighty Buzzard on Sunday July 30 2017, @08:53AM (1 child)
Yeah, misusing the term snowflake isn't going to butthurt me. Sorry.
My rights don't end where your fear begins.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @02:46PM
Can't butthurt someone whose entire existence is that of a pained butt.
Don't worry, the snow might help your butthurt, embrace you existence as part of the shit blizzard.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @11:25AM (2 children)
So, This is why you dropped out of college? Confirmation bias? Or just ignorant ideological blindness?
And just because you think that the experts are not experts, that does not mean that your bullshit is any more valuable that it was before you made such an asinine claim. False equivalency, bozo!
(Score: 2) by The Mighty Buzzard on Sunday July 30 2017, @12:10PM (1 child)
No, because they taught too slowly.
FTFY
If the certifying authority does not have useful standards for gaining a certificate, it is worthless. End of story.
My rights don't end where your fear begins.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @02:50PM
Lol, you want to claim genius status? It is readily apparent that you are average at best. Maybe you have some aspbergers or some other disorder that makes you really good at learning tech, but oh boy from your arguments here you are a reactionary type that hides behind an illusion of calm. You truly believe that the person who gets upset first is wrong, and by remaining calm you maintain superiority. If it wasn't so lame it might be funny, but after years of seeing it, it is just kinda sad.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @03:00AM (1 child)
http://steshaw.org/economics-in-one-lesson/ [steshaw.org]
Lets go with this then. Most socialist ideals start with 'lets take the money from the shop owner'.
We are not sure capitalism works. We are however *VERY* sure socialism/communism does not and why.
One thing I have learned after getting a degree in economics is everybody has an opinion on it. The top people disagree on just about everything. The formulas only work in very specific conditions. They quickly go off the rails once you apply any real people into it. None of them have a real idea what is going on. They have general ideas that *might* *maybe* *possibly* *kinda* work in very specific conditions. You can only use the existing formulas in the most broad terms to kinda point out trends and possibilities. You can not make any real monetary decisions with them. Economics is a bunch of snake oil dressed up in silk suits.
At this point you may say I am full of shit and a liar. Think on this. Name one economist or theory that has predicted the last 3 recessions. Not a 'I think it will' pundit, but with actual theory and numbers to back it up. They do not exist.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @11:31AM
One thing I learned after getting a terminal degree in economics is that anyone who claims to have a degree in econ after having made such a factually incorrect description of socialism, ignorant statement about the state of understanding of capitalism, and politically fascist statement about communism, does not in fact have a degree in economics. But, don't let your mendacity stop you. Maybe you also have a law degree? Medical? Commerical aviation? Are you not, in fact, Matt Damon? Or was it Leo Craprio?
(Score: 1, Interesting) by Anonymous Coward on Saturday July 29 2017, @04:01PM (17 children)
To be expected. If you cant argue against the argument, go for the man.
Why don't you explain to us how increasing inequality is actually a good thing after all.
Capitalism is working quite well for the capitalists, who would have thought...
(Score: 3, Interesting) by http on Saturday July 29 2017, @06:45PM (1 child)
...on top of that, the thing that the people with capital don't want you realizing: owning your own business does not mean you are a capitalist. Having a nest egg that feeds you and grows, owning your house, does not mean you are a capitalist. But they've spent decades and billions convincing that you you're a temporarily embarrassed billionaire, so you'll vote for politicians who set the laws and policies that benefit actual capitalists.
I browse at -1 when I have mod points. It's unsettling.
(Score: 0) by Anonymous Coward on Saturday July 29 2017, @11:35PM
owning your own business does not mean you are a capitalist
True. It means that you are an entrepreneur.
...if you are the -only- worker and if you paid for everything out of your own wealth or you got a loan.
...but you left out explaining what a Capitalist is.
If you needed investors, who expect an ongoing return on that investment (especially without them performing any labor in the company), then -those- folks are Capitalists.
If you have workers^W employees whose labor you will exploit, without them having any ownership in the company, then -you- are a Capitalist.
Having a nest egg that feeds you [...] and grows does not mean you are a capitalist
Actually, it does.
owning your house
There was a time when a house was looked on as a place to live.
People didn't view at that as an "investment" that would appreciate in value.
The nest egg thing applied to housing is pretty bizarre (especially the hock-your-house thing).
The FIRE sector has REALLY perverted people's view of economics.
-- OriginalOwner_ [soylentnews.org]
(Score: 2) by The Mighty Buzzard on Saturday July 29 2017, @09:56PM (14 children)
Sure, why not?
You can't otherwise teach the greedy fucks at the bottom that how much more the greedy fucks at the top have is utterly irrelevant to anything but their own avarice.
My rights don't end where your fear begins.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @12:56AM
So circle jerking cxo's giving each other pay rises is supposed to incentivise everyone to be a cxo. Right gotcha, but who is going to do the actual work in your bukake system?
