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Cayman Islands24199 Posts
On May 30 2013 08:26 JonnyBNoHo wrote:Show nested quote +On May 30 2013 06:51 aksfjh wrote:On May 30 2013 06:18 Sbrubbles wrote:On May 30 2013 03:42 aksfjh wrote:On May 30 2013 01:46 JonnyBNoHo wrote:On May 29 2013 21:54 oneofthem wrote:
well, when the marginal rate on a slice of income is approaching 90%, it makes sense for that rate to have a large impact on income share, whether it is through taxing that income away, or through making people rearrange their income stream to avoid the tax. I don't think it's being taxed away (unless you meant indirectly as well?). The average tax rate on the 1% in 1979 was 35.1% compared to a 35.3% average tax rate in 1995 ( source) despite vastly different top marginal rates. Rearranging income sounds very plausible. On May 29 2013 20:54 aksfjh wrote:On May 29 2013 20:09 mcc wrote:On May 29 2013 17:50 aksfjh wrote:On May 29 2013 09:44 JonnyBNoHo wrote:On May 29 2013 08:58 aksfjh wrote:Tax policy and correlation on top income brackets share of income. + Show Spoiler + You think the marginal rate is that powerful a factor? That's some pretty solid correlation. Obviously other factors are involved, but it looks like a key player. Correlation is not causation, how do you know that some other factor is not causing changes to both of the attributes you displayed ? For example "political climate" can cause tax rates to go down and at the same time influence passing/revoking of other laws that make it possible for rich to get more wealthy. I am not saying you are wrong and I am far from saying that my scenario is true (I am rather sure it is not), but I would be more cautious about calling causation. I think you would need to at least analyze how much did they save on taxes and analyze how much money could have been gained by investing that saved money. Which would be pretty hard to do without rather sophisticated model. But looking at the graph, the correlation seems to be near immediate, so maybe it would be enough to analyze how much they saved on lower tax rates and if it explains majority of the wealth gain. I don't have enough of an economic and/or political science background to make detailed analysis to prove causation. However, causation would be logically consistent in this case, especially in the earlier half of the century. The 2 variables seem to be linked without being dependent, unlike, say debt to GDP ratios vs GDP or GDP growth. In that example, you have to look at more data to make bold statements, like one causes the other. In the graph above, however, we know that higher income share doesn't cause rates to go down instantaneously, so that reverse causation possibility is eliminated. The only other likely scenarios involve either culture shifts (which are gradual, so a rapid jump mid 1980s seems out of place) and major policy changes. Those major policy changes in the 80s deal mostly with tax policy. About the worst I could do with my assumption is that large changes in tax policy outside of marginal rates play the primary role and marginal rates just happen to coincide, but that's really hard to prove. If I were doing real research on this, I would probably focus on determining if the income share of the top is stable or unstable depending on tax rates or why the correlation decouples in the mid 90s (this is probably where policy or capital gains come in). What do you think the causation is/would be though? Are the rich shrugging off the tax and accepting lower income? Or are they changing their behavior? My suspicion is that a higher tax would lead to behavior changes much more often than benign acceptance, which is a problem from a tax policy perspective. The 1980's is the part of the graph where correlation looks really strong. During that time businesses in the US were undergoing some pretty radical changes. Those changes certainly went hand in hand with tax changes. My point here being that cultural changes can happen much faster in the business sector than the country as a whole. I want to clarify that I'm not talking about taxes in this sense as strictly a means of generating revenue. I'm looking at the data in more of a "how did income inequality get so great" light, and less of a "how do we pay for government?" Thus, I'm mostly talking about behavioral changes anyways. I've knocked around the theory before that higher tax rates at the top actually encourage investment much more than we're led to believe. My experience is anecdotal, mainly pertaining to business owners wanting to put their money to "better use" than the government. Instead of letting Uncle Sam take 50-70% of that next 50-100k that you don't "need," you hire 2 workers or reinvest in your business to make your life easier running the business and/or increase competitiveness. The opportunity cost is drastically reduced because the government would be taking a lot of that money anyways. So, in a sense, they aren't "shrugging off the tax" as much as they are finding ways to use that money before the government can get to it. Business culture, in my opinion, does change faster than in the community and at home, but it still takes close to a decade to see those changes permeate the market. Think about how long it took small offices to adopt computers and electronic databases. The income inequality gap trend since the drastic reversal in marginal tax rates at the top in the 80s could possibly be described as culture slowly changing to accommodate the shock. Policy experts have theorized that business culture changed in the 80s, in a way that removed the stigma around very generous compensation for executives. I think your train of thought is a bit off, at least theoretically. I can interpret your scenario as a business owner, when foreseeing profit, being faced with 3 options: 1) Doing nothing: government taxes profits (now) 2) Invest well: government taxes anyway later through future, higher profits (or now through a tax on capital gains since your business will be worth more) 3) Invest badly: just threw away money Since 3) is a bad idea (30% of something is better than 0% of something), you're left with 1 and 2, and in both cases you're gonna get taxed the same (unless you differentiate tax on profits from tax on long-term capital gains, but that's a different story). You assume that the only thing business owners value is profit. Investment in this case give back non-monetary returns, like reduced responsibility and less personal overtime. With a low tax rate (10% on first 100k, 20% on rest), the choices look like: a) Business nets $300k, pay $50k in taxes, final income $250k b) Business nets $300k, decide to hire worker for $30k, pay $44k in taxes, final income $226k That worker costs him $24k. In a high tax scenario (10% on first 100k, 70% on rest): a) Business nets $300k, pay $150k in taxes, final income $150k b) Business nets $300k, decide to hire worker for $30k, pay $129k in taxes, final income $141k That worker costs him only $9k. That worker may or may not increase profits or production, but the risk and investment for hiring that employee is much less to the owner. Add that with the "non-monetary" benefits, and it's a solid package. That's why the high tax would be bad. Managers would have an incentive to make work cushier, rather than increase productivity and cap ex.
