patrick.net

Remember, friends. R/De-regulation, subsidies, and tax credits are "Stimulus" when companies receive them. Beneficial laws, subsidies, and tax credits for employees are "Entitlements" or "Socialism".

The way I look at it is that the attitude regarding how government 'should' function or how money is to be spent or handled changed like a pendulum back and forth. From the 30's-60's and even early 70's populism was highly regarded. With first Nixon then Reagan there was a reaction against this and so we have had 30+ years of this insistence on trickle down economics and the effects of it are clearly visible, with the money having migrated to the top of the earning populace.

As we speak populism is once more becoming increasingly popular and thus the pendulum might be swinging back.

How about 50% income tax cut for everyone making under 1 million, and 50% corporate income tax cut across the board? You think spending will follow?

Analyzer says

How about 50% income tax cut for everyone making under 1 million, and 50%
corporate income tax cut across the board? You think spending will follow?

Why cut corporate taxes?? Profits are already at record highs--you want them to be record high X 2?

tatupu70 says

Analyzer says

How about 50% income tax cut for everyone making under 1 million, and 50%
corporate income tax cut across the board? You think spending will follow?

Why cut corporate taxes?? Profits are already at record highs--you want them to be record high X 2?

Corporate tax breaks given based on how many people they hire?

I'm fine with the 50% corporate tax break from standard tax liability. It's like 37% right now, which is high by global standards. What I would absolutely insist upon is getting the off shoring tax incentives off the books! As is, big corporations can hide their profits on overseas development and never pay a dime in tax. Worse, they often qualify for refunds! It's insane that we are paying companies to ship our jobs overseas. Demoncrats need to read up on economics and reality and fix this. Republicans never will, fat cat Limbots that they are. I'm disgusted with the GOP! And I hate the jackass party too! What's an independent socially liberal fiscal conservative to do?

Quigley says

I'm fine with the 50% corporate tax break from standard tax liability. It's like 37% right now, which is high by global standards. What I would absolutely insist upon is getting the off shoring tax incentives off the books! As is, big corporations can hide their profits on overseas development and never pay a dime in tax. Worse, they often qualify for refunds! It's insane that we are paying companies to ship our jobs overseas. Demoncrats need to read up on economics and reality and fix this. Republicans never will, fat cat Limbots that they are. I'm disgusted with the GOP! And I hate the jackass party too! What's an independent socially liberal fiscal conservative to do?

The government should immediatley lower worker income tax rates until they can prove all these loopholes are closed. Don't ask me for an additional dime until you can get your house in order!

I don't think you can say "trickle down" doesn't work as it's a self-describing term. If money actually did trickle down, then it would work.

The problems are that it hasn't been, or at least at a rate that gets enough of it from the arteries to the capillaries.

Part of the problem is pooling. The capital tends to go to guaranteed returns which occur within the sphere of governmental subsided and protected activities. Then there are the large economies of scale derived from globalism and the advanced knowledge needed to produce anything of significant profit.

Even the companies that are developed and sold at high cost, like Nest, seem more like money transfers (given that a teenager could probably build Nest with a $50,000 Kickstarter grant) between one wing of the stratosphere and another.

We need rainmakers, I guess.

I don't see it so much of a problem of how much goes to the top, it's what they DO with it.

Richie Rich doesn't really want to employ anyone, or make capital investments that improve anyone's lives. Richie wants to engage in parasitic rent-seeking activities that grow their fortune with minimal hassles. Over time more and more of the wealth is tied up in circle-jerk games like MBO, CDS, etc. It distorts the economy badly from the ideal that everyone is indoctrinated with.

Vicente says

Over time more and more of the wealth is tied up in circle-jerk games like MBO, CDS, etc.

The only real trickle down is Entropy.

At the point there are no more guarantee returns, then people will have a choice of sitting on their money and watching it gradually erode via inflation, taxes or fees, or taking real risks -- the kind where a total loss can occur like in real business, or simply spending it while they are alive and having a good time!

I would think all but the crustiest skinflints would choose the first option.

Vicente says

Richie Rich doesn't really want to employ anyone, or make capital investments
that improve anyone's lives. Richie wants to engage in parasitic rent-seeking
activities that grow their fortune with minimal hassles. Over time more and more
of the wealth is tied up in circle-jerk games like MBO, CDS, etc. It distorts
the economy badly from the ideal that everyone is indoctrinated with.

Why would the Rich invest in jobs when there is overcapacity as it is? The whole trickle down theory is garbage. Companies hire when there is unmet demand. They don't hire because they have excess capital.

They should cut taxes on the middle class, but they won't. Because the dirty secret is that all of the work is done by the middle class, and we are the once who pay all the taxes. If they stop taxing our labor so heavily, rich and poor won't have a dime to live on.

