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On March 01 2014 02:39 JonnyBNoHo wrote:Show nested quote +On March 01 2014 02:21 WhiteDog wrote:On March 01 2014 02:12 JonnyBNoHo wrote:On March 01 2014 02:02 WhiteDog wrote:On March 01 2014 01:49 JonnyBNoHo wrote:On March 01 2014 00:38 WhiteDog wrote:On March 01 2014 00:22 Wolfstan wrote:The problem is, as I stated before, those people "who earn it" almost does not exist in reality. There are exemples, but at the macroeconomic level they do not exist - it's a statistical residue. True there is a huge difference between the US and Europe because in the US the capital only represent 400% of the total revenu of the country for one year, while it is closer to 600 % in Europe, but OVERALL, most of the richest people on our planet :
- gain more money from their patrimony rather than from their labor
- herite their condition from their famillies You touch on another very valid point that is also very dangerous. You are correct that all large portion of wealth is not affecting the "real" economy, it is VERY dangerous to advocate policies that take wealth from wall street and contaminate main street. The wealth of the 1% looks very attractive when you think about how many houses, cars and food the poor could have if the money was forced out of investments seeking growth into the consumption of the poor. Nothing good can come of it as the last crisis has shown. I would elaborate more but have a few meetings to run into. Actually the last crisis is exactly a result of the fact that we are not taxing enough capital. Capital was so high, and unchecked, and capitalists wanted to gain so much from their savings, that it came to point where rich were indirectly lending their money to poor people in risky loan just to maximize their capital gain. At the macroeconomic level, the 2007 crisis was really a marxist crisis resulting from the contradiction of a system that remunerate capital accumulation too much in a situation of low or almost no economic growth. Sorry, but I think that's misguided. Credit cycles happen all the time without creating a major crisis. The problem had more to do with how the credit was being used - in money markets with highly leveraged institutions. Nothing you said goes against any of the things I said. I think the difference is in how the contradiction gets resolved. The dot-com bust didn't leave the US in a horrid recession, nor did the S&L crisis - but the sub-prime bust did. The latter didn't have a good way to resolve the issue, and I see that as the real issue. Credit, capital, whatever - it's always going to over and undershoot the ideal. What matters more is the ability to keep mistakes in the past and move forward. You didn't understand my point, and it does not go against your views. What I was implying is that we are in a society where capital is overflowing, by opposition to labor and production. In this situation, capital is cheap (and the low interest rates are a good exemple of that). With an overflowing capital and less regulations on capital accumulation / investment, it is normal that a huge part of dormant capital will be invested in risky loan. To say it in another way, when the production is not growing enough to assure a high return on investment, then capital will naturally find other ways to gain a high return, and the subprime is the kid of this situation of overflowing capital and a slow economical activity (what Ben Bernanke called a saving glut). There is a reason why all major economic bubble (1930 and the 2007 subprime crisis) happened in economic situations where the inequalities were at their highest and where the cpaital expressed in % of the revenu were also at their highest. That the effect of the bubble were bigger with the sub prime than with other kind of bubble is another subject. I do understand your point. BUT - if you want to talk savings glut, a lot of that came from overseas... and then the debt came back when credit insurance was triggered (good bye AIG). Afaik, it wasn't an internal accumulation by class situation, though I'll welcome data that says otherwise.
It came from overseas meaning there were no outlet overseas because demand was (is) low in country with high growth in production and they had (have) an under developped financial system. It does not mean that the capital was only coming from oversea.
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Actually the last crisis is exactly a result of the fact that we are not taxing enough capital. Capital was so high, and unchecked, and capitalists wanted to gain so much from their savings, that it came to point where rich were indirectly lending their money to poor people in risky loan just to maximize their capital gain.
At the macroeconomic level, the 2007 crisis was really a marxist crisis resulting from the contradiction of a system that remunerate capital accumulation too much in a situation of low or almost no economic growth.
Yes that wealth is not meant for the lower class, the problem was that we let the capital out of the sterile, insulated playground of the rich where the damage could be contained. When you allow the uneducated masses actual equity that they are allowed to liquidate disaster will happen because they equate equity and debt with cash not realizing the an improper valuation will hurt them in very real ways as opposed to shrinking number on a financial statement. This is especially true because the economy doesn't have a labor and productive outlet when the injection of capital that is valued too high hits the real economy. Taxation to redistribute is just as bubble inflating as chasing returns in main street, you will run into exactly the same problems. That capital has to stay in the hands of the 1% where it won't be used for consumption but investments in labor and production that the state will direct there through subsidies.