his example is not meant to be comprehensive, just illustrating one side of the effect.
a small business example where owner and management merges is not really illustrative of the scale of the issue anyway. when management is paid more from option stock, which is taxed differently, you get a short term biased distortion on management behavior.
the language of management compensation is always about incentivizing efficiency, but often that language is a rationalization for destruction of existing ecology, so to speak, without that much rational consideration.
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On May 30 2013 08:26 JonnyBNoHo wrote:Show nested quote +On May 30 2013 06:51 aksfjh wrote:On May 30 2013 06:18 Sbrubbles wrote:On May 30 2013 03:42 aksfjh wrote:On May 30 2013 01:46 JonnyBNoHo wrote:On May 29 2013 21:54 oneofthem wrote:
well, when the marginal rate on a slice of income is approaching 90%, it makes sense for that rate to have a large impact on income share, whether it is through taxing that income away, or through making people rearrange their income stream to avoid the tax. I don't think it's being taxed away (unless you meant indirectly as well?). The average tax rate on the 1% in 1979 was 35.1% compared to a 35.3% average tax rate in 1995 ( source) despite vastly different top marginal rates. Rearranging income sounds very plausible. On May 29 2013 20:54 aksfjh wrote:On May 29 2013 20:09 mcc wrote:On May 29 2013 17:50 aksfjh wrote:On May 29 2013 09:44 JonnyBNoHo wrote:On May 29 2013 08:58 aksfjh wrote:Tax policy and correlation on top income brackets share of income. + Show Spoiler + You think the marginal rate is that powerful a factor? That's some pretty solid correlation. Obviously other factors are involved, but it looks like a key player. Correlation is not causation, how do you know that some other factor is not causing changes to both of the attributes you displayed ? For example "political climate" can cause tax rates to go down and at the same time influence passing/revoking of other laws that make it possible for rich to get more wealthy. I am not saying you are wrong and I am far from saying that my scenario is true (I am rather sure it is not), but I would be more cautious about calling causation. I think you would need to at least analyze how much did they save on taxes and analyze how much money could have been gained by investing that saved money. Which would be pretty hard to do without rather sophisticated model. But looking at the graph, the correlation seems to be near immediate, so maybe it would be enough to analyze how much they saved on lower tax rates and if it explains majority of the wealth gain. I don't have enough of an economic and/or political science background to make detailed analysis to prove causation. However, causation would be logically consistent in this case, especially in the earlier half of the century. The 2 variables seem to be linked without being dependent, unlike, say debt to GDP ratios vs GDP or GDP growth. In that example, you have to look at more data to make bold statements, like one causes the other. In the graph above, however, we know that higher income share doesn't cause rates to go down instantaneously, so that reverse causation possibility is eliminated. The only other likely scenarios involve either culture shifts (which are gradual, so a rapid jump mid 1980s seems out of place) and major policy changes. Those major policy changes in the 80s deal mostly with tax policy. About the worst I could do with my assumption is that large changes in tax policy outside of marginal rates play the primary role and marginal rates just happen to coincide, but that's really hard to prove. If I were doing real research on this, I would probably focus on determining if the income share of the top is stable or unstable depending on tax rates or why the correlation decouples in the mid 90s (this is probably where policy or capital gains come in). What do you think the causation is/would be though? Are the rich shrugging off the tax and accepting lower income? Or are they changing their behavior? My suspicion is that a higher tax would lead to behavior changes much more often than benign acceptance, which is a problem from a tax policy perspective. The 1980's is the part of the graph where correlation looks really strong. During that time businesses in the US were undergoing some pretty radical changes. Those changes certainly went hand in hand with tax changes. My point here being that cultural changes can happen much faster in the business sector than the country as a whole. I want to clarify that I'm not talking about taxes in this sense as strictly a means of generating revenue. I'm looking at the data in more of a "how did income inequality get so great" light, and less of a "how do we pay for government?" Thus, I'm mostly talking about behavioral changes anyways. I've knocked around the theory before that higher tax rates at the top actually encourage investment much more than we're led to believe. My experience is anecdotal, mainly pertaining to business owners wanting to put their money to "better use" than the government. Instead of letting Uncle Sam take 50-70% of that next 50-100k that you don't "need," you hire 2 workers or reinvest in your business to make your life easier running the business and/or increase competitiveness. The opportunity cost is drastically reduced because the government would be taking a lot of that money anyways. So, in a sense, they aren't "shrugging off the tax" as much as they are finding ways to use that money before the government can get to it. Business culture, in my opinion, does change faster than in the community and at home, but it still takes close to a decade to see those changes permeate the market. Think about how long it took small offices to adopt computers and electronic databases. The income inequality gap trend since the drastic reversal in marginal tax rates at the top in the 80s could possibly be described as culture slowly changing to accommodate the shock. Policy experts have theorized that business culture changed in the 80s, in a way that removed the stigma around very generous compensation for executives. I think your train of thought is a bit off, at least theoretically. I can interpret your scenario as a business owner, when foreseeing profit, being faced with 3 options: 1) Doing nothing: government taxes profits (now) 2) Invest well: government taxes anyway later through future, higher profits (or now through a tax on capital gains since your business will be worth more) 3) Invest badly: just threw away money Since 3) is a bad idea (30% of something is better than 0% of something), you're left with 1 and 2, and in both cases you're gonna get taxed the same (unless you differentiate tax on profits from tax on long-term capital gains, but that's a different story). You assume that the only thing business owners value is profit. Investment in this case give back non-monetary returns, like reduced responsibility and less personal overtime. With a low tax rate (10% on first 100k, 20% on rest), the choices look like: a) Business nets $300k, pay $50k in taxes, final income $250k b) Business nets $300k, decide to hire worker for $30k, pay $44k in taxes, final income $226k That worker costs him $24k. In a high tax scenario (10% on first 100k, 70% on rest): a) Business nets $300k, pay $150k in taxes, final income $150k b) Business nets $300k, decide to hire worker for $30k, pay $129k in taxes, final income $141k That worker costs him only $9k. That worker may or may not increase profits or production, but the risk and investment for hiring that employee is much less to the owner. Add that with the "non-monetary" benefits, and it's a solid package. That's why the high tax would be bad. Managers would have an incentive to make work cushier, rather than increase productivity and cap ex.