The system is rigged.

John Bailo says

The problems are that it hasn't been, or at least at a rate that gets enough
of it from the arteries to the capillaries.

Won't work until the ultimate greed mentality is broken....don't hold your breath.

FortWayne says

Because the dirty secret is that all of the work is done by the middle class, and we are the once who pay all the taxes.

"Broadening the Tax Base" is the codeword for this.

The proponents of this idea certainly do not want it applied via a Tobin Tax, Wealth Tax, Intangible Tax, property tax increases, or any other sort of tax on capital or speculation.

thunderlips11 says

The proponents of this idea certainly do not want it applied via a Tobin Tax, Wealth Tax, Intangible Tax, property tax increases, or any other sort of tax on capital or speculation.

The counter argument is the one being made now. That the world has improved over the past 30 years. This is essentially saying, yes, we know it's unfair, but it's for some ultimate good (which you may or may not be alive to see, and yes, unfortunately you had the misfortune to live your adult life through one of the darker ages of humanity). However if we had distributed the money to the middle classes, we wouldn't have things like wireless broadband, trained t-cells and artificial leaves as a self-indulgent bourgeoisie would have just spent it on bigger houses and longer vacations.

John Bailo says

However if we had distributed the money to the middle classes, we wouldn't have
things like wireless broadband, trained t-cells and artificial leaves as they
would have just spent it on bigger houses and longer vacations.

huh? How do you figure?

John Bailo says

thunderlips11 says

The proponents of this idea certainly do not want it applied via a Tobin Tax, Wealth Tax, Intangible Tax, property tax increases, or any other sort of tax on capital or speculation.

The counter argument is the one being made now. That the world has improved over the past 30 years. This is essentially saying, yes, we know it's unfair, but it's for some ultimate good (which you may or may not be alive to see, and yes, unfortunately you had the misfortune to live your adult life through one of the darker ages of humanity). However if we had distributed the money to the middle classes, we wouldn't have things like wireless broadband, trained t-cells and artificial leaves as they would have just spent it on bigger houses and longer vacations.

Maybe we would all be more happy with bigger houses and longer vacations as opposed to useless technology like Facebook.

tatupu70 says

John Bailo says

However if we had distributed the money to the middle classes, we wouldn't have

things like wireless broadband, trained t-cells and artificial leaves as they

would have just spent it on bigger houses and longer vacations.

huh? How do you figure?

The argument is that it takes drive to build these things. To drive people you need to have big rewards...and also hungry people. If everyone were rich, who would be staying up late and scheming how to build these widgets? Also, even if they could, they would be looking around and seeing everyone else getting a pretty good life without striving and wonder what they were doing in the lab or on the computer wasting their youth when they could simply be going on vacations.

Analyzer says

Maybe we would all be more happy with bigger houses and longer vacations as opposed to useless technology like Facebook.

What about cures for cancer...like the one they just announced using trained T-cells? What about pollution free energy like artificial leaves.

We simply could not let technology stagnate at 1980s levels and expect that we could keep going as it was.

John Bailo says

Analyzer says

Maybe we would all be more happy with bigger houses and longer vacations as opposed to useless technology like Facebook.

What about cures for cancer...like the one they just announced using trained T-cells? What about pollution free energy like artificial leaves.

We simply could not let technology stagnate at 1980s levels and expect that we could keep going as it was.

Keyword was 'useless'.......

Ya ya all carrot and no stick makes us lazy jackasses. But all stick and no carrot makes us resent the fuckwad with the stick, and that mofo better watch his ass!

John Bailo says

The argument is that it takes drive to build these things. To drive people
you need to have big rewards...and also hungry people. If everyone were rich,
who would be staying up late and scheming how to build these widgets? Also, even
if they could, they would be looking around and seeing everyone else getting a
pretty good life without striving and wonder what they were doing in the lab or
on the computer wasting their youth when they could simply be going on
vacations.

OK--I think that's a very poor argument. First, it assumes the people who innovated and made the advances were the ones getting filthy rich--which is clearly not true. Second, it assumes money is the primary driver which I would argue is not the case with most innovators. Fame, pride, et. al are at least as important as money.

Tell me--who is getting rich off of trained T-cells? The guy who actually did the lab work? Or the top executives with stock options??

Get the term straight! It's VOODOO ECONOMICS. G.H.W. Bush a True Republican said it.

PCGyver says

I'm not the only one who understands that Trickle-down doesn't work

no you certainly dont understand at all nor will you ever...

http://www.pwc.com/us/en/press-releases/2014/annual-venture-investment-dollars.jhtml

Venture capitalists invested $29.4 billion in 3,995 deals in 2013, an increase of 7 percent in dollars and a 4 percent increase in deals over the prior year, according to the MoneyTree Report by PricewaterhouseCoopers LLP and the National Venture Capital Association (NVCA), based on data from Thomson Reuters. In Q4 2013, $8.4 billion went into 1,077 deals.

