patrick.net

It's not the wealth. It's the corruption.

We go at it here, but I -- assuming I am one of the 'pseudo-rationalists' you are referring to -- don't hate "the rich".

People who provide real value from their labor deserve every penny.

It's the rent-seeking I hate, profiting from mere ownership of existing wealth, or taking advantage of monopoly rent situations to extort wealth in non-consensual transactions.

We can find these operators in real estate, consumer finance, our $8500/capita health industry, natural resource sector, etc.

Altogether this is a several trillion dollar flow from the nation's productive population -- our workers -- to the parasitically wealthy, who already own 90% of the country and are going for 100% apparently.

Seeing the corruption in our economy is really mind-boggling. We're just about as bad as the Soviet Union was ca. 1980. Maybe we got another 10 years too, maybe not.

that some people "deserve" their "excess" wealth is too severe for their egos to bear.

LOL. For a supposed non-'pseudo rationalist' you're sure painting in broad strokes here, Tex.

Peter P says

The consequence of accepting that some people "deserve" their "excess" wealth is too severe for their egos to bear.

Textbook straw man.

You're out on a limb that you don't support in the slightest.

If I think that a guy who makes $500,000 can afford to pay $10K more in taxes and that he should, IT doesn't mean that I have any feelings of hate or even envy (although I might be a little envious). It's just logic, or an opinion based on logic.

Given our broken financial and economic situation, the question of how much should be paid by those with huge discretionary income is a fair debate to have.

You have a keen sense for the obvious, if you are observing that the opinion on this subject of someone who makes 60K a year may (but will not always) be different from someone who makes 600K per year.

But you sound not so bright when you try so hard to to conclude that just because the opinion of many of the wealthy on the subject is influenced by their self interest and ego (sense of entitlement), that therefore the opinion of a regular joe on this should be driven by such similar psychology.

Reasons are ultimately driven by emotions. We need to be true to ourselves. We all tend to over-rationalize in order to make ourselvds feel better.

taxee says

It's not the wealth. It's the corruption.

Corruption is a symptom of market inefficiency.

What if we had a system where income distribution was flatter? Like some of the more socialist countries have? (NO NOT ANYWHERE CLOSE TO COMPLETELY FLAT).

Is it clear that we would be a less wealthy country in the long run if this were the case? Is it clear we would have less extremely rich people and less extremely poor? (yes).

Are we ready for that (maybe not)?

These are big questions.

The fact that a poor or middle class person is maybe going to have a different opinion on this than some wealthy individual, is a given and is really beside the point.

Peter P says

Reasons are ultimately driven by emotions

I disagree. It's more complicated.

Emotions often become intermingled with and attached to our opinions and beliefs, and they play a role. But the genesis of the opinion or belief, that is eventually backed up with emotion, is not emotion. At least not usually.

The genesis can sometimes be self interest though. Often it's not. Take the many many people with income above 250K who think their tax rates should go up. Keep in mind if their income is just a little over 250K, it hardly affects them.

My point is that we form such opinions and beliefs based on our emotional needs and wants.

Peter P says

My point is that we form such opinions and beliefs based on our emotional needs and wants.

In the case of taxes paid by someone on their marginal income over 250K, that person's opinion is somewhat likely to be affected by their self interest (which they may or may not have emotion about - but the emotion if it does exist, comes about as they rationalize their opinion).

But I on the other hand am very close to being objective about the question. I can balance what I see as a potential benefit to the system of lowering wealth inequality, and improving our budget versus the hit that the person in the high bracket takes to that higher increment of their income. And I can even take in to account my opinion of the degree to which that rich person may feel justified in not wanting to pay a little more, and objectively whether I think they are correct.

To some people, the label of "rich" may give them enough emotional satisfaction to support the tax plan.

Then there are rich rent seekers who benefit from a big government.

Peter P says

To some people, the label of "rich" may give them enough emotional satisfaction to support the tax plan.

I just can't begin to see what this anti-rich emotion you think is out there. You sound like Romney talking about envy of the rich.

Americans in general love the rich, and hope to be there themselves one day.

Or did you mean that the high income guy who wants to pay more(thinks the marginal rate needs to go up), would want to because he gets to be in the "rich" group?

That's just crazy.

marcus says

And I can even take in to account my opinion of the degree to which that rich person may feel justified in not wanting to pay a little more, and objectively whether I think they are correct.

