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  1. #121
    Lex Parsimoniae Xander's Avatar
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    Quote Originally Posted by Tellenbach View Post
    Me too and yet you've dismissed ideas that have abundant evidence in their favor for ideas (such as an estate tax and a minimum wage) that have very little evidence to support them.
    As I've pointed out your evidence is all circumstantial. You can only come in after the event and show two events and state that one followed the other through causality. You've actually made no causal link, it's just assumed.

    What I'm challenging here is, where's the causal link. I'd be interested if you could find one because pound to a pinch of shit there'd be a more moderate idea which would suit both "isms".


    Quote Originally Posted by Tellenbach View Post
    Hound away. If I've ignored a question, it's probably because I've forgotten it already and I'm not going to go dig for those questions. Also, I'm enjoying this discussion. I hope there are no hard feelings. I've wondered for a while now why some nations and policy makers insist on repeating the same mistakes over and over again. This discussion has provided me some clues.
    Oh I'm not offended, just operating in true brit fashion.

    As said above however, I am looking for how your ideas actually work in the real world so I can use the bits which make sense and can work and get shot of the bits which don't. For example a minimum wage. Sure it makes business more expensive but it also stops the least well educated (presumably) from being bullied and broken by those in the comfortable position of power. So what exact effect does it have and can it be mitigated.
    Quote Originally Posted by Tellenbach View Post
    The estate tax (death tax) doesn't work because the rich will just move their assets out of the country to Swiss bank accounts or they'll hire really smart tax consultants and lawyers to shield them from it. The evidence shows that the money collected from the estate tax is roughly equal to the money spent hiding it. Such a waste of time and resources.

    It's also largely a myth that the majority of the rich inherited their wealth. In the US, only 18% of millionaires inherited their fortunes. The rest earned that money themselves. In the end, their is no evidence that the estate tax reduces the gap between the rich and poor. You can confiscate the entire fortunes of the top 1% right now and it wouldn't make a dent in the poverty rate.
    I'm fairly sure that if you could do such a Robin Hood move, it would have an effect. Just taking one example, imagine how much but licking a bank would do for the common man as opposed to how currently you get second class services because they reserve the real honey for the big earners.

    This is the problem behind the money. People wrongly assume that wealth implies competence and importance. Ergo if you have no money you tend to get treated like a waste product of society.
    Isn't it time for a colourful metaphor?

  2. #122
    Lex Parsimoniae Xander's Avatar
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    Quote Originally Posted by Tellenbach View Post
    Think about this: is it really so bad that the income gap widened when everyone is enjoying greater prosperity? Let me ask it another way.
    Now compare it to cost of living. Oh and don't forget to include the marketing impact which means that every year we are conditioned to "need" more things to be considered normal.
    Quote Originally Posted by Tellenbach View Post
    Do you want to be equal and poor (cavemen) or do you want to be unequal but prosperous (modern, industrialized societies)? Those income figures are inflation adjusted.
    How unequal?
    How prosperous?
    How much is enough?

    Given adequate opportunity most people will take as much money as they can and in your free market idea this is encouraged. However, each bit of money you suck up is one less piece for everyone else. So is the end goal to be the sole person with all the money and everyone else can eat your scraps? Doesn't sound very advanced a civilisation to me.
    Isn't it time for a colourful metaphor?

  3. #123
    deplorable basketcase Tellenbach's Avatar
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    Quote Originally Posted by Xander
    You can only come in after the event and show two events and state that one followed the other through causality. You've actually made no causal link, it's just assumed.
    That's how economics works. Economists evaluate the success of a policy by comparing various economic metrics (like per capita GDP) before and after. Human behavior doesn't just change on a dime by coincidence. People don't just move out of a state by the hundreds of thousands coincidentally. Economic growth doesn't just happen by accident. What are the driving forces?

