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Post by Deleted on Apr 16, 2014 16:05:36 GMT -5
The author has not proved that there is a problem to begin with. Therefore no "solution" is necessary. You are right. If you don't have a problem with most of the wealth being concentrated in the hands of a small elite that perpetuates itself, if most people finding it impossible to attain that kind of wealth by their own skills and abilities doesn't bother you, and if you are perfectly fine with the idea of an aristocracy controlling both economics and politics, then no, there is absolutely no problem with the scenario Piketty is describing.
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Post by Deleted on Apr 16, 2014 16:15:19 GMT -5
Yes. And my question is still the same? What's so bad about income inequality? The implication of Piketty's work is that the economy is some sort of fixed quantity and that if some are getting more, others must be getting less. How is that an implication of his work? It is self-evident that some people have more capital, and some people less. That does not mean that it is a "fixed quantity". What it means is that some people will find it easier to accumulate more and more capital over time, and that is, as Piketty demonstrates, what happened in the past, and what has started to happen again in the recent 30 years in the West: The rich get richer, the poor stay poor. He does take into account economic growth - in fact his entire argument is based on how economic growth affects society: Most of the growth since the late 1970s has been happening to capital, not income. Real incomes have almost stagnated since then, but returns on capital have greatly increased. In order to be rich (or to stay rich), it has become more and more important to invest, rather than to have a high paying job, because the gains in capital investments have increased so much. And...? Do you disagree with that? Do you have any facts to disprove those claims?
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Post by rmarks1 on Apr 16, 2014 16:21:57 GMT -5
The author has not proved that there is a problem to begin with. Therefore no "solution" is necessary. You are right. If you don't have a problem with most of the wealth being concentrated in the hands of a small elite that perpetuates itself, if most people finding it impossible to attain that kind of wealth by their own skills and abilities doesn't bother you, and if you are perfectly fine with the idea of an aristocracy controlling both economics and politics, then no, there is absolutely no problem with the scenario Piketty is describing. LOL! Look at what you are saying. 1) Did that small elite steal that money form you? Did they steal it from anyone? Or did they earn it? If they earned it and they didn't steal it, then the only thing wrong here is irrational envy. 2) Yes, most people find it impossible to attain that kind of wealth, including me. Does that mean these people are desperately poor? Of course not. As long as someone has enough to be happy, where is the problem? As long as the economy grows fast enough to provide opportunity for everyone, people won't suffer. Unless, of course, they are the envious kind who just can't stand it when someone has more then them. 3) As far as an aristocracy controlling both economics and politics, isn't that your liberal dream? Don't you want an elite to redistribute everyone's income? With a limited government, there will be less politics to control. With a free market, it will be impossible for any one group to control the economy for any length of time. Monopoly requires government interference. Bob
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Post by rmarks1 on Apr 16, 2014 16:48:52 GMT -5
Yes. And my question is still the same? What's so bad about income inequality? The implication of Piketty's work is that the economy is some sort of fixed quantity and that if some are getting more, others must be getting less. How is that an implication of his work? It is self-evident that some people have more capital, and some people less. That does not mean that it is a "fixed quantity". What it means is that some people will find it easier to accumulate more and more capital over time, and that is, as Piketty demonstrates, what happened in the past, and what has started to happen again in the recent 30 years in the West: The rich get richer, the poor stay poor. He's wrong. The poor don't stay poor.The poor 20 years from now won't be the same poor we have today because they will have move up the income ladder. On top of that, a poor person today (at least here in the USA) will likely own a car, a television, and a cell phone. All Piketty is doing is rehashing Marxist mythology. And what did that? It was government policy, not the free market. It is less profitable today for a business to actually make something than for it to engage in financial manipulations. First sell a bunch of junk bonds. Next use the proceeds to buy back the company's stock. This causes the stock price to go up. When that happens, the business officers exercise their stock options and sell their shares. When the principle on the junk bond loans comes due, they issue a new round of junk bonds and start the cycle again. This is called "extend and pretend." They extend the debt and pretend that it will ever be repaid. If the companyis large enough, they expect the government to bail them out when the scheme collapses. None of this would be possible in a free market. These are crony capitalists who collude with the government. Piketty mistakenly thinks that this s free market capitalism at work. It isn't. Once again, that is the result of government policy, not the free market. This effect would disappear instantly if capital gains were taxed at the same rate as income. There would no longer be any economic advantage to these games. Only everything that has happened since then. That book was published in 1957. Since then, the major corporations that were the subject of Perlo's rant have been replaced at the top by new companies and totally new industries. Perlo was simply assuming that this concentration process was moving in a straight line. Had he been correct, those same families would still be at the top today. Some of them are, but there is also Warren Buffet and Bill Gates, neither of whom is leaving great wealth to their children. BTW, Perlo wrote in the 1950's which was supposed to be the time when government re-distribution schemes were at a peak. Yet he was claiming that wealth concentration was increasing. Isn't that a contradiction? Bob
