Sharing the Wealth (or not)

Discussion in 'General Discussion Forum' started by ScottXeno, Nov 26, 2008.

  1. Herr Mike

    Herr Mike Look, Ma! Two Heads!

    322
    Jul 28, 2008
    Just since the first World War.

    I don't think this assertion can be backed up.

    How does uneven wealth distribution result in bubbles?

    Again, you have no grounds to assert this. No one has ever quantified the economic impact of uneven wealth distribution.

    Why not? If linear distribution of wealth is the overriding factor of economic success, why not do this?

    I'm getting the idea that your whole argument is bunk because you are relying on the notion that uneven distribution of wealth is bad.

    My thinking is, the AMOUNT of wealth is what is important, not the distribution. This is why the US economy fared a wee bit better than the Soviet ecnomy, which had real linear wealth distribution.

    Yes, because all of a sudden you have means of production. The power to invest. You know, stuff that drives the economy.

    You know what else is easier when you have a lot of money? Losing a lot of money. Take a look at the other side of the coin.

    Then how are they making more money?

    Then how are they making more money?

    Hmm. Who sets the magical number of "the right amount of wealth"?

    Very good. I like it. Except you leave out the bit where the government needs to take a large portion of the profit. Maybe that part isn't needed at all?

    Now I'm confused. Are these companies not the same as in your bit about the economic cycle?
     
  2. Herr Mike

    Herr Mike Look, Ma! Two Heads!

    322
    Jul 28, 2008
    Bad sarcasm is generally a mask for an inability to make a point.
     
  3. Herr Mike

    Herr Mike Look, Ma! Two Heads!

    322
    Jul 28, 2008
    More like a gradual erosion of production and general wealth.

    I don't think eventual collapse is a foregone conclusion. As long as there are enough people around to see that higher taxation is something to be avoided, westernized countries may in fact always walk the line as they are now.

    That said, democracy is mob rule, and the mob gets what the mob wants. if the mob can continue to vote itself money, it will do so.

    I think a great many things keep the USA and Finland from being very comparable.
     
  4. ceacar99

    ceacar99 It Wandered In From the Wastes

    128
    Nov 11, 2008
    ok i FINALLY have the time to talk about this.... jeeze its been a busy week.... my crappy right leg (knee and hip) is all jacked up from all the work i've been doing....

    sooooo anyway, lets get back to the arguement, i hope nobody has been getting truely upset. if you are just stop and dont even bother, its not worth the bother if your going to shit your pants from screaming too hard over this. honestly it isnt.

    *note i am using canada as an example below because its a good comparison. canada is so similar to the us in many ways that its really in some ways a contest of ecenomic theory, also because so many boobs think that the canadian system is so perfect.....

    *one more note, finland's gdp per capita is 33k 2006 est, by the average test of standard of living you dont compete.

    alright, lets look at a major fact. as of a few days ago in our great economic crash(as happens from time to time, its happened more then once before) we JUST reached the unemployment rate of canada! canada had astronomical unemployment rates compared to the us on average over the past 15 years for a few reasons.

    hell why bother when if you fail in business at least the government will take care of your right? there's even the fact that many business owners have had SERIOUS trouble because of canadian regulations, a big chinch in the economy. something thats really started showing up in the us too as our growing bureaucracy starts to reach critical mass.

    lets look at another fact.

    the 2007 estimate for gdp per capita of the united states(according to the cia factbook webpage) is about 45k, where the canadian production in 2006(havent found a more fresh date) is 31k. now i went by capita because its really not fair comparing our economies pretty much any other way.

    ya canada is so much more productive because of the systems they have put in place. better standard of living my ass.... in case you didnt know gdp per capita is the most used method to determine standard of living. ALL methods have their flaws, such as the life expendancy method which can be effected by facts such as people living well enough off that they often just off and die from being too god damn fat. really gdp per capita is used because it is the least fundamentally flawed system of them all.

    in fact standard of living for MANY highly educated individuals such as doctors is so low that often they are seeking new lives in the united states. you do realize that under the canadian system the average doctor makes about as much as a factory worker after all his business costs right?

    social darwinism actually is real, and functional. like some people even still speak of old theories like durring hitler's day that evolution in the human race is now going to be on a negative trend because of the way society tries to prevent even the "weakest" members from getting killed. however i dont believe that's true. it may no longer matter as much if you are a serious he man who can crush a child's skull in your fist, but a lot of other things have MUCH more weight to them now. social characteristics programed into your dna, intelligence, how able your mind is to adapt to a constantly shifting environment. a person who would have been worthless durring gengis khan's day may be a great man today, and often his bloodlines inheret those traits and are successful because of it. on the fundamental level social darwinism is still taking place.

    on the ecenomic level it takes place. its a constantly shifting environment. comsumers are actually the meal, and your competing with all sorts of other businesses. just as in nature consumers can only provide so much and that provision is equal to the actual strength of the entire food chain.

    the rules are different then with raw nature. sometimes pure brutish strength and claws wont do you any good. someone or something able to dazzle the consumers and devour them en masse often is more sucessful then old developed titans with claws. every day the business empires small and large adapt and try new things to strive and survive. just watch how marketing has evolved. cigerette adds in magazines used to often have odd details like a woman with a barely noticable third leg. this would make the add stick in your memory even if you just flipped past it without paying it any real attention.

    banks have evolved too. an example is wamu which before its collapse was the dominant power in private checking accounts. it achieved this by developing systems and idealology that was widely different then its competition as well as developing a flashy campaign to dazzle its meals into submission.

    however, JUST like nature there are hickups. we've had them quite a few times in just this century. the modern banking crisis can be calmly explained as something that can even sound reasonable.

