Aside from the major hiccup the economy faced during the COVID-19 pandemic, the economy has been on a steady upward trajectory ever since years ago when we were talking about extending the Bush-era tax cuts. In case you don’t remember, we did end up keeping those cuts in place permanently for any individual making less than $400,000 per year, and for couples earning less than $450,000. Nowadays, those fortunate few who make more than that amount are paying a marginal rate of 35%.
But like I said, it’s been years since we passed the extension into law and I still don’t personally know anyone bringing home $400,000 per year. So who is actually paying that top tax rate these days? I decided to find out what kind of jobs command such high salaries:
1. The President
Perhaps the most famous $400,000 per year job is the leader of the free world. The office of the president not only pays a $400,000 annual salary, but also provides the president with a $50,000 annual expense account, a $100,000 nontaxable travel account, and a $19,000 entertainment account.
There are some obvious downsides to this particular career, however. Besides being very difficult to get, the job is highly stressful, and advancement post-office can be considered somewhat iffy. And, of course, you can’t expect regular raises: the last salary increase for the commander-in-chief (from $200,000 to the current rate) was in 2001. Prior to that, the previous raise (from $100,000) occurred in 1969.
On the other hand, most presidents end up receiving so many requests for speaking engagements after they hold office that he or she will be set for life. They also get a pension equal to the salary of the head of an executive department (Executive Level I) would be paid. In 2020, that is $219,200.
2. Surgeons and specialists
Even a local general practitioner can expect to pull in over $100,000 per year, but the real money in medicine is reserved for those who specialize. Anesthesiologists, heart surgeons, and brain surgeons can all expect to make up to $400,000 per year at the height of their careers. Plastic surgeons can make up to twice that amount.
Most people are completely okay with that though. After all, these people do a very, very important job.
3. CEOs and Founders
The median salary of a Chief Executive Officer (CEO) of a public company is over $700,000. These individuals are in charge of both short- and long-term profitability for their companies. CEOs generally have to know the industry inside and out (although there are certainly plenty of counter-examples), and need to have worked their way up over many years.
There are also plenty of CEOs from private companies who make quite a bit of money. The job can be stressful, but when you are the top dog, you reap the reward whenever your company does well.
4. Wall Street Bankers and Lawyers
If you work in either finance or finance law, the place to go for fat paychecks is Wall Street. According to an October 2012 report, “the average salary of financial industry employees in New York City rose to $362,950 in 2011.” While that still falls short of the mark required for the higher tax bracket, it’s important to remember that this figure represents the average (meaning some people are making more) and that there have almost certainly been raises in the past few years.
5. Mortgage Loan Officers
This may be surprising to you because not many people think of this group of individuals as ones who can earn the big bucks. However, there are some loan officers, riding the wave of historic low rates, who are raking in the dough right now. After all, their salary is directly tied to commissions they earn as a percentage of the total loan amount they get approved for their clients. They work hard, often seven days a week in many cases due to unprecedented loan volume these days, but they are definitely getting rewarded for their hard work.
6. Speakers in Public Events
Before the pandemic, the good speakers were booking speaking engagements left and right. Not only do they speak at conferences, but they also have opportunities to speak to employees in their offices as well. Some people even write books that tie into their brand. They travel all over the country (and some all over the world), so clients are plentiful.
The pandemic has slowed business to a trickle, but these people will bounce back because everything will eventually go back to normal.
7. YouTubers
Can you see why your son or daughter would want to be a YouTuber yet? The popular video creators not only make $400,000 a year, but they can have earnings in the millions every year. The vast majority of people who try to make it big fail to amass a following, but many dream of the life of recording themselves play video games and earning the big bucks all the time. What they don’t realize is that those who earn millions not only have talent, but they also work extremely hard. If not, then they have a team of people who are behind all the videos that get produced. An entertaining video takes hours and hours of editing, but most people just see someone talk, have fun, and collect cash.
The Top Percent of the Top Percent
These high-income earners are really rare. Consider the fact that most articles listing the highest paying jobs in America don’t even include any professions with median salaries of $400,000. Those individuals making $400,000 per year are in the top one percent of the top one percent — and often, they’re also public figures.
Thankfully, even though individuals in this bracket are few and far in between, the government estimates that raising the tax rate on this small group raise about $600 billion in new revenues a decade.
Not bad for a group that small.
What other professions that earn annual incomes of $400,000?
{ read the comments below or add one }
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FWIW I sit at home in front of a computer, without a college degree, and apparently I’m in the top 1%. As our most of my self-employed colleagues. I see a younger generation that doesn’t want to pay their dues. They want to go from zero to a youtube star. I started at a 19,000 a year job in the industry at age 20, started my business at age 25 and then it took about 20 years to get to this level. And yes it’s a really nice level to be, a series of good choices over a long period of time. I don’t mind paying my fair share of taxes. I do mind supporting people who make series of bad choices and want the government to take care of them. Here in California the money I make does not make me rich. It’s not like a Hollywood star who owns 10 homes. I own a single home which I could afford in my 40’s. My income allows me to not worry about paying bills and saving for retirement and pay for my own exorbitant health insurance premiums, property taxes, and state tax. I am the employer I have to pay for everything and I never get a penny from the government. It pisses me off I have no say where my tax dollars go! But the liberal rich (as in Hollywood level rich) love to tell me what my tax dollars will pay for…
Well said. I started at 19 and have worked every day since. My wife is very successful as well and came from a working class family in Michigan. We both work very hard to get where we are at. We should not be punished for this. We paid $49k in federal alone last year.
Amen sister! Your example is 100 times more likely than a “YouTuber”. Incidentally, I’m from Huntington Beach… We use “HB” for short.
Well SH, you were wrong about collusion. I guess you’ll move on to obstructing justice for a non crime like the rest. Get over it and move on or plan for Trump to win again. Just some friendly advice. Best wishes to you!
affiliate marketers and bloggers have the potential to earn over $400,000 annually and achieve “side hustle millionaire” status. 🙂
Well I’m stunned. Elizabeth Warren and I agree on something. A super wealthy tax.
You do? Think this is a little dangerous….. a few questions:
1. How do we collect it? How do you determine someone’s wealth? Do we have to get appraisals for all real estate and business interests? Seems like a lot of red tape and room for loopholes and fraud.
2. I always hate to add another tax, because they never go away. This will be here forever and could possibly bleed down into the rest of us.
3. Should we be giving the government more money anyway?
I’m actually very excited about the next 10 years of politics. I think the duopoly dictatorship of the Dems/Reps is finally going to implode. Both parties being eaten alive from the inside by radicals and more outsiders are emerging. The vitriol thrown at Howard Schultz in the last two days shows how fiercely protective those that benefit from the system are. This even includes the major media outlets and people like Bill Maher, Rush Limbaugh and Stephen Colbert who make their living off of the sport of red vs. blue. And all the red vs. blue games get us is government gridlock, higher spending and deeper in debt.
My rationale is I pay 2% on my largest asset and so should they. Abolish estate taxes completely and pay as you go. Value of stocks, bonds at public value as of 11/1 of that year. A reasonable multiple of Ebitda for private companies (I guarantee their accountants already calculate it). Credit real estate
for taxes paid (so 1.5% local taxes, you pay 0.5%). Precious metals at market value. Collectibles are harder, but can be valued. All of this only on those with > $50 million in wealth. Remember the best way to keep people from getting wealthy is income tax. They don’t even have an opportunity to save it. That’s why the Rockerfellers instituted it. They already had their money…
Agree on the mismanagement by our parties, but I’d like it ALL to go to debt reduction.
I so hope we can dislodge the duopoly. Gary Johnson quashed a real opportunity by being a moron. “What’s Aleppo?”
Good to see you’re still out there. Steven H honed my game. Still crushing Libs on Twitter due to his constant challenging. He would hate this: http://i2.wp.com/metrocosm.com/wp-content/uploads/2017/04/ft-income-distribution.gif
It disproves all of the “vanishing middle class” BS. They went away because they got RICHER. Granted, there is a new super high income group (far right). That is due to shifts from manufacturing to IT and the increased use of IT in financial industry. ALMOST ALL of it comes from there and is concentrated in Dem counties. 17/20 worst income inequality counties voted Hillary.
Great chart! And I agree….talking with Steven H, even though he was quite nonsensical at times, did help. Sometimes it is good to hear someone articulate the nonsense that is behind some of the movements and policies that are out there. And he articulated his point of view well.
I do agree the rich should be taxed fairly.
Another libtard idiot. Look at the data.
https://www.ntu.org/foundation/tax-page/who-pays-income-taxes
The top 10% pay 70% of the taxes.
The top 1% pay 37% of the taxes.
Argue with facts, not feelings or opinions.
Peter, are you the CFO of Legg Mason?
Now the accused must PROVE their innocence. A Senator is publicly attacked at dinner. Will the Right react? Will Rebups grow a backbone? What’s next? Grab your popcorn, it’s going to be interesting.
From the WSJ – Take the economy, which is faring better under Mr. Trump by many measures than it has in a generation or longer. Each week throughout this summer has brought almost nothing but economic sunshine. The pace of factory hiring has more than doubled since last year. A July survey from the National Federation of Independent Business notes that optimism among small-business owners, who employ nearly half the nation’s private-sector workforce, is at levels not seen since 1983. Wages are also increasing, which was reflected in a Commerce Department report last week that showed retail sales—on groceries, restaurants and clothing—far exceeding economic forecasts and surging at double the rate of inflation.
The best feature of this economic growth is its inclusiveness. The simultaneous gains among various demographic groups is something the country hasn’t experienced in a long time, if ever. Older workers, women, minorities, seniors and the less-educated all are faring better in the labor force today than they did under President Obama. The jobless rate for Americans age 16 to 24 hit a 50-year low this summer. In May, the black unemployment rate dipped to 5.9%, the lowest number on record at the Bureau of Labor Statistics. People who had stopped looking for work are sending out resumes. More people are quitting jobs because they are confident that a better one awaits. Employers are increasing perks and benefits in an effort to attract new hires and keep the ones they already have. There were 6.7 million job openings last quarter, a 17-year high.
Yes, but there is panic at the Fed as all is too well. Time to hit the brakes. Hopefully they’ll tap them and not slam on them.
And personal attacks on Trump continue to become more crazed. We now see a huge portion of the country ok with unelected officials trying to rule based solely only on their self perception of wisdom and raw arrogance. The precedent is frightening. I recall Adolf Hitler had the same rationale. And they call Trump the dictator….
It’s getting worse yet, Maxine Waters fans flames while Pam Bondi gets assaulted verbally. Once again, it will get worse yet again…
Liberal panic worsens. In the past few days we’ve seen prayers for recession and war from them. Wow! Just as I predicted. It WILL get worse!
WOW! I left long ago. Can’t believe this has lasted still!
Question: How is this idiocy any different from the idiot conservatives who doomed and gloomed constantly over Obama? They have even openly admitted to gathering and agreeing to block everything and anything that Obama put forth, whether or not it would help the rest of us. When will the stupidity end and the fools start working together?
I actually agree with you. The Left is just more vocal and getting more out there right now. I’m sure it will be the same way after the worm turns the other way. I just don’t recall nearly the silencing and cutting off of debate during the Obama time. A Bill Clinton type deal making centrist would help everything out, but would never survive the exetremisism of the primaries.
I really don’t think the Left is being terribly more vocal than the Right was. They have become more vocal than they were as they have seen how effective it became for the Right. I feel often we don’t notice (or maybe just excuse) the lies and harping that matches our personal beliefs as much as those we disagree with. Many are totally happy believing the many lying pundits without fact checking as long as the lie validates them, but as soon as someone else says something contradicting what they want to believe they will search until they find a source that says otherwise, no matter how valid that “fact” is.
It’s unfortunate how lies have become our new reality along with fear-mongering. I agree, we need a centrist who can make deals, it’s what I had hoped Trump would be. But, he showed in campaigning he was no longer that person. His blaming of all ills on others and constant lying made it so I couldn’t vote for him. Which after the bungling of the primaries by the Democrats is a feat. He has unfortunately continued his rhetoric and lies and now has many others to lie for him. Both parties continue their blatant hypocrisy, pointing and blaming each other for the exact things they do themselves or excuse for those they share beliefs. This Korea trip is a perfect example, if it was done by Obama, the Right would be crying about how terrible it was to meet and how he was played by Kim while the Left touted his diplomacy, yet now we just have the reverse. The bitter partisanship BS has got to go!
There are many things I’ve consistently stayed behind in this thread: not ridiculously overspending our children’s money, a more limited Federal government while expanding more local governments, not getting in people’s personal business as much as possible, asking our friends and trade partners to deal fairly with us, supporting the economy in reasonable ways, etc. One of my biggest, however, was hoping a 3rd party would emerge. Unfortunately, Gary Johnson was not up to the task. Perhaps a seed could have been planted when the two main candidates were so poor. This might bring balance to the galaxy. (Shameless Star Wars reference)
Welcome back JTM! I do check in here every now and again to see if any activity has been stirred up….. it’s like 5 years of this now! I made the mistake of turning on cable news for an extended period last night for the first time in a while. It’s amazing how awful it is during prime time. Just people talking over each other – and the hosts of the shows blatantly lying or at the very least spinning the stories. I quickly turn this off identifying it is sub-intellectual nonsense but it worries me to think there are people that trust Cuomo, Blitzer, Hannity, Carlson, Ingraham, Cooper, Maddow, etc. (not to mention the radio and print counterparts) and buy whatever angry, biased, uninformed nonsense they spew. Of course with freedom of speech there is nothing we can do about this. Not sure where we go from here.
Did you guys notice we’ve had over 9000 posts (mostly SH, Peter and me)?
I miss the repartee, SH. I get in the occasional Twitter war, but you have my game so polished that they usually get crushed in a few posts.
This was fun while it lasted, particularly the early days with Ken and Man-of-Reason. Such intelligent debating you don’t normally hear online in the twitter wars.
Yes, it got testy at times, but almost always more light than heat.
Oh no! More good news: https://amp.washingtontimes.com/news/2018/may/7/cbo-says-april-was-best-month-history-us-budget/?__twitter_impression=true
Time to hear more about hookers and porn stars from CNN! SH? Comments? Can you call Nancy Pelosi and see when Armageddon is happening?
This is directly from the CBO report, in case you want the source data: CBO estimates that receipts in April 2018 totaled $515 billion—$59 billion (or 13 percent) more than those in the same month last year. Individual income and payroll taxes rose by $73 billion (or 20 percent), on net. Nonwithheld payments for those taxes, largely final payments of 2017 taxes, rose by $60 billion. Withholding of individual income and payroll taxes rose by $7 billion (or 4 percent). Withheld taxes rose both because wages and salaries were higher and because April 2018 had one more business day than April 2017. However, those factors were partially offset because the share of wages withheld for taxes was lower, CBO estimates, reflecting the new withholding tables issued in January. Corporate income tax payments declined by $14 billion (or 24 percent).
So NK and SK are talking peace, ISIS territory drastically reduced, economy growing faster than predicted. Where is the disaster you predicted SH? Trump, for all his large and ugly warts is getting stuff done. As I predicted, the Left is getting more desperate and more inflamed. Despite NK / SK story, the first 6 stories on CNN were Trump / Russia. Surely it would be at the top if Hillary or Obama were involved in it. The bias is getting worse and worse.
Couldn’t agree more.
CNN has completely lost their minds. It’s truly amazing….. clearly this came from the top. Some exec somewhere said the only way we compete with Fox is to do what Fox does but to the other side. Now both of them are tabloids.
GOP loves deficit spending. Look at the projections over next decade.
https://www.cbo.gov/publication/53781
The deficit spending makes me ill to think about…..one of these days I hope there is a politician that cares about this.
Interesting, WSJ article states top 20% of taxpayers share of income tax will go UP, with only those making more than $730,000 (1%tile) paying a larger proportion. They will get 15,9% of income and pay 43.3% of taxes (thanks for pitching in “a little more, Peter). SH, wasn’t this a giveaway to the rich? The top 0.1% will go from 18.9% to 22% of tax paid, while receiving 7:6% of the total income. The bottom 80% receives 48% of the income and pays 13% of the taxes. SURELY anyone would see this as progressive, and unlike Liberal / Democratic talking points, it is MORE progressive than before. Care to comment?
That’s ironically the definite end result of the new tax plan. People just use talking points without worrying about facts. Bottom line is this tax plan has minimal effect for almost all Americans. It helps corporations, which in turn helps people. But on your 1040 – no real change even for the rich.
Hi Guys,
This tax cut is great for corporations, investors and the really rich. Of course, Trump is trampling his own good works for the rich by stomping all over trade policy. Have you noticed stock market is practically flat for the year, at least re DJI?
As for this being a progressive tax cut … not hardly. Remember that the percentage OF taxes paid by the rich is not how you measure progessivity. He who has most of the money pays most of the taxes. What you are noting is the continued damaging rise in high income disparity.
The measure that matters is how percentage (or absolute) after tax income rises for the poor middle and rich. The average tax cut for those making $733M and up is over $50K, or an entire median income worker wage. Which begs us to ask the question: What benefit is there to the economy in giving multimillionaires any tax cut whatsoever in a booming economy? It drains the treasury and provides no benefit.
Not true…. I make about $1.2m and my taxes increase slightly under this new tax plan. Have seen this to be the case across the board for clients in the $400k-$1.5m range as well. The multi millionaire tax cut is a lie.
Probably just spinning numbers a little. Initially (when my income was a little lower) I calculated a 1.5% decrease in my taxes. That could translate to $11k or so (not $50k like you quoted). $11k savings sounds worse than a 1.5% cut. But regardless, I do not get any tax benefit from the new plan other than the massive benefit to our economy and stock market that is has given us all.
Link for above:
https://www.bbc.com/news/business-42812453
Another link showing percentages.
The median range (40 to 60%) are getting a 1.6% increase in after tax income, while the upper 1% are getting a 3.8% increase. This is not progressive, but extremely regressive.
Scroll down to Table 3 at the link.
https://taxfoundation.org/the-distributional-impact-of-the-tax-cuts-and-jobs-act-over-the-next-decade/?gclid=EAIaIQobChMI_I_b_NrH3AIVgrXACh2tpgQrEAMYASAAEgIuTvD_BwE
Just a follow up from way back about quote “A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury.” I talked to my Daily Oklahoman source recently and Elmer T Peterson was a person that wrote several op eds around the country, but had no official capacity with them. Some research found that he was a follower of John Locke. He wrote this: https://fee.org/articles/the-battle-for-the-inner-man/ as well.
What did I say about Republican policy?
Big tax cuts to the rich.
Big spending and big deficits.
Threats to the safety net for the poor to finance transfers to the rich.
And here we are.
Obama had trillion dollar deficits initiated by a drop in GDP and sound spending on stimulus.
Trump will have trillion dollar deficits on top of a successful economy (built on previous administration policy) and draining the treasury for benefit of his friends and himself.
Don’t you miss those fiscally responsible Democrats who reliably cut deficits?
I guess the last is Bill Clinton with a gun to his head with the Repub Congress. BOTH sides spend WAY too much.
And I agree we should have cut corporate taxes and raised cap gains to negate effect on deficit. I contacted my Senator twice to that effect. And should have left individual taxes alone. There, we can agree.
LOL. Ancient history. Unicorns. Rand Paul the only senator I’ve seen talking about being fiscally responsible on either side. And by the way, it is a myth that the rich got a tax cut of any significance. Do the math on this and you’ll see.
SH: you continue to miss my point: NEITHER party is doing what is best for America. The whole thing is self serving. Good to see you back BTW.
The fun of politics is writing the story so that your side gets credit for all the good and none of the blame for the bad. Makes us all feel better about ourselves.
The victor writes the history books, yes. But what if both sides lose? Do we just become irrelevant?
Still have a dream for one of two things (admittedly possibly fantasy)…. 1) an emergence of a party with sensibility and prudence. or 2) a revolution of “thought” among the citizens who suddenly realize they are being had by the charade of the two party system. The second one is tough because the media, internet and social sites all feed into this brainwashing that one side is for something different and better than the other. Yet the spending continues, the wars continue, the petty gridlock continues, corruption continues and on and on and on and on……
Last election was a great opportunity for another party to emerge. And they ran Gary Johnson,,,,what’s Aleppo? Sigh…
Yes, but he is doing a lot to push to change the debate rules which are unconstitutional. That’s probably the first step….then there will be a viable candidate. Agree Gary wasn’t the best. (Liked Bill Weld a lot though….think he gave a glimpse as to what might be out there)
Well it hits the fan tomorrow… memo release. Meanwhile, Atlanta Fed estimates 1Q18 growth of 5.4%… annualized would add about $1T to GDP.
Well the memo was a classic OPUD. Overpromise underdeliver, but all of it needs more looking in to.
Yep…. just more drama for people to get excited about to give the media ammo to take sides.
The memo had 3 primary assertions.
1) The FISA court was not told of Steele’s political motivations.
2) Knowledge of the political motivations was necessary for the court to make a valid decision.
3) The dossier was the primary motivator for the case against Carter Page.
In less than 48 hours, all 3 assertions had been debunked.
And the we find Nunes did not even read the FISA information before releasing his uninformed and inaccurate memo.
What a bunch of clowns.
$9.5T over 8 years is a LOT more than $1.5T over ten. Simple math. And if we don’t grow out of our deficit then we have a Great Depression or hyperinflation. Which do you wish for?
Ah, I see, you’re talking about the budget, not the tax cut. I agree completely. We need to tweak taxes, just not income taxes in my opinion. And we need to cut back on SOMETHING.
It all stinks. Need another special prosecutor.
I should also note that the deficit in this budget is around $440b or 12% of total receipts. (This means we are actually spending 12% more than we take in) Of course this is WAY too much for my liking of course – since I want a balanced budget – but lower on a percentage-of-receipts basis than every budget since 2006. The Clinton years were the best for this – averaging about 4% overbudget. George W averaged around 11%. Obama averaged around 37%. We appear to be back to some normalcy at least…..
An underappreciated benefit of increasing wages and bonuses will be reduced payouts for some entitlements, thus reducing the spending side as well as increasing revenue with an improving economy. This is basically the same plan P Ryan had before Trump came down the escalator. Of course he will take the credit…. of course if it fails, he’ll take the blame. Grab your popcorn, this is going to be entertaining! And scary…
And now WalMart – the epitome of the argument Steven H was making – has raised minimum wage as well. Interesting….
This will be a fascinating 3 years as this all plays out. My elves predict 4+% growth and $75 oil. It’s hard to hate on prosperity, but I’m sure the Dems will find a way…
Frankly, there is enough to hate on with this President rather than attack the economy. That would be a foolish way to go after him as there is so much more low hanging fruit to pick with Trump. They also can’t criticize the likely rising debt we will see without spending cuts, since they do the same thing only without the robust growth and tax cuts for most Americans. My biggest regret with this tax plan is that I get a tax cut. It is so minimal as to be meaningless and it provides fuel for the high-tax, high-spending politicians to criticize the plan (by saying “they cut taxes for the rich”). At the end of the day, the main thing that was so positive was the reduction of the corporate tax rates and the cleaning up of the ridiculous overdone (and clumsily enforced) regulatory environment. This is the primary reason why companies feel comfortable investing their capital again. The problem wasn’t on main street, it was in the business world. Now that money is free and being pumped back into the economy like adrenaline.
Merry Christmas Peter and Stevendad.
And to you! And a great New Year as well!
Yes you have a great holiday as well….
And of course to you, Peter.
Isn’t it interesting as well that with the tax cuts at the corporate level, corporations are already offering bonuses and pay increases. I know it is fairly minor on the bottom line, but isn’t this EXACTLY what the ultra-liberals like Steven H want? Wells Fargo today announced they are increasing their own minimum wage to $15/hour. Oh the irony. Probably one of the most evil corporations in Steven H’s eyes is doing the very thing he thought that more corporations should do.
Lets see what deficits do over next 2 years. Do they increase or decrease. Most economists say Trump tax cuts will not pay for themselves. Are they right?
Meanwhile it is good that banks use part of their windfall to increase wages. Smart marketing. And about time, and it could spark a slight increase across broader industry. This is what is SUPPOSED to happen at low unemployment. A shame we had to btibe the rich to make the economy work as it is supposed to.
And Peter, I’m sure your investor customers will see big gains from the stock buybacks and dividend increases from the lower corporate and pass through rates. I’m sure your business will profit bigly from this economic stimulus that almost certainly puts the nation in greater debt.
I have to point out how little Dem angst there was over $9.5T in 8 years and how much over $1.5T over 10. I would prefer none, trust me, and thought they should have not cut individual taxes at all. As mentioned before, cut corporate and raise cap gains. I hope it works out regardless for all of our sakes. If not….
I don’t think it is necessary to simply call it marketing. Almost everything that is done at the corporate and government level is for PR to some extent. The important thing is that a major corporation is seeing the value in increasing minimum wage, which is exactly what you asked for. Corporations hoarding cash due to gridlock and uncertainty was not good for the economy. This corporate tax cut (and to a lesser extent the streamlining and revising of regulations) has opened the floodgates for this money to come back into the economy and into the hands of the middle class. This is a very good thing. The personal tax cut for the rich is very minor (and almost non-existent over $1m). Now if we could just cut some spending, we might be onto something!
All of this HAS to help growth. The angst and “unnamed sources” exposes’ are about to double in intensity from MSM and the Left. Should be entertaining as those in the “middle third” of the country who haven’t already decided set our future course.
Just happened by,
All I can say after reading the comment thread is, there is always something to complain about with Steven H around.
Now that’s funny….. with him gone there is no purpose anymore.
Oh yeah, an actual quote I overheard on Black Friday from an employee: “our manager was talking about closing this store but we did so well that they are going to hire more people”. Attitude has completely turned.
Oh and for the record, my taxes go down about 1.5% under the new tax plan. 7 figure income. Although the media trying hard to portray this as a tax cut for the rich. Such nonsense.
The idea is growing out way out of the debt. I hope it works because the alternatives suck. You can’t cut taxes on the poor because they don’t pay taxes. Only options would be to cut benefits, but Repubs are too kind for that! (Emoji wink). We could approach 5 % GDP growth according to my elves who have been dead on so far…
Actually just did the calculation – with Fed, state and local taxes I pay about a 44% rate under the new plan.
SH. If you’re still out there: proof raising wages causes inflation. https://www.stlouisfed.org/~/media/Blog/2015/November/Graph_Blog_WAGE_growth-FINALv2.jpg?la=en
Just ran across this….
Enters into the minimum wage discussion as per previous posts.
By the way too Steven H….check out the studies for how lower corporate tax rates spur wage growth. It’s a fairly direct connection and hopefully one we will see soon.
Economy is starting to cook. Outside of healthcare and housing, inflation is limited. Goldilocks economy to come?
https://www.financialsamurai.com/the-life-of-a-financial-advisor/
—
Steven H – Since you showed back up on here I did want you to see this article. Maybe helps shed some light on why it is so hard to find people in today’s society to follow my career path. You have never understood my industry and always come back with “just pay them more” to fill the positions. Hopefully this explains my industry in more detail in a simpler fashion.
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It does speak to a larger point about jobs with low starting salaries and huge upsides vs. safety and being dependent on the “man” (the corporate structure). In a lot of ways it illuminates my core disagreement with you. Freedom of choice and opportunity vs. reliability and safety. Capitalism vs. socialism. Independence vs. dependence. All the themes are here – and at the core of our dissenting philosophies.
Another one with no “reply”, so…
“I’m ok with raising capital gains tax on higher investment income. Taxing wealth is OK in principle but I’m not sure the specifics of such a scheme have been tried successfully.” This is exactly what inheritance taxes are. They are just done in a huge swipe at a bad time and largely avoided by the rich through trusts. So a little bit each year on your investments/ business that are your main assets, just like the Middle Class already goes on their biggest asset, their home. Now that I think is fair: some instead of none. That’s a lot different than the income tax increase drum beat of “a lot” to “a lot more” is fair.
To be fair, you can’t really “avoid” estate taxes. You can minimize them slightly with bypass trusts and the like, but certainly if someone dies with a $50 million estate there is no shelter, no reduction, no place to hide assets. Their heirs will give about half of it to the government.
Can’t reply to your latest post below, so here goes: I agree with zero of those Conservative points. There, that was easy. They all go against my belief we should have maximal self determination. Not 100%, of course there has to be rules, but maximal.
SH: Still waiting on ONE THING you disagree with the Democratic platform on… you’re way too smart to not have something you could improve on in their platform…
I don’t have time to read through their entire platform for this silly exercise. It would mean nothing and prove nothing. More important things to do …
But you accused me of being a Repub shill and I disproved it on double digit points. You are hiding again…
The fact that you can’t think of something right off the top of your head answers his question fully.
Peter and Stevendad, Maybe i have gotten tired of beating my head against your brick walls. I haven’t even looked at this forum in a month. There have been some good conversations in these realms, but i find the resistance to basic economic common sense frustrating. Want to reduce debt? Raise taxes on the rich to levels that worked in the past. Want to cut Corporate tax rate? Do so on small business, but cut the loopholes for big business so that they actually pay more. Want to bring foreign profits back home to US? Only allow a tax break if the new money goes to capital investment and worker salary, not management salary or investors. Want to cut tax rates on individuals? Only do so for lower and middle class , not one penny break to anyone over 100K per year (including me). They don’t need it. Want to help out the middle class? Increase minimum wage, increase the wage threshold at which overtime stops being paid (exempt/non-exempt threshold), institute single payer healthcare with strong Rx price controls imposed on big pharma to keep prices down. Alternate ‘new’ approaches are fine (wealth tax etc) but need to be proved out. This is the same sensible stuff I have been saying all along. You guys fight it all.
I think the biggest frustration is the constant blaming of the poor and middle class, all the while claiming you DON’T blame them. Most of this was from stevendad: his summary of interviews with 75,000 poor patients certainly did not paint a positive picture of them and he ultimately claimed that the lower quintile was, by his estimates and tortured math, not reporting 75% of income and was therefore living better than Europe middle class, and oh by the way there is no problem with hunger in the US either. I don’t even know why those conversations came up except to deflect from the proven doubling of income share to the rich, and stagnation of incomes to the middle class, and to try to somehow say the economy’s woes are primarily the fault of the fallen morals and hidden incomes of the poor.
On one hand I appreciate the time you have invested in this forum and some of the productive back and forth. On the other I am saddened that there is so much stubborn reversion to talking points of the economic elite (Richest x% pay y% of all taxes (ignoring effective tax rates)!! You should not give more money to government because they will waste it (ignoring tax increases ability to pay down debt, as done 1950-1980 and 1994-2000)!! Debt can can be easily reduced wholly by cutting unnecessary spending and waste (as if that had never been tried)!!
Anyway, I wish you both well. I think we have run out of ideas that can be productively discussed here. Osmosis Amoebas.
“not reporting 75% of income and was therefore living better than Europe middle class” False. I just said there could be a lot. But even WITHOUT it our poor do better than several EU countries. But you want more, more, more. To take control and take a cut.
Did you ever volunteer and meet these folks? Didn’t think so. I’ve admitted homeless and poor people for 30 years and ALL the missed meals I’ve seen were due to drug abuse or alcoholism, not unavailable food. You just have blinders on. As usual. And I’ve said several times we need to strengthen mental health programs.
I’d support many new taxes, just not the income tax well but you’re just too thick and too sold into Democrat BS to hear it. I gave over a dozen ways I disagree with Repubs, still waiting to hear how you do the same with Dems…
And NO, the economic woes aren’t due to the poor, but mostly misguided government programs dusguised as well intentioned programs but mostly meant to feed the bureaucracy while politicians take a cut and enrich themselves. Just my opinion, of course…and some 80% of Americans who think our government is fair to poor at serving the public.
And YES, all would do better if they took maximum advantage of SWEAR rather than waiting for rescue from our dysfunctional government. So yes, I haven’t bought into Democratic platform / Progressive BS. I’m facing reality though that YOU CANT TAX AND REGULATE YOUR WAY TO PROSPERITY. The idea you can is ludicrous in my opinion. It flies into the face of natural law and human behavior. Again, just my opinion.
You see SH, people are ultimately self serving AND SHOULD BE, with an eye out to help those not doing as well. If you give individuals as much power over their lives as possible they are more motivated and all benefit. If you give people power of force (government) then the people in government will serve themselves and become “the more equal animals” at the expense of others and society as a whole. Has ALWAYS happened and likely always will… Besides, we’ve moved hugely in that direction already. But you want MORE. You are too cowardly to answer what gives you the wisdom to define “fair” for everyone else. Or is it because you have no answer?
What gives YOU the wisdom to make that decision stevendad? You have opinions too. Why do you think yours are superior?
But Stevendad isn’t saying he has that wisdom. He is saying that he wants that decision in the hands of the people themselves, not in the hands of a few (the government or elite).
Leaving decisions in the hands of the ELECTED government is doing the peoples will, or is as close as we get. With this govt having only 30% support ii is arguable that they are now opposing the people. Nevertheless, taking decisions from the givt means giving it to a different elite, the economic elite. Why is it your opinion that is a good idea?
It is a mirage that government is the will of the people just because of an election. The two party oligarchy election has become a sham, particularly with campaign finance the way that it is. Why not reform the governmental system rather than pour more money into the hands of the elite oligarchs? How can you possibly have confidence in EITHER of the two parties doing what the will of the people is?
As you can see the will of the people cannot win in the construct of these two monied establishment behemoth parties. Two popular candidates emerged and one (Sanders) was quieted from within by the powers that run the party – via some very terrifying corrupt and underhanded means. The other won the nomination with unprecedented opposition from the establishment and continues to run the country with his own party flying in his face. This is an unmitigated disaster and it needs to be fixed before we start worrying about giving the monster more money (to build a wall? for another war?) or before we try and pass gigantic programs like ACA. The Democrats and Republicans are a disgrace and it is time we move on with reform that takes their power away.
This is where you are TRULY the most blind. I ask government to do the necessary minimum and let people’s own choices rule. You (as Progressives) pretend to know what is better for them than the people do. Astounding arrogance in my opinion. I do not try to impart my wisdom on anyone, figuring THEY know what is best for them.