Never mind the fact he assumes that employers would want to increase their liabilities and work force for such modest and miniscule profits/gains. These tax rates wouldn't affect larger businesses as much as it would smaller businesses (though lay offs would be more common in the multi-nationals). As far as I am aware taxes are levied upon gross income, not net revenue. Businesses instead of re-investing would try as much as possible to minimize their tax burdens either by shifting monies and production over seas, or bribe politicians for 'exemptions', and other such activities. We see this in France right now.
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On May 30 2013 08:34 aksfjh wrote:Show nested quote +On May 30 2013 08:21 Wegandi wrote:
Ak, why would anyone continue to invest in a venture where the more money you make, the more tax is levied upon you. It simply is not worth their labor and time for such a modest gain, especially considering all the risks and Government burdens placed on employers. Taxes in this country are also a million times more complex than your simple illustration. I assume you're also very much a logical positivist, so even your methodology is very flawed since you're making axiomatic statements. I simply find your axiomatic statements logically wrong in the first place, so your chain of reasoning will lead to wrong conclusions. I could simply demonstrate an argument from absurdum to show that increasing tax rates do not increase productivity or investment, since the monies are simply diverted from productive ventures to Government, which is far from productive and almost always lines the pockets of special interests who, if they were competitive in the first place, wouldn't bribe politicians for competitive advantage.
You talk about behavior, but I'm not sure you understand human behavior. Do you think it is worth someone's time and labor for a measly 9k increase? Taking on employees in this current atmosphere is very risky and burdensome. Most people would value their leisure and less-stress much higher than 9k, never mind that you're leaving off other liabilities.
My point is, you're making vast assumptions and generalizations which lead you to your desired outcome in the first place. Take away your blinders and bias and focus strictly on methodology and epistemology. I think logical positivism is hogwash in the first place, but if you're going down that route well, I'm going to call you out on trying to mix your positivism with my deductionism/empiricism. It's a quick example that demonstrates anecdotal experience in my life. It's a highlight of a possible microeconomic force, but amounts to little more than a notion or rough idea.
Anecdotal experience is a terrible methodology. Economics has many counter-intuitive laws, for instance, Frederic Bastiat's Seen and Unseen (broken window fallacy). Economics demands reason and logic not intuition or anecdotes precisely for this reason.
http://en.wikipedia.org/wiki/Broken_window_fallacy
This is why I always laugh at Krugman because he is such an economic moron (or simply an ideologue with an economics cover).
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Cayman Islands24199 Posts
if you think his example is not very watertight wait until you see what professional economists come up with.
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On May 30 2013 08:39 oneofthem wrote:
if you think his example is not very watertight wait until you see what professional economists come up with.
Yes, I am well aware whenever I read 'mainstream' (Neoclassical or Keynesian) works. How many times must I see that vast destruction, war, and other such activities are economic boons. Lol...
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On May 30 2013 08:26 Sermokala wrote:
He address's that there is a glut in the workforce and with the same post dismiss's any solution at all to deal with said workforce glut.
No one can look at the current recovery and say that its a good situation. Other countries are already waging a tariff war on us. There will always be people who are not competitive, selling our poor into bread lines and a welfare lifestyle on the alter of free trade is no reasonable way to run a country. Free trade only works when it goes both ways, and it is definitely not going both ways. So either give our poor jobs or reign in china's anti-free trade policies but for fucks sake stop living in a fantasy world where a free trade ideology is infallible.
You solve the glut that we have now with a fiscal and monetary shock that entices businesses to invest in personnel.
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On May 30 2013 08:41 aksfjh wrote:Show nested quote +On May 30 2013 08:26 Sermokala wrote:
He address's that there is a glut in the workforce and with the same post dismiss's any solution at all to deal with said workforce glut.
