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October 16, 2015

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HTML, on the other hand, is fickle

But I thought that SS was not designed as a retirement program -- which is what it would have to be for it to make a difference how much you put in.

It was sold as a retirement supplement, not a redistribution scheme.

f'ing italics

How is a retirement supplement not a redistribution scheme? It is pretty clearly redistributing money from those who made lots to those who barely scraped by.

It may not have been sold as a redistribution scheme. But anybody looking at it ought to be able to figure out that it is.

It isn't a zero sum.

Yes, I understand that one person not buying a yacht doesn't send some other set of people to college.

Or, Al Gore not building one house doesn't automatically make 100 other people build one.

The point I'm making is that the policy choices we make result in a particular set of outcomes.

If you have policies that favor the accumulation of vast wealth in a small percentage of the population, you end up with a really robust luxury goods market, and a less robust market for ordinary consumer goods.

If you have policies that favor a broader distribution - not RE-distribution - of wealth, you have the converse.

The luxury goods market in the US is somewhere around $75B, and in general is quite robust. The folks who participate in that market are not particularly price-sensitive.

If they are willing to pay $200 for a bottle of wine, $225 is not going to make them change their mind.

If they are willing to pay $2M for a boat, $2.2M is not going to dissuade them, by and large.

In some cases, it may even be an incentive. See how rich I am!

There is always some point at which an additional expense makes someone say no, but the place where that is least so is in the luxury goods market.

We did have a federal luxury tax regime in the 90's, under Bush 41. It wasn't particularly successful, and we dropped it.

The level of income and, especially, wealth inequality at this point in time is much greater than it was 25 years ago. It might be an appropriate policy now.

Just out of curiosity, what fraction of the luxury goods market is imports? I'm actually in favor of free trade. But if that stuff has a large portion of imports, it rather undermines the "the extra money of the rich will stimulate the US economy" position.

It's called consumption. It's what we want and need.

Wait a minute. I thought we needed investment, so we offered favorable tax rates on capital gains to encourage that. Suddenly it's consumption that we want instead.

Actually, consumption - demand - is very important. You can give people all the tax breaks you want, but no one is going to build a factory if there are no customers buying the products. That's a big flaw in the whole "job creators" notion.

And of course, it is also the idea, simplified, behind Keynesian stimulus. If no one else is buying the government steps in and buys. Why is the government paying workers to repair a bridge a waste, while the Mr. Uber paying a mechanic to tune his Ferrari a wonder of capitalism?

Bain & Company are a good resource for information about the luxury goods market.

I have no idea if they are related to Bain Capital or not, but I guess it would make some kind of sense if they were.

And of course, it is also the idea, simplified, behind Keynesian stimulus. If no one else is buying the government steps in and buys. Why is the government paying workers to repair a bridge a waste, while the Mr. Uber paying a mechanic to tune his Ferrari a wonder of capitalism?

Well, an economist could do a better job with this one, but: Uber to Mechanic payment places zero load on the public purse. The bridge might be necessary and if it is, the citizens can vote to tax themselves for the bridge. Most people are ok with necessary bridges. Agreeing to a bridge doesn't mean you have to agree to unlimited Keynesian-ism.

But, on balance, people are more free if they get to keep and spend their money as they please. Freedom/liberty has an intrinsic value of its own.

I would rather consume as I see fit, not as someone else would have me consume.

The level of income and, especially, wealth inequality at this point in time is much greater than it was 25 years ago. It might be an appropriate policy now.

Russell, people were buying yachts back in the day, just not yachts made in the US. Is the idea to express disapproval of luxury items, to pick a class of goods and services and saddle it with special taxes and fees, or to raise income? If it's the latter, why not just jack up the marginal rate one point?

Bain & Company and Bain Capital are wedded at the hip.

https://en.wikipedia.org/wiki/Bain_%26_Company

I would rather consume as I see fit, not as someone else would have me consume.

Oh tosh. If that's how you really, really, really feel then come out of the closet and demand that all taxes and public spending be done away with.

Otherwise, you are just another wimpy statist.

;)

Well, an economist could do a better job with this one...

Indeed. You seem to be arguing that if the economy is stuck well below its potential output, that we should do nothing.

(1.)From an economics standpoint, that is a waste of resources; and (2.) most of the time it is a political non-starter.

You seem to be arguing that if the economy is stuck well below its potential output, that we should do nothing.

That would depend on how/why it was stuck? Too much regulatory and tax burden? Paying employees to stay home? Satellite litigation over what "same work" means killing off smaller business and depleting resources from larger concerns?

Paying employees to stay home?

The bridge might be necessary and if it is, the citizens can vote to tax themselves for the bridge. . . .
But, on balance, people are more free if they get to keep and spend their money as they please.

So, if I understand correctly, it's OK if people vote to tax themselves to build a bridge. Even though, if the vote is less than unanimous, at least some people are being forced to pay for something that they don't want. So it makes them less free . . . but it's OK?

Whereas if people vote to tax themselves to, for example, provide universal medical care? Which also makes those who voted No less free . . . and so it is not OK?

Somehow, I'm not seeing the distinction. Except, I suppose, that those who would vote For the first, and Against the second, could see it that way -- but that's simply a matter of "When we collectively do what I want, that's OK; but if we do the same for something I, personally, don't want, that's an unacceptable loss of freedom."

