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tands
Guest
gltech said:
I'm really interested in this accountant/skateborder inequality explanation.
Donald trump. what is your take on him?
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I'm really interested in this accountant/skateborder inequality explanation.
living sounds
Well-known member
gltech said:
This is not the issue. Today the rate of return on capital is greater than economic growth. This can be summed up in that you get richer by having money, not by working. This is unsubstainable. Also corporations and people have gained the system. There is no justification for the 180 million $$ Rex Tillerson gets for leaving the company.
For long-term stability the system needs application of negative feedback (= highly progressive taxation) in order to remain stable. Otherwise the current positive feedback mechanisms (the more money you have the more you make, by investing it, lobbying, gaming the system) leads to an explosion (economic crisis, war). This has happened before and will happen again.
A meritocratic system that rewards more intelligent hard-working people is a great theoretical goal, but it has nothing to do with today's actual system. Trump's own record is a standout example.
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tands
Guest
Thank you, living sounds! The feedback metaphor is truly inspired!
dmp
Well-known member
Agree - great explanation. It's not about class warfare or other deflections you hear.
Since the mid 1970s wage growth has stagnated while earnings have risen greatly i.e. the returns on capital ( earnings for S&P500 companies for instance). An accountant making $100k today would actually be making more if a disproportionate amount of income weren't going to capital over the last 50 yrs.
I've mentioned wealth inequality many times and I never meant it between low/mid income workers ($20k-$50k) and mid-high income workers ($100k+).
And to make it clear to those who don't see a difference between Republicans and Democrats:
- Bill Clinton increased the progressiveness of the tax code (top tax rate up to 39.6%)
- GWB reduced it (top tax rate down to 35%, cap gains down to 15%)
- Obama increased it (For instance, 3.8 percent surtax on investment income earned in households making at least $250,000 / $200,000 single)
dmp
Well-known member
Quote from: gltech on January 18, 2017, 12:58:12 AM
I'm not a fan of body art personally, but it really doesn't bother me. I think increasing personal freedom is a sign of advancing society, not a decline.
I actually see other important issues as evidence of a declining society: unsustainable population growth, environmental pollution, unsustainable energy, unhealthy diet.
In my opinion these problems could be solved with education, science, and technology if societies had proper resource allocation and leadership. Collectively, we misallocate resources and select poor leaders (to some extent).
Ancient civilizations saw humanity in decline, rather than in advancement (ancient egyptians / Buddhists).
Time will tell...
I'm not a fan of body art personally, but it really doesn't bother me. I think increasing personal freedom is a sign of advancing society, not a decline.
I actually see other important issues as evidence of a declining society: unsustainable population growth, environmental pollution, unsustainable energy, unhealthy diet.
In my opinion these problems could be solved with education, science, and technology if societies had proper resource allocation and leadership. Collectively, we misallocate resources and select poor leaders (to some extent).
Ancient civilizations saw humanity in decline, rather than in advancement (ancient egyptians / Buddhists).
Time will tell...
More wealth bashing?living sounds said:
Rex Tillerson started out as a civil engineer at Exxon in 1975 and worked his way up the corporate ladder creating wealth (from his intelligent work effort).
Preventing the high performers among us from being rewarded for that performance will just discourage high performance.
I consider some regulation a useful NF mechanism to prevent the excesses of unfettered capitalism, but wealth creation is generally a good thing, we should want more of that, not less. Too much regulation can hurt small business and benefit big business who can absorb the costs and pass them along to consumers.
Do you have any specific advice...? I am making some return from investing my personal capital I accumulated from decades of paid employment, into the stock market, but returns there were never high enough for me to just stop working.
Who decides who are the deserving hard working people, who should get wealth transfers from those with more money than they have? Free markets rewarding results (value created) appear to be more equitable in such allocations. Zukenberg at facebook created value from a product that millions of people want. Under your hypothetical meritocracy how would future Zukenbergs fare? Would we have the same modern technology we presently enjoy, under a government managed economy (history suggests no, China may be worth watching, but I sure wouldn't want to live there)?
This is a very popular screed, older than I am, and is the foundation behind several populist revolutions.
As I have said before we are looking at this incorrectly. The fraction of the world population in deep poverty is shrinking. We are on a path to wiping out world wide poverty. Globalization and automation are dramatically changing the playing field for modern employment (don't tell your kids to be truck drivers, maybe drone pilots). As I have said before education is important, and people need to learn how to create value (plumbers and welders create value too). We already have a very progressive tax system. Using your negative feedback reference, applying even more negative feedback to wealth creation will leave the world with less wealth creation.
These arguments are older than some of us reading this. Of course the weakest among us need some help from society but increased entitlements over the last several years is just a disincentive to work for many able bodied citizens (workforce participation is down). We would all like to live off somebody else's work effort but that is not sustainable (nor is borrowing to pay for government spending). The golden goose can get throttled and stop laying those golden eggs.
