Overestimating 'Inequality'

Paul Krugman is wrong.

Some Democrats seem to think that the very fact "inequality" even exists should be enough to lure the entire nation to the progressive cause. New York Times columnist Paul Krugman, in a recent piece imploring President Barack Obama to put emphasis on social justice in his State of the Union speech, argued as much, writing that "to focus on inequality is political realism. Like it or not, the simple fact is that Americans 'get' inequality; macroeconomics, not so much."

They may "get" it, but the message is probably a lot less powerful than Krugman imagines.

There's been a lot of talk about a new Pew Research Center poll that finds that 65 percent of Americans believe the divide between rich and poor has been increasing over the years. Not surprisingly, 90 percent of Democrats believe that government should do "a lot" or "some" to tighten the gap. Republicans (45 percent) believe that the government should do something about inequality, and 23 percent say it should do a lot.

The latter revelation is so awesome that Krugman punctuated it with an exclamation point. But really, why wouldn't most people want to "do something" to diminish this appalling rise in "inequality" they've been hearing about on the news every day for years? How wide the disparity really is—and how much it really matters in alleviating poverty—I'll leave to economists and the good citizens of the income-parity wonderlands of Laos and Bulgaria.

As with all things, wanting to "do something" will mean an array of contradictory policy measures. It is not, sorry to say, as easy as the false choice Pew ultimately offered in its poll: Do you want to raise taxes on the wealthy or do nothing? In fact, Pew might have done well to add another, more germane, question. Something along the lines of:

Which do you believe is a more effective way to reduce poverty, implementing policies that further redistribute wealth and close the inequality gap or fostering policies that create more class mobility for Americans?

Because poverty is not "inequality." Not even if Obama conflates the two, as he did recently when he argued that "a dangerous and growing inequality and lack of upward mobility" is the "defining challenge of our time." Democrats tether inequality and mobility because they, no doubt, realize that one still matters more than the other. Without a zero-sum fallacy to rely on, explaining why inequality is so "dangerous" isn't easy. And Americans don't believe, as Obama seems to intimate, that the poor are stuck in their circumstance without government.

As it turns out, new data—data that Obama is unlikely to share with Americans—show that little has changed over the past decades when it comes to mobility. The Equality of Opportunity Project's new study by economists Raj Chetty and Emmanuel Saez found that despite perceptions, social mobility in the U.S. is at the same level it was 30 years ago. Economists measured the ability of kids born in 1971 to 1993 to move into different income groups and found that a child born in 1971 in the bottom 20 percent of household earners had an 8.4 percent chance of ending up in the top 20 percent of earners by the time they hit their 30s. The chance of a child born in 1986 finding himself/herself on the same trajectory was slightly higher, at 9 percent. The strongest predictor of upward mobility, it turns out, is one that conservatives have been touting for years: Getting married—not higher levels of "social justice"—is the key predictor for success.

Granted, that mobility number could be a lot better. And it seems that movement is more compartmentalized today than it used to be—as success breeds success and vice versa. The report states that America is probably better described "as a collection of societies, some of which are 'lands of opportunity' with high rates of mobility across generations, and others in which few children escape poverty." So treating "the poor" as one entity rather than making distinctions among working-class families that have fallen on hard times, those stuck in the cultural continuum of poverty and those who need society to bail them out of bad choices might be good populist politics, but it's lousy for policy.

Yet in the political class's arms race on empathetic political rhetoric, it's starting to sound as if we don't believe that anyone in any of those groups can help himself anymore. This is a perverted view of the American experience. It's also false.

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  • Torontonian||

    I've stopped calling it "inequality"... I prefer the term "socio-economic diversity".

  • CE||

    Proglodytes hate inequality only because it is the result of freedom, which is the core of their hatred. They actually love inequality, so they can pander to the poor and use their votes to help get their greedy little hands on the wealth of those who create the most value.

  • Tony||

    You caught us. You're so smart.

  • kris713||

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    (Go to site and open "Home" for details)

  • timbo||

    Krugman is always wrong.

  • JWatts||

    "Paul Krugman is wrong."

    That's really stating the obvious.

  • newshutz||

    next Reason headline, "Dog bites Man"

  • timbo||

    The last gasps of failed politics are class warfare and nationalism.
    Start goose stepping.

  • american socialist||

    ... or Denmark. maybe you should get used to pickled herring...

  • JWatts||

    So you are saying Denmark is the last gasp of failed politics?

    I thought the failed socialist state of Somali is the classic example of failed politics?

  • american socialist||

    hi david, its pretty clever the way you slide the conversation from income equality to income mobility. did you think people weren't going to notice? the first has changed the second is subject to debate. i haven't read the study that you libertarians have been citing again, and again and again and again as evidence that, hey, nothings wrong, but i tend to doubt any study that doesn't consider the fact that there are more people in college and more women getting into the workforce than in the 1950s-- among other obvious examples that may skew this type of study.

    its not emphathetic rhetoric, david, its the fact that every time we have income levels that are skewed as they currently are and libertarians start to glad hand each other about how great it is to live in the land of freedom, some great economic calamity occurs that requires the government to come to the rescue.

    its nice that you mention bulgaria and laos-- i presume to denigrate societies that have low Gini coefficients. i think you've got it wrong... I've been to both countries and they are lovely places. but now that you've brought them up can we mention Somalia as the most obvious example of your type of libertarian utopia? let me know.

  • Calidissident||

    How is a failed Communist state dominated by Islamist clans an indictment of libertarianism?

  • JWatts||

    I'm guessing through a combination of ignorance and ideology.

    "The Somali Democratic Republic was the name that the communist regime of former President of Somalia Major General Mohamed Siad Barre gave to Somalia during its reign, after having seized power in a bloodless 1969 coup d'état. The putsch came a few days after the assassination of Abdirashid Ali Sharmarke, the nation's second President, by one of his own bodyguards. Barre's administration would rule Somalia for the following 21 years, until the outbreak of the civil war in 1991"

    It is quite ironic that a poster named "american socialist" doesn't realize that Somali is a classic example of a failed socialist state.

  • Butler||

    "can we mention Somalia as the most obvious example of your type of libertarian utopia?"

    DIE, STRAWMAN, DIE!!!

    BTW, Somalia is not a libertarian utopia, idiot. Libertarianism is a philosophy of peaceful cooperation without the initiation of force. That's not an apt description of Somalia.

  • american socialist||

    if you read carefully i'm making the point that it is the author that is invoking the strawman. does the experience of an ex-communist country and an Asian country racked by u.s. carpet bombing instruct us in any way about income inequality in the u.s.?

  • Calidissident||

    His point was that low income inequality is not inherently good, nor is relatively high income inequality inherently bad.

  • Square||

    And if anything, income equality via making everybody poor is probably inherently worse than income inequality.

  • Tony||

    Which is the goal of no one.

  • Square||

    Intentions =/= outcomes

  • Tony||

    Good thing outcomes can be changed on evidence. Why don't we attempt to solve the problem, and if it leads to universal poverty, we can take it back? Or are you just spewing ridiculous hyperbolic strawman bullshit in the service of doing absolutely nothing for the problem?

  • Michael S. Langston||

    Yeah Tony - keep claiming socialism doesn't lead to everyone being much poorer off - historical evidence be dammed.

    Next thing you know you'll tell us that just because you shot someone in the head with 9 MM does not mean you intended death.

    Honestly your lies are tiring - your idiocy... sometimes amusing, but in the end - your philosophy in every place ever tried has not just failed, but ended with innocents being killed by the millions.

    & even if hardly anyone gets killed, it always ends with everyone poorer except a very small minority of political elites.

    Therefore, to state that's not your goal is irrelevant because your stated beliefs lead to that end.

    Therefore Tony - you should really embrace your hatred of man and just be honest - your intention is a poorer world for every single individual.

    Though maybe it's just me... but it sure seems like cowardice to continually refuse to admit to the obvious consequences of your desired political system.

  • Rufus J. Firefly||

    That's the ultimate irony. When socialism fails it ends up killing millions. Literally.

  • 07Negative||

    Maybe that's the point? The dictators want to weed out much of the population for whatever reason. Not to sound all conspiracy theorist, but lets say resources.

  • John C. Randolph||

    Sure, Tony: I'm sure that this time would be different than every other time you shitheads have usurped power on the pretext that you wanted to make people equal.

    -jcr

  • newshutz||

    At this point what difference does it make between intended outcomes and obvious to foresee outcomes?

  • ||

    Perhaps he is insinuating that standard of living is more important than equality of income?

  • JWatts||

    Um yeah you said: "but now that you've brought them up can we mention Somalia as the most obvious example of your type of libertarian utopia?"

    You didn't actually know that Somalia was a failed Communist state, did you?

    ROTFLOL. That's priceless.

  • american socialist||

    i'd just mention that siad barre did manage to hold the country together as a socialist and anti-imperialist and that the country collapsed when he started taking money from ronald reagan. i'd take him over the libertarian lot they have there now in mogadishu.

  • Calidissident||

    LMAO

  • Square||

    Are they making a lot of headway on the civil liberties stuff over there, or just in defending everybody's right to earn a living as they see fit?

  • Brian||

    i'd just mention that siad barre did manage to hold the country together as a socialist and anti-imperialist and that the country collapsed when he started taking money from ronald reagan. i'd take him over the libertarian lot they have there now in mogadishu.

    The "libertarian" lot they have in Mogadishu?

    They are not libertarians.

    When you burn down a church, the people fleeing and screaming aren't atheists, and what they're doing isn't an example of an atheist society.

    When your communist nation collapses, the warlords that follow aren't libertarians, and what they're doing isn't an example of a libertarian society.

    IT amazes me that argumentum ad Somalium is so popular. If I were using it, I'd be embarrassed.

  • american socialist||

    i think you libertarians should stop being so bitchy whenever someone mentions somalia and just wear it the way this... Rothbardian... does. http://www.libertariannews.org.....n-somalia/

    Yeah man, the fact that Usam makes $2/day selling papaya and only made $1.90 under a obscure African nationalist just goes to show that raising capital gains tax rates in the u.s. is crypto-fascist

  • Sevo||

    american socialist|1.31.14 @ 6:22PM|#
    "i think you libertarians should stop being so bitchy whenever someone mentions somalia and just wear it the way this... Rothbardian... does. http://www.libertariannews.org.....n-somalia/"

    You should read what you post, idjit. It doesn't say what you claim.
    --------------------------
    "Yeah man, the fact that Usam makes $2/day selling papaya and only made $1.90 under a obscure African nationalist just goes to show that raising capital gains tax rates in the u.s. is crypto-fascist"

    Did you bring the strawman from home or pick it up on the way?

  • american socialist||

    so Mr. Rothbardian didn't put a chart in the middle of the article comparing Libertopia in 1991 with Libertopia in 2011 and then make a claim about how it might be because they are all miniarchist and shit? maybe you just don't scroll down when you read a by-line.

  • Square||

    So you have a situation in which no government at all and a situation of general lawless chaos is demonstrably doing better than the socialist state that was there before, and your take-away from that is that socialism is great?

  • american socialist||

    i'm glad at least one libertarian is man enough to defend somalian libertarians.

  • Square||

    If there are any, I will defend them, yes (verbally - I'm a pacifist).

  • JWatts||

    Damn you really are digging yourself a deep hole. From the article you linked to:

    "The Rothbardian doesn’t claim that the prosperous and law-abiding a society absence of a state is a sufficient condition for bliss. Rather, the Rothbardian says that however is, adding an institution of organized violence and theft will only make things worse."

    He doesn't claim the situation is good, you cretin, he claims that despite it being bad, it's still better than it was under Communism. And it's probably better than it will be if the West tries to create a central government.

  • Brian||

    All american socialists knows is, "libertarians want us to be like Somalia." Because that is what he wants to know. And he won't let a libertarian tell him differently.

  • american socialist||

    yes he makes an argument that the situation in somalia isn't applicable except, oh yeah, it is. none of which is an argument i would make because you can't reasonably be instructed on the relative merits of socialism or libertarianism by what happened in Somalia. its you guys that went down that particlar rabbit hole. but its nice to know that any mention of the libertopia that is somalia is bound to raise blood pressures amongst people that make arguments that laos and bulgaria are illustrative of what happens when third world countries try not to become shithole oligarchies.