Stevendad, how specifically has anything you have suggested consisted of letting people’s choices rule? Decisions in the marketplace where powerful monied interests wield ultimate control? I know all about your work hard, SWEAR, all will be wonderful, but while that it is always a recipe for RELATIVE improvement, it is not a recipe for BALANCE. The difference is illustrated by a dog covered with ticks or other parasites. Food , love, sleep, and exercise will be better for the dog than not having those things. But at some point you have to remove the parasites. The economic imbalance of income disparity and tax cuts to the rich is a parasite on the economy and on the middle class. SWEAR is fine, but at some point we need to address the parasites.
You still haven’t given your basis, be it legal, religious, ethical or philosophical on what gives Progressives the right to say what is “fair”, and ultimately enforce it by force.
This is your most ridiculous persistent meme Stevendad and I am frankly sick of it. Conservatives are 1000 times more controlling than Progressives. You may not be the Conservative I describe here, but you can please stop addressing Progressives as if they are the Authoritarian Party, then Conservatives have earned that spot many times over. They want to control women’s bodies, they want to put Christian prayer in schools (ignoring desires of non-Christians), they want gays to go through Conversion Therapy, they want to force football players into specific rituals at games, they want to compel useless expensive and degrading and inaccurate drug testing for poor people to get benefits, they want to move monet from government charity to private charity, where donors can impose all the biases and inequalities of giving that humans are prone to (i.e. give because the recipients look/act/think like me).
You still haven’t given your basis, be it legal, religious, ethical or philosophical on what gives the wealthy the right to say what is “fair”, and ultimately enforce it by economic force.
Arguing which party is more invasive and controlling in our lives (or which party is more controlled by the super-wealthy) is like arguing over whether arsenic or cyanide is more dangerous to your health. Talk about a pointless exercise.
Stevendad: “I’d support many new taxes, just not the income tax”
So the Trillion dollar question is WHY THE L NOT???
What is so friggin EVIL about having a multi-tiered tax rate on millionaires and up that eventually hits a marginal rate of 50, 60, or 70%. Not an effective rate, a MARGINAL rate? It’s proven, it works, it’s simple, it won’t even affect you personally. What bug has the GOP put in your ear that has convinced you this is such a WRONG answer? Seriously, why is THAT simple proven solution to raising revenue and restricting ultra-high incomes (and this could be investment not just wage income) the ONLY thing you will never accept?
Because nearly 70% total taxes is fair in my opinion. Why is your fair more valid than mine? And taxing wealth and RAISING capital gains taxes will go right to the REAL problem, stock gains and options, NOT wages.
I’m ok with raising capital gains tax on higher investment income. Taxing wealth is OK in principle but I’m not sure the specifics of such a scheme have been tried successfully.
When I am taking about taxing high income, I also mean investment income.
Ah that relative word “fair”. I don’t give a hoot what’s fair. I just want to apply what works. Marginal tax rates of 70% for very high income (on the order of 1 million) would still be an effective rate of less than 50% for all but very richest. And yes for 1 Billion income, the effective rate approaches 70%, but really now, why is it wise for society to allow any individual to have 1 Billion in income? What if they are reinvesting in useful business. OK, they get credit for how they re-invest that money and put it at risk. But while you may think it is unfair for Billionaires to be taxed at effective rates approaching 70%, I think it is unfair that they control that much money in the first place.
So they take their money and ideas to somewhere else. Like the Beatles fled England to NYC (hard to think of it as a tax haven!) to avoid 95% taxation. The return to England’s treasury went from 95% to 0%. That worked…
Spending less, or at least more efficiently works as well.
“YOU CANT TAX AND REGULATE YOUR WAY TO PROSPERITY”
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And you can’t get there by indiscriminately cutting taxes and cutting regulations either.
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Here is what creates prosperity. We have a hard working population up and down the economic ladder. We have the richest nation in history and on the planet. Yet the prosperity of this nation is STOLEN from much of the population to give it to the RICHEST in greater and greater abundance.
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We are the richest and most prosperous country in history and on the planet. Say that ten times. And then explain to me why we cannot treat our working and middle class better, provide all levels of education effectively for reasonable cost, provide health care for every citizen, and provide sufficient numbers of well-paid living wage jobs so that every family can have adequate food and decent housing. Why is that not happening? A failure of the poor who have no power? Or a failure of the powerful and selfish rich?
It is a failure of the powerful and selfish rich…..I agree. The ones that run our government and puppet our politicians. Even when they try to help the “average joe” (i.e. ACA) they grease their own palms and the rich get richer. That’s the problem, not our tax code.
Thank you Peter. But i would argue that the tax code is the payday, kr one of them, by which corrupt politicians reward the powerful and selfish rich.
I don’t disagree here. And no politician is immune to this. This is not a one-party issue. We need an outside force to break through – a more populist party. Not a populist candidate in a major party (like Trump) – but a populist party. If you truly want what you say you want. The Dems and Republicans need to go the way of the dinosaurs.
In this sense, Bernie might be part of your answer. I know you disagree with the far end of his policies, but you also know that no President gets all that he wants. There are always pressures and constraints that pull the country back toward the middle. A Bernie-led Dem-Socialist party by whatever name could replace the current Dems, and eventually the TrumpGOP monster will flame-out (hoping real soon) and something else will rise from those ashes. I don’t have a problem with replacing parties, but unless really new blood gets in place at the state legislature and US Congress level, new parties with old people won’t mean much.
I was a big supporter of Bernie’s campaign. He and Trump were the two that I wanted to win….mainly since they were not funded by the big Washington money. And we see how that went….. Agree that new parties funded by the same big money won’t help at all. We need reform to our campaigning and election process for their to be change beyond Congress.
“We are the richest and most prosperous country in history and on the planet” So why do we need to blow that up? All those things are laudable, but the government has proven over and over it sucks at delivering any of them in an effective way. This is because we have politicians and bureaucrats who are incentivized to help themselves over the people. So, local>state>Federal political power is what I advocate. Where people are more aware and responsive to the electorate because they live there.
Middle class, working-class, and poor always do better when Democrats run things. Even allowing for lag time, President vs Congress, etc. If government is broken, it is because GOP believes it is incapable and proves it every time they take control. Clinton cleaned up after Reagan/Bush; Obama cleaned up after Bush2. It will take awhile for Dems/ Liberals/ Progressives to clean up after this current Republican/ Trumpist catastrophe.
I’m tired of trying to speak nicely and non-partisan. The Republican Party is a total disgrace and should be trashed. The traditional GOP electorate is dying and fading. The Trumpist electorate is deluded and disheveled and deplorable. The Progressive electorate could use some re-organization but they are on the upswing. Pray for a Progressive takeover in 2018 and 2020 to save the country.
I like local control of local issues: education, higher minimum wage for cities, control over urban fracking. I really wish the Authoritarian Republican State Overbearing LEgislatures (ARSOLEs ; ok that’s juvenile but I need a laugh) would stop imposing state will on cities that prevents such local control.
Obviously, some issues require or benefit from common standards nationally, and these should be regulated and managed at federal level.
Stevendad,
Middle class and poor incomes stagnant for 35 years.
Real minimum wage 20% lower now than average in 60’s and 70’s.
90% of Americans have income share 25% smaller than 1980, while upper 1% have 100% larger.
The Americans I am defending want more, more, more because they have only been getting LESS, LESS, LESS. Only the 1% have been getting MORE, MORE, MORE, and no they are not the Gods of Job Creation, or the Lords of Economic Wisdom. They are just power-hungry and wealth-hungry, and are oblivious to the needs of the people of this nation.
The people I am defending don’t want government handouts. They want a fair wage for a day’s work, a fair economy, and to stop getting SCREWED by the unscrupulous fat-cat financial industry, the greedy banks, the overpaid CEOs, and the politicians who needlessly pass out big tax cuts to the rich.
Look at what is happening in DC. Yet another attempt by the godforsaken GOP (Godforsaken Oligarchs and Plutocrats, I like that) to give out money to the rich while figuring out how to remove the meager benefits of the poor. I’m pissed. Trump’s approval ratings are heading to be as low as Congress’s and I hope to high heaven we get some Democrats in charge in 2020 to fix this economy and give the middle class some relief, because the GOP is once again running up the national charge account and destroy our institutions as they do EVERY TIME they get in power since and including Reagan.
The biggest “fat cat screwers” come from the Progressive darlings of Silicon Valley. Can you not see that?
I’m all for simplifying taxes by essentially changing everyone to AMT, which is close to what current plan does, but NOT attempting to decrease anyone’s taxes until we bend the debt curve. This is a mistake as I’ve said before. The corporate tax needs to drop, but in a revenue neutral way as I’ve described (I’ve sent this plan to my Senator). Then we need to build in a long term debt reduction plan, raising tax rates when Congress spends more, but dropping rates when they spend less. We adjust COLAs every year for Soc Sec, why not adjust rates on income? That would sure raise the awareness of the public when it comes DIRECTLY out of their pockets. And, SH, I’m not opposed to helping the poor, health, education, essentially all of your goals, but we have leveraged ourselves to the point that MORE spending on anything is totally out of the question. Your solutions are rooted in the Federal government increasing in size and scope and somehow leveling wages. Again, I and 80% of Americans, think they suck at it and you continually want to give them more money and power. Can you really NOT see the folly of that? I’m with Peter, a three or more party (which we essentially had until the 80’s) is much more effective in governing. But alas, Gary Johnson stunk…
“raising tax rates when Congress spends more, but dropping rates when they spend less” I’m ok with that.
Cool, would definitely bring accountability of Federal spending down to the average person.
We HAVE to spend some money in the near future on infrastructure. We HAVE to invest in healthcare. These cannot be “out of the question”. If we have to raise taxes on the wealthiest and cut fat where we can find it to meet these NECESSITIES, then DO IT. Just don’t kick grandma out in the cold to do it.
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And tax rate cuts to corporations to keep US competitive are fine IF balanced against increases in high income/investor tax rates and cutting big corporation loopholes (that often zero their taxes) to keep things at least revenue neutral or revenue positive for that set of changes. I have no problem with more taxation of “Progressive” led corporations like Apple, Google, Amazon, Micosoft, etc. They are getting too big and too monopolistic. Let them share their cash-hoard with the treasury.
Wow, I almost totally agree on these. Finance infrastructure at least half with user fees and I’m in. Tort reform and logical deregulation for healthcare would cut 10-20% and rebalance the whole mess and leave plenty to cover grandma and everyone else. And set up a special “securities as income tax” to capture a HUGE proportion of wealth inequality. Just quit going the “$250k and over” income tax well. See, we can agree…
You always pick the abberantly high late 60’s and 70’s as you minimum wage Nirvana. It was NOT typical of the minimum wage era as a whole and was a contributor to runaway inflation in late 70s in part. It must be, more money chasing goods. A modest increase in minimum wage is fine, but I still feel is much better locally determined as there are variations of over 200% in cost of living from locality to locality. So $20 is more appropriate in NYC and $8 in Gotebo. Spending power is ALMOST IDENTICAL at these levels. Isn’t that what matters?
“You always pick the abberantly high late 60’s and 70’s as you minimum wage Nirvana.”
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Perhaps it is because it is the minimum wage I am familiar with, the wage I made as a teenager working Camera Dept in a drugstore and unloading trucks at Target in mid to late 70’s. It was not a King’s ransom. It was not excessive. It’s a good baseline.
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“It was NOT typical of the minimum wage era as a whole…”
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It ramped up to that point and then fell in decline as high income disparity came in to play. 1960-1980 is my baseline. The chart I see had minimum wage of 8 to $10 in 2012 dollars, visual average of $9.00, or $9.68 in 2017 dollars. This is not an aberration or a cherry pick. Including years before or after that point would be a cherry pick. It is an average over the last 20 years before high income disparity kicked in, which is what makes sense for my argument.
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“… and was a contributor to runaway inflation in late 70s in part.”
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Prove it.
Econ 101.More money chasing finite goods equals inflation. From the Fed: “Demand-pull inflation occurs when aggregate demand for goods and services in an economy rises more rapidly than an economy’s productive capacity.” More money = more demand = inflation. Of course, the Fed May be wrong. So, according to the Fed, increased wages must lead to inflation at least until production can catch up. So as, as I said, this had to be part. The article also mentions increased raw cost inflation, which also occurred in 70’s. It was a perfect storm… Proof.
Exactly. Was just about to type this Econ 101 explanation. The policies of the 60s led to a pretty awful economic crisis in the 70s if memory serves….
National minimum wage is a minimum applicable to all. States and cities can raise minimum wage for their localities. That solves your un-even cost of living problem.
Right, and $8 / hr is plenty in Gotebo. So there is your base.
Peter: Well it’s been a month. Not sure if we bored or wore down Steven H. Regardless, I appreciate your insight and knowledge as well as Steven’s. Thanks for the fantastic conversation!
Yes I totally agree. Thanks to you as well. Hopefully some others will pop in here down the road Was a fun discussion…
Many relatively unknown authors earn that much and more.
You omitted doctors in this catogory. Lots of them make $400,000 or more a year.
They are in the picture. 🙂
They were in the original picture, but it recently changed. Surgeons and specialists are #2 in the text.
SH: Way down listed 10 ways (it took me longer to type than think of them)I disagree with Rebuplican platforms and ideas. I’m sure there are more. Still think in a Repub hack? Still waiting for the ONE THING you disagree with the Dems about.
A few more stances Repubs like I don’t have: metadata collection, civil asset forfeiture without due process, school prayer.
I think the military guarding the Persian Gulf (where we don’t get oil) and the 3rd, 4th and 11th world economy militarily. Not Repub ideas..
I’ve also never suggested cutting income taxes -and am for eliminating some loopholes for the rich.
Although I want to eliminate the inheritance tax. I would replace with wealth tax. Again, small cuts year after year rather than a huge swipe at death. And no tax advantages for trusts.
Too many great ideas! Steven H gonna have to change the subject quick to avoid addressing all of this. Thanks to both of you guys for all of this. I hope people read it and find the reason in it. So many reasonable solutions and things that would help the country if politics, emotion and BS (like reparations) would step aside.
Again SH, I’m curious…how do you FORCE money from CEOs and business owners into the middle class without crushing small businesses? “Raise taxes, raise min wage” won’t work. And if the Dems get their way and give everyone healthcare, free college, etc it sure doesn’t sound like they want to reduce debt. They want increase taxes, give away stuff, take a cut, repeat. That sounds familiar…. Debt is the key and the Dems are not even talking about it.
From CNN: “A broad 63% of Americans say the economy is in “very good” or “somewhat good” condition in a new CNN poll conducted by SSRS, matching the best number on this question stretching all the way back April 2001.
Perhaps just as importantly, the number has climbed 15 percentage points since November, powered by increases among every demographic group available but Democrats.”
I did foretell this several months ago. My “elves” still see dramatic growth coming. Maybe Trump’s “probusiness” attitude may help all this mess after all. Looks like it could be “4 more years” for better or worse on the present track. At least it’ll be entertaining! Oh, and a tighter job market and booming economy will raise wages (not by force) and government revenue (hopefully not squandered). We’ll all win. And the Dems will get increasingly crazed and desperate. When the present party fails, we old school Liberals (now Libertarians) will take over the world and leave everyone alone!!!!
Exactly! And hopefully Trump ruins the Republican Party from within as well. Everything I’m seeing/reading is also predicting significant economic growth – the first big numbers we have seen in 10-15 years. Remember, the stock market is historically a leading indicator…..the growth is coming and think this time it will come all the way through the quintiles, which will make SH happy as well. Lots of reasons to be positive.
StevenH: we get caught in the minutiae a bit and I get a little sarcastic and on occasion a little p/o’d at you (&a visa versa), but is this a fair assessment? You wish that we raise taxes on the rich and use that money to rebuild infrastructure, retrain our populace (both trade and college), give healthcare to all and give more money to the poor. Fair enough?
I found a post from James that gives our position (at least mine) you never answered:
James says:
August 4, 2017 at 6:19 am
Never understand the resistance to the two pronged idea of 1) working down the deficit, being smarter fiscally, reforming bloated programs and 2) individuals practicing SWEAR, working hard, saving money, etc. is so offensive to some. Just seems like obvious, practical solutions that would help our nation as a whole.
That’s just it in a nutshell.
Why are these so objectionable to you?
My take: Your plans will slow the economy and accelerate the debt crisis. Hard to argue either and that’s my objection. I like and the respect the poor (as an alumnus as is my wife) more than you in my opinion. The debt is like a huge reservoir of water, held back by a failing dam. I’m trying to go through the thought problems of how to harden the poor against the flood and trying to reduce the water. You are trying to add water to the reservoir and ask people to sit tight and wait for help. This will only hasten the bursting of the dam and worsen ensuing flood and destruction. I’m sure you’ll again find me cynical and cruel. In the long run, if we continue or accelerate our present course the institutions you put so much faith in that will be cynical and cruel, but to a much greater degree. We MUST suffer some pain soon across the board or all will suffer much more later. That’s all I’m saying.
Stevendad, there is NOTHING wrong with your two pronged approach. What is wrong with accelerating that process with a 3rd prong? The third prong is to reform taxes to provide a highly progressive tax rate structure with marginal rates of 50, 60, and 70% on the highest earners. Why do that?
1) Increased revenue will lower the debt quicker.
2) Encourages responsible investment. Caches of wealth at the top tend to accelerate economic instability. Witness the rush to investment in housing market and questionable and risky financial schemes that contributed to the 2008 crisis.
3) Calms populist unrest. People across the country believe they are being cheated by the rich. Restoring a highly progressive tax structure will make everyone feel we are moving to a better balanced economy.
4) Proven success. The ONLY times we have effectively and quickly paid down debts from this level are when we had more highly progressive income tax rates than today.
The 25 % pays 85 % of taxes, the 10% pays 70%, the 1% almost 40%. Sounds progressive to me. The system is highly progressive, approaching 60% in several places JUST in incomee taxes without sales tax, real estate tax, etc. Ive asked before, how much is enough? 70% would exceed 100% in some locales (70% + 4% +8.5% in NYC plus sales tax of 9% plus usage fees, real estate taxes)? You harken back to preReagan brackets, but effective taxation was much lower than posted rate as there were a jillion deductions. It always slows the economy to raise taxes. Revenue from income will go from the highly taxed to the lower taxed and thus collections. Think about it: $1000000 taxed at 43%% yields $430,000. If it is pushed down to those in 10% bracket yields $100,000. Ok, throw in employment taxes and its $257,000, still less.
What would really raise revenue is getting money that is sitting in investments to circulate more. Remember, the government makes money on the transaction. If there was just a way to get that to circulate some: maybe like a wealth tax?
And I see all kinds of ways you want to increase spending. That’s “adding water”. The dam is the ability of our government to borrow at reasonable rates in my analogy BTW. It bursts in about $9T.
So no, I think you’re wrong…..
“The 25 % pays 85 % of taxes, the 10% pays 70%, the 1% almost 40%. Sounds progressive to me. ”
I have explained to you before why this is deceptive. Of course the rich pay more because they HAVE more. If you double your income you double the percentage of taxes paid and the tax SHARE contributed. But income tax SHARE is less important than income tax RATE. And the income tax RATE on the wealthy, while only recently increased somewhat, is still lower than in the decades when we reliably paid down national debt.
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These tax foundation tables only go back to 1980 and up to 2014.
https://taxfoundation.org/summary-latest-federal-income-tax-data-2016-update/
But you can peruse those tables and see that from 1980 to 2014, the income share of the 1% more than doubled (2.4x, or 140% increase), from 8.5% to 20.6%, while the tax shares also went up a bit less than that from 19% to 39.5% (2.08x or 108% increase). But the effective tax RATE went DOWN from 34.5% to 27.7%.
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Tell me, do you think it would be a good deal for you to get double your income but have to pay 3x in taxes? I would take that deal in a minute. If you got a million dollar income but paid about 35% (1980 rate) in federal income taxes, you get 650K net income with 350K in taxes. If you double that income to 2 million (same job, same skill, same effort), but triple the taxes to 1.05M, you still have a 95)K net income. Sound sweet?
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What we have offered our wealthy is even better. 2.4x the income SHARE, plus all of the benefits of 35 years of Real GDP increase (an additional 2.5x multiplier), and LOWERING the effective tax rate by 20%.
This is the deal the very rich have been provided by the American economy and government. It is a very very bad deal for the country.
$950K, not 95)K. Typo.
You looking at this all wrong. Why is the increase Obama put on the rich not enough? When do we actually start cutting things?
“And the income tax RATE on the wealthy, while only recently increased somewhat, is still lower than in the decades when we reliably paid down national debt.” There were lots of deductions and that made the effective rate much lower. Most of the disparity is not in wage income, but investment income. See previous discussions on raising capital gains tax while lowering corporate taxes. My point, again, is that for you to say it’s not progressive is ludicrous. It’s not just progressive ENOUGH. As always, true to a Dem, you want MORE. MORE killed our unions and manufacturing in this country. Let me introduce you to a concept: ENOUGH.
You avoided the question: how much is enough? Should the rich be taxed 90%? 100%? (total) or 105%? And at what point do they just take their capital and leave. People DO move to avoid excessive taxation: CA to TX comes to mind. And here’s a Beatles lyric protesting 98%(!) taxation:
Let me tell you how it will be.
That’s one for you, 19 for me…
Should 5 percent appear too small,
Be thankful I don’t take it all.
And then they moved to NY…
“It always slows the economy to raise taxes. ” False. Reference Obama and Clinton. No economic slowdown after raised taxes.
“Reagan, and Bush tax cuts increased government debt” True.
“But Reagan and Bush Tax cuts provided lasting economic growth.” False. Reagan/Bush1 economic growth just barely exceeded debt growth. Bush2 economic growth was less than debt growth.
Reasonable tax increases on rich to achieve debt reduction are good for the economy.
Tax cuts to the rich are generally bad for debt and the economy.
So much wrong in this but let me keep it simple. Economy grew with rising taxes during Clinton due to the explosion of the internet. Obama didn’t raise taxes on the rich until the last couple of years of his second term. And the economy crawled during his entire administration.
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Agree also on the dramatic portrayal of unrest. I like in DC area and see the “marches” with my eyes vs the nonsense they show on TV. The protesting and anger downtown is honestly not one bit different than it was every other year I have lived here. Don’t believe it…. if there isn’t any unrest it is the public being sick of being lied to and over promised by politicians. That’s why they rejected Hillary and other establishment candidates.
Re: Clinton. It worked because tax cuts went with debt reduction. It happened ONCE. I guess your “trusted” government will do it again. Whatever. You have to do BOTH, as occurred in Clinton years and as I advocate. But taxes HAVE gone up, so the debt reduction…well we’re still waiting. I’m not sure how to evaluate Obama as MASSIVE debt increase and UNPRECEDENTED Fed action distorted everything. Just a little reminder: https://www.google.com/search?q=us+debt+gdp+ratio+historical+chart+back+to+1945&client=safari&hl=en-us&prmd=insv&source=lnms&tbm=isch&sa=X&ved=0ahUKEwiSqY6Ljr7WAhXnqFQKHfJFB0oQ_AUIESgB&biw=1024&bih=649#imgrc=w98jRUt6e1XRtM:
Unrest is dramatically overstated IMHO, just makes for good TV. And, AGAIN, you want to increase the power and revenue of the people that are filling the dam past it’s ability to withstand. And the public is highly distrustful of the government (please don’t make me drag all those pathetic numbers up again). Always puzzling…
Cue up Einstein’s quote: “the definition of insanity is doing the same thing over and over and expecting a different result.”
Oh week, I suppose we’ll still be here in 10 years when the dam bursts. If we’re not economically (debt) or literally (climate change) under water…
WHY are you so damnably opposed to increasing government revenue if you want to cut government debt?
Debt = sum of deficits
Deficit = revenue – expense
Because BOTH need to happen. I’ve recommended several taxes (VAT, wealth, eliminate carried interest, transaction tax), all directly to debt reduction in my world. Just no more income tax increases.
Why is your plan (what we have done) not the “definition of insanity”? At least they are different.
Yes unrest is way overstated. It could never make a difference in real national politics, like by nearly electing a socialist as the Democrat Presidential candidate or by actually electing a fascist incompetent populist promising impossible fantasies of simultaneous huge tax cuts, healthcare for everybody, trillions in infrastructure investment, and a restoration of a manufacturing economy. Nobody would really fall for that. The unrest is just fake news. I wish.
Whatever. The “unrest” is highly magnified. Most people do not want to take to the streets and march. People at work and sitting at home grumbling make for bad TV. But yes, nearly all think our government is dysfunctional and just sucks. (Pew poll 18% of Americans trust government to do the right thing). And yet you want to give them MORE?!? This is the recurrent flaw in you “logic” SH. As far as Trump, he’s not a Facist, racist, you’re just smoking the media joint on this. He definitely could use more politic in what he says. Of course he said a bunch of difficult and likely impossible things, like “if you your doctor you can keep your doctor, if you like your plan you can keep your plan.” Oh wait, that was someone else. Politicians all make promises like that. And Trump probably really believes what he said. If the economy grows 6% like he thinks it will (I’m more than skeptical) then all those things MIGHT be doable.
“70% would exceed 100% in some locales.” No.
1) State taxes reduce federal taxes. Total tax rates could never exceed 100%.
2) 70% would be a marginal rate on incomes of say, $1B. It is not an effective rate on the entire income.
Marginal rates become effective rates when the numbers are that large. Come on now. I can’t draw the math up for you if you need me to.
And of course investment income SEEMS lower, but is TAXED higher as it is double taxed. First 24.5% corporate, then 23.8% = 48.3%. That is NOT included in your calculations of course even though it direct tax on their assets paid indirectly by the owners. So half is not enough for you? Plus state and local? And Bernie wants to take the cap off Soc Security contributions and apply them to capital gains. So under our our present system in NY it’s 48.3% (on capital gains)+ 12.5%(state and local) + 8.85% (sales) =69.65%. Is 70% enough? And in Bernie’s world add 15.3% = 84.95%. Is 85% enough? In your 70% world it’s 91.35%. Is keeping 8.65% of each dollar “fair”? And if Bernie’s SS / MC plan it is then 6.65 percent IN THE HOLE. Yes, you lose money for making money! Do you think rich people are STUPID? None of it’s a stretch, it’s all out there. Dems must learn ENOUGH and not MORE all the time.
A limit! I loved calculus!
1) that’s not the present law. Not in the AMT which a huge percentage of the rich pay. So you subsidize CA and NY over TX and FL? That’s what this does….
#3 is ridiculous. Only in the world of Steven H. A) don’t think the unrest is what you think it is and B) don’t think a “more progressive” tax code would do squat to calm it. Are things calmer since Obama raised taxes on the rich?
Stevendad,
We both want to help the poor. And we both want to see the economy succeed and improve. Your 2 prongs are a help to achieving both.
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However, I think we also both recognize that we will have to go through some pain in transition to transform our economy. Do we put most of that pain on the poorest AND the middle class who have already suffered through suppressed incomes, mortgage losses, lost jobs, student debt, rising medical costs and all the other problems we have discussed here? Or do we put more of that pain on the wealthiest 1%, who receive about as much annual income as our entire federal government and have more than doubled their income share? And is “pain” even the right word when this burden is on the wealthy? It’s just money. Increased taxes on the most wealthy just drops their living standard. It doesn’t kill them or their children or put them in crushing debt. But slashing economic assistance and social programs to the poor and middle class IS life threatening. ===
And what GOOD does it do the economy to have an extra 10 to 15% income share going to the very rich? Does it improve the economy? Has economic growth accelerated since the shift to the rich happened? No. There is no evidence that it is good for the country to have high income disparity and a huge share of the nation’s income stripped from the middle class and moved to the rich. All of the evidence is to the opposite. Economic instability, political corruption, massive national debt, populist unrest, decline of middle class, all tied at least partially to the middle class having too little and the rich having too much.
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There is a big pile of wasted money in the corner with a pampered oligarchy guarding it. You tell me why that shouldn’t be used for the good of the economy.
Not ONCE have I suggested “slashing public assistance or social programs”. You just want to take the rich’s money and give it to the poor. Period.
Peter, would it help if, instead of you placing the thought “Steven H thinks people are owed … “, you instead think, “Steven H would prefer to live in a society where …”
e.g.
I would prefer to live in a society where:
– a middle class family can afford to send their child to quality colleges.
– on average, all economic classes have improved income as the economy improves
– on average, working children are able to exceed their parent’s incomes.
– on average, as the economy improves, the funds to help the poor, the elderly, and disadvantaged are expanded.
To quote Stevendad. This says it all -“the poor without anything from the underground economy rank 42nd in the world. How high should they be? Should we just divide all the money equally?
You and your party’s short term thinking will doom the poor long term. That’s my only thought. The government behemoth has become counterproductive and you think it is the answer to all. It has created the problem and you expect that giving it more money and power will solve it. Ridiculous.”
Peter: ‘This says it all -“the poor without anything from the underground economy rank 42nd in the world. How high should they be? Should we just divide all the money equally?’
1) I’m not convinced of stevendad’s statistics ranking our poor against the world.
2) I don’t really care about how our poor rank against the world. There are a lot of crappy places to live in the world. My goal is not to match our poor against the lowest nations.
3) Our poor are better off than they would be BECAUSE of the government programs that politicians are trying to CUT. We SHOULD be advancing low cost education, decent training, job mentoring, low cost housing, higher minimum wage to IMPROVE and LOWER the poverty rate, but because we don’t do those things, or don’t do them enough, the war on poverty has become little more than a safety net and a slowly dropping floor. And politicians preaching debt-lowering have their eyes on slashing that net. So the question is: How low do you want to push our poor before they are poor enough for you?
4) The overarching difference in our perspectives, it seems to me is that you think cutting government will fix debt and other problems. I think cutting government will do nothing more than lower taxes on rich, cut social assistance to poor, slow the economy, increase economic instability, and bring on the next recession. I don’t believe bigger and bigger government is the answer to all problems. But I sure as L know that small and weak government isn’t either. I do believe that strong and smart and competent government is possible and necessary to be a PART of the solutions. Submitting to the politician-corrupting oligarchs who want to slash government just to improve their likelihood of tax cuts, cuts to social programs and increased profits through suppressed wages is not a way to improve our economy or our country.
You should research #1. Absolute indisputable fact.
And please stop focusing on cutting social programs or assistance. I DO NOT WANT TO DO THIS. Never have even hinted at this. Do I need to re-list the things I want to cut? None of them hurt the poor….in fact cracking down on illegal immigration and ending the drug war HELP the poor immensely.
Me as well. I’ve never advocated cutting benefits. Yes, we should distribute money more efficiently and address root causes of poverty in education and mental health. This is a straw man you put up for Peter and I incessantly. My point is that it’s not that bad for them and we don’t need MORE across the board. Raise taxes, give stuff away, take a cut. EEPEAT. Lklike the good Dem lemming you are.
Agreed…..
Peter: What I don’t agree with is statements like “a middle class family should be able to send their child to quality colleges”.
Wow. THAT offends you? Well let me offend you some more.
I think that when a country’s economy expands:
– on average, all economic classes within that country should improve as well.
– on average, working children should be able to exceed their parent’s incomes.
– on average, as the ability for society to help the poor, the elderly, and disadvantaged improves, the funds that support those programs should be expanded.
Do I think that is what people are owed? No, I think it is a vision for a decent society.
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And you probably won’t like this either:
Observe that the necessities of life — food, shelter and transportation — are the greatest expense of the poor, and the greater part of their little revenue is spent in getting it. In contrast, the luxuries and vanities of life occasion the principal expense of the rich. Therefore, it is completely reasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
Some have noted that the collection of taxes already falls principally on the rich. But I say that it is our desire to make them contribute the whole money we want, if possible. The rich must be made to pay for their luxuries. And we have a hope that they will furnish enough for all the expenses of government and the interest of our whole public debt. I tell you now that an enormous proportion of property vested in a few individuals is dangerous to the rights and destructive of the common happiness of mankind; and, therefore, every free state has a right by its laws to discourage the possession of such property. It is the government’s prerogative to take such action because property superfluous to basic survival of the individual and family is in fact the property of the government, who, by its laws has created the nation’s wealth, and so it may therefore dispose of or recall that wealth at will, whenever the needs and welfare of the country’s citizens require it. Therefore, we ought to go as far as may be practical in making the luxury of the rich a tributary to the public treasury, in order to diminish the taxation burden on the poor.
From my experience, I have seen that man is an animal which devours his own kind, for I can apply no milder term to the general prey of the rich on the poor. So the greater goal is to establish political equality by blocking the opportunities of the fortunate few to accumulate an immoderate, and often an unmerited and unearned accumulation of riches. Instead, there ought to be a smooth and silent operation of laws and policy which reduce levels of extreme wealth and raise people up from extreme poverty towards a humane and comfortable standard. Indeed, the poor and middle classes should see the government supported, their children educated, and the face of this country made a paradise by the contributions of the rich alone, without anyone else being called on to spend a cent from their earnings. It is in fact a happy and fortunate circumstance that the interests of the government and this nation coincide with a proper distribution of the public tax burdens, and also with the need to guard the least wealthy part of the community from oppression.
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I see the above statements as a vision for a decent society. I guess you would just see them as a disgusting assertion of what some believe may be “owed” to the undeserving.
We have all of this already. Almost everything you said that was true is already in place. So how much is enough? We have asked you this question at least a dozen times. You will always want more. And they will always spend more. It’s worse than “trickle down” as far as doubling down on failed ideas.
More? Where is more? Only to the 1%. Everyone else is getting less of the pie. The real doubling down on failed ideas is the reliance on the ideas our current government is trying to accomplish. Their priorities are:
1) Slash social programs.
2) Cut taxes to rich
3) Spend on infrastructure (good idea but only with tax increase to pay for it)
Borrow and spend and tax cuts to themselves is the Republican way. See you at the next recession if they get their way.
Again I only want #3. Hopefully someone who thinks like this will show up so you can argue with them.
I disagree with first two and number 3 only if paid for. And you say I’m a Reuplican hack? Idiotic.
And nothing you said “offended” me. Just disagreement.
