patrick.net

Reality says

There have been many utopian dreams concocted to displace free individual human choice . . . they all failed miserably.

The current US implementation of capitalism displaces free individual human choice. How much choice do you have in the terms of service with your bank, your phone company, your ISP? When was the last time you negotiated a contract on equal footing with a company?

Dan8267 says

Reality says

There have been many utopian dreams concocted to displace free individual human choice . . . they all failed miserably.

The current US implementation of capitalism displaces free individual human choice. How much choice do you have in the terms of service with your bank, your phone company, your ISP? When was the last time you negotiated a contract on equal footing with a company?

There is no such thing as "the current US implementation of capitalism." The government can only implement government control, whatever the name such control is. Free market is decision by individuals, no bureaucratic "implementation" needs to apply.

Monopoly and Oligopoly are usually the result of government intervention in the market place.

bob2356 says

Crony capitalism is using the government to further corporate aims in an illicit manner. Either through funding obtained without the proper processes being followed or using government to hinder competitors.

Yep.

bob2356 says

In the past examples would include the extreme financial irregularities (putting it mildly, fraud would be closer to the truth)

In the very recent past clear cut fraud going unprosecuted, instead of jailing the involved partied the government/Fed keeps the million dollar bonus party going with taxpayer money. Try selling a couple of lemons on the used car market, bragging after the sale in emails how you got rid of that "crap" and made money and see how fast your ass lands in jail for fraud. Anyone thinking that a government that corrupt will use more tax money wisely is anywhere between foolish and disingenuous.

Reality says

Fiat money is the biggest Crony capitalist scheme going, both now and at the time of John Law, and in between whenever there is a fiat money system. The other aspects of Crony Capitalism often has to rely on Fiat money system to keep going. John Law's experiment had both Crony capitalism in general and fiat money system in one major particular aspect written all over it. It was the first attempt at a modern state controlled economy . . . via bubble making by government officials to pay for government spending and to enrich well-connected cronies at the same time. Sounds familiar?

Agreed - it's an extremely powerful tool because it is legal for the gov/Fed but severely punish for the common guy to counterfeit and basically controls money supply and distribution thereof. These cases where the same action is ok for the government to engage in but a crime for the common man should be kept at an absolute minimum at ALL times (hence illegally obtain evidence is usually not admissible in court) in order to protect the common citizen from the tyranny of the government.

mell says

In the very recent past clear cut fraud going unprosecuted, instead of jailing the involved partied the government/Fed keeps the million dollar bonus party going with taxpayer money.

That's a very common complaint, but I've yet to see anyone state exactly what was the fraudulant behavior and show the proof.

mell says

Try selling a couple of lemons on the used car market, bragging after the sale in emails how you got rid of that "crap" and made money and see how fast your ass lands in jail for fraud

Used car dealers do it every day. It's not against the law to sell something that you wouldn't buy yourself. Hell, a majority of people that sell their stock think it's going down. Doesn't make them a criminal. Having said that--I believe that they should be in jail too because there's no way folks didn't know that the securities were not AAA. But what I know and what I can prove are two different things.

The Professor says

In the 50's and early 60's money was real. A dime was made of silver and you could buy 2 candy bars or a beer with it. Now it takes at least 4 zinc quarter dollar tokens to buy the same.

Who cares?? Other than being nostaglic, all that matters is real income and productivity. Both of which have risen significantly since the 1940s. Fiat money is a red herring that diverts people from the real issue. It's almost meaningless in the big picture.

The Professor says

What is the real issue?

Income/wealth distribution

tatupu70 says

The Professor says

What is the real issue?

Income/wealth distribution

You nailed it. We've gotten worse and worse at robbing from those who have earned and giving to those who haven't. Until we fix that, we'll continue to be building a nation of deadbeats.

tatupu70 says

That's a very common complaint, but I've yet to see anyone state exactly what was the fraudulant behavior and show the proof.

tatupu70 says

Used car dealers do it every day. It's not against the law to sell something that you wouldn't buy yourself.