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @04:54AM (7 children)
God DAMN you would benefit from a formal education. Your ideas for how to solve the world's problems are just so infantile in their naivety. You just never got past the shock of losing 1/4 - 1/3 of your paycheck to taxes huh?
Those damn gov thieves!!!! Rarrrgh!!!!
(Score: 2) by The Mighty Buzzard on Sunday July 30 2017, @08:50AM (6 children)
Formal education in this nation isn't. Education I mean, not formal. The radical left (no, not just ordinary old Democrats) has owned the higher education system for longer than I've been alive.
My rights don't end where your fear begins.
(Score: 3, Insightful) by aristarchus on Sunday July 30 2017, @11:40AM (5 children)
Yes? So? That does not mean that they are wrong (they are more educated, you know), or that you would not benefit from some higher learning yourself. Everyone here with some college experience can see plainly how your ignorance is harming you, and has utterly destroyed your ability to make a coherent and persuasive argument on matters of economics. Go back to school, Buzzard. We promise not to hurt you.
(Score: 1, Troll) by The Mighty Buzzard on Sunday July 30 2017, @12:01PM (4 children)
FTFY
My rights don't end where your fear begins.
(Score: 3, Informative) by aristarchus on Sunday July 30 2017, @12:19PM (3 children)
No, you just re-asserted your ignorant presumption stemming from a lack of actual education. When you are not educated, a lot of things you do not understand can seem like indoctrination. You may say to yourself, "How could anyone believe that?" And if you cannot answer this question, then it must have been brainwashing. On the other hand, educated people can understand how people can believe what they do, and so there are far fewer cases where this question does not have a reasonable, or at least plausible, answer. But it also means they do know why they believe what they believe, and can give reasoned arguments for their positions. The uneducated, deprived of this tactic, more generally resort to name-calling, like "libtard" or "SJW", or in your case, "indoctrinated". Come through the looking-glass, Buzzard! It's a whole new world!
(Score: 2) by The Mighty Buzzard on Sunday July 30 2017, @12:32PM (2 children)
Sweety, darlin, honey...
Education = the learning of stuffs
Education != attending a degree mill/indoctrination center
My rights don't end where your fear begins.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @02:54PM
Well you learned tech and then stopped, you are worse than Hawkings because you are an ignorant ass who doesn't even have fame in an advanced field yet you claim superiority over everyone else. You are such a massive toooooool.
Oh, and it is easy to tell when you are triggered, you hop back to overly sweet crap mixed with shitpoints.
(Score: 3, Insightful) by aristarchus on Sunday July 30 2017, @06:49PM
Easily avoided. Just do not attend a for-profit school, or one that has waco right-wing religious sponsorship. That rules out Univ. of Phoenix, Regent, and Liberty Universities. Just follow that pattern. (Oh, the scam schools usually offer to teach you stuffs that will make you more money, watch out for that. Education is not the same thing as training. But you know that, you were in a military.)
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @11:36AM (4 children)
Is this what you meant? Because it doesn't make sense otherwise. And, "We're coming for your capital gains, Chuck!"
(Score: 2) by The Mighty Buzzard on Sunday July 30 2017, @12:06PM (3 children)
You think the poor aren't greedy fucks as well? I'm sorry but that is the only way to see anyone who gets butthurt just because someone else has more than them.
My rights don't end where your fear begins.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @12:24PM (2 children)
Come now, Buzz! You are a coder? Living in Tennessee? I have vastly more than you will ever see. I am so rich, I don't know what to do with all my money! So I invest in Social Justice Stocks. And, I am a socialist. I believe in taxing the rich. This is not a matter of greed. I certainly do not need any of these avaricious rich people's wealth, but I do think we should violently rip it from them, just to make the point. That is because they are sociopaths and criminals, in thought if not yet in deed. We need to neuter them, before they do real harm to society. So drop your petty projections of jealousy, it does not become you.
(Score: 2) by The Mighty Buzzard on Sunday July 30 2017, @12:30PM (1 child)
Pretty fair shitpost. It did make me laugh.
My rights don't end where your fear begins.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @03:01PM
You're still able to laugh?? Good! Now quick, step back into the light before the devil claims the rest of your soul!!
(Score: 2) by c0lo on Saturday July 29 2017, @11:32PM
It ain't so.... (there, happy to oblige)
---
(now, mod me +Informative. Grin)
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 2) by mcgrew on Sunday July 30 2017, @03:24PM
Read it again, your comprehension appears to be limited. They are NOT saying capitalism is bad, they're saying that the vast income equality that has developed is bad.