Wow! Is that from the Communist Manifesto? And those greedy Repubs who are the largest givers to charity in the history of mankind? Its so easy to I gnore that. Sure there are those who overindulge, but it’s interesting the three richest Americans are Dems. I say tax them 10% of wealth and 200% of their income. It’s not my money….
“No one wants to be told to be more frugal by the very people whose incomes and wealth seem to be derived from vacuuming up the wallets of those below them.” So who is vacuuming? Are you saying the rich steal from the poor? The government is the ONLY one taking money out of my wallet. The rest I spend freely.
Another “straw man”? I’ll just start going back and using your quotes. It’s tedious but may actually let you hear yourself.
Yes that would be helpful…..every time we get him backed into an uncomfortable spot he says “I don’t believe your stats” or “I haven’t had time to research” or lately, argues against points neither of us make (like cutting social programs). Lord help us if Congress is this dense
I am saying that the current populist unrest is built upon the notion that political influence of the most wealthy, and the resulting national policies, have redistributed incomes and wealth from the poor and middle class to the very rich. The majority of the nation believes this. I believe it too. You can call it theft if you like. I just think it is bad and unsustainable policy
Peter: “I’m not sure why working on helping the mentally ill, increasing charity’s role and adding incentives for giving, revamping education to tailor to today’s jobs, providing affordable base health care for all, reducing illegal immigration, providing incentives for companies to keep production in the US, etc. makes us poor-hating people.”
StevenH: “What I propose is a more balanced economy with job opportunities, affordable college and medical care, and wages which will support families without having to rely on the dreaded government handout. Government policy to help establish and maintain a sustainable economy is what I am after. And that is not the same as a handout. It is allowing people to get a leg up and earn their living.”
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How are those ideals any different? And yet, you turn around and twist my words into something you despise, as an assertion of what is “fair” and “owed”?
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When you want affordable health care, it’s your vision for a better world. When I want affordable health care, I am saying people are “owed” something. Is there really no way for me to say something to you without you distorting it into something not intended?
Because I think my version of government provided health care is far different than yours.
SH. Your recurring theme is helping the poor. As is mine. However, my outlook is that if we don’t become more efficient and eliminate a huge portion of the government largesse the debt time bomb will explode ($29T per GAO) and CRUSH everyone without assets, i.e. wealth. That is FAR AND AWAY more concentrated than income. Then we WILL have the Second Great Depression and no ability to borrow our way out of it. That’s why I (and I think Peter) keep talking about reigning in waste, holding steady on benefits, decreasing nation building, zero based budgeting, etc. And I, more so than Peter, talk about targeted taxes that avoid soaking the hard working, honest taxpayer who already pays 86.78% of the bill (top 25%) or 70% of the bill 1 in 10 Americans). Again this is a real and present danger that dwarfs climate change effects over the next decade. Funny almost no one talks about it….
Because it would be an unpopular position to take for a politician. … Nobody from the major parties is going to be able to take a stance like this. And the average person doesn’t realize how bad this is – or the looming catastrophe awaiting the poor when the bubble bursts.
Moving this to top because it was getting buried. Here is stevendad’s post first.
===Stevendad: ===
I didn’t include any underground income in initial analysis. Family spending is 2.3 times income in the lowest quintile due to benefits. 2015 median household income $12,457 x 2.3 = $28,651, 25th in the world, just above Chile (also above Poland, Greece, Portugal) It is hard to find this, as I’ve said before. And again this excludes private donations, free phones, etc. SNAP $6000 per family of 4. EIC $4600 per family of 4. Medicaid $10,00o (family of 4). So that number may a bit low in a family of four. This excludes housing benefits, private and state administered donations such as TANF. So $20,600 + $12,457 is more yet.
So if you EVENLY ( as you say I didn’t) distribute underground income $2.0T in 2012 (likely higher now, but NOT inflated to satisfy you) across 125M households = $16,000 per household then you get over $44 k ($28k + $16k) on low end and $49 k ($33k + $16k) on high end. The low end is between France and Germany, both above the U.K. If you make my initial assumption, half underground concentrated in lowest quintile, it is $40k ($2T/ 2 / 25M households) and goes above US median income ($60,154) at $68,651 and highest in the world. So, no I didn’t “over attribute” underground income. Sorry, you’re just absolutely wrong again. But again, the TRULY poor are better off than several European countries, even if they have ZERO underground income.
Questions and comments. Sorry if I have lost track of some of your initial analysis, but I have to ask about some of your statements.
1) “Family spending is 2.3 times income in the lowest quintile due to benefits.” This statistic doesn’t seem to match up with anything I have seen. Please give reference. See CBO report for 2013 here.
https://www.cbo.gov/publication/51361
Market household income for lowest quintile is $15,800, with all federal transfers and benefits adding another $9,600, Net after tax income is $24,500. If you assume all of the income is spent, and get the ratio of spending with benefits to just pre-tax market income, you get 1.55x, not 2.3x.
2) My recollection of the Census surveys was that they include spending from any source. If you use these numbers, you must assume they include (and in fact are the basis for revealing) shadow economy income.
3) This also means that “lowest quintile” stats are hiding some outlier incomes (quintile masqueraders) that may distort the numbers for the true residents of lowest quintile.
4) Since the lowest quintile has only about 6% of all reported post-tax income (including transfers and benefits), it is not at all reasonable to assume that half, or even a fifth of all shadow economy goes to that quintile. You would be saying that every household in lower quintile, on average, doubles (your low end) to quadruples (your high end) their market income of about $16K through the shadow economy. Sometimes, when you look at an analysis and get a surprising result, you have to sit back and notice that something does not add up. You have to question your assumptions. This is one of those times.
4) It would make more sense to assume that shadow economy is distributed nearly evenly by income. Thus, the total personal income (reported) in US was about 14T (includes income and benefits and transfers) and then using your 2T shadow income, we get a % increase of 2/14 or about 14%. Allowing that those in the lower quintiles may be more motivated to participate in shadow economy and hide higher percentages of their income, you might “guess” that actual incomes are 20 or 25% higher (rather than 14%) than reported, on average. But not 100% to 300% higher. That doesn’t make any sense, unless you are just trying to “prove” a predetermined conclusion.
The 14T income number was from 2012, to match the year of your 2T shadow economy statistic.
US estimate is 12% of total income, based on several methodologies including unexpected retail sale and electricity use.
Sorry my last #4 didn’t get renumbered to #5.
Also, as Peter pointed out, increased taxation also increases the motivation to operate in the shadow economy. So it should not be surprising that a large part of the shadow economy would come from higher incomes that are more highly taxed. Doing some work on the side for cash under the table has even more benefit for upper income than lower income.
Don’t agree with this at all in practicality. Why would someone like me engage in “cash under the table” and risk ruining my entire life (which is a pretty good one) for a few bucks? I actually did engage in the shadow economy somewhat heavily when I was younger (I won’t say how 🙂 haha) but it was more out of necessity. It would be STUPID for me to do this now. I don’t need the income and it would put my lifestyle and family at risk. Your logic just doesn’t hold up there….
What the studies meant about increased taxation motivating the shadow economy was on a societal level, not an individual one.
Yes, I know, but motivation all ultimately happens at an individual level.
Those dots don’t connect from what my initial statement was … that societies with higher taxes and more regulations tend to foster shadow economies. Has nothing to do with your attempt to separate this among quintiles or on an individual basis.
Without an in-depth study of the shadow economy, it is difficult to know how it is distributed. And no one is saying that everyone at every level participates. But I believe you said you pay for services in the shadow economy (maid? child care? don’t remember now). I pay cash for a sitter for my mom in assisted living. That’s not income for you and me but it is a savings. In other situations, a wealthy person might pay cash for a live-in maid, butler, or mechanic and they all benefit while contributing to the shadow economy. There are all kinds of possibilities that can be imagined, but I am not necessarily talking about a regular side business. Just wheeling and dealing that happens on the side.
My point is that it makes little sense to assume that there is $400M to $1T of shadow income to a group that only receives a total of about $400M of reported market pre-tax pre-benefit income. And if this is especially concentrated among a small population within the quintile (crime, drugs, legal shadow businesses except paying no taxes whatsoever) the shadow incomes within that community are even higher, more accurately putting them in a completely different income group. They certainly shouldn’t be used as part of an argument that the poor or not poor.
Actually yes, we pay maids that way simply because that’s how they are paid (in cash) with the assumption that they are reporting it and paying taxes on the money. But that’s about it.
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I think the bigger issue is that with more regulations, taxes, inconsistently enforced rules and general government-induced headaches for the average citizen in our society, the shadow economy rises up. Paying a maid or babysitter contributes slightly to the shadow economy. But the BIG numbers are laid out in drugs, gambling, black markets and illegal immigrant labor. Are you trying to say that each quintile has the same proportion of income from the shadow economy? The rich might contribute to it, but they don’t benefit from it at anywhere near the proportion the bottom quintile does. Hard to imagine how you would draw that equivalency.
Isn’t the point about who receives the INCOME from the shadow economy though? Doesn’t really matter who is putting money into it. That was the genesis of this discussion. The point was that our maid may show up with poverty-level income but actually be much better off than that due to the tax evasion she is practicing by not reporting her income. All my income is reported and taxed. Heavily.
You will be liable for your mother’s sitter’s payroll taxes and unemployment if she is caught (unlikely). This is the “nanny tax”. The 2.3 times was in National Review, but you arrived at almost the exact number so it seems moot. Even without shadow income our poor do quit well on a global basis. In fact, the are in the worldwide 80%tile with Fed benefits ALONE. People just aren’t as poor and limited in opportunities as you keep saying. The ONLY reason I point this out is that if we continue to salve the festering wound without MAJOR surgery, the patient will die. Of course there is more pain with surgery, but the long term outcome is better. Federal spending is exactly analogous to this.
I COMPLETELY AND UTTERLY WITHOUT A DOUBT AS MUCH AS I CAN COMPLETELY
disagree
3) I have seen this occur many times. Like the drug dealer with a Cadillac and a ($3000 (today’s dollars) per month) car phone in 1985. He had NO legitimate income. It’s not at all unreasonable.
4) my math is much less complicated and assumes nothing in an EVEN distribution. Let me walk you through it again:
125M/5 (definition of a quintile)= 25M households. Two trillion / 5 = $400 billion. $400,000,000,000 / 25,000,000 households= $400,000/25 = $16,000/household. No assumptions or misplaced fractions. Simple arithmetic.
You can’t make a gigantic unreasonable assumption that underpins your entire argument and then claim you make no assumptions. Per capita distribution of the shadow economy is a HUGE assumption and guaranteed to be way off base. There is no way that the typical lowest quintile earner earns 100% as much in shadow income as reported market income. A sizable percentage of that population are retirees in nursing homes. How are they getting that shadow income? And IF (a really big IF) the quintile masqueraders of criminals and drug dealers and complete businesses hiding income are the big drivers being included in your lower quintile to drive up the numbers, then those incomes and populations have nothing whatsoever to do with the true members of that quintile, and that subverts your whole argument that the poor or not the poor. Your argument becomes “Averaging the incomes of the poor with organized crime and shady businesses is a larger income which proves the poor are not so poor.”
Ok. Whatever. I assumed EVEN distribution and stated it straightforwardly. My fireman friends tell me about the 70 inch flat screens they see in the houses of the poor. It never happens. And yet the poor without anything from the underground economy rank 42nd in the world. How high should they be? Should we just divide all the money equally?
You and your party’s short term thinking will doom the poor long term. That’s my only thought. The government behemoth has become counterproductive and you think it is the answer to all. It has created the problem and you expect that giving it more money and power will solve it. Ridiculous.
So have you volunteered in a drug rehab or kitchen yet?
Just how much of your income do you donate?
Thanks for backing up #3 by the way.
You’re welcome. You seem very supportive of criminals and cheaters.
Here’s some more free college stuff: Pell grants (not loans)
The maximum amount has increased for the 2014-2015 award year to $5,730.
AVERAGE community college is about $9k/yr (total), so loans could be about $15 k for your degree. There are many community colleges UNDER the Pell grant amount: http://www.affordablecolleges.com/rankings/community-colleges/
Free (yes, free) college programs that are solely income related or related to all graduates of a certain high school:https://www.google.com/amp/amp.timeinc.net/time/money/4830367/free-college-tuition-promise-programs/%3fsource=dam
So let’s see… no college opportunities….shot down in flames. Of course, you may not be able to scholar to go to Harvard and study humanities, but if you thrive at others, schools will pay your way COMPLETELY. My genius nephew had his PhD paid for at Harvard. So maybe there are opportunities for those who pursue them. Or we can wait for government rescue…
“No college opportunities”. Again something I never said. For someone who accused me of misquoting you, you have sure been making up a lot of crap.
You may have missed it, but there is a student debt crisis in this country. You are correct that there are some student grant opportunities for good students at lowest incomes and a few states have recently implemented free community colleges for high school graduates and residents within that state. Of course you can’t just drive in from out of state after high school and be eligible.
What you have identified are limited and regional opportunities for a few. Anybody can participate in these but not everyone can. Eligibility and funding are generally restricted.
There are the beginnings of some efforts to address college costs and loans. But it would not only be an exaggeration but a complete farce to imply that there is not a current problem with a long way yet to go in fixing it.
Oh come on. You’ve said over and over there are little to no opportunities.
Pell grants are available in entire US. Wrong. Junior colleges are cheap across the country. Wrong. The private liberal arts college is a costly disaster, yes. But there are MANY, MANY opportunities. They just may need to make better choices, not that there are no choices.
Community colleges are a good choice for starting out. Millennials are figuring out better choices and avoiding debt when they can. But the system is still broken. A middle class family (often ineligible for grants) should also be able to send their child to engineering or other quality colleges (not talking about Ivy League) without breaking the family economy and going into decades of debt. The examples you post are good guidance for individuals, but the national statistics still indicate we have a big problem to fix.
I have two children in college and can tell you it is a bit disgusting when you go through the process. Every college we visited looks like it has recently been renovated – brand new buildings, fancy dining halls, etc. In other words, stuff you don’t need to get a degree – but things that make the experience more expensive. Of course, RECORD numbers of people are applying for college when compared to 50 years ago. So demand is up, cost is higher. I do believe that basic economic principles will take hold as more people reject the 4-year state school and use community colleges and alternatives like you suggested.
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What I don’t agree with is statements like “a middle class family should be able to send their child to quality colleges”. Should a middle class family also be able to attend a professional sporting event? Should a middle class family be able to afford a Disney vacation? Because you know what???? They all manage that just fine in droves…..Sometimes things get too expensive and people have to be able to say NO. If more people start making these choices, rejecting out of state tuition or 4-year expensive colleges that leave their student with debt, then costs will adjust. Nobody has a right to go to Disney, nor do they have a right to go to Arizona State. Maybe a camping trip or a community college would be more sensible and leave the family without debt.
I’m not talking about rights and what is owed. I am talking about a broken system. We have seen better implementations of affordable state schools in the past and that can be used as guidance. Families should not be getting raked over the coals just because they are trying to obtain a decent education for their children or themselves. As we talk about the need for retraining and re-educating for new careers, we need to0 make that process affordable for high school graduates and mic-career job changes. I agree (SHOCK!) that the push for available loans via govt backing has made the problem even worse, but also the reluctance of states to fund and constrain tuitions on their own schools is a contributor. The push for free or continued low cost community colleges is a help, and states should continue this trend.
There are opportunities opening up, but we should not ignore that the system is still broken and causing a great drain on many families.
Maybe the old system is broken. The system where every capable child can go to State U for 4-5 years and have a meal plan, join a fraternity/sorority, study whatever interests them and have the generally accepted college experience. Yeah, that is probably gone as it is much less useful (and more expensive) in today’s society. But you can still do it if you want. An analogy would be someone who continues to buy all of their favorite movies on DVD or VHS, building their collection and complaining about how expensive it is – when they could just have Netflix or a streaming service for much less. Sure, it isn’t what their parents did or what they had in mind when they thought of the movie-watching experience. But times change. —
I really laugh about “families getting raked over the coals”. Say NO! Go to community college or follow one of the many programs that Stevendad has referenced. A dear friend of mine is doing this very thing now with their daughter. She is practically going to a state school for free now. There are many, many paths. People are lazy on this one and just want whatever they want without regard to the costs. I run a scholarship fund in my local community. Do you realize how few people apply for it? People don’t even know it exists, or put forth the effort to apply. Kind of along the lines of the 31% of all workers who have 401ks and don’t participate at all! That doesn’t make the 401k system flawed.
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Whining about the education costs isn’t going to get you anywhere. And asking the government to control costs in a private enterprise is a horrible, horrible, horrible idea. Just take an alternate path. There are many.
So start out. Each year of education adds thousands to income. And if you’re successful, colleges will fall all over themselves to pay your way for upper division and grad schools.
https://www.forbes.com/sites/zackfriedman/2017/02/21/student-loan-debt-statistics-2017/
Some stats on student debt crisis. fyi.
Right. And no one made a single bad choice about getting a liberal studies degree at a private university that lead to a barrista career. You think everyone should have zero accountability for poor choices. Quit asking our children and grandchildren to pay for their mistakes. These colleges are slowly pricing themselves out of existence.
“You think everyone should have zero accountability for poor choices. ”
You should really stop trying to tell me what I think, and exaggerating every single thing I say into a straw man position. I know you are just aching to make these straw man arguments and attribute them to me, and then knock them down and declare success. But really, such trolling taunts are better suited to the FoxNation comment page than here.
So you think people SHOULD be accountable for poor decisions? Should those who make repetitive mistakes face consequences? I just don’t remember that being a theme in your posts. Much more poor, downtrodden with no hope without your party rescuing them.. The debt time bomb is a disaster of frightening proportions. And you and they just want to make it worse.
Everything you say has this tone to it though…..you are constantly raging against the system and defending or minimizing the poor decision makers. You realize that don’t you? Is it all possible that the road isn’t as broken as you think it is? You don’t seem to want to believe that.
I have a theory that unpleasant tone gets amplified in the space between disagreeing people. Just ask any married couple. I try to be polite but I have no intent to walk on eggshells here. It’s certainly not what you folks do. Do you realize the tone of how you sound when you constantly deride Americans for their poor choices, their vacations, their decisions to eat out occasionally or send their children to a decent 4 year college, just like they attended when younger? I understand the message of frugality and economic balance. I understand that people will tend to overindulge. But you come across as blame blame blame. The middle class squeeze and the shift of income and wealth from middle to top is real. And people HAVE been compensating. It was the case in my father’s time that most middle class families lived well on a single income and good companies had a retirement plan and people could afford a decent doctor and a state college education for their kids. Now, with salaries stagnant for decades, company retirement plans obsolete, medical and education costs so high, two salaries are required and still sometimes insufficient. People can sacrifice. People do sacrifice. But they have to feel they are part of a team, a community that sacrifices. No one wants to be told to be more frugal by the very people whose incomes and wealth seem to be derived from vacuuming up the wallets of those below them. And whether you or I believe that is a fair assessment of reality is irrelevant. It is what many suffering people believe. It is what a majority of Trumpists and Democrats believe. Try convincing the Trump electorate or the Bernie supporters that the wealthiest 1% deserve their riches and doubled share of the economy and that the middle class problems of lost incomes, underwater mortgages, and suicidal fathers is all their own fault. Blame blame blame. That is what your tone is. You need to at least be aware of it.
The broken road: High income disparity, 100% national Debt/GDP, crumbling infrastructure that desperately needs investment, unfettered campaign finance rules corrupting political process, student debt crisis, rising personal debt (now back up to 2008 peak), highest middle age suicide rate in 30 years, populist unrest due to economic conditions, civil asset forfeiture, grotesque examples of excessive force by police, Medicaid and Medicare under political attack, growing risk and intensity of wildfires and hurricanes (exacerbated by global warming), navy ships colliding due partly to cuts in military training and maintenance budgets, growing international tensions due to incompetent leadership. Economically, the poor, middle class, very young and very old, infrastructure, government coffers, almost everybody is low on funds. The road is very broken. Is it any surprise that people are going to notice the inflated hoard of cash and income going to our most wealthy and highly paid and most politically influential, and strive to put that to better use?
SH.: Your recurring theme is what is OWED people for living in our country: A house, food, healthcare, cell phones, internet access, a job with benefits, a “fair wage”. Next will be college tuition, a “meaningful” job, $15/hr and so on and so on. I just wasn’t raised that way. Nobody OWED me anything for my mere existence in my upbringing. As my father and mother did and my children have. For this reason I EARNED my way in the world and am vastly better for it. I’m SOOOOOOOOOOOOOO glad I didn’t listen to people like you growing up, feeling entitled and satisfied with anything but my best efforts. AGAIN we need safety nets, but they should be for bouncing out of not getting entangled in. But that’s just my philosophy….
That’s why the word “fair” should never be included in this conversation. That is a subjective term. There is no empirical, universal “fair”. If there were, then the USA would be among the leaders in the world in “fairness”.
The only true Fair is down the road 5 miles from me. Fair is totally in the eye of the beholder. Most of Dem fairness is a way to take money from others and give it to them to redistribute in order to maintain political power or maybe “generosity”. Again, income inequality is a problem heavily leaning towards Dem. voting counties. Republicans give over $5000 to charity at a rate 3 times the Dems and independents and pay $4300 more in taxes (hard to find but in an academic text from 2008). American Republicans are the most generous givers in the world. And what is “fair” is often not practical and leads to bureaucratic mess more often than not. I know what’s fair to me: a person keeping a larger portion of what they earn to spend as they wish. Valid? Maybe not, but no less pulled out of the air than a lot of other “fairness”.
“Owed”, “Fair”.
You are still making up crap that I am not saying.
What I propose is a more balanced economy with job opportunities, affordable college and medical care, and wages which will support families without having to rely on the dreaded government handout. Government policy to help establish and maintain a sustainable economy is what I am after. And that is not the same as a handout. It is allowing people to get a leg up and earn their living.
It’s hilarious to see you deny saying “fair and owed” and then turn around with points about what is fair and owed! You deny that you said there is no college opportunity and then turn around and say it. Ok, no “affordable” college opportunity. No question health care is a mess. Much of it is due to perversion of the system by government interference. More government makes thing so worse not better. That is the source of college inflation to a large degree. Also massively increased administrative costs for Federal regs. What is a “fair” wage? Why does business “owe that to anyone?” Your point, over and over, is that if we could just make government big enough then all would get what is “fair and owed”.
Was just about to post this very reply.
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“A middle class family (often ineligible for grants) should also be able to send their child to engineering or other quality colleges (not talking about Ivy League) without breaking the family economy and going into decades of debt”
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Sounds like “owed” to me.
Here’s another good one: “Nothing is going to get better until we enact laws and standards that persuade or oblige every business to pay every worker a fair, dignified and livable wage” – Steven H
Here is a puzzle to consider. We have each, I believe, generally agreed that the 30 hour per week work threshold on providing benefits is a disincentive and a damaging policy to working people. I think we might even agree that a ramped benefit policy (15 or 20 hrs gets half standard benefits) would be a reasonable solution. OK so far?
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But what would happen if this was suddenly passed. Chances are, employment would decrease, at least temporarily. Suddenly, three 40 hr employees would be more economically efficient than four 30 hr employees. So is this a good policy or not? Unemployment goes up, but the people employed get a better deal. Hmmm.
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To answer this, I think you have to apply math AND philosophy. What is the purpose of having a job? To the worker, it has some abstract appeal of purpose and personal satisfaction, but ultimately a job is the means by which we provide food, clothing, medical care, and shelter for ourselves and our families. If the job does provide those things, it is not a worthwhile job.
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So IMHO it ultimately does little good to increase employment by parceling out part-time substandard wage jobs carved from full-time jobs. The 40 hr policy is better. Whatever unemployment is temporarily created needs to be addressed by creating more and better full-time good wage jobs, not carving up full time jobs into inadequate portions for more people.
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Agree?
Typo: Should read:
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If the job does NOT provide those things, it is not a worthwhile job.
— sorry for the error.
“ultimately a job is the means by which we provide food, clothing, medical care, and shelter for ourselves and our families. If the job does provide those things, it is not a worthwhile job”
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Don’t agree with this at all. A job is simply an agreement with another party to receive compensation for a task, labor or service. It’s nothing more.
I see both sides of this. The classic American vision of a job includes all those things SH says, but the reality is that it always was only what Peter said. What has changed we no longer have hirers starving for employees for many reasons (automation, globalization, unfettered AND targeted immigration, demographics) like in the 50’s when that vision formed. So there is no scramble to get good employees and thus increase benefits and pay. So maybe SH really does want the MAGA economics of the 50’s and 60’s after all! Emoji wink. Of course if you have skills as an engineer, competent financial planner or physician you get headhunter cold calls and letters all the time because you have rare talents and abilities. Maybe if people improved their skills….
There is no way to have a job with “half benefits”. Not sure you would swing that. You have nailed the debate on this though…..if it were required to offer benefits for everyone working 20-30 hours, companies wouldn’t hire these people. They would likely hire 40-hour employees and provide incentives for them to work 50 and 60 hour weeks. That would be more cost effective. The dropping of the requirement encourages companies to hire more people as it is less expensive for them to do so. Thus, the catch-22.
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I’m not sure this is the problem. There are pros and cons to both sides here. More important is a growing economy with clearer regulations and less politics so that companies know what the rules of the game will be. So much of the lack of hiring of the last 8-9 years or so has been the uncertainty in Washington. If I hire three 30-hour a week workers instead of two 40-hour employees, will I be told later that I must provide benefits? And will those involve the more expensive ACA option? It’s hard to hire/fire this way. Whatever we decide on this debate it needs to be clear and precise. That’s what will start bringing back good jobs to the economy.
What is missing is the union manufacturing job. This loss was in some ways CREATED by unions. I have friend who was a union rep at AT&T/Western Electric, now Lucent. She had several persons who used every bit of sick leave, personal leave, emergency leave, etc. It amounted to almost 3 months! Then they would file a grievance with the union for an extension of benefits. She got so disgusted with these people taking advantage of the company she quit her union job. That work became so expensive it was shipped overseas. The railroad union made the companies keep coal shovelers for decades after they changed to Diesel engines. Many examples of similar abuses. The strikes and more, more, more attitude lead to off the charts benefits and globally uncompetetive salaries. So the our manufacturing was eventually off-shored or replaced by machines. That’s the biggest reason for the income gap and lack of benefits that keeps showing up. “We hate the world” and “we hate machines” just doesn’t play as well as “we hate the rich” for Dems. Of course the evil CEOs are legally bound (civilly) to do all they can to maximize profits. You really can’t blame them. Interestingly, it was the ME generation of Baby Boomers who did this, the same folks leaving debt, using up Medicare and Soc Security, etc. Just more screwing of Gen X with generational wealth transfers. But hey, talk to them, they know it’s coming and seem to accept it.
I have issues with unions abusing power and CEOs abusing power. But the manufacturing union jobs are gone. Now we need to fix the economy with jobs of the future, and enable working Americans to build this economy back to its potential. That can only be done with better education, job training, and decent wages and medical care.
Agree with all of that but decent wages. Decent wages will come eventually – but can and should not be forced.
The economy of the future, IT I presume, is small and has not changed in size as a proportion of the work force. I’m not sure it will rescue us. See BLS stats
They are gone. Cause if the politics of MORE. and you want MORE YET.
Talked again with my “source” in trucking. Shortages of trucks are getting worse due to massive orders in industry. The economy may be exploding. Dems will get more desperate as the economy improves and the fallacy of their policies becomes more apparent. Seeing the way they act now it could get uglier and uglier as they look more and more out of touch. Antifa may just be the beginning…
Here is an article from trucking industry suggesting the shortage is self-inflicted — low pay and lousy conditions. These are industry averages, not just a few choice Wal-Mart trucker jobs. It certainly seems that if the Wal-Mart trucking jobs are all that great, the folks in this article would snap them up.
Half MedicalBenefits would be donations to a medical savings account in a high deductible plan. That is completely scalable.
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i agree the endless political squabbling over health care and labor policy does the country no good, neither for employer nor employed. GOPpers should stop trying to ram massively unpopular policy into law with barely a legislative majority. Not are what they think they will accomplish by passing unpopular law.
And before you claim that they are doing the same thing as the Dems, it’s not even close. Dems had a much bigger majority and mandate, yet still held months of hearings and engaged GOP in debates, even taking their ideas. GOP is just bullying their way through, neglecting regular order, popular opinion, ignoring feedback from the industries they impact, and not waiting for economic assessments.
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“You know, I could maybe give you 10 reasons why this bill shouldn’t be considered,” Iowa Sen. Chuck Grassley told local reporters, according to The Des Moines Register. “But Republicans campaigned on this so often that you have a responsibility to carry out what you said in the campaign. That’s pretty much as much of a reason as the substance of the bill.”
Stupid. They promised to pass better policy, but they want to bait and with with crappy policy nobody (not medical industry, not governors, not populations) likes. How is that keeping a promise?
“bait and SWITCH with crappy policy” — lost a word in editing.
You don’t have to convince me that politicians are inefficiently handling these issues….. not even slightly surprised.
All:
Regarding whether my “politics” prevent me from acknowledging expertise, experience, or relevant facts. That’s really a lot of malarkey.
1) “Politics” doesn’t even come in to play in forming my world view. If I favor Democrats, it is because their views may happen to match mine, not because they somehow persuaded me.
2) My economic world view is formed from experience, empathy, research of writings of actual experts, and most importantly, math.
3) Too often, you each have put forward your personal opinions as expertise. In very limited situations you are an expert, such as in financial planning or medical matters. In macro-economics, your expertise does not compare to actual economists. Nor does mine. The best we can do here is reference experts and make arguments about our own interpretations. But I can’t think of a single instance where I have actually ignored your expertise. I just disagree with some of your opinions.
4) I listen to facts, and have learned some things, even altered my views. But I do not accept made up numbers, or deflection arguments (e.g. attacks against views which are straw men, or not even close to my views, as ‘proof’ that I am wrong).
1. This could not be more untrue. You won’t see it though.
2. Fair, although I do think you include some people as “experts” that are a little bit questionable.
3. I resent the insinuation that we are somehow equals in knowledge of macro-economics. I have a college degree in this and have several additional certifications that require a deep knowledge of the economy. From the things you post – and articles/experts you tend to agree with – it is obvious that you have some large holes in your understanding of economics. If you could take economics courses that are not from politically motivated spin doctors, then I think you would be much more informed. Yet, you are simply trying to understand economics from a political point of view, with an endgame (punish the rich, help the poor) in mind the whole time. This has resulted in selective learning. I can only hope that I have been of some help to you in this throughout the debate.
4. ??? OK
Altered your views? Only as the Dem party changes its views.
I reiterate: name a SINGLE issue you disagree with Dem platform about and I’ll consider this. You are a political hack, whether you realize it or not.
This should be interesting. Agree with you 100%. Again….the problem in our society’s debates.
I disagree with Repubs in abortion, nation building, borrowing money, their healthcare platform, tax cuts…. is that enough? I’ll find some more…
1) This is possibly the most arrogant and idiotic thing you have posted. You claim to know how I make my decisions? What does it even mean to make decisions by politics. I turn to Dam platform before I state an opinion?
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I have scanned (not read the whole things because they are LONG) the Dem and GOP platforms. They are written like marketing brochures, so most people will agree with about half of each one no matter their politics. Improve business. More jobs. Mom. Apple Pie.
The interesting thing is that on almost every issue on which you two spar with me, you toe the letter of the Republican line, even though neither of you claim to be Republican. So by your own definitions and arguments (not mine), you are both nothing but a couple of political hacks.
Defend yourself just once without the “you do it too” defense. Such BS
I defend myself by pointing out it was a stupid proposition to begin with … that if I agree with most of Dem platform, I am ruled by it. But if you agree with GOP platform, you are not ruled by it? Really? Why shouldn’t I point out the ridiculous symmetry that negates your argument? It’s not that “you do it too”. It’s that the argument is absurd. Whether there is a club or political party or group of any kind that shares our beliefs does not void those beliefs.
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Your assertion that you know how I make my decisions and establish my beliefs is extraordinarily asinine and offensive. You constantly go on about how I should “listen to expertise” (meaning you) and that I should “think for myself” (as if I am ruled by external spoon feedings of mindless propaganda). I have been thinking for myself for decades, and obtaining my belief system from the lessons of the world around me, not some political guidebook.
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I’m sure you have a hard time believing that the world you perceive is not the same as how others perceive it. Perhaps you think your experience and your studies and ruminations have provided a perfect perspective on the truth. Or perhaps, if you exercise a bit of humility, you might imagine that we are each seeing reality from different, valid perspectives.
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But here is a catch: The symmetry of our differing perspectives and “truths” breaks down at some point. At some point, we have to face up that differing perspectives cannot both be 100% correct and differing choices will yield different successes and failures. My way is a better path or yours is, or perhaps some compromise. This is why I read and argue and question and compile spreadsheets and quote arcane numbers. To figure it out. To invite scrutiny. To learn.
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If I truly wanted to just settle in to an unquestioned “truth”, I wouldn’t waste my time here. There are plenty of places I can go to find nodding, enthusiastic agreement with my views. There are plenty of intelligent discerning people who look at the world and see precisely what I see.
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I am trying to get you to express and defend your view and your truth, not just from the corner in which you stand, with your limited experience, but from my corner, and stevendad’s and MOR’s. Be willing to examine another perspective and evaluate it in full light and from a different stance. I am trying to do the same. But I will never see or understand your view when all you do is revert to your safe arguments that anyone who sees the world differently than you is insufficiently educated, doesn’t think for themself, or is a political hack or robot.
It’s not all about perspectives. It’s about education and open-mindedness. The equivalency I would draw would be that your “perspective” on how the economy works is much like the “perspective” the skeptical scientists have about global warming. That and your constant attacks on the GOP and applause for all things Democrat (PLEASE find a post where I do the reverse of that – I beg you!) paint this impression. And literally every soul that has wandered through here has said this about you. NOBODY has said that about me. NOBODY.
You may not praise Republicans, but you praise almost everything in their platform. From the outside, that looks pretty much the same.