I think the difference is in how the contradiction gets resolved. The dot-com bust didn't leave the US in a horrid recession, nor did the S&L crisis - but the sub-prime bust did. The latter didn't have a good way to resolve the issue, and I see that as the real issue. Credit, capital, whatever - it's always going to over and undershoot the ideal. What matters more is the ability to keep mistakes in the past and move forward.
And insulate people who have no business being in the business from being affected. Neither production, nor Labor lost anything when pets.com went bust but 300 million in capital vanished. Yes, the 1% have no way of ever consuming their wealth so they put it to use where a change on a balance sheet doesn't ruin the lives of accredited investors. Many think that forcing 600% value into an economy to fight inequality is an intelligent move but making a valuation mistake when capital is 4-6 times the revenues of an economy is a huge problem. Because that value often simply isn't there yet
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On March 01 2014 02:51 WhiteDog wrote:Show nested quote +On March 01 2014 02:39 JonnyBNoHo wrote:On March 01 2014 02:21 WhiteDog wrote:On March 01 2014 02:12 JonnyBNoHo wrote:On March 01 2014 02:02 WhiteDog wrote:On March 01 2014 01:49 JonnyBNoHo wrote:On March 01 2014 00:38 WhiteDog wrote:On March 01 2014 00:22 Wolfstan wrote:The problem is, as I stated before, those people "who earn it" almost does not exist in reality. There are exemples, but at the macroeconomic level they do not exist - it's a statistical residue. True there is a huge difference between the US and Europe because in the US the capital only represent 400% of the total revenu of the country for one year, while it is closer to 600 % in Europe, but OVERALL, most of the richest people on our planet :
- gain more money from their patrimony rather than from their labor
- herite their condition from their famillies You touch on another very valid point that is also very dangerous. You are correct that all large portion of wealth is not affecting the "real" economy, it is VERY dangerous to advocate policies that take wealth from wall street and contaminate main street. The wealth of the 1% looks very attractive when you think about how many houses, cars and food the poor could have if the money was forced out of investments seeking growth into the consumption of the poor. Nothing good can come of it as the last crisis has shown. I would elaborate more but have a few meetings to run into. Actually the last crisis is exactly a result of the fact that we are not taxing enough capital. Capital was so high, and unchecked, and capitalists wanted to gain so much from their savings, that it came to point where rich were indirectly lending their money to poor people in risky loan just to maximize their capital gain. At the macroeconomic level, the 2007 crisis was really a marxist crisis resulting from the contradiction of a system that remunerate capital accumulation too much in a situation of low or almost no economic growth. Sorry, but I think that's misguided. Credit cycles happen all the time without creating a major crisis. The problem had more to do with how the credit was being used - in money markets with highly leveraged institutions. Nothing you said goes against any of the things I said. I think the difference is in how the contradiction gets resolved. The dot-com bust didn't leave the US in a horrid recession, nor did the S&L crisis - but the sub-prime bust did. The latter didn't have a good way to resolve the issue, and I see that as the real issue. Credit, capital, whatever - it's always going to over and undershoot the ideal. What matters more is the ability to keep mistakes in the past and move forward. You didn't understand my point, and it does not go against your views. What I was implying is that we are in a society where capital is overflowing, by opposition to labor and production. In this situation, capital is cheap (and the low interest rates are a good exemple of that). With an overflowing capital and less regulations on capital accumulation / investment, it is normal that a huge part of dormant capital will be invested in risky loan. To say it in another way, when the production is not growing enough to assure a high return on investment, then capital will naturally find other ways to gain a high return, and the subprime is the kid of this situation of overflowing capital and a slow economical activity (what Ben Bernanke called a saving glut). There is a reason why all major economic bubble (1930 and the 2007 subprime crisis) happened in economic situations where the inequalities were at their highest and where the cpaital expressed in % of the revenu were also at their highest. That the effect of the bubble were bigger with the sub prime than with other kind of bubble is another subject. I do understand your point. BUT - if you want to talk savings glut, a lot of that came from overseas... and then the debt came back when credit insurance was triggered (good bye AIG). Afaik, it wasn't an internal accumulation by class situation, though I'll welcome data that says otherwise. It came from overseas meaning there were no outlet overseas because demand was (is) low in country with high growth in production and they had (have) an under developped financial system. It does not mean that the capital was only coming from oversea.
