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Free Minds & Free Markets

Living with Inequality

Has Thomas Piketty really found "the central contradiction of capitalism"?

(Page 2 of 2)

People who are genuinely materially desperate aren't the issue here. The Tenth Commandment Club has no qualms with a Jean Valjean stealing bread to feed his family. But the implicit emphasis of Piketty's Capital is with comparing the 1 percent (or 0.01 percent) to the typical person living in the G-7, a person who is, on average, more fortunate than most of the world's population and more materially fortunate than almost anyone living in the 19th-century novels that Piketty so loves to discuss. To paraphrase an old P.J. O'Rourke joke, just think about Mr. Darcy's visits to the dentist.

Piketty clearly prefers to talk about the wealth of European and U.S. elites, but he spends a few crucial pages talking about capital accumulation in developing countries. It's here that he notes what may be the most important fact in his book: According to his long-run forecast, "Asian countries should own about half of world capital by the end of the twenty-first century."

The high savings rates of Asian and particularly East Asian economies have been a puzzle that resists a complete explanation. Asian nations with young populations and old, those with fast-growing economies and the slower-growers, generally tend to have savings rates as high as or higher than those of similar economies outside Asia. If these countries keep saving at higher than average rates, it means a world of bountiful capital for decades to come. If capital flows stay free—if money can move to its highest return across the globe with few tax and regulatory fetters—that means there will be ever more homes and machines available across the world. And, a bountiful supply of capital tends to push interest rates in a direction that diminishes whatever is left of Piketty's central contradiction. The "global savings glut" that Ben Bernanke wrote about a decade ago may last quite a while, and that's good for global productivity.

Things could change at any time—culture and law are both hard to predict—but normal economics has a very strong prediction for what happens when some countries are (on average) more patient than other countries and when capital can flow freely the world over: In the long run, the patient inherit the earth. As long as nations differ (on average) in patience, the patient capitalists start by investing in the less patient countries and the less patient countries gladly and willingly borrow the cheap cash. The patient countries help increase the capital stock of their less patient neighbors, and—as long as there aren't legal barriers to foreign ownership—in the long run the patient nations end up owning essentially all of the world's capital and the less patient nations ultimately end up sending not only their profits but even most of their mortgaged wages to the patient nations.

One lesson of this story is that it's good to be patient. So let's start training ourselves and our children to delay gratification, to forego that great sound system on the new car, to eat at home a little more often. Another lesson is one that Piketty hits head on: If the world moves toward this outcome, where some rich nations own vast amounts of other rich nations' wealth, we can all expect a political backlash. An attack on foreign investment might show up as bans on foreign ownership, discriminatory regulations that end up as de facto bans, confiscation of foreign-owned assets, or something worse, something more violent.

Hence the need for tolerance. As Piketty reminds us, human beings can be pretty bad at living with economic inequality. But when it comes to capital, simple economic theory is right: the more, the merrier. And if we can reduce covetousness, we can say the reverse: the merrier, the more.

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  • Hollywood||

    OT: Wife of police officer runs over two kids, killing one and crippling the other, suing the victims' families for emotional trauma


    Now the driver of the SUV, Sharlene Simon, 42, a mother of three, formerly from Innisfil, is suing the dead boy for the emotional trauma she says she has suffered. She’s also suing the two other boys, as well as the dead boy’s parents, and even his brother, who has since died. She’s also suing the County of Simcoe for failing to maintain the road.

    ...

    In a statement of claim filed with the court, Simon is claiming $1.35 million in damages due to her psychological suffering, including depression, anxiety, irritability and post-traumatic stress. She blames the boys for negligence.

    “They did not apply their brakes properly,” the claim states. “They were incompetent bicyclists.”

    ...

    Simon’s husband, Jules Simon, a York Regional Police officer, was driving behind his wife that night, but little is mentioned about him as a witness in the police report. He pulled over when Brandon was struck and shortly after drove his wife home in his vehicle.

  • JW||

    I'm actually OK with the victims' families forcibly dragging this woman to Baffin Island and letting her go to survive on her wits.

    Have a nice what's left of your life.

  • Cytotoxic||

    Scroll down. You're not getting the whole story.

  • Notorious G.K.C.||

    She was speeding, of course (if we believe the cops' own report), while her husband was right behind her.

    What kind of Pharaonic sense of entitlement must these cop types have?

  • Tulpa (LAOL-VA)||

    Can't blame her for speeding with a cop tailgating her.

  • Hollywood||


    Can't blame her for speeding with a cop tailgating her.

    Is that supposed to be some kind of joke?

  • ||

    Pathetic autistic retard alert!

  • Plàya Manhattan.||

    I need to stay current on the alert system.

  • lap83||

    Between this woman and the Florida teacher who sicced the 8th grade students on the 7th grader, is there some kind of c*nt of the year contest underway?

  • Notorious G.K.C.||

    This is a bit worse than prompting a fight between two kids.

  • Kreel Sarloo||

    The lawsuit is bullshit but so is the fact that three kids were out riding bicycles with no lights at two in the morning.

    As to the speeding, 90 kph in an 80 kph zone is the same as 55 mph in a 50 mph zone. Let him who is without sin....

  • Notorious G.K.C.||

    Supposedly the kids had pedal reflectors, but no, they shouldn't have been riding around that late without being lit up like Christmas trees.

    But what kind of sense of entitlement must these cops and their families have, that they think they can just sue a grieving family for over a million dollars (Canadian dollars, I suppose, but still...)?

    What if the situation were reversed? What if the guy from the other family ran over one of the woman's kids? Would she have shrugged and said, "well, it was the kid's fault"? No, she'd have shrieked at her husband until he charged the other driver with at least manslaughter.

  • Kreel Sarloo||

    That's why I said that the lawsuit was bullshit.

    However, I do not see the woman as having been primarily at fault.

    One of the problems with our litigious society is that people can't put some situations into the "shit happens" column and keep their feelings of guilt to themselves.

    IOW, I'm pretty sure that "her psychological suffering, including depression, anxiety, irritability and post-traumatic stress" has been brought on by feelings of guilt. A less self-entitled person would try to resolve by consulting a shrink or a priest rather than blaming the victims and hiring a lawyer.

    I somehow doubt that any jury will ever find in her favor (assuming it isn't summarily dismissed). And the defendants can take advantage of Canada's "loser pays".

  • Notorious G.K.C.||

    Assuming they don't cut a deal.

  • Notorious G.K.C.||

    Since there's suits on both sides (see below), the woman now has more negotiating leverage - "let's both drop our claims, I pay X [fairly small amount] without admitting liability, and we'll each pay our own expenses."

    This is just a guess, by the way.

  • Hydra||

    That's the speed the driver claimed she was doing, which may or may not be her real speed. Also it wasn't a bright sunny day, it was drizzling with a wet road at night. She was clearly driving too fast for conditions.

  • R C Dean||

    He pulled over when Brandon was struck and shortly after drove his wife home in his vehicle.

    If he didn't take her into custody (and he didn't, since he took her home), how is this not a hit and run?

  • Notorious G.K.C.||

    She was *suffering*! She was *suffering* to the tune of a cool million! You're going to have a woman with a million bucks' worth of suffering remain at an accident scene, you monster?

  • Hydra||

    They presumably called 911 in between. I don't believe there's any legal requirement to take someone at fault in a collision into custody, especially for an off-duty cop.

  • R C Dean||

    Good luck getting a ride straight home from a cop after you kill some kids with your car.

    You're right, though: it may turn on whether they called 911 before or after they left the scene and identified themselves, etc. And, many states require that a driver render assistance to those that they have just injured.

    At this point, we don't know enough to say if it was a hit and run, but it could easily turn out to be one.

    But, I am quite confident NOTHING ELSE WILL HAPPEN.

  • Hydra||

    There's no reason to believe it was a hit and run. That you want it to be one because you don't like cops and anyone associated with them is not evidence.

  • DesigNate||

    Hi Dunphy.

  • Hydra||

    Good luck getting a ride straight home from a cop after you kill some kids with your car.

    If your wife got in an accident would you just leave her by the side of the road after it happened?

    No? Then why do you expect the guy who happens to be a cop to do so?

  • Virginian||

    I wouldn't have the fucking option Tulpa. She went home because she was a cop's wife. Just like that fucking Kennedy get doesn't get punished for constant DUIs.

  • R C Dean||

    If your wife got in an accident would you just leave her by the side of the road after it happened?

    No. I'd stay with her.

    What wouldn't happen, without going to jail, is me just driving off with her unless and until the responding officer said it was OK.

  • Hydra||

    There's no evidence to suggest they didn't wait for the responders.

  • Irish||

    Jesus Christ. I work in a law firm. I've seen people with shattered bones and torn muscles who only end up getting $40,000.

    I don't know in what universe this woman thinks 'psychological trauma' is worth $1.35 million.

  • Kreel Sarloo||

    Yeah, but if you work in a law firm, you must surely know that the amount demanded is rarely the same as the amount awarded or settled for.

  • Irish||

    Yeah, but I've never even seen a demand of $1.35 million for fucking 'psychological trauma.'

    The only time I've seen someone demand anything like that for mental issues was when an actual bipolar person had their meds withheld by cops and had a breakdown.

  • Notorious G.K.C.||

    Ah, this is a *countersuit* - the family sued the woman and the cop, and the woman is striking back with her own legal action.

    http://www.bayshorebroadcastin.....wsID=65677

    I think I begin to see the "logic" - reduce the amount of an ultimate settlement by making a counterclaim. There would be a "compromise" by which the claims are set off against each other, so the woman doesn't have to pay as much.

  • Notorious G.K.C.||

    (I'm guessing that the family's suit was first, but the article doesn't say)

  • Cytotoxic||

    If that's the case, then I am definitely favoring the women over the bicyclists. You can't bike in the dark with a few reflectors.

  • Kreel Sarloo||

    And you're absolutely nuts if you rely on passive illumination, like reflectors, over active illumination, like lights.

    Reflectors are simply not effective for providing visibility on a 50 MPH road at two in the morning.

    Also if you don't wear high visibility light colors etc.

  • R C Dean||

    High-risk move, to counteclaim like that. Put all that in front of a jury, and its pretty likely they are going to be pissed off at her for countersuing the family who's kids she just killed.

    The cardinal sin of litigation is pissing off the jury. They can start tacking zeros onto your damages if they really, really don't like you.

  • Virginian||

    He pulled over when Brandon was struck and shortly after drove his wife home in his vehicle.

    http://www.rvamag.com/articles.....it-a-crime

    Looks like driving loved ones home after they commit a crime in a car is just one of those officer perks.

  • Acosmist||

    Fuck

    And let me repeat this

    FUCK people who ride their bikes at night without taking appropriate steps to be visible to cars.

  • John C. Randolph||

    I believe that if I were sitting on a jury and this was the case before us, I would do my best to convince the rest of the jury to hop over the rail and slap the shit out of her.

    -jcr

  • LynchPin1477||

    You want millions or billions of people to suddenly not become covetous? Good luck. Honestly, I wish it were so, but I can't see that happening.

    From a strictly strategic point of view, the better course of action would be for more (and more visible) charity on the part of the very rich. Many of them are already very charitable, but that isn't the perception. That needs to change, or hatred for the very rich will only grow. If it reaches a critical mass, bad things can start happening.

  • AlmightyJB||

    Reminds me of this study and others like it.

    http://www.significancemagazin.....iment.html

  • ||

    Good grief. Clearly none of those people have seen a dog guarding a haystack from the cattle.

  • JW||

    Meanwhile, ultra-wealthy economic elites can buy massive political influence, pushing the government to favor well-connected insiders and in the process slowing down the economy.

    Guess what, statist fuckstains? If you hadn't been so eager to have the all-powerful state with it's tentacles in everything, everywhere, so you could have an easier, comfier life at the expense of everyone else, this wouldn't be a problem.

