Are You A One Percenter

[lektrode]

Re: Are You A One Percenter

Forget the conspiracy. There isn't one. ...

whooooo....dc....
DAMMIT BOY!!!!
when you is on point, hammerin like this - you is SMOKIN HOT
but....

...
And if you think a stagnating and sinking middle class throughout the first world is a great thing, that's fine. You're allowed to hold that opinion.

doesnt this (above) constitute THE Big Kahuna, THE Numero UNO of ALL CONSPIRACIES?? (with apologies to real kahunas)

It's just from my vantage point, old small 'r' republicanism was always about smashing the nobility - decentralizing control, both political and economic, spreading ownership of both land and business widely, ensuring as many people as possible have both stakes and skin in the game along with a fair opportunity to play. ....
....
But maybe I'm wrong? ....

not only no, but hell NO!
+1
and i still say that you (might) be missing your true calling, sir.

very truly sincerely,
a 'small-r' type from waaay back (in '76)
formerly of The Live Free or Die State

[santafe2]

Re: Are You A One Percenter

So inequality between the 99% or whatever might be decreasing between some countries. But inequality between the 99% and the 1% (or 99.9% and 0.1% or whatever number you choose) is increasing drastically in every country such that total inequality is increasing quickly.

To expand a bit on your idea, the problem in the US is not simply with entities generating rentier income. Labor itself has become much more bifurcated with high income earners moving ahead toward rentier class living standards and low income earners moving down the ladder toward subsistence living. I think about 1/2 the inequality you sight is now built into the labor market itself. And these arguments don't consider the new permanent underclass created by high levels of full recourse student debt.

It bears mentioning that there is a rather insidious side effect of under-reporting unemployment in the US. When we pretend we are approaching full employment, (U3, ~6% unemployed), and the actual unemployment rate is 12%, (U6), it's not possible for labor to gain the bargaining power to lift wages. There are simply too many people willing to work for the wages offered.

In the US people could begin to reverse this trend by voting for progressive candidates. In 2010 only 9 states reported 50% or more eligible voters casting ballots. In Texas less than 1/3 of eligible voters cast a ballot. I'm sure voter suppression accounts for some portion of this but clearly 2/3 of the vote in Texas was not suppressed. However over 3% of Texans are felons...but that's probably an issue for another thread.

[santafe2]

Re: Are You A One Percenter

The numbers say otherwise. Washington, D.C. has a much larger percentage living below the poverty line than the U.S. average...

Um...vt, so does Alabama, Arkansas, Georgia, Kentucky, Louisiana, Mississippi, New Mexico, (how'd we get in this group?), South Carolina, Tennessee, Texas and West Virginia...and these are states! Last time I checked, with the exception of our fair state......these are bastions of right wing politics.

[vt]

Re: Are You A One Percenter

Of course all but NM are to the right. But the income of the elite in D.C. are at the very top as is inequality, in spite of liberal leanings.

This has everything to do with the fact that spending and big government has not eliminated inequality; only new industries, better education and training, and many more jobs will help.

[santafe2]

Re: Are You A One Percenter

Of course all but NM are to the right. But the income of the elite in D.C. are at the very top as is inequality, in spite of liberal leanings.

This has everything to do with the fact that spending and big government has not eliminated inequality; only new industries, better education and training, and many more jobs will help.

Let's not conflate several issues. My point was simple. Outside of NM, the states with the highest rates of poverty happen to also be states leaning well right of center. I'll let other ascribe reasons for this.

As for DC being "liberal", if you mean free spenders, sure, they're liberal, especially the most "conservative" among them.

The elite in DC, (both left and right), are simply the lap dogs of the US elite and to a lesser extent, the world elite. Not all but you'd be hard pressed to find more than a handful that aren't bought and sold on 2-6 year cycles.

It is not the purpose of today's "big government" to end inequality. The last of those ships sailed in the early '60s. Today's purpose is to serve up as much income to the real elite as possible while keeping everyone else in line and happy enough to not cause much trouble.

If by better education you mean a more complete education that creates a thinking working person, that will not happen. Elites know that the less educated a person is, the less they vote. People with advanced degrees are more than twice as likely to vote as people without a high school diploma. Also, an uneducated rabble are easier to fire up for your side if you really need to "get out the vote".

[Slimprofits]

Re: Are You A One Percenter

Guess who's number 1? Washington, D.C., home of the most liberal population in the U.S.

Excellent trolling, as usual.