OK, sure, some came from within the US too, but that's arguing the tail wagged the dog. Internally our savings rate hit an all time low and interest rates and equity returns were low. I don't see how, internally, too much capital was being accumulated. Meanwhile flows to the US were ballooning to all time highs. That seems the more powerful answer.
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On March 01 2014 03:12 JonnyBNoHo wrote:Show nested quote +On March 01 2014 02:51 WhiteDog wrote:On March 01 2014 02:39 JonnyBNoHo wrote:On March 01 2014 02:21 WhiteDog wrote:On March 01 2014 02:12 JonnyBNoHo wrote:On March 01 2014 02:02 WhiteDog wrote:On March 01 2014 01:49 JonnyBNoHo wrote:On March 01 2014 00:38 WhiteDog wrote:On March 01 2014 00:22 Wolfstan wrote:The problem is, as I stated before, those people "who earn it" almost does not exist in reality. There are exemples, but at the macroeconomic level they do not exist - it's a statistical residue. True there is a huge difference between the US and Europe because in the US the capital only represent 400% of the total revenu of the country for one year, while it is closer to 600 % in Europe, but OVERALL, most of the richest people on our planet :
- gain more money from their patrimony rather than from their labor
- herite their condition from their famillies You touch on another very valid point that is also very dangerous. You are correct that all large portion of wealth is not affecting the "real" economy, it is VERY dangerous to advocate policies that take wealth from wall street and contaminate main street. The wealth of the 1% looks very attractive when you think about how many houses, cars and food the poor could have if the money was forced out of investments seeking growth into the consumption of the poor. Nothing good can come of it as the last crisis has shown. I would elaborate more but have a few meetings to run into. Actually the last crisis is exactly a result of the fact that we are not taxing enough capital. Capital was so high, and unchecked, and capitalists wanted to gain so much from their savings, that it came to point where rich were indirectly lending their money to poor people in risky loan just to maximize their capital gain. At the macroeconomic level, the 2007 crisis was really a marxist crisis resulting from the contradiction of a system that remunerate capital accumulation too much in a situation of low or almost no economic growth. Sorry, but I think that's misguided. Credit cycles happen all the time without creating a major crisis. The problem had more to do with how the credit was being used - in money markets with highly leveraged institutions. Nothing you said goes against any of the things I said. I think the difference is in how the contradiction gets resolved. The dot-com bust didn't leave the US in a horrid recession, nor did the S&L crisis - but the sub-prime bust did. The latter didn't have a good way to resolve the issue, and I see that as the real issue. Credit, capital, whatever - it's always going to over and undershoot the ideal. What matters more is the ability to keep mistakes in the past and move forward. You didn't understand my point, and it does not go against your views. What I was implying is that we are in a society where capital is overflowing, by opposition to labor and production. In this situation, capital is cheap (and the low interest rates are a good exemple of that). With an overflowing capital and less regulations on capital accumulation / investment, it is normal that a huge part of dormant capital will be invested in risky loan. To say it in another way, when the production is not growing enough to assure a high return on investment, then capital will naturally find other ways to gain a high return, and the subprime is the kid of this situation of overflowing capital and a slow economical activity (what Ben Bernanke called a saving glut). There is a reason why all major economic bubble (1930 and the 2007 subprime crisis) happened in economic situations where the inequalities were at their highest and where the cpaital expressed in % of the revenu were also at their highest. That the effect of the bubble were bigger with the sub prime than with other kind of bubble is another subject. I do understand your point. BUT - if you want to talk savings glut, a lot of that came from overseas... and then the debt came back when credit insurance was triggered (good bye AIG). Afaik, it wasn't an internal accumulation by class situation, though I'll welcome data that says otherwise. It came from overseas meaning there were no outlet overseas because demand was (is) low in country with high growth in production and they had (have) an under developped financial system. It does not mean that the capital was only coming from oversea. OK, sure, some came from within the US too, but that's arguing the tail wagged the dog. Internally our savings rate hit an all time low and interest rates and equity returns were low. I don't see how, internally, too much capital was being accumulated. Meanwhile flows to the US were ballooning to all time highs. That seems the more powerful answer.
America's low saving rate, and its big size are the two main reasons why the capital overall in the US is less than in Europe (as I said 400% of the national income in one year to 600 % average in europe) but it doesn't mean there are no capital at all. Plus the savings were low before the crisis, exactly because capital was cheap.
It's true that the US is different as it has also a great inequality in labor income, but that doesn't mean the patrimony part does not exist.