See above list of how I disagree with Repubs. I left out marijuana, jail sentences, the “drug war” in general, shipping out illegals and dreamers, gay marriage… the reason I disagreed with DACA is Obama did it with “a pen and a phone” and went around Congress to write what is in effect a law. This is frightening to me. Are you OK with Trump writing law? List the one thing you disagree with Dems about. So BS SH. I’ve listed ten already. Only you are an unthinking hack.
Here is some “math” you never acknowledged: in Obamas years our economy grew $9T total and we put $9.5T on the Federal credit card. Is that the growth you Dems are so proud of? Is that a sustainable idea? So did it achieve anything economically at all? As far as I can tell we wasted $500B at best and doomed our economy at worst. That’s a success? And we should do more of it?
On the contrary, this has been extensively discussed, so it is absurd to indicate I never “acknowledged” it. But as a reminder …
1) You forget to mention there was a massive economic downturn in 2008 and 2009, with reverberations into the next 5 or 6 years (and still now, really) that could have been a lot worse if not for Dem leadership in saving banks, jobs, auto industry, and the stock market, and coincidentally (and unfortunately) restoring most of the lost incomes and the wealth to the 1% (but not so much to everyone else). This produced the majority of debt increase. That and fallout from past tax cuts.
2) At the end of FY 2009 (Bush’s last budget year), debt was 11.9T and at end of FY 2017 (Obama’s last budget year, ending this month), debt is projected to be 20.4T, up 8.5T, so you overstated a bit, even after ignoring the Great Recession.
3) In those same years, GDP grew from 14.4T to 19.2T, only 4.8T, (not sure where you got your 9T number). The ratio is not good. 8.5T investment and 4.74T growth. This is not great; we only got GDP growth (delta GDP in dollars) that was 56% of debt growth (delta GDP in dollars).
4) But consider, Bush2 only had GDP growth/ Debt growth of slightly better at 62%, and he was not impacted for as many years by the 2008 crash. Still a net loss across 16 years (8 GOP and 8 Dem)
5) Reagan had 31% more GDP growth than Debt growth in his term (in raw dollars) but Bush1 lost ground. Net for 12 years was a measly 9% more GDP growth than debt growth (109% ratio). But the RATIO of TOTAL Debt to GDP went from 31% to 63%, more than doubling, and reversing a 30 yr trend of reducing Debt/GDP.
6) Clinton had a whopping ratio of 264%, i.e. 2.6 times more dollars on GDP growth than debt growth.
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From my perspective, if we are going to score the parties, Republicans drive up the Debt/GDP ratio, bring about economic downturns, and achieve mediocre GDP gains at best with a net loss of GDP gains vs Debt investment over last 3 GOP presidents. Obama’s term looks poor by these stats but was on the heels of a massive downturn and is difficult to judge on it’s lone 8 year timeline. Clinton’s term was wildly successful, the only one of last 5 Presidents to actually reduce Debt/GDP.
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So tax cuts and big military spending produce tepid economic gains. Tax increases (to reasonable levels) and constrained spending produce strong economic gains. That’s a success and we should do more of it.
Bush was almost as bad at wasting our children’s future as Obama. I got the GDP by adding each years GDP over the 2009 baseline. So Obama “rescued” us by getting out the credit card and charging it up. So why do Libs (maybe not you) give him so much credit? Anyone could do that.
Romney would have done the exact same thing. Any economist would have told you that whoever won the 2008 election (could have been Trump, Sanders, The Rock, whoever…) was going to be applauded for the inevitable turnaround that comes from massive stimulus funded by long-term debt. Not exactly a stroke of genius.
$9.0T was the sum of all years 2009-2016 per Wikipedia fabove the 2009 baseline.
Stevendad:
“We are trying to tell you your heroic Dems want the road broken as much or more as the Republicans.”
And thats just stupid. Both sides just have different ideals about what to fix and what will work.
This is mostly opinion, but I think you are wrong here. Go back to the Presidential election and see who raised the most money from the wealthy. Hint: it wasn’t the winner. See ho wmuch Dems and Repubs have profited from public “service”. Or bury your head in your….partisanship.
Why does it matter who raised most money from the wealthy? Are wealthy evil? Of course not. Ate there wealthy people who set aside their own self interest for national good? Yes. Do we have to worry that politicians become beholden to wealthy? Yes. Is Trump’s self interest as a wealthy person just as worrisome as Hillary’s loyalty to wealthy donors? Yes.
So again, what do you believe your statistic proves?
It’s just that you say things like “nobody has helped the poor more than Democrats” and constantly bash Republicans for having rich people in their cabinet or catering to the 1%. All we are trying to point out is the folly that there is some sort of difference between the parties when it comes to what part of the economic spectrum they support. It’s blind, foolish fandom talking if you think somehow the Dems are “above it all” or even better or more noble than Republicans. It’s like the Wizard of Oz’s curtain has already been pulled back and you still believe the Wizard is magic.
Then why does it matter how rich the Cabinet is? I’ll bet you it would matter to you if the Republicans raised the most money from the wealthy? Politics are all about picking and choosing talking points for a narrative. That’s why I find it exhausting and a waste of time that keeps us from really talking about issues.
Evil. Mostly no. Selfserving? Mostly yes.
I only bring that up because you characterize Dems as some party of the people beholden only to the poor. Ridiculous. Ever ask yourself how Bernie got a net worth of $2.7 million on what is a subsistence wage in DC? Or how Maxine Waters lives in $3.5 million home? Look into it a bit.
This whole thing is indisputable….of course the Dems want the road to be broken as much as the Republicans. That’s how you win elections. Control as many people as possible and make them rely on you. Promise them everything.
Trump just did a better job of this than Clinton this time around (Wisconsin, Illinois, Pennsylvania).
Stevendad: re poor as blameless victims. I never said that. My point is that you cannot expect government social systems to be fully successful in helping the poor of you simultaneously suppress wages and raise costs on education and healthcare.
And post high school education is less free and available nationwide than you like to advertise.
Please prove your last sentence. You made a proclamation, now back it up. Ok, it is in Oklahoma and San Francisco. Move there then. Oklahoma is cheap as it gets to live in. Or do I need to go state by state, city by city?
And more and more smart people (i.e. SWEAR practitioners) are forgoing the traditional 4-year state or private school for 2 years at a local community college and then transferring to a larger, more expensive school for the final degree. This path is WIDE OPEN for people, but I see many in the middle class in suburbia that go into debt so their child can have the 4-year fraternity/sorority/college football/dorm/meal plan experience they feel like they are entitled to. Or, you can go to college COMPLETELY for free by joining the military. Like many things, there are cheaper paths. These paths might not be as good as the more expensive paths, but that is life. A limo costs more than a taxi for a reason. Yet we shouldn’t make both cost the same so the poor can ride in limos. And the poor can’t stand around and complain about the giant debt they have run up using limos when taxis and rideshare options have been available to them for much less – but they CHOSE to avoid them.
Stevendad: re SWEAR and your job opportunity list.
I think you should start a charity to offer your ethics advice and job counseling. It could do some good. But it will not counteract the decline in wages and income that must ultimately change to improve our overall economy.
I’m writing a book about SWEAR, some of that will be in the work and education chapters. I don’t have time for it but of course you missed the point. You OVER AND OVER AND OVER state they are no opportunities, I just wanted to point out how easy it is to show you are wrong.
I have NEVER said there are no opportunities. Strawman. I have said that education overall costs more and jobs overall pay less.
I can’t count how many times you’ve said there are NO LADDERS. Puh-leeeze.
I can. Zero.
Then disprove this statement. Americans still have the same mobility as they have in the past. It is hard to find a country in the world that has the potential for a family to move up the income ladder – every American citizen can move from poverty to the upper echelon’s with the right combination of work ethic, effort, SWEAR, networking and luck.
Crickets
There is the same mobility from quintile to quintile as there has been for decades. BUT, the 4 lower quintiles and all but the upper quarter OF the upper quintile OF the upper quintile are being suppressed and constrained at the behest of and to the benefit of that uppermost economic elite.
What good is mobility to the next level if the next level keeps getting pushed down? Doesn’t that cheapen the gain?
And there are many analyses with conflicting conclusions but at least some researchers believe that there is actually declining mobility in US and less mobility here than in other countries.
http://science.sciencemag.org/content/early/2017/04/21/science.aan3264.full
Peter: “And we could pay for all of this in two seconds by reducing our overbearing presence all around the world, staying out of regime change in countries we don’t even understand, taxing churches who are truly for-profit organizations, legalizing and taxing gambling and marijuana, ending the futile “drug war” and the billions wasted on it once and for all, and most importantly reforming campaign finance and lobbying.”
I support some of what you propse, but I have less confidence in the savings providing sufficient funding for your good works list. I think the tax on churches would be particularly difficult to push througb, though I sympathize with the idea, with appropriate exemptions for smaller church facilities and true charity work. I certainly want to see the mansions, huge property investments, and outsized preacher salaries taxed.
My apologies to the post below. Hadn’t seen this yet. I think you do misunderstand the cost of the solutions I support. First of all, health care is the most expensive but far more affordable if we do it right – it should be a very low level of care and one that doesn’t line the pockets of insurance companies. Of course, we need politicians that don’t answer to lobbyists for this to happen. The others are not very expensive at all – incentives for charity and US production all pay for themselves. But please don’t ignore campaign finance reform. Nothing matters in government if we don’t fix that.
Peter: “I’m not sure why working on helping the mentally ill, increasing charity’s role and adding incentives for giving, revamping education to tailor to today’s jobs, providing affordable base health care for all, reducing illegal immigration, providing incentives for companies to keep production in the US, etc. makes us poor-hating people.”
Peter, those are all great ideas, and if you are willing to see that they get adequate funding and attention, I will back you up on all of them. What I do not support is the idea, frequently pit forward here, that there is nothing wrong with our system, that we need to cut funding for all of those efforts, and that we just need to encourage people to lift themselves up with SWEAR, because all of the social help and jobs are already available and provided and sufficient. If that is not what you and stevendad have meant by your SWEAR preaching, you have done a poor job of expressing yourselves.
We are not preaching, we are giving an avenue while the dysfunctional government flails away and serves itself. YOU are in some La La Land that the government will suddenly become responsible and responsive. I’m in the process of trying to send out the idea from this thread somehow…
Again, if you think that I believe there is nothing wrong with our system you REALLY aren’t listening. The whole system is f****ed which is why I want to quit thinking that the answer is to feed more $$$ into this failed system. We must stop the big money politicians like Clinton, Bush, etc. that marry up to the uber-rich and lie to the poor.
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And I appreciate you agreeing with all my ideas. But why didn’t you agree with the second paragraph? I posted a list of things I support along with the list of ways to pay for it. As is typical with you, you support all the extra programs I support, but ignore the cost cutting solutions on the other side. I will repost so you can see it again:
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“And we could pay for all of this in two seconds by reducing our overbearing presence all around the world, staying out of regime change in countries we don’t even understand, taxing churches who are truly for-profit organizations, legalizing and taxing gambling and marijuana, ending the futile “drug war” and the billions wasted on it once and for all, and most importantly reforming campaign finance and lobbying.”
Stevendad:”The poor income equals U.K. And Japan middle class. Showed you the numbers. You just hate FACTS that don’t fit your narrative. ”
You make unfounded assumptions (inflated current value, and arbitrary guesses about distribution) about us shadow economy to inflate the well being of US poor, but completely neglect the shadow economies for comparison countries. Made up numbers and wild guesses and apples to oranges comparisons with little to no outside corroboration are not facts.
Another analytical flaw in your analysis of shadow economy and 5th (lowest) quintile. Many members of shadow economy have incomes to put them in 4th, 3rd, 2nd, or even 1st quintile, but are hiding income. Therefore they are masqueraders in the 5th or 4th quintiles, seeming to be there officially, but not truly members of that group. Averaging thete incomes with the legitimate poor and low income does not make the truly poor less poor. It is just an illusion of statistics.
My point is common sense. The very rich don’t need to shelter income (because they have it) and have greater likelihood of getting caught (because they are under scrutiny. Even if you spread $500 billion across the lowest quintile evenly, it is still $4000 per family, not inconsequential. An offset VAT tax taxes ALL who cheat to some extent.
Agreed. Very logical approach.
Redid my math, as I was hasty and pressed for time (divided by 125M not 25M): it would be $20,000 per family ($2.5T / 125M households) assuming inflated $2.5T or $16,000 ($2.0T / 125M households) on 2012 Federal Reserve estimate of $2.0T if EVENLY distributed. So I vastly UNDERESTIMATED the contribution which of course strengthens not weakens my point. And, my main point, is that collecting 10% ($200 to $250B) of this would almost cut our deficit in half and with offsets in taxes and EIC would have no effect on honest earners. I just keep running the numbers. That’s a lot of money!
Again you averaging cheater, masqueraders, who would legitimately be in a completely different quintile if their income was reported, against legitimate poor, old, and sick in the lowest quintile. The whole averaging thing across disparate community makes no sense and does not prove the point you are trying to prove. If I am poor struggling single parent, what benefit is it to me that some tree trimmer/handyman is not reporting $40K of income? None.
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And while you are trying to capture that shadow economy with a complicated and regressive VAT tax and refund scheme, remember these counterpoints:
1) Additional taxation tends to increase, not decrease, the size of the shadow economy. Unintended consequences.
2) The Tax/Rebate scheme only discourages those who spend more than they earn and who spend it over the table. Cheaters on earnings will also cheat on spending, bypassing the VAT tax entirely on big and small ticket items. You will just grow the black market.
3) A VAT tax of whatever% (15?) will at least temporarily make EVERBODY 15% poorer until they get back the tax rebate, thus slowing down the economy. This could be alleviated with an advance of some kind , but … more complication.
4) Peter has a point that new types of taxes tend to stick around and grow. First you get a rebate back of the full 15%, then just 14% (to cover admin costs) then only 10%, then not at all.
Wrong again. Sales taxes are very difficult to cheat. That’s why Europe does that. It’s even a bigger problem there. It’s not complicated. Simple math.
4). Yes the government you love, worship and want to make larger tends to steal for their own interests. Maybe you are listening some.
As to first part, out poor are 42nd without any underground income, ahead of several EU countries. Without private donations. But you want more.
I didn’t include any underground income in initial analysis. Family spending is 2.3 times income in the lowest quintile due to benefits. 2015 median household income $12,457 x 2.3 = $28,651, 25th in the world, just above Chile (also above Poland, Greece, Portugal) It is hard to find this, as I’ve said before. And again this excludes private donations, free phones, etc. SNAP $6000 per family of 4. EIC $4600 per family of 4. Medicaid $10,00o (family of 4). So that number may a bit low in a family of four. This excludes housing benefits, private and state administered donations such as TANF. So $20,600 + $12,457 is more yet.
So if you EVENLY ( as you say I didn’t) distribute underground income $2.0T in 2012 (likely higher now, but NOT inflated to satisfy you) across 125M households = $16,000 per household then you get over $44 k ($28k + $16k) on low end and $49 k ($33k + $16k) on high end. The low end is between France and Germany, both above the U.K. If you make my initial assumption, half underground concentrated in lowest quintile, it is $40k ($2T/ 2 / 25M households) and goes above US median income ($60,154) at $68,651 and highest in the world. So, no I didn’t “over attribute” underground income. Sorry, you’re just absolutely wrong again. But again, the TRULY poor are better off than several European countries, even if they have ZERO underground income.
Just saw this, I’ll look it over again. Still sounds fishy. Seems like you need to find comparable hidden spending from benefits in other countries as well.
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“Family spending is 2.3 times income in the lowest quintile due to benefits. ” Are you sure? i thought you got spending numbers without knowing where it the revenue came from. If so, then it includes shadow economy, including quintile masqueraders. There should be good documentation on govt transfers that defines benefits to lower quintile, without shadow economy.
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Does spending and benefits include medical? In US, medical spending is inflated and is not equivalent to cash in terms of quality of life. In other words, if France spends $100,000 on cancer treatments for a parent, and we spend, through govt benefits, $500,000 for same treatment, that does not make the family here $400,000 richer.
That is COMPLETE BS. I purposely left out ANY underground income. I included government subsidies (Fed only) and income, both from census data. You just can’t stand facts can you? Look it up! No wild guesses. FACTS. That you hate because they go against your narrative. Reread my post. AGAIN I left it out. Also state benefits and private giving. I just pointed out they add something. You get more blinded as you are backed into a corner. You are fading fast. I used to respect you.
See above for numbers….
Yep – had been enjoying this conversation but for the last few months I think you all have Steven H defeated. He just doesn’t have the desire to have a productive debate. Think he has been down for the count for a few months now, which is why he is suddenly “too busy to respond”. LOL.
Will look this over. I seriously doubt our lower quintile equals UK median quintile. No one else makes this claim and the GOP think tanks would headline it if it added up. But I’ll look it over again when I can.
No made up numbers or wild guesses and the data just doesn’t exist to completely avoid apples to oranges. See below.
Several items to address, but I will mostly keep them one item per post. Btw, i should mention that i have not yet read those min wage articles. That is still to come.
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stevendad:”The “floor” is the safety net that you said worked well ($25T spent War on Poverty was successful) and now you say it is failing. Which is it?”
I dont believe I proclaimed it a success exactly, nor a failure. I just pointed out that your analysis method was flawed. The ideal goals are twofold. (1) to alleviate poverty by providing basics of food and and medical care. (2) to enable people to lift themselves out of the circumstances for which they need that help.
SS, Medicare, medicaid, food stamps, meals on wheels etc are successful in helping very many people and thus address goal 1 with some level of satisfaction. Goal 2 is harder to assess. If you use the poverty rate measure, then success is limited, but does that mean money was wasted, or does it mean that other pressures counteract the good done by social services? I would note that increases in poverty rate since mid 70s correlate to increases in income disparity, drops in minimum wage, economic downturns etc. If we are really interested in dropping the poverty rate, we should do everything we can to raise wages for working people. That is ultimately what will reduce poverty.
stevendad: “Yes, it had almost zero PERMANENT effect on poverty. Perhaps that clarifies it.”
As long as we keep a PERMANENT safety net, we have had a PERMANENT impact on improving lives of the poor. Do I want to actually reduce the pre-welfare poverty rate? Absolutely. Improved low cost targeted education, better wages for adult wage-earners, and affordable healthcare for all will help take care of that.
Right. We have the same goals, yet I want to do different things and you want to further feed the system that has failed and is more and more rapidly bankrupting us. I no longer have faith in either party to find effective solutions. You know the poor will get CRUSHED when the debt bubble bursts. GAO said this will happen at $29T. At our recent rate ($9.5T in 8 years), less than 8 years from now. I think we need to make changes on the cost AND revenue sides. Unlike climate change, this is an immediate CLEAR AND PRESENT DANGER. It is not something 50 years from now with very difficult to predict results. It is in the next decade and will cause orders of magnitude more destruction than climate change in that decade.
Amen Stevendad. And raising wages is NOT the way to stop poverty. The government doesn’t control this sort of thing the way you think they do – and additional subsidies haven’t worked in the past, so why would they work now. We can’t keep doubling down on this idea.
Minimum wage is in the center of the same band from the 50’s on of $6-$8.50 in 2013 dollars. You always pick the anomaly of the late 60’s minimum wage for your example. AGAIN, it was not typical. Stagflation was at least in part due to this. No one can proportion how much.
Kudos to you guys for staying with this argument. Most people – including me- gave up trying to debate with Steven H. Even though from time to time he would offer points that were very interesting and valid, it always fell back to his basic agenda. Now it seems like the last couple of months you guys have him pinned – he disappears, changes the subject, dodges the questions, has emotional reactions….signs of knowing that he might not be 100% correct. You guys aren’t always 100% correct either, but it feels like you might know that. I just wish more people could engage in these debates and break down these sad, narrow minded, politically driven walls like Steven H has (barricades?) THEN we might actually fix what ails us.
You would be a better debater with more facts and research and less snark.
BTW, my basic agenda is improving the country and the economy, lifting up the poor and middle class with better wages and opportunities and leveraging the outsized income and wealth increases to top earners in order to help pay down our debt. Is that so awful?
You think that is your goal….but it isn’t. Your goal is to increase the presence of government, support the democratic party, and tax the rich more heavily. That’s what you keep coming back to even when the intelligent conversation about helping the poor veers into other solutions or debates.
Re: mental illness. Yes! A huge problem. I have trouble finding people with serious mental health issues, even with GREAT insurance, psychologists/psychiatrists to treat them. And then we just let the wander around our cities (a large percentage of homeless) or put them in jail (I’d bet it’s over 2/3rds of the root cause of the crimes). The people of Oklahoma, in a wise move, passed 2 state questions to reduce sentences for nonviolent crimes and to encourage drug offenders to seek counseling over prison. The money saved from prisons was to go for drug prevention, mental health benefits, etc. The Legislature, in true government fashion, said the people “didn’t understand ” and immediately made attempts to circumvent the will of the people and the intent of the law. Whether this was “tough on crime” politicking or pandering to the private prison/ law enforcement/ legal lobbies isn’t clear. What is clear was the “we know better than you” attitude that permeates politics on BOTH sides.
Yes, and I’m not sure why working on helping the mentally ill, increasing charity’s role and adding incentives for giving, revamping education to tailor to today’s jobs, providing affordable base health care for all, reducing illegal immigration, providing incentives for companies to keep production in the US, etc. makes us poor-hating people. I agree with the way you put it that the systems we have had in place have had the reverse effect in some communities and circumstances.
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And we could pay for all of this in two seconds by reducing our overbearing presence all around the world, staying out of regime change in countries we don’t even understand, taxing churches who are truly for-profit organizations, legalizing and taxing gambling and marijuana, ending the futile “drug war” and the billions wasted on it once and for all, and most importantly reforming campaign finance and lobbying.
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But NO….we MUST take more from the rich either for princple or reparations or politics. And we must continue to double down on the programs we already have that have had mixed results. Makes no sense to anyone who really thinks about it.
stevendad: “The people of Oklahoma, in a wise move, passed 2 state questions to reduce sentences for nonviolent crimes and to encourage drug offenders to seek counseling over prison. The money saved from prisons was to go for drug prevention, mental health benefits, etc.”
These are excellent proposals. Really tragic they did not get passed.
“Whether this was “tough on crime” politicking or pandering to the private prison/ law enforcement/ legal lobbies isn’t clear. What is clear was the “we know better than you” attitude that permeates politics on BOTH sides.”
I think it is probably the tough on crime rhetoric and pandering to law enforcement, but also the ignorance and authoritarian attitudes of a big segment of the population, similar to what propelled Trump to office. Some people have zero tolerance to law-breaking (when it isn’t themselves) and are anxious to punish people. Unfortunately, our President and Attorney General, by keeping tough drug sentences, rejecting medical and state legal marijuana policy, and advocating for civil forfeiture, have set that vengeance bar where it is and served as national bad examples, amplifying the public tendencies for revenge and punishment and rejecting more sensible policy.
In other words, it is not so much the politicians saying “we know better than you”, than it is,a willingness to cater to the contituency that knows very little about effective policy. It is a failure to lead and advance higher motives and goals. I think the majority of population would support the original directives, but the minority of vengeful authoritarian types are the current political squeaky wheel. Our leaders need to push back with moral and legislative leadership against this wrongheaded minority.
To clarify: the people PASSED the state questions and the Legislature immediately went about trying to subvert the laws, saying “the people didn’t understand what they were passing”.
Ok. Were the “questions” passed just advice, or do they have legislative weight? Just curious.
To save space I’ll post a link. SQ 780 &781. It was VERY specific about changing laws. The Leguslature (Repubs by the way) immediately went about trying to undermine it because the people “dont understand”
https://ballotpedia.org/Oklahoma_Reclassification_of_Some_Drug_and_Property_Crimes_as_Misdemeanors,_State_Question_780_(2016)
If you guys haven’t seen it already, pull up the recent Rand Paul speech on the floor of Congress (about 10 minutes long) about spending on Hurricane Harvey relief. Awesome stuff….and good to know some people on the floor of Congress actually still care about our debt and want to change the way government is run.
https://www.youtube.com/watch?v=Yw-NKpYwkHE
Credit is just such a high for all of us: Free stuff now without immediate tangible cost. Like all things, it can be addictive and lead to destruction. Unlike the establishment, I don’t think giving the next Generation’s money away is generous. In fact it is a self serving “high” that only serves to avoid tough choices wrapped in a warmth of false generosity. Here’s an analogy: my job sucks and my boss just asked me to do something against my own morals. I’m hocked to the gills and can’t afford to change jobs. Faced with a dilemma, I take a tequila shot and snort some cocaine. For a while I feel great! Then tomorrow I wake up with an empty wallet, a hangover and a bad taste in my mouth. And, worst of all, nothing has changed. Still the same hard choices, just feeling miserable and a bit more desperate.
A Federal government that is strong and well funded with a NARROW SCOPE is far and away the best in my opinion. Had we made some hard choices AND let states, cities and private entities serve much more of the local needs the Feds could just reach in their war chest for $15 billion in NEEDED funding and give it without robbing our future. Or if there is war or an earthquake or an economic catastrophe….but so much for fantasies.
And it is one of the biggest things killing the poor……. credit card debt
Of course Progressives want control, you just can’t see it. They are SO arrogant and SO wise they know what we all want and need:
“No. We just can’t trust the American people to make those types of choices … Government has to make those choices for people.” – Hillary Clinton
And will throw political bones to meet their goals:
“These Negroes, they’re getting pretty uppity these days and that’s a problem for us since they’ve got something now they never had before, the political pull to back up their uppityness. Now we’ve got to do something about this, we’ve got to give them a little something, just enough to quiet them down, not enough to make a difference.”
This quote appears on page 155 of Goodwin’s LBJ biography. The utterance was made to Richard Russell, a fellow Democratic Senator from Georgia.
Arrogance….control. The Progressive’s creed
Here’s one you won’t like from one of your heroes. Looks like President Obama believes in the W & E in SWEAR:
“We need to steer clear of this poverty of ambition, where people want to drive fancy cars and wear nice clothes and live in nice apartments but don’t want to work hard to accomplish these things. Everyone should try to realize their full potential.” Barack Obama
No comments SH?
My only way to make people do the S in SWEAR is very controversial. Essentially use present or increase payroll taxes and force them to save (even 1% would be a start). Allow some “outs” (like IRAs) in special circumstances and perhaps open up parts of it at decade mile posts (30?, 45?, whatever). Of course why save when the Proggressives will reward your poor decisions without any repercussions? Liberals will NEVER see the weakening that occurs when you rescue and support people in need. Of course they need help, but we should at least ask SOMETHING back if they can. Volunteering, public service, something. Maybe they’ll learn at least a bit how to “swim” to go back to that metaphor. Or throw life preservers and threaten your political opponents will take them away….
In my opinion, Soc Security SHOULD be a savings plan in its intent, albeit only for retirement. Unfortunately, Congress broke the bank and stole some of it and even then they do not invest it (even in safe as they can be Tbills) but use it is a functional Ponzi scheme about to screw Gen X.
Can’t wait for SH to compare me to Snidley Whiplash about asking for something for free food / housing / etc. Perhaps another option might be an agreement to attend school or go tech or something…. Wicked and cruel to try to help people to learn to stand on their own, I know.
In a way, I think this kind of thinking is a mistake. No matter what policy we offer – incentives, tax breaks, education, etc. – there are going to be some people who simply don’t participate. The allure is far too great to have everything now…..that is a HUGE hurdle to overcome for many people. (Just a quick look at the credit card debt in this country tells you all you need to know about that).
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To me, the role of government should primarily be to provide a floor of some sort to those that do nothing, make poor decisions, or simply fail. In my opinion we already have that. I wish I thought taking away the floor would motivate those people that are sitting on it – but I don’t think it does. Might have to agree with Steven H on this one. (Of course, I certainly don’t want to RAISE the floor)
And yes I heard you want to keep the floor, Peter. But not raise it, even after it has been dropped and dropped for decades and continues to drop. How do you seriously claim to encourage people when full time jobs still require food stamps to keep a family fed? How do seriously think that the biggest problem we have is motivating people to save 10% when rent, food, education, and medicine takes 120%? How can you be so disconnected?
Sorry, this reply was supposed to follow the one just below, to stay in sequence.
Because it isn’t as common as you try to present it. You should find another job if you can’t feed your family. Walmart is hiring truck drivers at $85k + benefits, and WILL TRAIN. can’t find enough people who can pass the drug test and are willing to do this. Are you sure people just aren’t willing to try and sacrifice? Or is it easier to just get SNAP and housing supports?
The “floor” is the safety net that you said worked well ($25T spent War on Poverty was successful) and now you say it is failing. Which is it?
Education is by and large free for the poor even after high school. I know, I was and it was. Or perhaps join the military like my Dad and get it paid for. But don’t ask anyone to sacrifice.
And maybe you have live with roommates or family. Or maybe you have to give up $5 / day cigarette expenses (most indigents I admit to the hospital smoke @ $2000/year + higher health costs) and $10/day liquor (talk to a liquor store owner and they’ll tell you about it). And not buy pot or heroin. Or not have a smart phone. (Cell phone is free on SNAP) Or not have $200 tennis shoes (I was appalled to pay $45). Or not have cable (internet is free for those on SNAP). And watch Netflix instead of renting movies. And eat at home for 1/4 the price (we do 5-6 nights per week). And drive an old car (mine is 6+ years old/wife’s 7+). And work close to home if you can. And move to a cheaper state if you need to. And have older furniture you can afford. (OK, I spend some money there). And wear last year’s clothes or buy at the thrift store for 20 cents on the dollar (my wife does). And exercise and eat better (yes, you can eat healthy on a low budget) Think it through: FAR AND AWAY, by orders of magnitude, the biggest nutritional problem is obesity. And half the food costs half as much (or whatever proportion is appropriate). Or walk or bike to work. Or don’t have pets (I don’t). And don’t buy the latest games or system (my kids don’t). Should I go on?
Of course in the world of SH, the poor NEVER make any bad choices because EVERY PENNY goes for gruel, a shack and shoes to walk to school. A few really do, but most do other things that make them poor. I KNOW I grew up with them and interface with them all the time. It’s so hard to get through your dense skull but I’ll try: I don’t disdain these folks, I just try to help them find ways out. Of course we connect them to free housing and food kitchens, SNAP and sometimes work. Or should I tell them to continue to smoke, be sedentary, eat bad food and do drugs? To you SH, any advice is some sort of judgment.
I’d like you to volunteer in a homeless shelter or kitchen or a drug rehab program (I know several folks who work in those) a while and see if you find the poor blameless victims that are just the road kill under the Cadillac wheels of Evil Capitalism OR a lot of victims of their own bad choices. The proportion will surprise you I’m sure. But hey, after all this have the courage to put down the computer and step out in the real world. I’m sure you’ll have some lame excuse or anecdote to avoid it. You’d rather others pay the way and do the work that needs to be done.
Just a few corrections since you don’t listen.
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I don’t think that the biggest problem we have is motivating people. I think the biggest problem we have is a corrupt money-driven political system. BOTH parties are equally liable in this by the way. There is NO difference.
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I don’t care about things relative to the past. At all. All I care about is the present and how we can improve the future for the poor and struggling.
And another great post, Stevendad. I see the same things you say when I volunteer at shelters and soup kitchens. Mental illness is another huge factor – which I think as a nation we do an awful job of addressing and treating. SNAP gives you free cell phones and internet? That’s excellent…I didn’t even know that part existed.
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It’s funny how so much of what you described doing is what I did when I was in the bottom income quartile. Even as I moved up, most of my furniture was free – we even had found our patio furniture on the side of the road. 🙂 We had pictures up in our home that cost $1 at yard sales. We ate a lot of peanut butter sandwiches. We didn’t have cable TV. We shared a car. We had no pets. We didn’t go out drinking. And now we are millionaires. And most millionaires got there by practicing these things (SWEAR) early on. There is just no other way. But it sucks…..it really does. Like dieting or fitness – it takes discipline, pain, worry, etc. It is hard. All we need in our society is a path to rise up if you practice these simple things (which ANYONE can do) – and a humane floor for those that make all the wrong decisions or just have grave misfortune.
Quite the contrary. Providing positive motivation is always a good thing. In fact, the big problem I have is that we have been removing motivation from those work hard. Working hard and saving money? How about if we drop salaries. Making money with overtime? Hey, I’ll declare you a manager and you have to work 60 hrs a week with overtime for free. Like your benefits? I’ll cut your hours AND that allows me to eliminate benefits, too. Want to work a second job? Good luck. I demand that you be available when ever I want to schedule you on short notice. Want to go to school? Sorry about that high tuition and big interest rate on the loan. Oh, and your neighborhood is getting trendy so the rent is doubling. You have a house, and that house mortgage is underwater and you want to refinance? Gee we lost your paperwork. Yes, for the 4th time. By the way, our foreclosure specialist has an appointment for you tomorrow. Better be there.
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Only a complete sadist would even consider that lowering the floor would “motivate” people. I swear, you two claim to have sympathy for poor and middle class but you are constantly dissing them, showing your true mind. People who do nothing. Folks waiting for a handout by the road while everyone else zooms by. Asking for raises just to get the latest tech. Do you really think this represents the common poor or middle class citizen in America? Do none of the statistics serve to convince you that most Americans’ incomes have stagnated or declined despite a lot of hard work, while the rich benefit off of their decline (as well as working hard, but no harder or with any more cleverness than generations past)?
Oh that’s right. You believe that all the poor are just as cash rich as European middle class and they are actually the ones who need a new tax to capture all of their tax avoidance. Scummy poor people. Just can’t trust ’em.
No, you diss them. You have such disdain you believe they can’t succeed without handouts. The poor income equals U.K. And Japan middle class. Showed you the numbers. You just hate FACTS that don’t fit your narrative. And again, Americans are the world’s most generous both public and private. I guess immovable objects get that way by being incredibly DENSE. I just can’t believe it at times. Never said lower the floor, just asked people who can to do something for the handout, including going to school or volunteering for Meals on Wheels. I guess you hate Meals on Wheels? That’s the kind of drivel you assign to me. Your stubbornness is only out done by your complete blindness to anything but the verbal vomit from Pelosi et al.