[DSpencer]

Re: Are You A One Percenter

Forget the conspiracy. There isn't one. Forget the terms nobility and peasant. I simply used hyperbole to make the idea clear.

There is only self-interest.

When the global elite meets at the WTO or the Davos World Economic Forum or the G20 or the World Bank or wherever else to discuss world economic policy, they meet to advance their own interests. Why else fly all the way to Switzerland or wherever? When they donate to political causes, they donate to advance their own interests. Otherwise why throw the money away? The thing is that we know what their interests are: More for themselves and less for everyone else. That's why capital's share is increasing and labor's share is decreasing. That's why inequality is increasing faster everywhere and at all times. That someone in India or China earns an extra $1 per hour at a factory job is incidental. It occurs if and only if someone else lost $20 per hour first. That $1 per hour matters to people today, and will maybe for another 10 years, but it's not a ladder out of poverty. As soon as it becomes $5 extra per hour, the work there will up and vanish and run to Bangladesh or Nigeria or wherever the next low-wage frontier is. The game is set up so they cannot win regardless. And who sets the rules of the game? Ah. You don't need conspiracies for that. Just institutions.

And if you think a stagnating and sinking middle class throughout the first world is a great thing, that's fine. You're allowed to hold that opinion. It's just from my vantage point, old small 'r' republicanism was always about smashing the nobility - decentralizing control, both political and economic, spreading ownership of both land and business widely, ensuring as many people as possible have both stakes and skin in the game along with a fair opportunity to play. And yet here in the land of the birth of the modern republic in the 21st century we agree that we should tax someone making $30,000 at a lower rate than someone making $300,000. But we tax someone making $300,000 exactly the same or a higher rate than someone making $3,000,000 - or $30,000,000 - or $300,000,000 - or $3,000,000,000. As many orders of magnitude as you want.

In the end of the day, someone making $30,000 lives a life far more similar to someone making $3,000 or someone making $300,000 than they do someone making $30,000,000. You trade in your bike for a used chevy or your used chevy for a new cadillac - your room for a small house, your small house for a fancier one. But you don't set up six generation iron irrevocable trusts, set up super PACs, and sit back while even paltry T-bills fill your coffers for doing nothing - nevermind engage in complicated offshore tax avoidance schemes and trade in restricted funds and engage in financial fraud from a vantage point above the law. The game is rigged. You don't need to close yourself off from the rest of the world. But you don't have to write the details of every trade agreement such that they benefit capital and punish labor either.

So maybe you laugh at me for calling it nobility. And maybe you're right to do so. But then again Ted Turner owns more land than any European Baron could ever dream of. He gets special tax privileges for earning his money by capital gains, and special political access. He personally owns enough land to make a Rhode Island AND a Delaware. How far is the US from just naming Senate seats as hereditary Forbes 500 families and making the transition back to the House of Lords complete? That's hyperbole again for now, but you can answer that one how you want to. It probably doesn't matter anyways.

And maybe none of this matters to you. I think it probably doesn't. I think you probably side either one of two ways. Either you actually think that an accelerating and ever increasing inequality leads to increasing growth for everyone. But if that's true, then why doesn't it pan out in the data? Or you dislike the status quo, but you'd rather see a scenario with ever increasing inequality for philosophical reasons - i.e. you think the middle class and poor in the first world deserve harsh punishment, moral judgement, and ever decreasing incomes and living standards. The good news if this is where you fall is that you'll get your wish. It's happening. But if that's the case, I just think you ought to be careful what you wish for.

But maybe I'm wrong? What's your take on this whole mess anyways?

My mistake if it was intended to be hyperbole, but lots of people really believe in true conspiracy stuff. I agree that people moving in one direction due to similar motivations can have the same result though.

I don't think that inequality is the cause of increasing growth. I do think that, to some degree, inequality is a result of economic growth. After all, if everyone just has a loin cloth and spear there isn't much ability to have 10,000 times the wealth of someone else. As for the middle class and poor deserving harsh punishment, I just barely know how to respond. I "probably" either believe in an absurd theory of economic growth or I have some burning hatred of anyone who's not rich and think they should suffer? Why is that the dichotomy? Have I ever posted something implying that I think the middle class deserves moral judgment and decreasing living standards?