![[image loading]](http://delong.typepad.com/.a/6a00e551f080038834019b0328b6bc970d-pi)
![[image loading]](http://delong.typepad.com/.a/6a00e551f08003883401a3fa9c423a970b-pi)
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On March 01 2014 03:19 WhiteDog wrote:Show nested quote +On March 01 2014 03:12 JonnyBNoHo wrote:On March 01 2014 02:51 WhiteDog wrote:On March 01 2014 02:39 JonnyBNoHo wrote:On March 01 2014 02:21 WhiteDog wrote:On March 01 2014 02:12 JonnyBNoHo wrote:On March 01 2014 02:02 WhiteDog wrote:On March 01 2014 01:49 JonnyBNoHo wrote:On March 01 2014 00:38 WhiteDog wrote:On March 01 2014 00:22 Wolfstan wrote:
[quote]
You touch on another very valid point that is also very dangerous. You are correct that all large portion of wealth is not affecting the "real" economy, it is VERY dangerous to advocate policies that take wealth from wall street and contaminate main street. The wealth of the 1% looks very attractive when you think about how many houses, cars and food the poor could have if the money was forced out of investments seeking growth into the consumption of the poor. Nothing good can come of it as the last crisis has shown. I would elaborate more but have a few meetings to run into. Actually the last crisis is exactly a result of the fact that we are not taxing enough capital. Capital was so high, and unchecked, and capitalists wanted to gain so much from their savings, that it came to point where rich were indirectly lending their money to poor people in risky loan just to maximize their capital gain. At the macroeconomic level, the 2007 crisis was really a marxist crisis resulting from the contradiction of a system that remunerate capital accumulation too much in a situation of low or almost no economic growth. Sorry, but I think that's misguided. Credit cycles happen all the time without creating a major crisis. The problem had more to do with how the credit was being used - in money markets with highly leveraged institutions. Nothing you said goes against any of the things I said. I think the difference is in how the contradiction gets resolved. The dot-com bust didn't leave the US in a horrid recession, nor did the S&L crisis - but the sub-prime bust did. The latter didn't have a good way to resolve the issue, and I see that as the real issue. Credit, capital, whatever - it's always going to over and undershoot the ideal. What matters more is the ability to keep mistakes in the past and move forward. You didn't understand my point, and it does not go against your views. What I was implying is that we are in a society where capital is overflowing, by opposition to labor and production. In this situation, capital is cheap (and the low interest rates are a good exemple of that). With an overflowing capital and less regulations on capital accumulation / investment, it is normal that a huge part of dormant capital will be invested in risky loan. To say it in another way, when the production is not growing enough to assure a high return on investment, then capital will naturally find other ways to gain a high return, and the subprime is the kid of this situation of overflowing capital and a slow economical activity (what Ben Bernanke called a saving glut). There is a reason why all major economic bubble (1930 and the 2007 subprime crisis) happened in economic situations where the inequalities were at their highest and where the cpaital expressed in % of the revenu were also at their highest. That the effect of the bubble were bigger with the sub prime than with other kind of bubble is another subject. I do understand your point. BUT - if you want to talk savings glut, a lot of that came from overseas... and then the debt came back when credit insurance was triggered (good bye AIG). Afaik, it wasn't an internal accumulation by class situation, though I'll welcome data that says otherwise. It came from overseas meaning there were no outlet overseas because demand was (is) low in country with high growth in production and they had (have) an under developped financial system. It does not mean that the capital was only coming from oversea. OK, sure, some came from within the US too, but that's arguing the tail wagged the dog. Internally our savings rate hit an all time low and interest rates and equity returns were low. I don't see how, internally, too much capital was being accumulated. Meanwhile flows to the US were ballooning to all time highs. That seems the more powerful answer. America's low saving rate, and its big size are the two main reasons why the capital overall in the US is less than in Europe (as I said 400% of the national income in one year to 600 % average in europe) but it doesn't mean there are no capital at all. Plus the savings were low before the crisis, exactly because capital was cheap. It's true that the US is different as it has also a great inequality in labor income, but that doesn't mean the patrimony part does not exist. + Show Spoiler +
I still think you're arguing that "it's an issue" rather than "it's a driving issue". The other issues I cited just seem so much more important.