    think about it, these banks were being proved by other banks across the developing world that the poor and super poor actually COULD be good targets for loans. those consumers actually could pay back the loans well enough for the bank to make profits overall. the problem was not so much this mentality, it was the combination of that and a trick called the adjustable rate mortgage. that mortgage REALLY wasn't designed for the poor, it was designed for rich moronic trust fund babies and the average upper middle class boob. i mean cmon, you hook em with a 2% rate, count on the fact that the rate wont stay low and make more like a 4% total average over the 35 year loan. however when the poor started taking that, well you saw the results.

    its just normal and natural and the fucking fact is that no damn 80 year old bureaucrat could have EVER cought it, not in a million fucking years. american leaders didnt catch it, european leaders didnt catch it, even asian leaders didnt catch it. in a world that is MUCH more strict then the us you'd think that ONE person would catch it but they didnt. that fact alone COMPLETELY obliterates the bullshit that "oh if we had more regulations this wouldnt have happened". in a system more complex then most people can imagine you cant really track shit like that, even when it is starting to become a large trend. this current crisis actually started very quiet and surged up with alarming speed and force, so fast actually that it had already poisoned everything before it was really possible to tell what was happening or do anything about it.

    the bullshit of more regulation to control the economies and keep them safe like bumper bowling really doesn't do anything except try to make people feel better. in a century of ever increesing regulation(never shrinking) across the entire globe crisis like this have struck at us again and again and NOBODY has been able to do anything about it, no one was able to stop it. really the only thing the ever increesing regulation has done is act like fat in the arteries, it clogs the system and slows it down. it brings the torrent of life in the blood to a trickle.

    the ONLY socialist system that was able to avoid events like this was the extreeme system displayed in soviet block nations where the entire economy was built from the ground up by the government. in fact the whole economy in those nations were very un complex, low prodiuctivity and just plain downright primitive. even then they had their own crashes, such as the complete lack of agricultural productivity displayed in almost all communist systems at the start....
     
  5. Roflcore

    Roflcore Mildly Dipped

    579
    Nov 2, 2008
    Ignoring statements is generally a mask for poor discussion style.
     
  6. Patton89

    Patton89 Vault Dweller

    727
    Nov 21, 2008
    I have to say GPD doesn't really clearly show how good the living standards of the average or the lower classes are. All it shows is that your country makes more money per year, you produce more.
    5million 33k per head. 280 million 40k per head.

    And let me say, you cant convince me that social darwinism actually works well in reality. It creates large social problems, you cant deny that. Social darwinism must not be mixed with theory of evolution. Social darwinism means applying the "fittest survive" rule to real societies, and that just doesn't work.

    And competition needs to excist yes, i needs to excist, have i said otherwise ? That is the basis of market economy. But do we need to let corporations do what ever they want ? No. And have i claimed that we need to go to totally regulated economic system ? No. Only system that works well is market economy with capitalism.
    The question is that which variation works the best without creating too many problems. All nations regulate economies, currency is regulated by everyone for example. You can withhold currency, or print more. Thats economic regulation.

    And the bank crisis was banks fault, why did they give risky loans ? because they were only thinking about the profits they could get, not the possible problems or repucussions. Was it absolute necessary to screw up the world economy once again ? I don't think so, it wansn't normal. It is crisis, not something that is a necessary to happen. 70s had the OPEC rising oil price, not the fault of anything else. 20 and early 30s had the great depression because they didn't regulate ENOUGH and didn't keep track of goods at all, this allowed for the bubble to form. We have this crisis because American investment banks were not carefull enough. Its not because of regulation, you need to see the reasons why the crisis has formed, you are blaming regulation when it isn't the cause or the problem. Yes no one can stop them once they have started to roll on their own weight, but the effects can be lessened.

    Socialist style ,officially and completely regulated economies never worked. Again stating the obvious, they were impervious to all economic situations, simply because they didn't trade freely and didn't have normal way of determining prices. The soviets would have collapsed in the early 80s if it wasn't for the oil crisis in 70s.

    Welfare states work well. We are just using taxation to lessen the gap between the poorest and the richest. And thats the thing that is going to destroy and stagnate our economy ?
    we don't regulate our economy much, why ? Because we cant and we dont want to. We have already felt the effects of the crisis here.
    If world has slow years, we should have them too, it is the way that market economy works.

    We are part of european union, we cant regulate much ourselves,
    EU is a economic zone, if Germany ,France and UK have bad years, so do we. Market economy works like that, someone has bad years and don't buy things we produce, we suffer economically.

    We don't stop the losses of possible economically slow years, we simply reduce the impact on the workers and people who have lost their jobs. That is simply moving the money from one place to another, not just creating it from nowhere.


    And next time herr mike don't triple post. Against forum rules.
     
  7. ceacar99

    ceacar99 It Wandered In From the Wastes

    128
    Nov 11, 2008
    i said least fundamentally flawed, lol. the issue there is tieing in distribution of wealth, which is a VERY complex and difficult problem that nobody has a truly accurate answer on in a country as large as mine.

    you see, some people think of problems as a negitive thing, i think of them as opportunity. a free system has effects such as the giant squishing the little guy, but it also has cases of david vs goliath, not too often but it does happen.

    the plan is simple, do EVERYTHING in the government's power to make the playing field as even as possible for people just reaching adulthood. some may have better connections to wealth, friends, relatives and lots of other things that they lucked into but the government can at least provide for them the equal opportunity for any sort of training and education and opportunity to explore any career path they choose. the end idea is to remove all the stoppers and create a system that allows those with true potential to reach their heights of greatness. all western nations practice this to a degree.

    the question is how the socialist ideals like subsidizing basic needs such as healthcare, programs such as wellfare, and ever increesing governmental oversight of business effect each individual's true potential and chance of developing that potential. how productive will a person really be if they are not pushed to be?

    transition moment, blending in my comments to cover this quote too...

    wellfare states function, they function better then a communist state(which DID function, russia collapsed over corruption not over their crappy economy), however the more free systems function MUCH better. its depressing because every year i see my own nation bogged down more, it becomes fatter and more lethargic as the grissle known as socialism seeps through its veins. then i look at places like bangladesh, india, singapore, and countless others. i watch the individuals that make the whole struggle daily to survive and thrive, instead of being fat asses counting on that wellfare check they work as hard as they can to get five degrees. they break their backs daily and take incredibly risky ventures sometimes throwing every last penny they have in a new business idea just in the dream of something better.