Anyway, my take is that it's very complex and often needlessly so. How can we debate the tax code when we have so little understanding of what's in it? What percent of the US tax code could you honestly claim to know and understand? My take is that we've let everyone with enough money buy whatever loopholes and exemptions they want. We've given the federal government the power to regulate essentially everything. And so they regulate away competition for the companies that pay the best. Google et al do legal and accounting back flips to avoid paying a higher tax rate. I don't expect them to voluntarily pay higher taxes when there is a legal way not to do so. I do expect that the tax code be written in a way that normal people can understand it. You shouldn't be punished by the tax code just because you can't afford an army of lawyers.

Is what you think so different?

[astonas]

Re: Are You A One Percenter

First off, I want to thank you both, dcarrigg and DSpencer, for steering a conversation that could easily have become very uncivil indeed, back toward civility. I am benefitting greatly from it.

I don't think that increasing inequality is the cause of increasing growth. I do think that, to some degree, inequality is a result of economic growth. After all, if everyone just has a loin cloth and spear there isn't much ability to have 10,000 times the wealth of someone else. As for the middle class and poor deserving harsh punishment, I just barely know how to respond. I "probably" either believe in an absurd theory of economic growth or I have some burning hatred of anyone who's not rich and think they should suffer? Why is that the dichotomy? Have I ever posted something implying that I think the middle class deserves moral judgment and decreasing living standards?

I'll let dcarrigg answer this question that was obviously meant for him, but I want to ask a few of my own based on your response:

1) Has it been objectively established that increasing inequality is a necessary side effect of economic growth?

And:

2) If ever-increasing inequality is a necessary consequence of growth (presumably measured by GDP) has it been established that a growing GDP is really the most desirable metric for measuring the success of a group of people, such as a nation? Desired by whom?

Anyway, my take is that it's very complex and often needlessly so. How can we debate the tax code when we have so little understanding of what's in it? What percent of the US tax code could you honestly claim to know and understand? My take is that we've let everyone with enough money buy whatever loopholes and exemptions they want. We've given the federal government the power to regulate essentially everything. And so they regulate away competition for the companies that pay the best. Google et al do legal and accounting back flips to avoid paying a higher tax rate. I don't expect them to voluntarily pay higher taxes when there is a legal way not to do so. I do expect that the tax code be written in a way that normal people can understand it. You shouldn't be punished by the tax code just because you can't afford an army of lawyers.

Is what you think so different?

Thank you again for trying to find common ground here. I am again made curious by your response:

3) Which of the following is more responsible for the abuses you cite?:
(a) the existence of taxes and regulations whose initial purpose was to fund basic services and create a fair playing field.
(b) the corruption of those same taxes and regulations by lobbying efforts of interested parties to provide market advantages for themselves.

[astonas]

Re: Are You A One Percenter

Yes, but all doctrines are going to be written by people in power, or the elite.

As Keynes said "I can be influenced by what seems to me to be justice and good sense; but the class war will find me on the side of the educated bourgeoisie."

and "How can I adopt a creed which, preferring the mud to the fish, exalts the boorish proletariat above the bourgeois and the intelligentsia who, with whatever faults, are the quality in life and surely carry the seeds of all human advancement?"

Thanks, POZ for these quotes. I hadn't been aware that the inventor of GDP had ever been this explicit about his allegiance.

But I think the problem is deeper than mere doctrines. It is curious that even those who revile Keynesianism still use his metrics, isn't it? Whether the doctrine is Keynesian, or Austrian, the "coin" of GDP remains the object of the game. As long as that is true, all that can change is which side of it you look at.

[dcarrigg]

Re: Are You A One Percenter

My mistake if it was intended to be hyperbole, but lots of people really believe in true conspiracy stuff. I agree that people moving in one direction due to similar motivations can have the same result though.

I don't think that inequality is the cause of increasing growth. I do think that, to some degree, inequality is a result of economic growth. After all, if everyone just has a loin cloth and spear there isn't much ability to have 10,000 times the wealth of someone else. As for the middle class and poor deserving harsh punishment, I just barely know how to respond. I "probably" either believe in an absurd theory of economic growth or I have some burning hatred of anyone who's not rich and think they should suffer? Why is that the dichotomy? Have I ever posted something implying that I think the middle class deserves moral judgment and decreasing living standards?

Anyway, my take is that it's very complex and often needlessly so. How can we debate the tax code when we have so little understanding of what's in it? What percent of the US tax code could you honestly claim to know and understand? My take is that we've let everyone with enough money buy whatever loopholes and exemptions they want. We've given the federal government the power to regulate essentially everything. And so they regulate away competition for the companies that pay the best. Google et al do legal and accounting back flips to avoid paying a higher tax rate. I don't expect them to voluntarily pay higher taxes when there is a legal way not to do so. I do expect that the tax code be written in a way that normal people can understand it. You shouldn't be punished by the tax code just because you can't afford an army of lawyers.

