patrick.net

That man in an example is just a middle man leech on society... Worthless.

Krugman also makes this argument that rent-seeking is fine as long as the rent-takers spend their money on luxuries and whatnot.

Stiglitz has a different thesis and I side with him.

http://www.cepr.net/index.php/blogs/beat-the-press/krugman-versus-stiglitz-on-inequality-and-economic-growth

One thing about the Krugman argument I can pick out is that our economy is healthier if we build and sell 20 middle-class Hyundais vs. 1 upper-class Ferrari -- a given dollar of consumption does not result in equal wealth creation -- goods and services -- in the economy.

Well, until gasoline shortages arise and AGW kills us at least, but the point is luxury goods have a lot more embedded labor, which results in a lesser amount of total wealth for all when they are created.

I first noticed this looking at some mansion's ornate walk-in closet with some rather involved woodwork for the central wardrobe armoire thingy that held ties and whatnot. I was thinking that sure took a lot of work, but damn if it wasn't completely useless.

The rightwing counter-argument is that without having Ferraris as an aspirational good, our present system of cowboy capitalism will collapse.

I disagree, since so much of our present system is just rent-seeking and not actual creation of new wealth anyway. The worker bees making $20-150k are where the wealth-creation happens in this economy.

Bellingham Bill says

The rightwing counter-argument is that without having Ferraris as an aspirational good, our present system of cowboy capitalism will collapse.

Buy them used when they cost 1/2 or less of their original price -even with only a few thousand miles on the clock.

Funny how this form of depreciation hasn't stopped rich people from buying brand new luxury cars.