  • Square||

    "you can't reasonably be instructed on the relative merits of socialism or libertarianism by what happened in Somalia"

    I'm confused. Weren't you the one who brought it up?

  • Brian||

    american socialist:

    that laos and bulgaria are illustrative of what happens when third world countries try not to become shithole oligarchies.

    Actually, the author said:

    How wide the disparity really is—and how much it really matters in alleviating poverty—I'll leave to economists and the good citizens of the income-parity wonderlands of Laos and Bulgaria.

    In other words, he said that Bulgaria and Laos show that social well being and poverty alleviation are more complex than Gini coefficients. You're straw manning.

  • Eggs Benedict Cumberbund||

    You must be into anal sex 'cause you are getting ass raped continuously in this thread. By all means keep it up. High entertainment value.I loved it when depraved collectivist come over to play.

  • Brian||

    american socialist:

    i think you libertarians should stop being so bitchy whenever someone mentions somalia and just wear it the way this... Rothbardian... does.

    Translation: even though it's an incoherent argument, I'd really like you to pretend it's a good one, anyway, and go on the defensive.

    Sorry, but I'll just stick to pointing out how it's a stupid argument.

    Saying that Somalia is a libertarian paradise is like saying Detroit is a libertarian paradise, because they've had to cut government services. As if democrats didn't create the mess Detroit is.

    If you want to believe the people fleeing and screaming a burning church are demonstrating atheism, go ahead. It says a lot more about how you think than anything you're saying about anyone else.

  • Rufus J. Firefly||

    Fuck.

    Who's this guy?

  • ||

    some great economic calamity occurs that requires the government to come to the rescue.

    Isn't "requires" an assumption?

    GM doesn't get a bailout and the people aren't just going to move out of their homes and into the street to starve or freeze.

    I will admit that the Freddie Mac people may, but they were overseen by HUD to begin with.

  • Calidissident||

    And of course the government never plays a role in causing these calamities

  • american socialist||

    so calvin coolidge and george w. bush are socialists? i never knew i had such friends in high places.

  • Calidissident||

    Coolidge didn't cause the Depression, and Bush might not be a socialist but he's closer to being one than he is a laissez-faire capitalist

  • american socialist||

    LMAO

  • Sevo||

    american socialist|1.31.14 @ 6:02PM|#
    "LMAO"

    Only slightly more ignorant than "Yo Moma!"

  • american socialist||

    you guys did it first... see comrade caldissident.

  • Calidissident||

    You described the rulers of Somalia as libertarian. There's nothing to say to someone like that besides laugh, because anyone who believes that is either too stupid or too deluded to debate rationally.

  • Square||

    The government demonstrably made the Depression worse with short-sighted knee-jerk protectionism that caused markets to collapse and stagnate ever further than they already had.

    Sometimes bad things happen and it's not actually any one group of people's fault. In the 1930s, the stock market had crashed AND there was a devastating drought in the Midwest. Europe was half destroyed from WWI and was about as economically dysfunctional as all get out. It's not a failure of free market Capitalism - Socialism was failing just as catastrophically all over Europe at just the same time.

  • Rasilio||

    Actually Bush and every president since at least Johnson would be most properly termed a Fascist**, at least economically with the possible exceptions of Carter and Reagan.

    **Pleaqse note I did not say Nazi, I did not invoke National Socialism, death camps or any of the other atrocities of Hitler, I am referring very specifically to the economic system and only to that economic system

  • Eggs Benedict Cumberbund||

    Maybe little "f" fascist would have been more appropriate.

  • CE||

    ...can we mention Somalia as the most obvious example of your type of libertarian utopia?

    Oh my gosh, now critics of liberty are bringing up Somalia as an example! Since we have no rejoinder, and no experience in dealing with this clever example, I guess we'll have to give up.

  • ||

    "Without a zero-sum fallacy to rely on, explaining why inequality is so 'dangerous' isn't easy."

    I have tried to argue this point to leftists before. It's frustrating because when I try to explain the fallacy, I can see the moment when their eyes glaze over and they have already decided that I must hate the children, women, blacks, and eat puppies. It seems their brains cannot, or will not, process the idea that the economy is not a zero-sum game.

  • american socialist||

    Do you think that the Leftists you argue with could be quite aware of this and just would prefer to live in a well-ordered socially-advanced country with a GDP inrease of 2% as opposed to an oligarchy with high crime levels, pockets of grinding 3rd world poverty that has a GDP increase of 5%. maybe your problem is that you have an inflated sense of your own ego and no one wants to argue with you.

  • Calidissident||

    False dichotomy much?

  • american socialist||

    The poster's point was to say that Leftists don't understand economic growth. well, i do andi'd still prefer to live in a social democracy with good infrastructure and quality of life as opposed to one that concentrates wealth in the hands of the 0.0001%

  • Brian||

    i do andi'd still prefer to live in a social democracy with good infrastructure and quality of life as opposed to one that concentrates wealth in the hands of the 0.0001%

    Since you live in a social democracy, how's that working out for you?

  • Tony||

    It just needs to be said that you guys really, really can't argue as well as you think you can. I mean this in the most respectable possible way, but it very much seems that the only ones of you who have gone to college are engineers.

  • Free Society||

    False dichotomy, equivocation fallacy and ad Hominem attack, respectively attached to each progressive argument in this thread. Teach us more about how to debate, Tony?

  • Tony||

    I couldn't have caricatured it better myself.

  • Free Society||

    I named three specific arguments made. One such is yours.

  • Brian||

    Tony:

    It just needs to be said that you guys really, really can't argue as well as you think you can. I mean this in the most respectable possible way

    Considering that your arguments are based on fallacies and inconsistencies, and contain almost constant factual errors, I'll take that in the most respectable possible way: an unintended compliment. Thanks.

  • Rufus J. Firefly||

    This from the one guy that systematically gets his ass handed to him with reason, facts and logic only to be waved off with the flick of a hand and a 'no, because I say!'

    "would prefer to live in a well-ordered socially-advanced country"

    Yeah, through force and control.

    When does comedy hour end?

  • pogi||

    IOW, people who have acquired knowledge that has an application in the real world of employment instead of a $100K degree in Gender Studies (with that ever popular Psych minor), leading to exciting career opportunities in food service and bookstores.

    Tell me, does every socialist-leaning nitwit who "earns" a degree in some socialist-leaning nitwit field of study get issued that requisite poster board along with the useless degree at graduation so that they are prepared for "tomorrow's challenges", like protesting "inequality of outcomes" or having to pay back their student loans on that salary they're earning as a coffee waiter/waitress at Starbucks?

    I feel no particular need to subsidize a lack of intelligence or personal initiative that leaves some earning less than I do. Envy and forced equality is not a system of governance that lends itself to long-term happiness or sustainability.

    Oh, yeah. I went to college but I'm not an engineer. Dipshit.

  • Red Rocks Rockin||

    It just needs to be said that you guys really, really can't argue as well as you think you can.

    Considering how much I destroy you on a routine basis, I'll take that bit of bitchiness as a compliment.

  • OneOut||

    Fuck you idiot.

    If you truly understood economic growth you would know that the way to achieve your "supposed" goals is to do the opposite of what your ilk propose.

    You don't understand shit.

    And also , fuck you for saying that we have "3rd word pockets of poverty" in this country. Our poor have A/C and many of them are fat.

    Dipshit.

  • John C. Randolph||

    Leftists are entirely bereft of any understanding of economics. That's why you say such idiotic things.

    -jcr

  • JWatts||

    " well-ordered socially-advanced country"

    Isn't that just the classic description of a Fascist state?

    Hey, but at least the trains run on time.

  • american socialist||

    yes, cult-like libertarians frequently conflate modern day Scandanavia with fascism.

  • Sevo||

    american socialist|1.31.14 @ 6:04PM|#
    "yes, cult-like libertarians frequently conflate modern day Scandanavia with fascism."

    And idiot lefties claim it's not.

  • JWatts||

    I wasn't conflating the two. I was referencing your specific use of the phrase " well-ordered socially-advanced country", which is pretty similar to how Fascism was described in the 1930's.

  • Calidissident||

    Did Scandinavia become wealthy because of socialism, or did they become socialist after becoming wealthy?

    Furthermore, in the case of Denmark, their economy is freer than the US in pretty much every way except spending and taxes, and is ranked higher overall on indices of economic freedom.

  • Free Society||

    yes, cult-like libertarians frequently conflate modern day Scandanavia with fascism.

    Unthinking socialists frequently conflate Scandanavia's high resource+low population situation with the government largess that grew up around that wealth.

  • ||

    You want to argue with me (YAY ego).

    I think the people with the inflated sense of ego are the ones that believe the force of government should be used to confiscate the legally acquired property of others because they believe they know how spend it better than the actual owners.

  • OneOut||

    You show me one pocket of third world poverty that exists in this country and I'll get sarcasmic to suck your dick.

    Idiot.

    Our poor people have A/C and are fat.

  • JWatts||

    "You show me one pocket of third world poverty that exists in this country and I'll get sarcasmic to suck your dick."

    Good Luck, an ideologue will always just move the goal posts around, rather than admitting their wrong when making such ridiculous claims. It's inherent to their psyche to never admit that they made a statement that's outlandish and unsupportable.

  • Rasilio||

    There is no grinding 3rd world poverty in the US and your claim that there is shows either how stupid or how disingenuous you are.

    Once income transfers are included even Americans at half the poverty level would be significantly above middle income in 3rd world countries

  • Sugarsail||

    Lefties exhibit unquestioning cult-like paranoid adherence to their ideologies, which psychologist James Hillman points out is "incorrigible". You can't win an argument with a liberal anymore than you can convince a UFO conspiracy guy that aliens aren't among us.

  • american socialist||

    yes, yes... back at you.

  • ||

    The strongest predictor of upward mobility, it turns out, is one that conservatives have been touting for years: Getting married—not higher levels of "social justice"—is the key predictor for success.

    I wonder if that's the more traditional 'stop gallivanting, get a job, get a car, get a house, have some kids' kind of marriage or the super-equal, 'My brother and brother-in-law bought a loft together' kind of marriage?

    Not to say that one is right and the other wrong but I find the potential for the notion that 'Now that the government issues us licenses, we can prosper.' to be very puzzling.

  • Square||

    Studies have shown the same trend with same sex unions as well (moreso actually - committed gay male pairs are the most upwardly mobile of all groups).

  • JWatts||

    Yes, that would make sense. A stable marriage reduces expenses and creates an incentive for long term wealth accumulation. Children are an expense. So a committed gay couple, who are much less likely to have parenting expenses, are probably going to perform better than a normal heterosexual couple.

  • DarrenM||

    Long, but good article. The title is not really accurate.

    http://mobile.nytimes.com/blog.....blogs&_r=0

  • TucsonNotLiberal||

    Yet again, Krugman shows that he will elevate or defend any rhetoric this administration puts forth. He is the nodding bobble head doll on Obama's desk. He deserves exactly that much professional credibility.

  • newshutz||

    I think that is unfair to the bobble-head.

    Eventually, a bobble-head will stop nodding.

  • ||

    I was gonna say that the bobble-head isn't vigorous enough or low enough. More like a drinking bird.

  • TucsonNotLiberal||

    So will Krugman, the minute the "other" party takes the house.

  • TucsonNotLiberal||

    White House

  • OneOut||

    I used to watch Krugman on the Sunday talking head shows before Obama shot down Hillary.
    he was pure "Hillary as Queen" until she lost to Obama. Without missing a beat he bowed to Obama.

    But alas. It was too late. He had championed Hillary too deep into the primary that Obama refused him his desired appointment.

    Poor krugman. No vaunted title and yet he had touted the liberal economic policies so strongly that he couldn't possibly backtrack and regain any respect from other, mainstream economist, so he has just doubled down.

    Krugman, the people's (without any economic education) economist !

  • Free Society||

    There are few men in history who can match Krugman's ability to be so often and consistently wrong and still be given popular credibility. The man is genius.

  • CE||

    You can fool some of the people all of the time.

  • Free Society||

    Krugman's false premises and bad arguments, whether wielded by him or other populist propagandists, fools most people most of the time.

  • Rufus J. Firefly||

    Not according to this prof of critical thinking who thinks Krugman is more right than wrong.

    http://thenonsequitur.com/

    Love how he cherry picks the Godwinning thing. In fact, how he cherry picks and goes into critical thinking overdrive.