    You created this monster, so get a fucking leash on it already and stop blaming the villagers for allowing it to eat them.

  • LynchPin1477||

    Yeah, this problem isn't related to income inequality at all. One need look no further than unions to see that.

  • Waffen Hans||

    As much as I don't like Keynes, he and his circle often spoke about unions. Unions alone threw a monkey wrench into their plans. I wish I could copy and paste my quotes I found in some books I'm reading on Keynes so I could copy and past them here, but I'm not sure how to do that and don't want to write line by line.

  • The Immaculate Trouser||

    Right, Keynes developed his theory in response to tremendous wage stickiness, which in his case examples were greatly exacerbated by trade unions.

  • Hydra||

    Don't you know the politicians and bureaurats are innocent victims of capitalist seducers?

  • Jim in Denver||

    Yep take away Congress' ability to pick winners and losers and class warfare disappears with it.

  • MJGreen||

    I posted this in yesterday's Piketty thread, but late at night: Piketty's data-driven book can't even get the facts about the US minimum wage correct:

    Piketty states, "From 1980 to 1990, under the presidents Ronald Reagan and George H.W. Bush, the federal minimum wage remained stuck at $3.25, which led to a significant decrease in purchasing power when inflation is factored in. It then rose to $5.25 under Bill Clinton in the 1990s and was frozen at that level under George W. Bush before being increased several times by Barack Obama after 2008." (page 309).

    Anyone who worked a job in the US in 2007 probably knows how wrong this is. They would have seen the federal notices displayed somewhere in their workplace, detailing the three-step rise in the minimum wage passed by W. As the reviewer points out, before explaining standard objections to the minimum wage, the US minimum wage also increased under HW Bush.

    But this fact-minded author just knows that a Republican president would not have raised the minimum wage. Reality serendipitously conforms to his ideological assumptions.

  • Austrian Anarchy||

    Speaking of facts, presidents don't have any control over the minimum wage rate. Congress does. If the president signs it into law, it was what Congress passed. If Congress really wants it passed, they can do it without a presidential autograph.

  • Carl Youngblood||

    The big problem with the growing inequality is not the covetousness of the lower classes but the fact that the 1% represent a systemic risk that easily can (and does) corrupt the political process. Your review hardly mentions this.

  • LynchPin1477||

    See above. The very rich wouldn't spend their money on influencing government if government couldn't have so much power over things the very rich care about. The real question is, how do you prevent government from taking that power in the first place? Focusing only the influence of the rich is a recipe for failure on that front. Plenty of government power grabs have been justified and widely supported as ways of hurting the rich or helping the middle and lower classes.

  • Scarecrow Repair||

    Class warrfare, racism, money inequality, and all similar problems have the same root source: a government worth corrupting.

    One of the most frustrating arguments I get into is trying to explain that slavery and Jim Crow institutionalized racism were entirely the result of a coercive government, and it's especially aggravating that they refuse to see how society was integrating after the Civil War, albeit slowly, until the Progressives came along and brought in occupational licensing, segregated railroad cars, unions, and all sorts of government-enforced discrimination.

  • AlmightyJB||

    Which is exactly why people should not vote for anyone who advocates for a large powerful government. The less money and power a government has, the less they are able to "stack the deck" in anyone's favor. if there were no money or power in Washington, there would be no lobbyist.

  • MJGreen||

    This assumes there was a time when the political process was not corrupt, or sufficiently less corrupt than today.

    How is the political process corrupt today, and when was it not so corrupt?

  • Anonymous Coward||

    the fact that the 1% represent a systemic risk that easily can (and does) corrupt the political process.

    Why bother purchasing influence unless there was influence to purchase? What's that? You mean our tireless public servants are corruptable? They have sufficient power that their corruption can affect great numbers of Americans?

    Obviously the answer is to give them more power.

  • Irish||

    Corporations control the government. Therefore, we should expand the power of the government that corporations control in order to make corporations weaker.

    It's genius logic, and if you weren't such a libertardian you'd understand.

  • Anonymous Coward||

    I know, I know. I have this perverse notion that a person is less likely to abuse power if they have less of it.

    Why, oh why, can't I have faith in TOP MEN? When will my heart be filled with love for Big Brother?

  • prolefeed||

    When will my heart be filled with love for Big Brother?

    While drinking Victory Gin and watching your confession on the telescreen at the Chestnut Tree cafe, shortly before you get a bullet in the back of your head.

  • Irish||

    The big problem with the growing inequality is not the covetousness of the lower classes but the fact that the 1% represent a systemic risk that easily can (and does) corrupt the political process.

    Which is only possible because the Federal government is powerful enough to sell influence. Which is the direct result of left-wing policies.

    In fact, left wingers actually advocate allowing the government to sell even more influence. After all, how will government spending on green jobs work? The government bureaucrats will get to decide which businesses get money, which, in practice, means it will go to friends and allies of connected insiders.

    That's not even getting into the fact that food stamps and welfare have essentially become a Democratic vote buying scheme which they use as a cudgel to keep poor people in 100% Democrat districts voting the 'right' way.

    Progressives ADVOCATE a corrupt society, and then complain about the consequences of the corrupt society they have implemented.

  • Palin's Buttplug||

    Food stamp recipients in Congressional districts overwhelmingly vote GOP.

  • AlmightyJB||

  • Palin's Buttplug||

    Times are a changin'

    Among the 254 counties where food stamp recipients doubled between 2007 and 2011, Republican Mitt Romney won 213 of them in last year’s presidential election, according to U.S. Department of Agriculture data compiled by Bloomberg. Kentucky’s Owsley County, which backed Romney with 81 percent of its vote, has the largest proportion of food stamp recipients among those that he carried.

    The Bloomberg review of 2,049 counties where the data was available included the 250 with the highest concentration of food stamp recipients. Among that group, 227 are wholly within one congressional district, with 160 represented by Republicans and 67 by Democrats.

    http://www.bloomberg.com/news/.....rolls.html

  • Big Chief||

    Counties with the largest concentration of SNAP recipients does not indicate how the recipients voted.

    This is not factual support, this is redirection.

  • Irish||

    Counties are also not the same thing as congressional districts. A county can be 60% Republican, but the one Democrat elected is from a 90% Democrat district with land inside that county.

    He started off talking about 'congressional districts' then switched to counties because it's factually inaccurate to say majority Republican congressional districts have more SNAP recipients.

  • Palin's Buttplug||

    Polls will show that race is the #1 factor with indigent whites voting GOP and indigent blacks voting Dem. KY, AR, WV are extremely indigent, white, and anti-Obama.

    What we also know is that the wealthier and more educated a district is the more likely it will vote Dem.

    We do know that the counties with the most SNAP recipients vote GOP by 160-67.

  • vazhzsh||

    "Polls will show"

    Lol

    I got your poll right here.

  • Big Chief||

    If you're going to make a statement as unlikely as "Food stamp recipients in Congressional districts overwhelmingly vote GOP." you'd better bring some damn facts to the table and not just your own prejudices.

  • Palin's Buttplug||

    We don't have current data for what you ask.

    We do know GOP voters are becoming less educated, more rural, and more dependent on government.

  • Big Chief||

    You may know this, but that's bigotry, not facts.

  • Big Chief||

    I think what you mean is that you don't have data to support your claim or that can counter the report AlmightyJB links above.

  • vazhzsh||

    "We do know that the counties with the most SNAP recipients vote GOP by 160-67."

    I feel like that's you massaging what they actually found, again, because you've made a fool of yourself and can't find a way out.

  • Big Chief||

    No, we DON'T know that. The article states that the counties that they have data on(which is only about 2/3s of the total) with the highest concentration of recipients are IN GOP congressional districts. I didn't see any information stating how those counties themselves voted. More importantly I didn't see any information indicating how the recipients voted, which was what you initially stated.

  • Mint Berry Crunch||

    shrike, please click here, examine all the ways they broke down the Obama - Romney vote by income, and explain how the results support your narrative that the GOP is now the party of poor people.

  • Hydra||

    What we also know is that the wealthier and more educated a district is the more likely it will vote Dem.

    That would explain Bronco Bamma pushing income inequality every time he opens his pie-hole.

  • wadair||

    What we also know is that the wealthier and more educated a district is the more likely it will vote Dem.

    You don't know about Collin County, Texas--do you?

    Bonehead.

  • Sevo||

    "This is not factual support, this is redirection."

    Shorter:
    Shitpile lies.

  • Cytotoxic||

    Among the 254 counties where food stamp recipients doubled between 2007 and 2011

    Doubled from what to what?

  • Big Chief||

    Yes, it's a pretty poor article and seems to be more about advancing a narrative than revealing new or pertinent information. Otherwise why write this when you are including only 2049 out of 3007 counties?

  • Irish||

    Doubled from what to what?

    Exactly. It strikes me as rather difficult for a deeply impoverished county like Wayne County, Michigan to see their food stamp recipients double.

    Example: 34.5% of households in Detroit are on food stamps.

    It would be awfully difficult for that to double given that you would need 69% of all households to be SNAP recipients in order to achieve that doubling.

    That's also 'household' statistics rather than individual statistics. Given that poorer families are more likely to have more children, I'm willing to bet the number of individuals on food stamps is well over 34.5%.

  • Hydra||

    It would be awfully difficult for that to double given that you would need 69% of all households to be SNAP recipients in order to achieve that doubling.

    YES WE CAN!!!!

  • Big Chief||

    +1 Hope and Change!

  • Scarecrow Repair||

    The linked Pew Research data is dated 2013. Yep, times are a-changing ... backwards.

  • Irish||

    Really? So I imagined those 100% Democrat districts in Cleveland, Detroit, Chicago, New York, Los Angeles, Atlanta, Birmingham...

    Hell, AlmightyJB's posted article totally proves my point. Food stamp recipients are far more likely to vote Democrat, despite being about equally likely to say they're conservative or liberal.

    That implies that an awful lot of supposed 'conservatives' vote Democrat entirely because of the benefits they receive.

  • Big Chief||

    If I was really into wasting my time, I'd check to see which counties they didn't include due to lack of data. I'd be willing to bet that they include all the ones you list.

  • Francisco d'Anconia||

    Ooooh, PB, that had to hurt. Thanks for playing.

  • Palin's Buttplug||

    see 12:40 above.

    The median SNAP recipient has moved rural - GOP territory.

  • vazhzsh||

    "see 12:40 above."

    I did, it was a sad and obvious attempt to move the goalposts after you were embarassed.

    Why would you want me to reread your shame?

  • Austrian Anarchy||

    If true, that is another reason to get rid of that program. If false, it should still be abolished.

  • The Immaculate Trouser||

    the 1% represent a systemic risk that easily can (and does) corrupt the political process.


    A [citation needed] moment if ever there was one. For all their flaws, the liberal democracies and autocracies of the 19th century which made their peace with the inequality resulting from wealth were the most prosperous, free, and democratic nations around. Switzerland's incredible wealth and democracy were themselves the *result* of its status as a safe haven for old money during and after the French Revolution. This is still true today.

    The level of inequality in a society says nothing about the causes of said inequality, much less whether such is in fact harmful to the political process.

  • R C Dean||

    Time to trot out an Iron Law we haven't used in awhile:

    Money and power always find each other.

    If you want a powerful state, you can't get away from this, because those with the reins of power will make sure that themselves and their cronies are rich. See, its not just that rich people look for power, its that powerful people try to get rich. Ex. A: Harry Reid.

    While you can try, as Piketty and his crypto/neo-Marxist pals want, to impoverish everyone and leave the Total State intact, that doesn't work because the powerful will make themselves rich.

    The only way out is to strip the state of its power.

  • Mutt||

    Like the man said, Under capitalism, the rich become powerful. Under communism, the powerful become rich.

  • Hydra||

    While you can try, as Piketty and his crypto/neo-Marxist pals want, to impoverish everyone and leave the Total State intact, that doesn't work because the powerful will make themselves rich.