No one can look at the current recovery and say that its a good situation. Other countries are already waging a tariff war on us. There will always be people who are not competitive, selling our poor into bread lines and a welfare lifestyle on the alter of free trade is no reasonable way to run a country. Free trade only works when it goes both ways, and it is definitely not going both ways. So either give our poor jobs or reign in china's anti-free trade policies but for fucks sake stop living in a fantasy world where a free trade ideology is infallible. You solve the glut that we have now with a fiscal and monetary shock that entices businesses to invest in personnel.
Why would you need to entice employment in the first place given that human nature is self-interested? The answer is because there are barriers which change ordinal preferences. To increase employment we simply must destroy and abolish these barriers, not only for our standards of living, but also for progress. We as a nation wonder why we have unemployment problems and then we look and see we pay people to be unemployed. It never ceases to amaze.
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On May 30 2013 08:20 aksfjh wrote:Show nested quote +On May 30 2013 08:14 JonnyBNoHo wrote:On May 30 2013 07:23 aksfjh wrote:On May 30 2013 07:03 JonnyBNoHo wrote:On May 30 2013 05:54 aksfjh wrote:On May 30 2013 04:29 JonnyBNoHo wrote:On May 30 2013 04:14 aksfjh wrote:On May 30 2013 03:57 JonnyBNoHo wrote:On May 30 2013 03:42 aksfjh wrote:On May 30 2013 01:46 JonnyBNoHo wrote:[quote] I don't think it's being taxed away (unless you meant indirectly as well?). The average tax rate on the 1% in 1979 was 35.1% compared to a 35.3% average tax rate in 1995 ( source) despite vastly different top marginal rates. Rearranging income sounds very plausible. [quote] What do you think the causation is/would be though? Are the rich shrugging off the tax and accepting lower income? Or are they changing their behavior? My suspicion is that a higher tax would lead to behavior changes much more often than benign acceptance, which is a problem from a tax policy perspective. The 1980's is the part of the graph where correlation looks really strong. During that time businesses in the US were undergoing some pretty radical changes. Those changes certainly went hand in hand with tax changes. My point here being that cultural changes can happen much faster in the business sector than the country as a whole. I want to clarify that I'm not talking about taxes in this sense as strictly a means of generating revenue. I'm looking at the data in more of a "how did income inequality get so great" light, and less of a "how do we pay for government?" Thus, I'm mostly talking about behavioral changes anyways. I've knocked around the theory before that higher tax rates at the top actually encourage investment much more than we're led to believe. My experience is anecdotal, mainly pertaining to business owners wanting to put their money to "better use" than the government. Instead of letting Uncle Sam take 50-70% of that next 50-100k that you don't "need," you hire 2 workers or reinvest in your business to make your life easier running the business and/or increase competitiveness. The opportunity cost is drastically reduced because the government would be taking a lot of that money anyways. So, in a sense, they aren't "shrugging off the tax" as much as they are finding ways to use that money before the government can get to it. Business culture, in my opinion, does change faster than in the community and at home, but it still takes close to a decade to see those changes permeate the market. Think about how long it took small offices to adopt computers and electronic databases. The income inequality gap trend since the drastic reversal in marginal tax rates at the top in the 80s could possibly be described as culture slowly changing to accommodate the shock. Policy experts have theorized that business culture changed in the 80s, in a way that removed the stigma around very generous compensation for executives. That's possible, but it likely wouldn't be good (i.e. productive) investment. Prior to the 80's US businesses were plagued by bloated management structures and empire building. Lower tax rates gave owners an incentive to increase competitiveness because they'd actually benefit from it. They did benefit from it before, just not monetarily. And it was good, in a sense, but not directly. While it bloated payrolls, it also propped up the middle class and made it possible for people to make important choices in life (college, housing, training), as opposed to the road map and dice roll we have today. That kind of propping up is unsustainable. If companies were similarly bloated today they'd be getting crushed by foreign competitors and productivity would be stagnant. The current propping of the economy through consumer debt is unstable as well, hence our crash and weak recovery. I'm not convinced the US would be crushed by foreign competition though. There are things we can't do cheaper than other parts of the world, but there are local goods and services that would thrive as long as locals can pay for them. Of course, being a high-tech information economy would shore up that competitive side as well. Also, every industry that could flee for cheaper labor did so already, and nothing short of selling low/no-skilled American workers to some form of slavery would change that. Of course we'd be crushed by foreign competition - that's what happened in the past! If US businesses lose competitiveness foreign companies will take market share either domestically or abroad (or likely both). GM held off restructuring for a long time and their long decline in market share and inevitable bankruptcy were testament to that. And competitiveness isn't just about labor costs. I brought it up mainly in reference to outdated business practices and general complacency. I think I addressed a lot of this already in an earlier post to sermokala. I think the US will inevitably be priced out of many industries and their manufacturing sectors, so fighting it by selling our poor into slave wages isn't likely to help anybody. Move those people into low skilled service sector jobs that are bought by higher paid skilled workers that deal in high-tech/skilled industries, like design and automation. Right now, those workers that do provide those high skilled sectors are having wages depressed by a glut in the workforce in general. Yes the US will not be competitive in certain industries. I don't know what you're getting at. Again, I'm not discussing wage levels so I don't understand why you are bringing up "slave wages" other than to distract from the discussion. I'm exhausted and I get the feeling we're not actually at odds on anything right now, but are acting like it...
Ahhh, ok. You're talking about the trade stuff. I was still working off of the discussion over taxes.