    Here's yet another example from the world of capital gains:

    1. In 1968, the capital gains tax rate was 27%; the capital gains tax collected was $34 billion.

    2. By 1977, the capital gains tax rate was increased to 36.5%; the capital gains tax collected was only $27 billion.

    What happened? What's the driving force for this change? Economists believe that when the government raises capital gains taxes, investors simply hold onto the stocks (the "Lock-In Effect") to avoid paying the high rates. When the capital gains tax is cut, investors sell and the government collects more taxes due to the sales.

    Some evidence:

    1. In 2003, Bush cut the capital gains tax from 20% to 15%. Taxes collected went from $49 billion to $110 billion.

    Quote Originally Posted by Xander
    Sure it makes business more expensive but it also stops the least well educated (presumably) from being bullied and broken by those in the comfortable position of power.
    I've never been bullied by any business. Businesses that bully customers don't survive long; it's not in their interest to bully customers.

    Quote Originally Posted by Xander
    I'm fairly sure that if you could do such a Robin Hood move, it would have an effect.
    In the US, we've redistributed $19 trillion over the past 50 years with negligible effect on the poverty rate.

    Quote Originally Posted by Xander
    How unequal?
    How prosperous?
    How much is enough?
    1. How prosperous: "The percentage of Americans who are chronically in poverty (36 months or more) is low, just 2.5%." Laffer: "The Return to Prosperity"

    2. Today, the average poor American has running water, electricity, a refrigerator, and cell phone; these were items that only the rich could afford 100 years ago.

    3. How unequal: I've already posted the income disparity between the bottom quintile and the top quintile; In 2005, it's a $156,900 difference.
    Senator Rand Paul is alive because of modern medicine and because his attacker punches like a girl.

  4. #124
    Lex Parsimoniae Xander's Avatar
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    Quote Originally Posted by Tellenbach View Post
    That's how economics works. Economists evaluate the success of a policy by comparing various economic metrics (like per capita GDP) before and after. Human behavior doesn't just change on a dime by coincidence. People don't just move out of a state by the hundreds of thousands coincidentally. Economic growth doesn't just happen by accident. What are the driving forces?

    Here's yet another example from the world of capital gains:

    1. In 1968, the capital gains tax rate was 27%; the capital gains tax collected was $34 billion.

    2. By 1977, the capital gains tax rate was increased to 36.5%; the capital gains tax collected was only $27 billion.

    What happened? What's the driving force for this change? Economists believe that when the government raises capital gains taxes, investors simply hold onto the stocks (the "Lock-In Effect") to avoid paying the high rates. When the capital gains tax is cut, investors sell and the government collects more taxes due to the sales.

    Some evidence:

    1. In 2003, Bush cut the capital gains tax from 20% to 15%. Taxes collected went from $49 billion to $110 billion.
    Sorry hit you've still shown no understanding of the elements which lead to these effects beyond the most crude elements. That in itself would not be a problem if you weren't vehemently supporting making radical changes to people's lives.

    If I said to you that you should cut off one arm because you'll live longer and you don't really need two arms, you'd argue. I could quote a dozen cases of really old one armed men, you'd still argue. I'd have to come up with some pretty rock hard science before you'd consider my point never mind agree with it. So to say to someone who's only source of predictability is that their wages cannot drop as they are being paid minimum wage that they must sacrifice this for the good of everyone... I'd expect just as hard a conversation to persuade them. That argument you are ill prepared for.

    Quote Originally Posted by Tellenbach View Post
    I've never been bullied by any business. Businesses that bully customers don't survive long; it's not in their interest to bully customers.
    I was speaking about employees not customers.
    Quote Originally Posted by Tellenbach View Post
    In the US, we've redistributed $19 trillion over the past 50 years with negligible effect on the poverty rate.
    Percentage of gdp each year is?
    Quote Originally Posted by Tellenbach View Post
    1. How prosperous: "The percentage of Americans who are chronically in poverty (36 months or more) is low, just 2.5%." Laffer: "The Return to Prosperity"
    You have not challenged the definition of chronic poverty and what it covers. Meaningless stat.
    Quote Originally Posted by Tellenbach View Post
    2. Today, the average poor American has running water, electricity, a refrigerator, and cell phone; these were items that only the rich could afford 100 years ago.
    Yes and we don't die from cholera by twenty five, aren't we all lucky.