    A country can become so poor that even the elites aren't that well off. The average middle class American probably has higher quality of life than Kim Jong Piggy over there.

  • R C Dean||

    I doubt it. The elites in even the most impoverished countries these days live pretty fucking well, indeed.

  • Mr Whipple||

    Tyranny of the Proletariat

  • Cytotoxic||

    'The political process' is a monster that deserves to be corrupted and is often restrained by that corruption. Thank goodness for the 1%.

  • Virginian||

    You're assuming that corruption is restraining the monster. I think things like Kelo, those horses in Central Park, and the monstrous injustice of drug courts and DUI rehab cronyism shows that most of the corruption is not of the positive variety.

  • Cytotoxic||

    There's also lobbying to restrain legislation that would crush industries. I'm not sure what the net effect is, but I think the darkness of Socialist Sweden in the '70s gives a glimpse of what 'pure' and uncorrupted political process looks like.

  • Hydra||

    Among the million-murderers club of the past century, Hitler and Stalin each lived, worked, and ate in a single room. Mao had a healthy desire for wine and women, but of course his millions of murders were largely unintentional.

  • Sevo||

    "but of course his millions of murders were largely unintentional."

    Only if "unintentional" means he didn't exactly order his minions to kill them.

  • Sevo||

    And:
    "Hitler and Stalin each lived, worked, and ate in a single room."
    Not exactly, but close and in both cases is was from a well-earned fear of assassins.
    Similarly, Stalin would not leave the country to meet FDR or Churchill; he feared being overthown by the time he returned.

  • Virginian||

    True, but I'd rather have an honest government that repressed everyone equally. We have another way to solve that problem, one the rest of the world doesn't have.

    As it is now, those who are winners at playing the game have a vested interest in keeping the game going, even if they would do just as well or better under a more free system. One of the great tragedies of this current state is the amount of bright and capable people doing regulatory compliance or tax accounting instead of productive work.

  • The Late P Brooks||

    The obvious solution to the scourge of inherited wealth is to bulldoze the homes, stores and factories of dead entrepreneurs, and to throw their money on the funeral pyre.

  • Notorious G.K.C.||

    Yeah, if only entrepreneurs had a shorter time horizon, making money to spend right away or give to NPR, instead of wanting to leave wealth to their families. This whole "work hard because you want your families to be better off" thing is an abomination!

  • Austrian Anarchy||

    It would not be better served as grants to artists? What a way to die for art.

  • The Late P Brooks||

    Curse you, Sam Walton!

  • Charles Hurst Author||

    Never in history has Marxist policy increased the standard of living for a nation. As a matter of fact it has greatly reduced it—every single time.
    And the next anti reason statement from the Progressive will be that Obama is not a Marxist. Feel free to look up the definition of Marxism. From each according to ability—to each according to need. Like ACA—where one who earns more supplements with higher premiums for one who does not.
    Marxism. Exactly the above. And with continued implementation we will continue to plummet. As it was once said: “Eventually you run out of other peoples’ money.” Obama’s entire agenda was to take from the producer and give to the non producer. And we have an entire youth that is fine with it.
    I predict total economic collapse in my fiction followed by tyranny. Not because I’m a sage, but because I based my work on this wonderful professor known as History. And the thing with this lecturer is he tends to repeat himself on the podium.

    Charles Hurst. Author of THE SECOND FALL. An offbeat story of Armageddon. And creator of THE RUNNINGWOLF EZINE

  • Palin's Buttplug||

    By your definition all US Presidents are Marxists.

  • AlmightyJB||

    Stalinist would probably be more accurate.

  • Duke||

    Wut?

    There wasn't any welfare until FDR and no federal healthcare until LBJ. There were no income taxes until the early 20th century. Why do you hate truth buttplug?

  • kbolino||

    There was an income tax in the Civil War, but it ended with the war and was largely considered unconstitutional, hence the "need" for the 16th Amendment fifty years later.

  • Mutt||

    Who cares about standard of living? I'll be so much happier if everyone lives without air conditioning.

  • ||

    You can have my air conditioner when you pry it from my hot, sweaty hands.

    *checks forecast high of 98 and wishes it were Monday afternoon AFTER new central AC is installed and running*

  • Sevo||

    "Piketty sums it up with a simple equation: r g. And if r g for decades, he argues, capital contains the seeds of deep social conflict."

    Two points:
    1) The current US interest rates are largely set by the government; whatever "capitalism" might have caused is irrelevant to the current circumstance.
    2) "deep social conflict"? So he's proposing a protection racket? Fuck him.

  • Big Chief||

    He states in the article what Piketty means by interest rate. As it states above "Piketty correctly uses the term "interest rate" as a stand-in for the total average return on capital: profits, interest, and, when he has data available, capital gains."

    That's not the same thing as the funds rate set by the Fed that I think you're talking about.

  • Palin's Buttplug||

    Sevo, like many here, mistakenly thinks the Fed sets interest rates when in reality the markets do.

    The Fed funds rate is just a target for inter-bank reserve loans.

    Of course the Fed influences the rates through FOMC activities - but in a small way all buyers/sellers do the same.

  • Sevo||

    Palin's Buttplug|4.26.14 @ 12:09PM|#
    "Sevo, like many here, mistakenly thinks the Fed sets interest rates when in reality the markets do."

    Yes, just like the buyers set mortgage rates. AFTER the fed has distorted the market and forced them up or down.
    Shitpile, like so many not here, thinks the fed can do what it pleases and it will have no effect on the market.

  • sasob||

    Shitpile, like so many not here, thinks the fed can do what it pleases and it will have no effect on the market

    And if that were actually true, there would be no point to the Fed's existence - since its purported justification is to stabilize market prices for just about everything in the economy.

  • Irish||

    Sevo, like many here, mistakenly thinks the Fed sets interest rates when in reality the markets do.

    Hahahahahahaha. Yeah, that explains why when the Fed lowers interest rates the interest rates go down, and when they raise interest rates the interest rates go up.

    It also explains why Paul Volcker raising interest rates in the early '80s to combat inflation, banks immediately raised interest rates and inflation dropped.

    If the Fed doesn't directly impact interest rates, why did the early '80s interest rate spike result in an increase in interest rates? And why do the low Fed rates right now result in interest rates on savings accounts below 1%?

  • Palin's Buttplug||

    Volcker raised the Fed funds rate to 20% back then which meant that banks had to pay that rate on overnight loans to meet reserve requirements.

    There was nothing to prevent a bank that paid 12% on savings to charge 15% on loans at all. It was still profitable.

    The real world difference is that banks usually loan to the hilt and often hit that 20% reserve trigger.

  • Sevo||

    "The real world difference is that banks usually loan to the hilt and often hit that 20% reserve trigger."

    Translated from shitpile-speak:
    "Yes, the fact is the Fed sets the rate"
    Got it.

  • Irish||

    So when the Fed sets a target, the banks almost always hit it.

    But the Fed doesn't set interest rates. Okay.

  • Sevo||

    "But the Fed doesn't set interest rates. Okay."

    He keeps throwing bullshit on the wall 'cause his mommy said something will stick.

  • R C Dean||

    PB pretends to be knowledgable about capital markets.

    Anyone knowledgable about capital markets would know that the Fed dictates the fed funds rate, and that rate in turn is directly and explicitly used to set lots, and lots, and lots of other interest rates.

    And, of course, indirectly drives the rest of the market.

    The Fed doesn't follow the market. It makes the market.

  • R C Dean||

    One other way the Fed makes the interest rate market:

    The Fed clears Treasury auctions, no matter what. That's why rates are so low right now. When the Fed decides rates are too low, it dumps Treasuries in quantities sufficient to move the Treasury market rate to where it wants.

    The Fed doesn't just directly set the fed funds rate, the Fed also sets the rate for Treasuries. And, again, this directly and explicitly, by formula, drives lots of other variable rates in the market.

  • Palin's Buttplug||

    The reserve requirements are small, what, about 4% on average?

    The fact that banks cannot manage capital around a small reserve requirement dictates the need for a central bank.

    Otherwise nearly every depositor would have lost his account in 2008.

    I can do without SS, Medixxxx, SNAP, everything but a modern capitalist economy cannot do without a central bank.

  • vazhzsh||

    And yet, when you say "[Sevo] mistakenly thinks the Fed sets interest rates when in reality the markets do." you're apparently too fucking stupid to see that, by your own admission in the post I'm replying to, the Fed manipulates the supply of money, which in turn...wait for it...wait for it...

    Yeah, you know what it does.

    I love that you are so inept that you end up arguing against yourself.

    Shorter, more instersting PB "Derp, the fed dun't do interest rates, dey just mess with the money supply derp"

  • Sevo||

    Palin's Buttplug|4.26.14 @ 1:14PM|#
    "The fact that banks cannot manage capital around a small reserve requirement dictates the need for a central bank."

    The central bank sets rates and forces banks to act, therefore we need a cental bank.
    Fuck your circular reasoning.

  • Hydra||

    The fact that banks cannot manage capital around a small reserve requirement dictates the need for a central bank. Otherwise nearly every depositor would have lost his account in 2008.

    In the absence of a central bank the 2007 crisis never happens.

  • Mr Whipple||

    The reserve requirements are small, what, about 4% on average?

    LOL "Reserve requirements".
    http://en.wikipedia.org/wiki/B.....quirements

    The fact that banks cannot manage capital around a small reserve requirement dictates the need for a central bank.

    Sure they can. They just can't overextend themselves as much. And if they do, then they are placed in receivership and their assets are sold to the highest bidder in a liquidation process, like any other business.

    The problem with that is the legal system is so damned slow. Which is part of the reason why about 90% of bank failures are resolved through "Purchase and Assumption". Which is why the top 4 banks went from controlling about 40% of all assets, to well over 60%, today.

    However in the case of Bear Steams and AIG, the Fed purchased assets through it's 3 "shell companies" the Maiden Lane LLCs, which is really outside the scope of the Fed. But now, they don't even pretend. They directly buy the shit MBS and put it on their balance sheet as paert of QE Infinity.

    People really need to take a non-partisan look at the Fed and what it does, and how central banks affect the distribution of wealth, among other things. All one needs to do is study the history of money and banking.

    http://mises.org/document/1022.....rld-War-II

  • Hydra||

    Of course the Fed influences the rates through FOMC activities - but in a small way all buyers/sellers do the same.

    The difference being that other buyers and sellers are using their own money and suffer if they make poor decisions. That limits their ability to willfully influence rates.

  • Irish||

    Other buyers also don't have the same amount of money or power as the fucking Federal Reserve.

    Saying 'in a small way other buyers do the same' is a rank absurdity. It's like saying I and a monsoon both have the ability to raise water levels because one time I dropped a glass of water on the floor.

  • Sevo||

    "Saying 'in a small way other buyers do the same' is a rank absurdity."

    You're too kind. It's a blatant lie, as is common with shitpile.

  • Palin's Buttplug||

    Private market loans can be arranged at any rate.

    In a fractional reserve system you must have a central bank.

    Some Paleo extra-crispy libertarians want full reserve, I am aware. They are fools.

  • Cytotoxic||

    Private market loans can be arranged at any rate.

    *Can* be. They ARE arranged at rates influenced by the fed.

    In a fractional reserve system you must have a central bank.

    Lies.

  • Sevo||

    Palin's Buttplug|4.26.14 @ 1:23PM|#
    "Private market loans can be arranged at any rate."
    Yeah, I'm sure you charge 50%/annum, right? And customers are lined up around the block!

    "In a fractional reserve system you must have a central bank."
    Assertion acting as argument.
    Fuck off.

  • Hydra||

    Private market loans can be arranged at any rate.

    Bookstores are free to sell books at any price, therefore Amazon doesn't influence the price of books at all.

  • Jordan||

    In a fractional reserve system you must have a central bank.