And I even go further than that and can see that just giving the bottom 50% a free ride on taxes will result in the private rent-seekers being able to beat more rents out of them!

So when we get soft-headed with government charity what really happens is the productive upper-middle class has to support both the lower 50%'s subsidies and pay the freight on the actual government economy.

I could be wrong about this, but AFAICT the high-tax Nordic states solve this problem by having high taxes on everyone, all the time. They also have progressive taxation to redistribute better, but their tax system starts high and stays high.

German social welfare tax rates (ie "FICA") are very, very high, I know that.

Beyond that comes the structural problem of Kobe Bryants' children living off their financial inheritances. If they just go out and create a $400M rental empire with their fortunes, Kobe's past savings will just result in more redistribution UP the socio-economic pyramid.

The key thing is to break the rents in the major life necessities of housing, energy, health-care, and finance. Henry George had the answer for the first two, and the socialist states have tackled the latter two pretty well I guess (having learned from their 1990s crises I hope).

Peter P says

Corruption is a symptom of market inefficiency.

The efficient market is a fairy tale.

Markets, being human constructions, corrupt themselves.

And what's worse, the more market power a market participant has, the more he can corrupt the market. See the 19th century for how that works.

This is why democratic socialism beats free market fundamentalism here in the real world, it changes the one-dollar one-vote dynamic of minarchism to one man one vote, providing an EXTRA-market correcting force not present in pure markets.

We call this democratic socialism a MIXED market economy.

http://en.wikipedia.org/wiki/Mixed_economy

marcus says

That's just crazy.

nah, Peter P is just going ad-hom, which is what people do when they run out of rational supports for their arguments.

this whole thread was just a 'when did you stop beating your wives, liberals' troll

I was attacking a label, not anyone in particular.

Bellingham Bill says

This is why democratic socialism beats free market fundamentalism here in the real world, it changes the one-dollar one-vote dynamic of minarchism to one man one vote, providing an EXTRA-market correcting force not present in pure markets.

I think you're right Bill, and it's always interesting hearing your insights.

What if at this point, the way our economy is structured, rent seeking is such a key and fundamental feature or 'engine'of our economy, that it can't change?

How much of our GDP is from rents of one form or another?

It seems like it goes all the way to the foundation, at this point.

But understanding it is important, even if only for very small little baby step policy changes. The deeper in to the rabbit hole one goes, the more clear it becomes that in the long run our system has to change.

I believe it will, maybe in a century or two, if we make it. After our role in the world has changed somewhat.

marcus says

Americans in general love the rich, and hope to be there themselves one day.

That's what I thought. But the whole idea of progressive taxation is not consistent with this view.

As boomers grow old, they discover that the prospect of them getting rich is now dim. Then they focus on getting hand-outs themselves. As a result, they come up with reasons to justify taxing someone just "richer" than them.

Peter P says

I was attacking a label, not anyone in particular.

Your thesis was very clear, except I'm not sure what a psuedo rationalist is. Go back and read it.

Peter P says

But the whole idea of progressive taxation is not consistent with this view.

Wrong. It's about the governemt paying for what it spends, and possibly about one ideology which says govenrment can't do anything well versus another that says, that's not always true.

When Bush initiated his famous tax cuts, he said, "you know how to spend your money better than the government." But he was essentially taking money out of the social security surplus, and further engaging in deficit spending on unfunded wars etc.,.. Those tax cuts were skewed towrds benefitting the rich.

Someone has to pay for all that deficit spending.

This is logic, it isn't a personal "feeling" about the rich.

Somehow we need to pay more of our bills. Before we further lower the standard of living on the middle class, since the standard of living has been going up on the rich, they can afford to pay more.

Let's start there. That's all.

Peter P says

As a result, they come up with reasons to justify taxing someone just "richer" than them.

The justification is that without this redistribution from the rich, our economic system would be running on an closed-loop positive feedback without any stabilization.

The rich -- top 5% -- didn't make their $2.5T in AGI in 2010 from the Mines of Zanzibar or trading among themselves. They get their incomes largely from the 95% below them.

http://research.stlouisfed.org/fred2/series/CP/

shows our skyrocketing corporate profits are operating on a similar trend of "#Winning".