You spout out how I despise them (though I actually once was one of them as was my wife) but are too blind to see that it is YOU who harm them. Your handouts lead to malaise in many (of course not all). I’ve been there beside them and watch them sucked in by the safety net. Some become mired in it forever.
Ok, SH: refute this: $85,000 to drive a truck for Walmart. And they’ll get your CDL (as mentioned previously). Welding training tuition is $2000 at the local school per year. Two years and hire at $50k to $100k. Is that an OK salary? Or is that abuse by the rich? Pell grants or loans cover all of it. Dirty fingers too much for you? Tuition is FREE in my state for community college. And degrees are numerous. We are starving for teachers, over 1000 needed. $35000 per year (agree needs to be more) with great benefits and time off. Or move to your state and make $50,000+. Should I post you the ads?
Need another example? Here’s a quote from San Fran Comm College: Free City (free tuition) is a partnership between City College of San Francisco and the City & County of San Francisco funded by the voters of San Francisco to provide San Francisco residents free enrollment to City College of San Francisco.
Where you can get Windows certificate. And here are the jobs: Average salary for MCSEs and other Microsoft Certified Professionals:
MTA: Microsoft Technology Associate: $66,668.
MOS: Microsoft Office Specialist: $71,367.
MCDST: Microsoft Certified Desktop Support Technician: $76,409.
MCSA: Microsoft Certified Solutions Associate: $79,067.
None of those do it for you? Do I need to go City by city and state by state job by job to show you the OPPORTUNITIES ARE THERE IF YOU ARE WILLING TO PURSUE THEM. Of course, it’s easier to blame and whine and hope for the benevolence of the Kings (politicians). Your hardheadedness and just plain ignorance of life is appalling. Of course, I grew up with these folks? Were you below the poverty line growing up? Really, it’s time for you to quit judging if you really don’t know these folks. Not some BS “I had a neighbor once”story. I mean every day, every week, working alongside them and watching them destroy themselves. ALL I’VE EVER DONE IS ENCOURAGE THEM TO STOP DESTROYING THEIR FUTURES. ALL YOU’VE EVER DONE IS ENCOURAGE THEM TO WAIT FOR RESCUE. And of course let them continue their negative behaviors (by saying they don’t help that is EXACTLY what you do). Please give DATA about those who SWEAR and lose out on America’s gifts. You won’t because you can’t. But EACH SWEAR component has a positive value on earning. Or just call me Snidley. You are an ignorant, unthinking fool sucked in by Democratic BS. James has pegged you from the start. I truly believe in the value of these people beyond their vote for my chosen ruling party. You do not.
Yeah, enough is enough. Part of what draws me back to this insanity is some weird civic duty to try and stop the Steven H’s of the world. They are doing far more damage to society than they realize. And to blow Stevendad and I off as people that shame the poor is so pathetic and misguided.
No one is disputing that SWEAR technique can improve lives. No one is disputing that many psople lack self discipline and can improve. By the eay, this has always been and will always be, true. You are using this, however, as a distraction from what has been an occasionally productive discussion on how to improve our economy outside of the efforts of self improvement.
No one of any intelligence and econpmic insight ever believed the poverty of the gilded age or the great depression or even the great recession, was primarily caused by, or could be primarily solved by, individual efforts of self improvement by those who were most victimized. These economic shifts are caused by larger forces and must be responded to with power of those who can shift policy, i.e. government and banking and business leaders. This continued pretense that the world economy or the us economy will be lifted up by people saving money that the forces of the economy have lifted and continue to seek to lift from their wallets and paychecks, is mildly entertaining, but is ultimately nothing more than rich blaming poor as if to say ” its not my problem”.
Lets get back off of car repair and back to fixing the road.
We are trying to tell you your heroic Dems want the road broken as much or more as the Republicans. Youll never see it though…that is clear.
Very true…..and you are addressing our discussion with emotion rather than logic. None of the players in this discussion want to starve poor people into motivation. Only Peter N has really echoed anything that sounds like that.
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If you have 10 people in a race, someone will finish last. It may be because of their own effort, lack of talent, or just bad luck. But someone will finish last. All we need in society is two things….1) the ability to rise out of your situation and finish higher next race. That is in place and countless stats back that up. (Even you haven’t really denied that) and 2) a floor for the last place finishers that provides them with food, clean water and adequate shelter so that they can survive and have the foundation they need to finish higher in the next race. I think we even go a step beyond that in our country. What we don’t need is ankle weights on the people that finished first in the last race.
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Your “race to the bottom” comments to Stevendad in another thread illustrated your sourness and pessimism to society. If you could see past your own ideology you would see that neither Stevendad nor I are shaming the poor at all. Sure, some people do that for political purposes and it is horribly, horribly wrong. Not everyone who is finishing last is there because of laziness. In fact, I’ve said countless times that MOST aren’t there for that reason. I blame technology and innovation. Watch this week’s South Park episode for some excellent satire about this situation by the way.
I think the TX / CA experiment will be interesting. They are similar in size, have lots of coastline, diversified economies (CA has lots of oil and gas but choose not to pursue it https://www.google.com/search?q=picture+of+oil+derricks+in+LA&ie=UTF-8&oe=UTF-8&hl=en-us&client=safari#imgrc=MXVkZgSBGIxIHM:, you’d think that was in TX!), strong university systems. TX has a zero state tax and CA caps at 13.3%. Property taxes are about equal. Regs are MUCH less stringent in TX. Business is talked up in TX and down in CA, unless it’s some “green” business that is arbitrarily decided. (Example:The Tesla C footprint = a gas engine EVEN if it uses wind energy because of the CO2 generated by lithium mining, but still a “greenie”.) Texas is (so far) Red and CA blue. CA has roughly twice the per capital debt. TX is growing at 110k in migrants (from other states) to CA losing 94k, especially the high income earners. Of course, much of everything about CA could be said about NY, only about as bad or worse in almost every category (NY taxation is a bit better at about 11% state +city). So in summary: CA attitude is government is good, business bad and TX the opposite. If I had to bet….
Peter, I’d really like your thoughts about the capital gains and corporate tax issue. That seems right up your alley.
Just as an aside, I love the way Trump made a deal the Democrats on the debt limit. This is a shot across the bow against all the establishment, but in this case the Republicans. It’s ridiculous how things that are obvious and necessary always get tied to something that’s not so obvious or necessary. Sort of like you have to eat fried chicken and force down some liver with it. Let’s just stick to the “fried chicken” until it’s decided over the next few years whether we want bigger or smaller Federal government, the key question of our times.
I think it is interesting. Corporate taxes could definitely stand to be lower. We have a problem now where dividends are actually taxed twice – they are taxed at the corporate level and then to the shareholder as income. Granted, Bush’s administration did pass a resolution to tax qualified dividends at a lower rate than regular income (which helps the situation a bit) – but it is still double taxation.
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So you are proposing that we lower corporate tax, but increase capital gains. I assume we would keep personal income tax as well as the preferred tax on dividends as well. The only concern I have with higher capital gains is it prohibiting money in motion….people being reluctant to sell things. Of course, this could help the average investor who buys/sells far too much, usually in a bad way (selling low and buying high). Who knows. Plus, I’m sure capital gains would be tiered to be heavier on higher income individuals. While I think it is a nice break to give lower income people no capital gains taxes, I would imagine this has little impact practically, as many of these people do not invest in securities – or save at all. The idea is to encourage them to save for something beyond the current time period, but I think expanding things like the Roth IRA do a better job of that.
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But bottom line, I do think your idea has some merit. Do you think it would reduce the income disparity Steven H is worried about?
Funny I just posted this and got an email with this stat in it….. just 20% of all households between $50k-$75k in household income invest in the stock market. Interestingly, EVERY income group is below 40% participation. So maybe this isn’t as impactful as we might hope.
Yet another HUGE factor that separates the haves from the have nots. No excuse for someone making $50k-$100k to not have anything in the stock market. Particularly in retirement plans through employers…..(where participation rates are shocking low as well)
I think leaving the bottom rung if taxpayers at zero MIGHT encourage saving for the poor. As far as revenue, it would be made up for by increased business investment and perhaps attracting companies from abroad. But that is speculation. So you feel my math and the process is correct in general?
I think it sounds logical (unless I’m missing something). Unfortunately, I don’t think the zero does encourage savings – it hasn’t so far – but it certainly doesn’t hinder. I think it might be a myth that taxing capital gains would make people say “well, what’s the point of investing if I have to pay taxes on my gains?”
That does bring up a good question. What policies (since most of this talk has been about what the government can do to help) can be put in place to encourage people to practice SWEAR?
Please google this phrase “would minimum wage help”? And read every article on the first two pages. Thank you.
I plan on doing this, but have several projects at hand. Be patient, please.
Medicare and part of Medicaid, Soc Security and the debt are all forms of generational wealth transfer, so of course the elderly (now have the MOST wealth) benefited. The bill comes due in Gen X. Good luck.
By the way, your $25 Trillion on the War on Poverty is an interesting statistic. A few years back, I set up a spreadsheet to accumulate the sum of the DIFFERENCE in dollars between the income of the upper 1% with their income share in 1980 and the income shares they actually received after that point with growing income disparity. I calculated you could have paid off the entire national debt with this income difference. I suspect that is still true, and more so. And since the Debt is about $20T, I suspect that income difference to the 1% is probably hitting there $22 to $25T mark as well. So it seems the country has been wasting at least as much on the rich as it has been spending trying to cover the living shortfalls of the poor. That’s a pretty concise description of how the incomes of the poor and middle have been transferred to the rich.
Perhaps. So: Raise income taxes and increase giveaways. Take a cut. REPEAT. REPEAT. REPEAT.
Basically what you are asking is how we could have gotten so much money FROM the hands of the people that developed better technology that made our lives immensely better but made many industries obsolete TO the Everyman laborer that worked for these companies. Income disparity isn’t only a government thing. Sometimes it happens during economic booms – the same way the disparity would shrink in a giant downturn. We have been over this though.
And by “these companies” I mean those that worked for the industries that are now more obsolete in the Information Age. The guy that creates the kiosk gets rich, while the workers that are replaced by it get fired or at least don’t make more money.
That’s why a wealth tax to replace the estate tax. Would get a lot of that disparity you mention back. Require it to go to debt reduction.
I don’t think the wealth tax is practical. Just brings so much possibility for loopholes, corruption, etc…. Plus, I think it was Ron or Rand Paul that said the last thing you want to do is give Congress another tax. Once you start it (like income tax) it is NEVER going away. It will get politicized like all the other taxes and pointlessly manipulated back and forth over time to win elections.
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Of course, I see your point – that we essentially have an estate tax now, the wealth tax is no different. In my profession, I deal with estate valuations at times and have seen how that goes – the process where we determine how much your assets/liabilities are worth. This is a majorly time consuming process that can take months and can be disputed (for instance, valuing a business interest). I think the last thing we need is to be doing this annually.
It’s actually not too difficult. Leave out personal property with a few exceptions. And real estate as already taxed. Share or nond value times .02. EBITDA (has to be calculated for business income any way) / industry standard times .02. Collectibles are harder, but still have value books for everything from baseball cards to artwork. And that is not that people EVER cheat or lobby for loopholes with income tax. I agree Congress can pervert any good intentions. No question about that. But, that’s the only game in town. I think it’s better than just letting them run up the national credit card.
I do like the politicians that say any new tax must come with a corresponding cut….. wouldn’t even entertain more taxes without there being some give on the ridiculous spending.
Oh yeah, only Norway (with huge free money from North Sea oil) spends more on the poor than evil America. And private Americans lead the world in donations to charity (20 times more than Dem hero Germany) http://www.washingtonexaminer.com/americans-are-worlds-most-charitable-top-1-provide-13rd-of-all-donations/article/2580876
Interesting that wicked Repubs far outpace giving to charity than good hearted Democrats.
Could it be they only want to give away OTHER people’s money?
Of course, if you have fewer poor people, because your economy, taxation policy, labor rules, and government services better support ALL citizens, you don’t have to spend as much on the poor, nor solicit donations from the very rich for charity.
You’ve never answered why larger local government at the expense of the Feds is such a bad idea. Just curious?
Sometimes you need national policy that is consistent.
1) Regulations are easier to follow if they are consistent nationally.
2) You want to avoid a race to the bottom. States will offer lowest min wage, lowest labor protections to entice companies to their state. Companies win. Politicians win. Citizens lose.
3) Interstate commerce regulation and standards are federal responsibility. These days, that is most commerce.
4) Disaster relief is best handled at federal level.
Those are just a few reasons.
1) right: defense, weights and measures, pharmaceutical approvals, matching up highway construction, helping disasters. NOT education, SNAP and minimally for health. (The latter are where all the money goes). Let the rest go. Sounds like…oh yeah the Constitution!
2) or a race to the top! States that take best care of their citizens thrive. You TOTALLY made this up. No data at all. CA and TX are a lab for this. Let’s see…. we’ll know in a decade or two. My guess is TX is, well TX then and CA is Detroit. Not wishing that, its just clear to me they are doing the same things as Detroit.
3) right…and the commerce clause has NOTHING to do with health care, Soc Security, Medicare, etc. Was designed to keep states from having trade tariffs and embargoes. It’s been stretched into 2/3 (!) of the budget.
4) Absolutely. As I said above. If they weren’t trying to do everything else they wouldn’t have to burden the future generations to do it.
You really can’t, can you? Other than your bias that the Feds do everything so well. The take a large administrative cut and add regulations (strings) they apply which may or may not be appropriate. You cannot refute the locals have more accountability and are more familiar with the needs of their communities. Of course, it’s easier to pay for the things the Dems in their arrogant, superior attitudes if they can force everyone else to do it. As below, they are not nearly as generous with their own money.
Agreed. Tend to believe it would be a race to the top rather than a race to the bottom. Such a fundamental difference between us (and I’m not sure who is right).
Yes, yes, yes, the government is soooo good at all of those things… That’s why it hasn’t worked. So SWEAR for yourself, which will only make it better if those other things improve.
You love to diss government. Without government, nothing good happens. Think lord of the flies. Chaos and survival of the most vicious.
Are you that dense? Neither of us are suggesting we have no government. It should just serve the purposes the constitution laid out for it – not running industries like finance and health care where it doesn’t know what it is doing. The government should also not be used to redistribute income or wealth or for political purposes you desire.
That is the argument of a third grader. I’ve just said over and aver we have enough, perhaps a bit too much. And that it should move more locally. No question you want MORE,MORE,MORE.
Raise taxes, give stuff away, take a cut. REPEAT.
Very banal reply…..it’s not a question of should we have government (we do) or taxes (we do) or significantly higher taxes on the wealthy (we do). This whole thing is a debate about whether we have problematic income disparity, the reasons for it (we wildly disagree here) and whether the solution is more of the three things I listed above (also disagree).
Banal reply to a banal comment. Im glad I could finally get you to confess some benefit to government. Honestly, most of your posts portray it as completely dysfunctional and worthless. Government has purpose, and I believe that ours, like pretty much every modern national government, is served well by having national policies on education, health care, labor, banking, energy, etc. States can be a proving ground for some policy, but there is no going back to an agrarian society of semi autonomous states of the 1700s.
LOL if you are just now realizing that I see “some benefit to government” you are even more dense than I thought. After 4-5 years of this ….. ARRGHHH
I know you believe there is benefit to government. I’m just glad you finally say so in writing. You tend to make it and all politicians sound pretty worthless.
Its that simple Stevendad. It really is
Can’t reply, so here’s the info on the $25,000,000,000,000. I’m sorry I misread and used the under 18 data, still not good. The start of most of the legislation was was 1966 after being passed in 1965 (and it was already better BEFORE the legislation:
1965 6,721 13.9 1,916 38.4 10.3 28.5 7.3
1964 7,160 15.0 1,822 36.4 10.4 25.4 7.8
1963 7,554 15.9 1,972 40.4 10.2 26.1 7.2
1962 8,077 17.2 2,034 42.9 10.0 25.2 6.8
1961 8,391 18.1 1,954 42.1 9.9 23.3 7.0
1960 8,243 18.1 1,955 42.4 10.1 23.7 7.0
1959 8,320 18.5 1,916 42.6
(Out of Census bureau data)
Dropping from 18.5% to 13.9% (gross percentage 4.6% and almost 25% better the 7 years BEFORE the legislation) again government solving problems that were getting better anyway. )
not 1964 (cherry picking again) and not reflected until 1966 census. 1966 11.8% of families, 2015 10.4%. That’s 1.4% gross improvement for $25,000,000,000,000. You call that success and you want more…
“(3) Lastly, it is important to note that the poverty rate is calculated with income that EXCLUDES the war on poverty government benefits. ” This is a bit disturbing to me. You consider permanent reliance on government a “win”. So these folks can vote for your Dems maybe? I’d rather they have wealth through work, saving, reasonable temperance and responsible parenting and education. Silly me. OF COURSE we need some tweaking to many things, I’ve offered over a dozen. SH and Dems solutions are the same:
Raise income taxes and give away stuff. Take a cut to enrich yourself.
Raise income taxes and give away stuff. Take a cut to enrich yourself.
REPEAT, REPEAT, REPEAT.
Also, this is EXACTLY WHAT I SAID a while ago. People aren’t really as poor as you like to say they are because the bottom quintile gets $10,000 per family in benefits. And the $10,000+ in the underground economy (on average). So the SPENDING (what matters) of the average lowest quintile family in US is about $30,000 WITHOUT private charity, free phones, underground income. This places our poorest 20% about equal to the median U.K.& Japan (not exactly Third World countries) at number 15 in the world in disposable cash.
(1) Thanks for your correction.
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(2) I need to correct one of my numbers as well. My “1964” stat was actually the Table number for individuals in 1965 (which according to the census table was “People as of March of the following year), so it is really early 1966. Since we should use a baseline closer to the first passage of legislation in late 1964, preferably just before any effects of legislation are in play, the 1964 table value (aka March 1965) or even the 1963 (aka March 1964) value are probably most appropriate.
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(3) More complete Poverty Rate tables, with some historical notes.
Year, IndividualRate,FamilyRate
1963, 19.5, 17.9
1964, 19.0, 17.4 (March ’65 data, may reflect some impact of late year War on Poverty legislation passed in 1964)
1965, 17.3, 15.8
1966, 14.7, 13.1
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1979, 11.7, 10.2 ; Not sure why this year is lower than 1980
1980, 13.0, 11.5 ; Reagan elected;
1988, 13.0, 11.6 ; Reagan term ends; Poverty constant despite economic expansion, and tripling of raw national debt; big increase in wealthy incomes and shares.
1992, 14.8, 13.3 ; Bush1 terms end; Poverty has increased .
2000, 11.3, 9.6 ; Clinton term ends. Economic expansion has further increased income disparity, but at least poverty rate has gone down.
2008, 13.2, 11.5 ; Bush2 term ends. Poverty starts to climb with economic crash.
2012, 15.0, 13.1 ; Poverty peaks from economic crash
2015, 13.5, 11.6 ; Current stats available, still in Obama term. Poverty coming back down slowly, but dropping significantly from peak level from crash.
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(4) Poverty rates fluctuate with economic conditions. However, it is important to note that the economic expansion under Reagan did NOT decrease poverty, but the economic expansion under Bill Clinton DID. Policy matters.
(5) Please don’t take both sides of the same argument. You can’t simultaneously argue that government expenditures on the poor serve no purpose and do not help them, and then also argue that the poor are not really as poor anymore because they receive government benefits.
(6) I understand the concern of simply propping up the poor with government benefits without addressing underlying problems. What are the underlying problems? High income disparity. Wage suppression. Wage theft. Forced part-time hours to avoid benefits. High education costs. High medical costs. Fixes? Many already discussed and agreed upon. But I can garan-dam-tee that cutting the Social programs that support the poor and middle class won’t fix anything. And if we fix some of those underlying problems by helping Americans do better INCLUDING PAYING THEM MORE (including increased min wage and higher threshold for “Exempt” management employees and a fix for the 30 hr benefit loophole), then the cost and need for some of those benefits will decline.
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5) I love it when you make stuff up. I never said “that government expenditures on the poor serve no purpose and do not help them”. That is created in your mind. I said they are horribly inefficient and misguided in how they give out benefits. This is largely to buy votes in my opinion, but just could be straightforward incompetence. LBJ is rumored to be on record about that. I’ll look further…
You said $25T was spent and accomplished nothing. Then you said it made zero real impact on poverty levels. How is that different than saying the expenditures serve no purpose and do not help the poor? I just thought that was an accurate paraphrase of what you meant.
Yes, it had almost zero PERMANENT effect on poverty. Perhaps that clarifies it. I don’t think a large part of our country living off the government is good. That is a Progressive plan to control them, wrapped in “generosity” with other people’s money. And, of course, it’s good to help the poor. It’s just clear what we are doing is not working. You want to do what Einstein warned against: more of the same thing expecting a different outcome.
There is no progressive plan to control the poor. Why do you spew such absurd nonsense? If anything the rich are trying to suppress the poor and the Dems are just trying to give them a leg up.
SH – You do realize that instead of noting each year with who was President (as a way to assign causal connections between politics and poverty rates), you could have just drawn a chart of the economic cycle and it would have explained everything clearly. Wars play a huge role in this as well. If there is a variable to isolate that has the LEAST IMMEDIATE impact on poverty rates, it would be who the President of the United States is. In my opinion of course. People constantly blame or praise a President for how the economy does in their own term, when the reality is that any changes usually take several years to bear fruit. I remember telling everyone this during the 2008 election – that it was a big one for the various parties because we were clearly going to have excellent growth out of the 2008 over-reaction and panic. Whomever was President during this would get the credit from those that don’t know better. Same thing is happening now to a lesser degree.
Policies matter. And presidents drive policy even though they do not write the legislation. It would be foolish to think that policies and their impact would be identical under Trump, Bernie, or Hillary. Millions are about to lose healthcare under the TrumpCare debacle, whether or not the current repeal bill passes. It is almost too late to pass the needed insurance protections to keep policies affordable. This would not have happened under Bernie or Hillary.
And I still don’t know what table you are using. I am using Table 2 from the Census Bureau website, which indicates Individual and Family Poverty rates, and matches the most widely quoted numbers. Your numbers still don’t match the tables I have found.
https://www.census.gov/data/tables/time-series/demo/income-poverty/historical-poverty-people.html
Oh, I see, you used Table 13, which is percentage of families. Table 2 has all people, and also people IN families. Table 2 is more widely quoted and you don’t have to keep track of how big the families are, so it is probably the more credible table for these purposes.
And again, 1964 is not a “cherry-picked” reference year, but is the most appropriate year. It actually reflects March 1965 data, and since the first War on Poverty legislation passed in late 1964, these March 1965 numbers are probably lightly impacted, if at all. The 1965 and later numbers most likely incorporate some impact of the legislation.
The legislation has a delay in activation and adoption. Regardless, it was coming down rapidly before.
Of course, for more thorough analysis, you have to look at impact on different age groups and even at the poverty definition, which has not been updated adequately over time. This is why I hesitated to get into this conversation. It is complicated.
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All that said the drop in elderly poverty rate from 28.8% in 1966 to 8.8% today is pretty impressive. And that is BEFORE actually measuring govt benefits themselves.
28.5% in 1966, not 28.8%. Referencing Wikipedia.
It will get close to that again for Gen X when all the unpaid bills hit them. But they are a “throwaway” generation like the Lost Generation who were old in the 60’s. See the boo Generations by Strauss and Howe.
Gee if only we knew some portion of the populace who has 20% of all income when they used to have only 10. Then we could get them to pay back a sizable cut of their windfall for the good of the country.
I just hope you will be for the same equalization when the market falls and I lose half my income and 1/3 of my assets like I did in 2008.
With all due respect, our national mistake was not taking that opportunity of temporary reversal of income disparity to gear the economic recovery to benefit the middle class more than the wealthy. Instead we have let the wealthy get 90% of the gains of the recovery and we are back where we started. Maybe next time. Might be soon.
There is no way to “gear the economy to help the middle class”. This isn’t a video game.
Remind me (since these stats are more nebulous) where you got the $10,000 per family in benefits and assumption of $10,000 per family in underground economy for lowest quintile. I know we discussed this before but I don’t recall that we agreed on numbers. Also, don’t assume the underground economy all benefits the lower quintile or even the lower half. Even rich folks buy services and sell services under the table. and they may very well account for over half of underground economy, just because the services they buy and sell cost more.
$10,000 in benefits off of BLS data. There are assumptions in the underground economy, but I assumed the lowest 20% has about half of the $2.4 trillion the Fed estimates, assuming that the rich cheat less as they have a lot more to lose and get more money through legal means. You can argue this, that’s why I didn’t include it in comparing with U.K. and Japan median income.
“People aren’t really as poor as you like to say they are because the bottom quintile gets $10,000 per family in benefits. ”
=== Which they get because they would be in poverty without the govt help.
“And the $10,000+ in the underground economy (on average).” === determined by questionable stats.
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“So the SPENDING (what matters) of the average lowest quintile family in US is about $30,000 WITHOUT private charity, free phones, underground income. ”
=== How could you possibly know if spending came from underground income or private charity or not? And what is this conservative obsession with free Bush-phones?
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“This places our poorest 20% about equal to the median U.K.& Japan (not exactly Third World countries) at number 15 in the world in disposable cash.”
=== Way too many assumptions in that analysis.
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Consider flaws in your assumptions:
— You used a 2011 or 2012 underground economy analysis to get your summation. But underground economies are known to flourish in recessions and high unemployment, so your measure was likely an anomalous peak. We are now post recession with low unemployment and so underground economy can be assumed to have reverted to avg from 2000 to 2007 of about 8.7% of GDP (which was 18.6T in 2016) or about 1.6T not 2.4T.
— The assumption that half of the underground economy is in the lowest quintile has no basis in any study I have found. Maybe it is only 20 or 30%. Or maybe only 10% in lower quintile with a bigger concentration in 2nd and 3rd quintiles.
— The lowest quintile includes a large number of people in unusual categories, who are unlikely to be part of a significant underground economy, especially the elderly and disabled. This makes the underground economy much more likely to be spread among higher quintiles.
— Even when people in the lower quintiles offer a service for cash under the table, it is very likely to benefit higher quintile purchasers (home construction, home repair, lawn care, tree-trimming, maid service, elder-care, nanny, personal auto mechanic, butler, etc.). Have you considered how this factors into hidden upper income?
— Upper quintiles also offer services for cash under the table, and their services have more value, driving up the percentage of underground economy in those quintiles.
Statistics don’t convince him unless they back up his politics. Third party articles don’t convince him unless they back up his politics. Anecdotal real life experiences don’t convince him unless it backs up his politics. Expertise in a certain industry is meaningless unless it backs up his politics. This is what is wrong with our society. There are too many on the left and right thinking like this. So we either give up- or continue this running up against a brick wall.
You’re right. He is the Immovable Object. Only my wife finds me irresistible.
Sounds like me describing you. …
“The assumption that half of the underground economy is in the lowest quintile has no basis in any study I have found.” —-
OK, so people making over $100k/year legitimately are the ones selling drugs and running prostitutes? Kind of hard to “study” the underground economy, isn’t it? Trying to equate the MASSIVE amount of money in drug trafficking/sales in our country to under-the-table butler payments is a bit of a stretch. So ridiculous.
So you presume to know a breakdown of the shadow economy? What percent is criminal? What percent is legitimate business doing side work for cash? And what percentage for each business? How much is independent contractor maid or cleaning or tree trimming with most or all income unreported? Hard to say. I dont think anyone has claimed it is 100% drugs and prostitutes. But I bet some of those folks make more than 100k a year.
“But underground economies are known to flourish in recessions and high unemployment” This is also not true. Just for your general education on this. Countries with the lowest tax rates and fewer regulations tend to have smaller underground economies. These economies flourish in highly regulated, highly taxed environments. In other words, when government’s hand is the heaviest. Not when unemployment is high or recessions are occurring. Tax laws and regulation/rules/prohibition are BY FAR the most important factors in determining whether shadow or underground economies will grow. Sorry, but this goes against your politics again so it will likely be hard to accept. But a little cursory research and you will see this is indeed the case. Literally thousands of places you can learn about this, but here is one from the IMF https://www.imf.org/external/pubs/ft/issues/issues30/#6
A great line from that article: A heavily regulated economy combined with weak and discretionary administration of the law provides especially fertile ground for shadow activities.
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This is what we have in the US with drug laws, immigration laws, gambling laws, even some Wall Street laws. Heavily regulated, poorly and inconsistently enforced.
Your comparison of countries is true, but my comparison of changes in economy is also true. The shadow economy was seen to expand in the recession. This makes perfect sense. As unemployment increases, the unemployed will seek other cash only ways to make money. As economy improves, this activity should go back down.
That’s not how it works, but OK…… recession/expansion has little to do with it. Regulations and low tax rates are far more correlated. But keep believing what you want.
Again, SH, avoiding hard to refute arguments:
So to reprise:
September 8, 2017 at 5:21 pm
See the much longer post. You cherry picked the ONE YEAR it was $11/hr (in 2013 constant $). THIS WAS THE ABERRATION. $6.00-$8.50 the norm.
Yep….just bails when his narrative is challenged and attacks the poster or the source. Getting old.
Your acusation is called projection. Attacking sources rather than substance. Didnt you just do that?
No, I think he attacked your avoidance of hard data that doesn’t fit your (the Democratic) narrative.
Stevendad, Peter provided no hard data. He attacked an asserion irrelevant to my post, and which I had not endorsed. Just because I praise specific points in an article by NH does not mean I endorsed every idea he ever wrote. Peter was deflecting with irrelevant side information, nothing more.
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As for hard data, where did you get your incorrect stats on poverty levels? They dont match govt stats. And do you understand that those stats do not actually include the benefits the poor receive?
See above, I misread a table while watching football. Sorry.
Thanks for correcting.
As for your article, I just have not read it yet. My proposal of 11 or 12 dollars is not cherry picking. I am suggesting (as others have done) that min wage could and should rise more than inflation because inflation measures do not fully reflect living costs or other national economic gain.
I just pointed out $11 is the highest ever, was for one year and was well above the usual $6-$8.50 range. And it’s NEVER been $12. All in constant 2013 dollars…
The difference is that my narrative isn’t being challenged – and I don’t bail out on the arguments. And I’m not attacking you personally – more of an attack on your incorrect understanding of the economy and your stubbornness to learn or have an open mind.
A better assessment of the chart is that from about 1955 to 1983 (eyeballing the graphic) min wage was almost always between 8 and 9 with a visual mean of around $8.50, in 2013 dollars or about 8.50 to 9.50 with mean of $9 in 2017 dollars. So $9 (plus or minus 50c) was the norm for almost 30 years before high income disparity kicked in. Since you have to raise to a high number and generally let it deflate over time, this indicates we should raise to about 9.50 this year just to match the 3 decade historical norm, OR raise to 9 and tie it to inflation. The recommendation of an even higher min wage is to account for increases in national prosperity and to more quickly address income disparity.
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Would you at least support a raise of min wage to $9 or $9.50 to match the norms of 1956 to 1983?
I have ZERO concern for “matching” anything to 1956 or 1983. Maybe we should “match” our civil rights laws to 1956 too?
Here’s a thought about dropping corporate income taxes without raising deficits: since profits flow to shareholders as dividends or capital gains, why not lower the corporate rate to increase competitiveness but at the same time raise capital gains taxes? In a purest case, say we drop current effective corporate tax rate of 24.5% to 15%, the raise the capital gains tax (immediately on stocks, bonds would be phased in) by the same 9.5% (24.5% and 29.5%)? We could even leave the lowest bracket the same (zero for 10% bracket): It’s a wash for the wealthy shareholders (don’t win,but don’t lose as profits rise concomitantly), makes our corporations more competitive (we should all win) and makes it easier for the poor to accumulate wealth (even SH wins!). Thoughts?
I don’t have enough data to analyze this scenario. Maybe Peter can provide some insight as to its viability.
I’m not sure, but it seems even win win. I’ll send to Sen Lankford if so, so he can ignore it.
The only other hurdle here – which I addressed above – is that it may make it easier for the poor to accumulate wealth, but they still would have to do so. (Practice SWEAR) So we may likely be in the same situation we are in now, where a large percentage of poor rise up in income quintiles throughout their lives, but many who don’t practice SWEAR or save/invest money for wealth building remain poor. The only way to increase the quality of life (generally speaking) for the bottom 10-20% or so is handouts. Higher minimum wages, more Fed assistance, food stamps, subsidized housing, etc. Any other tweaks are simply going to increase MOBILITY – which is what I care about the most by the way – but won’t help those that don’t play the game or put in the work.
Here is another one from a left-leaning news organization that shows the idiocy of Hanauer (and thus, Steven H). https://www.washingtonpost.com/news/wonk/wp/2013/06/22/a-15-minimum-wage-is-a-terrible-idea/?utm_term=.82b849a4b629
Again, these are quick political fixes. Real solutions are more nuanced and require far more time.
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The bottom line is – if you want to raise minimum wage slightly, do so. If you want to raise taxes on the wealthy slightly, do so. Anything done dramatically – even when trying to “equalize” things to rates of the 1950’s or cost-of-living or just redistribution of assets – would very likely be a catastrophic idea for the economy.
A ways down is a post about the 70’s that followed late 60’s “wage Nirvana”: wage and price controls, double digit inflation, 18% mortgages, and economic stagnation. All were in large part due to wages being driven so high (along with government overspending). Why would anyone not learn from this disaster?
Not sure if i spotted this post you reference, unless it was the minimum wage stats. Are you claiming that late 70’s economy was damaged by high minimum wage? I always thought it was the oil embargo.
Could have been energy costs as well as Vietnam Nam spending as well as min wage.
What a fascinating debating technique! When attacking an idea from an article, find something else tangentially related that the author of the article said 3 years ago and attack that as false, therefore proving that anything they say afterward must also be false, and that anyone agreeing with these later statements must be idiotic as well!