    they surge forward, the individuals are coming up with new and incredible ideas. bangladesh has many places powered by incredibly efficient sterling engines for example. the same time my people grow fat off the money of others smoking pot and sitting around watching tv.

    i said before i see europe dieing, and it really is. however my rants against socialism are for another reason. i dont see america dieing yet, but i see it coming. every day we slip further down the road that our western brethren have taken. our nation, the only truely growing western nation durring its good years grows less and less every year. i see the sickness sneaking in and its going to kill my home.

    once a great man, the general patton said "accept challenge to enjoy the exhilaration of victory", its truly something to think about. however i think there is something everyone should hear about people, the economy and the world.

    "challenge people so you can marvel at their success" -ceacar99

    i hate socialist tendencies because it strips the sucess from exceptional individuals and tries to succor those who refuse to go for it. the issue is that most people dont have the stomach to go against those policies.

    the "bubble" was there before the great depression, LONG before and it was not what caused the issue.

    study the effects of the world economy that the first world war caused. if you pay attention you will realise that it was essentially a time bomb. none of the allied nations could pay off their war debts, and they tried to stimulate all their economies into exportation to try to generate the revenue to pay back all that they bought, especially from america. in a world where everyone was selling and nobody was buying you can really see it coming... of course that was not the only cause but things such as that were the major contributors, and not really the elite 1% whom owned such a large portion of the wealth in the economy.
     
  8. Nullifidian

    Nullifidian First time out of the vault

    92
    Nov 4, 2008
    You show complete and total ignorance with that statement. After Wilson there was a total and complete backlash against Wilsonian Democracy. The answer to that was Harding. Harding led the most scandalous term in US history; presiding over Teapot Dome. His administration also ushered in an era of total lack of economic regulation.

    After Harding died, Coolidge took over and was very much a protege of Harding. The anything goes no holds barred capitalism continued. The result was possibly the biggest economic bubble in our history. The wealthy got insanely rich, some middle class moved up, and the poor stayed where they were.

    After Coolidge was Hoover. Many blame Hoover for the Depression but that's a bit ridiculous seeing as how the market crashed only a few months after he took office. You hadn't done anything yet. The Crash of 1929 was from Coolidge and Harding. It was a bubble bursting. What Hoover did do however was not react fast enough and the reaction he took was the wrong one to take. He jacked up taxes for EVERYONE and reigned in spending. The result worsened the economy and made what would have been a really bad recession into the Great Depression.

    Then came FDR. The economy in 1932 when FDR got elected was almost the worst in history. I say almost because by the time FDR actually took office in 1933 it had gotten worse. Under FDR however the economy steadily improved. Unemployment went from more than a quarter of the people to single digits inside of 8 years. By the time WWII came, unemployment was UNDER 2%! That was FDR. One extremely important piece of legislation which helped here was the Glass Steagall Act which made it against the law for investment banks to also have deposit bank business. It also established the FDIC. It is important to note because up until Glass Steagall, the US had a major Depression and Banking collapse once every 20 years starting in 1837. 1837, 1857, 1873, 1893, 1907, and 1929.

    After the war Truman took over and the Marshall Plan under Truman gave US businesses huge footholds in Europe and gave the US major economic influence there. Most of FDR's economic laws stayed in tact. The US economy improved.

    Eisenhower loosened some economic restrictions while tightening others. Wealth distribution under Eisenhower was almost linear. Not flat! Linear.

    Then came Kennedy and LBJ, under which more liberal policies were ushered in. It also saw an extreme heightening of the Cold War and the start of Vietnam. Extreme civil unrest, riots, protests, etc. rocked the country creating civil instability, which had some negative economic impact.

    Under Nixon, economic restrictions were lifted, spending was increased, and a more conservative tax approach was taken. The result was the start of what was called "stagflation". Economic stagnation coupled with inflation (decreased value of the dollar). Ford continued Nixon's lagacy. Carter came in and made things even worse.

    Reagen entered the scene and halved the taxes on the highest income brackets and lowered capital gains tax. The result? The era of the yuppy. The lower and middle class weakened and the upper class and wealth increased wealth dramatically. Wealth distribution moved from more or less linear to Poisson in less than a decade. US wealth increased, but it was meaningless because the entirety of that wealth was held by fewer and fewer people. Independent of such policies, various tariff policies were put in place which increased some jobs here in the US. Most notably the auto industry, where tariffs resulted in Japanese car companies building manufacturing plants here in the USA. While Reagan claimed to be a conservative, he was in reality far from it. Until Bush Jr, no President had spent money in a time of peace like he had. After Reagan the US had an insane deficit and massive debt. despite the massive spending, important social programs like Social Security, Medicare, and Medicaid were underfunded for the first time in their history.

    Then came Bush Sr. who actually WAS more of a conservative (except with respect to foreign policy). While he increased taxes, he also decreased spending in a failed attempt to lower the deficit.

    Clinton was NOT a liberal President. The economic policies under Clinton were Centrist. The Republican COngress later on in Clinton's second term however signed in some laws which would later lead to the economic woes we are seeing now. The first was Graham Leach Blighly. This act repealed Glass Steagall. As a result, companies were once again permitted to mix holdings of deposit banks and investment banks. The result? Subprime mortgage securities. They did not and could not exist under Glass Steagall.

    Under George W. Bush, virtually any and all economic regulation and restrictions on financial markets were lifted. W. made Coolidge look like FDR in comparison.

    Currently, over 40% of all of the wealth in the US is held by the top 2% of the population. The wealth distribution is skewed so badly that it actually closely resembles FEUDAL models of wealth.

    Don't tell me that our economy and our economic policies haven't changed over the years. It just makes you look ignorant of the subject.