    Arrogantly as well.

  • Eggs Benedict Cumberbund||

    Paul Erlich(sp?)

  • Eggs Benedict Cumberbund||

    Paul Erlich(sp?)

  • Sugarsail||

    The progressives imagine equality as everyone having the same amount of material possessions. That's not what the founding fathers had in mind. Equal opportunity and equal amount of stuff isn't the same thing.

    And you will never hear a progressive use the word "earn" because it undermines their notion of equality, which is not conditional on earning.

  • Free Society||

    The progressives aren't wrong because they diverge from the opinions of the founders. They're wrong because what they propose is fallacious and immoral.

  • SusanM||

    What would you say to a prog who says that social and economic inequality means unequal opportunity?

  • Square||

    That it's not a necessary correlation. Economic freedom necessarily means income inequality, but income inequality doesn't necessarily mean unequal opportunity.

    Equal opportunity to me, however, is a definite problem. Coming from a working class background, I can definitely say from my own personal experience that the playing field for individuals born into wealthy families vs. those who weren't is not level by any stretch of the imagination.

    However, there's more social mobility in a free market than in an unfree market, and it is almost certainly the least of the various evils we have in front of us.

  • Eggs Benedict Cumberbund||

    Difference in playing fields between middle class and the wealthy is not enough to matter a great deal. It's more on the order of just being a pain in the ass.

  • Free Society||

    What would you say to a prog who says that social and economic inequality means unequal opportunity?

    I would ask them upon what they base this assertion. And how it is that the probabilistic properties of nature entitles them to plunder their neighbors.

  • David_B||

    Equality = Every person has the opportunity to perform to the best of their inherent abilities.

    Leftist Equality = Every person must be the same regardless of their inherent abilities.

  • Free Society||

    Leftist Equality= every person is morally entitled to the productive capacities of those who produce more

  • newshutz||

    you forgot:

    except for those in charge that get to be more equal than others

  • Free Society||

    In their heads, they're in charge. The government is 'the people' or something. They talk about libertarians being the brainwashed pawns of rich people, while they vote away their neighbor's life, liberty and property and mistakenly believe they come out ahead in the bargain.

  • Clegg||

    The mobility study is interesting, but it is "tangential" data. Primary data shows that after we switched from progressive to uniform taxation (circa 1975) America's middle-class started shrinking and never stopped shrinking. Where did that former middle-class wealth go? It trickled up to the top 1%. Here's the data:

    http://www.cbpp.org/cms/?fa=view&id=3629
    http://microclesia.com/wp-cont.....gain_0.jpg

    Other disturbing socio-economic trends:

    1.) After 1975, the top 1% has grown by 250% while the middle class in total has grown by just 38% (and mostly all of that at the upper rungs of the middle-class).

    2.) 1 in 5 Americans are now on food stamps - more than at any time since the program started.

    3.) 77% of families are living paycheck-to-paycheck, with little or no savings.

    4.) Fully HALF of all American children will be on food stamps before their 18th birthday.

    ... (more)

  • Calidissident||

    Since when did the US abandon progressive taxation? And what (significant) tax cuts were there in 1975? I love how when making this argument, progressives focus everything on marginal tax rates (not even taxes actually paid) and completely ignore the massive increase in government spending, growth of the bureaucracy, increase in regulation, and bad monetary policy that has occurred in the last few decades.

  • Clegg||

    Talking top marginal rate. In the 50s and 60s, we were at 91%. By 1975, we were at 70%. And by 1987 we were at 39%. I call 1945-1970 "progressive". Today, not so much.

    Nobody is ignoring govt spending and massive govt bloat. And I agree with you -- "bad monetary policy" is what has allowed the 1% to confiscate nearly 20% of 99% wealth over these last 35 years, a trend that will continue, supported by "bad fiscal policy".

  • Rasilio||

    America has the most progressive taxation of any OECD country, by a pretty significant margin.

    Primarily this is because we do not have a VAT but our effective tax rates (not top marginal rates which tend to be rather meaningless) are more progressive than average as well

  • Clegg||

    Yes, of course. My use of the word "progressive" is in a 1950-1970 context with top tax rates of 80-90%. By contrast, nothing we do today comes close. And I would think, when you factor in VAT, there are numerous countries far more "progressive" than the USA -- Scandinavian, NZ-Aus, other Euro-zone, etc..

  • John C. Randolph||

    You're attributing the loss of the middle class to tax policy, while ignoring the fact that Nixon enabled unrestricted inflation by reneging on the Bretton Woods treaty in 1971. Inflation favors borrowers at the expense of savers. Middle class savers got robbed, rich borrowers got the loot.

    -jcr

  • Clegg||

    Exactly! There are a number of reasons why the middle-class has been decimated over the last 35 years, but they ALL come back to FISCAL POLICY. Tax policy is just one of many fiscal avenues that can be engineered so that our middle-class returns to a reasonable share of national wealth.

    In the mid 70's, the 99% possessed 80% of the nation's wealth. By 2020, the 99% will possess 60%. When polled, the vast majority of people think 80% is closer to a proper fiscal-social distribution - this isn't an arbitrary number.

    http://www.discoversociety.org.....-how-it-is

    And just as fiscal policy has allowed the largest super-wealth trickle-up in U.S. history over the last 35 years, so fiscal policy can be aligned to reverse that trend.

    Do we have the political will to make these changes? It probably doesn't matter. The political machine is run by the 1%, so it's doubtful that anything will change. The 1% will keep drinking the milkshake of the 99% until the wealth gap becomes so egregious (45%? 50%? 60%?) that the 99% will say "enough", and take some form of constitutional action.

    Ultimately, this is more than just "policy". It's a fascinating study in social-economics, tribal dynamics, the psychology of fairness, ruling class power, and an exercise in defining our shared values a nation.

  • Clegg||

    5.) The mobility study doesn't address the fact a broad swath of America's middle-class continues to die, and since 1978 has declined 18%.

    http://big.assets.huffingtonpo.....lass_6.png

    6.) Today, one family of 6 possesses more wealth than the bottom 40% of Americans combined. Today, just 85 people possess the same wealth as the bottom 50% living on the planet. We are approaching a national and global oligarchy.

    http://www.latimes.com/busines.....z2qxqupJTl

    7.) Household savings rates are today at their lower moving average in U.S. history (compare with China at historically high rates).

    8.) From 1945-1980, America had the highest GDP in the world, by far. Today, we're #12, and falling.

    9.) Today, we have the highest U.S. poverty rate since they started keeping track (1958).

    In October 2013, Nobel laureate Robert Shiller said "rising economic inequality in the United States is the most important problem that we are facing now today."

    The trend data since 1978 points to a systematic decimation of our middle class, irrespective of "mobility". Wealth has clearly not been "trickling down" since the late 1970s. It has been trickling up. Actually more like a fire hose than a trickle.

  • JWatts||

    You know you really aren't going to impress anybody with a cut and pasted copy of your Talking Points. Try some original thought, not what was emailed as a set of counter points.

  • Clegg||

    ** 8.) GDP/capita (CIA World Factbook - 2012)

  • JWatts||

    We are 8th according to the CIA fact book and we weren't number 1 in GDP/capita from 1945 to 1980 either.

    Monaco has always been higher than the US on a GDP/capita basis.

    And have you bothered to look who is ahead of us?

    Small, oil rich countries or havens for rich people.

  • Clegg||

    According to Nationmaster, we are now 13th.

    http://www.nationmaster.com/gr.....per-capita

    And, yes, in the post-war era, we were #1. Here's the list in 1950 if you're interested:

    USA
    Swiss
    NZ
    Venezuela
    Australia
    Canada
    Sweden
    Denmark
    Netherlands
    Belgium
    France
    Argentina

  • OneOut||

    7.Household saving rates bla bla bla...

    Let's raise their taxes even more and that will fix that problem !

  • Clegg||

    In fact, a progressive tax policy enabled the largest savings rate in modern history. It peaked around 1982, as the uniform tax rate took hold. Since 1982, the moving average savings rate has been declining (today at it's lowest in modern history)

    http://www.tradingeconomics.co.....al-savings

    What many don't understand is that, with a maximum tax of 80% on windfall profits, NOBODY paid anywhere near that kind of tax. Instead, it was re-invested into American infrastructure, building the most vibrant middle-class the world had ever seen (1945-1980).

    When our uniform tax took over, the middle class started dying, and continues dying to this day.

  • Calidissident||

    "What many don't understand is that, with a maximum tax of 80% on windfall profits, NOBODY paid anywhere near that kind of tax. Instead, it was re-invested into American infrastructure, building the most vibrant middle-class the world had ever seen"

    Considering that tax revenue as a % of GDP was virtually the same from 1980-2010 as it was from 1950-1980, and government spending significantly higher, I highly doubt that explains what you think it explains.

    *And if you don't believe me, do a little math
    http://www.presidency.ucsb.edu/data/budget.php

  • Clegg||

    I don't doubt your math, but you're missing the more important metric. When the highest socio-economic class rises disproportionately faster then all other classes, we weaken the foundation of the country. It's simple math.

    If the high-wealth class keeps rising at today's disproportionate rate, we eventually end up with an oligarchy (70% of all wealth owned by 1% by 2080 at today's slope imbalance).

    From 1945 to 1980 (ish), ALL socio-economic class incomes rose at the SAME rate. Countless millionaires were minted during this period, but NOT at the expense of middle-class and lower-class income growth.

    After 1980 (ish), that all changed. The incomes of the very highest wealth class started rising radically faster than all other classes.

    http://www.cbpp.org/cms/?fa=view&id=3629

    During this time, the middle-class has shrunk by 18%. And 1% incomes continue to rise in drastic disproportion to the 99%.

    http://big.assets.huffingtonpo.....lass_6.png

    Do the math. In 1976 (the peak of middle-class health), the top 1% possessed 20% of national wealth while the bottom 99% possessed 80%. Today, the 1% possess 36%, while the 99% has fallen 15%. This is entirely a result of grossly dissimilar income growth curves, which began after our switch to unitary taxation. Economists call this "The Great Divergence".

  • JWatts||

    "In fact, a progressive tax policy enabled the largest savings rate in modern history. It peaked around 1982, as the uniform tax rate took hold. "

    Your not going to get any traction when you start out with such a gross distortion of the truth. The US tax code is not uniform, it is highly progressive.

  • Clegg||

    Hehe. The 1945-1975 tax code WAS "highly progressive". Today, what's called "progressive" is anything but.

  • Clegg||

    Look at tax code in 1970, and tax code today. Tell me which one is the "highly progressive" policy:

    http://currydemocrats.org/in_p....._rates.png

    True progressive taxation is often associated with systems with a far lower Gini Index, like Scandinavian countries and NZ. But, technically, you are right -- any tax code that has income-proportionate rates is "progressive".

    But as for today's U.S. tax code being "highly progressive". No.

  • OneOut||

    In fact, a progressive tax policy bla bla bla bla

    If you continue to increase the taxes of people as they strive to move up the socio economic ladder, you necessarily make it harder for them to climb the ladder.

    What part of common sense do you not get you dumb fuck ?

    3rd wold pockets of poverty in this country. Idiot little college puke with no real world experience is what you are.

    You stupid fuck. Our poor have A/C, flat screen TVs, many own cars, and many of them are fat because they eat too much.

    Stupid ass.

  • Tony||

    "Fuck your stupid direct presentation of correlations, my kindergarten economics platitudes, however completely contradicted by reality, trumps that bullshit."

  • OneOut||

    No Tony.

    Fuck you and your " I'm a law student", idiotic sense of self delusions of grandeur.

    Get back to us about 10 years after you have left the world of academia and learned how the world really works. It would be interesting to see if you are honest enough at that point to admit how childish and naive you sound today.

    Here's a lesson for you Tony.

    My fifth semester econ professor told the class a story one day. He asked the A students to all raise their hands. The he asked the b & C students to raise their's. He then told the A students they should be very nice to the rest of us because his experience in 20 years of teaching economics was that 90% of the A students wound up working for, and running the businness' of, the 20% of the B and C students.

    I brought a pencil sharpener to the final and rented it out for $5 per pencil.

    You should learn from that Tony.

    I don't have high hopes.

  • Clegg||

    College Dropout. Bootstrapped numerous tech companies. A member of the 0.3%. Sure, I'm a dumb fuck, but I can read data, and the data is clear:

    Income growth slopes of ALL socio-economic classes from 1945 to 1978 were in virtual PARITY -- which is why these years were the strongest middle class in world history.