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Post by Deleted on Apr 19, 2014 12:51:39 GMT -5
How is that an implication of his work? It is self-evident that some people have more capital, and some people less. That does not mean that it is a "fixed quantity". What it means is that some people will find it easier to accumulate more and more capital over time, and that is, as Piketty demonstrates, what happened in the past, and what has started to happen again in the recent 30 years in the West: The rich get richer, the poor stay poor. He's wrong. The poor don't stay poor.The poor 20 years from now won't be the same poor we have today because they will have move up the income ladder. On top of that, a poor person today (at least here in the USA) will likely own a car, a television, and a cell phone. That statement was true for the West in 1950-1980. Since the early 1980s, it has steadily become less true. Nowadays, there is no reason to expect that people 20 years from now will earn more than they do right now (as long as we adjust for inflation). According to Piketty, it's actually the other way round. Until the late 1920s, people were in a similar situation. The Great Depression, and the destructive force of WW2, completely changed that, and the welfare state measures of the 1950s and 1960s prevented the economy from reverting to its pre-1930 state. Yes. That is what happens when the government refuses to regulate. As we can see in our latest world economic crisis. Globalization has released companies from the shackles of national regulations, they can now move to manufacture wherever it is cheapest and most efficient to do so, absolving them of the need to manufacture expensively in their countries of origin. Steve Jobs, your hero, was one of the people to realize that: Apple nowadays does all of its manufacturing outside the US, in countries where the workforce is cheap but reliable (mostly China and Malaysia, IIRC). And that is exactly what Piketty suggests.
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Post by rmarks1 on Apr 19, 2014 16:01:27 GMT -5
He's wrong. The poor don't stay poor.The poor 20 years from now won't be the same poor we have today because they will have move up the income ladder. On top of that, a poor person today (at least here in the USA) will likely own a car, a television, and a cell phone. That statement was true for the West in 1950-1980. Since the early 1980s, it has steadily become less true. Nowadays, there is no reason to expect that people 20 years from now will earn more than they do right now (as long as we adjust for inflation). Wrong. Here is an article from NOR (national public radio) a left-wing source, that gives evidence to the contrary. www.npr.org/2014/01/23/265356290/study-upward-mobility-no-tougher-in-u-s-than-two-decades-agoDuring the 1950's the USA economy stagnated. There were 3 recessions. Thing picked up during the 60's because of the Kennedy tax cuts. By the 1970's the end results of those welfare state measures were manifest. Stagflation (inflation and recession at the same time) and an ever increasing crime rate were the result. The UK also went through a crisis at the same time. LOL! The finance industry was already heavily regulated. It has been the government policy for over 2 decades to keep the interest rates low. This is what makes it possible for those companies to refinance their junk bonds every few years. Government policy does this, not the free market. YES!!! And it's WONDERFUL!!! Hundreds of millions of people have already been raised out of poverty, and they didn't require any "aid" (with all the strings attached) from any western government. Do you think it's a bad thing for all those people to be raised out of poverty? Or do you think that only white westerners deserve good jobs? The goods they produce are now available for a lower price. That means people save money when they buy. That money enables them to buy more goods, and that stimulates the economy more. This provides more jobs. In short, everyone gains. Is that bad? Good! On that we agree. I knew he coldn't be all wrong. Bob
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Post by Deleted on Apr 21, 2014 9:44:16 GMT -5
LOL! The finance industry was already heavily regulated. It has been the government policy for over 2 decades to keep the interest rates low. This is what makes it possible for those companies to refinance their junk bonds every few years. Government policy does this, not the free market. Government policy not to regulate a "free" market, yes.
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Post by rmarks1 on Apr 21, 2014 12:31:07 GMT -5
LOL! The finance industry was already heavily regulated. It has been the government policy for over 2 decades to keep the interest rates low. This is what makes it possible for those companies to refinance their junk bonds every few years. Government policy does this, not the free market. Government policy not to regulate a "free" market, yes. For some reason, you seem to think that the many thousands of pages of bureaucratic regulations (not to mention all the laws) means the government is not regulating the market. Why is that? Bob
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Post by Deleted on Apr 21, 2014 16:10:05 GMT -5
Government policy not to regulate a "free" market, yes. For some reason, you seem to think that the many thousands of pages of bureaucratic regulations (not to mention all the laws) means the government is not regulating the market. Why is that? Bob Many thousand pages of bureaucratic regulations don't really mean much when they aren't enforced. We know for a fact that the agencies responsible for oversight over the financial markets responsible for the US Housing Crisis were not properly enforcing regulations.