    Historically, Poisson distribution of wealth is an indicator for revolution or rebellion. French Revolution, Communist Revolution in China, Communist Revolution in Russia, and so on. By and large, rebellions start because of uneven wealth distribution. When wealth distribution is linear, people are happy.


    Go look up 1837, 1857, 1873, 1893, 1907, and 1929.

    Yes they have. It's called collapse.

    Don't do it because while it attempts to create a linear distribution of wealth, it fails to do so. It doesn't accomplish linear distribution because it creates disincentive. The distribution must be indirect.

    What part of "uneven distribution of wealth is the single most common cause of economic collapse and societal rebellion and revolution" DON'T you get?

    Now you've PROVEN you don't know anything about economics, economic history, or political history. Under the USSR, distribution of wealth was largely flat. The state owned everything. So essentially no one owned anything at all, everyone was destitute. While that's the theory, the reality was, effective wealth was almost entirely flat but there was an extremely small minority with a large amount of power (since it was a heavily authoritarian government) which translates to wealth. Thus you had less than 1% of the population with over 90% of the wealth. That's not linear. That's actually worse than the US has now.

    WHat happened? Economic collapse.

    My great uncle is worth over 200 million dollars. I remember talking to him one day while he was reading the paper. He told me he lost 50 million that day. He wasn't too upset. I asked him why he didn't seem too shaken up by that and he said it was because it didn't have any effect on his lifestyle. He said for him personally, anything over 10 million had absolutely no effect on him. His life had remain virtually unchanged from 10 million all the way to 200 million.

    So losing a lot of money is inconsequential as long as you have at least a certain amount.

    Besides that, the nature of out society is such that even if a wealthy person were to lose literally everything they own, they could make it back in short order simply by virtue of the personal connections they have. There's a reason why they say "it's WHO you know, not WHAT you know."

    By printing it. Go read about how the Fed works and then come back. We have a fiat currency.

    You don't make money by spending it.

    No one, there is no magical number. For different people it is a different amount. Spending money has diminishing returns on the effect of quality of life at the top. The more money you have the more money it takes to have any sort of impact on your quality of life. At a certain point there is no impact at all. The less impact spending has on a person's quality of life, the less likely they are to spend money. They will spend only the amount that gives them the "most bang for their buck" and the rest they horde. It is taken out of circulation.

    My point is that when there is such a scenario where the poor and middle class get more money they spend it, and so on. Basic supply and demand principle.

    The comment wasn't about how to achieve that, just on how it works.

    If a company makes more money by not doing anything, why would they change their business at all? They wouldn't. There's no incentive for them to do so. That's what happens when you give a blanket tax break to the wealthy; they simply keep it. You give a tax break to the poor or middle class and they spend that extra money. See my comment above on what happens when people spend money.

    The health of an economy isn't about how much money is there it's about how much is moving. Money has to change hands for an economy to work.
     
  9. ceacar99

    ceacar99 It Wandered In From the Wastes

    128
    Nov 11, 2008
    heh, reminds me of a study that demonstrated that the more uneven the wealth is in an area the more democratic it tends to lean....

    and yes, your totally right. hell even look at ceasar, his power lay in the free men. the citizens(also known as the nobles) really didnt support him at all, when he brought class warfare to senate and tried to force things that he thought would do only good for the plebs the citizen senators stabbed him to death. rome never really was stable because of that imbalance, especially because the rule of law was not balanced equally between citizen and free man.

    acts like the anti trust act(which never got obliterated) are some of the few things that are required to make a playing field that is "equal" for everyone, especially in a world where production can really outpace consumption as it did in 1929-30. however im against this ever increasing regulation that can only be called socialism. every damn day someone thinks of another way to regulate business and constrain it, they either do that by flat out requirements and fines or by taxes, and every day business makes less business decisions and more tax decisions.....

    now really, the only real problem with dramatic uneven distributions are the fact that as distribution becomes more polarized in a smaller group spending shrinks. less needs and less wants(even big wants like wanting a ship or a jet) means less activity.

    when i started this big argument i talked about one of the biggest problems in the united states is the large populations of the poor, and you are saying that too. its just that we have different ideas of how we can level things out enough to make things perfect, also how level things have to actually be for things to work well.

    the economy in russia failed initially because of over regulation(see the starving ukranian farmers, that is until the russian government started making concessions to the farmers)however, it mostly failed because it government which did have so much power became so incredibly corrupt. saying that government bled money is understating it, it was more like a flood. they had titanic black holes for resources with no end in sight. even minor governmental functions required astronomical ammounts of resources to operate. that was the real death knell to the system.... the us is starting to seriously have the same problems too however, we got black holes for money everywhere and pay WAY too much for simple tasks. you wouldnt believe the sort of usery prices the us government agrees to pay....

    a smart businessman would tell you that you dont make money, you dont even earn it. money represents resources and trade. in a truely equal deal you give up something you have acess to for something that you dont and dont actually make a net gain or loss. like the farmer selling wheat for clothes. if the net resources in an economy stays flat but the ammount of printed money rises then you have inflation.... economies used to be ballenced by gold(or a stock of other similar valuable material), but the system of letting the currency float on the actual value of whats in the system proved to be the best plan in almost every case.

    im actually fine with taxing the wealthy on a higher scale then the poor. however, im against tax manipulation to control business and direct social trends as A LOT of socialist governmental systems do. it really dulls and stagnates the economy. but ya, the wealthy INDIVIDUALS can afford to have a higher scale of taxation without effecting their plans, well that is if you tax income. there have been a lot of stupid taxes supposedly aimed at the wealthy, from ideas to tax stock trade and sometimes capital gains taxation(that last one is on the edge there)....
     
  10. Nullifidian

    Nullifidian First time out of the vault

    92
    Nov 4, 2008

    Capital gains taxation is a really tough nut to crack. On the one hand, capital gains is primarily a tax on the wealthy. On that same hand, capital gains represents wealth gained without actually contributing anything to society; no labor or product is represented; it's money for free.