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Your 2013 found article response to some article Hanauer wrote in the past has little if anything to do with the 2017 article I posted, or the extracts I specifically endorsed in my post. I really don’t care if Hanauer did (or maybe still does) have overzealous confidence in taxation and minimum wage as endorsed solutions and has, in the opinions of some, overstated their effectivity in some article in the past. You have also made overzealous and inaccurate endorsements of certain financial solutions but that does not necessarily render every subsequent statement or idea from your head a proclamation of idiocy.
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I have repeatedly stated skepticism that an instant national $15 minimum wage would be appropriate, and have conceded that $11 or $12 by 2020 may be more suitable. That does not however, negate the more general principle of quickly restoring a minimum wage that has matched past real levels, or indeed of having it reach $15 at some point in the future.
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Raised minimum wage is an effective and IMHO necessary act as part of multiple approaches to fix our economy. We don’t really need more “jobs” at less than a living wage. Providing a few more “jobs” at slave wages ultimately does not help the economy or society and simply serves to expand the poverty class.
To be clear, this is a reply to Peter’s post, not stevedad’s.
Any reply to mine?
Sorry – was just trying a different method. When I tell you the people you quote (and you yourself) don’t understand basic economic principles, you question my credibility. Thought if a third party told you that you would maybe listen. Never mind…
But the principles you were refuting were not the principles I was advocating. The article you posted was refuting the wisdom of an instant national $15/hr minimum wage in 2013. Nick H is no economist. But his social observations and his TRUE observation that Seattle’s economy did not suffer from a local $15/hr min wage are still legit. Even in the article you posted, it noted the debate among economists as to whether a rise in min wage could INCREASE employment. And while the majority opinion falls more to no impact or very slight negative, there was still legitimate debate, and conflicting data. So it seems to me rather disingenuous for you to be dismissing all Nick H ideas as idiocy simply because (a) he has exaggerated legitimate economic studies based on his ideology (something I’m sure you never do, tongue in cheek, LOL) , and (b) his ideology is opposite of yours.
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There were many salient points in his article, as I outlined. And as to the GENERAL principle that modest increases to minimum wage will help earners at the low end of the scale with little to no impact on employment, that is not idiocy. It is generally accepted mainline economics.
“Real solutions are more nuanced and require far more time. The bottom line is – if you want to raise minimum wage slightly, do so. If you want to raise taxes on the wealthy slightly, do so.”
Yes, I agree.
. Multiple approaches applied in moderation over time are required. But they need go move in the proper direction. Minimum wags must go up, not be allowed to regress by inflation. Deficits must be reduced through smarter spending and budgets AND required tax increases on very rich. If corporate wealth is to be repatriated, strings must be attached to compel job creation, worker pay onctrase or other national onvrstment, not just investor reward. Etc.
Don’t completely disagree with this – although we can’t “make up” for lost time trying to match metrics to a prior decade that we might idealize. Must proceed slowly and carefully from here without regard to reparations or equalizing things. And must tax the super-rich, not the rich.
By the way, it is estimated that the opening/expanding of Amazon HQ in Seattle brought $38 billion to their economy since 2010. Most great booms come from industry like this … not policy.
And when an economy is expanding, that is an excellent time to boost minimum wage, and is likely to further enhance growth by putting money in hands of those who spend it.
Perfect! Raise it in Seattle, but not where the economy is NOT booming. You make my local>state>Federal government case over and over.
Right. But what happens when Seattle’s economy slows? Say Amazon moves out of Seattle for instance….taking all the jobs with them…. Then what? The problem with so much of this stuff is that you can never DECREASE minimum wage – or put the cat back in the bag. So you have to be very careful not to overreact to short term phenomena in the economy.
Yes, giveaways are like a diode, only travel one way.
Yeah, all those giveaways to the rich are REALLY hard to reverse.
The problem with so much of this stuff is that it is so hard to pass a tax INCREASE to the rich, or put the tax cut back into the Treasury. So you have to be very careful not to let politicians pass big tax cuts to the rich.
$25,000,000,000,000, the money transfers by the Great Society. I just have to keep counting the zeroes because it seems it can’t be right. But it’s real. 7 + stacks of dollar bills that reach to the moon! End to end 13 round trips to the sun! And no real effect on poverty. But let’s keep plugging away and give the bureaucracy more! Great idea!
We are all saying the same thing….don’t give the elite and those that don’t need it MORE money! The difference is Steven H won’t accept that the elite are people like Hillary Clinton and Obama…..that they are at the very least run by the elite, as are prominent Republicans.
The costs and benefits of the Great Society and War on Poverty programs are much debated and your dismal characterization is at one extreme, and certainly unjust and inaccurate. Many have benefitted from Medicare, Medicaid, Food Stamp programs, as well as the Civil Rights protections that were enacted as part and parcel of these efforts. There have been and will be endless arguments about how policies might have been enacted or implemented differently. But to claim no positive impact is a curmudgeonly untruth.
And???
Google it. There are extensive detailed arguments on both sides. This issue is too complex, and Not something I have time to delve deeply into. Im just saying that stevendads argument is extreme and simplistic, and by those characteristics alone, certain to be wrong.
I could find an article declaring success and you would find one declaring failure. No point.
Simple and correct.
US Census bureau: poverty rate 1966: 17.6% 2015 19.7%. No spin, no bias, just the closest thing there is to facts, Census Data. 19.7 > 17.6 when I took math.
Stevendad, your data seems to be incorrect, as well as misrepresented.
(1) You used the % of people below the poverty line (the 1.0 multiplier in Census Bureau tables) for 1966 and perhaps the % of people below **1.25x** the poverty line in **2012** as your 2015 number. The correct numbers for 1.0 poverty rate are 1964: 17.3%; 2015: 13.5%.
This is also reflected in the Wikipedia test on the subject: In the decade following the 1964 introduction of the war on poverty, poverty rates in the U.S. dropped to their lowest level since comprehensive records began in 1958: from 17.3% in the year the Economic Opportunity Act was implemented to 11.1% in 1973. They have remained between 11 and 15.2% ever since.
(2) Note that the rise in poverty from 11% to current 13.5% is largely reflected in policies that have undercut and reduced poverty programs since 1980.
(3) Lastly, it is important to note that the poverty rate is calculated with income that EXCLUDES the war on poverty government benefits. From NCCP page: “the federal Earned Income Tax Credit isn’t counted [as income], underestimating income for [many poor] families. Also, in-kind government benefits that assist low-income families – food stamps, Medicaid, and housing and child care assistance – are not taken into account. This means that official poverty statistics cannot be used to analyze the effectiveness of these programs.” In other words, all of the benefits that you say make no impact, actually make HUGE positive impact, but are actually outside of the statistics you stated. The poverty statistic is intended to indicate who is in poverty BEFORE they get help, so it can be determined who is ELIGIBLE for help. Even this rate has gone down since 1964 (or 1966), despite the rise since 1980. But the real impact would have to be measured against a post-benefit poverty rate, which I have not located and may not be calculated. Regardless, all of those benefits obviously will lift people above the level of poverty they would have been in without food and medical and housing benefits from the government.
Summary: Thanks for supplying some data. But your statistics are inaccurate, your comparison points ignore the rise due to underfunding and attack against these programs in the last several decades, and your interpretation of the statistical measure is just wrong. But thanks for trying.
Typo, “Wikipedia text on the subject” not “Wikipedia test on the subject”. And I used 1964 instead of 1966 as that was when the programs started.
Also from Wikipedia [with update].
The most dramatic decrease in poverty was among Americans over 65, which fell from 28.5% in 1966 to 10.1% today. [Actually now dropped to 8.8% in 2015, latest stats].
Yay! Celebrate the effectiveness of Medicare and Medicaid!
All these tax hikes Steven H wants will never happen as long as the very multimillionaires you want to target are able to buy your beloved politicians. Trump is actually the best President we have had in decades when it comes to that…..he doesn’t appear to listen to anyone (scary, I know) or be puppeted by the rich the way Obama, Hillary and GWB were. You should be excited! The 0.01% has a lesser voice in this presidency than they have EVER had – which is why the media and other establishment organizations are flipping out.
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My beef continues to be….if we don’t/can’t attack the multimillionaires and billionaires with higher taxes because of their political power, we attack the next tier down. This is the group I’m in – people making $250k to $2 million or so a year. This group is already VERY heavily taxed and are predominantly entrepreneurs or job creators. It’s completely counterproductive to tax this group any further without first going after the tip-top bracket. The weakness is that this $250k-$2m group has ZERO political power. The Obamas/Bushes of the world are being controlled by the mega-rich. So….I ask AGAIN….why give more money to the mega-rich controlled politicians and expect things to trickle down to the poor?
Part of your analysis is way off base. Trump and many many of his cabinett and advisers ARE the .01%. They have more influence than ever. Trump cannot drain the swamp when he is the swamp and hires the swamp. Trump is the worst President in history in this and any other criteria.
OK then more of the same…..why give them more money?
And I don’t agree with you by the way…there are two billionaires in Trump’s cabinet – DeVos and Ross. I’m talking more about the people in the shadows -Koch and Soros most famously- and the powerful lobbyists from each industry. (For example the powerful insurance lobby that got Obama to cater to them, tainting his vision for the ACA) I’m not saying that Trump is “clean” of billionaire crony influence…just saying he is cleaner than any candidate we have had because of his rogue nature. The media moguls who are alot of these cronies I keep referring to are losing their minds over this. Clinton would have been a much better candidate for the wealthy establishment. What worries me is that they will regain control of our country in the next election and continue to fatten their pockets while they run up debt and pass BS policy that helps nobody but themselves.
I KNEW I should have invested in UNH in 2009! Better than a “ten bagger”by the Peter Lynch taxonomy. Too bad it was on the backs of the insured…
Billionaires (or millionaires) on the cabinet is such stupid political fodder. There have been wealthy people on the cabinet for years – and why is that bad? In fact, the richest guy on Trump’s cabinet is Ross, whose net worth is actually LESS than his predecessor. How about we focus on the point I made in my post instead of stupid political wrangling.
You were making the point that the very rich have less influence in Trump’s cabinet. Your argument holds no credibility. While it is true that Trump is capricious and might do anything at his whim, and is thus the most dangerous and potentially catastrophic president in history, he also has advisers at his elbow, in his cabinet, and in the party that elected him, which are just as influential in bending his will toward the benefit and advantage of the rich as anyone. And it has been said that Trump is likely to believe and act upon whatever convincing advice is provided by the most recent person he speaks to. I should scarcely find any reason to rejoice in any of that.
How in the world do you claim to know all of that? Lol
I read.
All conjecture. You have no idea who has the President’s ear and who he does or doesn’t listen to. Particularly this president. You said many of his cabinet and advisers were the 0.01%. You were wrong. And it is misleading to blaspheme millionaires in his cabinet when other presidents have done the same thing. Presidents do tend to want successful people in their cabinet. I don’t begrudge that – nor do I have prejudice like you against the rich.
Ben Carson is “the swamp”? Is he an “elite”? He is worth several million dollars, made as a successful surgeon. I don’t think he is who you are talking about, is he?
Ben Carson is an intelligent man who got a job he has no qualification to hold as partisan payback for political support. That is SWAMP.
I separate the acts of providing money to the government to pay down debt and provide needed services to the country, vs. providing money “to the politicians”. You consider it the same, but I don’t. I would counter that it makes no sense to continue to leave so much money (via tax cuts to rich and incentives to waste capital) in the hands of the mega-rich CEOs and investors which they then USE to buy politicians. That is the more dangerous flow, IMHO.
How can you separate it? The politicians decide where the money goes. DIRECTLY.
By not “giving them more money” you are advocating increasing government debt. Withholding taxes keeps nothing from the politicians. It just keeps the government from functioning and drives up deficits. The politicians get their money from the corrupting influence of money from lobbyists and big business leaders who get THEIR money, in part, from the lessened taxes you advocate not going to government. This is so obvious.
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Money withheld from govt ==> lobbyists and wealthy ==> wealth-serving politicians ==> tax cut policy ==> money withheld from govt ==> lobbyists ==> wealth-serving politicians.
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Withholding money from govt does not deprive the wealth-serving politicians, it rewards them.
Wrong- I want less government, less spending. Reform. If “functioning” is building a wall across the Mexican border, fighting a 20-year war in Afghanistan and having troops in hundreds of countries, spending billions on the futile drug war, and funding an ill-thought out behemoth like the ACA, then yeah…. I don’t want government to function. You are trying hard to connect the dots in a convenient way for your argument but it makes ZERO sense. Politicians at the top = BIG money players. No denying it when Clinton and Obama both spend $1 BILLION running for president. That didn’t come from you and me.
You are arguing both ends and contradicting yourself. Look, you and I both know that being rich does not make you evil, or make you unpatriotic or unqualified to help lead the country. But it does tend to make you rather sympathetic to the rest of the rich. So when you say the rich impart less influence in the Trump administration, your argument holds no weight. Despite your head count at the arbitrary .01% or billionaire statistic, Trump has surrounded himself with many rich people, and more importantly, not very many known to fight for the little guy. Trump himself is very rich, and SAYS he will fight for the the common citizen, but his history of keeping promises is dismal. So I see no bright side in the Trump years for most of us. And your argument, also Trump’s argument, that his wealth gives him independence from the more self-serving influence of the wealthy, may sound good in theory, but has yet and is unlikely to prove true.—–
But then while noting, correctly, that wealthy people CAN put national interest first, you turn around and imply there is something nefarious in rich people donating to Obama or Clinton, as if wealthy donors have soiled their motives. After arguing that rich people are not evil, you then imply that they are.
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I agree with you that big money on campaigns is an issue. But most important is what politicians do, and who they serve, not what they make or how much their campaign costs. Obama and Bill Clinton and Hillary, have a history of fighting for the common citizen and the under privileged. Trump has a history of fighting for himself, and breaking promises and contracts, and lying profusely about matters large and small. That is the difference, more than money influence alone.
And by the say, when I was using the term “the .01%” in my post, I was echoing your post and also intending to generally reference the very rich, not just a statistical red line in the sand.
“Obama and Bill Clinton and Hillary, have a history of fighting for the common citizen and the under privileged. ” – I almost hurt myself laughing at this ridiculousness. Just like Trump, they have a history of SAYING this.
Wow. You are both cynical AND blind.
A repost:
September 2, 2017 at 7:34 pm
It’s terrible for all the people in America who SWEAR and fail. They almost don’t exist. Please prove me wrong!
Please supply some “Big Data” about the failure rate to progress has in income of those who SWEAR over a long period of time, not just your feelings that some do. I’m sure some do, but then again there is an occasional blue lobster.
Also explain how the people (Fed government) who transferred $25, 000,000,000,000 (still a lot of zeroes) to the poor via Great Society with NO IMPROVEMENTS in poverty rates are the best ones to solve this issue?
AMEN! Especially when those very politicians are being financed by the 0.01%! Why would you want to give them MORE money?
Again and again. Success at improving your car does nothing to fix the broken road.
That’s assuming we agree that the road is broken. I think it is an excuse. Like blaming the wind for a missed basketball shot. Improve your game….improve your life. SWEAR.
Yes, but a more rugged, more flexible and valued car travels the road much better! I’ll take a Range Rover (don’t drive anything that nice BTW, 6+ year old Toyota) over a Pinto to negotiate the broken road. Or stand on the side and wait for someone else to fix the road…
LOL great analogy. Standing there with your hands on your hips whining because the road isn’t perfectly straight while other cars zoom by you, one after the other.
No There must be a way that the government can fix this, guys! I should be making more than I am currently – when you compare my net increase in wages to the 1950’s – or when you compare my increases to CEOs. This is unfair and I should be paid more. My hope is that the government forces my company to raise my salary. That would be super cool. Because you know I need to have high-speed WIFI and HDTV at home, unlimited data on my smartphone, a super-cool car that I lease, and money to go out drinking on the weekends. Plus, I hate cooking so I need money to eat out most nights. And my 4 kids need to be enrolled in 3-4 activities each – and that costs money too! Plus, we have to pay for vacations each year too…. So please, a raise would be really helpful. I am barely surviving. Tell me who to vote for to get this and I’m in!
James, i hear the Russians are hiring internet trolls. You are iniquely qualified and should apply.
Humor aside, this analogy does illustrate what is fundamentally wrong with your point of view. Or at least the point of view that comes across.
Dont feed the troll.
Oops. Messed up my name line. Fixed it.
There are no stats on SWEAR. you know that.
I think if you add the benefits of later children, education, saving, avoiding drug addiction and working you will get to a tiny little number of people who don’t do at least fairly well. EACH has good to excellent positive data (outlier a few weeks ago) so the likelihood that they are not additive or perhaps symbiotic is remote. Yet you live by the exceptions (likely rare) and throw out 30,000,000 or 30% that are created from thin air. That is like saying all whites are racist because a few are, but the Left would never do that…
Outlined not outliers
On this labor day, I will requote Hanauer because in these brief sentencese has provided the most concise, accurate, and insightful description of our economic problems on this whole blog:
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Our country will not get better until our fellow citizens feel better; and they will not feel better until they actually do better. And … The American people will not do better until they are actually paid more. And they won’t be paid more until we change the way we manage our economy.
So they should SWEAR, an almost guaranteed way to do better! And of course tax the rich and hand it out. (Emoji wink)
Maybe we should stop technology from advancing and replacing people with kiosks and robots then. Or stop Amazon from selling us products at low prices with no shipping costs so that your local stores can still thrive. Or stop the elite from funding the top political brass from both parties to keep their palms greased. Or start training our children in school for technology careers. ….. Or we could just take some of the rich’s money and give it to the poor – maybe that would be a quicker fix. LOL
Nothing in my reply is a bad idea…..except the last sentence. No straw man there…..just good ideas.
Really? You think your first 2 sentences are good ideas?
Don’t you?
LOL. No.
You are both oblivious. You hear nothing. You offer straw man responses to serious arguments. I dont know why I bother.
LOL they call that “projection”.
I hear well. You place great faith in the establishment that created the mess. If we were just taxed enough and gave them enough money, all would be well. I feel that we should move all the things we can to localities more than states more than Feds. Why is that so bad? Don’t you think that the people who actually live in a jurisdiction have more of a stake? Don’t you think they are more aware of the issues? And how could anyone think sending money to Washington, them taking a cut, then sending it back to localities with strings that have NOTHING to do with them is a good idea? And why do NYC and Gotebo (real town BTW) have to have identical min wages? And do Alaskans need hurricane preparedness? Or Floridian earthquake readiness?
I saw a fascinating (to me) thing in Europe this summer. A lady from Hungary served us in Ireland. She moved freely without any visa or anything. Now she makes 3 times as much. She moved 1500 miles to a country with a different language (though English is very widespread there I’m sure) to work and live a new life. Americans can move just or more freely. So IF Seattle’s minimum wage is the answer it will grow and prosper. If California’s largesse for the poor and stringent environmental regulations is the answer, they will thrive. If looser regulations and lower taxes are the answer, Texas will prosper. Let each compete and all will benefit. Or let some paternalistic regime in Washington decide what we need in each locale.
Frankly, lately your arguments aren’t that serious. You pick outliers as norms, like most Dem hacks do…
Well, Peter, it seems you have also found your news muse in Tim Worstall … a blogger and radical neoliberal ideologue, and Forbes’ favored attack dog for anything to do with raising minimum wage. From the articles of his i have sampled, it seemsI he speaks outside of the political and economic mainstream, relying only on his own wits, mostly bereft of logical arguments or without reliance on safety nets of evidence, facts, or reality. He also has more than a few harsh critics, as shown in articles with titles “Tim Worstall does not understand money or banking”, “Marvel at the Stupidity of Forbes’ Tim Worstall”, and “Catching Up Tim Worstall on 120 years of Economics”. Of course all of these writers are political bloggers and commentators, and they and their writings have nothing to do with the article I posted.
So, rather than tally up how many bloggers agree with us on personality sniping and attacks, here’s a radical idea … Let’s actually discuss the ideas in the article I posted, not irrelevant critiques by irrelevant bloggers of some other writing Nick Hanauer did 3 years ago.
Since you apparently didn’t actually read the article, here are a few choice quotes and insights. And while an entrepreneur is not automatically a macro-economics expert, Mr Hanauer does a good job of combining observation, logic, facts and studies into a good summary of issues at hand. Something Mr. Worstall is seemingly not best at (sorry).
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(1) Trumpism: “I firmly believe that Trump, by himself, is not the problem. Indeed, the left’s maniacal focus on Trump confuses cause with effect. Yes, Trump is a manifestation of a serious civic sickness. But treating the symptom by removing Trump won’t cure the disease, even if it temporarily makes us feel better. No, to heal the body politic we must confront the disease itself.”
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(2) Social Divide: “The real threat to our republic is an alarming breakdown in social cohesion, and the cause of this breakdown is obvious: radical, rising economic inequality, and the anger and anxiety it engenders. The truth is that over the span of decades, American lawmakers (at the behest of economic elites like us!) have enacted policies that have depressed wages, stoked economic insecurity and exacerbated cultural angst and social dislocation. At the same time, a tiny minority of mostly urban elite (again, us!) have benefitted obscenely from our growing economic, political and legal power.”
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(3) Executive Summary: “I believe that we in the American political and economic elite face an extraordinarily inconvenient but undeniable truth: Our country will not get better until our fellow citizens feel better; and they will not feel better until they actually do better. And this is the hard part for many of you: The American people will not do better until they are actually paid more. And they won’t be paid more until we change the way we manage our economy. This is the stark, simple fact at the heart of our ailing political system. Nothing is going to get better until we enact laws and standards that persuade or oblige every business to pay every worker a fair, dignified and livable wage. Everything else, from Trump on down, is a distraction or a lie.”
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(4) Denial: “Today in America, tens of millions of lower- and middle-class workers are routinely subject to poverty wages, unpaid overtime, wage theft, dehumanizing scheduling practices and the constant threat of automation or off-shoring. … Many of my peers prefer to hide behind the enduring myth that today’s crisis of economic inequality and insecurity is the result of forces unleashed by unstoppable trends in technology and globalization. “It’s not my fault I have so much while others have so little,” we comfort ourselves, “it’s the economy.” That is nonsense. There’s no intrinsic reason why the social and political changes delivered by technological advances and globalization have to massively concentrate wealth in the hands of the few. We simply exploited changing circumstances to take advantage of people with less power than us.
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(5) Wage to profit transfer: “Over the last 40 years, corporate profits as a percentage of GDP have increased from about six percent to about 11 percent, while wages as a percentage of GDP have fallen by about the same amount. That represents about a trillion dollars a year that used to go to wages, but now goes to shareholders and executives. One trick we use to keep profits high and labor costs low is to refuse to schedule workers for the 30-plus hours a week they would need to qualify for benefits. Today, an astonishing 6.4 million involuntary part-time workers are denied the full-time work they seek in order to keep our profit margins high. You can call that “the market” or you can call that “stealing,” but from the point of view of a disgruntled worker it amounts to the same thing. How could they not be angry?”
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(6) Mythical solution of education: “Another elite excuse for inequality is “education.” If everyone had a Harvard MBA, the argument goes, then we’d all be fine. Don’t get me wrong; the better educated our citizens, the better off we all will be. But someone is still going to need to clean the hotel rooms, flip the burgers, pour the coffee, assemble the cars, cut the hair, etc. But if that job doesn’t provide a decent and dignified life, then we have made little collective progress. And while it’s true that college graduates earn more on average than those without college degrees, wages for young college graduates have stagnated since 2000, with wages for young female graduates falling 6.8 percent. Churning out more college graduates can’t close the inequality gap if wages are stagnating or falling across the board.”
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(7) Raising Minimum Wage: “In 2014, when I last checked in with you all, my home city of Seattle had just passed a $15 minimum wage ordinance. The derision thrown my way for supporting this initiative was predictable. Pundits from the Chamber of Commerce, Forbes and AEI went crazy. “Job killer” they screamed. When wages rise, they said, employment plummets. Seattle we were told, would slide into the ocean. Restaurant closures. Epic job losses. Poverty. Economic Armageddon!
—
Over the last three years we have implemented the policy in stages. Today, all large employers—those with more than 500 workers on their payroll—pay their workers $15 an hour (or $13.50 for those that provide medical benefits). Small employers pay between $11 and $13. Let me remind you that this minimum wage includes tipped workers, who now earn a remarkable 700 percent more than the federal tipped minimum of $2.13—as stark an experiment in whether higher wages kills jobs as has ever been attempted. So how is Seattle doing?
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When the ordinance passed in June of 2014, Seattle’s unemployment rate already stood at a healthy 4.5 percent; in April 2017, it hit a record low of 2.6 percent (basically a labor shortage). Seattle is now the fastest growing big city in America. Our restaurant industry is booming, second only to San Francisco in the number of eateries per capita, with food service industry job growth far outpacing the nation. Restaurateurs who once warned against raising wages are now complaining about how hard it is to fill the positions they have. Around the corner from my office, the sandwich chain Jimmy Johns is paying drivers $20 an hour plus tips, well above the mandated minimum rate. Are there many factors at play? Of course. But our city has proven that raising wages does not automatically kill jobs. In fact, of the 10 largest counties in the nation, King County, Washington had the largest year over year job growth in 2016 (3.8 percent), and was the only one of the 10 counties to see over-the-year growth in wages (3.5 percent).
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How can this be? Because that is how capitalism works. Because when workers earn more money, businesses have more customers and hire more workers. Because a thriving middle class is the source and cause of growth in capitalist economies.
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(8) UW Study: ” A new working paper from researchers at the University of Washington recently generated gloating headlines from conservative news outlets eager to confirm their “job killer” mantra, whatever the self-evident reality is on the ground. The UW researchers analyzed payroll data at single-location employers—mostly small businesses held to the slower implementation schedule ($10.50 to $12.00 in 2016)—concluding that low-wage workers are actually worse off than workers in a hypothetical “Synthetic Seattle” where the minimum wage was never increased. But it’s hard to take these findings seriously. The UW researchers report a 30-percent decline in low-wage employment for every 10 percent increase in the minimum wage—a finding 10 times higher than the average reported in 942 published studies. It’s an extreme outlier that raises serious questions about the limitations of the UW team’s data and methodology.
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For example, by studying only single location employers, the UW study excludes 48 percent of Seattle’s low-wage workers, while introducing an unavoidable bias into the results: When a worker moves from a single location employer to a multiple location employer (where the minimum wage was up to 24-percent higher in 2016), the study counts that as a low-wage job loss. When a successful single-location employer expands to a second location, the study counts all of its current workers as low-wage job losses. When a low-wage worker sees her wages climb over $19, the study counts that as a low-wage job loss. When a low-wage employee moves to contract or gig economy work (Uber alone estimates it has 10,000 driversin the Seattle area), the study counts that as a low-wage job loss.”
==========
So please discuss these ideas and assertions and attempt to refute. Don’t answer with other blogger critiques of some other issue. Thats the Worstall thing you could do (sorry).
Peter, I see you have posted SOME substantive replies to this article further below. Thanks. I would still be interested in your, and stevendad’s response to the subtopics as I have broken them out above.
Yeah after all that unnecessary reposting you missed all my responses. And not defending bloggers or writers. I rarely link articles just for that reason. Just didn’t have time to reply so thought an open minded person might want to see the counter to the article you posted. I personally (and this is just my educated opinion) think Hanahauer is a good example of a rich person who thinks they know everything and stepped into a world he doesn’t understand due to his political leanings. Don’t care particularly about him, but this article is total rubbish.
The article explains in careful detail the perception of the nations problems by more than half of the country – almost all democrats plus almost all working class trump voters. You would do well to read and understand that perspective, and not dismiss the complaints of about 2/3 of the population as rubbish. As for the parts of the article subject to actual economic analysis, ie minimum wage, Mr. Hanahauer’s,description aligns with most economic research and with historical evidence. His article is far from rubbish. It does not contradict fact or general opinion. It just conflicts with your ideology.
The reason why I posted the Forbes article wasn’t to be “pro-Forbes” or “pro-blogger”. It was to quickly refute the garbage article you posted. I could pull any one of a dozen similar articles that all say the same thing – that Hanauer has no idea what he is talking about. But we have been over this before (and with Piketty). Rather than continue to try and argue with me, or ignore me when I make points you can’t refute, just do a quick google for the objections of Piketty and Hanauer’s articles/work and you can learn.
But you posted a rdsponse to some other years old article. Irrelevant.
Then google one of the more recent ones. Nobody who knows anything about economics gives what some rich know-it-all says any credence.
Well your answers now need some backup. “Much like Piketty, this guy writes an article with complete fallacies about economics that contradict most agreed to principles.”
1) what in this article is a fallacy contradicting agreed upon principles?
2) What in Piketty’s writing is fallacy or in disagreement with agreed principles? Its hard to see how such a highly regarded author and masterwork could be considered full of fallacy.
So why should this be national law? Or should it be adjusted for cost of living, say $20 in NYC and $8 in Gotebo,OK. That would pretty accurately reflect the difference in SPENDING POWER and that’s what really matters. Just like the post a few months ago, income is far less important than what you can spend (that was regarding government support for the poor). There is no question it would help raise Federal revenue and hopefully pay down the debt, IF it doesn’t increase automation and discourage small businesses from forming / growing. The latter is a factor, no matter what anyone says. And, it would affect the small businesses much more negatively than the large. Perhaps coupled with inventory exclusions from taxation (say $50k) and a startup payroll tax holiday for 3 to 5 years (subsidized by the government, an Obama / Dem idea) it could have less deleterious effects.
I would agree with Peter, regardless who is right, Seattle is about as cherry picked a city you could find. It’s a lot like football, when you’re winning everything else takes care of itself. Washington state was the 7th fastest growing economy (US News) BEFORE the minimum wage increase, so it is clearly atypical. Do you think New Mexico, Detroit or Gotebo would have the same result? No, they would become ghost towns / states even more than they have. Thriving cities CAN afford a higher minimum wage. I seem to remember somebody arguing that these changes should be local?
True. Raise the minimum wage in Goldsboro, NC and you will put a lot of small business owners completely out of business almost overnight.
A national minimum with options for localities to raise higher. That is what we have done and should do. But raise the national minimum back up to old levels. That will help, not hurt economy. Put national at 12 and cities can jump it higher. Done and all your objections become moot.
$12!!!!???? Slap that on Gotebo or Goldsboro and you devastate their local businesses. This is not even slightly debatable.
You can find all the studies about raising minimum wage even slightly on the Wikipedia page. You don’t have to look far…..the majority of studies agree that it would hurt unemployment (particularly for the young) to move minimum wage up even slightly. A $12 minimum wage is so preposterous it doesn’t even warrant debate. That’s politics talking – not economics, logic or even good common sense.
It’s interesting you always go back to late 60’s as “the right wage”. It was actually $11/hr and was followed in the late 70’s by the worst of all worlds, stagflation. https://en.wikipedia.org/wiki/Minimum_wage_in_the_United_States
I remember the ensuing wage and price controls that perverted the economic system and led to 18% mortgage loans. Do you SH? Just curious. There were laws and fines and potentially jail time for raising prices, regardless of whether you needed that price to be viable as a business. So if you’re not viable, due to inflation in your costs, you just stop (the stagnation part).
It’s also interesting how much an aberration $11/hr was. And it NEVER reached $12/hr much less $15. The band is much more $6-8.50 or so. So NOONE KNOWS exactly what would happen if we suddenly poured $trillions into the economy. It seems very probable that we’d have inflation and bread would go up 50% too and we’re right where we were with spending power, what really matters. The 70’s are a perfect lab for what happens… Of course the rich who own stocks and real assets would do very well. And bond holders, sorry for your luck. It would help the national debt if we played it right…
See below. You cherry picked the ONE YEAR it was $11/hr (in 2013 constant $). THIS WAS THE ABERRATION. $6.00-$8.50 the norm.
StevenH: I see hope for you. You are realizing that all laws have UNINTENDED CONSEQUENCES and soon you will realize the party you worship serves only itself. It’s only taken 5 years…
You are finally realizing that I have always known laws and actions have unintended consequences. Like Reaganomics and tax cuts to rich setting us on the path to massive national debt. Like loosening the reins on financial regulation being a major contributor to an economic crash.
Good. So we should make as few Federal laws as possible. And here’s your Libertarian card!
LOL! Right! Let’s not layer more regulations and bad laws on top of the current ones. And let’s not give more money to the same idiots that made these laws in the first place .
Here is a fantastic article. You may think I read this weeks ago and have been echoing it. In fact, i just found it today. But it so perfectly expresses the ideas and realities I have been trying to express with less success, that I think you will learn much from it. And since it is written by a rich entrepreneur, you cannot easily complain that he does not know how business and the economy function. Please read it all and let me know what you think.
http://www.politico.com/magazine/story/2017/07/18/to-my-fellow-plutocrats-you-can-cure-trumpism-215347
Actually I just read it an hour ago AFTER my posts that tried to say the same sort of thing.
Trump is a consequence of the backlash against the establishment. It most likely would have been Sanders vs Trump had the Dem establishment not subverted the electorate. It exists on both sides of the aisle, but SH, you are too blind to see it. The Repubs are ACTUALLY LESS disdainful of their voters or they would have never allowed Trump. I know you can’t see this…but I can’t help trying. I’ve grown fond of you despite our differences.
And the backlash against the establishment is due to what? The decline of the middle class due high income disparity, and the response of the establishment that the economy is fine and people just need to buck up and work harder and learn more. You are the failed and despised establishment.
No, I want several new taxes on the rich, and no tax cuts just not income tax. The debt has left us no choice. I am not throwing stones, but asking you (the establishment on the Dem side) and the Rebups to stop throwing stones (borrowing money from the future so you can take a cut) and “sin no more”.
Repubs, my dyslexia sowhs up every now and then…
Thanks for nice words. But those dem/gop complaints have nothing to do with the article or how to fix the problem. What do you think of the article and its solutions?
Reread the first few paragraphs of the article and substitute Sanders for Trump. Do you still agree with this guy?
Hmmm. Since the first few paragraphs don’t really make any sense with Bernie sanders substituted in, I don’t see logic in your experiment.
“He was an historically terrible candidate, and his behavior and actions as President have confirmed my worst fears. There is a thuggish, violent undercurrent to everything he says, tweets and does.”