On May 30 2013 08:26 Sermokala wrote:
He address's that there is a glut in the workforce and with the same post dismiss's any solution at all to deal with said workforce glut.
No one can look at the current recovery and say that its a good situation. Other countries are already waging a tariff war on us. There will always be people who are not competitive, selling our poor into bread lines and a welfare lifestyle on the alter of free trade is no reasonable way to run a country. Free trade only works when it goes both ways, and it is definitely not going both ways. So either give our poor jobs or reign in china's anti-free trade policies but for fucks sake stop living in a fantasy world where a free trade ideology is infallible.
China's still a problem, sure. But the issue is being mitigated. I doubt the benefits of a tariff war would outweigh the cost.
Edit: Softer measures, sure  US intellectual property still gets the shaft, big time, in China. Exporters should have better access, etc.
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On May 30 2013 08:48 JonnyBNoHo wrote:Show nested quote +On May 30 2013 08:20 aksfjh wrote:On May 30 2013 08:14 JonnyBNoHo wrote:On May 30 2013 07:23 aksfjh wrote:On May 30 2013 07:03 JonnyBNoHo wrote:On May 30 2013 05:54 aksfjh wrote:On May 30 2013 04:29 JonnyBNoHo wrote:On May 30 2013 04:14 aksfjh wrote:On May 30 2013 03:57 JonnyBNoHo wrote:On May 30 2013 03:42 aksfjh wrote:
[quote]
I want to clarify that I'm not talking about taxes in this sense as strictly a means of generating revenue. I'm looking at the data in more of a "how did income inequality get so great" light, and less of a "how do we pay for government?" Thus, I'm mostly talking about behavioral changes anyways.
I've knocked around the theory before that higher tax rates at the top actually encourage investment much more than we're led to believe. My experience is anecdotal, mainly pertaining to business owners wanting to put their money to "better use" than the government. Instead of letting Uncle Sam take 50-70% of that next 50-100k that you don't "need," you hire 2 workers or reinvest in your business to make your life easier running the business and/or increase competitiveness. The opportunity cost is drastically reduced because the government would be taking a lot of that money anyways. So, in a sense, they aren't "shrugging off the tax" as much as they are finding ways to use that money before the government can get to it.
Business culture, in my opinion, does change faster than in the community and at home, but it still takes close to a decade to see those changes permeate the market. Think about how long it took small offices to adopt computers and electronic databases. The income inequality gap trend since the drastic reversal in marginal tax rates at the top in the 80s could possibly be described as culture slowly changing to accommodate the shock. Policy experts have theorized that business culture changed in the 80s, in a way that removed the stigma around very generous compensation for executives. That's possible, but it likely wouldn't be good (i.e. productive) investment. Prior to the 80's US businesses were plagued by bloated management structures and empire building. Lower tax rates gave owners an incentive to increase competitiveness because they'd actually benefit from it. They did benefit from it before, just not monetarily. And it was good, in a sense, but not directly. While it bloated payrolls, it also propped up the middle class and made it possible for people to make important choices in life (college, housing, training), as opposed to the road map and dice roll we have today. That kind of propping up is unsustainable. If companies were similarly bloated today they'd be getting crushed by foreign competitors and productivity would be stagnant. The current propping of the economy through consumer debt is unstable as well, hence our crash and weak recovery. I'm not convinced the US would be crushed by foreign competition though. There are things we can't do cheaper than other parts of the world, but there are local goods and services that would thrive as long as locals can pay for them. Of course, being a high-tech information economy would shore up that competitive side as well. Also, every industry that could flee for cheaper labor did so already, and nothing short of selling low/no-skilled American workers to some form of slavery would change that. Of course we'd be crushed by foreign competition - that's what happened in the past! If US businesses lose competitiveness foreign companies will take market share either domestically or abroad (or likely both). GM held off restructuring for a long time and their long decline in market share and inevitable bankruptcy were testament to that. And competitiveness isn't just about labor costs. I brought it up mainly in reference to outdated business practices and general complacency. I think I addressed a lot of this already in an earlier post to sermokala. I think the US will inevitably be priced out of many industries and their manufacturing sectors, so fighting it by selling our poor into slave wages isn't likely to help anybody. Move those people into low skilled service sector jobs that are bought by higher paid skilled workers that deal in high-tech/skilled industries, like design and automation. Right now, those workers that do provide those high skilled sectors are having wages depressed by a glut in the workforce in general. Yes the US will not be competitive in certain industries. I don't know what you're getting at. Again, I'm not discussing wage levels so I don't understand why you are bringing up "slave wages" other than to distract from the discussion. I'm exhausted and I get the feeling we're not actually at odds on anything right now, but are acting like it... Ahhh, ok. You're talking about the trade stuff. I was still working off of the discussion over taxes. Show nested quote +On May 30 2013 08:26 Sermokala wrote:
He address's that there is a glut in the workforce and with the same post dismiss's any solution at all to deal with said workforce glut.
No one can look at the current recovery and say that its a good situation. Other countries are already waging a tariff war on us. There will always be people who are not competitive, selling our poor into bread lines and a welfare lifestyle on the alter of free trade is no reasonable way to run a country. Free trade only works when it goes both ways, and it is definitely not going both ways. So either give our poor jobs or reign in china's anti-free trade policies but for fucks sake stop living in a fantasy world where a free trade ideology is infallible. China's still a problem, sure. But the issue is being mitigated. I doubt the benefits of a tariff war would outweigh the cost.