Or am I missing some subtlety somewhere?

That would depend on how/why it was stuck?

Possibly.

Too much regulatory and tax burden?

Possibly. If, for example, the federal government ran a persistent budgetary surplus, that action would reduce consumption and suck money out of the economy. Economic activity would be reduced accordingly.

Regulatory burdens are simply a cost of doing business. If businesses do curtail their activity due to regulations, then presumably those now idle resources can be employed elsewhere.

Paying employees to stay home?

hahaha(not). If they are "staying home" then they are presumably not employees. However, if a business decides to pay people to sit on their ass, that's OK. (See just about every corporate board of directors, for example.) However,they may not be very competitive as a result. Paying people who are unemployed is not only the right thing to do, it promotes consumption.

If they are employees Satellite litigation over what "same work" means killing off smaller business and depleting resources from larger concerns?

The overwhelming majority of small businesses fail. They kill themselves off with startling regularly. Other than that, I am unfamiliar with your example.

There is a subtle difference. Or not so subtle really.

OK, Marty, enlighten me. Seriously. I'd really like to know what I'm missing here.

Well, an economist could do a better job with this one, but: Uber to Mechanic payment places zero load on the public purse. The bridge might be necessary and if it is, the citizens can vote to tax themselves for the bridge.

Or, the government can borrow the money to pay for the bridge repair, which borrowing might be profitable for two reasons:

1. The social return on the repair may exceed the rate at which money is borrowed. That is, the repair is, from a social point of view, a positive NPV project.

2. The multiplier effect of the increased spending may stimulate a lot of economic activity, just as Uber's spending, in your previous comment, generates economic activity.

Note that in a recession the bridge repair is essentially using idle resources for productive purposes.

hsh,

Thanks for presenting these figures.

It would be interesting and illuminating (for some) to plot them on a graph where the vertical axis represented your figures, and the horizontal axis showed Presidents in office.

Is the idea to express disapproval of luxury items, to pick a class of goods and services and saddle it with special taxes and fees, or to raise income? If it's the latter, why not just jack up the marginal rate one point?

The point is to raise income.

The approach is Adam Smith's, which is to tax folks who make a lot of money at a higher rate than folks who earn less money, because the use value of the wealthy person's last dollar is less - often significantly less - than the use value of the less wealthy person's last dollar.

I'm fine with raising the top marginal rate a point, if we can get if freaking done.

What I'm after over all in this thread is pointing out that if we want to lower our level of debt, one of the entirely reasonable approaches to addressing that is to increase revenue.

That will likely involve raising taxes.

If you don't like income taxes, taxes on folks buying stuff will do the job. We don't want to make it harder for folks to buy groceries, so if you're going to tax expenditures, luxury items seems like a reasonable place to start.

If you want to cut stuff, the big ticket items are Social Security, DoD, "overseas contingency operations" aka GWOT, Medicare, Unemployment, Medicaid, and the interest on the debt.

Cutting SS is, frankly and blatantly, unfair. The program is only in significant trouble if we decide to simply not repay the notes that 30 years of surplus was invested in.

DoD and GWOT, good luck trying to make cuts there.

Medicare and Medicaid are a problem because our approach to paying for medical care is profoundly FUBAR. You aren't going to get a handle on those programs without addressing the general up-f***edness of the medical industry in all of its forms.

You can cut unemployment, but then people don't eat or have a place to live.

Can't default on debt service.

The rest is basically noise.

Everybody keeps saying they are going to get rid of "fraud waste and abuse", but those things seem to be always with us. That's a game of mole whack.

So if the debt bugs you, you need to find really significant places to cut, or raise more money.

"Raise more money" means taxes.

wj, not so subtly, you don't sign up to pay for the construction of the bridge forever. You actually build something, no one is required to use it, but you can charge a toll that is paid by those who do choose to use it. Or not.

Universal health care is an indeterminate forever cost that provides little for 85% of people except a cost if they choose not to use it, forever.

I can see a not too subtle difference in those things.

The people who are committing the fraud and the waste, such as doctors and nurses scamming Medicare are Americans, by any other name.

Their excuse is, according to conservative orthodoxy, that they are incentivized to cheat, lie, and steal.

So to avoid this scamming, we must stop supplying healthcare to the American people.

Because we don't want to hurt the feelings of the entrepreneurs who are incentivized to steal from Medicare and sh*t on their patients.

Marty, about this.

Every time you pay to cross a bridge and pay a toll, you receive a complimentary colonoscopy, or a cholesterol lab measurement, whichever is more invasive.

Conversely, if you are diagnosed with cancer, no bridge crossing or tunnel drive-throughs for you.

Airports will be off limits. AMTRAK, no more.

This should lower the cost of both public subtleties. Well, by 85%, according to the experts.

Universal health care is an indeterminate forever cost

As opposed to a special interest driven extremely overpriced and ineffective and inefficient private system that can't deliver the goods like, since forever?

A 'no' to a sane system of public health is a policy choice. A really bad one.

Some numbers which may be of interest.

FRED at the Fed tells us that US federal debt is now just over 100% of GDP. About 25% of that is intragovernmental debt, most of which I assume is SS. The rest is owed to other countries, and to private investors.

I'm not totally freaked out by the county carrying debt as a regular practice, but 100+% of GDP does seem to be a sobering number. To me, anyway.