No, the proof has been given and presented on numerous websites and occasions, these emails exist, e.g. from GS were they were bragging about selling that crap. Used car dealers that sell lemons and provide proof (written, orally, email) that they knew are car was defect land in jail immediately, same should apply to bankers, but doesn't.

debyne says

You nailed it. We've gotten worse and worse at robbing from those who have earned and giving to those who haven't. Until we fix that, we'll continue to be building a nation of deadbeats.

Interesting. So all the data measuing income/wealth distribution are incorrect then?

And the CEO has "earned" a salary 1,000 times greater than the operator on the line that actually makes the widgets?

debyne says

@thunderlips

Wow...and that's a bad thing? You want to take that away from someone who achieves that through hard work, discipline and being smart? Our country is screwed.

Nice move. First we spoke about how almost all of the 10 richest people in the US inherited their wealth, being born in the top 1%. Then you asked me for a defintiion of wealthy.

Now you're asserting, without proof, the hard work/discipline/smart BS a second time.

mell says

No, the proof has been given and presented on numerous websites and occasions, these emails exist, e.g. from GS were they were bragging about selling that crap.

That's not against the law.

mell says

Used car dealers that sell lemons and provide proof (written, orally, email) that they knew are car was defect land in jail immediately, same should apply to bankers, but doesn't.

That's true. Do you have sources that show that the bankers mischaracterized the risk of the securities? They were rated AAA after all. If anyone should be going to jail, it should be Moody's IMO.

tatupu70 says

debyne says

You nailed it. We've gotten worse and worse at robbing from those who have earned and giving to those who haven't. Until we fix that, we'll continue to be building a nation of deadbeats.

Interesting. So all the data measuing income/wealth distribution are incorrect then?

And the CEO has "earned" a salary 1,000 times greater than the operator on the line that actually makes the widgets?

Income and wealth are two entirely different subjects. Best not to attempt to conflate the two.

The disparity in incomes, is a result of paying most laborers, by the hour. As technology improves, and capital investments are made, the workers toil less and less, to produce the same amount of goods/services.

The time component in economic musings, confuses the hell out of most people.

Unions and their gift of the 40 hour work week, are partly to blame. As technology improves (making tasks take less energy, effort, and time) p, workers should be putting in less and less hours. Rather then union shops with lifetime shleps standing around watching machines do the work, where people rack up overtime, should have instead fought for something of more value. Like the eight hour work week.

It's not income inequality, it's "Opportunity" inequality that is killing this country. And there's not a day that doesn't go by, with out some Washington shitbag doing something to further along that decline.

Let's face it, there will never be a time, where people work 15 to 20 hours a week flipping burgers or serving baked goods with a Lucite salad tong, will ever be making a living wage. When that happens, then only rich people will be able to afford to even buy a cup of coffee. And that living wage that those people though they had, will be consumed just in rent, which will also be the price of a tea and a slice.

Wgaes don't necessarily have to rise, in order to make things work. Prices of necessities could fall in line with wages, and we'd all be better off.

The entire concept of taxing labor to the hilt, while allowing land ownership to be taxed at a pittance, was always doomed to end up with what we have now.

For the landowner, his pittance of a tax (a constitutional tax at that), comes with it all the protections and efforts of the government from the top down. The navy and the rest of the military, to protect the homeland. The police state to fend off the poor.

For the labourer, he is burdened with the weight of the world, for merely the privilege to go out and earn a living. Its insane.

End the federal income tax, and restore constitutional taxes on land ownership, and there would be no discussion of income inequality

errc says

The disparity in incomes, is a result of paying most laborers, by the hour. As technology improves, and capital investments are made, the workers toil less and less, to produce the same amount of goods/services.