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On March 01 2014 03:41 JonnyBNoHo wrote:Show nested quote +On March 01 2014 03:19 WhiteDog wrote:On March 01 2014 03:12 JonnyBNoHo wrote:On March 01 2014 02:51 WhiteDog wrote:On March 01 2014 02:39 JonnyBNoHo wrote:On March 01 2014 02:21 WhiteDog wrote:On March 01 2014 02:12 JonnyBNoHo wrote:On March 01 2014 02:02 WhiteDog wrote:On March 01 2014 01:49 JonnyBNoHo wrote:On March 01 2014 00:38 WhiteDog wrote:
[quote]
Actually the last crisis is exactly a result of the fact that we are not taxing enough capital. Capital was so high, and unchecked, and capitalists wanted to gain so much from their savings, that it came to point where rich were indirectly lending their money to poor people in risky loan just to maximize their capital gain.
At the macroeconomic level, the 2007 crisis was really a marxist crisis resulting from the contradiction of a system that remunerate capital accumulation too much in a situation of low or almost no economic growth. Sorry, but I think that's misguided. Credit cycles happen all the time without creating a major crisis. The problem had more to do with how the credit was being used - in money markets with highly leveraged institutions. Nothing you said goes against any of the things I said. I think the difference is in how the contradiction gets resolved. The dot-com bust didn't leave the US in a horrid recession, nor did the S&L crisis - but the sub-prime bust did. The latter didn't have a good way to resolve the issue, and I see that as the real issue. Credit, capital, whatever - it's always going to over and undershoot the ideal. What matters more is the ability to keep mistakes in the past and move forward. You didn't understand my point, and it does not go against your views. What I was implying is that we are in a society where capital is overflowing, by opposition to labor and production. In this situation, capital is cheap (and the low interest rates are a good exemple of that). With an overflowing capital and less regulations on capital accumulation / investment, it is normal that a huge part of dormant capital will be invested in risky loan. To say it in another way, when the production is not growing enough to assure a high return on investment, then capital will naturally find other ways to gain a high return, and the subprime is the kid of this situation of overflowing capital and a slow economical activity (what Ben Bernanke called a saving glut). There is a reason why all major economic bubble (1930 and the 2007 subprime crisis) happened in economic situations where the inequalities were at their highest and where the cpaital expressed in % of the revenu were also at their highest. That the effect of the bubble were bigger with the sub prime than with other kind of bubble is another subject. I do understand your point. BUT - if you want to talk savings glut, a lot of that came from overseas... and then the debt came back when credit insurance was triggered (good bye AIG). Afaik, it wasn't an internal accumulation by class situation, though I'll welcome data that says otherwise. It came from overseas meaning there were no outlet overseas because demand was (is) low in country with high growth in production and they had (have) an under developped financial system. It does not mean that the capital was only coming from oversea. OK, sure, some came from within the US too, but that's arguing the tail wagged the dog. Internally our savings rate hit an all time low and interest rates and equity returns were low. I don't see how, internally, too much capital was being accumulated. Meanwhile flows to the US were ballooning to all time highs. That seems the more powerful answer. America's low saving rate, and its big size are the two main reasons why the capital overall in the US is less than in Europe (as I said 400% of the national income in one year to 600 % average in europe) but it doesn't mean there are no capital at all. Plus the savings were low before the crisis, exactly because capital was cheap. It's true that the US is different as it has also a great inequality in labor income, but that doesn't mean the patrimony part does not exist. + Show Spoiler + I still think you're arguing that "it's an issue" rather than "it's a driving issue". The other issues I cited just seem so much more important.
Everything you cited is linked to the biggest macroeconomic trend I'm talking about. Just look in the graph, the 2007 subprime crisis is easy to spot. The correlation is pretty clear... Every bubble are on that graph actually, more or less, but what's most interesting is the global trend of capital being more and more important in our societies, which was my first point.
Wolfstan came up with the 2007 crisis like it was a perfect explanation of why you should not tax capital (or give capital to poor) and I just responded that it is the lack of capital taxation that is directly linked to the crisis. I'm not saying there are no specific questions about the financial market, the way it function, the lack of regulation, etc. that explains the subprime crisis, like you are trying to argue. I'm merely saying capital is part of the problem : to say it in another way, you talk about the specifics of the crisis, while I'm talking about the macroeconomic context.