    Since we departed from a progressive tax (80% max rate), the top 1% (me) has seen their income growth slope increase about 10X over the middle-class.

    The only healthy society is that which shares income growth equally. The period 1945-1978 created myriad millionaires and billionaires, but NOT at the EXPENSE of the MIDDLE CLASS.

    Go bury your head in the sand. It doesn't change the reality that the middle class of 1978-2013 has lost 9% of its members to the lower class.

    And why the absurd jr. high school name-calling? Is that the only way you can communicate?

  • Calidissident||

    I'll take you seriously when you actually respond to the points I made at 7:22 and 7:48 instead of ignoring them because they don't fit your narrative.

  • Clegg||

    I did reply.

  • OneOut||

    So are you a member of the top 3% or the top 1% ?

    Maybe you should get your story straight.
    Even if you are a member of either one ( which I doubt since you can't seem to remember which one it is ) it has zero bearing on your understanding of why we are where we are as a country. Simply because you came of age at a time when the internet was growing exponentially and swept you along does not mean that your economic politics have merit. Cherry picked data gathered by a "dumb fuck" ( your words, not mine) can say anything one wants it to.

    If we are supposed to listen to your words of wisdom based upon you being in the 3%,( or is it 1% ?), also means that you should sit down and shut up and listen to Mitt Romney when he speaks to you.

    "Spoken by a University graduate with 30 successful years in a dynamic commodities market place who can probably buy the "tech startups who you
    fail to name" out of his front pocket."

  • Clegg||

    0.3%

    Nowhere did I say otherwise.

    David, the CEO of Reason, and I have had cordial chats at TED conferences over the years. Too bad all of the folks here aren't as REASONable.

    Commodities, huh? A trader. A money changer. Not what I call a creative career. Sounds god awful boring.

  • Clegg||

    Oh, maybe you missed this in your math for business class, but someone in the 0.3% category is also in the 1%. No contradiction.

  • Eggs Benedict Cumberbund||

    Don't make hard to validate claims on the net especially when they are self serving.

  • Clegg||

    Then ignore my personal claims, and deal with my thesis. I'm a nobody, but my concerns deal with the survival of our nation and our personal freedoms and liberties. You can't have either when you're enslaved to an oligarchy.

  • Malkavian||

    Oligarchy can't enslave you without government doing the actual enslavement for it.

  • Clegg||

    PRECISELY MY POINT !!! thank you.

    And how does government facilitate the growth of oligarchy? Through fiscal policy.

  • Malkavian||

    What's the mechanism for growth of oligarchy through fiscal policy? If Bill Gates sells me a copy of Windows OS, what's the problem with letting him keep the money i willingly gave him? Why should he hand it over to the government, the government didn't make the Windows OS.

  • Clegg||

    "Why should he hand it over to the government, the government didn't make the Windows OS."

    We ALL "hand over" a sizable amount of our income in taxes. We're paying others to defend our country, teach our kids, delivery our utilities, maintain our roads, make and keep our laws, etc... We can argue over various federal and state programs, but that’s tangential to a study of national wealth distribution.

    The correct question is: how do we structure our tax policy, and other fiscal policies, to maintain a healthy balance of wealth among classes? Which begs the question "what is a healthy balance, or "range" of economic balance, for the USA?”

    Fiscal policy DETERMINES the percentage of wealth which flows to different classes. The healthy amount of wealth flowing into the 99% class from 1945-1975 was no ACCIDENT. From 1975 until today, the hemorrhaging of wealth being siphoned from the 99% into the 1% is NO ACCIDENT. It's not like the 99% suddenly got lazy after 1975, or the 1% worked harder. The massive flows of wealth into, AND out of, the 99% was (and is) engineered by SOCIAL and FISCAL POLICY.

    The first step is to agree upon a healthy "range" of wealth distribution. The second step is to establish fiscal policy that assures we stay reasonably within that range. If lawmakers think that X% of U.S. wealth in the hands of 1% is healthy, then our fiscal policy will assure that X% of U.S. wealth will flow into hands of the 1%.

  • Clegg||

    Simplistically, there are two simultaneous dynamics at play. If you engineer too much wealth out of the hands of the 1%, you undermine the stores of capital required for smart, fundamental growth that creates jobs for the 99% (the extreme case is Marxist economic theory). Conversely, if you engineer too much wealth flowing into the 1%, you undermine the foundation of a healthy nation, which is the middle class. You want to find that (elusive and debatable) maxima point that optimizes 1% wealth while maintaining a strong and vibrant middle-class.

    Today, we've grossly overshot that maxima. We know this because of two reasons, (1) middle class wealth has fallen dramatically for 30 years, and (2) since 1975, the 1% has accumulated more wealth than at any time since before the Great Depression.

    The latest Pew studies show that a vastly larger number of people consider themselves low-mid or lower class compared with 20 years ago (a subjective sense of class, when shared by enough people, is just as "real" as any objective data). Caloric intake and flat-screen TVs are not primary indicators of wealth, prosperity, or well-being. A "reasonable" (maxima) distribution of wealth is the proper indicator of a nation's well-being, and by that metric we see the USA as an increasingly sick society. And getting sicker year by year.

  • Red Rocks Rockin||

    Since we departed from a progressive tax (80% max rate), the top 1% (me) has seen their income growth slope increase about 10X over the middle-class.

    What, no mention of the growth slope of government spending in that time? After all, Eisenhower had an inflation-adjusted budget of about $750 billion a year, and that was with half of it going to the military. FDR, at the height of the Depression, spent $150 billion a year, inflation-adjusted.

    Go bury your head in the sand. It doesn't change the reality that the middle class of 1978-2013 has lost 9% of its members to the lower class.

    The fact that you zero in exclusively on the tax rates from those two periods tells me that you have little understanding of the geo-economic complexities that got us to this point.

    Why focus on the tax rate, and not, say, the growth of women in the workforce, the effects of exponential inflation and credit on the CPI, or the growth of global markets that didn't even exist before 1978? Or are you simply an ideologue trying to get other people to pay taxes that you'd never dream of paying yourself?

    You remind me of PJ O'Rourke's observation that progressives are only willing to do good for others when a gun is pointed at their head.

  • Clegg||

    "If you continue to increase the taxes of people as they strive to move up the socio economic ladder, you necessarily make it harder for them to climb the ladder ... you stupid fuck"

    Review your U.S. economic history from 1945 to 1975. You'll find that massive numbers of millionaires were created. But the top tax rate was 80%. WTF? How could this be?

    Study the brilliance of Truman-Eisenhower fiscal policy. Recognize how such a policy kept ALL income slopes, of ALL socio-economic groups, in PARALLEL. Social HEALTH.

    Since 1980 the income growth slope of the 1% has accelerated 10x over that of the bottom 99%. This is crazy economics, and if we don't return to income growth slope parity, we will be hearing the word "oligarchy" more and more frequently..

  • Red Rocks Rockin||

    Study the brilliance of Truman-Eisenhower fiscal policy.

    What were the inflation-adjusted budgets of the Truman-Eisenhower administrations, again?

    This is crazy economics, and if we don't return to income growth slope parity, we will be hearing the word "oligarchy" more and more frequently..

    No one is stopping you or your fellow guilt-ridden liberals from giving more of your money to the Treasury. I'll even post the address if you can't find it in a Google search.

  • Clegg||

    Seriously? It's not about absolute budgets (inflation adjusted or whatever). It's about unhealthy wealth accumulation. Tell me, is it healthy that 1% of a nation accumulates 20% of the wealth? 30%? 40%? 50%? 60%? 100%?

    At what point do we adjust fiscal policy to limit the amount of wealth trickling up to a handful of modern Solomons? You tell me.

    And it's NOT about giving more to the government. You should study the 80% top tax rate 1950-1970, and why nobody ever paid that tax (!), and why Truman-Eisenhower fiscal policy engineered that 80% windfall tax -directly- back into the nation's infrastructure that we ALL share and use. It was brilliant, and middle-class freaking flourished.

    Since 1975, the middle class has been dying.

  • Red Rocks Rockin||

    Seriously? It's not about absolute budgets (inflation adjusted or whatever). It's about unhealthy wealth accumulation.

    Wny, because you say so?

    Tell me, is it healthy that 1% of a nation accumulates 20% of the wealth? 30%? 40%? 50%? 60%? 100%?

    You seem to presume there's a "perfect" level of where the top 1% should be. I'll be happy for you to tell me what that is and justify it using basic math and historical context.

    At what point do we adjust fiscal policy to limit the amount of wealth trickling up to a handful of modern Solomons? You tell me.

    You think I really give a shit how much money they take in? You sound like those people who bitch about how much athletes make.

    And it's NOT about giving more to the government. You should study the 80% top tax rate 1950-1970, and why nobody ever paid that tax (!), and why Truman-Eisenhower fiscal policy engineered that 80% windfall tax -directly- back into the nation's infrastructure that we ALL share and use. It was brilliant, and middle-class freaking flourished.

    I'm sorry you think the middle class flourished in a vacuum of high marginal tax rates and nothing had any other impact on that. That's your tunnel-vision, not mine.

  • Clegg||

    "You seem to presume there's a "perfect" level of where the top 1% should be."

    You don't seem to care that every year since the 1970s, 0.5% of American wealth has been trickling up from the 99% to the 1% class. That's not some "accident" of "free market" economics. That's a direct result of fiscal policy, DESIGNED to transfer wealth from the 99% to a tiny number of emerging oligarchs. YOu REALLY think this is "free market economics" at work? YOu really think fiscal policy has nothing to do with this unhealthy trend?

  • Red Rocks Rockin||

    You don't seem to care that every year since the 1970s, 0.5% of American wealth has been trickling up from the 99% to the 1% class.

    Stop deflecting. It's pathetic.

    YOu REALLY think this is "free market economics" at work?

    Of course not. The federal government is spending more as a percentage of GDP than any other time since 1948.

    Here's some more stats for your ass. The revenue-to-GDP ratio since the Truman era has averaged about 17.5% in a very narrow range. It's never gone above 20%, and has only hit 19% or greater eight times in that whole span, NO MATTER WHERE THE TAX RATES WERE SET.

  • Clegg||

    Good data point, but get back on point: what is a fair % of wealth for the top 1%? When does it become an oligarchy?

  • Red Rocks Rockin||

    what is a fair % of wealth for the top 1%? When does it become an oligarchy

    "Fairness" is irrelevant. The data on tax revenue and spending is indisputable.

  • Red Rocks Rockin||

    Since 1975, the middle class has been dying.

    Well, it's not just tax rates. This might have something to do with it as well:

    http://www.caseyresearch.com/l.....lation.gif

    You want the middle class to start coming back? You better be prepared to accept some deflation in conjunction with that, along with LOWER government spending.

  • Clegg||

    Good fiscal policy moderates government spending, while reinvesting (redistributing) windfall income back into the nation's infrastructure to benefit all, not just a few.

    Good fiscal policy moderates an over-accumulation of wealth into too few hands, which destroys the fabric of a nation. I can't tell you a percentage that defines "over-accumulation" but I can tell you that, at some 1% wealth imbalance point (40%? 50%?), the 99% will say enough, just as the peasants have done throughout history when told by the oligarchs to eat cake.

  • Red Rocks Rockin||

    Good fiscal policy moderates government spending, while reinvesting (redistributing) windfall income back into the nation's infrastructure to benefit all, not just a few.

    During your glorious era of middle class wealth, military spending was at least half of the federal budget, not infrastructure.

    The rest of your rant is coffeehouse bilge.

  • Clegg||

    At that point in history, defense spending was far more about rebuilding than expanding. Over time, after rebuilding, that percentage came down, and remains today around 20%, which I personally think is about 5% too high. And in a way, you prove my point about high marginal windfall taxes being reinvested into a shared infrastructure (which at that time included military rebuilding).

    And, as I said, if you have other fiscal policy ideas that will reverse the hemorrhaging of 99% wealth, please share them. Or explain why you think the 1% / 99% wealth ratio isn't a massive social problem.