Uh, no they don't. They produce more/hour and toil more. There's just fewer of them.

errc says

Unions and their gift of the 40 hour work week, are partly to blame. As technology improves (making tasks take less energy, effort, and time) p, workers should be putting in less and less hours. Rather then union shops with lifetime shleps standing around watching machines do the work, where people rack up overtime, should have instead fought for something of more value. Like the eight hour work week.

This is high comedy (no pun intended for you errc). Unions are to BLAME?? If it weren't for unions, we'd still have 60-80 hour workweeks.

I'm not sure what union shops you have visited--but you're sorely mistaken. It sounds like the ones you went to have completely incompetent management. Laying off union workers is not difficult.

The politicians that voted to bail out the financial institutions, are the criminals that belong in jail.

Where does it read in our constitution that it is within the duty of the wsfedgov to print money (promise further taxing on future labor yet to be toiled) and fork it over to the likes of AIG and WFC, JPM, GS and the like?

We would have 60-80 hour work weeks?!?

Someone is smoking on a Wednesday am, and its not me.

My friends that work in union shops, do work 60 hour work weeks.
Johnson and Johnson
Armstrong

They actually have said, they don't work. They stand around and finger their phones, and take naps and bullshit with the other union shleps, for 28$ per hour. The machines do all the work. If the machines break, they call in a tech to repair them

errc says

My friends that work in union shops, do work 60 hour work weeks.

Johnson and Johnson

Armstrong

They actually have said, they don't work. They stand around and finger their phones, and take naps and bullshit with the other union shleps, for 28$ per hour. The machines do all the work. If the machines break, they call in a tech to repair them

Like I said--your friends need to do their jobs then. I work in a union shop and discipline is clearly written in the contract. If you let guys play on their phones, take naps(!!??) at work, then they will. That has nothing to do with union vs. non-union.

tatupu70 says

mell says

No, the proof has been given and presented on numerous websites and occasions, these emails exist, e.g. from GS were they were bragging about selling that crap.

That's not against the law.

mell says

Used car dealers that sell lemons and provide proof (written, orally, email) that they knew are car was defect land in jail immediately, same should apply to bankers, but doesn't.

That's true. Do you have sources that show that the bankers mischaracterized the risk of the securities? They were rated AAA after all. If anyone should be going to jail, it should be Moody's IMO.

http://legal-dictionary.thefreedictionary.com/fraud

"A false representation of a matter of fact—whether by words or by conduct, by false or misleading allegations, or by concealment of what should have been disclosed—that deceives and is intended to deceive another so that the individual will act upon it to her or his legal injury."

http://thinkprogress.org/economy/2011/04/14/173896/wall-street-deal-pi/

"For instance, one Deutcshe Bank trader, Greg Lippman, described the assets his bank was peddling as “crap” and “an absolute pig”:
– Email regarding GSAMP 06-NC2 M8, an RMBS security that contained New Century loans and was issued by Goldman Sachs: “[T]his is an absolute pig.” (12/8/2006)
– Email describing ABSHE 2006-HE1 M7, a subprime RMBS security issued by Asset Backed Securities Corporation Home Equity Loan Trust, as a “crap deal”; and describing ACE 2006 HE2 M7, a subprime RMBS securitization issued by ACE Securities Corp., as: “[D]eal is a pig!” (3/1/2007)
Goldman Sachs did the same thing (in less colorful language), going so far as to tell investors that it’s interests “were aligned” with their own, even as it was spending billions betting against the very securities that it was selling. In all, Goldman “generated net revenues of $3.7 billion” betting against securities."

You can split hairs about the degree of illegality but you can bet that any average joe doing something like this goes to jail for a long long time. The government not only turned a blind eye but teamed up with the Fed and handed them freshly minted fiat as a rewards for fraud and failure. No wonder people refuse to pay more taxes.

errc says

The politicians that voted to bail out the financial institutions, are the criminals that belong in jail.