Internet-specific companies captured $7.1 billion in 2013, marking the highest level of Internet investment since 2001. Additionally, annual investments into the Software industry also reached the highest level since 2000 with $11.0 billion flowing into 1,523 deals in 2013. Dollars going into Software companies accounted for 37 percent of total venture capital invested in 2013, the highest percentage since the inception of the MoneyTree Report in 1995.

“Advances in technology continue to revolutionize how companies engage their customers on nearly every level and has changed the landscape of virtually every industry,” said Mark McCaffrey, global software leader and technology partner at PwC. “Consumers can see how innovation is changing their lives in the internet and software spaces and are eager to embrace technology at a faster and faster rate. Combined with the high ROI being driven by the success of recent IPOs and an active acquisition market, it is no surprise that more venture capital dollars are flowing into early stage software and internet companies. In fact, investments in software companies accounted for more than one-third of all VC investing in 2013.”

thomaswong.1986 says

it is no surprise that more venture capital dollars are flowing into early stage software and internet companies.

"Why yes we invested in AMERICAN SOFTWARE INC. what of it? They have 3 HS dropouts in a trailer in Stockton, and 148 code monkeys scattered around the Pacific Rim but we hold it still counts as INVESTING IN AMERICA!"

Yes it's fashionable to pour money into The Next Facebook but this does just about nothing for average American.

tatupu70 says

OK--I think that's a very poor argument. First, it assumes the people who innovated and made the advances were the ones getting filthy rich--which is clearly not true. Second, it assumes money is the primary driver which I would argue is not the case with most innovators. Fame, pride, et. al are at least as important as money.

Tell me--who is getting rich off of trained T-cells? The guy who actually did the lab work? Or the top executives with stock options??

The market illiterate keep making those silly arguments, as if every person were the same and should be treated exactly the same whether the person likes it or not.

You don't need money to motivate those who are not motivated by money. For those who are most motivated by money, money is the best motivator to get the most work out of them. duh, simple, isn't it?

thomaswong.1986 says

Venture capitalists invested $29.4 billion in 3,995 deals in 2013,

Holy cow batman. A whole 29.4 billion dollars trickling down in a 15 trillion dollar economy. That's certainly going to raise the standard of living in the US.

Reality says

The market illiterate keep making those silly arguments, as if every person
were the same and should be treated exactly the same whether the person likes it
or not.

And Reality keeps making insults as if he actually understood the point of the post...

It was the post I replied to that made that assumption--that money was the only motivator. I was the one who posted that there are several motivators and that money likely isn't the most important. Very often, the primary inventor/innovator doesn't reap the same monetary rewards as others who usually had little to do with it...Reality says

You don't need money to motivate those who are not motivated by money. For
those who are most motivated by money, money is the best motivator to get the
most work out of them. duh, simple, isn't it?

I'm glad you agree with my point.

Just one more tax cut.

Then the Golden Age will come!

Vicente says

thomaswong.1986 says

it is no surprise that more venture capital dollars are flowing into early stage software and internet companies.

"Why yes we invested in AMERICAN SOFTWARE INC. what of it? They have 3 HS dropouts in a trailer in Stockton, and 148 code monkeys scattered around the Pacific Rim but we hold it still counts as INVESTING IN AMERICA!"

Yes it's fashionable to pour money into The Next Facebook but this does just about nothing for average American.

It ain't just Software Inc anymore... it's every single business in America. If it's in person, work is done by Mexicans, if it's not in person it's done by someone overseas. That is why we are finished economically. We have raced to the bottom, and now Americans have to compete with Walmart wages if they want jobs... that's a messed up future.

John Bailo says

To drive people you need to have big rewards...and also hungry people. If everyone were rich, who would be staying up late and scheming how to build these widgets? Also, even if they could, they would be looking around and seeing everyone else getting a pretty good life without striving and wonder what they were doing in the lab or on the computer wasting their youth when they could simply be going on vacations.

Who would be staying up late and scheming how to build these widgets?

In June 1902, Einstein received the letter he’d been impatiently waiting for: a positive answer regarding his application to be a technical assistant - level III at the federal patent office in Bern. One month later he was examining inventions applications for patentability at his famous lectern in room 86, on the third floor of the building on the corner of the Speichergasse and the Genfergasse. The director at the time, Friedrich Haller, was a strict boss. However, Einstein appreciated his superior’s tough-but-benevolent and logical-but-uncompromising character which seemed to stimulate Einstein’s natural critical tendency.