    On the other hand, someone ELSE did something with that money to produce something. Additionally, investment is the means by which businesses expand. The biggest leap in economic growth in transitional societies tends to come when when investment and credit become extended to more people.

    So investment should be encouraged. Our current method of capitals gains taxation is completely broken though. The rate it is taxed is only 15%. The end result is the wealthiest in the nation actually pay a lower percentage of income tax than the middle class.

    That great uncle I referred to before once told me he pays about 18% in taxes when factoring in all the taxes he pays. It's because at this stage in his life, virtually every penny he makes he gets from capital gains and thus they make up the bulk of his taxes. He also pays sales tax and property taxes; that's about it.

    On the flipside, I pay 44% when factoring in all my taxes. I'm smack dab in the middle of middle class and he's in the upper 1%. Thus, our tax system currently is directly hindering the middle class.


    I think a better tax system would not categorize capital gains income as any different from any other income.
     
  11. ceacar99

    ceacar99 It Wandered In From the Wastes

    128
    Nov 11, 2008
    well, we could go back to the old way where assets and land were taxed :P. buuuuut there were a few people who wound up dieing in jail because they couldnt pay those taxes.... lol.


    capital gains is a problem because that money IS doing something for the economy. it is providing a source of energy for business other then loans. stock actually is one of the most fueling things in a larger business. the more taxes you put in that arena the less activity there will be(duh). further i dont know how your relative does things but i promise you the average wealthy man invested in the stock market doesnt pull out and go in constantly. a lot of them make good incomes off just the dividend on all the stock they own.
     
  12. Nullifidian

    Nullifidian First time out of the vault

    92
    Nov 4, 2008
    Dividends are taxed as capital gains. Along with interest on savings and other various accounts.

    For the past few years or so, my uncle actually hasn't paid any income taxes at all. He's creeping up on 90 years old so he's been donating money hand and fist to his charitable foundation. He's been using those "losses" to offset any gains so that he breaks even or is actually negative for the year. Still living like a king obviously.

    As far as capital gains doing something for the economy, share value has little impact on a company except influencing ownership. They don't make any money for the company unless they buy their shares back when they are low and then sell them high or use them in merger or buyout deals.

    Originally, the only major money to be made from investing in a company was a cut of the profits. Now shares are pushed around as a form of regulated gambling as opposed to being used to actually infuse companies with money.

    Past the initial sale of a share from a company, the company sees no gain or loss from the value of its shares, and acquires no wealth or assets of any kind when a share is resold any more than Sony sees when someone sells a TV at a garage sale.

    On top of that market values are and always will be self fulfilling prophecies. That is to say, the price is based on speculation not on actual value. Any price based on speculation will lend itself to overvaluing and undervaluing with little or no way to determine if and when such a bubble will end. A perfect example is stock in Microsoft. It's so overinflated it's not even funny (the total value of the shares in circulation increases at a much faster rate than company profits and holdings do). Reason for that is Microsoft issue millions of new shares every year and the price doesn't really change. Want a stock price to go up? Start a rumor that someone is looking to buy it out. Want it to go down? Start a rumor that the CEO is going to dump a ton of shares. Notice, neither of these rumors involve actual company performance.

    The point is, investment fuels business, but the stock market isn't about investing in businesses, it's about gambling with a rigged deck of cards. The investment that fuels business are IPOs and new stock issues. It isn't the shell game of the stock market.
     
  13. ceacar99

    ceacar99 It Wandered In From the Wastes

    128
    Nov 11, 2008
    so your point is that we should tax the stock market itself a hell of a lot more heavily and tax individual income(especially below a certain ammount) far less? everyone agrees that taxing the poorer population over the wealthy is not the way to go, the issue is ensuring that it actually works out that way. often such plans wind up backfireing in one form or another.
     
  14. Nullifidian

    Nullifidian First time out of the vault

    92
    Nov 4, 2008
    No.

    I'm saying income should be income. Capital gains should not be treated any differently from salary, from income from a personal business, from income from rent collected, etc. Income should be income. Thus, if you are making enough money to be in the highest tax bracket, then money that falls in that bracket should be taxed at that rate, whether or not it is from capital gains or anywhere else.

    Additionally, there are certain existing tax loopholes that need closing. Now. Things like the Charitable Remainder Trust. That's just the tip of the iceberg though.
     
  15. Herr Mike

    Herr Mike Look, Ma! Two Heads!

    322
    Jul 28, 2008
    I'm not speaking only of economics. That is only a part of it. America carved out a very large role in world affairs when Wilson tossed our boys into the European hellhole, a role that led to a massive, all powerful government not fully realized until after the second World War. It might be more accurate to say it started with Teddy Roosevelt, Mr. Big Stick Bully Pulpit Imperialist. I would rather not go into such esoterics, suffice to say the nature of the USA underwent a dramatic transformation in the early decades of the century, and I see the greatest catalyst as Wilson getting us involved in the war. Which led to Germany's total ruin, which led to WW2 and concentration camps and atomic bombs. I'll take a Teapot Dome scandal over that.

    Anyway, moving on.

    This is more or less what they teach in grade school, yes. But lets remember that although Harding and Coolidge were so-called "do-nothing" presidents, they both happened to have a very "do-something" Secretary of Commerce, poor old Herbert Clark Hoover. Poor Herbert who takes the fall for all that Laissez-Faire evilness.

    What they don't mention is that Hoover was very much an interventionist and a progressive. He was appointed by Harding in 1921 under pressure from the leftist democrats. If you don't believe I'll dig up sources.

    Not to mention the increase in tariffs during the 20's, hurting demand for US agriculture.

    The effect being the erosion of "no holds barred capitalism" over the course of the 1920's. Under the direction of Hoover. I'm not saying he caused the crash of 1929, I'm just pointing out he was at heart an interventionist.