This describes Trump, but not Sanders, or hypothetical President Sanders. Hard to See Sanders as thuggish and violent.
No, but his idea, Socialism, led to about 100,000,000 deaths in the last century. Seems violent and thuggish to me…
Your brain really only runs on one track doesn’t it? I’m sure every single word doesn’t match perfectly but I’m sure Stevendad sees my point. A populist candidate – historically terrible – and our worst fears for Bernie would be socialism (as Stevendad stated)
Wow you found a rich person who also doesn’t understand the economics, labor markets, etc. Much like Piketty, this guy writes an article with complete fallacies about economics that contradict most agreed to principles and progressives link to it because it backs them up. (The left’s version of Pizzagate or the borth certificate thing, I guess). While your boy Piketty at least has perspective and knowledge, this guy isn’t even worth responding to. He is just rich – which doesn’t mean anything. Let me at least reply with an article that explains all the holes. Maybe you will see it if it comes from someone other than me.
https://www.forbes.com/sites/timworstall/2012/05/19/the-ignorance-of-nick-hanauers-ted-speech/
By the way….do you realize the difference between being s rich entrepreneur and understanding business vs understanding macroeconomics?
See also: Donald J Trump.
Another point ignored. We should give credibility to Hanauer because he is rich? If you say no, then why give Hanauer ANY credibility?
So much wrong with this article I don’t even know where to start. But let me start with the funniest one …. equating Seattle’s minimum wage hike to its growth, when the reality is Seattle is growing in no small part to Amazon and other technology companies. And for every high paying Seattle job Amazon provides, it probably takes away 25 low paying ones. Fools gold. Hardly a victory for the little guy.
“So much wrong with this article I don’t even know where to start. But let me start with the funniest one …. equating Seattle’s minimum wage hike to its growth,”. Very funny. But he didnt say that. Read again. What he said was “Are there many factors at play? Of course. But our city has proven that raising wages does not automatically kill jobs.” When the rich consistently proclaim and predict gloom and doom from raising minimum wage, in accordance with agreed on principles, and it NEVER materializes, it is completely fair to call out the fallacy.
When your city goes through an economic explosion it can withstand and overcome even the worst policy. That is about the ONLY example like it as well…..because the local growth was so nuts. Of course know there is much whining in Seattle of baristas and such not being able to afford real estate now and asking for subsidized housing from the government. It never stops. And the reality is housing is up because of the very same growth….and Asian immigrants pouring in buying real estate with no restrictions. Even Canada (BC to be specific) saw the need to heavily tax immigrant real estate….well now Seattle bears the fruit.
Raising minimum wage is not the worst policy. Suppressing wages might be. I am becoming more and more convinced raising the minimum wage is the most important and most effective starting point to healing the economy. Economists generally agree, as per the following testimony to Congress, that modest raises to minimum do NOT hurt employment.
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Raising the federal minimum wage to $12 by 2020, as the Raise the Wage Act would do, would restore the national wage floor to the same relative position that it had in the late 1960s. Under conservative assumptions for wage growth at the median, $12 in 2020 would be equal to roughly 54 percent of the full-time median wage, bringing low-wage workers closer to the pay of a middle-class job, and helping undo some of the growth in wage inequality that has taken place since 1968.
Whenever increasing the minimum wage is discussed, there is always concern that doing so might hurt job growth or imperil businesses that employ low-wage workers. In the 22 times the federal minimum wage has been raised, and the over 300 times that states or localities have raised their minimum wages just since the 1980, these concerns have never materialized. The effect of increasing the minimum wage on employment is probably the most studied topic in labor economics, and the consensus of the literature is that moderate increases in the minimum wage have little to no effect on employment. In fact, this was the conclusion of a letter sent to the leaders of both houses of Congress in 2014, signed by over 600 PhD economists—including 8 winners of the Nobel Prize. The letter stated, “In recent years there have been important developments in the academic literature on the effect of increases in the minimum wage on employment, with the weight of evidence now showing that increases in the minimum wage have had little or no negative effect on the employment of minimum-wage workers, even during times of weakness in the labor market.”
…
Most importantly, research has consistently shown that raising the minimum wage boosts the pay of low-wage workers who typically come from low- and moderate-income households. Because these households typically spend a larger portion of their income than wealthier households, the rising wage floor can provide a modest boost to consumer spending, generating new business activity, particularly in lower-income areas where consumer demand is more depressed. And this is true even if some firms have to enact small price increases as a result of the higher minimum wage. Pay raises for low-wage workers resulting from higher minimum wages are vastly larger than any resulting price increases – typically by a factor of more than 10 to 1.7 This is because labor costs are only one piece of businesses’ overall operating costs, and as previously noted, raising pay simultaneously generates savings from higher productivity and lower turnover.
In summary, raising the minimum wage to $12 by 2020 would boost the wages of tens of millions of American workers, increase low-income households’ buying power, reduce reliance on federal assistance programs, and bring the wage floor back up to the same relative value it had in the 1960s. The research indicates that such an increase would not be overly burdensome on businesses or hamper job growth, and could, in fact, strengthen the consumer demand that drives the U.S. economy. I strongly encourage Congress to pass the Raise the Wage Act.
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http://www.epi.org/publication/the-impact-of-raising-the-federal-minimum-wage-to-12-by-2020-on-workers-businesses-and-the-economy-testimony-before-the-u-s-house-committee-on-education-and-the-workforce-member-forum/
Again ignoring all the other factors that are at play in Seattle. Like rewarding Clinton for a budget surplus….in a bubble, it is impressive…..but when you consider the MASSIVE growth at the time, it changes the context. Everyone and everything looks good during a boom. We’ll see what happens in Seattle when the eventual correction hits.
A few useful points in here….. the lack of negotiating power of some low paid workers via unions, for instance. Also agree with the push to not hire full time employees to avoid paying benefits. This is one of about 100 workplace regulations I would change if I could….but they won’t be changed because the 0.01% likes it this way and pays politicians to leave things alone. Far better ideas than the ludicrous $15 minimum wage.
Example of how rich employers pay employees on the cheap.
http://www.huffingtonpost.com/entry/jeff-bezos-workers_us_59a7220fe4b07e81d354e6e3
So SWEAR is a good philosophy to adopt for those who do not already do it, and it will help to solve the personal wealth and income problem. For some.
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Reminder to occasional readers. SWEAR means:
Save 10% always.
Work 40 to 50 hours a week.
Educate to your maximum ability (includes trades).
Avoid excessive alcohol and drugs.
Reproduce responsibly. Have kids when your financial and work life are in order (seldom <25)
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One problem: 90% of the nation require a 30% boost in income share to reach historical norms. Are you saying that 90% of the country does not practice SWEAR? If not, then what is your solution for the struggling Americans who already practice this philosophy? And how do you account for the fact that the economic crash in conjunction with the income losses of income disparity have pushed people further down the hole they need to crawl out of?
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High income disparity and crash losses make it really difficult to do the S, and until recently almost impossible to do the W, way too expensive to do the E, and the financial lives that used to be in order allowing R are now out of whack leaving families with too many mouths to feed. High income disparity CRUSHES families as medical and education and housing expenses rise way faster than inflation measures suggest.
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So to repeat, what is your solution for the half (or more) of the struggling population already practicing SWEAR?
Sigh….. historical norms. That’s your defense? You want retribution not solutions.
That is simply shorthand for solving the problem at hand, which os high income disparity. Historical norms are the income slopes that keep tbe economy productive, and the current sloprs are what drag down tbe economy. Do you actually want to solve high income disparity, or do you just want to keep your money and claim the struggles of the people whose losses feed your gains deserve their fate? And yes, their losses do feed your gains, despite all of your claims that the economy of the middle class has nothing whatsoever to do with the fortunes of the rich.
So what do you recommend for Americans who already practice SWEAR to the best of their ability, struggle with economic losses from the crash, high college debt, low pay from decades of little or no effective raise as their bosses and overseers absorb all of the nations profit to their own pockets? You scoff at historical norms. Im sure you like your new normal and want to keep it. But ultimately the solution to high income dostribution IS a reversal of the last decades of income redistribution to rich. Are you willing to accept that? Thats what it really means to solve this problem.
$25,000,000,000,000 has not worked. So how much is enough?
You just can’t answer this can you SH?
NOPE. Astounds me how he is so pro-poor and anti-rich/elite and yet his solution is to help the poor by putting more money in the hands of the elite to then build programs for the poor. Seems like a roundabout way of doing things. The fallacy in his argument is that he must think Dems are not controlled by the rich/elite. He continually ignores that point. I’m all for anything going DIRECTLY to the poor, which is what I (and many of my peers) practice in my private philanthropy.
Discussion is way up higher (later). I postponed answering this because the post didn’t really seem serious.
And the acknowledgment that the redistribution to the rich is just a side effect of globalization and automation is not a free pass to take no action. We are still a national community whose fortunes and economic prospetity are linked together. We must take care of midfle class through the mechanisms we have discussed and agreed upon, but also througb some sacrifice of the 0.1% (super rich), 1%, (Peter), and 10% (stevendad and myself). This is not an attack borne of hate or resentment, but an economic and mathematical necessity borne of decades of accumulated imbalance.
I KNEW you couldn’t conceptualize the concept that the poor can help themselves. My God you disdain them! You feel they are incapable of discipline and sacrifice. You truly feel they are inferior, only worth the vote that elects your Democratic ruling Elite. The number who do all of 5 SWEAR for many years and fail is small. Typical whiny Liberal BS. I doubt you can prove that people who do all five fail. Please supply some “big data” and find percentages of those who do all five and don’t achieve at least lower middle class. Education, parenting at older age, work, saving all clearly correlate with wealth. Actually, the rich drink more but use less drugs on the average. So maybe just avoid drugs should be the “A”.
Your arguments are complete BS. S is almost always a choice for those who work. It’s just what you decide to give up. You may have to move or spend time away from family, but there were never NO jobs available, but just maybe not the perfect job. Education is free in Oklahoma, for military grads, in high school and those in Vo Tech, IF you take advantage of it. And the truly poor can get Pell grants (like I did for 1 year). Avoiding alcohol and drugs is ALWAYS possible. And reproduction is always a choice given availability of contraception and abortion. So YES THEY CAN if the CHOOSE.
You want a hand out over a hand up.
You want to give a man a fish rather than teach a man to fish.
You want those who must be rescued rather than those who stand on their own.
You want to control the poor, and I to liberate them.
Again, $25,000,000,000,000 in your method has achieved NOTHING! Except, perhaps, nearly 25% of Americans eating out of the government’s hand. Or was that the plan all along?
YES!!!!! Sacrifice….hard work….perseverance. all very well said.
Bullcrap. I can conceptualize just fine. All you can focus on are the truly lazy who need to improve. You have no respect for the hard working families who do all they can and have their dreams crushed by hogh income disparity and crashes brought about by fat cat speculators. Just work harder and improve yourself is all you can advise. You are completely blind to the realities and hardships of this economy. Why do you have no respect for American hardworking families?
They are really rare. Seldom do people SWEAR and fail. Please give DATA about those who SWEAR over ten or more year periods and fail. They exist almost EXCLUSIVELY in you mind. Bullcrap indeed.
Stevendad, i do get tired of repeating myself and you not listening to what I say. I did not say that people practicing SWEAR do not succeed at improving themselves. What I said is that success, or climbing to the next rung of the ladder is diminished by economic structures that have cut rungs off the bottom. What good is it to advance to a higher wage if you still need food stamps to feed your family or cannot manage the college debts necessary to educate your children? And besides, there are no statistics on SWEAR because nobody outside of a half dozen readers of this blog know what it is. Bit Im pretty sure there are thousands if not millions of hard working ethical Americans who have been crushed and ground up by this economy.
SWEAR is and individual’s way out no matter what the self serving in government do. It is not national policy. I think it’s easier to do something yourself than to disrupt the entire US political / bureaucracratic complex. The military/ industrial complex pales in comparison to it. And if by some chance they DO fix some of the broken machinery of capitalism then you will do better yet.
You have not answered my question. What do you do Bout thlse people who SWEAR and successfully hit lower middle class only to find that their “success” is still a huge struggle due to wage suppression, medical, and education vostz, all due to high income disparity. You are still compley oblivious to the realities carefully explained by the wealthy author. While you are detailing how individuals can struggle up one rung of tbe ladder, the author is trying to explain how the entire economy can be improved. And it has nothing to do with handouts to the poor and everything to with ceasing the coddling of the rich.
Sorry for typos. Read between the characters.?
Just don’t believe the problems a few may have are systemic due to tax law, politics or minimum wage. That’s what the bullcrap part of this argument is. No matter who is in power, what we do to tax law or wage laws, there will still be those that struggle in certain locales and industries. But an overwhelming number of people practice SWEAR and achieve, succeed and have great lives.
In the journey to national economic prosperity, SWEAR tells individuals how to repair their cars, but I am trying to repair the broken highway. Prople can practice SWEAR and incrementally improve their lives but the highway, the national economy, will still be broken. Too much of the national income will still be wasted at the top of the income scale and diminished in the middle. You STILL dont even perceive high income disparity as a problem and just think Americans should buck up and try harder. But I can guarandamntee you that will do nothing to diminish excessive CEO compensation or big corporate abuse of employees or excesses of risk in financial industry or wage theft or raiding of pensions or any of the other abuses of the middle class. Your Pollyanna attitude toward this problem is disappointing.
You want to fix the highway (which I don’t see as damaged as you…) then we need to first separate our politicians – including the ones on YOUR home team – from the .01%. At the end of the day, we can’t do anything about most of the things you are whining about….and a hedge fund or derivative security isn’t keeping some super hard working do-everything-perfect type you idealize from succeeding. Sure would be convenient though….. That’s what makes our country so great. Everyone has a chance. Practice SWEAR and keep your expenses and lifestyles down (there is somewhere in between everyone having TVs and cellphones and the poverty of the rest of the world) and your odds are HUGE in this country. I believe in people. That’s another big difference between us. You think they need more help than they do.
It’s terrible for all the people in America who SWEAR and fail. They almost don’t exist. Please prove me wrong!
Yes the rich are coddled to some extent, but the truth is the taxation system is lagging behind the economy as it is. And your beloved Dems are only picking and choosing amongst the rich for their own benefit. Wake up StevenH. It can’t change in the framework of the present parties.
Taxation system lagging … we may have something to agree on here. Wealth tax, FTT, and higher income tax rates at high multimillion brackets. That will help.
I think I’ve reached another overarching insight (or it’s really late and I’m getting punchy). Steven H, Peter and I both believe you have a good heart and really want all to be safe (food/shelter/healthcare) and have a chance to succeed beyond basic needs. Fair enough? We do too, just as much or maybe more. We just feel the Repubs (let’s split a much bigger pie) and the Dems (we’ll slice a bigger piece of the same pie for you) strategies are neither right nor wrong, but that they are slogans to get votes to enrich themselves. We want you to see that only outsiders (Sanders (not the path I’d choose as it has always failed outside of Scandinavia), Trump (where we are now for better or worse) or Libertarians can truly change the focus of government. I find the possibility remote to be honest.
Again, I thought up SWEAR not as a moralistic, judgemental crusade, but as a way to much more freedom financially and geographically for all. It requires no outside help and will NEARLY ALWAYS work if applied consistently in a lifetime or over generations (like my parents sacrificed for me, thanks Mom and Dad!). Of course, we can wait for the government to intercede as well. Their track record is extremely poor, just witness the success of the $25 T spent on the “war on poverty” with zero real change in poverty levels, but miracles do happen. I frankly see a poor track record by the Feds. $25,000,000,000,000. A lot of zeroes…
Peter: “Socialism gives everything to the elite oligarchs that are tied closely to government.” Me: “The more equal animals strike again.” Why is this a non sequitur? The format interspersed a few of your comments…not that I don’t value them as always.
Just missed the thread of continuity. Sorry.
No worries!
A quote from SH: “Well regulated Democratic Capitalism with social programs to support the poor and invalid and elderly are good.” This is EXACTLY what we have and you are blind or foolish if you deny it. But you want MORE, just MORE. I’m curious, why?
Of course that is our system. Glad to see you agree. But we always have to tweak the system and protect the vulnerable. Even now in the midst of the largest flood disaster in our nations history, and despite Trumps empty political promises, congress is proposing CUTS to FEMA to go to an ineffective wall.
If we didn’t have $20,000,000,000,000 in debt, we wouldn’t think twice about giving them all they need. We won’t anyway, but our kids will get stuck with the tab.
If we hadnt transferred so much tax revenue to the rich, we would not have 20 trillion in debt!
Since Steven H dodging the argument Stevendad laid out to focus on CEO pay, let me make one point here about that. Once again, the stats aren’t so black and white as the media/liberal thinktank/leftist playbook wants us all to believe. When you look at the top CEO pay of each year, take a closer look at who the top paid CEOs are. The majority of them are paid so highly as part of signing bonuses, deferred comp payouts or stock option exercises or bonuses. Not cheapening the fact that these people make silly amounts of money (whether it is too much or just right is not my place to judge without knowing each industry)….. just saying that most of these people’s pay are one-year aberrations. In fact, many of them may not collect this pay unless they meet certain criteria.
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For example, last year Thomas Rutledge from Charter Communications was listed as the highest paid CEO at $98 million. This is 4x what he made the year before. Rutledge’s compensation included $88 million from stock and option awards as part of a new 5-year employment agreement. This was due to the fact that Charter absorbed two other cable companies and they wanted Rutledge to stay for 5 years to help guide the merger through and all the logistics that go with that. For him to collect the full amount, Charter’s share price will need to rise 155% over six years.
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It’s not just as simple as people who don’t understand corporate economics or sound-bite fans make it sound. It’s not that Rutledge makes a $98 million salary and pays all of their employees minimum wage. And it also doesn’t make sense that in a merger you give people raises and cut the CEO pay. That would be horrible business. Instead, you lock up your management to navigate the merger and layoff a bunch of people. That’s how mergers work. But somehow I suppose this isn’t fair.
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Again, I await Steven H’s response to the last post by Stevendad. My main goal now in sticking around is to continue to show Steven H that the answers to his frustration with society and income inequality do not lie in the laps of politicians or greedy rich jerks. They instead lie in the cataclysmic shift to technology and automation and in the 0.1% that puppet people like Clinton, Obama and the Bushes.
Dodging? No. I jave a life and I am not inclined toeard a knee jerk response. Wait.
And the stats on CEO compensation ratios are averages not peaks, so the variation is irrelevant. And of course stock bonuses, signing bonuses, golden parachutes are all still compensation. You are the one dodging het
Re. It doesnt take deep analysis to recognize that American CEOs are grossly overpaid.
Dodging here, not dodging het Re.
Just a random thought, do you suppose Game of Thrones is an allegory for our political system? Or maybe all political systems?
I don’t watch that show so can’t comment….I do think “The Wire” has a lot to say about this particular topic though.
I dont watch either of those.
Your post also demonstrate that you are learning SH. When I bring up the possibility of locally raising minimum-wage, at least you are starting to recognize that there are unintended consequences pf all legislation.
Ok reposting an earlier response:
In reply to #1. I think an error in your logic is that employers are somehow paying on the cheap. As I’ve said before, at least one factor is not average pay, but sheer number of employees. When GM was a pinnacle employer it employed nearly 620,000 people (1/4 of 1% of US population and .4% of ALL workers) all but a few in US. Now it has 50,000 US jobs. They also supported many more jobs in support of the business and their families. Salaries were good. Now Google employs 75,000 workers (less than 1/40 of 1% of US population and .04% of workers) many of whom are not in US (can’t find breakdown). Manufacturing has lost over 7,000,000 jobs since the peak. They are being replaced at a 1 to 10 rate by technology in this particular case. Interestingly, “information” hasn’t grown much as a percentage of work force, despite of the conception that that is where “the new jobs are”. A global view is an almost 30% loss of manufacturing and smaller but significant losses in construction and mining. It is the “rise of the machines” both with manufacturing robotics and the “manufacturing” of software by copying. Good overview here: https://www.bls.gov/opub/mlr/2016/article/current-employment-statistics-survey-100-years-of-employment-hours-and-earnings.htm
Of course the value of CEOs has gone up and thus you get the highly skewed CEO / average ratio, but this is far less an issue than the loss of millions of much better paying blue collar jobs to machines and overseas. That isn’t a very sexy rallying cry “I hate technology” or “I hate the rest of the world” for the Left. So they instead cry “I hate rich people”. As I’ve said before, new methods of taxation may need to be embraced. Or I suppose we could just drive these people from America with confiscatory income taxes. If so, we should look at the 0.1%, not 1%. This would avoid netting the simply hard working person who picked the right field. Their jobs and companies are very portable and their loyalties to America only go so far. All but a few of the top 50 wealthiest Americans could remote in their work from Belize or wherever. The list is overwhelmingly dominated by those who made money in information technology or finance. We just haven’t figured out how to equitably tax them. To me a wealth tax is answer, but you knew that.
Reply
Stevendad says:
August 26, 2017 at 7:54 am
#2 pretax income and not factoring in paid benefits DOES exaggerate income inequality numbers, but is not all of it. Both are correct.
# 3 I don’t think anyone disagrees it is an issue, but shrinking middle class is going both ways, up and down. And importing 10s of millions of primarily low wage workers, legal and illegal, has to raise inequality. That’s simple arithmetic. So you can’t ignore it. Again, it is worst in Dem districts. 17 of worst 20 income inequality municipalities voted Hillary. So raise those local taxes and give away to the poor! Leave everyone else alone.
#4. Yes, we all do. But when you use machines to make money, you benefit disproportionately. The old saying was there were 2 ways to make significant money: other people’s money, other people’s time. Now we have a third to a much larger extent than ever before: machines. That, rather than greed, is the main reason for income inequality. “I hate technology!” just doesn’t look as good on a protest sign or bumper sticker. Especially when Tech bankrolls your party. Just another way the Dems are cutting off their nose to spite their face.
While I’m on the subject, I still feel Latinos will be the MOST solid Republicans once the immigration mess is figured out. They are by their nature more Conservative (per Gallup) and many of them or their relatives faced death and travelled thousands of miles to get here. They will not be so willing to give up money to the Cause as they work their way up the income scale (and I’m quite sure they will). Another Democratic Party misfire.
I saw the post, but have had little time to construct a response. I will comment on one point.
“Of course the value of ceos has gone up.”
The compensation of CEOs has gone up, not the value.
The following article excerpt is interesting.
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The ratio of CEO pay to the median salary for all other employees in the company provides a reference of how high CEO pay is. It’s often used to compare CEO pay across countries. U.S. CEOs earn from 400 to 500 times the median salary for workers. For CEOs in the U.K., the ratio is 22; in France, it’s 15; and in Germany it’s 12.
Hardly the point of his post. Just semantics really….
Yeah, the value has gone up: Michael Eisner started the whole high pay party to my recollection. He made about $1 billion. A nice piece of change. But he made the company 26 times more valuable from $2B to $53B, a 50:1 payout for the company. It was a BARGAIN for shareholders. I’ll take that any day. Of course it has lead to some really high CEO payouts, some justified, some not. This may come as a shock SH, but his obligation and JOB is to return money to shareholders, not employees. So they are WORTH it IF they are Eisner level CEOs. Unfortunately, most are not.
SH, your thoughts? Are ANY CEOs worth this? I’m all in if I can find a CEO who gives me a 50:1 return on a billion dollar salary. Alas, they are rare…
Thanks for this post. Couldn’t have said it all better myself and through all of this discussion, your last post summarizes the way I view the problem now. SH- how can you dispute any of his post?
#1) Stevendad says: “I think an error in your logic is that employers are somehow paying on the cheap.”
My gut response is: That is not an error. That is the fundamental fact that defines high income inequality, describes excessive income slopes, and is portrayed in every economic chart and statistic I have been posting on here for years. Real minimum wage is 20% lower than in the 70’s. Wages of 90% of the nation have been stagnant as most economic growth goes to the 1% with a bit of it also sprinkled over the next 9%. Richest 1% have doubled their income share while increasing economic instability and risk. Are employers paying on the cheap? Unquestionably.
My next response is: How can our perspectives (mine vs Stevendad’s AND Peter’s) be so different on this fundamental and obvious point? Here is what may be the issue. You (both) see the world as a set of rules that everyone plays by. You recognize that certain things in the world change (globalism, automation, etc) and expect individuals to adapt to those changes to survive. Survival of the fittest. Winners and Losers in the game. You do NOT see that the overall economic structures (banks, education, job opportunities) have altered greatly. Therefore you conclude that people, and their failure to adapt and to adhere to certain principles (SWEAR) are the root cause of the problem and thus the root solution is also in individual effort. Changing rules of the game (taxation, wage rules, trade limitations) in such a manner as to constrain incomes to businessmen and the wealthy, and to shift it to the majority of the nation (middle and poor) is “redistribution” and is somehow both unnecessary and unfair.
Now I will moderate the above in noting that you both have been discussing ways to tax the rich in measured ways (FTT, wealth tax, etc) to mobilize stagnant wealth and income at the very top into more productive investment and debt repayment. So yours are not absolute, but tend toward my description in broad terms.
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My perspective is that people have not changed much at all, but globalization and automation continue to advance, as it has since the 19th century, or perhaps even for all of human history. When the rules are left stagnant and do not adapt to the changing world, the economy becomes unbalanced. This is not PRIMARILY due to individuals failing to seek the right career or to exercise personal ethics. These human flaws are not new or worsening. The problem is in the economic structure itself. If automation and globalization makes the country richer, why should only a minuscule fraction of the population benefit? Does the CEO and management team of the company get all credit for company growth? Why not the whole employment base? Why should we not shift rules such as minimum wage, labor rules, tax rates, to provide increased reward to the common man as well as the privileged, as they are all ultimately driving and maintaining our economic engine. This is the very core of our differences. Peter asks why the ice cream man should get better pay or a better life just because the nation’s economy improves. And I ask Why shouldn’t he? Why should we all not profit by equal growth rate from the nation’s growth? You find this premise absurd, and I find it fundamental, and therein, perhaps, lies our unbridgeable divide.
They would benefit if they saved and invested alongside the rich. SWEAR strikes again. Or just wait for a handout or arbitrarily raised min wage (raising makes sense, but much more so when locally determined). My point is not that CEOs are not making a lot more (they are) but that it is a relatively small contributor when compared to the loss of 7,000,000 jobs that were making $50 to $60 k. And of course importing millions in the low end of scale skews downward. SH, you’re talking about a few hundred making more, I’m talking tens of millions making less. This is arithmetic again. 20,000,000 times $20,000 >>>> than 500 times $10 million (numbers illustrative, not exact). It’s just so much more popular to deplore the rich than technology and immigration, constituents of Dems. I hope you can see that this is the fundamental flaw in identity politics, that each position that helps one constituency hurts another…
What the hell does it mean to “pay people on the cheap”? To call that unquestionable is idiocy. You pay people what it takes to fill the position, right? That’s what you keep telling me.
#2) My point about pretax vs postal income is that since the decades of 50’s to 70’s post-tax income of upper 1% has grown even faster than pretax income. Peter’s implication was that pretax disparity was high but post-tax disparity (or it’s growth) was very low. That is not at all true, except in cherry-picked non-representative time scales, such as over the last ten years.
#3) Shrinking middle class is not going up and down. I’ve seen such an argument, but it seems to rely on peculiar and strained definitions. To me, the middle class is some definition of a range of percentiles. e.g. the middle 3 quintiles, although various economists offer various definitions and ranges. But the middle 3 quintiles (for example) are never shrinking. So “shrinking middle class” doesn’t mean too much to me. It is the shrinking incomes, or income shares, of the middle class that are a problem. They are just getting a lesser rate of the national reward than the upper sliver of the upper quintile. All quintiles below the upper quintile are suffering from income growth at much less than the national rate, and have a lesser than historical income share.
4) When you use machines to make money, you make more product, and more money for same effort. So again, why don’t we ALL profit from this technological advance? Did the CEO imagine the machine, design the machine, build the machine, test the machine, run the machine? Or did he just finance and own it? My view: The economy is a contrived tool which exists to reap benefits for all from the resources of the nation, and to justly reward the citizens of the nation, and they step up and earn part of that reward by working and participating in the economy. Your view APPEARS to be that the economy is just a complicated game at which the top winners can reap vast and outsized reward and it is unjust to limit that reward even if its magnitude unbalances the economy and harms the rest of the citizenry.
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Consider: when our economy is so vast and profitable that we reward our richest citizens more than historical kings and emperors, and yet those richest find it repugnant to fund the infrastructure failures that threaten the economy they depend on (witness the failed levee in Brazoria County, the threatened dams in Houston, the chemical plant about to explode in Crosby, the many bridges, dams and highways, and plumbing infrastructures throughout the nation that need repair), then we have a problem of too much wealth and income going to the pampered few. The rules must change.
“post-tax” got auto-c0rrected to “postal” in some sentences.
I agree. A wealth tax of 1% 20 to 100 million, 2% 100 to $1 billion, 3% 1 billion to 50 billion and 10% above $50 billion. The last bracket only hits Dem heroes Gates, Buffet and Bezos, purely by coincidence (emoji wink). It goes RIGHT AT THE MEGA WEALTHY without ensnaring the simply hardworking and well planning. See before, but exclude real estate to some extent as it is already taxed. And lose the “1%”, let’s nail the 0.1%. Would that satisfy you? Of course, it will never happen. Way too many donors in there. And so the wheel turns, benefiting the haves as always…
SH, we agree (Peter, I infer from your posts at least) that the system is in many ways rigged towards the rich BY BOTH PARTIES. It seems unlikely that will go away, but that’s the whole point of SWEAR. It achieves the goal of personal wealth without relying on outside help. It’s not some moralistic crusade against the poor. It’s a way out that doesn’t rely on a political revolution. But I’m sure you only see me as Snidley Whiplash when in fact I am the hand reaching down trying to free the poor from the abyss, LIKE I WAS.
SH. See my 7:23 this AM post if you’re interested Re: Your response to Piketty errors, et al. It was a lot of typing, so I’d prefer not to retype it all…
What I don’t get about the Trump coverage in the media is – why embellish the stories? Why build narratives? The truth of this presidency is enough – you don’t need to lie or connect dots or add “color” to the stories. Just let what Trump does speak for itself. By adding all this crap to the stories, the media is walling off a huge portion of society that is deeming them untrustworthy.
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For instance, all of the rhetoric about Trump endorsing or supporting the KKK. Some went as far as to imply he was sending them subliminal messages in his words. He completely screwed up the post-Charlottesville talk. Let it speak for itself rather than adding in lies and assumptions that we can easily show are untrue.
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Another example was the rally in Phoenix. Much of the coverage tried to imply that the crowd was lukewarm to him and many left early. Most showed a tight shot of Trump to not show the crowd. The truth is if you watch the raw video of the rally, none of this was true. Same thing with constantly blaming Trump supporters for violently attacking “non-violent” protesters at his events. Watch some of the raw video of this. Or go to one. Or talk to someone who is there. You will find that none of this is actually true.
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My point is – the media doesn’t need to make stuff up to make Trump look incompetent. Just let the tape play….. add your opinions later if you like…..but the awful lies being told about Trump aren’t doing anything but galvanizing his base (and many neutral people) and turning people off to the media, which could be a very important part of our society and political system if it wasn’t so nefarious.
Ratings went up a lot for MSNBC and CNN for the summer, but now are starting to plummet and FOXNews, despite all the disruption in their programming, is back on top. People are tired of the constant drumbeat of stories , high in emotion and low in facts.
SH/BD: I was going through some things and found several things you never answered. One is “what is solar flux” and why is it important to North American solar energy? Have you ever looked into it?
The details of the goobal warming issue are not really appropriate for this forum. Suffice it to say that I put my trust in the professional scientists who indicate that man-made global warming is a serious issue to address, and I tend to distrust the lobbying of the monied energy industry who undercut and deny the science. I am not sufficiently immersed in the science of the global warming to dispute the scientists who have made this study the focus of their careers.
I see, it’s ok to waste our government dollars. It’s all relevant. Solar flux is the incident energy / m squared of surface. It is fair in summer and poor in winter in these latitudes. Shine a flash light on a tennis ball and watch the intensity fall off from the center to the top (full to none). We’re closer to top than bottom. Of course there are cloud cover issues too. And that thing called nighttime. If you Libs weren’t burning tax dollars on a poorly matched (to where we are (except Hawaii)) technology it wouldn’t be relevant to this. But with the exception of remote areas in US, it’s not a good idea. Windmills actually makes a lot more sense, if you don’t mind seeing them dominate the landscape. We can’t afford to waste a nickel where we are in our debt situation.
What the hell am I denying. You NEVER listened, what a surprise! All I said was methane could be the biggest source and you challenged that CO2 causation is a FACT, like Obama, despite disagreement in the community of climate science. And if we spend $25 billion a year on something that MIGHT NOT WORK, it is relevant. It does give government control of the energy industry. Surely, that can’t be why…
So let’s see, government already controls health care to a great degree, almost completely education, completely defense, then energy, and so what’s your next target? Good thing Libs are so wise to know how we should all live.
Wow. I have,agreed multiple times that methane and CO2 are both contributors to AGW. Solar and wind are both good clean sources and getting more efficient. Not sure why you are raving. Your “disagreement” in climate science is just good scientific inquiry. The experts know what they are talking about and just about all attach huge importance to man produced CO2. Trust the science. Listen to the lobbyists and cigarrettes dont cause cancer, co2 doesnt cause global warming, and lead paint doesnt cause brain damage. There are always those who deny facts for a buck.
Sure it does.
Is it more than methane? Don’t know. Is methane 40times cheaper to control? Do know.
Is solar a good energy source in northern latitudes?
Not really. Wind yes, though still not competitive with methane.
Is government really just trying to control another industry? Maybe, but seems highly likely. There is lots of info out there to support that.
Is government wasting money on solar? 100% yes.
And get their entire funding based on this belief. Should I redux the articles in disagreeing scientists who have been silenced? There were several. Galileo was also viewed as heretic for questioning the orthodoxy. Didn’t make him wrong. Or perhaps the Earth is the center of the universe in your scientific world?