JR
living sounds
Well-known member
JohnRoberts said:
The fundamentals don't support your opinion. People work more than ever in increasingly fundamentally useless occupations financing their income gap with borrowed money. The political instability reflects this. It will not last much longer no matter how often the mantra of the hard-working executives and the trickle down fairy tale is told. Reality has a way of catching up on ideology.
dmp
Well-known member
Welcome to the Trump era, groan.
Attached chart shows productivity and wages - notice the fundamental change in the 1970s - when productivity increases from work stopped being shared with workers and started going disproportionately to capital.
More propaganda?
As does the country.
dmp
Well-known member
Although it is a somewhat progressive system (higher incomes pay higher tax rates), in light of the country's history, it is near the least progressive.
During the eras when wealth inequality was lower, the tax system was much more progressive. Like livingssounds excellent analogy, the negative feedback knob is clearly too low right now and is leading us to disastrous consequences.
As often happens in politics, that is a too simple answer for a complex issue. Nobody advocates excessive wealth, or abject poverty, but government redistribution causes any number of unintended consequences.dmp said:
Castro got rid of all the wealthy, but did not get rid of poverty.
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You mention productivity, its growth is down... from BLM website
It is not trivial to get productivity growth up, but hopefully more business investment will help. Government cannot mandate increased productivity (increased regulation and work rules generally hurt it) The last administration was not helping this.
JR
living sounds
Well-known member
JohnRoberts said:
Always with the straw man. We are not arguing for 20th century Communism here.
If you are arguing for higher taxes, the recent election just voted against that.living sounds said:
The tax reform being discussed is reportedly revenue neutral to the wealthy, but it will need to raise revenue from somewhere since spending looks like it may increase. I am not a fan of border taxes (another name for an across the board tariff). Free trade is usually a win-win for both (all) nations.
I'll have to wait to see what actually happens "after" the new president is in place, I am not smart enough to know the future.
JR
While I agree with the theory of free enterprise and wealth creation, (it's much better than subsistence effort) the actual practice of it leads to gross inequalities for the maximum number of people.
There comes a point for the lucky few where the returns start to become exponential. Trickle down is a fallacy, buying a jet or a yacht or redecorating a mansion and fitting it out only consumes a tiny fraction of a billionaires wealth, the vast majority of it is reinvested or passed on to children. A minority, like Carnegie and Gates have used their wealth for the public good (free libraries and malaria research respectively).
Here's an example of what I mean.
I was involved with a start-up company that was financed by about 15 shareholders. One by one they decided to sell their shares, but only the CEO could afford to buy them as the rest of us were living hand to mouth paying mortgages and raising families. Every time he bought some shares his dividends increased so he could buy more shares, in the end he got the lot.
That is what I mean by exponential, the playing field is not level.
DaveP
There comes a point for the lucky few where the returns start to become exponential. Trickle down is a fallacy, buying a jet or a yacht or redecorating a mansion and fitting it out only consumes a tiny fraction of a billionaires wealth, the vast majority of it is reinvested or passed on to children. A minority, like Carnegie and Gates have used their wealth for the public good (free libraries and malaria research respectively).
Here's an example of what I mean.
I was involved with a start-up company that was financed by about 15 shareholders. One by one they decided to sell their shares, but only the CEO could afford to buy them as the rest of us were living hand to mouth paying mortgages and raising families. Every time he bought some shares his dividends increased so he could buy more shares, in the end he got the lot.
That is what I mean by exponential, the playing field is not level.
DaveP
M
mattiasNYC
Guest
tands said:
I think it speaks volumes already.....
M
mattiasNYC
Guest
JohnRoberts said:
A very good question above. The fundamental issue is the illusion of actual control which is what you imply people have when you write "who decides". The decision is never made as to how wealth is to be accumulated John, the decision is merely if an individual wants product X for Y dollars. That's it. You know it, and I know it. Why capitalists keep pretending that it's something else I will never understand.
As for the alternatives, you again repeat the false dichotomy of either a free capitalist market or a "government managed economy". Those are not the only two alternatives.
And you then finish with the incorrect inference that what we have couldn't have been achieved by any other means. But we've been here before, which is curious seeing that this is a forum based on technology (, and by "curious" I mean that capitalists here completely disregard the role technology has played in the creation of more technology).
JohnRoberts said:
So it's the old "If you're not working it's because you're lazy." argument.
M
mattiasNYC
Guest
JohnRoberts said:
That wasn't the point John, the point was the change in compensation relative to production increases.
dmp
Well-known member
I mentioned productivity because the gap between productivity and incomes is staggering. The slightly lower growth of productivity is much less worrisome than 30 yrs of stagnant wages.
Really? It dropped sharply due to the recession but has been coming up now that unemployment is below 5% (people are coming off the sidelines).
Maybe you've been misled by Trump's phony statements in the past year on the subject.
dmp
Well-known member
Why isn't my graph showing?
Are .png images not supported?
Are .png images not supported?
There is a random issue with some attachments not showing, try again...dmp said:
JR
dmp
Well-known member
trying again