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Post by rmarks1 on Apr 21, 2014 19:26:36 GMT -5
For some reason, you seem to think that the many thousands of pages of bureaucratic regulations (not to mention all the laws) means the government is not regulating the market. Why is that? Bob Many thousand pages of bureaucratic regulations don't really mean much when they aren't enforced. We know for a fact that the agencies responsible for oversight over the financial markets responsible for the US Housing Crisis were not properly enforcing regulations. Yes, McAnswer, I agree with you here! You are 100% correct! The question now becomes: Why did these agancies, which were supposed to uphold the law, ignoring it? Sort of makes one doubt the effectiveness of government regulation, doesn't it? Well here's why: 1) Clinton wanted to have a program to help minorities and the poor buy homes. So he... 2) Put pressure on Fannie Mae and Freddie Mac to lower the traditional 20% downpayment to 5%. Sure, this meant more people could now buy homes. But that also enabled people to buy homes they could not afford. 3) Janet Reno, the Attorney General started prosecuting banks for "racist lending practices." It seems that more white people were being approved for loans than black people. Never mind that banks issue loans on the basis of a credit score system. Never mind either that Asians had a much higher acceptance percentage than whites. The difference in the numbers was taken as "proof" of racism. Rather than face a costly legal fight, the banks gave in. 4) Since more loans were now going into default, the small banks couldn't stay in business, so many of them sold out to large banks, thereby increasing concentration. 5) People used to have to verify the income they claimed on their mortgage applications. Clinton's HUD Secretary eliminated that requirement to make it easier for poor people to buy homes. Unfortunately, this also made massive amounts of mortgage fraus possible. 6) When housing prices went up (of course they did; more people were buying homes; the Law of Supply and Demand) people started to think that housing was a good "investment", so even more people bought homes. That was the start of the Housing Bubble. 7) Anybody who pointed out that this was a disaster in the making was denounced as a racist who didn't care about the poor. 8) When the bubble finally burst, it was the free market that was blamed, in spite of the fact that the whole mess was the result of a deliberate government policy. Bob
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Post by Deleted on Apr 23, 2014 20:43:17 GMT -5
Tell me, how do these points lead you to the conclusion that regulations shouldn't have existed in the first place?
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Post by rmarks1 on Apr 23, 2014 22:16:39 GMT -5
Tell me, how do these points lead you to the conclusion that regulations shouldn't have existed in the first place? Are you sure you did your thesis on Foucault? Don't you get it McAnswer? It's all about power. The bureaucratic power elite does what it wants to. It makes the rules, and when the rules are not convenient at some particular moment, they change them. What caused that crash was a whole new set of "regulations." When everything falls apart, they blame someone or something else. In this case, they blamed the free market to cover up the fact that the crash was caused by government interference from beginning to end. Clinton needed votes from minorities so he put a program in place that would seem to give them something. The fact that the program lead to a financial collapse that mostly victimized the poor, minorities, and people of color didn't matter to anyone in his administration. He got plenty of mileage out of it when he was president and he was able to shift the blame afterwards. Until 2008, he even had a page on his website where he took credit for all the great gains that minorities made in housing. He took that page off in 2008 as the crisis was hitting. Oh don't think for one minute that I am only blaming the Democrats. Republican George Bush had a chance to stop the Clinton program. Instead he took it over and tried to make people think it was his. All Bush did was to change the target audience to the Hispanic population. When the crash came, they suffered too. Should regulations have existed in the first place? No. Once you give the government power to regulate, you also give them the power to change regulations. And they will use that power to their own advantage every time. The only legitimate regulations a government can make is for fraud prevention. Once the government has the power to interfere in the free market, it will use that power for immediate and temporary political advantage. "Regulations?" They change them at will. That is what happened here. The result was a major financial crash. Bob
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Post by Deleted on Apr 25, 2014 13:15:38 GMT -5
Tell me, how do these points lead you to the conclusion that regulations shouldn't have existed in the first place? Are you sure you did your thesis on Foucault? Don't you get it McAnswer? It's all about power. . If you want to quote Foucault at me, you should be aware that for Foucault, there is no fundamental distinction to be made between governmental power and non-governmental power. In fact, one of his central points on power is that it cannot be reduced to governmental force, that power works all across society, not just within governments. The bureaucrats of government are in and of themselves no more or less powerful than the bureaucrats of finance and industry. Bureaucrats cannot change rules at their leisure - in fact, one of the hallmarks of modern bureaucracy is that they don't make the rules they have to enforce. All they can do is choose not to enforce a rule. And in the case of the housing crisis, it was people enarmored with the concept of a market free of governmental regulation that chose not to regulate it, for good or ill - and it this case, it was for a lot of ill.