Sermo thinks that paying higher prices for goods and services would actually help the poor. If US companies could compete with foreign companies then we wouldn't be having this conversation right now would we? The fact that other countries subsidize industries is both a burden on their own citizens and a boon to whomever purchases said goods and services. They're paying the cost while we receive the benefit. For all the hate Wal-Mart gets, the fact is that poorer folks would be much much worse ceteris paribus without Wal-Mart.
Serm just doesn't understand opportunity costs. That's fine, a lot of people do not. This is why economic debates are always so tiresome with the general populace.
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On May 30 2013 08:45 Wegandi wrote:Show nested quote +On May 30 2013 08:41 aksfjh wrote:On May 30 2013 08:26 Sermokala wrote:
He address's that there is a glut in the workforce and with the same post dismiss's any solution at all to deal with said workforce glut.
No one can look at the current recovery and say that its a good situation. Other countries are already waging a tariff war on us. There will always be people who are not competitive, selling our poor into bread lines and a welfare lifestyle on the alter of free trade is no reasonable way to run a country. Free trade only works when it goes both ways, and it is definitely not going both ways. So either give our poor jobs or reign in china's anti-free trade policies but for fucks sake stop living in a fantasy world where a free trade ideology is infallible. You solve the glut that we have now with a fiscal and monetary shock that entices businesses to invest in personnel. We as a nation wonder why we have unemployment problems and then we look and see we pay people to be unemployed.
It's pretty disingenuous to suggest that people who are unemployed are so because they can collect unemployment insurance or something similar. It's specious to assert that people who collect UI are doing so in an attempt to make easy money, just as it's specious to claim that women have children for the sake of maternity leave.
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On May 30 2013 09:01 Shiori wrote:Show nested quote +On May 30 2013 08:45 Wegandi wrote:On May 30 2013 08:41 aksfjh wrote:On May 30 2013 08:26 Sermokala wrote:
He address's that there is a glut in the workforce and with the same post dismiss's any solution at all to deal with said workforce glut.
No one can look at the current recovery and say that its a good situation. Other countries are already waging a tariff war on us. There will always be people who are not competitive, selling our poor into bread lines and a welfare lifestyle on the alter of free trade is no reasonable way to run a country. Free trade only works when it goes both ways, and it is definitely not going both ways. So either give our poor jobs or reign in china's anti-free trade policies but for fucks sake stop living in a fantasy world where a free trade ideology is infallible. You solve the glut that we have now with a fiscal and monetary shock that entices businesses to invest in personnel. We as a nation wonder why we have unemployment problems and then we look and see we pay people to be unemployed. It's pretty disingenuous to suggest that people who are unemployed are so because they can collect unemployment insurance or something similar. It's specious to assert that people who collect UI are doing so in an attempt to make easy money, just as it's specious to claim that women have children for the sake of maternity leave.
I made no such argument, my only argument is the fact that if you make more money by not working, you're not going to seek a job in the first place. Similarly, if unemployment pays you 35,000$, most people will not take a job that makes less than 50-60k since they value their leisure/other time/activities greater than that 25k.
This does add to unemployment problems.
If you could address my argument without strawmanning I would appreciate it. Are you making the argument that paying people to be unemployed, does not cause unemployment?
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On May 30 2013 09:04 Wegandi wrote:Show nested quote +On May 30 2013 09:01 Shiori wrote:On May 30 2013 08:45 Wegandi wrote:On May 30 2013 08:41 aksfjh wrote:On May 30 2013 08:26 Sermokala wrote:
He address's that there is a glut in the workforce and with the same post dismiss's any solution at all to deal with said workforce glut.
No one can look at the current recovery and say that its a good situation. Other countries are already waging a tariff war on us. There will always be people who are not competitive, selling our poor into bread lines and a welfare lifestyle on the alter of free trade is no reasonable way to run a country. Free trade only works when it goes both ways, and it is definitely not going both ways. So either give our poor jobs or reign in china's anti-free trade policies but for fucks sake stop living in a fantasy world where a free trade ideology is infallible. You solve the glut that we have now with a fiscal and monetary shock that entices businesses to invest in personnel. We as a nation wonder why we have unemployment problems and then we look and see we pay people to be unemployed. It's pretty disingenuous to suggest that people who are unemployed are so because they can collect unemployment insurance or something similar. It's specious to assert that people who collect UI are doing so in an attempt to make easy money, just as it's specious to claim that women have children for the sake of maternity leave. I made no such argument, my only argument is the fact that if you make more money by not working, you're not going to seek a job in the first place. Similarly, if unemployment pays you 35,000$, most people will not take a job that makes less than 50-60k since they value their leisure/other time/activities greater than that 25k.
I used the word "suggest" in my initial sentence for the exact reason that it was not an explicit argument but a suggestion. I'd very much like to see some research on the phenomenon of leisure vs possible wage increase. Specifically, I'd like to see how much of an increase in wages would compel someone to work relative to the initial cost of living. To illustrate the relevance of my request, I'd point out that if one is making 200k per year doing nothing, it's not unreasonable to expect that even a raise to 250k or 300k wouldn't be enough to compel some people to work, mostly because there isn't a huge change in the quality of life. So please, any sources you provide should ideally include some sort of control for quality of life improvement.