Is what you think so different?

Yeah, sorry if that sounded hostile - I was just trying to get where you're coming from. In the end of the day, I think what I think is somewhat different. I think that if one wants to optimize growth, then inequality is in fact an optimization problem. That some inequality is good for growth because it creates incentives is obvious. But after a certain point, I think it just stifles growth. It saps resources from education. It de-motivates people at the bottom who see no way out. It encourages people at the top who make so much more than the rest of us to play political games to get their way. Why does John Arnold in Texas care at all what pensions for firefighters look like in Kentucky? Yet there he is, donating millions to have them slashed.

So, you get a rentier economy that hands capital special privileges over labor. This is absolutely no conspiracy either. We all know capital gains are taxed lower than working for a living. It's so obvious and in your face that it barely deserves mention. But I think people fail to realize that trust funders benefit from this far more than regular people do, and it's not going to trickle down. That's not a loophole. It's an explicit design of the system. Ditto with the removal of all the top brackets in 1986. It's obscene that your local medical doctor has to pay the same tax rate on his income at the top as LeBron James. Again, not a loophole. It's there by design. Look at the WTO. Closed-door meetings, completely out of democratic control. We don't get to vote on these deals. We don't even get to vote for representatives to negotiate these deals. They're just written in some far off foreign palatial retreat and then enforced upon us. That's not a loophole. It's there by design.

And I don't think that the "increased inequality leads to increased growth" argument is that absurd to most people. It's at least implicit in Greg Mankiw's microeconomics text book - the most popular one in the US. Smack in the first chapter - "We can have a bigger pie and cut it less equally, or we can be careful to cut equal slices from a smaller pie." The Laffer Curve's in there too. And I don't think it has ever been abnormal or strange for people in the United States to cast moral aspersions on the poor and middle class and to paint the rich in the light of moral virtue. There's a long history of that going back to colonial times. The rich are rich because they're godly, they live well, and they deserve it. The poor are poor for the opposite reason. Many people believe this. So I just want you to realize that I wasn't trying to paint you as crazy there. I was just suggesting a couple of common beliefs that might be driving us to disagree.

[ProdigyofZen]

Re: Are You A One Percenter

Thanks, POZ for these quotes. I hadn't been aware that the inventor of GDP had ever been this explicit about his allegiance.

But I think the problem is deeper than mere doctrines. It is curious that even those who revile Keynesianism still use his metrics, isn't it? Whether the doctrine is Keynesian, or Austrian, the "coin" of GDP remains the object of the game. As long as that is true, all that can change is which side of it you look at.

My suspicion with most of the so called Financial Commentators, Hedge Fund managers and Research Analysts who write about Austrian Economics, Keynesian Economics or even quote The Wealth of Nations have never actually read completely the theories much less everything the author of each school of thought has written.

Keynes was a brilliant man but you have half the investment industry who absolutely loathes him simply because they think he was on the side of the government aka left wing liberal or some other rubbish.

In my earlier days of investment research/political research I was a fan of Ayn Rand.

Then I found this little nugget of truth about the so called anti-government Libertarian Ayn Rand:

"An interview with Evva Pryror, a social worker and consultant to Miss Rand's law firm of Ernst, Cane, Gitlin and Winick verified that on Miss Rand's behalf she secured Rand's Social Security and Medicare payments which Ayn received under the name of Ann O'Connor (husband Frank O'Connor).As Pryor said, "Doctors cost a lot more money than books earn and she could be totally wiped out" without the aid of these two government programs. Ayn took the bail out even though Ayn "despised government interference and felt that people should and could live independently... She didn't feel that an individual should take help."
But alas she did and said it was wrong for everyone else to do so. "

I figured out a long time ago that there really are no schools of economic thought or political parties, they only exist/created to serve the self-interests of whoever deems them their "cause."

There is one truth, the truth of self-interest.

[DSpencer]

Re: Are You A One Percenter

First off, I want to thank you both, dcarrigg and DSpencer, for steering a conversation that could easily have become very uncivil indeed, back toward civility. I am benefitting greatly from it.

I do try although I have often failed. Most of the uncivil conversations quickly become uninteresting and unhelpful.

1) Has it been objectively established that increasing inequality is a necessary side effect of economic growth?