I disagree with these 3 points which appear to underly your argument.
1) There is more money in pro AGW CO2 based science than anti AGW science. – This is clearly untrue as GOP and well funded energy companies all control the most money right now.
2) There is motivation in science to give short shrift to impact of methane. – I don’t see why this would be true. There is no monetary or ideologjcal reason to bias the science. I think scientists investigate and understand impacts of each cause of AGW.
3) Government is in some kind of maniacal control frenzy to exaggerate or bias the issue of AGW and climate change. – Yes but only in the opposite direction from which you imply. Current govt, in hands of GOP are anxious to deny any idea which requires government expenditure, thus the govt is frantically denying science of AGW and denying impacts of CO2 and fossil fuels in order to favor their monied donors.
#1.Wrong of course. Grant money is what is at stake. Given by government and green foundations.
#2. Grants / tenure not given to nonCO2 folks. I’ll dig up articles again if you wish.
#3. Yes, it is. But I assume you’d like to switch it back? I’m opposed to either party controlling more. We need less, much less.
To reiterate, never said CO2 was wrong, just not willing to ignore all other possibilities like most Lefties. Perhaps we should 100% control methane (very doable at low cost) and see what happens. More methane for transportation, energy and feedstock is win, win, win, win: jobs, government, environment and America. I hope you like those?
Sorry guys. Been a little busy. Just got back from MO to watch the eclipse. I had never seen totality before. It was beautiful. Hope you also got a chance to see it or at least observe the partial.
I’m glad you guys spent some time plotting ways to move some of the dormant wealth and income from the most wealthy. Whether it is by wealth tax, micro tax on stock trades, taxing shadow economy, capital gains tax increases, or federal income tax rates, any movement to put dormant or wastefully invested money back into paying govt debt or encouraging economic growth, is a good thing.
I have to call Peter out on the whopper about after tax income inequality however. His claim that after tax income inequality is a non issue is just not true. From my reading, it is even worse than pretax numbers since 1979. The only way you could minimize it is to pick a short time evaluation period fromjust before to after the 2013 tax increases. I can look up sources if you like, but I would like to see Peter’s source, so I can properly critique it.
And to be clear. The important statistic about income inequality is the current state, not the rate of change. We are already at a historical extreme of income inequality. It can’t change very much more, although it is still getting worse. The point is that the current state is inefficient and unstable. Too much income aand wealth at the top that could grow the economy better if it was in the middle class income bucket.
Another interesting fact is that WORLD income inequality has dropped significantly since wicked American Capitalism took over the world after WWII. Coincidence?
Obviously capitalism >> communism/socialism from that standpoint. Socialism gives everything to the elite oligarchs that are tied closely to government.
Capitalism also seems to defeat Imperialism which was the pre-dominant European prior form of government and economy. Perhaps letting those countries run themselves makes for better customers in the long run.
Agreed. Pure Socialism is bad. Pure Capitalism is also bad. Well regulated Democratic Capitalism with social programs to support the poor and invalid and elderly are good.
Don’t see equivalency there….
Not equivalency. I just notice that any pure version of a good ideal tends to not work until it is balanced by practicality, which tends to result in a recipe of multiple approaches.
The “more equal” animals strike again!
Complete non sequitir animal farm reference there. I am saying pure idealism , like the communism and socialism lampooned in animal farm, is impractical. But so is the pure capitalism glorified in atlas shrugged.
Sounds like a straw man cage-match!
Who said American cap[italism was wicked? Certainly not me. Economic assistance (instead of oppression) to Germany and Japan certainly improved their economies and the world’s. Globalism has helped many third world economies as well. The issue is not that capitalism or globalism is evil, but that the effects of globalism effectively enrich the richest Americans at the expense of everybody else. Our society and economy, built and sustained by all Americans, enable the existence and profitability of large American companies, but they take advantage of their position by firing Americans and hiring overseas labor. This is understandable as it is allowed by trade policy. However, it is also understandable that Americans resent their jobs being exported and salaries suppressed by multi-millionaires who profit on the misery of their fellow citizens. Rather than blaming the common citizen for not learning the right skill or not working hard enough, the system needs to change to balance the distribution of our national profits to benefit all. We need better education for citizens, teaching of proper modern skills, but we cannot expect this to happen on the backs of workers making a minimum wage 20% lower than in the 1970s. Punishing the poor for their poverty does not make them or our economy more efficient. And setting aside the plight of the poor, the average workers from police to plumber to programmer are also under-rewarded in our economy. We can try to advance the work ethics and skills of workers. But we also need to advance the economic system in which they work. We should be at least as generous to our own workers and economy, as we were to the economies of Germany and Japan after WW2.
https://www.forbes.com/sites/aparnamathur/2015/02/25/the-fall-and-rise-of-inequality-over-the-great-recession/
This article is a reminder that stats on cherry picked time periods, such as the last ten years, which include the massive economic disruption of 2007 to 2010 and a tax increase, can hide larger trends.
Sounds interesting… Was 80% in our locale. Hope we can avoid fiscal / economic eclipse we are careening towards when the debt crisis erupts. It won’t be nearly as benign or entertaining…
Lost context to your post. WHAT was 80% in your locale?
The eclipse.
Oh, the eclipse? Hope you got to observe it safely.
As for economics, the proper solution is revenue positive tax reform with no added tax to the lower 90% of earners, along with some efficiency solutions. Not blind slashing of Medicaid/Medicare/SS.
And of course REAL economic boosters like raising the minimum wage and establishing policies that boost and favor small business over big business.
You know those two statements are directly contradictory. Raising min wage to $15 will destroy lots of small businesses.
Yep…..he doesn’t want to “favor small businesses”. He wants to tax successful small businesses the same as major corporations or the big donors that run the Democratic and Republican parties.
Doesnt have to be 15 and doesnt have to be instant or universal. 10 would be a good start.
Hedging. Then what is the point? Would small businesses be exempt from minimum wage rules? How do you plan on having your cake and eating it too? Your statement is in direct conflict.
Instant universal 15 is a straw man argument. Instant 9, sliding up to 15 over 5 to ten years is more practical. And setting a federal level with the ability to let cities raise higher is probably a good idea. The GOP authoritarian method of states preventing cities from raising min wage is the absolute wrong approach.
Peter, that is not true and not what I said. I do indeed want to favor small businesses over large. Stop attributing strawman liberal ideas onto me.
No small business woild not be exempt and minimum wage is not a tax and raised minimum wage will not destroy businesses. That has always been the claim, that raised minimum wage hurts business and employment, but it is never true in fact. Sure if you raise it too high it causes problems. And if you lower it too much LIKE TODAY it causes different problems. A phased in national $10 or $11 minimum wage is not going to hurt the economy. It will help it.
How do you deem it “not true” that raising minimum wage hurts businesses? Do business owners tell you this? Because I sure do hear the opposite. There is just no basis for your theory. Or maybe all the business people are scared of something unreasonably?
Not gonna argue the zero sum game thing either. Pointless. But it is a fact (hardly a whopper) that after-tax income inequality is not nearly the issue that you make it out to be. Plus, so many of these charts and graphs we see start in 1979. I find that fascinating. When you start in a deep recession, that is likely to be the period of MOST income equality since the higher earners get hurt FAR worse in bad economies. So of course we have risen since then. But as the raw data shows (in “share” of income, which I don’t totally care about but I know you do), there is hardly a “crisis” here. It is an issue (I have acknowledged that) but hardly a catastrophe. Again, if these charts would instead include the 0.01% and their concentration of income – and more importantly, power and control over the Democratic and Republican parties – we would be onto something. But the majority of the 1% who have seen their incomes rise are not atypical to any other economic expansion.
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http://www.taxpolicycenter.org/statistics/historical-income-distribution-all-households
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And be careful when constantly leaning on Piketty/Saez and the liberal media (NYT for example) that love to give these guys credibility. In economic circles, their work is interesting but notoriously flawed. For instance, they don’t even have access to all the necessary data so they “estimate” a great deal of it. Plus, they don’t include non-income benefits like welfare, health care, or other government assistance.
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But anyway, there is the source data since 1979. I don’t see the terrifying trend here. In fact, I was surprised it wasn’t worse considering the separation of have’s and have-not’s that the information technology boom created.
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Again….focus on the 0.01% that are running your beloved political party! Go after them rather than people like me and other small business owners who make lots of money by working hard, taking risks and improving other people’s lives.
1979 had just about the same income disparity as the previous 30 years. Any of those years would be a good reference. 1979 just has more complete economic statistics available. The FACT is pre-tax income shares went up 110% for 1% from 1979 to 2007 and post-tax shares went up 125%. So post-tax hardly minimizes the issue. And since 2007, upper 1% post-tax shares dipped from the recession and started growing again, and then dipped in 2013 from tax increases.
The point is we need to have the nation’s economic resources where they are actually helpful to the economy. What good does it do to have the very rich double their share of the economy if the resulting wasteful speculation tanks the economy? Maybe you see nothing wrong with the very rich share of economy increasing by 50 to 100%. But that IS an economic loss to the rest of the population despite your cries of zero-sum-gain.
And if you don’t like the idea of redistributing to the poor, just take that EXTRA $500B plus (5% of all after tax income) going to the upper 1% and apply it to the deficit.
I love that last idea, via wealth tax…
By the way – this is the “whopper” I told…. “The reality is – if you look at income on an after-tax level, income disparity has barely been rising. In fact, due to the government’s recent efforts to legislate equality, disparity has actually been DECLINING over the last 10 years”
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Just facts. Read into it what you will, but hardly a “whopper”.
Again, I have to admit SH, despite my nearly universal disagreement, fueled the whole discussion. Did you give up or give in to superior logic Steven H? Why DO you hang out with that sadist? ( Asked of the masochist) “Beats me!”
There used to be others in here….was an awesome conversation a few years ago – even before Steven H showed up. Need to find another comment thread to raid!
Hmmmm.. Libertarians unite!
The masochist says to the sadist: Hurt me.
The sadist says: No!
😉
One other great point to make about income inequality. Those who push for much higher taxes on the rich as the solution often quote Piketty’s work as the “evidence” for the need for this measure. We have already debated his work tremendously and poked the holes in it – as well as talked about the merits and validity of some of his arguments. However, since this one economist is so often quoted for the “other side” of the argument – I think it is important to dive deeper. First, as we have discussed, he makes two huge errors. One is his view that the economy is a zero-sum game. The second is looking at income on a pre-tax level. The reality is – if you look at income on an after-tax level, income disparity has barely been rising. In fact, due to the government’s recent efforts to legislate equality, disparity has actually been DECLINING over the last 10 years.
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To me, after-tax income is far more important as this is what truly affects people’s lives. This is people’s reality. And all this data shows that income disparity is not increasing. Good news for all of us.
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I think the other point that is so lost in all of this is that when the super-rich get rich, the rest of society is often benefiting. People have access to free utilities and entertainment like never before, as well as amazing conveniences that make our lives easier and more enjoyable. The people that have created these apps, technologies and products have become quite rich. And our lives have been enriched at the same time. The jealousy and hatred for the rich is so misguided as these are the people that often have made our lives better. Sure, there are some people like hedge fund managers who we could be critical of – but they do not make up the majority of the rich. People don’t get rich providing services or products people don’t want. It’s certainly to blame for my own success….I have improved people’s lives tremendously and as a result, my life has been rewarded as well.
I’ve made this poin in the past and agree. What matters is what you SPEND not make. This includes government benefits. It is MUCH more level, but defeats control agendas of the Progressives.
Politics are so dependent on creating an enemy. An “us vs them” mentality. Charlottesville is just more evidence of where all this division leads us.
The rising tide lifts all boats theory is a nice parable, and it is true and it works, until it doesn’t. The whole point about high income disparity is that the rising tide has been, and is now, FAILING to lift all boats. When 90% of of the rising tide (economic growth and new income) goes to 1% of the population, it is clearly NOT benefitting everyone in a balanced or sustainable fashion.
But there is no denying the point that many of the people like me who have seen ballooning incomes over the past few years have been people who have had VAST impacts on improving other people’s lives. Their incomes may not have grown, but by the services or products many of the fast rising income earners have created or provided – their lives are very much improved.
Your points Peter:
1) Piketty Error #1: Economy is a Zero Sum Game – We have debated this use of ZSG argument ad nauseam and I won’t go through all of it again. What you seem to be saying, though, is that it is false to assume that money to the rich takes away from others. EVER. This is based on the true observation that wealth and income can be ‘created’ through innovation and entrepreneurship. However your larger argument is clearly false in an absolute sense, by the simplest of observations. Companies control and set the salaries of employees. Reducing or suppressing those salaries increase profits to shareholders and owners and enable larger salaries for management. That divvy of the profits in any given business in any given year is absolutely a zero sum game. Integrate that process across all companies and many years, and rewards to the richest are clearly observed to be a combination of created wealth (created by many, mind you, not just those in control) and redistribution from bottom to top.
2) Piketty Error #2: Use of Pre-Tax income exaggerates income disparity. – Peter:”if you look at income on an after-tax level, income disparity has barely been rising.” You are just wrong on this one. Look at earlier posts, above. Post-tax incomes of the wealthy have risen more than pre-tax in the long term. Just because richest lost wealth and income in the crash and have (finally) suffered a tax increase and their post-tax incomes struggle to match their 2007 high, does NOT mean income disparity is halted or a non-issue.
3) If income disparity is not increasing, it is not a problem. – I disagree. It needs to be reversed, not just kept at its current imbalance.
4) We are all better off when the rich get richer. – I agree that capitalism, entrepreneurship, a community of thriving businesses, all benefit society and the economy. I do not agree that 90+% of economic growth going to the upper 1% is a good thing.
SH So raise city and state taxes in , Ill, CA and NY (again, the worst areas) and pass it out as rent supplements, etc to level it off. And add some of the taxes I’ve said ad nauseum. Be specific about how you raise taxes and redistribute income. I don’t remember what your stance is on this.
Yep. Have no problem with any of this. And raise the brackets on incomes over $10 million if that makes you feel better. None of this affects the economy or hurts the little guy. (But it also doesn’t really improve the economy or help the little guy either)
So the wealthy all move to Texas. You have to raise national taxes to capture the wealthy. Thats just obvious.
Raise minimum wages in cities so people can pay rents. Much better than handing out supplements.
Raising taxes is to pay off debt. Minimum wage increases and trade policy reform and college cost controls and incentives to business to promote mentoring and training are the way to addrezs income inequality. I am not advocating direct transfer of dollars from pockets of rich to poor. What I advocate is invrstment in our economic and social infrastructure, paid for by wealthy. Not the same.
Actually exactly the same at the end of the day. Except what you hope will happen won’t happen. The money going to “economic and social infrastructure” won’t find its way there. It will simply find its way back into the pockets of the fat cats that control our politics. It’s a cycle no matter how you spin it. And even if it does help the infrastructure you talk of, that is of proportional benefit to the poor. Not saying you are wrong in your idea – just saying you should call it what it is. Redistribution.
This country would be growing explosively if it were all run like Texas, to the benefit of all.
So raise the min wage to $40 an hour in NY and San Fran. The rest of us could choose to go there or not.
You are seriously saying we should ALL pay for the poor in the richest cities in America? Why not let the rich elites there pay? Digest that SH. They just want more money for themselves. At least Repubs are honest about being greedy.
Peter is right. It’s all part of “the wheel” (borrowed from Game of Thrones) that serves only itself.
In reply to #1. I think an error in your logic is that employers are somehow paying on the cheap. As I’ve said before, at least one factor is not average pay, but sheer number of employees. When GM was a pinnacle employer it employed nearly 620,000 people (1/4 of 1% of US population and .4% of ALL workers) all but a few in US. Now it has 50,000 US jobs. They also supported many more jobs in support of the business and their families. Salaries were good. Now Google employs 75,000 workers (less than 1/40 of 1% of US population and .04% of workers) many of whom are not in US (can’t find breakdown). Manufacturing has lost over 7,000,000 jobs since the peak. They are being replaced at a 1 to 10 rate by technology in this particular case. Interestingly, “information” hasn’t grown much as a percentage of work force, despite of the conception that that is where “the new jobs are”. A global view is an almost 30% loss of manufacturing and smaller but significant losses in construction and mining. It is the “rise of the machines” both with manufacturing robotics and the “manufacturing” of software by copying. Good overview here: https://www.bls.gov/opub/mlr/2016/article/current-employment-statistics-survey-100-years-of-employment-hours-and-earnings.htm
Of course the value of CEOs has gone up and thus you get the highly skewed CEO / average ratio, but this is far less an issue than the loss of millions of much better paying blue collar jobs to machines and overseas. That isn’t a very sexy rallying cry “I hate technology” or “I hate the rest of the world” for the Left. So they instead cry “I hate rich people”. As I’ve said before, new methods of taxation may need to be embraced. Or I suppose we could just drive these people from America with confiscatory income taxes. If so, we should look at the 0.1%, not 1%. This would avoid netting the simply hard working person who picked the right field. Their jobs and companies are very portable and their loyalties to America only go so far. All but a few of the top 50 wealthiest Americans could remote in their work from Belize or wherever. The list is overwhelmingly dominated by those who made money in information technology or finance. We just haven’t figured out how to equitably tax them. To me a wealth tax is answer, but you knew that.
#2 pretax income and not factoring in paid benefits DOES exaggerate income inequality numbers, but is not all of it. Both are correct.
# 3 I don’t think anyone disagrees it is an issue, but shrinking middle class is going both ways, up and down. And importing 10s of millions of primarily low wage workers, legal and illegal, has to raise inequality. That’s simple arithmetic. So you can’t ignore it. Again, it is worst in Dem districts. 17 of worst 20 income inequality municipalities voted Hillary. So raise those local taxes and give away to the poor! Leave everyone else alone.
#4. Yes, we all do. But when you use machines to make money, you benefit disproportionately. The old saying was there were 2 ways to make significant money: other people’s money, other people’s time. Now we have a third to a much larger extent than ever before: machines. That, rather than greed, is the main reason for income inequality. “I hate technology!” just doesn’t look as good on a protest sign or bumper sticker. Especially when Tech bankrolls your party. Just another way the Dems are cutting off their nose to spite their face.
While I’m on the subject, I still feel Latinos will be the MOST solid Republicans once the immigration mess is figured out. They are by their nature more Conservative (per Gallup) and many of them or their relatives faced death and travelled thousands of miles to get here. They will not be so willing to give up money to the Cause as they work their way up the income scale (and I’m quite sure they will). Another Democratic Party misfire.
And Trump idiotically won’t explicitly condemn white supremacists…. sigh…. Anyway, back to the economic stuff. A few facts that I saw that are interesting food for thought.
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So far in 2017, 5300 retail stores have closed. That’s 200 a week. This number is rising. More jobs for the unskilled vanishing into thin air.
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There are 6.1 million job openings in the USA that remain unfilled. Interesting when you consider there are about 15 million people still unemployed.
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In 2014, the top 1% of tax payers (1.4 million people) paid $543 billion in taxes. The bottom 95% (132.6 million people) paid $550 billion.
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95% of the companies in the S&P 500 have underfunded pension plans. Just like the Federal government.
Trump finally explicitly condemned white supremacists. Too late for some, but it doesn’t matter what he says or when to the political zealot. It’s a shame the media and left groups didn’t just ignore the idiots and their stupid march. Then it would have been a bunch of guys (mostly) chanting in a park for a couple of hours then disappearing back into their holes. Instead they are given publicity and more fuel for idiots to follow them…
Brick and mortar feel like they are going the way of the buggy whip and slide rule. But they aren’t as online is still a fairly small (though rapidly growing) segment. The Great Internet Catastrophe that seems inevitable may change this…. Time will tell.
Debt and unrealistic promises are the real threat to all…
Re Politics:
– “Trump finally explicitly condemned white supremacists.”
And then a day or two later, he took it all back. His “many sides, both sides” ambiguity makes the supremacists cheer in the streets. Trump is clearly a political idiot and probably suffering from dementia. He is destroying this country.
– “It’s a shame the media and left groups didn’t just ignore the idiots and their stupid march.”
The media is not to blame. The left is not to blame. Ignoring supremacist thugs (or encouraging them, as Trump is doing) does not make them go away. They need a spotlight shown on their repugnant philosophy. There are not many wrong “sides” here. Nazis and White Supremacy are evil. This needs to be proclaimed loudly, not whispered as they march with torches and guns through our streets and campuses.
I disagree. The media shown a huge light on about 20,000 or less NeoNazis / KKK / etc. now there are undoubtedly a lot more. This just gave them publicity, more members and fervor and did nothing to promote tolerance and love. Trump has said dozens of times he disavows them and they are repugnant. He clearly stumbled, but most if this is made up political BS.
Completely agree
And Trump hardly endorsing white supremacists. Lazy journalism. ANTIFA is a horrible group just like the KKK that has violence as a core method of furthering their cause. Obviously anyone who preaches hate, separation and violence must be condemned, which Trump has done repeatedly over his career.
“95% of the companies in the S&P 500 have underfunded pension plans.”
Isn’t that supposed to be illegal? Is this yet another looming catastrophe fed by government under-regulation and corporate greed?
Nope. Not illegal at all. Pension plans are a dinosaur that most of corporate America has walked away from. The government, of course, still has pension plans and supports them with public debt. Problem is there is no public debt to tap into to support the private pension plans when they fail. This is why the marketplace has largely walked away from them. The Fed government is toying with doing this as well. However, the move to 401k plans vs pensions has DEFINITELY widened the “wealth gap” as those who save and get the tax benefits, matching and growth accumulate wealth far faster than those who don’t. To me this is another example of the public option being bad for the American people. We need things like 401ks vs. pensions, but with education and encouragement of participation. Much better than pensions which rely on regulation or prudent management by corporations or politicians.
“There are 6.1 million job openings in the USA that remain unfilled. Interesting when you consider there are about 15 million people still unemployed.”
1) It is true that there are technology skill issues, and geographic issues (unemployed skill in one state, but jobs in different state) that are contributing to a high job opening number.
2) In a vibrant economy, there will always be a number of job openings. It is incorrect, or at least a bit deceptive, to speak of 6.1 million job openings that “remain” unfilled, as if they are the same openings sitting there for months that no one is taking. The job opening rate as reported by the BLS JOLTS report is 4% job opening rate and 6.2 million openings in June 2017. For reference, a ‘normal’ economy (Aug 2006 chosen somewhat randomly) had 3% and 4.1 million openings. Even in the depths of the 2009 crash when people were losing jobs and unemployment was high and people were desperate for work, there were 2 million job openings. It is a snapshot of the temporary state of labor turnover, and should not be expressed as if jobs are sitting there unwanted. Just FYI.
Agreed…..but still don’t get the need to explain away the stats. Need to have better alignment in our society with job openings and people. Some of that is training.
And the economy keeps rolling along with unemployment shrinking rapidly. Now we need to NOT immediately cut taxes and resist the urge to ADD expenses to the budget for this new revenue. Keep shrinking the deficit.
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The biggest impact I see that the political regime change has had on the markets and economy is the rolling back and reforming of the cumbersome and redundant regulations. The amount of overhead that was wasted annually tending to this nonsense is significant. You take some of that cost away from corporations and small businesses and they have more money to hire people. Plus, you maintain the basic regulations that are needed – you don’t turn it into the wild west…..just sensible regulations that work for an industry rather than nonsensical ones that make voters happy.
I talk to business people and some of the economy changes are just due to perceived more probusiness attitude of the government. If EVERYONE just spends 1 or 2% more the effect is huge.
Acording to what I read, 18% would be about budget neutral if you took out all the different incentives in the business tax code. Yes, the idea would be to try to close the income gap SH is so worried about directly without just continuing to increase income taxes on those who actually earn a wage. Hopefully, this would all try to work down the deficit, which I consider the biggest threat to our nation, people and government.
Never understand the resistance to the two pronged idea of 1) working down the deficit, being smarter fiscally, reforming bloated programs and 2) individuals practicing SWEAR, working hard, saving money, etc. is so offensive to some. Just seems like obvious, practical solutions that would help our nation as a whole.
Another WRONG statement SH, per Harvard business school: We find that while community banks weathered the crisis with greater resilience than many mid-size counterparts, since the passage of the Dodd-Frank Act the pace at which community banks have lost market share is nearly double what it was during the crisis.
Yes, Dodd Frank caused consolidation in the financial industry which hurt the little guy…..most of these regulations have that effect. The perfect ruse – make the public feel like you are “protecting” them, while making the big corporations and donors even stronger than before.
Seems to end up that way a lot, doesn’t it?
It really does. But is it a surprise? When politicians run on a combination of money from the super-rich and the promises to the average Joe. These types of policies (Dodd-Frank, ACA, the DOL fiduciary rule, etc.) all make both people happy – the rich donors that puppet their decision making AND give the appearance that you are helping the average Joe. Most average citizens don’t ever know how these laws are impacting them and that often the very policy they thought was going to help them suppresses them even more. This is the general storyline of the last election. A handful of counties in Michigan/Wisconsin/Pennsylvania started to wake up to the fact that the promises they had been made and the policies that had been put in place hadn’t helped them at all – so they voted for the “new guy” (Sanders AND Trump). People are souring on bull*** politicians across the nation as they start to see the truth about who they actually serve.
So our politicians are motivated by money (fundraising during (as well as occasional boondoggles) during office, becoming lobbyists after) and bureaucrats can only get promoted by spending more money on staff and stuff. We MUST change both. Unwind Citizens United by Const Amendment if necessary, spend limited public funds on campaigns and stop or reduce private funding, restrict total spending on campaigns, permanently ban Congress from lobbying positions, etc. As far as bureacrocy, need to do zero based budgeting, incentivize delivery of services at lowest cost (like the real world), increase accountability, etc. Other ideas anyone ?
All sounds good to me!
Peter: Re: wealth tax. I’d exclude real estate because it is already taxed on the state and local level. This is to get a tax on the very few who have many millions and billions in financial instruments and pay nothing on their wealth
And the EBITDA only for the nonpublic companies. Just use stock or bond value for public companies
Hmm….so you are saying apply real estate taxes (usually 1% or so) to all financial assets. Would anything be exempt? 401k’s? Businesses? Could make valuations difficult if you include businesses, farms, etc.
Right, 1-2%, in concept to catch up the very wealthy that “shelter” in stocks and business equity. All fair game, but maybe $10 million exclusion. There would be some issues, but EBITDA helps simplify by not requiring a bit by bit accounting of each piece of property.
Socialism at work: from CNN:
Under Chavez, the prices of key items were slashed so that everyone could afford them. The official price for a bag of cornflour, used in the national dish arepas, is 639 bolivares. That’s affordable for many people — but the price of flour is below the cost of production. Domestic producers have stopped making cornflour.
rampant inflation has meant more people are skipping meals, and the percentage of malnourished Venezuelans is growing rapidly.
UNINTENDED CONSEQUENCES
Re: wealth tax. Peter: A business can’t afford 1 to 2 % of valuation based on some multiple of Ebitda? I realize every industry is differeand should have different multiples.
Are you talking about wealth tax or estate tax? And why would every industry have different multiples?
I’m talking about valuation for the basis of taxing. Industries are all different based on their EBITDA. Trucking is very different from software for example. This takes out a lot of the manipulation that can be done in profits for example
So nice to have a non-politically motivated conversation by the way… 🙂
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I do think the intent of a wealth tax makes some sense – even though I’m against it conceptually (taking more of what people have earned – and penalizing saving). But besides that, I think it is quite complex and impractical. For instance, would Jerry Jones have to pay $40m-$80m a year to the government since the Cowboys are likely worth about $4 billion? This, in addition to the income taxes he pays? And the capital gains he pays when he sells the team? Or the 50% estate tax his children pay if he dies? All of this to give our government more money to mismanage?
Yes on 1% of valuation. Again, this is in lieu of estate taxes. No change in LT capital gain treatment.
It’s an interesting example, since their annual revenue is about $700m. Corporate taxes are 35%, or $245m. The wealth tax would take another $40-$80m away. His net annual taxation would approach 50%.
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I know football teams are kind of an odd example, but one we actually know the numbers for. I worry more about small businesses and farmers when we start talking about wealth taxes.
In my world, corporate taxes drop to at most upper teens, with big drop in exclusions, writeoffs, etc.
OK – but if you do all of that, it is then net neutral to government revenue? Or is it lower? Would be interesting to explore. I do see what you are suggesting here – trying to reposition the tax laws to target “hoarders” more than “earners”. Is that correct?
A wealth tax on business is stupid since much of the wealth is in intellectual property or the knowledge of a few people within the company.
This got lost I think: July 25, 2017 at 1:44 pm
Interesting data from WaPo: Clinton’s campaign received 16 percent of its money in donations of $200 or less. Trump’s campaign received 26 percent of its funds from small donations. Clinton outraised and outspent about 50% and raised $1.18B from large donors to Trump’s $790M, 50% more large donations by the “People’s Party”. Also: Nearly 74% of the money he (Trump) raised in the election’s homestretch and immediate aftermath came from small donors, according to the report his campaign filed late Thursday with the Federal Election Commission. It covered activity from Oct. 20 through Nov. 28.
So who is really a voice of the people? Who is being influenced by the rich and powerful? The rhetoric is with the Dems and the facts with Trump and to some extent Sanders. So how exactly is the Democratic Party for the middle class? And the working man is at least to some extent harmed by illegal immigrants. So ignore and harm a huge part of your base and suck up to the monied few = Trump.
A great quote that applies here to all you guys continuing to debate Steven H….. “Fools have no interest in understanding, they only want to air their own opinions” (from the Bible). Saw another funny one. “Arguing with idiots is like playing chess with a pigeon…No matter how good you are, the bird is going to s*** on the board and strut around like it won anyway. Hahaha
Lovely of you to air your own opinions, James. No info, as usual. Just pooping on the conversation again, I see.
SH: I picked (at random) a low Gini country in Sweden (.274) to compare with US(.39). Your thesis is this is due to high tax rates. (Sweden 42% and US 26%) In part, I’m sure that is true. But they also SWEAR better: substantially in savings, higher age at childbirth and much, much less opiates. The rest are close to break even. I won’t go through each country but that would be a nice master’s thesis. I suspect nearly all lower Gini countries do better at SWEAR.
Within the US data is available by race and Asians SWEAR best followed by whites, then Latinos, then Blacks. Income and wealth correlate 100%.
Some is undoubtedly due to a history of systemic racial bias and discrimination, but I’m not sure how to go back in time and change things. And of course Asians aren’t white and they do the best. But I do know how to go forward…. SWEAR.
My dad was dirt poor (kicked out of home at 14 with nothing, poor enough for you SH?) He worked 3 years and then joined the military and became the first in his family to get high school and college degrees. He was a decent saver, didnt borrow for depreciating assets, worked 60 plus hours per week, educated himself as above, drank a bit but rarely was drunk, didn’t do drugs and had his first child at 21 (a bit young, but that was the times). But he taught us SWEAR over and over. All his kids had degrees with 1 doctorate and 1 masters. 3 are top 5% earners, 1 top 25% and one didn’t listen. That’s another story, but suffice it to say it’s hard for a single person to build wealth if they don’t work at all. The government’s codependent relationship allowed and encouraged that by the way. This was generational SWEAR. And his grandkids all but one (last is close) have college degrees if they are old enough. One is easily top 10 in the world in his endeavor.
SWEAR is one method of teaching to swim vs temporary life preservers. SH wants you to passively sit back and wait for rescue. Perhaps just try one stroke, then another, then another. If you have a child at 16, then start that day. There are MANY programs to help you. But use them as a means not an end. Before long a vast majority will be swimming.
There are 5.666 million job openings, over 2 million require no skills (BLS May). Clean toilets and bus tables, move up to washing dishes, move up to cook, educate yourself along the way, save a little and don’t overspend, don’t do drugs or much alcohol, have first child at 27. Worked for me. Of course I am somehow wicked in the eyes of SH and Bernie Sanders (he never cleaned toilets) and the Dems crushing the poor for my own evil enjoyment. You are a fool if you believe this BS, and I suspect you do SH. You don’t have to rely our dysfunctional Congress to do it. You just have to make better personal choices and work harder. No moralizing, just TRUTH. But “you can’t handle the truth!” (Thanks Jack) Please refute that the vast majority who SWEAR don’t end up with more wealth and income than those who don’t. You can’t! Again, TRUTH versus political lies, doctrine and BS.
Well said….and people will continually disappointed if they wait for anyone (particularly politicians who are catering to the 0.01% who fund their campaigns) to help them. It’s all BS – a total charade to hoodwink the people that are most desperate. Why would a poor working-class Midwesterner think that a politician who raised $1 billion for their campaign would be beholden to help them? This is PRECISELY what happened in the last election. A number of counties that had voted Democrat the last two elections and seen no results decided it was time to go for someone who wasn’t “establishment” or part of the big business political machine. (I truly believe they would have voted Sanders if it was Sanders vs a Bush too) These poor, working class people that we have constantly been discussing who are looking for government to save them have finally started to become disheartened with that prospect. And this isn’t Dem or Rep at all….it’s Washington.
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The sooner an individual realizes that by practicing SWEAR they can advance out of just about any situation, the better. The sooner an individual realizes they are independent, wonderful people with something to offer the world, the sooner their lives will change for the better. Self-help books, lottery tickets, Oprah and Dr Phil, affirmative action, and most importantly relying on our inept, divided government won’t do it. Good parenting, inspiration, confidence and hard work will. And there are tens of millions (if not more) of people in our society that prove this to be the case. The government are the fools in this argument and anyone who thinks they can/will/are motivated to solve the plight of every American are fools themselves. Structurally, this is an impossibility with billion dollar campaigns funded by Wall Street, the .001% elite and powerful shadowy political figures like Soros and the Kochs.
Re: Podesta. Yes, the source colors the information. Perhaps I should use Breitbart all the time. It would be much easier than going to source data.
“unproved accusations against Hillary are not even in the same ballpark.” This is you opinion only. No proof. Again, if Hillary had won there might be similar attacks on her. The MSM really didn’t like her either. And we know the Repubs don’t. So I’m not arguing your dead fish smells more than mine. I’m arguing all dead fish smell.
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