Contributors

Saturday, July 21, 2012

Good Point


12 comments:

GuardDuck said...

I get the impression you think the rich guys have big Scrooge McDuck vaults where they are swimming in their cash waiting for the right thing to spend it on.

You are the caricature, the pictures in your head are fantasy.

Anonymous said...

Yay! A cartoon!

Mark Ward said...

But you haven't answered the question, GD. Why do the wealthy people who support Mitt Romney and other Republicans need MORE tax cuts and then they will start hiring?

juris imprudent said...

I'm not sure anyone is really arguing that they need tax cuts. You are arguing in favor of raising their taxes.

If I were running a business, I wouldn't want to expand to over 50 employees right now. You do realize why, don't you?

GuardDuck said...

Just because you are economically obtuse doesn't mean I didn't answer it Mark.


Think.

Where is that money? Is is in Scroge McDuck's vault? Or is it already invested in some sector of the economy? It is that method of investment that is effected by taxation, stability and other factors.

If you had $100 million where and how would you invest it right now?

Would you risk it in any sort of way that has a significant chance of failure when the powers that be (and their followers like you and Nikto) want to arbitrarily raise the capital gains tax? There's no incentive to invest in risky (and all investment has risk) ventures if the potential rate of return if it is successful is too low due to raised taxes. And until the issue of whether the 'rich' are going to be demonized enough to pass tax increases on them in the name of paying their 'fair share' is settled then they can't even know what that potential rate of return is going to be in six months, one year, three years or five years.

Mark Ward said...

If you had $100 million where and how would you invest it right now?

Med tech...maybe some green tech...and any sort of company that would assist with security or emergencies related to climate change disasters.

My point in putting this up is not to get people who are wealthy to hire more people. They won't do that until demand rises. I just want to know why they need more tax breaks because they aren't investing their considerable wealthy now because of the lack of demand.

GuardDuck said...

Utterly missing the point..... again.

juris imprudent said...

So, we can commence the discussion on Stiglitz!

Any solution to today's problems requires addressing the economy's underlying weakness: a deficiency in aggregate demand.

Classic Keynes. Yet according the the CBO report that M was so kind to link to - all income levels have increased since 1979. There has been no 'transfer' to the top, though the top grew faster than the bottom.

Rather, much of the growth of income and wealth at the top in recent decades has come from what economists call rent-seeking

No argument that this happens, but...

Curbing rent-seeking is not that complicated (aside from the politics).

Is stupid. Rent-seeking is all about politics. When govt has the power to hand out favors, what kind of moron can expect people not to seek those favors? Well, I think we all know what kind of moron thinks that.

The wealthy don't need public schools and parks.

Yet parks and schools aren't funded at the federal level, so federal income tax treatment (the main subject of this piece) is off target.

Indeed, the United States has grown much more slowly since the 1980s, while inequality has been growing more rapidly than it did in the decades after World War II, when the country grew together.

Post hoc ergo propter hoc. Now M is the time to recall your epiphany from Manzi. Here Stiglitz puts the cart before the horse - that less inequality created the economic conditions, rather than economic conditions (and politics) resulted in inequality. You can't have it both ways - yet that is precisely what Stiglitz does here.

Countries with high inequality tend to underinvest in their collective well-being, spending too little on such things as education

Yet during this era of rising inequality spending on primary education has roughly doubled in real terms. We are now to believe that we have underinvested? What might be a plausible argument if real spending had dropped becomes an article of liberal faith when the evidence points to the contrary.

Mark Ward said...

I'll be putting up some posts about Stiglitz in the coming days. Did you pick up the book or are you just going off of the opinion piece? I would hope that since you are calling for detail and sources that you read the book. I'll refrain from putting any posts about it until you are done if you like.

Yet according the the CBO report that M was so kind to link to - all income levels have increased since 1979. There has been no 'transfer' to the top, though the top grew faster than the bottom.

This is great example of why it's very frustrating to discuss stuff like this with you. Those numbers include government transfers. Take them out. Now what are the income levels? If you want people to rely less on the government, I would think that you would take that into account.

juris imprudent said...

Did you pick up the book or are you just going off of the opinion piece?

Just off the linked piece. If he gave his own argument short-shrift that isn't my fault. Note that there are points I fully agree with, and I am only critiquing what I think are the weak parts. His discussion of rent-seeking is solid, his prescription for how to fix it isn't.

Those numbers include government transfers.

Yes, and that would be primarily SocSec [hint - why I quoted that section of the CBO report that I did]. Also, the numbers were after taxes.

Here is the liberal problem on inequality - income does not grow in some amorphous pile that then has to be distributed. Taylor Swift isn't the highest paid artist under age 30 because some secretive cabal handed her all of that money - it is the outcome of the market. We can debate whether she deserves that as a moral matter (an utterly pointless exercise), or we can agree that it isn't because she stole it from a bunch of poor and middle class folks that otherwise would've had some claim on it.

You can argue all you want around it - but that is the central point.

Mark Ward said...

If he gave his own argument short-shrift that isn't my fault.

Good point. Perhaps he thinks he can reach more people if does a sort of executive summary. I still don't get it, though, considering he has 100 pages of sources in his book.

because some secretive cabal handed her all of that money

Well, they aren't secretive and they aren't a cabal. You've agreed in the past that if you are wealthy, you have more advantages than people that aren't. Generally speaking, I have no problem with this. But when these wealthy individuals seek to further widen the gap in equality even if it means shaking the foundations of our economy and our competitiveness in the world, then I put my hand up.

Further, when they do this by fucking people over (as they did in pre-collapse, 2008 by leveraging other people's money in speculation), then we really have problems.

juris imprudent said...

But when these wealthy individuals seek to further widen the gap in equality

The point is how are they trying to do that - via rent-seeking? I agree - that is not to be accepted. If as in the case of Ms. Swift by virtue of her talent and popularity - then I say she is free to earn as much as she possibly can. If you can't distinguish between those, then you have a problem.

Now, as for fixing rent-seeking the solution is for the govt to stop handing out goodies. As long as the govt is giving away goodies - people smarter and/or more aggressive than you will figure out how to get them. This is not a new argument - it was one of Adam Smith's insights 200+ years ago. Nothing since then has proven him wrong.