    I think you'd be hard pressed to find a mobile phone 100 years ago.

    The point is that to be a part of society today you need to know what happened on Coronation Street and be able to browse the internet on your phone. We're conditioned to "need" these things by businesses who want to sell more.
    Quote Originally Posted by Tellenbach View Post
    3. How unequal: I've already posted the income disparity between the bottom quintile and the top quintile; In 2005, it's a $156,900 difference.
    You haven't answered the question. How much is enough? When will the rich sit down and declare that they are rich enough? Since you usually have to speculate to accumulate (not just an adage but a truism) then the rich have a greater chance of amassing more riches. When will they sit back? Never. Otherwise they probably wouldn't be as rich as their social circle for long and feel left out.

    This gives you confidence in their ability to look after people who aren't in their social circle and hence are easier to ignore?
    Isn't it time for a colourful metaphor?
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  5. #125
    The Unwieldy Clawed One Falcarius's Avatar
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    Quote Originally Posted by Tellenbach View Post
    ...In the next couple of pages, I think I'll start posting actual examples of nations and states that have adopted freer economic principles.
    Perhaps, when you do this thread might actually be worth reading.
    Quote Originally Posted by Thalassa View Post
    Oh our 3rd person reference to ourselves denotes nothing more than we realize we are epic characters on the forum.

    Narcissism, plain and simple.

  6. #126

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    Quote Originally Posted by Falcarius View Post
    Perhaps, when you do this thread might actually be worth reading.
    I predict it wont be any better, freer economic policies is just synonymous for a state slaved even more closely to the goals of rich special interests.

  7. #127
    deplorable basketcase Tellenbach's Avatar
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    Quote Originally Posted by Xander
    You haven't answered the question. How much is enough? When will the rich sit down and declare that they are rich enough? Since you usually have to speculate to accumulate (not just an adage but a truism) then the rich have a greater chance of amassing more riches. When will they sit back? Never. Otherwise they probably wouldn't be as rich as their social circle for long and feel left out.
    This sort of mentality is irrational; you know this, right? What does it matter how much money Bill Gates has or how many houses Mitt Romney has if they're benefiting society through their pursuit of money? The bank accounts of the top 1% is entirely irrelevant to the prosperity of the bottom 1%. Some people think that the amount of capital is a static quantity and if the rich get more, it's at the expense of the poor, but this is nonsense. When the rich do well, so does everyone else. If it bothers you that other people are doing better, then the problem is yourself.

    Quote Originally Posted by Xander
    Yes and we don't die from cholera by twenty five, aren't we all lucky.
    Many of the modern conveniences we enjoy is because of free market capitalism, so yes, we are lucky.

    Quote Originally Posted by Xander
    This gives you confidence in their ability to look after people who aren't in their social circle and hence are easier to ignore?
    Why should they look after people? They don't owe other people anything. I don't expect corporations or the government to look after people. That's what families and charities are for.

    Quote Originally Posted by Lark
    freer economic policies is just synonymous for a state slaved even more closely to the goals of rich special interests.
    Care to back this up? What are you talking about? Is Nigeria or Greece a better society because they aren't closely tied to the goals of the rich special interests? There are actually studies that look at health of nations as a function of economic freedom. People who live in freer economies have higher life expectancies (almost 30 years longer) than those in the least free economies. Before the Berlin Wall came down, West Germans had a 5 year longer life expectancy than East Germans.
    Senator Rand Paul is alive because of modern medicine and because his attacker punches like a girl.

  8. #128
    Lex Parsimoniae Xander's Avatar
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    Quote Originally Posted by Tellenbach View Post
    This sort of mentality is irrational; you know this, right? What does it matter how much money Bill Gates has or how many houses Mitt Romney has if they're benefiting society through their pursuit of money? The bank accounts of the top 1% is entirely irrelevant to the prosperity of the bottom 1%. Some people think that the amount of capital is a static quantity and if the rich get more, it's at the expense of the poor, but this is nonsense. When the rich do well, so does everyone else. If it bothers you that other people are doing better, then the problem is yourself.
    The concept that money has no limit is ludicrous. Of course there is a finite source or the individual unit is devalued. Based on that, where else do you think it comes from? If one side profits more than the other then the other side is said to be losing. Based on the ideology presented, no game would ever finish because irrespective of the scores, both sides would win.

