Discussion Topic |
|
This thread has been locked |
Gary
Social climber
Right outside of Delacroix
|
|
|
Mar 15, 2013 - 12:03am PT
|
There are more capitalists out there than one might think.
Dave, who produces capital, and how is it accumulated?
|
|
Ken M
Mountain climber
Los Angeles, Ca
|
|
|
Mar 15, 2013 - 12:03am PT
|
There is no single answer, but it certainly was not because the the system was "rigged" in the favor of these few.
Kos, what I dont think that you can deny, is that in the decade before, or after, there were people who had every attribute of these very wealthy people.....and yet, they were not able to do the same.
Or here is another thought....there were no women. Surely you don't argue that the American women of that time were not as intelligent, industrious, devout to work, or any other attribute that you care to name.
They were not given the same opportunity of fortune.
Otherwise, you are saying that 1 Egyptian woman was the superior of all American women in history, are you?
Circumstances are far, far more important that anything else, in astonishing accomplishment.
|
|
Ken M
Mountain climber
Los Angeles, Ca
|
|
|
Mar 15, 2013 - 12:35am PT
|
conference I'm attending tomorrow.
Interesting to hear this perspective:
AMARTYA SEN, Ph.D.
Nobel Laureate
Thomas W. Lamont University Professor, and Professor of Economics and Philosophy, Harvard University
Social Welfare Economics:
A Discussion of Health Care, Education, and Freedoms
FRIDAY, March 15 @ 12:00 noon
NRB Auditorium
(Room 132 Neuroscience Research Building)
UCLA
Amartya Sen won the Nobel Memorial Prize in Economic Sciences in 1998 for his work on social welfare economics and social choice theory. Dr. Sen is one of the most economics and philosophical thinkers of our era. Among other topics, he is known for his work on the causes of famine, which led to the development of practical solutions for preventing or limiting the effects of real or perceived shortages of food. He helped to create the United NationsHuman Development Index. In 2012, he became the first non-U.S. citizen recipient of the National Humanities Medal. Dr. Sen's work focuses on the interconnection of social developments and freedoms with economic developments. We will discuss issues of health care,education, the US economy, and issues related to gender and minority inequalities.
|
|
Ken M
Mountain climber
Los Angeles, Ca
|
|
|
Mar 15, 2013 - 01:25pm PT
|
Here's a current example of the rich using their power to tilt the rules in their direction:
Ryan budget’s tax cuts would benefit the very wealthy, nonpartisan group says
From Wa Post today....
The tax plan embedded in the House Republican budget would cut taxes by $5.7 trillion over the next decade, with the benefits flowing disproportionately to very wealthy households, according to a new analysis by the nonpartisan Tax Policy Center.
Taxpayers earning more than $1 million a year would benefit the most from the GOP tax plan, the analysis shows, reaping an average $400,000 tax break that would send their after-tax income soaring by nearly 20 percent.
Those earning more than $1 million a year would gain the most from the GOP plan, Tax Policy Center says.
Meanwhile, taxpayers earning between $40,000 and $50,000 a year — closer to the national average — would see their taxes cut by about $666 on average, increasing their after-tax income by less than 2 percent.
|
|
Toker Villain
Big Wall climber
Toquerville, Utah
|
|
|
Mar 15, 2013 - 01:28pm PT
|
So Kos, flaming me, but how many digits you got.
Hey granite, you read the part about being homeless? No trustifarian there. Got $35K when my dad died in '85, not exactly the kind of wealth to make you independent.
The fact is that if you can live within your means you can acquire wealth. Warren Buffet lives in a modest home. The people that don't need to keep up with the Joneses are better off.
edit
and where on the list was Czar Nicholas, reputedly the richest man to ever live?
|
|
JEleazarian
Trad climber
Fresno CA
|
|
|
Mar 15, 2013 - 01:49pm PT
|
Gary,
Capital,in my economic definition, can be consumed in the production of goods and services. The hope of the entrepreneur is that the capital will be replaced, with an increase. The nature of entrepreneurial risk is that if the capital gets replaced with an increase, the entrepreneur gets the increase. If any capital is lost, the entrepreneur eats the loss.
Suppose I wanted to open a real estate or law office (to take to professions vilified herein) with normal accouterments. I need to undertake the following expenditures before i can earn dollar one:
1. I must acquire sufficient education to qualify to take the professional examination to be licensed;
2. I must pay rent for an office;
3. I must pay for office equipment, furniture and supplies;
4. I must pay for insurance;
5. I must pay employees' salaries and fringe benefits; and
6. I must pay for professional dues, subscriptions, etc.
Again, I need to pay all of this before I receive any payment. If we're talking about manufacturing a product, we can add huge production equipment expenditures, research and development, etc. etc.
Without someone accumulating enough money to make all these expenditures, and someone willing to take the economic risk of success or failure, there will be no enterprise. In my economic terminology, that expenditure needed to produce a product or service for sale constitutes capital.