The top marginal federal tax rate is now 39.6%, effective income tax rates are lower - they max out at a bit more than 20%, give or take.

Income tax is not the whole story, and our pal Pete Peterson provides this helpful analysis. With payroll taxes (SS + Medicare) factored in, top payers have effective rates in the higher 20th percentiles.

Peterson then allocates estate tax and federal corporate tax across the brackets and finds that the very highest earners have an effective rate of about 35% of income.

I will leave the soundness, or not, of Peterson's number-crunching to the green eyeshade crowd. We don't, as it were, share a world-view, but to my relatively unsophisticated eye his numbers seem reasonable.

Peterson has his top bracket - the top 0.1% of earners - beginning at a bit over $3M a year. To put that in numbers most of us can grasp, that's about $60K a week, $12K a day.

If you make $3M a year, Peterson says you keep $2M, uncle gets $1M.

Confiscatory or fair share will be in the eye of the beholder.

Universal health care is an indeterminate forever cost that provides little for 85% of people except a cost if they choose not to use it, forever.

Can you explain what the hell this means, Marty? Are you saying 85% of people wouldn't use a single-payer system (and that they would live forever)? And is not-universal health care somehow free, or at least significantly cheaper (with comparable outcomes)?

i believe Marty's "85%" refers to the fact that 85% of people already had insurance before the ACA went into effect.

you don't sign up to pay for the construction of the bridge forever

except, you do - maintenance and repairs aren't free. but they are required as long as you want to have the bridge. it's a longer timescale than health insurance, sure.

and, speaking of Open Thread:


In the last 10 days, five black churches have been set on fire in the St. Louis area.

On October 8th, the first fire was set at the Bethel Non-Denominational Church. Between October 10th and October 14th, three more churches were burned — New Northside Missionary Baptist Church, St. Augustine Catholic Church, and the New Testament Church of Christ. In the early hours of Saturday morning, another fire was set at the New Life Missionary Baptist Church. All 5 churches are within three miles of each other.

nobody is talking about all the white churches that have been set on fire recently. so this isn't news.

So by Marty's logic, we should abolish Medicaid.

i believe Marty's "85%" refers to the fact that 85% of people already had insurance before the ACA went into effect.

And, for people under 55, the need for healthcare is limited.

Confiscatory or fair share will be in the eye of the beholder.

A third at that level isn't confiscatory.

If you wanted more money from corporations (I do), you'd lower the tax rate to 15% or so and require companies to pay tax in the US on US profit.

nobody is talking about all the white churches that have been set on fire recently. so this isn't news.

When we know who is lighting the fires, then maybe it will be news.

Marty's comment about "building bridges" is especially relevant considering the decrepit state of US infrastructure, after decades of GOP tax-cutting and neglect.

But I'm sure the folks that died in the I-35W collapse were comforted by their low, low tax burden.

for people under 55, the need for healthcare is limited

what the what?

And, for people under 55, the need for healthcare is limited.

People age, unless they die first.

That's one thing I never understood about the argument that younger people today are paying for today's older people's health care. People's ages aren't fixed. Young people become old people, short of dying young. Isn't it just as valid to say that young people are paying for their older selves' future health care? Isn't it simply spreading the cost over a lifetime if the insurance system in question is enduring?

Alternatively, isn't that what risk pooling is all about? Isn't that how health insurance works?

McTX: If you are making some ass-backwards point that it isn't fair to charge the SE tax to people making 115k and not to people making 250K, that is a different thing altogether. You are not giving the 250K earner a better SS pay out.

First, let's just keep our facts straight: $250K is in the 33% bracket, not your 39.6% one.

Second, my point was not about unfairness but about whining. (Also I have to ask: is your ass frontwards, or what?)

Third, I'm sure you have heard it as often as I have: a stunning fraction (1/4? 1/2?) of "all taxes" is paid by a tiny percentage(1?, 5?) of the population. Invariably this right-wing talking point is based on excluding FICA from "all taxes". I'm glad you implicitly renounce such talking points by speaking of "the SE tax".

Now: I am willing to stipulate that taxing "the 250K earner" at the same rate as "people making 115k" for the same (capped) benefit is straight-up income redistribution. So is taxing high-frequency trades to pay for working-class kids' college tuition. So is taxing 39.6-percenters to pay for poor people's medical care. "Income redistribution" is not a dirty word to me. It's what government -- any government -- does: it collects money and it spends money, and it's ridiculous to expect that every penny it collects from me must be spent on me.

For what it's worth, the only limitation I would place on income redistribution is this: "redistribution" should preserve the rank-order of "income". That is, if you make more than me, pre-tax, you should end up with more than me, after tax. This preference of mine is probably violated most at the low end of the income spectrum, where various "means-tested" programs can phase out in ways that amount to a 90+% "marginal tax rate".

--TP

If you wanted more money from corporations (I do), you'd lower the tax rate to 15% or so and require companies to pay tax in the US on US profit.

Companies are currently required to pay tax in the US on US profit. A 15% tax rate on corporations would be great - I would stick all my income earning investment assets in a corporation and pay only 15% on the interest and dividends, rather than 39.6% on interest and 20% on dividends.

That is, such a disparity between the corporate rate and the highest individual rate means the return of the corporation as a tax shelter.