    Quote Originally Posted by Tellenbach View Post
    Many of the modern conveniences we enjoy is because of free market capitalism, so yes, we are lucky.
    If you could kindly show where this free market capitalism has brought us these modern "conveniences" (I use quotations because it is easy to sell an item with no real need as a convenience simply to sell the idea that it is better). Mind you, the example must be specifically free market and not some murky picture of less than tightly regulated industry or science. I'm holding you to your claim in the fondant hope my suspicions will be quashed.

    Quote Originally Posted by Tellenbach View Post
    Why should they look after people? They don't owe other people anything. I don't expect corporations or the government to look after people. That's what families and charities are for.
    Under such thinking private security/ mercenaries reign over police forces. Would you rather live in a world of corporations rather than governments?

    Studies have shown that when a workforce is looked after and feels secure you release the individuals minds to create for the company. However such things are not easily quantifiable and thus make no sense to accountants who understand the cost of everything and the value of nothing.

    You see this is the problem with your thinking in general. You only value that which can be counted.
    Quote Originally Posted by Tellenbach View Post
    Care to back this up? What are you talking about? Is Nigeria or Greece a better society because they aren't closely tied to the goals of the rich special interests? There are actually studies that look at health of nations as a function of economic freedom. People who live in freer economies have higher life expectancies (almost 30 years longer) than those in the least free economies. Before the Berlin Wall came down, West Germans had a 5 year longer life expectancy than East Germans.
    The most free market going, as I think I stated before elsewhere, is the drugs trade. Feel free to join a cartel where there is little to no regulation, no government "interference" and almost unlimited profit available. See how much richer and long lived you are, then explain how the free market has enriched your life.

    Life isn't as simple as an ism or a poll or as the numbers would suggest. If it were then everyone would see the genius you extol. Surely you must realise that if so many object so readily then there is a high chance that you're missing something.

    To paraphrase Socrates
    "a wise man knows that he knows nothing".
    Isn't it time for a colourful metaphor?

  9. #129
    Lex Parsimoniae Xander's Avatar
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    An interesting paragraph in Wikipedia on this subject sums up some of my thinking nicely.

    Advocates of free-market socialism, such asJaroslav Vanek, argue that genuine free markets are not possible under conditions of private ownership over productive property because the class differences and inequalities in income and power that ensue from this arrangement enable interests of the dominant class to skew the market to their favor, either in the form of monopoly and market power, or by utilizing their wealth and resources to pass government regulations and policies that benefit their specific business interests.[6]*Additionally, Vanek states that workers in a socialist economy based on cooperative and self-managed enterprises would have stronger incentives to maximize productivity because they would receive a share of the profits (based on the overall performance of their enterprise) in addition to receiving a fixed wage or salary.
    Having read a little of the current nomenclature around this subject, I might be more inclined to a economic liberalism or free market socialism but not free market capitalism for the concerns expressed above about the market serving those who work the market instead of their customers.

    If you want a simple example of a market not looking after its consumers and yet prospering, simply look at Apple devices in detail. For example, why do they not use micro USB for charging or why is it that an apple computer cannot have parts sold but must be sold as a whole unit? Such things look after the company primarily as does any practice which works around ensuring the customer comes back for anything other than excellent service. Sure it can be sold as helping the customer but that's not why the business will do it.
    Isn't it time for a colourful metaphor?