Off-hand, I can't think of any important good or service in our modern economy that would be realistically available without capital. We can gripe that some people don't "deserve" the wealth they have, but the fact remains that without wealth, there is no capital, and there is no modern economy.
I realize this is an aside to those who decry that alleged change in the distribution of wealth, but I think this difference in definitions of capital may account for our different conclusions concerning how it should be rewarded.
John
|
|
kennyt
climber
Woodfords,California
|
|
|
Mar 15, 2013 - 01:50pm PT
|
And at that point you can really start putting the screws to people.
|
|
JEleazarian
Trad climber
Fresno CA
|
|
|
Mar 15, 2013 - 01:59pm PT
|
I love the use of the graph with the highest marginal rates plotted against the rate of growth of GDP. I wonder if the creators of that graph would care to plot the percentage of tax paid by the top, say, 5% of income earners against the rate of growth. Perhaps they might also wish to plot the overall tax take of federal state and local governments against the rate of growth.
Plotting the highest marginal rate against GDP growth and attempting to draw a rational conclusion has two problems, at least. First, virtually no one paid those confiscatory marginal rates, because tax shelters existed then -- that do not exist now -- to avoid paying those taxes. Accordingly, the nominal highest marginal rate was, as a practical matter, meaningless.
More importantly, there is no testable hypothesis showing a causal relationship between a higher nominal maximum marginal rate and GDP growth. It is simply a nonsense correlation, in the same way that beer consumption per capita is correlated with infant survival rates. By and large, the greater the per capita beer consumption, the higher the infant survival rate. Does that mean that we could increase infant survival rates by distributing free beer? Of course not (unfortunately!) In fact, both rates reflect per capita income.
Every rigorous econometric study of which I am aware, including those by fairly liberal economists, shows that tax increases in general -- and on any income level, including the highest -- have a contractionary effect on the economy.
Frankly, though, any study of income tax rates is irrelevant to the topic of this thread, which deals with wealth. There is such confusion on this issue -- particularly from those who want to get at the income or wealth of someone else -- that meaningful comparison and intelligent discussion blurs.
John
|
|
sempervirens
climber
|
|
|
Mar 15, 2013 - 02:01pm PT
|
But John, do you deny that those with greatest wealth can and do rig the system? They use PAC's, lobbyists, the Citizen's United ruling, the American Heritage Foundation, etc.
I agree with your concept of taking risk and reaping the reward or the loss. But the wall street bankers risked taxpayer money and recieved the reward even when their firms lost huge sums. The losses became ours - taxpayers, those who lost their retirment accounts, loss of equity in our homes. Isn't that the opposite of the free enterprise you're promoting? This is the whole point of the 1% campaign. THe 1% is cheating, that isn't free market capitalism, is it?
That is how they redistributed wealth. Not becuase lazy welfare Mom's and social security recipients sucked up our tax money.
|
|
karodrinker
Trad climber
San Jose, CA
|
|
|
Mar 15, 2013 - 02:10pm PT
|
good post sempervirens
|
|
JEleazarian
Trad climber
Fresno CA
|
|
|
Mar 15, 2013 - 02:19pm PT
|
sempervirens,
I think that any time you have a government that intervenes in an economy, you run the risk that the powerful will try to rig the system. That was the main argument of Adam Smith in The Wealth of Nations, and remains one of the strongest reasons for skepticism in the face of calls for governmental intervention.
I think the enterprises that got bailed out during the last four years, by and large, took the taxpayers for a ride, but those enterprises were hardly limited to "Wall Street Bankers." In Chrysler and GM, the lenders got shafted, to cite just two cases. In the case of Fannie and Freddie, the taxpayers generally took the hit and a bunch of other lenders -- and hundreds of thousands of borrowers -- got the benefit.
Am I angry about it? Yes. Do I blame "The One Percent?" No more than I blame all the rest of us, since I see rather little evidence that The One Percent were the main beneficiaries of this (choose one)[]Monumental stupidity []Theft.
I still know a great many people who have been living in their houses without paying a dime on their mortgages for anywhere from a year to, in one case, three years. The three year case involves someone employed (by the State of California, by the way) who can afford to pay for the house, but knows that under California Code of Civil Procedure 580b, the lender cannot obtain a deficiency judgment against him, and the amount of the loan now exceeds the value of the house by plenty. They aren't The One Percent, but the taxpayer funds that insured their mortgages are paying the cost of this.
If the expenditures of the last five years have increased the share of wealth of the wealthiest Americans, where does the blame lie? We had a Democratic House for three of those years, a Democratic Senate for all five of those years, and a Democratic President for four of them. If the wealthy can control both parties to bring about this result, we're probably screwed anyway, but I rather suspect the situation has more aspects than "the rich gaming the system."