This does add to unemployment problems.
But not in a way that's particularly problematic. Unemployment isn't bad because it's a number we don't like; it's bad because it isn't particularly good for the growing of the economy and because it typically means that there is a rather large segment of the population living dangerously close to the poverty line. I'd argue that it would be infinitely worse to tighten/abolish UI and have people choosing between poverty-level jobs and starvation than to simply accept that there will always be some fringe cases of corruption and general laziness.
If you could address my argument without strawmanning I would appreciate it. Are you making the argument that paying people to be unemployed, does not cause unemployment?
I'm arguing that providing criteria-driven support to people who are currently unemployed, in the hopes that they will get a job that can sustain a reasonable quality of life (i.e. don't tell me that anyone who is currently unemployed needs to go apply to every minimum wage job there is or else be branded as a leech on the system) is completely reasonable.
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Funny, the state with the highest unemployment benefits (Mass.) has an unemployment rate at least 0.5 pp lower than the national average. Somebody should tell those suckers that their free time is more valuable and they should act more selfishly.
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On May 30 2013 09:04 Wegandi wrote:Show nested quote +On May 30 2013 09:01 Shiori wrote:On May 30 2013 08:45 Wegandi wrote:On May 30 2013 08:41 aksfjh wrote:On May 30 2013 08:26 Sermokala wrote:
He address's that there is a glut in the workforce and with the same post dismiss's any solution at all to deal with said workforce glut.
No one can look at the current recovery and say that its a good situation. Other countries are already waging a tariff war on us. There will always be people who are not competitive, selling our poor into bread lines and a welfare lifestyle on the alter of free trade is no reasonable way to run a country. Free trade only works when it goes both ways, and it is definitely not going both ways. So either give our poor jobs or reign in china's anti-free trade policies but for fucks sake stop living in a fantasy world where a free trade ideology is infallible. You solve the glut that we have now with a fiscal and monetary shock that entices businesses to invest in personnel. We as a nation wonder why we have unemployment problems and then we look and see we pay people to be unemployed. It's pretty disingenuous to suggest that people who are unemployed are so because they can collect unemployment insurance or something similar. It's specious to assert that people who collect UI are doing so in an attempt to make easy money, just as it's specious to claim that women have children for the sake of maternity leave. I made no such argument, my only argument is the fact that if you make more money by not working, you're not going to seek a job in the first place. Similarly, if unemployment pays you 35,000$, most people will not take a job that makes less than 50-60k since they value their leisure/other time/activities greater than that 25k. This does add to unemployment problems. If you could address my argument without strawmanning I would appreciate it. Are you making the argument that paying people to be unemployed, does not cause unemployment?
Unemployment is generally only available for about 6 months after being laid off and generally pays a percentage of previous income (which is capped at different amount at different places). I have a hard time believing anybody could make more than 30k per year on unemployment. Maybe services like medicaid, tanf, section 8, etc. with unemployment could add up to more than 30k, but I'm sure that in most cases they don't.
Also, you have to realize that cutting welfare would lead to huge problems. Now we have a small number of educated people with job training not receiving adequate funds to survive- that's bad. We'd also have a very large number of uneducated, unemployable people receiving no assistance either. They could either die, get a job, or turn to crime. None of them will want to die and there wouldn't be enough jobs for all of them, but I'd bet that crime would go way, way up. The problem is balancing welfare- it has to be able to provide, but it can't provide too much. I know conservatives love to target welfare but it really isn't the problem.
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I'm just gona take a walk before I get myself banned.
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On May 30 2013 09:46 Sermokala wrote:
I'm just gona take a walk before I get myself banned.
Wonder if I'm the only one who read your comment  . It was pretty funny
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On May 30 2013 09:22 Chocolate wrote:Show nested quote +On May 30 2013 09:04 Wegandi wrote:On May 30 2013 09:01 Shiori wrote:On May 30 2013 08:45 Wegandi wrote:On May 30 2013 08:41 aksfjh wrote:On May 30 2013 08:26 Sermokala wrote:
He address's that there is a glut in the workforce and with the same post dismiss's any solution at all to deal with said workforce glut.
No one can look at the current recovery and say that its a good situation. Other countries are already waging a tariff war on us. There will always be people who are not competitive, selling our poor into bread lines and a welfare lifestyle on the alter of free trade is no reasonable way to run a country. Free trade only works when it goes both ways, and it is definitely not going both ways. So either give our poor jobs or reign in china's anti-free trade policies but for fucks sake stop living in a fantasy world where a free trade ideology is infallible. You solve the glut that we have now with a fiscal and monetary shock that entices businesses to invest in personnel. We as a nation wonder why we have unemployment problems and then we look and see we pay people to be unemployed. It's pretty disingenuous to suggest that people who are unemployed are so because they can collect unemployment insurance or something similar. It's specious to assert that people who collect UI are doing so in an attempt to make easy money, just as it's specious to claim that women have children for the sake of maternity leave. I made no such argument, my only argument is the fact that if you make more money by not working, you're not going to seek a job in the first place. Similarly, if unemployment pays you 35,000$, most people will not take a job that makes less than 50-60k since they value their leisure/other time/activities greater than that 25k. This does add to unemployment problems. If you could address my argument without strawmanning I would appreciate it. Are you making the argument that paying people to be unemployed, does not cause unemployment? Unemployment is generally only available for about 6 months after being laid off and generally pays a percentage of previous income (which is capped at different amount at different places). I have a hard time believing anybody could make more than 30k per year on unemployment. Maybe services like medicaid, tanf, section 8, etc. with unemployment could add up to more than 30k, but I'm sure that in most cases they don't. Also, you have to realize that cutting welfare would lead to huge problems. Now we have a small number of educated people with job training not receiving adequate funds to survive- that's bad. We'd also have a very large number of uneducated, unemployable people receiving no assistance either. They could either die, get a job, or turn to crime. None of them will want to die and there wouldn't be enough jobs for all of them, but I'd bet that crime would go way, way up. The problem is balancing welfare- it has to be able to provide, but it can't provide too much. I know conservatives love to target welfare but it really isn't the problem.