It's what government -- any government -- does: it collects money and it spends money, and it's ridiculous to expect that every penny it collects from me must be spent on me.

Not to mention that it's overly simplistic to look at who the money is spent on to figure out who benefits. The poor kid who got to go to school and turned out to be genius at writing software, for instance, is making lots of other people a butt-load of money, not to mention potentially improving the lives of countless others who bought that software.

Malnourished, uneducated, unhealthy people aren't very productive. The more of them you have, the more wasted human potential there is. Who's that good for?

it's good for the Haves. Have Nots let Haves know that they're the Haves.

Relative position in society means more to people than absolute.

you don't sign up to pay for the construction of the bridge forever.

What cleek said at 9:11 AM.

One of the serious problems we currently face is all the folks who have been, and still are, "balancing" budgets by deferring maintenance of our existing infrastructure. All that gets you is a significantly bigger expense down the road of replacing it under emergency conditions when the infrastructure collapses as a result. (Not to mention the costs of dealing with those injured or otherwise damaged as a result of the collapse.)

The country owes a lot of money.

Nobody wants to pay more taxes.

Nobody wants to give up anything they currently receive from the public sector.

Even with the current level of spending, there are lots of social and economic issues that aren't being addressed very well.

With no invidious ethnic slurs intended, this is a Mexican standoff.

Isn't it just as valid to say that young people are paying for their older selves' future health care? Isn't it simply spreading the cost over a lifetime if the insurance system in question is enduring?

Alternatively, isn't that what risk pooling is all about? Isn't that how health insurance works?

HSH, that's how life insurance works, too. You pay early on, when you probably don't need it (that's why insurance companies can afford to set premiums so low), so that you (or more accurately, your heirs) can collect on it later.

I'm sorry Russell but the disclaimer certainly doesn't negate the derogatory and clearly racist underlying meaning of your statement. It is a shame that in this day and age we have to resort to such insensitive language to make a simple point.

"Income redistribution" is not a dirty word to me. It's what government -- any government -- does

Some governments redistribute money from the higher income folks to the lower income folks. Ours, for example.

But others do not. The result of which is, eventually, a revolution. After which, the new government will either be one that does so or (as we have seen, for example in Russia early in the last century and China around the middle) a really nasty dictatorship. Either way, the wealthy lose out big time.

Which is to say, redistribution is actually in the interests of those with lots of money. Because otherwise they can look forward to losing not just some of their money, but all of it. And possibly their lives besides. So think of it as a form of insurance payment as well.

All that gets you is a significantly bigger expense down the road of replacing it under emergency conditions when the infrastructure collapses as a result.

Even short of catastrophic failure, poorly maintained infrastructure has costs. In the case of roadways, think of the added wear-and-tear on the cars and trucks riding on them. A more subtle effect is reduced gas mileage. A more acute effect is a blown-out tire, which could lead to an even more damaging accident. And there's lots of stuff in between.

Any large system of infrastructure you can think has analogous costs associated with poor maintenance.

There's just no line item in anyone's budget for these costs, so very few people bat an eye them.

All that gets you is a significantly bigger expense down the road of replacing it under emergency conditions when the infrastructure collapses as a result.

Even short of catastrophic failure, poorly maintained infrastructure has costs. In the case of roadways, think of the added wear-and-tear on the cars and trucks riding on them. A more subtle effect is reduced gas mileage. A more acute effect is a blown-out tire, which could lead to an even more damaging accident. And there's lots of stuff in between.

Any large system of infrastructure you can think has analogous costs associated with poor maintenance.

There's just no line item in anyone's budget for these costs, so very few people bat an eye them.

Well, an economist could do a better job with this one, but: Uber to Mechanic payment places zero load on the public purse. The bridge might be necessary and if it is, the citizens can vote to tax themselves for the bridge. Most people are ok with necessary bridges. Agreeing to a bridge doesn't mean you have to agree to unlimited Keynesian-ism.

One more point on this. You argued above that the various Bush wars were voted on, etc.

So is money for bridges and other infrastructure. Now, you can't have a vote every time a pothole needs to be fixed, so these votes generally allocate sums for a large variety of projects, but it's a vote nonetheless.

And potholes and bridges are real, unlike the WMD that did so much to create support for the Iraq War.

"I'm sorry Russell but the disclaimer certainly doesn't negate the derogatory and clearly racist underlying meaning of your statement. It is a shame that in this day and age we have to resort to such insensitive language to make a simple point."

Let us all keep a straight face.

We don't need no stinkin political correctness round here.

Regarding infrastructure (and sensitivo bullsh*t Republicans) to address the sincere concerns of immigration opponents in border states, did you here what Donald Trump said when it was proposed that a Chinese Wall of sorts be built along the southern border, something along the lines of the Chinese Wall the banks constructed to separate their banking and investment entities to mitigatehaha the destruction of Glass-Steagal, which would be very much cheaper since, you know, it would cost nothing on account of the fact that it wouldn't exist?

Trump: "That was all very good for fooling the American people in order to rob them blind, you suckers, but any wall I build to keep Mexican rapists out of the US will have no chinks in its armor."

Ben Carson chimed in that if anyone has any problems with HIS murderous plans for the border they should point their guns at the guy wearing the paper hat at the counter serving fried chicken, not at him.

I prefer the term "bribe".