You're calling an orange a razor blade.
mcgrewbooks.com mcgrew.info nooze.org
(Score: 2) by VLM on Saturday July 29 2017, @02:49PM (6 children)
If by today this meant "boomer economic era beginning in the 70s" then its pretty accurate. Income inequality didn't begin in 2017.
(Score: 3, Informative) by Anonymous Coward on Saturday July 29 2017, @04:28PM (5 children)
No, it didn't, but that's about when the modern period of it getting obscene happened. We've always had gaps between the wealthiest and the poorest amongst us. To an extent that's healthy and necessary in order to spur innovation and production capabilities. One of the big problems the Soviets had was that since pretty much everybody was making the same amount of money, there was no real point in doing any work. You got the same amount of money whether or not you were a good worker. So, people did the bare minimum in most cases.
The problem here is that the people at the bottom haven't made so little since the previous age of the robber barons. These days it's completely plausible for somebody making minimum wage to have less money at the end of the month than at the beginning even without wasting it on pointless bullshit. That kind of thing corrodes the moral underpinnings in a similar way to when we had actual slaves as a legal thing. The people abusing their power would come up with reasons to rationalize why it wasn't so bad and even today over 150 years later, that corrosion remains causing problems.
In the post-war period we had a lot of prosperity, in large part because the wealth wasn't so concentrated with a small portion of the population and there was a very real possibility of moving up in society if you were willing to work at it. These days, though, the people with all the money, insist on getting more of it. They insist on keeping wages as low as possible so they can siphon off as much as possible. It's a vicious cycle where people can't get ahead because the wealthiest Americans burned the latter after they got up by demanding tax cuts that required cutting services that people need to advance and cutting wages that people earn for their work.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @12:04AM (2 children)
Yeah. We weren't talking about The 0.1 Percent in the 1970s.
There weren't any mentions of fewer than 100 individuals in aggregate having more wealth than half the planet's population in aggregate.
That came in this decade. [google.com]
-- OriginalOwner_ [soylentnews.org]
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @02:07AM (1 child)
It's getting worse. It's down to eight individuals.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @02:57AM
Yup.
...and that's down from 82 just a couple of years ago.
Talk about your geometric progression!
What could someone do with that much money?
...beside cause trouble?
They sure as hell aren't creating jobs.
-- OriginalOwner_ [soylentnews.org]
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @11:47AM (1 child)
Yep! Clear as the pimples on the ol' man's behind! You see, that is why the Russians lost WWII to the Germans. Germans worked on the profit motive, and some people were, um, "paid" less than others, in the work camps. And it is also why the Soviets did not manage to put the first artificial satellite into orbit. And not why the Americans now have to rely on them to launch stuff to the International Space Station, that was in no way based on the Soviet Mir space station, which did not exist, because there was no incentive in the Soviet Union. And Russians are very much better off now, they only have to worry about being poisoned by something that is not actually vodka, or being killed by an oligarch, or starving to death. They work harder now! And it's good for them!
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @07:47PM
The Suma cooperative in the UK is the largest co-op there.
The co-op's workers have democratically decided that everyone in the company will have the same pay rate. [google.com]
It seems to work quite well for them.
(It's not a poverty wage by any stretch of the imagination; they brought up all the workers to the -higher- level.)
that is why the Russians lost WWII to the Germans [I'll add the /sarc tag for you here]
So many USAians think that USA is the reason Hitler was defeated.
USAians are very weak on History--but they do lap up propaganda willingly (especially nationalist propaganda).
...and, having incurred 27M dead Soviet citizens because of that war, and having a long cultural memory, the Russians want to avoid war--contrary to USA's propaganda. [dissidentvoice.org]
Russians are very much better off now
Heh. Well done.
Hurray for Capitalism and Oligarchs! /sarc
-- OriginalOwner_ [soylentnews.org]
(Score: 5, Insightful) by Thexalon on Saturday July 29 2017, @02:50PM (6 children)
The point of the "trickle-down" idea was never to accurately describe how the economy actually worked, but to provide an academic-sounding excuse for Reagan and his successors to cut taxes for rich people for reasons that had absolutely nothing to do with economics and everything to do with politics. Its central claims, that higher incomes for rich people especially via tax cuts improve economic growth, and that said economic growth will cause tax revenue to go up, have never been shown to be true, and there are several counter-examples.
The big problem of trickle-down economics is the issue of what rich people do with the extra money they make in a more unequal economy. They can and sometimes do increase how much stuff they buy, which indeed helps money trickle down, but the fact is that they can only consume so much: A rich person still can only wear 1 set of clothes at a time, eat a few meals a day, ride in a single private jet or yacht at a time, and so forth. So most of the money they make just gets reinvested in the various financial markets, usually to buy stocks that have already been issued (which means that the companies in question don't have any more resources to work with than they did before) and the only result of that is a change in rankings on the rich people's dick-measuring contest known as the Forbes 400.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 1, Troll) by VLM on Saturday July 29 2017, @03:05PM (1 child)
The alternative interpretation is in an era of automation and world trade to route economically around environmentalism and labor laws, is that trickle down makes the permanent economic decline smoother and less deep, at least immediately. The argument isn't that trickle down will give you the 60s boom economy again, its that it'll give you an economy that'll average as good as rural ohio rather than as bad as rural mississippi. Best of a bad situation, not the best situation.