    You asked, as I have, "what is a fair ratio?" I found a survey where people were asked the same question. Most define fairness far closer to 1% holding 20% of total wealth, rather than today's 1% holding 40%.

    http://www.discoversociety.org.....how-it-is/

    This isn't a arbitrary argument -- we know from history that there are ratios of class wealth that, once we start grossly violating (via imbalanced fiscal policy), must be adjusted back to a socially comfortable level. In historically egregious cases, that adjustment came through "extra-political" methods. In the USA, if the 1% wealth suck continues, it will probably come via constitutional means (because our politicians are no longer making policy to benefit the 99%).

  • Red Rocks Rockin||

    At that point in history, defense spending was far more about rebuilding than expanding.

    Sorry, but that's a load of crap. The whole point of the massive defense spending during the 50s-60s was to maintain a robust deterrent to Soviet ambitions.

    Over time, after rebuilding, that percentage came down, and remains today around 20%, which I personally think is about 5% too high.

    No, it came down because social welfare programs began to take up greater percentages of federal spending.

    http://www.usgovernmentspending.com/

    And, as I said, if you have other fiscal policy ideas that will reverse the hemorrhaging of 99% wealth, please share them,

    Most define fairness far closer to 1% holding 20% of total wealth, rather than today's 1% holding 40%.

    So what? Why not 10% and make it even more "fair"? This is the problem when Social Justice Warriors start getting into specifics--they can't define "fairness" beyond their silly arbitrary definitions.

    Or explain why you think the 1% / 99% wealth ratio isn't a massive social problem.

    It's not a social problem for me--I don't give a shit how much someone else makes, and neither do you.

  • Clegg||

    "So what? Why not 10% and make it even more "fair"?"

    Wealth distribution vs. national health is a well known econometric. There are a basket of countries that represent the healthiest nations on the planet today, but just about any metric (GINI, capital reinvestment stores, well-being indices, etc.). They are: Sweden, Norway, Finland, Denmark, etc.. Their 1% possess in the range of 25-28% of national wealth, similar to the USA in the 1950-1975 period.

    The U.S.A. is now approaching 40%, which is higher than at any time since the Great Depression. If you think we're on a healthy trajectory, then we disagree.

    "I don't give a shit how much someone else makes, and neither do you."

    Correct. I say "make as much money as you legally can!" My concern isn't about income. It's about wealth distribution and its impact on the overall health of a nation. Do you understand the difference?

    America's middle-class is dying, its wealth is being increasingly sucked away by a tiny number of people, and by ANY economic metric, this has reached an UNHEALTHY nadir.

  • Red Rocks Rockin||

    This isn't a arbitrary argument -- we know from history that there are ratios of class wealth that, once we start grossly violating (via imbalanced fiscal policy), must be adjusted back to a socially comfortable level.

    Heaven save us from the fantasies of social engineers.

  • Clegg||

    Are you that blind that you cannot see the profound depth of fiscal engineering that is going on under your nose at this very moment?

    As I've said, if you think engineering ever-increasing amounts of 99% wealth into the hands of the 1% is healthy, then we disagree.

  • Red Rocks Rockin||

    Are you that blind that you cannot see the profound depth of fiscal engineering that is going on under your nose at this very moment?

    Replacing one set of engineering with another isn't a solution. It's a managerialist idea that market forces can be manipulated to achieve the most ideal outcome and that other factors don't matter.

    The problem is that you believe that simply instituting a 1950s tax structure will solve all of our fiscal issues. You don't seem to have a clue about the limits of scale or the unique historical characteristics that occurred at the time which allowed that to happen.

  • OneOut||

    " the middle class started dying"

    The middle class started dying in this country the day Bill Clinton, with the help of a Republican Congress, signed NAFTA

    Signing a "free trade" agreement with a third world country is what started our middle class on the road to destruction.

  • Clegg||

    The middle-class started dying in the 1970s. And has continued to shrink ever since. A flat-screen TV does not wealth make (they are $200).

    http://big.assets.huffingtonpo.....lass_6.png

  • OneOut||

    " a flat screen tv does not wealth make"

    The topic of discussion wasn't wealth, it was your statement that " 3rd world pockets of poverty" you say exist in this country.

    I guess when someone realizes they have lost the discussion their only option is to move the goalpost.

    Third world poverty doesn't have A/C or flatscreens.

    I've never seen a third world pocket of poverty on TV with a bunch of fat people swatting flies from their ulcerated eyes as they watched their flatscreen TVs.

    Have you ?

  • Clegg||

    Um, I've never used the phrase "third world pocket of poverty". Not sure who you were responding to. Alas, I don't even agree with that phrase vis USA.

  • Eggs Benedict Cumberbund||

    American socialist made the 3rd world poverty claim.

  • AdamJ||

    About the time we closed the gold window an started massively incentivizing debt over savings.

  • Michael S. Langston||

    In fact, a progressive tax policy enabled the largest savings rate in modern history. It peaked around 1982,

    You likely don't realize... but you are actively and quickly, in the same argument, contradicting yourself.

    Up Thread you claim the end of progressive taxation in 1975 killed (and continues to kill) the middle class.

    Now you're claiming that progressive taxation which continued at least into 1982 is responsible for the middle class saving more money than anytime before.

    So... progressive taxes helped savings, while non-progressive taxes destroyed the middle class... all at the same time.

    As some else said to you - why not try thinking for yourself?

    Among other positive benefits thinking for yourself might do for you is it might well prevent you from positing contradictory statements literally within minutes of each other. Assuming minimal intellect, it should at least reduce that problem.

    Of course that's sort of what you get for believing what other idiots have told you.

  • Clegg||

    Huh??

    Let me simplify this for you:

    Progressive tax rate (1945-1980 ISH): Good for middle class, good for savings rate.

    Unitary tax rate (1980 ISH - present): Bad for middle class, bad for savings rate.

    After reviewing what I wrote, nowhere did I say or imply anything to the contrary.

  • Eggs Benedict Cumberbund||

    You certainly have correlation figured out.

  • Redmanfms||

    Gee, the inflationary degradation of the dollar and easy money policies beginning in the '70s din't have anything to do with the savings rate, now did it?

    No it was the lack of a more steeply progressive tax rate...

  • Clegg||

    Loss of "steep" progressive taxation led to declining household disposable income among lower and middle classes, and higher debt. Since 1970's, that "lost income" has trickled up to the top 1%, and continues to trickle up.

    The middle class is dying. You can't have a healthy nation without a healthy middle.

    http://big.assets.huffingtonpo.....lass_6.png

    In 1976, the bottom 99% possessed 80% of America's wealth, while the 1% possessed 20%. Today, the 99% possess 64% of U.S. wealth, while the 1% possess 36%.

    http://www2.ucsc.edu/whorulesa.....ealth.html

    Since we abandoned "steep" progressive tax policy, America has been transferring 1/2% of its wealth each year (since 1976) from the bottom 99% to the top 1%. If this continues, in 2080, the top 1% will possess 70% of American wealth, and the oligarchy will be complete.

    I'm happy to discuss any remedy to this ongoing disaster, but I'm convinced it starts with tax code.

  • Rasilio||

    Also lets not mention that prior to 1992 Fed interest rates had averaged close to 8% and had never gone below 5%. In 1992 the Fed cut the rate to 3% and eventually down to 1.5% and they never again rose above 5%.

    Since the Fed rates are the basis (either directly or indirectly) rates for almost all interest (both earned and paid) this has had the effect of significantly discouraging saving and encouraging spending.

    I think that just might have something to do with saving rates plummeting and personal debt levels climbing.

  • Clegg||

    Industrialized 1 yr interest rates worldwide are averaging between 1% and 3%. China is around 3%, an historical low return, with an historical high savings rate.

    http://china.deposits.org/

    The primary reason U.S. personal savings are the lowest in history is because far more young adults have more debt than the prior generation.

    http://www.theendofhistory.net.....lddebt.jpg

  • Calidissident||

    Because obviously the savings rate of China is relevant in a discussion on American economic history. Basically the same place.

  • Clegg||

    No, the decline in U.S. savings rate is just one of myriad symptoms of a dying middle class.

    Who is now America's largest landlord?

    http://seekingalpha.com/news/1.....all-street

    We no longer live in a republic. We live in an encroaching corporatocracy. Our liberties have been slowly eroded by a public fiscal policy increasingly defined by the very corporations and ultra-wealthy that most benefit by such laws -- FAR more than the common citizen -- and it grows more insidious year by year.

    Remember what Dwight warned us of in his "Military Industrial Complex" speech.

    http://coursesa.matrix.msu.edu.....ndust.html

    Our government is looking more and more like Cuffy Meigs, my Libertarian friends. And fiscal policy is one of the main REASONs why.

  • Redmanfms||

    We no longer live in a republic. We live in an encroaching corporatocracy. Our liberties have been slowly eroded by a public fiscal policy increasingly defined by the very corporations and ultra-wealthy that most benefit by such laws -- FAR more than the common citizen -- and it grows more insidious year by year.

    Remember what Dwight warned us of in his "Military Industrial Complex" speech.

    And your solution is what exactly?

    Because arguing that the lack of punitive taxation rather than the obvious problem of government power and shitty monetary policy makes you look like a fucking moron.

    If you really think returning to a 80% top marginal rate (which ended in the fucking '60s you ignorant buffoon) will somehow make the middle class more prosperous you are, well, a goddamned idiot.

  • Clegg||

    Thank you for your kind words.

    Before the 1970s, all boats were truly rising identically with the economic tide. But after we reduced the top tax rate from 80% to 39% (1970s), 0.5% of American wealth has been steadily flowing away from the 99% and into the 1%, every year. The loss of steep progressive taxation has been a windfall for the 1% and a disaster for the 99%.

    In 1976, the 1% controlled 20% of U.S. wealth. Today, the 1% controls 36% of U.S. wealth (a 16% increase in 30 years). At this rate of wealth transfer, by 2080, the 1% will control 70% of U.S. wealth (per Wolff, et al)

    Just three months ago, Nobel economist Robert Shiller said "economic inequality is the most important problem that we are facing now today." I'm happy to explore ANY changes to fiscal policy that will reverse this oligarchic hemorrhaging of 99% wealth into fewer and fewer hands.

    What are YOUR solutions? And what, historically, shows that such solutions will work? Highly progressive taxation WORKS to keep all socio-economic classes in income growth parity. Millionaires and billionaires are still created en masse, but NOT at the expense of the middle class.

    A highly progressive tax policy engineers the flows of wealth back into the hands of the lower and middle classes - the 99%. There are other ways to achieve this as well, but none as brilliant as the Truman-Eisenhower fiscal plan.

  • AdamJ||

    Debt encouraged by the govt, the Fed, and the corporations. Debt has crushed the middle class, not uniform taxes. Exponential growth of debt and regulation. Both caused or incentivized by our government.

  • Clegg||

    Since 1978, highly dissimilar income growth curves have decimated the middle class (largely a result of switching from progressive to unitary tax rates).

    http://www.cbpp.org/cms/?fa=view&id=3629

    http://big.assets.huffingtonpo.....lass_6.png

    Yes, debt has exacerbated our problems, but it is not the root cause. And in many ways, debt is a symptom, not a cause.

  • Redmanfms||

    You are going to have to actually draw a direct line proving that that the government taking less money from one group somehow magically makes another group poorer.

    As yet, you have completely failed to that, you just keep restating the same shit.

    Correlation is not causation, unless you can actually prove causation of "unitary tax rates" (which is fucking hysterical considering the U.S. still has the most steeply progressive tax system in the world) you are simply full of shit.

    What was it Hitchens said? "Exceptional claims require exceptional evidence."

  • Clegg||

    See above. After we reduced our top rate from 80% to 39%, roughly 0.5% of American wealth has been steadily flowing away from the 99% and into the 1%, every year. The loss of steep progressive taxation has been a windfall for the 1% and a disaster for the 99%.

    Causation is obvious. The brilliance of the Truman-Eisenhower fiscal plan engineered the top rates (60-80%) back into the critical infrastructure of this country, which directly benefited ALL socio-economic classes and kept income slopes in parity. This is VASTLY different than today's lightly taxed, under-regulated private hedge fund re-investment metrics.

    What are YOUR solutions? If we don't stop the oligarchic hemorrhaging of wealth flowing away from the 99% and into the top 1%, by 2080 70% of all U.S. wealth will be controlled by just a few people. What fiscal policies historically have prevented this disastrous outflow of common-wealth?