The patent office job — Einstein referred to it, tongue-in-cheek, as his «cobbler's trade» — turned out to be stroke of good fortune because it was excellently paid (3,500 Swiss francs per year) and was undemanding for his nimble intelligence. He spoke of the patent office as «a worldly cloister where he hatched his most beautiful ideas». With his courteousness and modesty and his humorous approach to life, Einstein was very well-liked. On April 1, 1906 he was promoted to technical assistant-level II. He managed his time exactly: eight hours of work, eight hours of «allotria» (miscellaneous) and scientific work and eight hours of sleep (which he often used instead for writing his manuscripts). Much to the patent office's regret, he left in the fall of 1909 to accept the post of Professor Extraordinary in theoretical physics at the University of Zurich.

That's who.
https://www.ige.ch/en/about-us/einstein/einstein-at-the-patent-office.html

Trickle down should work, the problem is the CEO's at the top pull the bags of 100's out of the wheel barrow, and places them in their own vault, instead of using that money to grow by adding to the work force with quality living wage jobs.

It's just money for nothing. And obligatory checks for free.

The real problem is that until they allow the market to clear the opportunities for real investment don't materialize

CaptainShuddup says

It's just money for nothing. And obligatory checks for free.

Look at them yo-yos. That's the way you do it. You get elected to the suite of C. No, that ain't workin' - that's the way you do it. Get your money for golfin' and your checks for free.

CaptainShuddup says

Trickle down should work

Is it just me, or is the answer "yes, trickle down would work IF conditions were right"?

If the problem were on the supply side, then supply side incentives would work. But the problem is on the demand side, and has been for a long time.

Lots of capital sloshing around at the top, often given back through shares and buybacks, maybe even through the "gift" of layoffs.

Like Tatupu70 said, companies don't hire extra people because they have extra money, they hire to meet demand.

The Pope basically summed up why trickledown economics don't work: It all depends on those with the money to use it in a way that was guesstimated as a result of having their taxes cut or other favors thrown their way- hence counting on " the goodness of humans" as he put it.

If you took the wealth of the top 85 people and gave it to the bottom half, they'd each get $500. Sure, they might have the time of their life for a few weeks, but after that, not much to show.

The problem is still lack of total wealth, not that some small few have managed to acquire enough of it to live a good life. Blaming The Rich is easy because it fools us into thinking that redistribution will make everything better. It won't.

If we want a planet with abundance, we have to learn to control our population size, our pollution, and exchange our bad technologies for good ones like hydrogen, so that there is more for everyone.

I think the Wealth of the top 85 people is $110 Trillion. Let's let them keep about $10 trillion amongst themselves, so we'll just take $100T and distribute it.

It amounts to $14,285 and change per person. Since about half the world lives on less than $2.50/day, or less than a thousand dollars a year, this would be an exponential improvement in their lives. For people in developed countries, it's a downpayment on a house, paying off a student loan, and/or a Nitro-burnin' fuel injection of new consumer spending that will rock the economy sky high.

If you only gave it to the poorest 50%, it would be almost $30k a piece - almost a year's US median income. A game changer.

The top 85 will still have more than $100M a piece and be able to:

Build a concrete bunker with 10 subfloors, fully stocked 300 square foot Meat Locker, and a private army in case of Cannibal Anarchy.
Buy a Sunreef 90 Catamaran
Go high-stakes gambling in Monaco
Cruising the Caribbean or Med for the rest of their lives staying in 5-star hotels with a full time paid crew.
Pay cash for a Harvard Education
Engage a luxury 5-star Michellin rated French Chef to serve them gold-flaked Chocolate Mousse for the rest of their lives
Own countless luxury properties all over the world
Set up their idiot family members as titular big salary-drawing Non-Profit Executives
Have plenty of money leftover to invest, etc. etc.

John Bailo says

The problem is still lack of total wealth, not that some small few have managed to acquire enough of it to live a good life. Blaming The Rich is easy because it fools us into thinking that redistribution will make everything better. It won't.

Very Good!

John Bailo says

We have to learn to control our population size, our pollution, and exchange our bad technologies for good ones like hydrogen, so that there is more for everyone.

That would require a propaganda campaign that respected their audience not treat them like they are stupid, or they need people to think for them. One that also didn't so transparently exhibit, cronyism, favoritism, and no questions asked bankruptcies.

Monkeying with birth rates is a delicate balance, either too low or too high of birthrates can be as equally devastating.

John Bailo says

The problem is still lack of total wealth, not that some small few have
managed to acquire enough of it to live a good life. Blaming The Rich is easy
because it fools us into thinking that redistribution will make everything
better. It won't.

That is 100% false. The total wealth of the US has continued to grow over the last 30 years. There is PLENTY of wealth out there, it's just distributed poorly.

Seriously--why do you continue to say that people are "blaming" the rich. Who is blaming them??