You have to be realistic. Giving the government another trillion would result in what positives? Only negatives like handouts that keep poor people poor, fund a war in Syria or Iran... When your government finds itself in a hole, step one is stop digging deeper.
Although this sounds strange analogy, think of teeny bopper top 40 music. In the ancient days everyone listened to Glenn Miller, for example. For a variety of reasons the music industry has shed all its listeners except teens, leading to pretty crappy pop music. Better a large slice of a small pie and all that. Anyway the point is that non-teens are no longer part of the pop music economy. For automation and regulation caused outsourcing large swathes of the population are leaving the capitalist economic system permanently, more every year. Arguably what the legacy remaining capitalist economy needs on its downside is going to look really weird to people no longer in the economic system. Much like Ariana Grande sounds ridiculous if you're not a 13 year old girl.
Its not necessarily the end of the world. If you eliminate the abstraction of mutual funds and 401K plans most people never participated in the stock market and everything was "OK" (well plus or minus great depressions and stuff). Or most citizens never participated in the bond markets and it turned out OK.
The middle ages didn't end because we ran out of superstition or labor. The world of the future will probably have the "gold market" separate from the "copper market" with essentially no economic activity overlap other than the usual predator-prey relations for taxation, etc.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @04:56AM
I was gonna give a real response, but then I remembered which user I was responding to and decided a simple "batshit crazy" would suffice. Best of a bad situation?? I'm glad you're looking out for the 1%...
(Score: 0) by Anonymous Coward on Saturday July 29 2017, @06:14PM (3 children)
You're missing the part where Reagan-era tax changes made astonishingly little difference to tax receipts because the rate cuts went along with a massive cut to tax dodges. Basically nobody was paying those top rates.
(Score: 4, Informative) by Thexalon on Sunday July 30 2017, @01:08AM (2 children)
I went over this about over a year ago [soylentnews.org]: Tax rate cuts = tax receipt declines, tax rate increases = tax receipt increases. Whatever the peak of the Laffer so-called Curve (and bear in mind that there's no evidence whatsoever that it's a smooth curve, and no equation has ever been developed to describe it) really is, it's above any tax rates anybody in the US has experienced since the 1980's.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @06:39AM
Right, which is why nobody hires an accountant for their taxes, which is why all the companies with a US presence pay fat chunks of their worldwide income to the US, which is why tax havens are science fiction and why loopholes are a theoretical abstraction.
In other news, there are alternatives to living like Cleopatra, as Queen of DeNial.
(Score: 0) by Anonymous Coward on Sunday July 30 2017, @08:18PM
It doesn't take a genius to figure out that when you start out at a tax rate over 90 percent (FDR, Truman, Ike) and make a cut, you will see some effect.
It quickly falls apart from there.
there's no evidence whatsoever that it's a smooth curve
Yup. It was a thought experiment, drawn on a cocktail napkin.
It had no data table that was analyzed.
There has never been a shred of evidence in any real-world economy that the Laffer Curve boosts job growth in any predictable way.
In fact, for the last 3-plus decades, we have seen evidence of the opposite.
When tax cuts to the Oligarch Class aren't tightly bound to actual new jobs created, those giveaways to The Rich aren't effective at their claimed purpose.
...and even attempts to do that have had questionable results.
I'll mention once again how, since 1985, a reworked unemployment insurance in Italy has been helping workers laid off by bust-and-boom Capitalists to start their own (Socialist) worker-owned cooperatives. [google.com]
It's working very nicely in northern Italy, with co-ops accounting for about a third of the economic activity.
-- OriginalOwner_ [soylentnews.org]
(Score: 5, Interesting) by Whoever on Saturday July 29 2017, @03:35PM
I don't think the idea that increasing economic inequality reduces overall growth is a new idea. I remember reading studies that showed this years ago.
I do think that the objective of the super-wealthy is increasing inequality rather than personal wealth. They would prefer to have 10% of a 1 pound pie than 7% of a 2 pound pie. This may seem irrational at first, but I think that there may be sound reasons for it.
Firstly, recognize that the super-wealthy have more money than they will ever spend. Increased money for them does not affect what they can and will buy: they already have too much money.
But a larger portion of the pie may give them more influence, which may mean that they are better able to hold onto their positions of wealth and power. In other words, 10% of a 1 pound pie is more stable than 7% of a 2 pound pie. That's their key objective: holding onto their position is society.