    Caused by an expansion of credit, i.e. Fed monetary policy.

    Neither here nor there, you just can't let go of this thinking.

    When you start out with the worst economy and decide you want to be the President For Life, that seems logical.

    What are you talking about? In 1937, unemployment was at 14.3%, in 1938 it was at 19%.

    If you consider building bombs to be a worthwhile occupation, yeah there were jobs aplenty! Thanks Hitler!

    Glass Steagal was just something whipped up by Rockefeller to put rival JP Morgan out of business. Who knew Mr. Standard Oil himself was actually a champion of interventionist policy??

    Obviously you are just looking at economic conditions and beating them into submission so that they fit your leftist viewpoints. Kennedy and LBJ get excuses, of course.

    I won't be claiming any of those guys were great economic presidents anyway. Assuredly for different reasons than you do, but this is long enough as it is.

    I'll just ask it, what did Bush deregulate that caused the current recession?

    So I guess all the wealth redistribution of the previous 50 years haven't helped much.

    When did I say that?

    Ridiculous stretch. This theory is conjecture, impossible to prove, and you cling to it because you are a good socialist.

    Round and round we go. I say it doesn't cause collapse, smart people agree with me. Academics employed by the government, lazy college students, and masses of poor people probably agree with you though.

    Something indirect like high taxes?

    You have utterly failed to make a case for this. People rebelling against opressive regimes? Please. I don't feel like rebelling. I'm not in the top 1% but I'm not hurting for anything. The homess guys I give quarters to couldn't rebel their way out of a wet paper sack.

    By this logic, the US government ought to be abolished for hogging ALL the power and MOST of the wealth. But then who will tax? A conundrum.

    I'm tired of this. Have fun, the floor is yours.
     
  16. Nullifidian

    Nullifidian First time out of the vault

    92
    Nov 4, 2008
    Really you'll take abject corruption and government cabinet members handing over public land in exchange for bribes? You'll take policies which enforce monopolies?



    Ah yes, despite the abject corruption and free for all economic policy, you somehow manage to try to pick the one singular cabinet member and blame everything on him.

    Talk about cherry picking. This is a perfect example of a pie-in-the-sky libertarian revising history to match his ideological beliefs. Sad, really.

    And he was one cabinet member amidst entire administrations of economic free for all.

    I assume you are referring to the Fordney-McCumber Tariff? A protectionist/isolationist policy. You know the OPPOSITE of what you are arguing America has been doing since WWI. You just keep contradicting yourself. You argue that America has been going more and more "liberal," more and more "socialist," and more and more "imperial" and yet Fardney-McCumber was the exact opposite of imperialism. It was isolationist in the extreme.

    You've got to be kidding me. Erosion? It increased until it PEAKED in 1929!! Hoover tried to stem the tied by sticking his finger in the dam. All he did was punch a bigger hole.


    And total and utter lack of regulation. Nothing to keep market speculation in check. Nothing to keep banks from gambling away the people's money.


    You just don't like to hear facts when they fly in the face of your pre-chosen false reality.

    FDR was re-elected each time by a landslide. There was a reason for that.

    What stats are you reading?! By 1936 it had dropped below 10%. In 1938 it spiked again, but by 1940 it was below 10% again. perhaps you're using metrics which count children as part of the labor force. Or perhaps you aren't counting people working for the WPA at the time. In case you didn't know, a government job is still a job and still counts as employment.


    A job is a job. I guess in your world, only happy jobs you agree with count. I guess THAT is why you think unemployment was 20% in 1936; people weren't all employed in professions you consider acceptable.

    And yet, since Glass Steagall, no depressions, bank panics, banking collapses, etc. While before Glass Steagall we had a major banking collapse every 20 years practically like clockwork.


    In other words, you grow tired of making shit up.

    I'll just ask it, what did Bush deregulate that caused the current recession?[/quote]

    The indicators for bank meltdown have been longtime coming. It's long been known, ever since the 1930s, that in order to prevent a banking crisis, the government must step in to ensure that depositors and shareholders and accounted for and that bank recapitalization occurs. In the past 80 years, Presidents have done this. Bush did not. In the past 80 years, America saw no major bank collapse.

    The most horrendous thing Bush has gotten away with IMO is that he acted as a deregulated economy not by actually deregulating, but by eliminating any and all enforcement of regulation. Countless mergers and takeovers that were in clear violation of Sherman. Bank policies set which violate our current regulations. Absolutely no oversight into financial fraud and cooking of books. That tends to happen when your largest campaign contributor is MBNA and the likes.

    Bush has basically been an "ignore the law" President.


    Again with you trying to claim that policy and trends have not changed over the years.

    In the mid 1990s, wealth distribution was going linear again.

    Under Bush, income disparity has increased more than any other time in history. The top 1% increased average income by OVER 20% while poverty level increased as well. But that wasn't just over 8 years. That was 2007-2008 alone! Income to the top 1% increased 20% in a single year. A single friggin year. 20% during a recession. Talk about disparity.

    You said nothing has changed since WWI.


    Income disparity is the single greatest cause for revolution and civil unrest.

    Every single economist in the world is primarily concerned with income distribution as a lead indicator of economic health. Every one.


    "Smart people". Great argument there. Nice job of attempting a poisoning the well fallacy too.

    "If they agree with you, they must be employed by the government, poor, or in college. because everyone knows every single government employee cannot tell the truth or think objectively and college is for retards." Let's nevermind the folks that don't fit into your nice little attempted ad hominem.


    Taxes and regulation. Taxes and regulation must be structured to prevent the wealthy from exploiting the poor, thus creating greater disparity. I suppose you think child labor laws and the Sherman Anti Trust act are bad ideas.

    Wow. The straw man combined with an anecdote. Cool beans. You rock at debate!!

    It isn't about oppression it's about standard of living and disparity of wealth. The greater the disparity in standard of living the greater the level of civil unrest. Go to Rio and tell the folks in the slums that they are totally cool with living in abject poverty. Go tell them that all out warfare in the streets isn't happening and see if they believe you.