Tilting the playing field increasingly toward the already well off only encourages them to tweak the rules further to provide them even more advantages. This is a self-ratcheting effect, and the end result is a parasitic aristocracy, like that in pre-revolutionary France.

The rich have no shame. They have no guilt. They are brazen in their endless greed. If you want to maintain the system of private property and "free" markets, they will have to be brought to heel. This will require countervailing social institutions (strong unions, etc.), financial reform, a broader social safety net, higher taxes on high incomes, a sane intellectual property rights policy, and other policies that are guaranteed to drive conservatives absolutely out of their minds.

"The rich have no shame. They have no guilt. They are brazen in their endless greed. If you want to maintain the system of private property and "free" markets, they will have to be brought to heel. This will require countervailing social institutions (strong unions, etc.), financial reform, a broader social safety net, higher taxes on high incomes, a sane intellectual property rights policy, and other policies that are guaranteed to drive conservatives absolutely out of their minds."

And maybe mandate that they read "Capitalism for Dummies" which states that in the event of a labor shortage it might be smart to voluntarily raise long-depressed wages and benies to entice demand among the workforce, including among those who have stopped looking for work, for the jobs that are available, which will also prevent the government from stepping in:

http://www.eschatonblog.com/2015/10/more-shortages.html

http://www.shiftgig.com/articles/restaurants-are-facing-shortage-chefs

But this is not going to happen. Capital, which of course is all very fine and good in and on balance in a civilized society, will immediately punish those who succumb to raising labor inputs. See Wal Mart's 30% plunge in its stock price after wage hikes to some of its workforce were instituted and earnings took a hit as a result.

Worker hours were immediately cut as a result.

We can either rationally shift this disparity in wealth that has been deliberately installed over the past 35-40 years, which may mean accepting somewhat lower returns on equity, or we can continue to let the gap widen between those at the top and those on the bottom.

If the second course is chosen, then a social cataclysm unlike anything this country has ever experienced will be in the offing.

The American people are not going to put up with working brutal hours and then being advised to buy a cheap rice cooker.

Some governments redistribute money from the higher income folks to the lower income folks. Ours, for example.

I would say that the direction of distribution of public money goes in a variety of directions.

Even more so if you include public laws, institutions, and policies that influence the DISTRIBUTION of money in the first place.

On the general topic of federal getting and spending, this discussion seems pretty good, and pretty fair-minded.

"Did you "hear" .... not here.

Companies are currently required to pay tax in the US on US profit. A 15% tax rate on corporations would be great - I would stick all my income earning investment assets in a corporation and pay only 15% on the interest and dividends, rather than 39.6% on interest and 20% on dividends.

Hmmm, then what is transfer pricing? Because I'm pretty sure GE paid no taxes a few years back using some sort of transfer pricing mechanism. Second, you are a tax guy. If you put your assets in a corporation, they will be taxed at the lower corporate rate, that is true. However, if you take any of the gain out, you pay tax a second time, and depending on your marginal rate, you could pay 15% on the front end and then 39.6% on the back end.

That is, such a disparity between the corporate rate and the highest individual rate means the return of the corporation as a tax shelter.

My understanding of a tax shelter is that income is "sheltered" by some off-setting device such as depreciation. You can operate as a corporation and not distribute any money to yourself, and only pay tax once. Once distributed, the income is taxed a second time. Corporations are not tax shelters in the since that you indicate.

Third, I'm sure you have heard it as often as I have: a stunning fraction (1/4? 1/2?) of "all taxes" is paid by a tiny percentage(1?, 5?) of the population. Invariably this right-wing talking point is based on excluding FICA from "all taxes". I'm glad you implicitly renounce such talking points by speaking of "the SE tax".

Yes, I am aware of the statement you allude to and yes, I agree it disregards FICA and Medicare tax which, all up , is about a 9% load that everyone carries. I don't consider wage earners who only pay the 9% to be freeloaders or anything of the sort. I would like to know, maybe someone has a chart, if there is a breakdown as to how "all federal tax" revenues are distributed over the wage-earning population.

Russell's link above indicates 1.1 trillion in payroll taxes, including the employer match (which is not a one to one ratio due to SE taxes). We can guesstimate that maybe 45% of 1.1 trillion comes from all wage earners. How that shakes down by percentile exceeds my very limited mathematical skills.

Which is to say, redistribution is actually in the interests of those with lots of money.

Really? We had no redistribution to speak of prior to 1933 and no revolution.

The rich have no shame. They have no guilt. They are brazen in their endless greed. If you want to maintain the system of private property and "free" markets, they will have to be brought to heel. This will require countervailing social institutions (strong unions, etc.), financial reform, a broader social safety net, higher taxes on high incomes, a sane intellectual property rights policy, and other policies that are guaranteed to drive conservatives absolutely out of their minds.

Discounting the hyperbole, as colorful as it is, BP, do you have an existing model where your plan has worked? Venezuela has strong unions. How's that working out for everyone? Cuba? Argentina?

Even more so if you include public laws, institutions, and policies that influence the DISTRIBUTION of money in the first place.

Yes. Many mistakenly take this for granted. It was not handed down from on high on stone tablets.

Regarding tax inversions:

http://finance.yahoo.com/video/icahn-financial-muscle-fight-tax-153716613.html

Also, Icahn:

http://www.cnbc.com/id/45575078

He's a lifelong Democrat I believe, but highly critical of Obama.