    Citation needed.

  • Plopper||

    In a fractional reserve system you must have a central bank.

    History would beg to differ.

    Canada up until the 1930s is just one example.

    http://www.cato.org/sites/cato.....selgin.pdf

  • Brian||

    Palin's Buttplug:

    In a fractional reserve system you must have a central bank.

    http://en.wikipedia.org/wiki/F.....ng#History:

    Fractional-reserve banking predates the existence of governmental monetary authorities and originated many centuries ago in bankers' realization that generally not all depositors demand payment at the same time.
  • sasob||

    Some Paleo extra-crispy libertarians want full reserve, I am aware. They are fools.

    Only for demand accounts like simple checking. Time accounts such as passbook savings, cds and the like - not so much.

  • Anonymous Coward||

    Yes, because me putting my pinkie on one side of the scale is remotely comparable to the Fed resting its ass on the other side.

  • Hydra||

    Sevo, like many here, mistakenly thinks the Fed sets interest rates when in reality the markets do.

    If Saudi Arabia started selling oil for $0.01 a barrel, it would be obtuse to claim that the resulting drop in oil prices was "chosen by the markets". And unlike Saudi, the Fed has an inexhaustible supply of dollars to play with.

  • R C Dean||

    Piketty correctly uses the term "interest rate" as a stand-in for the total average return on capital: profits, interest, and, when he has data available, capital gains.

    Why use the word "interest rate" when what you mean is "combined return on capital."

    But, even accepting his definition, the fact that fed funds rate is centrally controlled and manipulated means that the interest rate as he defines it is centrally controlled and manipulated, because its part of his equation, too.

  • Irish||

    Why use the word "interest rate" when what you mean is "combined return on capital."

    Because leftists need to sow confusion in order to make their ideas seem reasonable. That's why Piketty talks about 'return on capital' but doesn't break capital up into treasury returns, stock returns, real estate returns, etc. Because if you broke them up, it would become obvious that the 'return on capital' is an illusion since it depends on what you invest in.

  • The Immaculate Trouser||

    He does use the term 'return to capital' in the book, IIRC. I believe the reviewer misspoke, because 'r' as a variable in economics is generally in reference to interest rates -- but I don't recall Piketty using the term 'interest rate' in reference to his argument.

  • Palin's Buttplug||

    The article made it clear, Piketty uses "interest rate" to mean return on capital.

    The return on capital has been very high since 2009 where the actual interest rate banks pay has been very low.

  • Sevo||

    I used the plural advisedly to avoid some pedant misunderstanding, so I'll ignore that.
    And yes, the fed interest rate (singular this time) defines what other "rates" (plural to indicate it includes other ROI, OK?) are considered high or low.

    Oh, and shitpile? Go get screwed with a farm implement.

  • Notorious G.K.C.||

    Yale's Social Justice Network (headquartered in Dwight Hall) rejects a prolife student group's application for full membership.

    "Dwight Hall co-coordinator, junior Teresa Logue, claimed that she was very careful that political bias not interfere with the group’s decision — despite wearing a “Yale feminists” T-shirt to the vote....

    "Before the vote, Andre Manuel, chair of the Yale chapter of the American Civil Liberties Union, an SJN group, wrote an opinion piece advising against allowing CLAY into the network because it would “divert funds away from groups that do important work pursuing actual social justice.”"

    https://www.campusreform.org/?ID=5557

  • Virginian||

    It's almost like social justice is just a bullshit codeword for redistribution.

  • Big Chief||

    It seems to mean leftist causes.

  • Virginian||

    Leftists have no other cause. Their entire raison de' etre is taking from the people they hate and giving to the people they like.

    They literally advocate nothing else.

  • Mutt||

    Fetuses are not entitled to actual justice.

  • The Late P Brooks||

    How's this for a solution to wealth inequality: create and sell something to a rich person.

  • Notorious G.K.C.||

    But rich people already have all the diamond-encrusted monocles they need!

  • AlmightyJB||

    They never have enough souls though. You're not even a true libertarian if you haven't sold your soul to the Koch brothers. You get the best deal Christmas day.

  • Notorious G.K.C.||

    "Ho ho ho, stab thine arm courageously,
    And bind thy soul, that at some certain day
    Great Lucifer may claim it as his own;
    And then be thou as great as Lucifer."

  • LynchPin1477||

    Great, now we're going to have to change the passphrase for entrance into the secret libertarian club house.

  • From the Tundra||

    I had an ardent lefty tell me once:

    "You are making an economic argument. It won't work because there must be a loser for there to be a winner."

    Still not sure what she meant.

  • Anonymous Coward||

    That commerce is a zero-sum game and that it is impossible, utterly impossible, for both sides in a well-struck deal to benefit from their bargain.

    Me selling you food means that only I benefit. That food is merely an illusory benefit because you have to come back and buy more of it with more of your money. Money which I then throw in my big vault and swim around in.

  • Hydra||

    In the absence of efficiency differentials it is a zero-sum game. A transaction is only beneficial to both parties if they each can produce what they trade more efficiently than the other. In your example, it would require you to be more efficient at making food than getting money and vice versa for me.

  • Sevo||

    "A transaction is only beneficial to both parties if they each can produce what they trade more efficiently than the other. In your example, it would require you to be more efficient at making food than getting money and vice versa for me."

    Which is to say that trade only happens when it IS mutually beneficial.

  • Ann N||

    thats a really ignorant way to look at it.

    as shown with obamacare, volitional involvement in a business transaction is optional. sometimes the govt has to mandate participation against the wishes of potential parties.

    to say transactions only happen when mutually beneficial is not really true.

    for that to be true you have to expand the context from the transaction itself, to the broader legal context of penaltax/govt force.

    trade not only happens regardless of mutual benefit, it happens regardless of mutual consent. its wonderful.

  • Mr Whipple||

    Technically, one side probably will benefit more than the other. But since value is subjective, it is nearly impossible to determine which side does benefit more. Unless you are a mind reader.

    Jeffrey Tucker explains it 2 minutes so that a 10 year old can understand it.

    http://www.youtube.com/watch?v=BzS3khRwc6s

  • Gorilla tactics||

    both sides benefit because both sides have differing utility functions and indifference curves.

  • Dances-with-Trolls||

    She said that she believes that economics is zero-sum and that she has no idea about how wealth is created.

  • Ann N||

    if your grasp of economics comes from playing monopoly with only 2 players, you would probably arrive at the same conclusions. everything would be zero sum.

  • The Late P Brooks||

    "Piketty correctly uses the term "interest rate" as a stand-in for the total average return on capital: profits, interest, and, when he has data available, capital gains."

    I'd say that's a pretty shoddy use of the term "interest rate".

    Particularly for an "economist".

  • phandaal||

    Came to the comments for Tony. I am disappoint.

  • AlmightyJB||

    Derp. Derp. Derpity Derp. Better?

  • MJGreen||

    Give it 5 hours. When things quiet down, he'll swoop in to prove every one of our points wrong.

  • Swiss Servator, Käse, Käse!||

    Is that not Tulpa's MO, more so?

  • The Late P Brooks||

    Of course, making a distinction between types of investment and their respective risk-adjusted rates of return weakens the argument, doesn't it?

    Scrooge McDuck's swimming pool filled with doubloons is a much more easily grasped notion.

  • Irish||

    Of course, making a distinction between types of investment and their respective risk-adjusted rates of return weakens the argument, doesn't it?

    Exactly. Treasury notes give returns right now drastically lower than the number Piketty gives. On the other hand, investing in stock gives returns much higher.

    So the return on capital is actually based on risk. If we stopped people from getting high returns for the risks they take, the economy would not function since most great ideas come with high amounts of risk.

  • Sevo||

    "So the return on capital is actually based on risk."
    True enough, but the Fed sets the floor on supposedly zero-risk investment and that becomes the reference for the market.

    "If we stopped people from getting high returns for the risks they take, the economy would not function since most great ideas come with high amounts of risk."
    Piketty actually admits this in pointing out that efficiency is going to be harmed if he gets his way.
    And, of course, since this is a pitch for TOP MEN, we know who gets to make the choice about how much prosperity we give up to get "fairness".
    The Norks set a pretty high standard for "fairness"; starvation is fairly well distributed.

  • LynchPin1477||

    Perhaps not unexpectedly, during the famine of the 90s, black markets sprung up in North Korea that allowed certain people to attain a relative level of food security and even some comfort. Ask those people what it was like to pass by gangs of orphans that scavenged for food in the woods, and you get some fairly callous responses. They felt bad for those that were suffering, but they had to take care of themselves and their own. Kindness didn't keep them alive.

    Generosity is a luxury. Make society poorer and watch people get more anti-social, a charge often leveled against libertarians by progressives that want to weaken engines of prosperity. It would be a delicious irony if not for the human suffering.

  • Sevo||

    Both Pipes and Figes, regardless of their somewhat different political views, make no bones about the famine caused by the Bolshies' economics and the resultant cannibalism. Ditto Becker in "Hungry Ghosts: Mao's Secret Famine".
    You want famine and misery? Push lefty econ.

  • Gorilla tactics||

    Scrooge McDuck was a mercantilist, not a capitalist.

  • Hydra||

    What gets me about the income inequality canard is that if you look at it in terms of quality of life rather than the Fed's monopoly money, inequality is shrinking at a breakneck pace. The top 1% today don't have much better quality of life than their counterparts in 1980, while the bottom 10% have significantly more comfortable lives than their counterparts in 1980.

    And that's just the US -- look at India or the PRC for an even more enormous improvement in QOL.

  • Dances-with-Trolls||

    Craziness. Everyone knows that it's little green slips of paper that matter.

  • Banjos||

    I don't know who on here said it, but they put it perfectly when they said that they don't care if Bill Gates can afford to buy thousands of iPhones when he can only afford to buy one as both him and Gates gets the same amount of utility out of it. If I had the power of a schoolmarm, I would have every person screaming income inequality nonsense to write "money is not wealth" a thousand times on a chalkboard.

  • Gorilla tactics||

    exactly, it all boils down to utility functions; meaning no third person should interfere between trades because he cannot get in the head of those making the trade.But merely admitting that would undermine the nanny state entirely.

  • JagerIV||

    I don't doubt this, but could you give a link? I've never seen a study break it inequality down into standard of living, and if it exists that would be a useful source to have for future arguments.

  • Hydra||

    Quality of life is a hard thing to quantify. But I don't think anyone could seriously disagree with the claim.

  • The Late P Brooks||

    Of course the Fed influences the rates through FOMC activities - but in a small way all buyers/sellers do the same.

    That's so cute. Now, tell us where interest rates would be without the Federal reserve propping up the bond market.

  • Pulseguy||

    1. Amazon has a capitalized market value of about $400 Billion. A huge success, right? No, not actually. It barely nets anything. It is worth a tiny fraction of its market cap. Because market cap is not a reflection of what it is worth. A plumber in Ohio with no business acumen (or a dentist in LA, for that matter) invests $1050 when he pays $105 for a share of something that last traded at $100. The 'value' of the company suddenly increased to $105 B from $100 B. No, it didn't. The newspapers claim it did, everyone in their weird little psychologies claims it did, but in reality the company is worth what a prudent investor would pay for it after evaluating risk, longevity, and comparing it to competing investments. And, that value on Amazon, for example, is nowhere near what it is worth.

    The problem with these types of analyses is they treat aggregate wealth in all its various forms as if each form is the same. I can tell you from years of personal experience cash in the bank is excellent, a share of a high-tech company might or might not have any meaning on your life. Owning a good solid real estate investment that kicks off monthly income, geared to inflation, for life....now you're talking wealth.