    Go back in time and tell the folks in the French revolution that they weren't really pissed off at the aristocracy for taking all their money and preventing them from having any.

    Go back to early 20th century Russia and tell the virtual slaves that the Czars weren't taking all their money and building oppulent palaces while they lived in squalor. tell them that it doesn't really piss them off.

    Go to 1980s USSR and tell people that the squalor they live in and the total lack of functional infrastructure isn't making them disgusted to their stomach. Go tell them that they don't want to overthrow the government as a result.

    Yeah, wealth disparity has absolutely no influence on rebellion, civil unrest and revolution. Yeah. Oh wait, no, that's the way it works in your freakish world. In what everyone calls the REAL world, it's the cause of every major revolution in history. Including the US. Or need I remind you that the US revolution was about taxes.

    Straw man.

    But US government WAS tossed out this year. In 2008, the majority of the people voted to kick out the current policies and vote in different ones. The beauty of our government is that it has the ability to change and gives the people a say in that change.

    Thank you for finally admitting defeat.
     
  17. welsh

    welsh Junkmaster

    Apr 5, 2003
    actually, I have been enjoying this debate. It's been awhile since we've had a good one here.
     
  18. Herr Mike

    Herr Mike Look, Ma! Two Heads!

    322
    Jul 28, 2008
    :clap:

    As if. You surely won't concede that wealth disparity doesn't matter in and of itself, and I surely won't concede that it does. We could trade history lessons and interpretations thereof ad nauseum, but what's the point? It is, in the end, arguing on the internet.

    Besides, you've tainted the well by equating power with wealth. The villainous "top 1%" of today that we love to hate doesn't have the power to clap one in irons. The "top 1%" of Imperial France or Soviet Russia could do whatever they wanted.
     
  19. Nullifidian

    Nullifidian First time out of the vault

    92
    Nov 4, 2008
    WOW. Talk about naive.

    Go tell that to all the people who were made destitute by the RIAA in recent years.

    FFS, the RIAA has been ordering around SWAT TEAMS. How? Money. Don't try to say otherwise because it is in no way even remotely legal for a private entity like the RIAA to have anything even remotely smelling like power over any police force, and yet they do.

    Lobbying groups are the ones writing laws, not the people.
     
  20. welsh

    welsh Junkmaster

    Apr 5, 2003
    The problem with many of these dates over the internet is ontological and style. The style issue is really silly- people vest their egos into these debates and they become a war. The goal of a reasonable discussion evaporates and its really just posturing and a desire to grab some social support. For what purposes? God knows. Its really just vanity.

    The other reason- ontological- is more important. There we disagree on basic ideas of what is existence. We the world differently. But that's also why we should discuss these types of things in a rational manner.

    For instance, I generally think you're right that the top 1% doesn't have the power to directly clamp people down in chains- at least for the most part. A lot of that depends on where you live, of course. Police power is usually enforced locally, and I think, depending on the nature of power in society, in some communities the wealthiest members can pressure the police to do its bidding. In some cases, the police may see themselves as really agents for the wealthy. Is this true across the US- no. Does it happen? Yes.

    As Montgomery Burns famously said, "what good is power if you can't terrorize people with it?"

    So what really matters is the relationship of power and how that power is applied. To say that wealth doesn't equal power is naive. But there are other forms of power- military/coercive, ideological, political. Furthermore, in some situations one normally doesn't need to apply coercive force to achieve one's ends. In many cases, power need not be applied at all, the mere potential of power being applied might be enough to convince a weaker individual to do one's bidding.

    Terror- for instance- is less about the violence perpetuated against victims but in the fear of violence it creates in the audience. It is the potential of violence that terrorizes, not its applications.

    Let's consider power relations a bit more. Imperial France and Soviet Russia- both of them fundamentally authoritarian states, both possessing infrastructure that is obligated to serve a very powerful and oppressive ruling class. This ruling class- Tsars, Monarchs, or Communist Party elite- utilize the instruments of the state to enrich themselves and keep themselves in power. Their state is a creation of their desires.

    Yet in both these cases we see a problem. The desire of the ruling class to stay in power and enrich themselves comes, in the end, at the sacrifice of the state itself. As a class, they can't help being predatory. Oddly enough, we see the same behavior in animals. Predators that act without real constraint, will kill and consume everything, leading to their inevitable destruction. We see the same kinds of human behavior in a variety of strategic games- the prisoner's dilemma, the tragedy of the commons.

    While selfishness might be good for the individual and often good for society, if left unchecked or unconstrained, it creates a shift of power within a narrowing class of privileged to the costs of unprivileged. We see that in Imperial France and Soviet Russia. You can see variations of this form throughout the third world today. The struggle for these countries is to distinguish economic growth and economic development. Growth is merely the fact that the economy grows- GDP increases. Development has more to do with the enrichment of society- and we can measure it better with GDP per capita (but even that is a weak measure).

    The question is why we get development in some places and tyranny in others.

    Part of that has to do with what constrains the ruling class and how they use the state to that purpose. The governments of Korea and Japan, for instance, were very successful but essentially 1 party states or dictatorships. But they were also very constrained. Leaders of both countries knew that they had to improve their economy or they could be crushed- both depended on US protection against local threats.

    Ok but what about the US?

    You mention the top 1%. I would argue that the top 1% in America is perhaps less important than the 10% of that 1%. These were the principle parties that funded George Bush's 04 campaign- what he called "his base." And as for locking you in chains- you'd be surprised at how much power the police have to hold you for 48 hours if they want to- our constitutional freedoms have been eroded significantly over the last 35 years.

    But let's go back to the US and explore why its different than Imperial France and the Soviet Union. In both those countries you had an entrenched ruling class that could be removed only through political change within the class or by violence. Similarly, we see coup d'etat as a principle means of regime change in much of the world today and dictators either willing to manipulate elections or refuse to honor election results.