I doubt that such a thing could ever be objectively proved to everyone's satisfaction. I do think it's logical to think some degree of inequality is inevitable. I would say there's also historical evidence that trying to enforce greater equality has, at least in some cases, hurt economic growth.

2) If ever-increasing inequality is a necessary consequence of growth (presumably measured by GDP) has it been established that a growing GDP is really the most desirable metric for measuring the success of a group of people, such as a nation? Desired by whom?

Obviously a matter of opinion. I would say no, but finding other objective metrics is hard.

Thank you again for trying to find common ground here. I am again made curious by your response:

3) Which of the following is more responsible for the abuses you cite?:
(a) the existence of taxes and regulations whose initial purpose was to fund basic services and create a fair playing field.
(b) the corruption of those same taxes and regulations by lobbying efforts of interested parties to provide market advantages for themselves.

I'm not sure I exactly understand the question. I think that many taxes and regulations were never intended to create a level playing field. In fact many were intended to create the opposite. Take the special protections provided for the US sugar industry through import tariffs. Was that ever intended to create a fair playing field or fund basic services? Not in my mind.

I guess I would pick B, but really I blame the politicians whose job is supposed to be maintaining a level playing field, not picking winners and losers based on lobbying.

[DSpencer]

Re: Are You A One Percenter

Yeah, sorry if that sounded hostile - I was just trying to get where you're coming from. In the end of the day, I think what I think is somewhat different. I think that if one wants to optimize growth, then inequality is in fact an optimization problem. That some inequality is good for growth because it creates incentives is obvious. But after a certain point, I think it just stifles growth. It saps resources from education. It de-motivates people at the bottom who see no way out. It encourages people at the top who make so much more than the rest of us to play political games to get their way. Why does John Arnold in Texas care at all what pensions for firefighters look like in Kentucky? Yet there he is, donating millions to have them slashed.

So, you get a rentier economy that hands capital special privileges over labor. This is absolutely no conspiracy either. We all know capital gains are taxed lower than working for a living. It's so obvious and in your face that it barely deserves mention. But I think people fail to realize that trust funders benefit from this far more than regular people do, and it's not going to trickle down. That's not a loophole. It's an explicit design of the system. Ditto with the removal of all the top brackets in 1986. It's obscene that your local medical doctor has to pay the same tax rate on his income at the top as LeBron James. Again, not a loophole. It's there by design. Look at the WTO. Closed-door meetings, completely out of democratic control. We don't get to vote on these deals. We don't even get to vote for representatives to negotiate these deals. They're just written in some far off foreign palatial retreat and then enforced upon us. That's not a loophole. It's there by design.

And I don't think that the "increased inequality leads to increased growth" argument is that absurd to most people. It's at least implicit in Greg Mankiw's microeconomics text book - the most popular one in the US. Smack in the first chapter - "We can have a bigger pie and cut it less equally, or we can be careful to cut equal slices from a smaller pie." The Laffer Curve's in there too. And I don't think it has ever been abnormal or strange for people in the United States to cast moral aspersions on the poor and middle class and to paint the rich in the light of moral virtue. There's a long history of that going back to colonial times. The rich are rich because they're godly, they live well, and they deserve it. The poor are poor for the opposite reason. Many people believe this. So I just want you to realize that I wasn't trying to paint you as crazy there. I was just suggesting a couple of common beliefs that might be driving us to disagree.

When I say loophole, I don't mean to imply something that exists by accident. Maybe a better term would be "carve-out" or special interest exemption or something like that.

Saying that inequality leads to growth is not the same as saying growth leads to inequality. Nor is it the same as saying that attempts to fix inequality will stifle growth.

What do you think is a fair top bracket? Personally, I just find it distasteful to think that people's income should be taxed at a rate where most of what they make is used for taxes. When you add in state and local taxes we are basically at the point already depending on where you live.

[DSpencer]

Re: Are You A One Percenter

Then I found this little nugget of truth about the so called anti-government Libertarian Ayn Rand:

Give me a break. Social security and Medicare are involuntary programs. You pay into them or you go to jail.

What if the government took 100% of everyone's income in taxes and then redistributed it back in the form of food, clothing and shelter. Would anyone who vocally opposed this system be expected to starve or else be labeled a hypocrite?

How would her refusing Social Security do anything other than make the program stronger and more likely to continue? If you claim you're getting robbed, you're supposed to want your money back.

[ASH]

Re: Are You A One Percenter

In response to the question posed by the thread's title: "Boy, I wish!"