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On March 01 2014 04:20 WhiteDog wrote:Show nested quote +On March 01 2014 03:41 JonnyBNoHo wrote:On March 01 2014 03:19 WhiteDog wrote:On March 01 2014 03:12 JonnyBNoHo wrote:On March 01 2014 02:51 WhiteDog wrote:On March 01 2014 02:39 JonnyBNoHo wrote:On March 01 2014 02:21 WhiteDog wrote:On March 01 2014 02:12 JonnyBNoHo wrote:On March 01 2014 02:02 WhiteDog wrote:On March 01 2014 01:49 JonnyBNoHo wrote:
[quote]
Sorry, but I think that's misguided.
Credit cycles happen all the time without creating a major crisis. The problem had more to do with how the credit was being used - in money markets with highly leveraged institutions. Nothing you said goes against any of the things I said. I think the difference is in how the contradiction gets resolved. The dot-com bust didn't leave the US in a horrid recession, nor did the S&L crisis - but the sub-prime bust did. The latter didn't have a good way to resolve the issue, and I see that as the real issue. Credit, capital, whatever - it's always going to over and undershoot the ideal. What matters more is the ability to keep mistakes in the past and move forward. You didn't understand my point, and it does not go against your views. What I was implying is that we are in a society where capital is overflowing, by opposition to labor and production. In this situation, capital is cheap (and the low interest rates are a good exemple of that). With an overflowing capital and less regulations on capital accumulation / investment, it is normal that a huge part of dormant capital will be invested in risky loan. To say it in another way, when the production is not growing enough to assure a high return on investment, then capital will naturally find other ways to gain a high return, and the subprime is the kid of this situation of overflowing capital and a slow economical activity (what Ben Bernanke called a saving glut). There is a reason why all major economic bubble (1930 and the 2007 subprime crisis) happened in economic situations where the inequalities were at their highest and where the cpaital expressed in % of the revenu were also at their highest. That the effect of the bubble were bigger with the sub prime than with other kind of bubble is another subject. I do understand your point. BUT - if you want to talk savings glut, a lot of that came from overseas... and then the debt came back when credit insurance was triggered (good bye AIG). Afaik, it wasn't an internal accumulation by class situation, though I'll welcome data that says otherwise. It came from overseas meaning there were no outlet overseas because demand was (is) low in country with high growth in production and they had (have) an under developped financial system. It does not mean that the capital was only coming from oversea. OK, sure, some came from within the US too, but that's arguing the tail wagged the dog. Internally our savings rate hit an all time low and interest rates and equity returns were low. I don't see how, internally, too much capital was being accumulated. Meanwhile flows to the US were ballooning to all time highs. That seems the more powerful answer. America's low saving rate, and its big size are the two main reasons why the capital overall in the US is less than in Europe (as I said 400% of the national income in one year to 600 % average in europe) but it doesn't mean there are no capital at all. Plus the savings were low before the crisis, exactly because capital was cheap. It's true that the US is different as it has also a great inequality in labor income, but that doesn't mean the patrimony part does not exist. + Show Spoiler + I still think you're arguing that "it's an issue" rather than "it's a driving issue". The other issues I cited just seem so much more important. Everything you cited is linked to the biggest macroeconomic trend I'm talking about. Just look in the graph, the 2007 subprime crisis is easy to spot. The correlation is pretty clear... Every bubble are on that graph actually, more or less, but what's most interesting is the global trend of capital being more and more important in our societies, which was my first point. Wolfstan came up with the 2007 crisis like it was a perfect explanation of why you should not tax capital (or give capital to poor) and I just responded that it is the lack of capital taxation that is directly linked to the crisis. I'm not saying there are no specific questions about the financial market, the way it function, the lack of regulation, etc. that explains the subprime crisis, like you are trying to argue. I'm merely saying capital is part of the problem : to say it in another way, you talk about the specifics of the crisis, while I'm talking about the macroeconomic context.
A rising amount of capital isn't an "over" accumulation though... a big part of how modern economies grow is by intensifying capital use. It's only a problem if you don't have anywhere to put the financial capital... which was a problem external to the US (mainly).