John
|
|
Toker Villain
Big Wall climber
Toquerville, Utah
|
|
|
Mar 15, 2013 - 02:36pm PT
|
Kos, I was talking net worth so I'm sure you've got a hand to cover it.
But I understand how you could be upset when last spring you sold all your ammo and invested everything on margin in the Carnival Cruise Line.
|
|
sempervirens
climber
|
|
|
Mar 15, 2013 - 02:55pm PT
|
Well first forget the Democrats and Republicans. There are plenty of lobbyists who contribute to both in order to hedge there bets and maintain influence. So the blame lies with most of congress, senate and presidents. This is not a conservative vs. liberal issue because politicians and lobbyists care naught for these kind of values. Those values are smoke screens to keep you all riled up about the lazy poor people wanting handouts from you.
The evidence for the gains by the 1% are in the graphs that started this thread. THough I admit I have not checked their sources and we should always be skeptical. Have you seen the film, "Inside Job". It lays out a lot of evidence. Check it out on Netflix.
Now how about the banking system itself. The Fed. Reserve is accountable to nobody, right? See Alan Greenspan's testimony of 2008; it's on youtube along with the testimony from Moody's and S&P who rated the bundled loans as safe. Basically their answer is "oh dang, we goofed". But those execs were paid, and paid well. That is more evidence. How is money created? It's just zeros on spreadsheets and the fed. can control those spreadsheets. That isn't free market capitalism.
The gov. is involved whether you call it socialism or not. And it is staying involved. It was involved the whole time while Reagan was decrying that gov. is too big. If there were no gov. intervention there would be no capitalism, right? That's why we have anti-trust law, right? So maybe here is where we disagree - we don't have a free market system, absolute capitalism does not and cannot exist. That is why I think its ridiculous to argue in general against gov. regulation. What matter is HOW it is regulated.
I keep saying this on several threads so I'll shut up now.
|
|
JEleazarian
Trad climber
Fresno CA
|
|
|
Mar 15, 2013 - 03:22pm PT
|
Please don't shut up, sempervirens. I, for one, appreciate your arguments and the way you present them.
I don't think anyone would seriously say that we need no regulation in an economy. The question is whether a particular regulation is better than its alternative. In that analysis, we can make unwarranted assumptions in either direction. We can assume that the regulators possess knowledge, wisdom and trust that they, in fact, lack. We can assume the same about how the current relevant market, with current regulations (or the lack thereof), operates. Most often, though, we succumb to the "Grass is Greener" fallacy: We show that the alternative to our desired outcome is imperfect, and "therefore" our desired outcome is better. Those who disagree with us respond by showing our desired outcome is imperfect. Few make serious comparisons of the imperfections, and the outcomes those imperfections generate.
By definition, any politically powerful group can game the system. The difficulty is determining, in the real world, who constitutes the "politically powerful." IMHO, most of our arguments about this rest on untested (and often untestable) assumptions.
John
|
|
sempervirens
climber
|
|
|
Mar 15, 2013 - 04:39pm PT
|
Good. Now we're getting to the substance of it here.
But I gotta do some earning right now.
More later. I'll look up some better economic references.
Later.
|
|
Gary
Social climber
Right outside of Delacroix
|
|
|
Mar 15, 2013 - 04:46pm PT
|
Capital is an input, not an output.
But where does it come from?
|
|
Toker Villain
Big Wall climber
Toquerville, Utah
|
|
|
Mar 15, 2013 - 06:40pm PT
|
I disagree Dave, not all capital is venture capital.
But there is another fallacy in your argument; namely that anybody could shoot up all my ammo in a day or two.
|
|
Gary
Social climber
Right outside of Delacroix
|
|
|
Mar 15, 2013 - 07:44pm PT
|
Dave: Capital does not exist until someone makes the decision to risk wealth in an attempt to create more wealth.
To quote a friend of mine:
Money cannot produce money, Assets cannot produce more assets. The only thing that can produce is labour.
Capital is simply the result of resources and labor.
John wrote:Off-hand, I can't think of any important good or service in our modern economy that would be realistically available without capital.
Couldn't agree with you more.
We can gripe that some people don't "deserve" the wealth they have, but the fact remains that without wealth, there is no capital, and there is no modern economy.
No, rather without capital there is no wealth.
Without someone accumulating enough money to make all these expenditures, and someone willing to take the economic risk of success or failure, there will be no enterprise. In my economic terminology, that expenditure needed to produce a product or service for sale constitutes capital.
Why does it have to be "someone", why shouldn't capital be controlled by those who produce capital?
Our system is one where losses are socialized. Not true? So why not socialize the rewards?
|
|
Gary
Social climber
Right outside of Delacroix
|
|
|
Mar 15, 2013 - 07:45pm PT
|
But there is another fallacy in your argument; namely that anybody could shoot up all my ammo in a day or two.
Wanna bet?
|
|
|
SuperTopo on the Web
|
Let us know!