Really? We had no redistribution to speak of prior to 1933 and no revolution.

We had a pretty big redistribution and concentration of financial wealth from the 1870's to the onset of the Great Depression.

It was accompanied with a great deal of labor strife and violence. We had an actual socialist (Debs) running for the presidency and getting a significant number of votes.

You might read up on the history. That revolution was possibly closer to happening than you think.

Venezuela has strong unions.

So do, as examples, the GDR, France, and most or all of the Scandinavian countries, I believe.

They do OK.

do you have an existing model where your plan has worked?

Come on, Tex. How many times are you going to ask that one? There are some pretty obvious answers of current countries that do not have such vast disparities of wealth as we do and a healthy social safety net. You know which ones they are as well as I do.

But here's one for you: How many societies in history have thrived and survived under circumstances where the top 1% owned everything and ran everything? How about those paradises in central America?

For some reason, you never cite them as success stories.

Try reading Kevin Phillips' "Wealth and Democracy" for starters. Thanks.

Bobby, you might also mention the Progressive movement at the beginning of the last century. If memory serves, some years after he was President, Teddy Rooseveldt ran for President on the Progressive Party ticket. And got nearly 30% of the votes.

We can guesstimate that maybe 45% of 1.1 trillion comes from all wage earners.

The actual number is (drum roll please): 100%

We've had redistribution since 1933 and not only no revolution, but the United States emerged as the strongest economy on the face of the Earth.

And, yes I realize there are plenty of complicated factors that explain that, but steeply progressive marginal tax rates persisted through much of the high-growth periods since.

So, no revolution, no Galt's Gulch, as predicted at 91% top rates.

It wasn't until top rates declined to 28% under Reagan and went somewhat higher in a zigzag pattern since that we started to hear threats from conservative media personalities and conservative politicians regarding armed revolution against the Federal Government if ANY of the difference between today's rates and say, rates in 1955 is closed, and further, if taxes are not cut to below Reagan's 28% or below, there will be dire revolutionary consequences.

We're probably closer now to armed revolution from the top and their southern and western white sympathizers and their paramilitary forces, including the NRA, than we were to armed revolution from the bottom in 1932.

Capitalism, and the middle class, thrived in the United States while Unions were strong.

I don't know why we ourselves can't be cited as an example of a success story.

Unfortunately, more of today's right wing in the U.S., and England, view unionization with the same contempt and oppressiveness as Soviet (now Russian), and Chinese Communists do.

Yes. It's as if the 40's, 50's, 60's and well into the 70's never happened.

Let's go to the source:

http://www.politico.com/agenda/story/2015/10/grover-norquist-tax-interview-000288

He trumpets violence:

"GN: I wrote a book called 'End the IRS Before It Ends Us' that’s actually a history of taxation in America. In 1774, Americans were paying 1 percent or 2 percent income taxes. The Brits thought about raising it a bit and the guns came out. The Civil War, aside from slavery, was partly about taxes. In the 1830s, South Carolina called out its militia over the tariff. People brought the guns out, so they rolled back the tariff. It was viewed as a tax on the South. Historically, it’s always been a huge part of U.S. politics."

When he starts it, he's mine. I will hunt him down.

Bullets can go in both directions.

It's Republicans now who constantly threaten violence if they don't have their way.

That's another gap between conservatives and liberal constituencies that will be closed.

It's as if the 40's, 50's, 60's and well into the 70's never happened.

But Bobby, that's all before Reagan. And as everybody knows, only the coming of Reagan saved the country from the disaster it had been since the mid-nineteenth century.

This is incredible:

http://finance.yahoo.com/news/knives-come-paul-ryan-gop-173000940.html

Keep beating on them, whitey:

http://www.balloon-juice.com/2015/10/21/this-is-what-gentrification-looks-like/

Given this promised attack on religious liberty in the U.S.:

http://talkingpointsmemo.com/livewire/donald-trump-close-mosques-isis

...the kid's family is making the right move:

http://abcnews.go.com/US/wireStory/texas-teen-arrested-homemade-clock-move-qatar-34618002

He and his family are less likely to be victims of violence in Qatar than they are here from conservative vigilantes in and out of government.

So do, as examples, the GDR, France, and most or all of the Scandinavian countries, I believe.

They do OK.

Each has its own set of problems (economic growth, unemployment) and none are comparable to the US in size or societal diversity. I wonder if anyone has done a like-to-like peer-reviewed study comparing US economic quintuples to Western European quintuples using metrics from size and cost of living abode to health care access to cost of education and so on.

The income (or wealth--the two are not the same) inequality thing is pure longitudinal, comparing gaps in the US to gaps in the EU. What about horizontal? What if someone in the US 4th quartile was, on balance, better off than the 4th quartile in France or the UK--would that make the longitudinal metric irrelevant?

We've had redistribution since 1933 and not only no revolution, but the United States emerged as the strongest economy on the face of the Earth.

And, yes I realize there are plenty of complicated factors that explain that, but steeply progressive marginal tax rates persisted through much of the high-growth periods since.

Well, there are one or two missing pieces here. Circa 1939 we were not the strongest economy on the face of the earth. We were on 9/1/45, but that was a result of the rest of the industrialized world, other than the UK, being bombed into smithereens. The UK unioned up after WWII and proceeded to function as an economic cripple until Thatcher came along (incoming!).