Where does it read in our constitution that it is within the duty of the wsfedgov to print money (promise further taxing on future labor yet to be toiled) and fork it over to the likes of AIG and WFC, JPM, GS and the like?

100% agreed.

mell says

You can split hairs about the degree of illegality but you can bet that any average joe doing something like this goes to jail for a long long time

OK--I'll make that bet. If I had a security with a Moody's AAA rating, it doesn't matter if I think it's a dog. Moody's is an expert in evaluating risk--I am not. Their rating carries much, much more weight than mine. I could email til the cows come home and it won't matter. It's just my opinion vs. a Moody rating.

mell says

The government not only turned a blind eye but teamed up with the Fed and handed them freshly minted fiat as a rewards for fraud and failure. No wonder people refuse to pay more taxes.

Turned a blind eye? They tried to stop the bonus payments, and have been investigating Wall St. since 2008 to try to find a way to prosecute. Did you see the JP Morgan proposed settlement? I wouldn't call that doing nothing.

Because in the 1960's, the cost of living was derived from peoples wages. You didn't need a 30yr mortgage to overpay for your shelter. Necessities weren't commoditized in the way that they are today. Oil was 8$ per barrel.

The problem today isn't that people don't make enough in wages. For chrissakes, me and my young 30 something buddies make 50k a friggin year. If housing costs were what they were in the 60's, we'd all be near retirement. Instead, I still owe the bank another 345 months of rent payments,,,,for my house that was built back in 1961. And paid for. Yet now, the bank holds the lein and I owe them a lifetime of labor

Another example of government inefficiency.
Let's hope it does not take 5 years to weave a website capable of taking ACA applications....

tatupu70 says

mell says

The government not only turned a blind eye but teamed up with the Fed and handed them freshly minted fiat as a rewards for fraud and failure. No wonder people refuse to pay more taxes.

Turned a blind eye? They tried to stop the bonus payments, and have been investigating Wall St. since 2008 to try to find a way to prosecute.

SoftShell says

Quite simply, robots are now consuming the larger share of the labor budget.

Automation has taken the biggest bite out of the middle class wage pool.

How to rectify this without sacrificing efficiency is the mystery question.

It's not difficult at all. There is more than enough wealth to go around.

Please forgive me the stories of how people will flee when they only get to make 60% on their investment rather than 80%.

I forgot to add the asian labor pool. Between that and automation, the american lower to middle class doesn't stand a chance...

tatupu70 says

SoftShell says

Quite simply, robots are now consuming the larger share of the labor budget.

Automation has taken the biggest bite out of the middle class wage pool.

How to rectify this without sacrificing efficiency is the mystery question.

It's not difficult at all. There is more than enough wealth to go around.

Please forgive me the stories of how people will flee when they only get to make 60% on their investment rather than 80%.

thunderlips11 says

debyne says

@thunderlips

Wow...and that's a bad thing? You want to take that away from someone who achieves that through hard work, discipline and being smart? Our country is screwed.

Nice move. First we spoke about how almost all of the 10 richest people in the US inherited their wealth, being born in the top 1%. Then you asked me for a defintiion of wealthy.

Now you're asserting, without proof, the hard work/discipline/smart BS a second time.

I can't have an honest debate with someone who just inherently believes that someone with any sort of wealth didn't earn it or that it doesn't belong to them.

SoftShell says

I forgot to add the asian labor pool. Between that and automation, the american lower to middle class doesn't stand a chance...

Not with continued Republican policies, I agree.

debyne says

I can't have an honest debate with someone who just inherently believes that someone with any sort of wealth didn't earn it.

That's good. Because nobody here believes that.

Try again and actually use logic this time.

Reality says

There is no such thing as "the current US implementation of capitalism." The government can only implement government control, whatever the name such control is.

U.S. does not equal "U.S. government". There most certainly is such a thing as the current U.S. implementation of capitalism. And that implementation has severe constraints that is hindering progress and real wealth creation.