  • Mr Whipple||

    But it's a whole new ballgame. CDs and money markets don't even keep pace with the price inflation that they claim we have. The only thing you are going to do with real estate is probably in a REIT, although we'll see what what happens to BlackStone with all of their residential purchases. (Personally, I still don't know how the commercial REITs didn't completely collapse). The only real game in town is equities, and the common investor is going to put that into ETFs and Mutuals. So, pick up your phone and call Vanguard or BlackRock.

  • Ken Shultz||

    "He is vague about what this awfulness might consist of, but the memory of the last century brings to mind quite a few unpleasant scenarios that can happen when the average citizen gets upset at elites: anything from an overregulated banking sector to a Marxist revolution, with dozens of possibilities in-between."

    This seems to presuppose the perspective of the ignorant. This seems to be about what the ignorant do under certain circumstances--not what they should do or what the solution is to that problem.

    In other words, even when there is widening income disparity, the solution to that problem isn't regulation, redistribution, or, God forbid, Marxist revolution.

    And, anyway, I think we're approaching a point where the left is likely to split over the environment anyway. You're not going to be able to have a tax based on how much people pollute (big enough to impact the problem)--and also tax people based on how much money they make or have, too.

    I mean, you can start out that way, but the impact on the economy will be so devastating that the American people will throw the bums out and undo either your socialist tax scheme or your environmentally based one.

    That infighting could last a couple of generations.

  • Hydra||

    He's basically restating Schumpeter's point that capitalism sows the seeds of its own destruction by breeding an intellectual class which is convinced it has all the answers.

  • Gorilla tactics||

    Yeah, Schumpeter was basically saying that capitalism works so well that it is able to afford a class of intellectuals who were outside of the "feedback loop";; a group of people of paid no price for being wrong. Hence the reason why intellectuals are always on the left-why wouldn't they be? They're tenured and they will never pay a price for being wrong.

  • Sevo||

    Gorilla tactics|4.27.14 @ 10:18AM|#
    "Yeah, Schumpeter was basically saying that capitalism works so well that it is able to afford a class of intellectuals who were outside of the "feedback loop";; a group of people of paid no price for being wrong."

    And it works, to a certain extent, even in primitive capitalist societies.
    The Bolshies were funded by capitalists in overthrowing the Tsar, with not a one of them prescient enough to see what they were doing.

  • Cytotoxic||

    The green left is already getting thrown under the bus. Ecuador wants more oil drilling. Labor unions are furious over Keystone getting delayed again and some Dems are going to start breaking ranks.

  • Mr Whipple||

    Germany pretty much screwed themselves with green energy. They could have been developing fracking technologies instead of all of those fucktarded windmills. If they had, they would be in a much better position with regards to what is going on in the Ukraine.

  • Gorilla tactics||

    sweet tears of unfathomable sadness

  • Pulseguy||

    2. I have yet to see the capitalized value of pensions included in wealth. A good indexed pension is worth about $1,000,000. More if the person is 42 and has put 20 years in in California. That pension could be worth double that. This fact reduces 1% wealth, because they ultimately pay for it, and adds to middle class wealth hugely.

  • Pulseguy||

    3. Everyone is concerned about how some people have too much, but no one really looks at the causes of why they have too much. Or, at least they spend too little time on that.

    Education hurts as many people as it helps. Get the wrong degree, get a PhD in art history, end up with $100gs in debt, and you are worse off than if you dropped out of high school and got a plumber's ticket, and bought a modest house in a decent area by the time you were 25.

    Our economy is largely mental now. Those with mental acuity do well. Those who smoke pot all day, don't. Even if they began with good mental acuity.

    The distance between those who have and are getting richer, and those who are hanging on, largely has to do with which field they went into, whether they can save, whether they over-spend, and their character. Largely. Not always. But, usually character wins out.

  • Plopper||

    I smoke pot almost every day and my mental acuity barely suffers at all.

    I think most stupid potheads were stupid long before they started smoking pot all day.

  • R C Dean||

    I smoked pot just about every single day through college and law school.

    Didn't seem to hold me back any.

  • Virginian||

    Right, but I wouldn't at all be surprised if long term marijuana use had negative health consequences. But I wouldn't at all be surprised if it was less than tobacco and/or alcohol.

    Gosh, sure would be nice if there was some scientific study done on the topic. Wonder why I can't find any?

  • sasob||

    Inhaling smoke - whether it is from tobacco or marijuana - increases the amount of carbon monoxide in the blood. This in turn contributes to placque build up on blood vessel walls. Over a period of time smoking - especially heavy smoking - will greatly contribute to atherosclerosis - inflamation, constriction and inelasticity of the blood vessels. Not only does this make heart attack and stroke more likely in later years, it can also deprive the brain of needed blood flow and oxygen, an attendant cause of dementia. Naturally some are much more susceptible to this than others, but no one is immune.

  • Charlotte Falcon||

    You're deluding yourself.

  • politicsbyothermeans||

    Citation needed.

  • The Immaculate Trouser||

    I read the book over the week. The research that went into it is obviously quite laborious, and will likely be referenced by economists for many years to come. The theory expounded... not so much. Basically, Piketti is saying that capital's rate of growth has historically tended to outpace the growth in the rest of the economy (r g). There is no evidence proffered as to why that this is a bad thing, and in fact it should be noted that real wages tend to grow under exactly those circumstances. Worse, the 'solution' is stunning in its stupidity and naivette: a global 60% wealth tax on 200K household income, and an 80% wealth tax on incomes over 500K. Forget how naïve this is in light of the failure of an international climate change treaty; Pickett admits that this won't bring in much wealth but is in favor of it anyways to stop 'inequality' -- despite the proven harm of those taxes in killing economic growth and the obvious ramifications of the government expropriating 80% of a nation's GDP through taxes every year.

    Pickett's 'bright spot' in his economic analysis is WWI, WWII, and the interwar/post war period, largely because this period was greatly destructive to Europe's accumulated wealth and capital. Between this and Krugman's fantasies of another WWII-level event, one must wonder at the motives of these economists in desiring wealth taxes which they themselves admit will not bring in much revenue.

  • Sevo||

    "Pickett admits that this won't bring in much wealth but is in favor of it anyways to stop 'inequality' -- despite the proven harm of those taxes in killing economic growth and the obvious ramifications of the government expropriating 80% of a nation's GDP through taxes every year."

    From Pipes "Russia Under the Bolshevik Regime":
    "When told in Russia that 'things didn't happen' the way he had described them, Reed responded "[...]The important thing was {...}over-all impression".
    Intent trumps result.

  • Dances-with-Trolls||

    I didn't read the book but have read a few reviews. My summation is basically "Leftist economist finds collectivist conclusion in service of Just-World Fallacy." Does that gel with your reading, or did I miss something critical?

  • The Immaculate Trouser||

    More or less. I got the impression that the author was really passionate about the economic data and history, and I don't have a huge problem with his overall takeaway (that capitalism tends towards inequality), but I also don't see a historical reason to see that as a bad thing in itself or to see his 'solution' as anything more than the typical leftist economy-wrecking garbage.

    IOW the economics is pretty decent, the advocacy/political theory not so much.

  • Dances-with-Trolls||

    Did he happen to mention a system that didn't tend toward inequality? Cuz I've never found one, just variations on how widely spread the inequality is and how the "winners" gain that status.

  • The Immaculate Trouser||

    He mentioned the period from WWI-1970 as a period which bucked the general trend. For obvious reasons, I don't think that's a good period to model your economy off of, but there you go.

  • Irish||

    "All we need are two world wars, a great depression, and the threat of nuclear annihilation, and we too can live a utopia based on income equality!"

  • Cytotoxic||

    Don't forget the inflation and shortages!

  • Sevo||

    Irish|4.26.14 @ 1:27PM|#
    "All we need are two world wars, a great depression, and the threat of nuclear annihilation, and we too can live a utopia based on income equality!"

    Pretty sure that the commies spreading poverty and starvation to something like a quarter (?) of the world's population might have something to do with the economic trends.

  • Gorilla tactics||

    Why the fuck am I supposed to give a shit about people making more money than me? They have longer hours and more stressful jobs, let them have their cash. Everyone wants a mercedes, no one wants that guy's office hours.

  • Hydra||

    And the media coverage will be 95% on the advocacy and 5% on the economics.

  • Mr Whipple||

    What I call "neo-Keynesianism", or "Progressive Economics" is an unholy merger between pure Keynesian economics, and Marxist economics. Labor Theory and Subjective theory are oil and water.

    Then there's the MMTers and RBEers which are totally out of their minds.

    Purple unicorns whose shit tastes like butter, so you can spread it on your toast and tell yourself, "I'm not really eating shit."

  • Gorilla tactics||

    fuck labor theory

    Remember what Rothbard said, the labor theory of value is not economics, it's the secularized aspect of the calvinist divinity of labor. That is all.

  • Hydra||

    It's not about collecting revenue, it's about discouraging wealth and the activities that produce it.

  • Mutt||

    "Basically, Piketti is saying that capital's rate of growth has historically tended to outpace the growth in the rest of the economy (r g). There is no evidence proffered as to why that this is a bad thing"

    It's bad because to his ilk, fair is synonymous with equal.

  • Pulseguy||

    4. Largely wealth is meaningless. You can only eat so much. Your money stays in the bank and gets loaned out. Or, you spend it on meaningless baubles which creates employment. Or, you own shares in companies, which you actually don't own, but they make it think like you do. It is largely a scorecard that says 'I won, you lost'. The quality of ones life is not dependent upon how much money you have past a very modest amount. I have owned Porsches and Honda Civics. I like my Porsche. I cannot arguably say I would have much less fun in a Honda Civic. And, the Porsche is pretty much the only material thing that actually affects me, and only then because of its sensual nature. The top is down, I toss it hard into corners, etc. It has an experiential value somewhat over and above the Civic. A Lexus sedan is virtually the same to me as the Civic, other than the ego status effect.

  • Irish||

    ^ This is a good point. Progressives tend not to understand the concept of diminishing returns.

    After you reach a certain minimum point of wealth, higher levels of wealth don't make you much happier. I don't think Bill Gates is notably happier than someone making $300,000, whereas someone making $40,000 is far happier than someone making $30,000 because they don't have to worry as much about making ends meet.

  • Pulseguy||

    A really great wife is a luxury few have. Kids that love you and respect you is something few have. Having a body that doesn't break easily is a luxury few have. Having time to enjoy yourself is a luxury few have. Only that last one usually takes some money. The rest not so much. And, the last one doesn't take a lot of money if you eschew baubles and big houses.

  • R C Dean||

    Largely wealth is meaningless.

    I disagree. Wealth is design margin, economic security and thus personal security. There's a huge difference between not knowing where your next meal comes from, and knowing that you and your family never miss another meal.

  • Pulseguy||

    RC...I don't disagree. It wasn't quite as clear in the first sentence where I wrote "Largely wealth is meaningless", which I meant as 'large amounts of wealth are meaningless'. Later in the post I wrote wealth is meaningless beyond a modest amount.

    I've been dirt poor, and it is horrible. And, I've been wealthy. It is great, by the way. Anyone who says money doesn't make you happy doesn't know what they are talking about. But, the principal thing money does is give you back your life. It gives you freedom to do, or not do. It buys you your own time back. Beyond that, not so much. Most of its effect is pure ego stroking. Real increase in sensual pleasure is not very money dependent. Other than if you are forced to work 60 hours a week at a tough job to make ends meet.

  • Hydra||

    I'm not entirely sure I agree. Michael Bloomberg's and George Soros' excess wealth is not meaningless, unfortunately.

  • Virginian||

    Bloomberg's certainly is. He's poured out his wealth like water, and yet the gun laws keep dropping.

    He would have generated a better return buying penny stocks or lottery tickets.

  • Swiss Servator, Käse, Käse!||

    I am begging him to spend his entire fortune on anti-gun lobbying - may his heirs receive naught but sour looks and derision.