  10. #130
    Vaguely Precise Seymour's Avatar
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    Quote Originally Posted by Tellenbach View Post
    This sort of mentality is irrational; you know this, right? What does it matter how much money Bill Gates has or how many houses Mitt Romney has if they're benefiting society through their pursuit of money? The bank accounts of the top 1% is entirely irrelevant to the prosperity of the bottom 1%. Some people think that the amount of capital is a static quantity and if the rich get more, it's at the expense of the poor, but this is nonsense. When the rich do well, so does everyone else. If it bothers you that other people are doing better, then the problem is yourself.
    So you are aware that the wealthy give away money at about the same rate as poor people? In fact, the charity rate has tended to remain between 2% and 4% (usually closer to 2%). Do you really think we're going to manage take care of all our poor (some of which don't have surviving families) on 2%-ish?

    Here's a chart of charitable contributions vs adjusted gross income by year:



    And a quote from The Atlantic, on how the rich give less:

    In 2011, the wealthiest Americans—those with earnings in the top 20 percent—contributed on average 1.3 percent of their income to charity. By comparison, Americans at the base of the income pyramid—those in the bottom 20 percent—donated 3.2 percent of their income. The relative generosity of lower-income Americans is accentuated by the fact that, unlike middle-class and wealthy donors, most of them cannot take advantage of the charitable tax deduction, because they do not itemize deductions on their income-tax returns.
    So concentrating wealth doesn't actually make most people's lives better off (even in the charity sense). Plus, there's pretty solid evidence that high inequality is correlated with a large number of ill effects. (Note that once income advances beyond a certain level, the absolute numbers don't seem to matter much). For example, here's a chart from The Spirit Level (that correlates income inequality with measure of various ills, including life span):




    Quote Originally Posted by Tellenbach View Post
    Many of the modern conveniences we enjoy is because of free market capitalism, so yes, we are lucky.
    Except that having a sustainable and relatively free market requires regulations. Corporations have to be compelled to be transparent and to release accurate financial data. They have to be compelled to abide by environmental regulations in order not to pollute the environment. There are whole classes of ill-effects that companies can do that aren't directly represented in the financial system. These are known as "externalities," and it takes something outside the free market to cause them to be represented. Otherwise one ends up with the tragedy of the commons.

    Self interest, on its own, is not enough to guarantee positive outcomes. Capitalism is awesome because it harnesses self-interest to good effect. But capitalism on its own (laissez faire capitalism) leads to boom/bust cycles, the exploitation of workers, corruption, rent seeking, monopolies, etc. Just look at the robber barons in the US for examples.

    Quote Originally Posted by Tellenbach View Post
    Why should they look after people? They don't owe other people anything. I don't expect corporations or the government to look after people. That's what families and charities are for.
    Why shouldn't those who have benefitted the most from roads, a (semi-)educated populace, a stable economy, and a stable trade system pay back into the system that benefited them the most. It's even more true in these days of highly profitable rent-seeking. I'd argue that high frequency traders are far less deserving of their income than hard-working (or disabled) poor folks who receive government benefits.

    And guess what happened before social security and medicare? Old people lived in poverty and suffered from untreated disease as a much greater rate. You claim that is does no good, but let's look at elder poverty vs social security expenditures:



    We can also look at percentage in poverty by age:



    Which you'll note does show a troubling rise in poverty of late amongst the non-elderly. We can also look at the overall poverty rate (from the us census):




    Still, to say that social programs haven't helped the poverty rate is to ignore the huge reduction of poverty in the elderly since 1967 (and a general reduction of 22% down to 15% (and some years below 13%). And again keep in mind that some in-need folks don't HAVE family... or the family they have is also poor. Are you really going to cover that gap with 2-4% of income? It wasn't enough before social programs, and I doubt human nature has fundamentally changed for the better since.


    Quote Originally Posted by Tellenbach View Post
    Care to back this up? What are you talking about? Is Nigeria or Greece a better society because they aren't closely tied to the goals of the rich special interests? There are actually studies that look at health of nations as a function of economic freedom. People who live in freer economies have higher life expectancies (almost 30 years longer) than those in the least free economies. Before the Berlin Wall came down, West Germans had a 5 year longer life expectancy than East Germans.
    Actually, people who live in societies with lower inequality have a longer life expectancy (also from The Spirit Level):



    Not a perfect correlation, but still striking.
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