Reality says

Monopoly and Oligopoly are usually the result of government intervention in the market place.

Incorrect. Corporations will inevitably create monopolies and oligopolies through mergers unless prevented by government. Game Theory predicts this and history confirms this fact.

Corporations don't like competition because competition lowers profits. Any system that maximizes profits, by definition, minimizes the efficiency of markets. There are conflicting goals in economics, therefore, no economic philosophy is ideal.

Reality says

Crony Capitalism, aka Corporate Welfare

I would say that cronyism and corporate welfare, although they may overlap, are distinct ideas.

tatupu70 says

debyne says

I can't have an honest debate with someone who just inherently believes that someone with any sort of wealth didn't earn it.

That's good. Because nobody here believes that.

Try again and actually use logic this time.

Wait, so you believe they earned it and it belongs to them, or you don't believe that?

debyne says

Wait, so you believe they earned it and it belongs to them, or you don't believe that?

I take that back. I may have misunderstood you. Yes, I think there are people that have wealth that didn't earn it. Not all people with wealth, but there are certainly folks that didn't earn their fortunes.

debyne says

For purposes of how taxes, laws and rights apply to them, is there any other
way to think about it? Oh wait, let's form a government committee to assess who
really earned their wealth and who didn't, and then we can apply different
rights and taxes accordingly.

Why don't we start with defining what wealthy is? I don't know a single wealthy person personally, but my definition of wealthy is $50 million.

A $50 million, even at todays low interest rates, a guy can make $100k per month after taxes investing in risk free treasury bonds. Thats wealthy. You'd have to really try to spend that much.

When someone has so much wealth that it takes effort to not compound even after a high level of consumption to support himself and his family, thats wealth.

$1 million is not wealthy. A bum on the street who panhandled $101 is closer in net worth to a millionaire than that millionaire is to a billionaire.

The title of the thread is "Income inequality questions"

And here we are confusing/conflating wealth inequality with income inequality. The two are almost completely unrelated.

People that have to work for their incomes, are not wealthy

I'm not even certain that income inequality is a "bad" thing. Different peoples laborings, have different worth's.

I'm not certain that wealth inequality is a "bad" thing either. Depending on how it comes to pass

control point says

$1 million is not wealthy

$1 mil can generate $50,000 in passive income at 5% dividend yield. That will put a family in the ballpark of median american household income. While it may not result in a life of luxury depending on location and if kids are in the household a retirement may be in the works. If I could generate $50,000 passively, I would seriously consider hanging it up and trading in my work for unlimited resource of time.

dublin hillz says

control point says

$1 million is not wealthy

$1 mil can generate $50,000 in passive income at 5% dividend yield. That will put a family in the ballpark of median american household income. While it may not result in a life of luxury depending on location and if kids are in the household a retirement may be in the works. If I could generate $50,000 passively, I would seriously consider hanging it up and trading in my work for unlimited resource of time.

Yeah - It's just that it's pretty hard to get that 5% yield these days unless you buy every fucking dip in the stock market ;) Let's stop the money printing and get reasonable interest rates going again. Also let's not forget that these passive "earners"/investors make room for others looking for a job in their previous field(s).

tatupu70 says

Who cares?? Other than being nostaglic, all that matters is real income and
productivity. Both of which have risen significantly since the 1940s. Fiat money
is a red herring that diverts people from the real issue. It's almost
meaningless in the big picture.

LOL, now you want to pretend distribution is not a problem so long as the whole pie is growing . . . aren't you sounding like what you accuse the trickle-down guys of? Fiat Money is the worst trickle-down scheme: give gobs of money to the banksters on Wall Street, and somehow some of the money would trickle down to the little guys on Main Street. In reality, that doesn't happen in terms of purchasing power. Unlike low taxes that promote higher productivity that grows the pie, whereas given a existing level of production, printing money and giving it to some cronies is a zero-sum / negative-sum game at the expense of the rest of the population.