  • Mr Whipple||

    I have an old-timer client that builds and sells houses. He's about 75 years old. He's got everything he and his wife need, and all his sons and daughters are in good shape, financially. His philosophy is, since he has the resources and the ability to build houses and create wealth, he feels its his obligation to the community to do so.

    Personally, I think everyone, to the extent possible, should be self-employed or a freelancer, or even shareholders in the company they work for. Sure, I agree with the Marxists when they say, "eliminate wage labor".

  • R C Dean||

    Pickett's 'bright spot' in his economic analysis is WWI, WWII, and the interwar/post war period,

    A period of time when economics was profoundly distorted by out-of-control statism increasingly displacing markets.

    Trying to create a general theory, and apply it to current circumstances, based on a deeply distorted and unusual period, is bound to fail.

  • The Immaculate Trouser||

    Right, exactly. Beyond that, it will be a though sell to claim the Great Depression period as preferable to 1910 for the average Oklahoman, or 1950s Japan as preferable to that of the 1930s to the average Kyoto resident simply because there is less inequality.

  • Hydra||

    Unfortunately, if you look at economic history, out of control statism is the norm and free markets are the freak accident. The human mind is designed for statism.

  • Sevo||

    "The human mind is designed for statism."

    I think this is left-over tribalism. Mommy and Daddy told you what to do, and when you got older, the village elder did.

  • R C Dean||

    out of control statism is the norm

    Can't argue. But the period bookended by the world wars and featuring the rise of communism and fascism, is anomalous, full stop.

  • Mr Whipple||

    The human mind is designed for statism.

    That question was asked in 1552.

    http://tinyurl.com/mgjzpge

  • WC Varones||

    Haha!

    Ironically, the central planners at the Fed manipulated interest rates lower, but ended up making the wealth gap much bigger as they created a bubble in asset prices.

  • Pulseguy||

    Lastly, profits can not grow larger and larger...unless you are in a highly regulated economy. It is regulations that create barriers to entry into a highly profitable sector of the economy. Create very high profits and suppliers flock to that sector, unless of course they can't, in which case the sector continues to kick off huge profits.

    Rents could be really cheap for example, provided one thing happens. Eliminate zoning. Take away zoning and the value of all land equalizes. Take away zoning and anyone can build rentals anywhere. The market would immediately create enough rentals that profit is gone. Put in rent restrictions and producers leave the market, rents become more and more onerous. Governments then, in their infinite stupidity, add more restrictions, which further reduces supply.

    Piketty isn't looking at why profits are so high, and why they are growing at a faster rate than the economy. I would love to see an analysis of government regulation and red tape and its effects on oligarchic profits vs GDP growth.

  • Jerry on the sea||

    Capital in the Twenty-First Century, by Thomas Piketty, Belknap/Harvard, 685 pages, $39.95.

    I see the book is priced rather proletarian.

  • Sudden||

    OT, but tangentially related: Rich white guy hate is about to skyrocket today, thanks to Donald Sterling's remarks courtesy of TMZ's Stasi like reach.

    A lot of people are apparently just seeing the excerpts that are being pulled like the "don't bring black people to my games" line he said to his girlfriend. But a lot of it seems to be less racism than a disturbing underlying sexual insecurity. The guy told his girlfriend that she could fuck Magic Johnson (seriously, bro, that dude's HIV positive), just not take pictures with him on "the Instagram" otherwise he'll get calls from people asking why his gf is hanging out with black people (and maybe they're asking because you've given your gf permission to sleep with other men). This is one of the most fucked up stories I've ever seen, and people seem to be viewing Sterling as a firebreathing hate demon consuming the souls of black people instead of seeing him as some disturbingly insecure man.

  • Calidissident||

    Why not both?

    (BTW, fuck the Clippers)

  • Heroic Mulatto||

    The Tenth Commandment Club has no qualms with a Jean Valjean stealing bread to feed his family

    Yet, tens of thousands of severed Middle-Eastern right hands would disagree.

    Jus' sayin'

  • Virginian||

    When hit with that bullshit hypothetical, I always like to say that I don't think the baker's children should go hungry because of a thief who is too lazy to work or too proud to beg.

  • Heroic Mulatto||

  • Virginian||

    Similar bullshit

    http://www.washingtonpost.com/.....story.html

    When he called police, he was shocked to learn that what happened was legal. A man working on the neighboring farm told police that Boo and Hank had gotten into his coop and killed a rooster and that he’d caught them in the coop before and let them go. This time, he shot them, and he was within his rights.

    “They’re city dogs. They live in the city,” Taylor said. Boo wore a pink collar with her name, phone number and e-mail address on a tag.

    “The simple solution for a rational person is to pick up a phone, but what this law allows people to do is to pick up a gun,” he said.

    Fucking city fools.

  • Heroic Mulatto||

    I'm sure Mr. Taylor offered to repay the farmer the cost of his livestock, because that's what you do when your negligence harms someone's livelihood, right?

  • Sevo||

    "I'm sure Mr. Taylor offered to repay the farmer the cost of his livestock, because that's what you do when your negligence harms someone's livelihood, right?"

    As a yute, I was warned by a farmer that if my dog chased his cows, he'd shoot the dog.
    He said simply 'if that cow's head isn't down eating grass, I'm losing money'.
    I didn't let the dog chase cows.

  • Irish||

    Clearly that farmer should have let them destroy his property repeatedly because their owners were too fucking stupid to keep them on leashes.

    I live in the city and bring my dogs to the country. To my knowledge, I've never let them break into a chicken coop.

  • Virginian||

    “They’re city dogs. They live in the city,”

    But they were killing stock in the country. It reminds me of when Sumdood kills Sumotherdood in one of the Richmond projects and the killer's mom (who's usually about 35 or even younger) says "He's a good boy." Even bad men love their mamas, and even the nicest dogs will kill chickens if they get a chance.

  • C. Anacreon||

    The comments on the article are surprisingly almost all "the dog owner should have kept his dog fenced or on a leash". Given it was the WaPo, I would have thought everyone would have been talking about the sanctity of Lassie.

  • Hydra||

    The baker was selling that bread, not feeding it to his children.

  • Heroic Mulatto||

    The baker was selling that bread, not feeding it to his children.

    And he shat out the materials to bake that bread from his ass?

  • Hydra||

    No, where did I say he did?

  • Heroic Mulatto||

    Think this through, then. The baker invested some of the money he could have used to buy food for his children to purchase materials for his bakery in hopes of selling his bread at a profit so that he ends up with more money in which he could buy more food for his children than had he not attempted to bake bread and sell it. This is called entrepreneurial risk. The baker's livelihood is how he ensures that he will be able to feed his children in the future. So yes, the thief is stealing food from the baker's children's mouths.

  • kbolino||

    Then what was your point, kemosabe?

    Yeah, the baker isn't feeding his own children with the bread he bakes, but instead with the money he makes from selling the bread. If the bread is stolen rather than sold, then the baker makes no money off it. If he can't afford to buy the materials to make the bread, then pretty soon he will have neither money nor bread with which to feed his children.

  • Hydra||

    He has more than just one loaf though. He can just raise the price of his remaining bread to recoup the loss.

    I would think if his children were on the brink of starvation he wouldn't be selling bread to other people.

  • Virginian||

    He has more than just one loaf though. He can just raise the price of his remaining bread to recoup the loss.

    Right, and people making more than 100,000 dollars a year don't need all that money, so we can just nudge taxes up a little bit.

    I would think if his children were on the brink of starvation he wouldn't be selling bread to other people.

    His children are not on the brink of starvation because he sells bread, not because he gives it away.

  • kbolino||

    He can just raise the price of his remaining bread to recoup the loss.

    He can raise the price, that does not mean he will "recoup the loss". People have to buy his bread for him to make money. There are other bakers and other types of food.

    I would think if his children were on the brink of starvation he wouldn't be selling bread to other people.

    He is selling bread to other people so that putting food on the table isn't his primary concern.

    If you steal from the baker, then yes he has remaining inventory to sell or feed his family if needed. But the bread you stole still cost him some amount to make, and now he does not have that capital to spend on replenishing his inventory.

    Repeat this process long enough and pretty soon putting bread on his family's table will be the baker's biggest worry.

    Wealth is hard to create and easy to destroy.

  • Hydra||

    He can raise the price, that does not mean he will "recoup the loss". People have to buy his bread for him to make money. There are other bakers and other types of food.

    But if they're also having bread stolen, their prices will go up too. Unless all the poor people are specifically targeting one baker everything works out.

  • Virginian||

    Right and auto theft isn't an issue because the insurance company will pay for it.

  • Locke||

    "He can just raise the price of his remaining bread to recoup the loss."

    Awesome! So the thief has basically raised the cost of bread for everyone else who pays for it, and now they get less bread.

    Everyone wins!

  • Locke||

    "But if they're also having bread stolen, their prices will go up too. Unless all the poor people are specifically targeting one baker everything works out."

    I don't want to live on this planet anymore.

  • Swiss Servator, Käse, Käse!||

    "fuck off, slaver"

    I'd be more articulate, but justifying theft deserves no more than this.

  • JW||

    The baker was selling that bread, not feeding it to his children.

    Let me break 3 fingers on your writing hand and blind you one eye. You're not feeding your kids with them.

  • Virginian||

    http://www.coyoteblog.com/coyo.....-wage.html

    Ideological Turing Tests. I bet every single libertarian here could pass one, and I bet most lefties could not.

  • Irish||

    The reason for this is fairly obvious. The media and educational establishments are entirely left-wing. As a result, it's impossible for a libertarian or conservative to go through life without hearing left-wing arguments often enough that they gain an understanding of the left-wing worldview.

    Conversely, a progressive never has to even listen to a conservative or libertarian argument unless he chooses to. Given that progressives tend to be hysterically thin skinned, they rarely choose to.

  • Sevo||

    "As a result, it's impossible for a libertarian or conservative to go through life without hearing left-wing arguments often enough that they gain an understanding of the left-wing worldview.
    Conversely, a progressive never has to even listen to a conservative or libertarian argument unless he chooses to."

    Yep, and it doesn't stop a single one from coming here and lecturing us about how bad libert'm is in his fantasy!
    'Cause a frat buddy read the first chapter of Atlas Shrugged and told him about it one drunken night.

  • Cytotoxic||

    It's not just exposure to worldviews. It's the whole culture of group think in education and other institutions. Progs know only it and love it. Anomalous ideas are a threat by instinct.

  • Irish||

    They don't really love it though. Progressives are the most consistently miserable people I've ever met.

    Go to any progressive blog. I guarantee that at some point the progressive will tell you about his severe depression, and somehow explain how his deeply felt misery is the fault of libertarians.

  • Cytotoxic||

    They love the idea of it if not the reality. They hate their lives however.

  • Banjos||

    Can we do a Turing test of a Turing test where we write what a liberal would write if they had to perform a Turing test?

    "As an old privileged white male, I am terrified of the prospect of women stepping out of their place in the kitchen, of minorities living above their station, and of those who are young and liberal minded obtaining more wealth. Forcing rich, white, male dominated businesses like the ones I own and control to pay more in wages would hurt my profits and give more power to those I control like slaves. In conclusion, I am terrified of losing my privilege and control over society."

  • Irish||

    That's actually not too far off.

    An African American woman on MSNBC recently claimed she had 'no freedom' because she is black.

    Note: This woman is making six figures and appearing on a T.V. cable news station. You would think that this alone proves she has property and free speech rights, but why use logic when you can spout mindless left-wing talking points?

  • Virginian||

    She should trade with me. My 1040 had 19,000 in income on it for 2013. But hey, I just get a thousand bucks in tax free cash each week slipped under my door from the White Privilege Corporation. Add in another grand from the Male Privilege Alliance, and my 500 dollar stipend from the brothers who shall not be named, and I am rolling in the cash.

  • Rev Match||

    An African American woman on MSNBC recently claimed she had 'no freedom' because she is black.

    Sounds a bit like MeliTHa HarriTH Perry.