The economy we've structured for ourselves has become catastrophically unbalanced. We can see that in our rising Gini ratio:

http://research.stlouisfed.org/fred2/series/GINIALLRH

and in our reliance on consumer credit 1999-2006:

http://research.stlouisfed.org/fred2/graph/?g=dBV

and after that flow failed in 2008, now government debt:

http://research.stlouisfed.org/fred2/series/FGTCMDODNS

to keep the rubber side down.

The asymmetric, multiple, trillion-dollar flows from working class to parasitical wealthy is what the issue is here.

"I don't have any solution but I certainly admire the problem"

Bellingham Bill says

The asymmetric, multiple, trillion-dollar flows from working class to parasitical wealthy is what the issue is here.

So what? In the age of 12-month-old $1B companies anyone can be anything.

No one needs to be in the working class.

The important thing is, there should be no artificial barriers of social mobility.

Peter P says

No one needs to be in the working class.

LOL

Choice is the most wonderful gift from God.

When you think you have no choice, in many cases you are simply not giving yourself a choice.

To be fair, many workers are conditioned by the system to think they have "a place" in the society. Bullshit.

Peter P says

As boomers grow old, they discover that the prospect of them getting rich is now dim. Then they focus on getting hand-outs themselves. As a result, they come up with reasons to justify taxing someone just "richer" than them.

Does Peter P stand for Peter Plutocrat ?

I take it that by "Then they focus on getting hand-outs themselves" you mean boomers not wanting their social security or medicare cut?"

These are programs that people paid in to, they aren't handouts. And if it weren't for GWB,, we wouldn't be talking about raising the age that medicare kicks in.

marcus says

I take it that by "Then they focus on getting hand-outs themselves" you mean boomers not wanting their social security or medicare cut?"

They certain want to make sure the music will play on.

marcus says

These are programs that people paid in to, they aren't handouts. And if it weren't for GWB, we wouldn't be talking about raising the age that medicare kicks in.

It is either a handout program or a ponzi scheme.

Medicare should be abolished. It should be replaced by a universal healthcare system for all.

Peter P says

To be fair, many workers are conditioned by the system to think they have "a place" in the society. Bullshit.

Yes, you're right, today it's easier than ever to go from poverty to wealth in America. All it takes is a little elbow grease. Any average intelligence American who feels stuck in their hard working job, barely getting by, needs to wake up and realize that there's always lots of room at the top.

You know that intelligence is an illusion, right?

Measures of "intelligence" were created by people who VALUE having high measures of intelligence to make themselves feel better.

It is quite often a matter of focus and introspection, not a case of innate intelligence.

Drive and discipline too, of course.

One secret: there is no formula of success. Market efficiency applies here too.

Academics are not comfortable with "knowledge" that are not universal. Hence they have DECIDED that education OUGHT to be the universal key to personal success and that anything beyond what education can provide is a source of inequality.

I'm having trouble with this thread. There's no facts in the thread to support the thread. It must be an opinion piece.

My opinion is : Damn! I've been Trolled.

It is an opinion.

"Facts" are more harmful because they are presented as such.

Facts can be spun. Statistics can prove any lie.

Opinions? You just agree with them. Or you can have your own.

Peter P says

You know that intelligence is an illusion, right?

Peter P says

Measures of "intelligence" were created by people who VALUE having high measures of intelligence to make themselves feel better.

I think I'm seeing a pattern here.

Peter P says

they try to invent reasons to explain why wealth beyond a certain point (i.e. a level attainable by their professions) should be re-distributed away.

The consequence of accepting that some people "deserve" their "excess" wealth is too severe for their egos to bear.

Peter P says

Measures of "intelligence" were created by people who VALUE having high measures of intelligence to make themselves feel better.

Peter P says

"Facts" are more harmful because they are presented as such.

Facts can be spun. Statistics can prove any lie.

Opinions? You just agree with them. Or you can have your own.

HEY YOU says

My opinion is : Damn! I've been Trolled.

Funny.

Enlighten me.

Peter P says

Enlighten me.

"If you lose your job, your marriage and your mind all in one week, try to lose your mind first, because then the other stuff won't matter that much."

Jack Handy (deep thoughts)

“I hope some animal never bores a hole in my head and lays its eggs in my brain, because later you might think you're having a good idea but it's just eggs hatching.”

Jack Handy

I guess the universe does not exist without the Mind.

“If a kid asks where rain comes from, I think a cute thing to tell him is "God is crying." And if he asks why God is crying, another cute thing to tell him is "Probably because of something you did."”

Jack Handy