    Well-engineered, highly progressive taxation WORKS to keep all socio-economic classes in income growth parity. Millionaires and billionaires are still created en masse, but NOT at the expense of the under classes. Perhaps there are other ways to reverse our train wreck, but none I can find as brilliant as the Truman-Eisenhower fiscal plan.

  • Red Rocks Rockin||

    Well-engineered, highly progressive taxation WORKS to keep all socio-economic classes in income growth parity.

    Balanced, sub-trillion dollar federal budgets WORK to keep all socio-economic classes in income growth parity.

    See, I can play this game, too.

  • Clegg||

    See, it's not about higher taxes going to the government. That's not how our 80% top tax rate worked. It was a well-planed incentive to funnel windfall profit back into the hands of the middle-class. It worked brilliantly. Ita was TRUE trickle down.

    Since 1975, the middle-class has been decimated, while the top 1% has grown 16%, and continues to siphon 1/2% of 99%-class wealth, each year. You think that's healthy? We disagree.

  • Red Rocks Rockin||

    That's not how our 80% top tax rate worked. It was a well-planed incentive to funnel windfall profit back into the hands of the middle-class. It worked brilliantly. Ita was TRUE trickle down.

    And yet you still ignore the much lower nominal and inflation-adjusted levels of government spending.

    Since 1975, the middle-class has been decimated, while the top 1% has grown 16%, and continues to siphon 1/2% of 99%-class wealth, each year. You think that's healthy? We disagree.

    No, I just don't think the change in tax rates is the sole problem. That you're so manically focused on it is your problem, not mine.

  • Clegg||

    "No, I just don't think the change in tax rates is the sole problem."

    Great, at least you agree that it's one method of many that can be used to engineer our 99% back into reasonable health.

  • Red Rocks Rockin||

    Great, at least you agree that it's one method of many that can be used to engineer our 99% back into reasonable health.

    This idea of "engineering" is the fantasy of managerialists. Raise the tax rates all you want, it won't lead back to middle class wealth. That ship sailed during a period of very specific historical conditions. It's not my fault that you're intellectually incapable of confronting them.

  • Clegg||

    You fail to note that the healthiest country's today engineer their government within normal, optimal, historical wealth ratios. They do this via fiscal policy. Their ships are sailing with far greater health, and less debt, than the USA.

    We can achieve this optimum balance, but our lawmakers are no longer working for us. They are working for the 1% who continue to benefit at the increasingly dwindling 99%. Keep your head buried so you don't notice.

  • Red Rocks Rockin||

    You fail to note that the healthiest country's today engineer their government within normal, optimal, historical wealth ratios. They do this via fiscal policy. Their ships are sailing with far greater health, and less debt, than the USA.

    And you fail to note that not all countries which are doing the things you promote are achieving the same rates of success. Japan, for instance, takes in 10% more revenue to GDP than we do, but their revenue covers only their social security system and debt payments. Everything else is deficit spending.

    We can achieve this optimum balance, but our lawmakers are no longer working for us.

    Like I've said, it's the tunnel vision of the managerialist who believes an "optimum balance" can be achieved.

    Keep your head buried so you don't notice.

    Take your pathetic shaming tactics and shove them up your ass.

  • Red Rocks Rockin||

    The primary reason U.S. personal savings are the lowest in history is because far more young adults have more debt than the prior generation.

    Gee, I'm sure that liberals telling them, "Go to college and don't worry about taking out debt to get a degree!!" did wonders to keep their debt levels down.

  • Clegg||

    This isn't a "left vs. right" problem. Absurdist-oligarchic wealth accumulation is literally an issue of national survival. Please realize that the "left" and the "right" are powerless. The shots are being called by the political lobbies, paid for by the 1% class.

    The commercial news media is now controlled by just 6 corporations (Disney, Newscorp, etc.). The directors of those corps don't care one hoot about left or right politics. In fact, they are required by law to maximize shareholder profits, not report news. And the best way to maximize profits is to sell advertising. And the best way to sell advertising is to cater to a highly polarized political demographic (left or right, but NOT centrist!). Pick a political side and push the polarization as hard as you freaking can. Keep people polarized. Keep people thinking that their political party has power.

    But your political party has NO power. The power is in the hands of the 1%, the corporate lobbies, the corporatocracy, the military-pharma-auto- tobacco-financial-banking-hedge complex that Eisenhower warned us about.

  • Clegg||

    Our fiscal policies are being driven by the 1% class, to keep their wealth growing -- by sucking increasing amounts of wealth from the 99%. This isn't about class envy or some kind of marxist ideology. This is about the survival of America's middle class, which has been dying since the 1970s, when the top tax rate went from 80% to 39%. Where did all that additional wealth go? Into the hands of the 1%.

    http://big.assets.huffingtonpo.....lass_6.png

    http://microclesia.com/wp-cont.....gain_0.jpg

  • Red Rocks Rockin||

    This is about the survival of America's middle class, which has been dying since the 1970s, when the top tax rate went from 80% to 39%.

    Yep, that's it, just the drop in the tax rates.

    For how knowledgable you claim yourself to be, it's rather amusing that you can't stop hitting the same hobby-horse over and over.

    This shit didn't happen solely due to the drop in tax rates, and to claim that it is the primary cause is simply begging the question.

  • Clegg||

    Finally, you admit that "this shit" is happening. Of course the change in top tax rate is not the only reason. So we agree there's a problem. As for a solution, beyond changes to tax codes, what would you do?

  • Red Rocks Rockin||

    As for a solution, beyond changes to tax codes, what would you do?

    Realign government spending with its historic revenue-to-GDP ratios.

    Eliminate the Great Society.

    Eliminate or reduce DHS, Dept of Ed, DoD, and cut the remaining departments by 25%.

    Nerf the EPA.

    Make it harder to get into college, not easier.

    You want your glorious 1950s-60s economy back? Because those were the conditions that existed at the time, save for the military spending levels, which were half of all federal spending back then.

    As for income, if the feds won't realign their spending with the historic revenue-to-GDP averages, I'd push for the reduction of the income tax back to its original levels and let the states set tax rates at where they feel they need to be to meet their needs. That would be my preferred solution, but I understand the wailing and gnashing of teeth from folks like yourself would prevent that from happening.

  • Clegg||

    Spending reductions, reducing depts, all good calls. Though if by "great society" you mean removing social safety nets (food, medical), then I would disagree.

    The first major tax code change I suggest is removing the cap on FICA. It should continue as a flat personal tax that kicks in after a minimum income, but (1) becomes paid on ALL income: interest, capital gain, dividend, wages, etc.. and (2) has no income CAP. A portion of windfall profits of the 1% are therefore sent back into the 99% for retirement and medicare funding, without further growing a bloated bureaucracy. It's one major step towards re-balancing 99% wealth.

    Besides, the SSI and Medicare systems are headed for insolvency. A tax plan like this (or similar) is clearly REQUIRED to keep them solvent.

  • Malkavian||

    You'll fail. Wage income of 1% is not that great - bulk of their gains come from capital (stock options etc), and willfully destroying capital, just out of spite, is the dumbest economic idea ever.

  • Clegg||

    It's not about wages, per se. It's about wealth. Between 1983 and 2004, in good part due to the tax cuts for the wealthy, of all the new financial wealth created by the American economy in that 21-year-period, a whopping 94% went to the top 20%, which means that the bottom 80% received only 6% of all the new financial wealth generated in the United States during the '80s, '90s, and early 2000s (Wolff, 2007).

    As the middle-class continues to work as hard as ever, but continues to deliver another 0.5% of its wealth annually into the hands of the 1%, there WILL be a breaking point. Is the breaking point when the 1% owns 50% of the country? 60%? I don't know, but I do know (from history) that if we don't start funneling wealth back into the 99%, we are headed for a train wreck.

    Can fiscal policy funnel TOO MUCH wealth back into the 99%? Yes, of course (which leads to a debilitating lack of private investment capital, etc. -- a hallmark of marxist economics). There is a healthy and optimal "share range" -- based on a massively complex economic formula that nobody knows, but most people can "intuit" -- when a culture achieves a reasonable socio-economic balance. We are quickly approaching the limits to that historical balance. It's why Shiller said economic inequity is the most important issue today. It's why the executive branch has made it a central policy issue.

    This is not about class envy. This is about the stability and survival of American freedom and liberty.

  • Malkavian||

    Financialization of wealth is a matter of monetary policy - whoever is closest to money creation machine (government and Federal Reserve), gets a first pass at money created. Hence the rise of big banks and Wall Street. Fiscal policy would have little effect on that - if you get taxed a $million, you just print another $million for yourself, same difference.

    As for wealth of the middle class, yes, they got screwed. Part of it is over-reliance on pension system and social security (both horrible investment schemes that consume huge amounts of worker's savings), and another part is inflation that robs workers of real returns in any but the more high risk investment scenarios. Again, little to do with fiscal policy.

    Hard work will have little to do with anything going forward - i can see a fully automated economy where all production (and all returns) are due to capital, with labor playing a trivial role. Middle class underinvested in productive capital, and is now paying a heavy price for it.

  • Clegg||

    "Fiscal policy would have little effect on that"

    Fiscal policy has EVERYTHING to do with all of these problems: banking system, money policy, social security and medicare taxation, etc..

    It's true we can't control global inflation, but we CAN control our fiscal response to it, making it less of a hit to the middle-class. We failed to do this.

    The middle-class is the FOUNDATION of a healthy nation. We must adjust monetary policy to adapt to any "outside force" (inflation) to keep the middle-class healthy. If you think monetary policy can't be adjusted to keep the middle-class in reasonable wealth during a period of higher inflation, you simply haven't thought hard enough.

    You say the middle-class is "paying a heavy price". No!

    WE, as a NATION, are paying a heavy price by allowing the middle-class to be decimated. WE are SCREWING OURSELVES by this folly of social engineering (tax codes mostly) that have gifted our 1% with an excessive accumulation of middle-class wealth.

    We call our tax code "progressive" -- but it is only progressive for the 99%. The 1% have gotten a free ride for 35 years. In the top 1% and especially the top 0.1% range, our tax code is REGRESSIVE. We must return to a true progressive code for ALL forms of income, at ALL levels.

  • Red Rocks Rockin||

    Spending reductions, reducing depts, all good calls. Though if by "great society" you mean removing social safety nets (food, medical), then I would disagree

    Tough shit. There was no Medicare, Medicaid, or any of those other large social programs during this wonderful era of middle class prosperity you're going on about. That you fixate so hard on tax rates without taking the other geo-political or socio-economic conditions into account speaks to your lack of intellectual integrity.

    The first major tax code change I suggest is removing the cap on FICA.

    The whole point of the cap is so millionaires and billionaires aren't taking out a greater share of SS obligations when they reach retirement age. Your idea is not mathematically sustainable.

    A tax plan like this (or similar) is clearly REQUIRED to keep them solvent.

    No, it just kicks the can down the road. All social redistribution schemes are reliant on ever increasing population and inflation numbers to remain solvent. Perpetual growth is a fallacy.

  • Clegg||

    "The whole point of the cap is so millionaires and billionaires aren't taking out a greater share."

    I didn't say that. The 1% don't NEED Social Security, nor would the maximum SS benefit change. A flat SSI tax is one way (among many) of engineering windfall profits directly back into the middle-class, while taking care of our unfunded liabilities for SS and Medi programs.

    "Perpetual growth is a fallacy."

    Agreed, but that's not what we're talking about. Fiscal policy adjusts to growth.

  • Red Rocks Rockin||

    I didn't say that

    It doesn't matter. That's the reality.

    The 1% don't NEED Social Security, nor would the maximum SS benefit change.

    Need has nothing to do with it. The 1% are still eligible for social security, because they paid into the program. Lift the cap and you're going to have greater payouts down the road, while living under the delusion that SS is "fixed." The math always wins, and it doesn't care about social justice nonsense. The whole point of the cap was so that the wealthy would sustain the system while not overburdening SS down the road due to their massively disproportionate contributions. If you're arguing that they shouldn't recieve the proportional benefits of the extra money you're now siphoning from them, well, that's just really nothing more than sanctioned theft.

    A flat SSI tax is one way (among many) of engineering windfall profits directly back into the middle-class, while taking care of our unfunded liabilities for SS and Medi programs.

    There you go with that managerialist engieering talk again. In your world, apparently the rules of math don't apply.