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On March 01 2014 04:43 JonnyBNoHo wrote:Show nested quote +On March 01 2014 04:20 WhiteDog wrote:On March 01 2014 03:41 JonnyBNoHo wrote:On March 01 2014 03:19 WhiteDog wrote:On March 01 2014 03:12 JonnyBNoHo wrote:On March 01 2014 02:51 WhiteDog wrote:On March 01 2014 02:39 JonnyBNoHo wrote:On March 01 2014 02:21 WhiteDog wrote:On March 01 2014 02:12 JonnyBNoHo wrote:On March 01 2014 02:02 WhiteDog wrote:
[quote]
Nothing you said goes against any of the things I said. I think the difference is in how the contradiction gets resolved. The dot-com bust didn't leave the US in a horrid recession, nor did the S&L crisis - but the sub-prime bust did. The latter didn't have a good way to resolve the issue, and I see that as the real issue. Credit, capital, whatever - it's always going to over and undershoot the ideal. What matters more is the ability to keep mistakes in the past and move forward. You didn't understand my point, and it does not go against your views. What I was implying is that we are in a society where capital is overflowing, by opposition to labor and production. In this situation, capital is cheap (and the low interest rates are a good exemple of that). With an overflowing capital and less regulations on capital accumulation / investment, it is normal that a huge part of dormant capital will be invested in risky loan. To say it in another way, when the production is not growing enough to assure a high return on investment, then capital will naturally find other ways to gain a high return, and the subprime is the kid of this situation of overflowing capital and a slow economical activity (what Ben Bernanke called a saving glut). There is a reason why all major economic bubble (1930 and the 2007 subprime crisis) happened in economic situations where the inequalities were at their highest and where the cpaital expressed in % of the revenu were also at their highest. That the effect of the bubble were bigger with the sub prime than with other kind of bubble is another subject. I do understand your point. BUT - if you want to talk savings glut, a lot of that came from overseas... and then the debt came back when credit insurance was triggered (good bye AIG). Afaik, it wasn't an internal accumulation by class situation, though I'll welcome data that says otherwise. It came from overseas meaning there were no outlet overseas because demand was (is) low in country with high growth in production and they had (have) an under developped financial system. It does not mean that the capital was only coming from oversea. OK, sure, some came from within the US too, but that's arguing the tail wagged the dog. Internally our savings rate hit an all time low and interest rates and equity returns were low. I don't see how, internally, too much capital was being accumulated. Meanwhile flows to the US were ballooning to all time highs. That seems the more powerful answer. America's low saving rate, and its big size are the two main reasons why the capital overall in the US is less than in Europe (as I said 400% of the national income in one year to 600 % average in europe) but it doesn't mean there are no capital at all. Plus the savings were low before the crisis, exactly because capital was cheap. It's true that the US is different as it has also a great inequality in labor income, but that doesn't mean the patrimony part does not exist. + Show Spoiler + I still think you're arguing that "it's an issue" rather than "it's a driving issue". The other issues I cited just seem so much more important. Everything you cited is linked to the biggest macroeconomic trend I'm talking about. Just look in the graph, the 2007 subprime crisis is easy to spot. The correlation is pretty clear... Every bubble are on that graph actually, more or less, but what's most interesting is the global trend of capital being more and more important in our societies, which was my first point. Wolfstan came up with the 2007 crisis like it was a perfect explanation of why you should not tax capital (or give capital to poor) and I just responded that it is the lack of capital taxation that is directly linked to the crisis. I'm not saying there are no specific questions about the financial market, the way it function, the lack of regulation, etc. that explains the subprime crisis, like you are trying to argue. I'm merely saying capital is part of the problem : to say it in another way, you talk about the specifics of the crisis, while I'm talking about the macroeconomic context. A rising amount of capital isn't an "over" accumulation though... a big part of how modern economies grow is by intensifying capital use. It's only a problem if you don't have anywhere to put the financial capital... which was a problem external to the US (mainly).
When the return on capital is systemically higher than production growth (5 to 2% a year), you know that there is a concentration of capital in a few hands that is not sustainable in the long run.
When the level of accumulation is the same as the beginning of the XXth century in Europe, it is a big problem. You don't know it, because you're from the US and it is not part of your culture (you never had a such a level of over accumulation for various reasons). But in France, and most of western Europe, between 1890 and 1930, a big part of the population were rentier who gained their money just because of their patrimony.
Also, a big part of how modern economies grow is by... using human capital. Yes there are studies about that. Capital accumulation is useless by itself : "il n'y a de richesse que d'hommes".