  • Hydra||

    I thought you guys were against pretending to be a liberal?

  • Virginian||

    See, according to some we are just Republicans who smoke pot. To some we are simply Democrats because we don't want to blow up all the brown people. To some we are the downfall of the white race because we favor race mixing.

  • politicsbyothermeans||

    We are, especially when progressives do it.

  • Derpetologist||

    Today on Derpbook


    Once again, the video you posted is a false comparison. NO ONE is advocating the "redistribution" of wealth, they are asking for a FAIR system where the people that are at the very top, get all the perks a day breaks that everyone in the middle and bottom have to pitch in for. The only way this comparison would even be close to accurate is if the students getting perfect GPAs had all the students with lower GPAs doing all the work for them and the students with the best GPAs were getting extra credit just by virtue of the position they are in. You see our system has become a caste system, wealth is rewarded with LESS responsibility to society. There is no reason why a person that makes $60,000 for a family of three should have to pay more of their income that a guy who makes $12,000,000 a year for basically shuffling papers around behind a desk, or worse yet, living off of their inheritance. When the handful at the very top, who own 70% of the wealth, are contributing well LESS than 70% back into the system that allowed them to get to where they are in the first place, there is a problem.
  • Virginian||

    Ah yes, Nostalgianomics.

    http://www.coyoteblog.com/coyo.....omics.html

    The Democrats are conservative, verging on reactionary, in their desire to return to a postwar economic model.

  • Derpetologist||

    FDR wanted a top tax rate of 100% on all income over $25,000. He had to settle for a mere 94% rate.

    http://www.dailykos.com/story/.....te-Was-100

    For some reason, the tax rates of 65% and higher during the 1930s did not cure the depression.

    http://en.wikipedia.org/wiki/F.....arners.jpg

  • ~Knarf Yenrab~||

    You see our system has become a caste system, wealth is rewarded with LESS responsibility to society

    This person should be beaten into a coma with a hardbound copy of The Law. Short as it is, you might have to weigh it down with about $50k in gold bullion to do the job.

    Every once in a while, I'll look at the comments on ABC or CNN as a reminder of why the world is always trying to undo all of the good that markets have wrought over the past two centuries. The initiative never fails to enlighten.

  • LynchPin1477||

    If that person really believed that the share of the tax burden of a particular income group should equal their share of GDP, they would advocate for a flat tax. If they aren't, then they are probably advocating for redistribution and just trying dress it up in their definition of fairness.

  • Derpetologist||

    Yeah, I love the part how he's not advocating redistribution. Oh, no- far from it.

    He just wants to take from the rich and give to the poor.

    See? Totally different.

  • Irish||

    I love when progressives advocate Marxist policies while spouting Marxist jargon and get angry when you call them Marxists.

    Apparently when feminists advocate 90% tax rates while using flat out Marxist arguments about patriarchy, they're not really socialists and you're evil for saying they are.

  • Derpetologist||

    A while back, I got the Derpbook prog to agree with every plank of the communist manifesto. He didn't have much to say after I revealed that to him.

  • Irish||

    You could definitely get him to agree with every economic aspect of the Fascist Manifesto.

    Do that, and then ask him to explain to you how the fascists were right wing when all of their economic beliefs were identical to the modern left.

  • Virginian||

    I always have fun with the platform of the National Socialist German Worker's Party myself. Strip out the Jew hate, and change "large department stores" to WalMart, and you could get 70% of registered Democrats to advocate it. The other 30% would think it hopelessly wishy washy and not progressive enough.

  • JagerIV||

    linK?

  • Gorilla tactics||

    you don't actually have to strip out hating the joos, just switch it to Israel and you'll get the same shit.

  • DesigNate||

    It must be hard for that guy, being so stupid he can barely hack it as a fry cook at McDonald's.

  • Derpetologist||

    Cont'd


    There is no reason why the poor, the sick, the elderly, veterans, the middle class, etc. Should have to have cuts to vital services so a banker can spend $500,000 on a new Lamborghini. It's not poor people and single mothers and suburban families that destroyed the economy, it was irresponsible greedy bankers and investors taking advantage of a system they created in their favor. The most prosperous times in this nations history,top earners paid over 70% income taxes. You know what happens when the super rich have to pay that much in taxes? They spend as much as the can on hiring and expanding their companies for the write offs, instead of say, shipping jobs overseas and hiding their money in offshore banks.
  • Cytotoxic||

    The most prosperous times in this nations history,top earners paid over 70% income taxes.

    I am ordering you to call that lie right out.

  • Derpetologist||

  • Anonymous Coward||

    There is no reason why the poor, the sick, the elderly, veterans, the middle class, etc. Should have to have cuts to vital services

    Because the State can't afford it without taking the money from someone else?

    It's not poor people and single mothers and suburban families that destroyed the economy

    Actually it is. You see, despite the "super-wealthy fatcat KKKorporations" not having votes, nor has anyone demonstrated where they buy votes, somehow, the same crooks who support this "system created in their favor" keep getting elected to office. Why might that be? Anyone? Anyone? Bueller?

    Might it be because the poor people and the single mothers and the suburban families keep pulling the lever and punching the ballot for the same set of crooks every 2 years?

  • Irish||

    The middle class is the group actually getting fucked, so I like that he sticks them in there.

    The hyper wealthy and the hyper poor are the new Democrat constituency. The Dems give just enough to the poor to keep them alive and voting and siphon off everything else to their buddies in business.

    The middle class is the most anti-left wing class in the country, but for some reason progressives insist that the middle class is secretly on their side.

  • Anonymous Coward||

    The hyper wealthy and the hyper poor are the new Democrat constituency. The Dems give just enough to the poor to keep them alive and voting and siphon off everything else to their buddies in business.

    TEAM Blue loves campaign finance laws because they recognize that regulatory capture allows them to use the Federal Election Commission to fuck over TEAM Red.

    The Progressives' middle-class fetishism is more a Platonic ideal than anything they can evidence (ask any two Progressives how much money it takes to be in the "middle class" and they'll give you three answers). Middle-class, inferred from their general comments means that Joe Q Peasant is only allowed to rise so high, but no higher. That he may be comfortable, but not wealthy.

  • ~Knarf Yenrab~||

    It may be my Austrian-tinged imagination, but the claim "if r g for decades ... capital contains the seeds of deep social conflict" is trivial.

    I fail to see how lenders could possibly charge higher interest rates than the rate of growth for any significant length of time--entrepreneurs would have to be sitting around for decades taking bad gambles, and there's zero rational or empirical evidence to believe that would occur, or that bankers get to dictate interest rates ex cathedra (sans central banks, natch).

    There are certainly individual entrepreneurs who fail, but the idea that all the capital would accumulate with banks and "capitalists" because everyone else is constantly making bad gambles is suspiciously similar to the old, equally dumb complaint that the gold standard and the relatively low rate of natural inflation that characterizes it would lead to a circumstance in which banks lending at interest would have all the gold, since they're repaid with a limited supply of gold at interest.

    Dr. Jones does well to take this silly argument down (and wealthy capitalists are not known for maintaining vast stores of their wealth in money without consumption/investment, as that tends to make them something other than capitalists), but the fact that respected economists even bring stuff like this up makes me wonder whether academics will ever stop falling for jargon-intensive arguments that, when reduced to their goofy, goofy core, would be transparent to even a child.

  • Cytotoxic||

    OT: I have had problems with Cruz before but his latest joint legislation with Birkenridge is dynamite for energy sector reform. This legislation does EVERYTHING right. Opens up federal lands and the offshore for drilling, streamlines applications, immediately okays Keystone XL, phases out renewable fuel standards, and some more. Energy Reaganism. It would be cool if enough Dems get on board to override the veto before the midterms but I think we'll have to wait. I think the GOP may get enough seats and scared pro-energy Dems after the midterms to do it.

    http://www.forbes.com/sites/pe.....r-america/

    Bonus Shriek-torment: The Congressional Research Service recently reported that the portion of total natural gas production from federally controlled lands and offshore declined by 40% from Fiscal Year 2009 to Fiscal Year 2013. The portion of total oil production from such federally controlled areas declined by 32% over that period.

    That was achieved by slowing permits for exploration and development of oil and gas in federally controlled areas, imposing moratoria on already granted permits (held to be contrary to federal law in federal court), and even withdrawing already granted permits.

  • Virginian||

    Opens up federal lands

    The importance of this cannot be overstated. One of the ways well meaning environmental moderates maintain their moderate position is by opposing drilling on federal lands, as though the private sector has plenty of available land to drill on. Except the feds own huge swathes of unused land simply because they have the guns. This land will sit empty, and unused, because it makes city dwelling progs happy to think of it. Billions of dollars and thousands of jobs will not exist, in favor happy feelings among the American Eloi.

  • PapayaSF||

    Nice. Does it get rid of ethanol subsidies and requirements?

  • Virginian||

    Nice. Does it get rid of ethanol subsidies and requirements?

    Without reading it, gonna guess no. Cruz has Presidential aspirations, and there's no way he can get past Iowa if he writes a bill killing their precious ethanol boondoggle.

  • Gorilla tactics||

    WE CAN POWER THE WORLD WITH CORN!!!!!!

    *every Iowa primary ever*

  • Cytotoxic||

    It seems so.

    Finally, the Cruz-Bridenstine bill would phase out the federal Renewable Fuel Standard (RFS) requirements over 5 years.

  • Virginian||

    Wow maybe he is a man of principle.

  • R C Dean||

    The other trick is that public lands are first opened for exploration. Then, they might or might not be opened for production. If they aren't opened for production, guess what?

    They aren't going to produce.

  • Derpetologist||

    This is what the Derpbook prog will respond to next:

    "If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coalmines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez faire to dig the notes up again . . . there need be no more unemployment. . . . It would indeed be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing."

    John Maynard Keynes, The General Theory, p. 129.

  • ~Knarf Yenrab~||

    Look you libertardians, if you increase your aggregate-demand humor, your aggregate-supply humor will be stimulated in turn, and the effect will be even greater if we bleed the economy occasionally via the application of several taxation leeches while covering the pallid, scrawny form in a TARP.

    Every *real* economist has known this stuff for a century since Keynes took down JB Say. Just look at how much the economy has grown since the beginning of the progressive era if you don't believe me!

  • Derpetologist||

    It's amazing how many top lefty economists have consistently failed to understand the Broken Window Fallacy. Not all activity is production.

    It would not surprise me to see some other lefty argue that the best jobs program would be have people dig holes and fill them back in.

  • Sevo||

    "It would not surprise me to see some other lefty argue that the best jobs program would be have people dig holes and fill them back in."

    Using teaspoons!

  • Gene Poole||

    What is a "real" economist? Is there a cutoff point related to annual income from fees from lectures given within the same ever-shrinking circle of orthodox neo-Liberal think tanks and salary from neo-Liberal-controlled univeristy faculties? Or is a real economist someone who engages with the economic realities of the majority of the world's population? No need to answer...

  • Virginian||

    The 'murican thread from yesterday is hilarious.

  • Irish||

    Calidissident|4.25.14 @ 9:36PM|#|–|filternamelinkcustom

    Murican, how much do you hate Ethiopian Jews? They must make your head explode just thinking about them
    Troje|4.25.14 @ 9:46PM|#|–|filternamelinkcustom

    It is a logical contradiction of course because they aren't real Jews. They aren't really accepted as real Jews in Israel either and they earn less income even than Arabs:

    http://www.haaretz.com/busines.....s-1.416551
    Calidissident|4.25.14 @ 11:05PM|#|–|filternamelinkcustom

    How the fuck is a group that converted to Judaism 2,000+ years ago "not really Jewish?"
    Troje|4.25.14 @ 11:17PM|#|–|filternamelinkcustom

    The Rabbinate didn't origonally think they were Jewish as their religion is more akin to Kariatism or Samaritanism than Rabbinic Judaism. As I understand it was the Oriental Jewish rabbinate decided they were Jews.