    Agreed, but that's not what we're talking about. Fiscal policy adjusts to growth

    Which is irrelevant, since your preferred social programs are reliant on it.

  • Tony||

    That mobility is flat (and not good) is a completely separate thing from inequality.

    One Walton could have literally all the wealth in the country and you guys would find a way to defend it from your public library computers and cat food meal.

    You all say you're just as concerned about the wealthy being rentiers and parasites as you are the poor being mooches. But every single dollar in their accounts is sacred. Does not compute. You're willing to rectify the "injustice" of the poor soaking too much from the public treasury, but what are you willing to do to the rich for their parasitism? Defend their wealth to the death, of course.

  • wheelock||

    The Walton's achieved that absurd level of wealth in large part by supporting and manipulating the corporate welfare state; tax subsidies, competition crushing regulations, etc. This is the same state you wish to grant ever increasing power to with the foolish idea that we can reign it in by sticking an "I voted" sticker on our sweater vests.

  • Tony||

    Absolutely incorrigible. Corporations that take advantage of a strong government can take even more advantage of a weak one.

  • Sevo||

    Tony|1.31.14 @ 8:08PM|#
    ..."Corporations that take advantage of a strong government can take even more advantage of a weak one."

    And, natch, you want MORE GOVERNMENT!
    Those of average intelligence would see the internal contradiction; you, of course, are incapable.

  • Tony||

    Yes, stronger government that is able to put up a fight against wealthy private interests I didn't get to vote for. Or, the very thing you guys exist to prevent--for "freedom."

  • Sevo||

    Tony|1.31.14 @ 8:14PM|#
    "Yes, stronger government that is able to put up a fight against wealthy private interests"

    A stronger government that can be cooped by those corporations to the further advantage of those corporations. Just like your shilling for Net Flix; wonderful example.

  • Tony||

    By stronger, I mean in a specific way: more insulated from corrupt corporate influence. I didn't even say how. But your prescription is clear: make government weaker and easier to manipulate.

  • Free Society||

    Tony, a weak government is one with less power in way or another. A government that is less expansive in it's power, is much less pervasive in it's corruption. When people like you successfully agitate for the expansion of political institutions' limits, the ability of those same political institutions to play favorites or worse necessarily goes up.

    What's the point of buying off a government that has no authority or ability to oppress?

    simple L O G I C

  • Tony||

    What's the point of buying off a government that has no authority or ability to oppress?

    Exactly right. What's the point when you can do the things government was preventing you from doing and not have to bother with buying government off first? Jesus Christ man. Government isn't the only thing that can oppress you. It's just the only one that asks you for your vote.

  • Free Society||

    Jesus Christ man.

    No need to add any more superstition than you already have.

    What's the point when you can do the things government was preventing you from doing and not have to bother with buying government off first? Jesus Christ man. Government isn't the only thing that can oppress you. It's just the only one that asks you for your vote.

    Yeah all kinds of criminal people and entities can oppress you, so what does that prove? I'm not the one proposing that we give any such oppressors a monopoly of legal aggression. The part in bold, is just a delusional view of government.

    It doesn't ask you for a vote, it compels your association with it, vote or no vote. And how is a vote of people within arbitrary boundaries morally qualified to own me?

    A free market doesn't oppress, but it does actually ask for your dollar, as opposed to seizing it, which you find to be a more moral interaction.

  • Brian||

    Tony:

    By stronger, I mean in a specific way: more insulated from corrupt corporate influence.

    I knew your argument was going to be unicorns.

  • Calidissident||

    Sarcasmic, please get in here your with your post that perfectly describes progressive "logic" on this issue. I would, but I know I can't do it as perfectly as you do.

  • OneOut||

    Weak doesn't equate to small.

  • Michael S. Langston||

    Corporations that take advantage of a strong government can take even more advantage of a weak one.

    Tell us please oh wise one - what would be the purpose of controlling a weak government? What power could one leverage from controlling a weak government?

    Idiot.

  • Tony||

    What power could one leverage from controlling a weak government?

    Just what's left over after they've taken the power they want for free. This line of reasoning is seriously fucked. Like total mental collapse.

    A corporation wants to pollute your water supply. Government wants to forbid it, costing the corporation in prevention and cleanup. The corporation buys off politicians to ease up the regulations. Cheaper than complying. Your solution? Just get rid of the regulations. The water is still polluted and the corporation just gets to do it hassle- and cost-free.

  • Brian||

    The water is still polluted and the corporation just gets to do it hassle- and cost-free.

    Tony, you've done a great job of advocating for environmental regulations.

    Congratulations on making an argument pointed directly at all libertarians who lean more anarchist than John Stossel. This implies that a lot of libertarians think that some environmental policies are compatible with a (relatively) weaker government.

    Now, can you push it further? Or do you pull out a hasty generalization fallacy and conclude that every policy idea that satisfies your perferences has been justified by a single example?

  • Tony||

    I'm just saying... the argument is to reduce crime by making fewer things illegal. It's such utter horseshit. Even worse than the usual horseshit you guys muck around in to justify your stupid nonsense. Tell me again how tax cuts pay for themselves.

  • Red Rocks Rockin||

    Even worse than the usual horseshit you guys muck around in to justify your stupid nonsense.

    You mean like your argument that guns are more dangerous than alcohol, contra the evidence of course, just because you like to drink?

  • Malkavian||

    If chemical company pollutes the water, water company that controls the aquifer will sue the pants off the chemical company for damages. Regulations are not necessarily the only way to prevent harm - tort and contract laws are superior in many cases.

    And yes, making fewer things illegal, and fewer people into criminals, would help out a great deal. Unless there's an actual victim, it would be nice to ask 'why is it illegal?'

    Fewer regulations would allow the state to actually focus and prosecute real crimes more effectively, rather than trying to police everything under the moon. You don't need to be a libertarian to see that - just apply a bit of logic.

  • Clegg||

    No, do NOT give more "power" to the state. Return to a Truman-Eisenhower fiscal policy and "persuade" (via 80% top rate) windfall income earners to re-invest those profits back into a very strict definition of American infrastructure, which benefits the MIDDLE CLASS, which is why the U.S. middle class was STRONGEST (by far) from 1950s to 1970s.

  • JWatts||

    "Return to a Truman-Eisenhower fiscal policy and "persuade" (via 80% top rate)..."

    So John F Kennedy was an idiot then, when he dropped the top tax rates?

  • Michael Ejercito||

    He forgets to mention that the reason the U.S. middle class was the strongest fropm the '50's to the '70's was because for that time, it was the only game in the world. almost all of Europe was leveled during WWII and it took decades to recover.

  • Clegg||

    Yes! But income growth parity was assured by a progressive tax rate. America's growth was both swift (by wartime spoils), and healthy (via fiscal policy).

    After we switched to a unitary tax rate, the top 1% income growth rose 10-times faster than the bottom 99%. Unhealthy. And it continues to this day. We are undermining the foundation of a healthy society - which is the middle class.

  • Clegg||

    AFAIK, we didn't see a change in fiscal policy during the Kennedy era. The top tax bracket actually kept rising until 1970, when it peaked right around 80%. By 1980 it had fallen to 60%. And by 1980, it had fallen to our current 38%

    http://currydemocrats.org/in_p....._rates.png

  • Red Rocks Rockin||

    The top tax bracket actually kept rising until 1970, when it peaked right around 80%.

    Meanwhile, in the real world, the top tax bracket peaked in 1963.

    http://taxfoundation.org/artic.....d-brackets

  • Clegg||

    When you combine the nominal top rates of normal income, dividends, and capital gains, we maxed in the early 70s. That's the data I have. If you have data showing an earlier combined max rate, do share.

  • Red Rocks Rockin||

    That's the data I have.

    From Curry County Democrats--yes, quite the unbiased source there.

  • Eggs Benedict Cumberbund||

    What do you think the wealthy do with their money now? Stuff it in a mattress? Money in a savings account finances mortgages or business loans, etc.

  • Clegg||

    Today wealth is mostly invested in capital gain and dividend paying vehicles. Before 1977, such vehicles were taxed FAR higher. Capital gain was taxed around 35%. Today it is far less. Before 1976, dividends were taxed at 70%. Today it is around 20%.

    Here's the thing: very few American’s below the top 10-15% earners enjoy significant capital gains or dividend income. Super low wealth tax rates benefit only the highest earners. If these gifts to the wealthy in fact “trickled down” we would have a thriving middle class today. But these fiscal policy gifts to the wealthy are not trickling down. They have not been trickling down for 30+ years.

    I'm not advocating for larger government. With proper fiscal policy, higher tax rates will go directly into key U.S. infrastructure (structurally very different than today's hedge fund investment and taxation models) which more directly benefit the middle class -- a TRUE trickle down model, like we saw in the Truman-Eisenhower model.

  • Redmanfms||

    Here's the thing: very few American’s below the top 10-15% earners enjoy significant capital gains or dividend income. Super low wealth tax rates benefit only the highest earners. If these gifts to the wealthy in fact “trickled down” we would have a thriving middle class today. But these fiscal policy gifts to the wealthy are not trickling down. They have not been trickling down for 30+ years.

    You haven't once in this entire thread shown a causal link between tax rates and prosperity.

    You also go on to completely ignore the elephant in the room. Namely rapidly devalued dollars making traditional savings a losing game and the regulatory capture of an ever expanding and intrusive government.

    But no, the withering of the middle class is actually because the wealthiest aren't being robbed enough.

    I'm not advocating for larger government. With proper fiscal policy, higher tax rates will go directly into key U.S. infrastructure (structurally very different than today's hedge fund investment and taxation models) which more directly benefit the middle class -- a TRUE trickle down model, like we saw in the Truman-Eisenhower model.

    For government to administer the redistribution of the revenue and "investment" in "infrastructure" it by necessity must be quite large.

    How exactly will these monies benefit the middle class?

  • Clegg||

    It's not complicated. The vast majority of American's (the 99%) continue to LOSE wealth. Where is that wealth going? It's trickling up to the 1%, and it has been trickling up for 30+ years.

    In the 1970s, the 99% possessed 80% of U.S. wealth. Today the 99% possesses 64%. On average, the 99% continue to lose 0.5% of U.S. wealth every year, as it gets sucked up by the 1%.

    So, tell me, what is fair? Should our fiscal policy be structured so that the 99% trickle-up ALL their wealth to the 1%? How about 50%? 70%? 30%? What is FAIR? And how do we determine what is fair?

    I don't have that answer, but I CAN tell you that, at a certain point (40%? 50%?), the 99% are going to say "enough" -- just as all increasingly marginalized people finally say enough.

    The bottom line is that fiscal policy determines how much wealth our 1% can suck-up from the 99%. Fiscal policy from 1945-1975 kept all socio-economic classes in income slope parity, and the lower classes prospered. After our fiscal policy was radically changed, the lower classes have suffered.

    If you have a better fiscal answer to address our growing social inequity, I'm all ears.

  • Clegg||

    And I would add to my last statement, while fiscal policy CAN determine a country's "socio-economic health and well-being" (a definition of which we may or may not agree upon), if the lawmakers forming that policy are not working for the 99%, but are in fact working for the 1%, then the laws will increasingly continue to favor a tiny, tiny cadre of oligarchs.

    It's not so much "big government" that we should be concerned about, but rather a government in collusion with a tiny number of power brokers, successfully lobbying for a greater and greater amount of the total pie, via fiscal policy made in their favor. This is decimating middle class wealth, and will eventually undermine the foundations of this country.

    The Princeton study is clear: today, most laws are in fact made in favor of the top 10% wealth holders, and not the bottom 90%. The lead author of that study, Larry Bartels, wrote that lawmakers are "considerably more responsive to the opinions of affluent constituents than to the opinions of middle-class constituents, while the opinions of constituents in the bottom third of the income distribution have no apparent statistical effect on their senators’ roll call votes."

    http://www.princeton.edu/~bartels/economic.pdf

    Regardless of our personal opinions about fiscal policy on 1% wealth accumulation, we can certainly agree that our lawmakers are NOT representing "we the people" -- but rather a relatively tiny number of the increasingly wealthy.