We were anything but redistributionists in the 50's and 60's. Medicare wasn't passed until '63 ('64?). It didn't start to bite into the economy for decades (see frog in pot of warm water metaphor).

You like strong unions? How'd that work out for Detroit? The rest of the rustbelt?

No doubt, there can be a balance between the depredations of capital and the depredations of overly rigid unionization.

Or we can just declare capital the total winner and low comparative wages for the vast majority of workers the eternal status quo and continue to allow the differential between the big winners and everyone else to widen.

You mentioned somewhere up thread that money and the choice of what to do with one's own wealth is a large component of a free society.

Money affords more options and thus more freedom, true. Nothing wrong with that. In which case, possessing less money closes options down for the vast majority and therefore curtails their freedom.

The option of purchasing the 30 foot vessel or the more expensive 50 foot ocean going cruiser is a nice thing to have.

The option of affording health insurance for one's family or going without and courting medical and financial catastrophe is a whole nother horse of a different color.

When those two situations persist with vast differentials over periods of time, I predict peril.

And look here, even Paul Ryan is demanding free family time:

http://talkingpointsmemo.com/livewire/joan-walsh-doug-heye-family

For himself only, of course, which keeps him within the constraints of "Atlas Shrugged", paragraph 7081.

The law as Vampire:

http://www.dailykos.com/story/2015/10/21/1436574/-Alabama-judge-can-t-pay-fines-pay-in-blood-or-go-to-jail

What's next, forced organ harvesting?

Each has its own set of problems

As do we.

There are lifestyle differences between folks here and folks in the EU countries. That is driven by differences in culture as much as, or more than, anything else.

Smaller house, but 6 or 8 weeks of vacation. You could talk me into that trade fairly easily.

In general, folks in the countries I named are pretty happy with what they have. There is not a huge influx of emigration from the GDR, France, the Scandinavian countries, or most EU countries for that matter, to the US.

Ireland, maybe, and Eastern Europe. Not the countries I named.

Net/net, you presented Venezuela as a poster boy for a country with strong unions.

There are other countries with strong unions, and strong traditions of robust representation of labor in government and industry, that do quite well.

You like strong unions?

I don't care one way or the other about unions per se.

I like folks who work for a living getting paid well enough to make a decent life for themselves. Without having to sign up for food stamps, and without working for 40 or 45 years and ending up with nothing to show for it.

Unions are one way to help make that happen.

If you don't like unions, we could simply restructure the relationship of capital to labor via law.

Unions would become irrelevant.

How'd that work out for Detroit?

It worked pretty well for a while.

How is right-to-work working out for Mississippi?

The problems of the auto industry in Detroit go well beyond unions.

Money affords more options and thus more freedom, true. Nothing wrong with that. In which case, possessing less money closes options down for the vast majority and therefore curtails their freedom.

Count, I think you are conflating freedom to choose how to spend your money with money can buy a lot of stuff that let's you do a lot of stuff, particularly if you are free to do so.

Two are quite different.

PS--check your inbox.

Net/net, you presented Venezuela as a poster boy for a country with strong unions

Actually, I was tweaking BP.

One significant factor in comparing EU countries to the US is relative levels and quality of educational achievement. A sizable portion of our society does much worse in school, and thus we have a larger un- or under-educated slice of the population. Wages stay lower with a higher number of un- and semi-skilled looking for work--or not looking for work as the case may be.

You like strong unions? How'd that work out for Detroit? The rest of the rustbelt?

Unionization is one of those issues where both ends of the spectrum are bad. Having massive union domination (as in Detroit; not to mention the public sector) is bad. Total lack of union clout is bad, too.

In my opinion, you need enough unionization to keep the owners honest. But not so much that the workers are not kept honest. "Honest," in this context, meaning "aware of, and accepting of, the value of the other."

Because if either one gets too strong, things will get bad. First for the weaker party, but eventually for everybody.

Circa 1939 we were not the strongest economy on the face of the earth.

The metric "strongest" cries out for some kind of meaningful definition.

One metric: US GNP was more than twice that of Imperial Germany, its closet gross economic output competitor, by 1913.

We were anything but redistributionists in the 50's and 60's

The economic pie was much more evenly split as between labor and capital during that period then it is now. A fact which everybody here but you seems to be aware of. cf Paul Krugman "the great compression".

It didn't start to bite into the economy for decades...

What bit into the economy was the rapid increase in private health care costs. Now one could argue that without medicare (which is just a public insurance company reimbursing the private sector for medical costs) there would have been less cost, but that would have only occurred by having less healthcare to go around. Is that the policy outcome you support?

When you say that medical care should be private and prices set by market signals, you are just saying you are willing to deny healthcare to the less well off and the poor.

How'd that work out for Detroit? The rest of the rustbelt?

It worked out great for nearly 40 years. Then we decided that ours had to be the strong reserve currency for the world (making imports cheaper), and our selective trade policy pitted our auto workers directly against low cost labor elsewhere ('free' trade).

Interestingly, there was not similar public policy to push down the incomes of attorneys (reducing legal fees and raising everybody else's standard of living). In fact, our policy was the reverse. We used public policy to make the legal profession pretty much a closed shop.