    The Jews are an ethnic group, plain and simple, and the Negroid falasha ain't part of it. Tell me, how many banks do the falasha control?

    HAHAHAHAHHAAHA!

    "Negroid?" Who says "Negroid?"

  • Sudden||

    "Negroid?" Who says "Negroid?"

    Donald Sterling?

  • Notorious G.K.C.||

    Someone who's looking to get beat up?

  • Heroic Mulatto||

    The Rabbinate didn't origonally think they were Jewish as their religion is more akin to Kariatism or Samaritanism than Rabbinic Judaism. As I understand it was the Oriental Jewish rabbinate decided they were Jews.

    The Jews are an ethnic group, plain and simple, and the Negroid falasha ain't part of it.

    So he goes from using a religious definition of Judaism in his first paragraph, as a way to say "Hey, even some Jews don't think they're Jews!" to denying a religious definition in his second paragraph.

    Hey, hey, hey, calm down, you two. New Shimmer is Israelites are both a floor wax and a dessert topping!

  • Hydra||

    Maybe he meant Jews are niggards.

  • Calidissident||

    Did you see the part where he alleged that the only reason I don't have a problem with race mixing, and am willing to date non-white women (to clarify, I don't do so exclusively, but white girls are less than half of the girls at my school, so even just by random chance most of the girls I encounter aren't white) is because I'm incapable of getting a white woman and am angry and bitter about not having access to them? Because clearly I was the angry one in that conversation

  • Virginian||

    That's one of my favorite examples of his psychosis. The best was when he went off on HM, claiming that his wife was Thai only because he could not find a white to marry him.

  • Calidissident||

    I remember that lol. I feel like he's getting progressively crazier and more unhinged. Hopefully this doesn't end with a Sikh temple, Holocaust museum, or Jewish community center shooting.

  • Swiss Servator, Käse, Käse!||

    Amen to that!

  • politicsbyothermeans||

    Amein!

  • ||

    What we really need is a vast deregulation, especially of the housing market, in order to make it easier to obtain the basic necessities for a satisfying life.

    People weren't wrong in thinking that making housing affordable was a worthy goal, they just went about it in a stupid way. Instead of making it easier to build homes, thereby bringing down the cost of houses, they just made it easier to get loans, which just made people borrow more and drove up housing prices.

    I an certain that there would be a lot less covetousness if a typical working class family could afford a single family home on a quarter acre lot in the suburbs. In many places in the US that is no longer the case. Even after the bursting of the housing bubble, it is still not the case.

    And there are all sorts of reasons why owning a home would make people less covetous. For one thing, you have equity in a house, so it lets you build capital. For another thing, once you pay it off you don't have to pay rent, so it makes retirement a lot less scary. But beyond that, owning a home provides opportunities for people to do a host of things that they can't reasonably do renting an apartment. I could make a lengthy list but you can use your imaginations.

    So just fucking make it easier to build houses - crack the local building cartels, and simplify the codes, and let people build anywhere.

  • Virginian||

    What we really need is a vast deregulation

    Summarized.

  • The Immaculate Trouser||

    While we're in that vein, one of the implications of Piketty's research is that anyone who invests in 'capital' (leaving aside the question of whether all capital is homogenous wrt returns) will receive returns beyond the economic growth rate. Instead of simply assuming that the wealthy are the only ones who can purchase capital and creating pie-in-the-sky schemes to steal their wealth, why not make it easier for the lower and middle classes to invest in capital? At least one implication of his work is that privatizing SS would have great returns; that's a no-brainer right there.

  • ||

    Indeed, excellent point. One argument I've been making for a while now is we should make it easier for people to grow capital at the lowest level. Not just in terms of the ability to buy homes instead of renting, but also by making it easier to start and grow a small business.

    Just for starters, people should be able to operate businesses out of their homes easily. It should be legal to convert a home into a restaurant or a beauty parlor or a bike repair shop, or whatever you want.

    Right now, we throw a major obstacle in people's way by forcing them to rent a completely independent space. Very few people are going to be making enough money starting off to be able to afford to pay the rent on a commercial space.

    But what do you think happened historically? Historically, the barbershop was the ground floor of a two-story building where the barber lived on the top. If people has the freedom to do things like that to *gradually* expand a business from being just a hobby to being a full-scale restaurant, it would be so much easier for middle-class and working-class people to grow their own capital.

  • Gorilla tactics||

    http://jewishworldreview.com/c.....103cfldU-A

    Can anyone confirm this? Is Palo Alto honestly that fucked up? I've never been, but I always thought it was full of mansions and stuff, turns out it's mostly a whole bunch of middle class homes wildly overpriced due to open space?

    1300 ft2 2.2 mil? really?

  • Sevo||

    I can't confirm that particular sale, but it wouldn't raise an eyebrow.
    Palo Alto is built-out, according to zoning ordinances. It is leafy, small-town, walk main-street, right in the middle of Silicon Valley, and you'd better not move a brick on your house without approval of the neighbors and any other busybody who wishes to gripe.
    The 'edgy' techies love the 'old time' feel, and I'll leave it at that.

  • Big Chief||

    Thank you, Mr. Jones, for the article. It looks to be a good summary and rebuttal of a book that I'm sure is going to become foundational for progressives in their anti-capitalist campaign.

  • PapayaSF||

    My version of The Tenth Commandment Club, in a slogan: Envy is at least as socially destructive as greed.

  • Big Chief||

    I like it. But I wonder if there is a study or something that could be cited that would support making it stronger, like "Envy is more socially destructive than Greed." I think it's probably true, since I think greed is just one manifestation of envy.

  • Virginian||

    They are seperate things to me. Someone who wishes a higher salary is greedy. Someone who wishes that someone else's money make it's way to their pocket via the gun thugs of the State is envious.

    Public school teachers who desire tax hikes to raise their salaries are both.

  • Hydra||

    Envy is directed against a person, greed is directed toward a thing. So in the scholastic tradition envy is considered worse, just as anger is considered worse than lust.

  • The Immaculate Trouser||

    The moment you've all been waiting for -- Krugman's review of Piketty.

    Sample sentence:

    I guess you could argue that willingness to engage in morally dubious wheeling and dealing, like willingness to flout pay norms, is encouraged by low marginal tax rates.
  • The Immaculate Trouser||

  • ~Knarf Yenrab~||

    Cry monopsony and let slip the dogs of the New York Times!

  • The Immaculate Trouser||

    More:

    Overall, I’m more or less persuaded by Piketty’s explanation of the surge in wage inequality, though his failure to include deregulation is a significant disappointment.


    My, but we are getting excited about a Grand Unified Theory of Derponomics, aren't we?

  • Hydra||

    I'm just disappointed he didn't include reality TV and the DH among the causes for wealth inequality.

  • Big Chief||

    The GUToD? Nice.

  • OldMexican||

    Simply that at some times and at some places, the interest rate is greater than the economy's growth rate [sic]. (Piketty correctly uses the term "interest rate" as a stand-in for the total average return on capital: profits, interest, and, when he has data available, capital gains.) Piketty sums it up with a simple equation: r g. And if r g for decades, he argues, capital contains the seeds of deep social conflict.


    Did Piketty correctly summed up what the FUCK is the "economic growth rate" and of whom? Or is he talking about C + G + I + NX where government spending is construed as "growth"?

    Because if Piketty is relying on a metric that is manipulated by governments left and right, then the guy is BEGGING THE FUCKING QUESTION.

  • ThatSkepticGuy||

    "Capital in the Twenty-First Century, by Thomas Piketty, Belknap/Harvard, 685 pages, $39.95."

    Garsh, anticapitalism sure is an expensive hobby!

  • Bubba Jones||

    One important feature if the late 18th century is that the wealthy actually withdrew their capital from productivity. The vast hunting estates if the French aristocracy meant less bread for the peasants and eventually a revolution. Today the wealthy invest their wealth in enterprises that generate wages for the working classes. This seems like an important difference.

  • thorax232||

    It didn't take long to tear apart Pikety's no so new discovery, but the gov. will still listen, it justifies their criminality.

  • Gene Poole||

    Maybe you should read the book before you take the word of a hack for the "Conservative" think tanks.

  • kathykattenburg||

    "People who are genuinely materially desperate aren't the issue here. The Tenth Commandment Club has no qualms with a Jean Valjean stealing bread to feed his family."

    I have to assume you don't literally prefer an economic system where destitute people steal food, to an economic system where no one is so destitute they *have* to steal food, but after reading this entire article, I can't be sure of that.

    "Instead of preaching to reduce inequality as a means to reduce social conflict, we should instead preach to reduce social conflict itself. The best way to defuse the situation is to teach tolerance for inequality."

    I'm guessing that this idea would work better for people like you who don't have to worry about where their next meal is coming from, or whether they'll still have a roof over their head next month, than for people like me, who would have been scrounging in garbage cans and living on park benches if I hadn't had food stamps and Temporary Rental Assistance (that's a program, not a description) when I needed it.

  • Sevo||

    ..."than for people like me, who would have been scrounging in garbage cans and living on park benches if I hadn't had food stamps and Temporary Rental Assistance (that's a program, not a description) when I needed it."

    And yet here you are now, typing on a computer and posting to the internet.

  • Gene Poole||

    Is a computer a luxury reserved for comfy liberals like yourself? What about a telephone?

  • sasob||

    Meanwhile, ultra-wealthy economic elites can buy massive political influence, pushing the government to favor well-connected insiders and in the process slowing down the economy.

    They couldn't buy it if it wasn't for sale. I take it that Piketty has no problem with the masses buying great political influence for their own perceived economic well-being. Trouble is that if the politicians are willing to sell their influence and power to the masses, they're just as likely to sell it to the rich and well-connected. It's what you get when you deal with a bunch of whores.

  • Gene Poole||

    What do you call "perceived economic well-being"? Earning a decent wage? Being able to have your own home? To pay for medical care instead of being wiped out by an illness? Being able to send your kids to a decent school and keep them out of the classroom-to-prison pipeline? Or all those all the imagined concerns of comfortable liberals like yourself?

  • Sevo||

    "Meanwhile, ultra-wealthy economic elites can buy massive political influence, pushing the government to favor well-connected insiders and in the process slowing down the economy."

    I'd like to see the mechanism which 'slows down the economy', mostly 'cause I think it's the same one that does so no matter who is getting the favors.

  • RoninX||

    Also note the typical bait-and-switch used by liberals when they talk about income inequality. One minute, they're talking about billionaires and the top 1% (or top 0.1%) controlling the government. The next minute, they're talking about a 60% tax on anyone making $200,000 a year...

  • Gene Poole||

    You uncomfortable with that? If you earn it honestly, you shouldn't be.

  • ibcbet||

    Also it wasn't a bright sunny day, it was drizzling with a wet road at night.

  • sgtipster||

    They can start tacking zeros onto your damages if they really, really don't like you.

  • Gene Poole||

    Looks like all your friends have the same name as you , pal...

  • Karl Bonner||

    What a sad defense of inequality. According to the author we should all just gracefully accept extremely high-and-rising levels of top-heavy inequality, plus all the ugly distortions it inevitably has on the politics of a democratic republic. After all, to complain that the system might be inherently unfair to the working majority, is somehow "covetous"; hence the need for a Tenth Commandment Club! (I thought the Reason movement was secular in its morality?)

    Also: "One lesson of this story is that it's good to be patient. So let's start training ourselves and our children to delay gratification, to forego that great sound system on the new car, to eat at home a little more often." Nope: Let's start training all unskilled workers to demand a $15/hour minimum wage, and at least $20/hour for all skilled workers. American workers have been "being patient" for a bigger piece of the pie for the past FORTY YEARS. The realities of income distributive evolution over this period suggests that it's time to get impatient instead!!!

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