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Post by rmarks1 on Apr 25, 2014 15:03:42 GMT -5
Are you sure you did your thesis on Foucault? Don't you get it McAnswer? It's all about power. . If you want to quote Foucault at me, you should be aware that for Foucault, there is no fundamental distinction to be made between governmental power and non-governmental power. In fact, one of his central points on power is that it cannot be reduced to governmental force, that power works all across society, not just within governments. The bureaucrats of government are in and of themselves no more or less powerful than the bureaucrats of finance and industry. Well he should have made that distinction. Government bureaucrats can kill you. Finance and industry bureaucrats can only kill you by using the government. LOL! You're joking. Either that or you have no idea of how modern government bureaucracy works. The legislature may pass laws, but the bureaucracy gets to interpret them. Here in America, the bureaucracy produces thousands of pages of rules every year. And these rules have the same force as a law.No, the government bureaucracy is not limited to not enforcing the law. That much should have been clear from the government pressuring banks to lower the mortgage downpayment from 20% to 5%. It should also have been clear from the decision of the FED to keep interest rates low so that the housing market would keep going (it kept going right into a major crisis). And it should be crystal clear from President Obama's by-passing Congress and ruling by "executive order." If that's not enough to convince you, take a loo at this article from Der Spiegel. "Not elected" yet they are making rules. Are these your passive bureaucrats? Bob
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Post by Deleted on Apr 29, 2014 11:10:37 GMT -5
If you want to quote Foucault at me, you should be aware that for Foucault, there is no fundamental distinction to be made between governmental power and non-governmental power. In fact, one of his central points on power is that it cannot be reduced to governmental force, that power works all across society, not just within governments. The bureaucrats of government are in and of themselves no more or less powerful than the bureaucrats of finance and industry. Well he should have made that distinction. Government bureaucrats can kill you. Finance and industry bureaucrats can only kill you by using the government. Government bureaucrats can't kill you without using the government, either. The president of the FED can'tkill you legally even if he set his mind to do so, not by any means that aren't also available to financial or industrial bureaucrats. They have to play by a set of rules, just like finance and industry bureaucrats do. But that's beside the point, because in Foucault's model, power is about getting people to do what you want. You can't get people to do what you want if you kill them. The entire point of governance (not just government in the strict sense) is to get people to do what you want without using destructive violence. Entire economies have been wrecked by US rating agencies switching up a few letters in their reports. Are you claiming that S&P, Moody's et al don't have power because they aren't allowed to kill at a whim?
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Post by Deleted on Apr 29, 2014 11:14:30 GMT -5
If that's not enough to convince you, take a loo at this article from Der Spiegel. "Not elected" yet they are making rules. Are these your passive bureaucrats? Bob The Spiegel article claims that they are "not elected and usually independent of their countries' governments". If these people act independently of governments, then why is it their governments that are the problem?
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Post by rmarks1 on Apr 29, 2014 17:23:53 GMT -5
If that's not enough to convince you, take a loo at this article from Der Spiegel. "Not elected" yet they are making rules. Are these your passive bureaucrats? Bob The Spiegel article claims that they are "not elected and usually independent of their countries' governments". If these people act independently of governments, then why is it their governments that are the problem? Heads of Central Banks are appointment by governments, aren't they? Bob
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Post by Deleted on May 2, 2014 4:16:20 GMT -5
The Spiegel article claims that they are "not elected and usually independent of their countries' governments". If these people act independently of governments, then why is it their governments that are the problem? Heads of Central Banks are appointment by governments, aren't they? Bob But according to the article you linked, they are not acting on behalf of their governments, correct?
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Post by rmarks1 on May 2, 2014 9:37:09 GMT -5
Heads of Central Banks are appointment by governments, aren't they? Bob But according to the article you linked, they are not acting on behalf of their governments, correct? Are you claiming that the central banks are private organizations? They obviously are not. They are appointed by the governments and are independent of them. They have all the power of a government without having to stand for election. In short, they are a tyranny And on top of that, they are doing a bad job. Bob Marks
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Post by Deleted on May 3, 2014 7:12:28 GMT -5
But according to the article you linked, they are not acting on behalf of their governments, correct? Are you claiming that the central banks are private organizations? They obviously are not. They are appointed by the governments and are independent of them. They have all the power of a government without having to stand for election. In short, they are a tyranny And on top of that, they are doing a bad job. Bob Marks Would you prefer it if they weren't appointed by elected governments?
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Post by rmarks1 on May 3, 2014 8:28:36 GMT -5
Are you claiming that the central banks are private organizations? They obviously are not. They are appointed by the governments and are independent of them. They have all the power of a government without having to stand for election. In short, they are a tyranny And on top of that, they are doing a bad job. Bob Marks Would you prefer it if they weren't appointed by elected governments? Exactly how is that supposed to work? Bob
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