So you see McKinney, you benefit more from labor solidarity than you appear to be willing to admit.


Pretty much any profession which requires a license from the state is basically a semi-closed shop. It doesn't matter if it is law or hairdressing -- if you have to have a license from the government** to do it, the state is artificially increasing your income by reducing the number of people who can supply the service.

** Of course, if you have to get the license from a "professional association" to do it, that's even worse. At least with a state license there is some chance of a non-self-interested decision about admitting new practitioners.

I wonder if anyone has done a like-to-like peer-reviewed study comparing US economic quintuples to Western European quintuples...

You're into odd time signatures, too, huh?

We used public policy to make the legal profession pretty much a closed shop.

So you see McKinney, you benefit more from labor solidarity than you appear to be willing to admit.

De-regulate the legal profession! Caveat emptor!

One significant factor in comparing EU countries to the US is relative levels and quality of educational achievement. A sizable portion of our society does much worse in school, and thus we have a larger un- or under-educated slice of the population.

Maybe, but is that cause or effect?

wj,
It more than just the barrier to entry created by a license requirement. The law profession is more like a cartel.

(incoming)

Regulations are bad!

PS--it's Miller Time

It should probably be over in the Two Nations thread. But no Brit would agree that Miller (or most other US beers) really are beers.

Figure of speech. Having scotch no 2 w my son in law.

Definitely an improvement! Enjoy your evening.

Drink up, boys.

Murderers are at the ready:

http://www.dailykos.com/story/2015/10/22/1437024/-Open-thread-for-night-owls-NRA-promotes-article-fantasizing-about-civil-war-killing-Democrats

There are at least 40 of these vermin, probably more like 100, in the House of Representatives.

The link:

http://mediamatters.org/blog/2015/10/21/the-nra-is-promoting-an-article-suggesting-radi/206318

There is going to be killing in this country unlike anyone has ever f*cking imagined.

They predict it.

If I were Paul Ryan, I wouldn't patronize the theater any time soon, because there are heavily armed Tea Party assassins lurking in the corridors behind the box seats:

http://talkingpointsmemo.com/livewire/ryan-freedom-caucus

However, he would be able to enter the Lincoln pantheon of martyrs, securing his legacy.

Brilliant tacticians they ARE:

http://www.motherjones.com/kevin-drum

Attempted murder is an expensive proposition.

I like that the hit men at least pay for the privilege.

Bibi Netanwhattheeff joined Ben Carsonogen the other day in more politically correct Hitler rehabilitation (hey it wasn't Hitler's idea to murder the Jews, but he did think up Obamacare) by turning Godwin inside out:

http://talkingpointsmemo.com/news/universal-outrage-greets-netanyahu-s-hitler-apologism

Germany had to step in and remind Bibi that, yes, indeed, Hitler did the deed.

David Barton, who works for Ted Cruz, got right on it and demanded school history books recognize Hitler as one of the American Founding Fathers, along with Moses, Yosemite Sam, and Connie Francis.

Hey! Yosemite Sam doesn't belong in that pack of reprobates.

Besides, his biscuits'r'burning also, too.

We join the long list of nations that encourage cold-blooded killers to run for President:

http://www.newsworks.org/index.php/new-jersey-more/item/87425-christie-nearly-made-thousands-of-disabled-residents-homeless?utm_source=dlvr&utm_medium=twitterauto&utm_campaign=social-inbound

Unhappily for Christie, the professional murderers are out-polling him.

The Sidney Blumenthal connection, courtesy of Patriot Adam Schiff of California (via DKos):
Questions ...

"•On Blumenthal's alleged business activities in Libya: more than 270 questions
•On Blumenthal's relationship with Clinton: more than 160 questions
•On the Clinton Foundation: more than 50 questions
•On David Brock/Media Matters: more than 45 questions

Here's what didn't matter:

•On the Benghazi attacks: less than 20 questions
•On security in Benghazi: only 4 questions
•On the U.S. presence in Benghazi: 0 (zip, nada) questions
•On Ambassador Stevens and other U.S. personnel in Benghazi: 0 (zip, nada) questions."

Curiously, Hillary Clinton was not asked to strip down at today's ""hearings" so her dress could be analyzed for traces of Blumenthal's semen stains.

However, several maggoty Republican, subhuman pieces of sh*t on the panel had Vince Foster's rotting corpse exhumed and the tastiest bits of it served to them during the questioning as nourishment.

Trey Gowdy, the former gay porn star (turned put later he was a fraud in that pursuit too, he's straight and has only French-kissed his sisters), whose on-screen specialty was calf-roping Southern blacks and then giving the rodeo clown a vigorous tongue-lashing for pulling him off them, dropped trow to reveal that he still wears a butt plug he claims was one of many such ornaments decorating the Clinton's White House Christmas tree during the 1990's.

Former right-wing anti-American hogsh*t who worked for the CIA reportedly passed the ornaments on to Rethugs as momentos of better times in the Nation's history.

Gowdy asked Monica Lewinsky to take dictation during the hearings, but she declined because she is a sensible woman, and she objected to the to tip jar placed at her recorder's desk by Republicans who had already decided they weren't going to pay her for fudging Clinton's testimony in their favor, and besides, she might have received health insurance as part of the bargain, and we can't f*cking have that, can we?

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