    Without means of peaceful transfer and where the state is the sole instrument of accumulating wealth, than those who rule will hang on to the state for dear life (indeed, in many cases, losing the state means death). Given that, the relationship between those who rule and those who don't is zero-sum with control of the state being the central instrument for both wealth and power. A very dangerous situation.

    But in the US we have a administrative state with a remarkably large infrastructure. We can include both the administrations of the 50 states and the federal government which overlap. We have a constitutional system based on divided government, and a political system that is highly institutionalized and normalized in our society. A military coup in the US is quite unlikely. Civil war or revolution is also unlikely - I can't recall a significant possibility of that even during the Great Depression.

    We have a state that is fundamentally integral to the interests of society. It provides unemployment checks, creates jobs, oversees the economy, intervenes when the economy is in crisis, etc. We, as members of society, see our well-being as being taken cared of by the state which, in exchange for this, charges as a fee in taxes. The state generally helps us accumulate wealth even as it also distributes wealth. Well, that's not completely true. Even in the US we have marginalized pockets that are generally under served and generally forgotten. But overall, most Americans are pretty happy with their government.

    But why don't the ruling class use coercion- the simple reason is that generally they don't have to. The stability of the state means the market works and that, when they are in trouble, they might even be willing to turn to the state to help them accumulate wealth. Boeing, a major manufacturer, is also a big defense contractor. Automobile companies also make tanks. Both companies get bailouts from time to time. So the top .1% can happily step away from the actually being a ruling class (the political elite) and spend their limited time accumulating wealth.

    Why not intervene? Well they don't have to- the state looks after them.

    Why doesn't the political class seize/nationalize their wealth? Because it would lead to economic disaster.

    How?

    Those we know as Kings started as little more than roving bandits. This bandits eventually settled down in a fixed area (easier to defend) and preyed on the locals because they had the power to do so. But over time, they began to realize that if they left enough surplus wealth among the rabble, the rabble would reinvest the wealth and make more wealth. Over time these kings would regularly cut back on taxes and allow the rabble to make more money. Only problem- the kings were crap financial managers and liked to go to war- this is why Imperial France, Imperial Spain and the Soviets go bankrupt and the Medicis do ok (because they can exploit the kings who like to go tow war). Finally the rabble get sick of the kings going to war and demand constraint- and thus you have the beginnings (but not quite the creation) of democracy.

    As Charles Tilly says, States made war and war made states. But war also destroyed states. Those states that survived learned to get better at being administrators and regulators of the economy- or they died.

    For the wealthy, an added beauty of the state is that the state overcomes the collective action problem of markets. It regulates, cares for them, lets them get wealthy. Absent the state.... then some other power will fill the vacuum. The notion of "God save the King!" wasn't because the King was popular, but because the rabble and the lords knew that if the King died and there was no succession- we had civil war and economic decline.

    Democracy- by creating a stable political order based on regular turn around of political leaders- means no succession crisis. If its a wealthy democracy and the rabble are satisfied- it means no revolution. Furthermore, added bonus- because democracy requires regular elections the ruling class (your political leadership) can't get too crazy with taxes or debt because economic downturn means that those political leaders don't get elected again.

    And so we see- economic crisis and the Republicans are popped out of office, much like Poppa Bush got bounced in '92, or Carter in '80, etc.

    Popular democracy means that political leaders are constrained in their capacity to be predators. They can't be wolves turned loose on the sheep. Rather, they are wolves who depend on the sheep to live.

    Sounds simple... except it gets worse.

    Being self-interested rational actors (or selfish sons-of-bitches), we tend to want both riches and power- Riches to be happy, power to keep it and get more. Those struggles continue into society and the political realm becomes the battlefield. Democracy may be stable and organized and even polite, but its still a battle field among social actors that struggle over wealth and power. Who rules, those that control the political house, get to determine the policies- who does the government favor in the accumulation or distribution of wealth.

    Sometimes the ruling class loves the wealth (and we have a Republican administration) and sometimes they love the poor (and we see Democrats). And often it has to do with the success of the economy and the ability of the state to see that the distribution of wealth and opportunities to accumulate are equitably distributed. Or the politicians get bounced out office.

    So- ruling classes are generally developmentally orientated- thus we don't have to worry about the coercion we see in Imperial France or Soviet Russia.

    (That is, unless the police are called in to break up a strike, or the cops decide to sick the dogs and spray the hoses on a group of black protestors asking for civil rights. Or if you're a gay person in some states who thinks he should have the right to live with who they want to. )

    The problem for Libertarians is that they begin with an ontological assumption that the state is evil. Its not- but it does need to be fed, but hey, nothing is free. The problem with Marxists is that they see only social classes, the problem with rabid capitalists is they believe in the dogma of free market capitalism and ignore the many abuses of firms that exploited opportunities for weath and the suffering they caused. The problem with statists is that they don't recognized that while the state can enhance the productive capacity of society, in the end, its society that develops.

    Which returns us to ontology- how do you see the nature of the world. Or perhaps we should think about it as your underlying assumptions of how the universe works.

    The more you stick dogmatically to one, the more your argument is based on faith rather than reason. The greater one tries to simply the world into a simple paradigm, the easier it is to lose the connections. Theories don't explain the world. Rather, they are used by individuals to help understand the world in a more simple way. Too much faith in any one dogma or set of assumptions means that it dims your capacity for rational thought.

    (Me- I look for conflict within society and between state and society. But my wife complains that I always look for conflict and abuse of institutional power- so I have to watch my bias. We often see that which we look for regardless of whether its there).

    Rationality- begins with our ability to question those underlying assumptions. To put those assumptions to a rigorous test. It means you have to question and challenge yourself and others.

    Which is, ideally, what a forum like this is supposed to be. The problem- is not that we argue, but rather- that we come to it with our own underlying assumptions of the nature of the universe and a style that looks at argument as a war of egos and not the opportunity to discuss the nature of our world in a reasonable manner.