  • Sevo||

    Tony|1.31.14 @ 7:22PM|#
    "That mobility is flat (and not good) is a completely separate thing from inequality."
    Gee, Tony lies again! What a surprise:
    "NBER WORKING PAPER SERIES
    WHERE IS THE LAND OF OPPORTUNITY? THE GEOGRAPHY OF INTERGENERATIONAL
    MOBILITY IN THE UNITED STATES"
    http://obs.rc.fas.harvard.edu/.....ty_geo.pdf
    ----------------------------------
    "One Walton could have literally all the wealth in the country and you guys would find a way to defend it from your public library computers and cat food meal."
    Imbecilic assertion. Get screwed with a garden implement.
    ---------------------------------
    ..."Does not compute."...
    When you're too stupid to understand the argument, of course it doesn't make sense to you.
    Buzz off, dimwit.

  • Tony||

    Reread the first sentence I wrote and try again. Better yet, don't.

  • Sevo||

    I quoted your first sentence and pointed out that it was a lie.

  • Tony||

    ?

  • Sevo||

    Mobility ISN'T flat, bozo. That's a lie.

  • Tony||

    Then Harsanyi's a liar:

    "As it turns out, new data—data that Obama is unlikely to share with Americans—show that little has changed over the past decades when it comes to mobility. The Equality of Opportunity Project's new study by economists Raj Chetty and Emmanuel Saez found that despite perceptions, social mobility in the U.S. is at the same level it was 30 years ago."

  • Free Society||

    What part is a lie? That Obama won't share the results of the study? That there was no such study? Or do you have some particular reason, other than wishful thinking, to believe that the study is bunk?

  • Tony||

    Sevo is a liar.

  • ||

    Ooh, good one. You've really got him on the ropes now. Try one of your patented insult finishing moves! Those ALWAYS work.

  • Michael Ejercito||

    Tony, do you even know the why behind the increase in inequality?

    People would rather go to concerts (and give money to rock and rap stars) than listen to a recital at a church or a school.

    People would rather watch films (and hand money to movie stars in the process) than watch a play at a school or a community center.

    People would rather watch professional sports at a stadium (and give money to sports stars in the process) rather than watch being played in a public park.

    This Sunday, the Super Bowl will be on, and as a result, there will be milliosn fo dollars transferred from the middle and lower classes to sports stars. Ias anyone going to boycott the Super Bowl in the name of equality?

  • american socialist||

    i wish all these cool anarcho-capitalist writers at reason magazine, who bitch and moan and bitch and moan and bitch and moan and bitch and moan about obama's overreach would have bitched about it under george bush. http://archive.frontpagemag.co.....RTID=23270

    how come even the most cursory check on what these writers wrote in 2001-2009 reveals that they made every kind of excuse for government power under bush? libertarian my ass.

  • Calidissident||

    Why is it that seemingly everyone one on the site, from the socialists to conservatives, cannot comprehend that Reason is not a homogenous singular entity, and that it has many writers with varying opinions on issues?

  • Rufus J. Firefly||

    Because we're true free thinkers.

    This guy is just another run of the mill socialist.

    Bitch and moan? The biggest bitches and moaners in history are the fucking left-wing. "Gimme this for free because it's good for us, gimme that for free because I say so, forgive my debts because 1%, gimme, gimme, gimme...at another's financial expense. Don't look at the results because you're mean! I deserve!"

    That's the whine of the left. A bigger crop of losers can't exist.

  • newshutz||

    Reason was hard on Bush.

    The pages of Reason were filled with complaints of the increase of government under Bush.

    They were anti-war then as they are now.

    Where did the anti-war left go?

  • Michael S. Langston||

    Where did the anti-war left go?

    Same place there were during Clinton's "Charity through military action" administration.

    Recall then too - Bush I was evil for Iraq. But Clinton was a savior when he used the military.

    Clinton was even arguing for resumed hostilities with Iraq and the Dems were on board.

    Right up until an R won. Then it became evil again.

    Then came Obama - and amazingly enough, he is able to double down on the "evil" policies of his predecessor, add to it an "extra-legal" ability to kill whomever he wishes without any meaningful oversight and.. well, we know how that's gone down.

    Greatest.President.Ever.

    As long as you don't pay close attention the emperor's clothes anyway...

  • Michael S. Langston||

    If you believe Reason was pro-Bush then you obviously have not searched google with the tag site:reason.com as this is the place where a majority of writers said "Vote Obama"

  • Calidissident||

    I don't think a majority of writers supported Obama. A handful did, but I'm pretty sure most went for Barr or didn't vote. I don't know if any went for McCain though.

  • OneOut||

    Bush did it too !

    Waa Waa Waa !

    News flash . Bush isn't President any longer.

  • Freddie||

    We who advocate free markets and limited government need a better message on "inequality". An eye-glazing statistical analysis won't cut it. Neither will finger wagging over "envy" and "class warfare". Clearly, emotion is not on our side.

    The concise - and legitmate! - message needs to be that Big Government = More Inequality. Whether it's lousy government schools holding back poor kids or crony capitalism shoveling undeserved wealth to the wealthy, or "quantitative easing" inflating stocks and real estate while leaving small savers with zero interest, the message to those concerned about inequality is that the government is not your friend.

  • Clegg||

    Agreed about bigger government. That's not the solution. It is one of the problems. But we CAN force our lawmakers to create a fiscal policy that engineers windfall income back into the shared infrastructure of our country, just as we did in the 1945-1975 period. It worked.

  • Red Rocks Rockin||

    But we CAN force our lawmakers to create a fiscal policy that engineers windfall income back into the shared infrastructure of our country, just as we did in the 1945-1975 period. It worked.

    Sorry--you can't have one now without the other. A big government getting $5-6 trillion a year instead of $3.5 trillion isn't going to suddenly reduce it's spending to $2.5 trillion just because it received a windfall.

  • Clegg||

    If that's the case, then we're doomed as a nation. Welcome to the emerging oligarchy.

  • Red Rocks Rockin||

    If that's the case, then we're doomed as a nation.

    Those were the conditions that existed during the period you're lionizing. It's not my fault that you're having trouble accepting that.

  • Clegg||

    Actually, the "conditions" that existed 1945-1975 favored the middle-class. By 1974, the 99% owned 80% of this country. Today they own 64%. By 2020, likely less than 60%. That wealth is being sucked up by a tiny cadre of increasingly powerful modern-day monarchs. Fiscal policy IS the reason.

    Whatever we did to assure a strong middle-class, we should do again. For the last 35 years, our fiscal policy has decimated the 99%, and continues to decimate them.

    You think that's healthy? Convince me.

  • Malkavian||

    Our regulatory and monetary policy ensured that only the best and/or the best connected could get ahead. The rest where either sent to prison, or doomed to welfare rolls. Social engineering at its finest. Fiscal policy had little to do with it.

  • Clegg||

    Fiscal policy has EVERYTHING to do with it.

  • Clegg||

    But, as we know, fiscal policy is merely the back end of the most complex collection of social interplay imaginable. So, in a sense, what we're discussing is the national-collective psyche, what it wants, what it needs, and how to find a balance that best sustains optimal health and well-being for the most people.

  • Malkavian||

    Market economics with minimum government intervention is the best way to find out what people need and want - that's what prices are for.

  • Clegg||

    "Market economics" is a slogan, a gross oversimplification used by low-information people to describe what seems like a good approach. I truly wish life was as simple as our catch-phrases.

    "Minimal government intervention" is another one of those quaint ideas that people dream about (me included), but maybe the better shibboleth might be "a government large enough to do us well, but no larger".

  • Clegg||

    We KNOW what people need. Beyond that, the net wealth of a nation, and the fair distribution of that wealth, will determine how much "want" can be realized, and who realizes it.

  • Malkavian||

    We KNOW what people need.

    Really? Like what? Food? What's food? A can of beans? Steak? Fish? Rice? In what quantity and quality? What share of resources should go to its production, and with what capital intensity? Once you start taxing capital like crazy, should abandon tractors (a capital good that you want less of), and use people to pull plows? If you don't want that, once you tax capital to the hilt, where will resources come from to build tractor factory? And that's just one set of problems out of millions. History shows that market economies solve those problems better than command economies.

    "a government large enough to do us well, but no larger".

    Fair enough. I believe that the government that will do us well is the least coercive and redistributionist. And no larger.

  • Clegg||

    Fair enough.

    I think my thesis is made.

    There is a "healthy balance" of wealth in any free nation. That "healthy ratio" (which is actually a modest range of healthy ratios) has historical and contemporary (measurable) precedence. That healthy ratio, in large part, can be sustained (or screwed up) via fiscal policy.

    The USA has drifted for 35 years into what is today an increasingly dangerous imbalance of wealth, when measured by well-established socioeconomic metrics. It's dangerous because it has reached a point where it is undermining the foundation of our nation, which is a strong middle-class.

    Thanks for the conversation. I've learned a lot.

  • Red Rocks Rockin||

    "Market economics" is a slogan, a gross oversimplification used by low-information people to describe what seems like a good approach. I truly wish life was as simple as our catch-phrases

    I'll refer you back to your "engineering social policy" catchphrase.

  • Clegg||

    The engineering of social and fiscal policy is what we've done increasingly for decades in the USA. We've strayed from a healthy balance of wealth, and its time to move us back a bit. If our lawmakers don't do it soon, via that same fiscal engineering, the people will find a way to do it themselves.

  • Red Rocks Rockin||

    By 1974, the 99% owned 80% of this country. Today they own 64%. By 2020, likely less than 60%. That wealth is being sucked up by a tiny cadre of increasingly powerful modern-day monarchs. Fiscal policy IS the reason.

    Sorry, this is just silly question begging.

    You think that's healthy? Convince me.

    I doubt anyone would be able to convince you of anything outside your predetermined narrative. You seem to have your mind made up.

  • Clegg||

    OK.

  • OldMexican||

    Re: Tony,

    But every single dollar in their accounts is sacred. Does not compute.


    Nothing but a thief, worse than that - a cowardly thief. A thief at least risks something.

  • pob||

    my classmate's aunt makes $73 hourly on the internet. She has been fired for 6 months but last month her payment was $14134 just working on the internet for a few hours. Read Full Report ➤➤➤➤➤➤ www.works77.ℂℴ¬m

  • julia14juli||

    my best friend's sister-in-law makes $70 /hour on the computer . She has been without work for 7 months but last month her check was $12532 just working on the computer for a few hours. you can look here

    =========================
    http://www.tec30.com
    =========================

  • kenezen||

    Here are basic tenants that Jefferson talked about 200 years ago READ!

    “The Democracy will cease to exist when you take away from those who are willing to work and give to those who would not.”

    “My reading of history convinces me that most bad government results from too much government.”

    “A government afraid of its citizens is a Democracy. Citizens afraid of government is tyranny!”

    “The end of democracy and the defeat of the American Revolution will occur when government falls into the hands of lending institutions and moneyed incorporations.” (Author’s Note: The Federal Reserve falls into this category).

    “I predict future happiness for Americans, if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.”

    “Laws that forbid the carrying of arms . . . disarms only those who are neither inclined nor determined to commit crimes. Such laws make things worse for the assaulted and better for the assailants; they serve rather to encourage than to prevent homicides, for an unarmed man may be attacked with greater confidence than an armed man.”
    President Jefferson’s words written in the late 1700’s, over 200 years ago are prophetic and apply especially today! They define realities of today. President Jefferson counted them as signs of future dangers of lost democracy to all citizens.

  • TKList||

    The Tax Code, excessive regulations, the national debt and the Federal Reserve are the major causes of the widening inequality gap.

    Solutions:
    Abolish Tax Code and IRS
    Enact Fair Tax (national sales tax)
    Minimize regulations to only what is absolutely necessary.
    Balance the budget.
    Start decreasing the national debt.
    Abolish the Federal Reserve as we know it. Replace with automated system as Milton Friedman suggested until better solution is discovered.
    Allow gold and silver as legal tender.

    National Debt. $17 trillion costs or is financed by each household, who is ultimately responsible for that debt. This comes out to $148,000 per household if paid for in one lump sum. Financed for 15 years at 5% interest it would take a monthly payment of $1170.

    Do not be fooled each household pays this one way or another, not the rich; whether you pay it directly in taxes and fees or by a lower standard of living than you would otherwise have if the government had not spent that money.
    The question is: Is your household getting its money's worth?

    The inequality problem is counterintuitive. Big government equals more inequality. Smaller government equals less inequality.

    The middle class is the byproduct of a free market economy; it is not manufactured by a politician's tax gimmicks, minimum wage laws, or government redistribution of wealth.

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