Oh c'mon. Are you really making the argument that we're providing welfare to prevent people from becoming criminals? You're really holding us hostage to that choice from the poor?
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On May 30 2013 09:14 aksfjh wrote:
Funny, the state with the highest unemployment benefits (Mass.) has an unemployment rate at least 0.5 pp lower than the national average. Somebody should tell those suckers that their free time is more valuable and they should act more selfishly.
But you realize you might be pointing the causation arrow in the wrong direction, right? Massachusetts might have the highest unemployment benefits because they have the lowest unemployment and the state can afford to be generous.
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On May 30 2013 10:15 coverpunch wrote:Show nested quote +On May 30 2013 09:14 aksfjh wrote:
Funny, the state with the highest unemployment benefits (Mass.) has an unemployment rate at least 0.5 pp lower than the national average. Somebody should tell those suckers that their free time is more valuable and they should act more selfishly. But you realize you might be pointing the causation arrow in the wrong direction, right? Massachusetts might have the highest unemployment benefits because they have the lowest unemployment and the state can afford to be generous.
Just an example that doesn't pan out if you assume unemployment benefits cause unemployment.
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On May 30 2013 10:10 coverpunch wrote:Show nested quote +On May 30 2013 09:22 Chocolate wrote:On May 30 2013 09:04 Wegandi wrote:On May 30 2013 09:01 Shiori wrote:On May 30 2013 08:45 Wegandi wrote:On May 30 2013 08:41 aksfjh wrote:On May 30 2013 08:26 Sermokala wrote:
He address's that there is a glut in the workforce and with the same post dismiss's any solution at all to deal with said workforce glut.
No one can look at the current recovery and say that its a good situation. Other countries are already waging a tariff war on us. There will always be people who are not competitive, selling our poor into bread lines and a welfare lifestyle on the alter of free trade is no reasonable way to run a country. Free trade only works when it goes both ways, and it is definitely not going both ways. So either give our poor jobs or reign in china's anti-free trade policies but for fucks sake stop living in a fantasy world where a free trade ideology is infallible. You solve the glut that we have now with a fiscal and monetary shock that entices businesses to invest in personnel. We as a nation wonder why we have unemployment problems and then we look and see we pay people to be unemployed. It's pretty disingenuous to suggest that people who are unemployed are so because they can collect unemployment insurance or something similar. It's specious to assert that people who collect UI are doing so in an attempt to make easy money, just as it's specious to claim that women have children for the sake of maternity leave. I made no such argument, my only argument is the fact that if you make more money by not working, you're not going to seek a job in the first place. Similarly, if unemployment pays you 35,000$, most people will not take a job that makes less than 50-60k since they value their leisure/other time/activities greater than that 25k. This does add to unemployment problems. If you could address my argument without strawmanning I would appreciate it. Are you making the argument that paying people to be unemployed, does not cause unemployment? Unemployment is generally only available for about 6 months after being laid off and generally pays a percentage of previous income (which is capped at different amount at different places). I have a hard time believing anybody could make more than 30k per year on unemployment. Maybe services like medicaid, tanf, section 8, etc. with unemployment could add up to more than 30k, but I'm sure that in most cases they don't. Also, you have to realize that cutting welfare would lead to huge problems. Now we have a small number of educated people with job training not receiving adequate funds to survive- that's bad. We'd also have a very large number of uneducated, unemployable people receiving no assistance either. They could either die, get a job, or turn to crime. None of them will want to die and there wouldn't be enough jobs for all of them, but I'd bet that crime would go way, way up. The problem is balancing welfare- it has to be able to provide, but it can't provide too much. I know conservatives love to target welfare but it really isn't the problem. Oh c'mon. Are you really making the argument that we're providing welfare to prevent people from becoming criminals? You're really holding us hostage to that choice from the poor?
Not entirely, welfare is a necessary component of a just society. Some abuse it and that needs to be shored up, but there would be a lot of consequences if it were eliminated. We'd be introducing to society a lower class that is poorer than before and one which would be unable to live at the meager standards which they were afforded before. We have lax gun laws, a non-homogeneous society than can promote us-vs-them culture, and also a culture which glorifies violence. If we suddenly pissed off all the poor people I'm sure you know what would happen. It's not a hostage situation, it's simply the current state of affairs that is largely a result of the culture of the US.
Obviously the solution is to break the cycle of poverty by providing high quality education to the children of the poor, but because of the tendency of the wealthy to keep their kids from interacting with those of the poor and limited resources for schools that are struggling (which, shockingly, often have the poorest students) that isn't happening.
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EPT![[image loading]](http://i.imgur.com/jkcYK6h.png)