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On March 01 2014 04:53 WhiteDog wrote:Show nested quote +On March 01 2014 04:43 JonnyBNoHo wrote:On March 01 2014 04:20 WhiteDog wrote:On March 01 2014 03:41 JonnyBNoHo wrote:On March 01 2014 03:19 WhiteDog wrote:On March 01 2014 03:12 JonnyBNoHo wrote:On March 01 2014 02:51 WhiteDog wrote:On March 01 2014 02:39 JonnyBNoHo wrote:On March 01 2014 02:21 WhiteDog wrote:On March 01 2014 02:12 JonnyBNoHo wrote:
[quote]
I think the difference is in how the contradiction gets resolved. The dot-com bust didn't leave the US in a horrid recession, nor did the S&L crisis - but the sub-prime bust did. The latter didn't have a good way to resolve the issue, and I see that as the real issue. Credit, capital, whatever - it's always going to over and undershoot the ideal. What matters more is the ability to keep mistakes in the past and move forward. You didn't understand my point, and it does not go against your views. What I was implying is that we are in a society where capital is overflowing, by opposition to labor and production. In this situation, capital is cheap (and the low interest rates are a good exemple of that). With an overflowing capital and less regulations on capital accumulation / investment, it is normal that a huge part of dormant capital will be invested in risky loan. To say it in another way, when the production is not growing enough to assure a high return on investment, then capital will naturally find other ways to gain a high return, and the subprime is the kid of this situation of overflowing capital and a slow economical activity (what Ben Bernanke called a saving glut). There is a reason why all major economic bubble (1930 and the 2007 subprime crisis) happened in economic situations where the inequalities were at their highest and where the cpaital expressed in % of the revenu were also at their highest. That the effect of the bubble were bigger with the sub prime than with other kind of bubble is another subject. I do understand your point. BUT - if you want to talk savings glut, a lot of that came from overseas... and then the debt came back when credit insurance was triggered (good bye AIG). Afaik, it wasn't an internal accumulation by class situation, though I'll welcome data that says otherwise. It came from overseas meaning there were no outlet overseas because demand was (is) low in country with high growth in production and they had (have) an under developped financial system. It does not mean that the capital was only coming from oversea. OK, sure, some came from within the US too, but that's arguing the tail wagged the dog. Internally our savings rate hit an all time low and interest rates and equity returns were low. I don't see how, internally, too much capital was being accumulated. Meanwhile flows to the US were ballooning to all time highs. That seems the more powerful answer. America's low saving rate, and its big size are the two main reasons why the capital overall in the US is less than in Europe (as I said 400% of the national income in one year to 600 % average in europe) but it doesn't mean there are no capital at all. Plus the savings were low before the crisis, exactly because capital was cheap. It's true that the US is different as it has also a great inequality in labor income, but that doesn't mean the patrimony part does not exist. + Show Spoiler + I still think you're arguing that "it's an issue" rather than "it's a driving issue". The other issues I cited just seem so much more important. Everything you cited is linked to the biggest macroeconomic trend I'm talking about. Just look in the graph, the 2007 subprime crisis is easy to spot. The correlation is pretty clear... Every bubble are on that graph actually, more or less, but what's most interesting is the global trend of capital being more and more important in our societies, which was my first point. Wolfstan came up with the 2007 crisis like it was a perfect explanation of why you should not tax capital (or give capital to poor) and I just responded that it is the lack of capital taxation that is directly linked to the crisis. I'm not saying there are no specific questions about the financial market, the way it function, the lack of regulation, etc. that explains the subprime crisis, like you are trying to argue. I'm merely saying capital is part of the problem : to say it in another way, you talk about the specifics of the crisis, while I'm talking about the macroeconomic context. A rising amount of capital isn't an "over" accumulation though... a big part of how modern economies grow is by intensifying capital use. It's only a problem if you don't have anywhere to put the financial capital... which was a problem external to the US (mainly). When the return on capital is systemically higher than production growth (5 to 2% a year), you know that there is a concentration of capital in a few hands that is not sustainable in the long run. When the level of accumulation is the same as the beginning of the XXth century in Europe, it is a big problem. You don't know it, because you're from the US and it is not part of your culture (you never had a such a level of over accumulation for various reasons). But in France, and most of western Europe, between 1890 and 1930, a big part of the population were rentier who gained their money just because of their patrimony. Also, a big part of how modern economies grow is by... using human capital. Yes there are studies about that. Capital accumulation is useless by itself : "il n'y a de richesse que d'hommes".
First, where are you getting your 5% and 2% numbers?
Second, some of the capital accumulation is related to human capital.
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On March 01 2014 05:00 JonnyBNoHo wrote:Show nested quote +On March 01 2014 04:53 WhiteDog wrote:On March 01 2014 04:43 JonnyBNoHo wrote:On March 01 2014 04:20 WhiteDog wrote:On March 01 2014 03:41 JonnyBNoHo wrote:On March 01 2014 03:19 WhiteDog wrote:On March 01 2014 03:12 JonnyBNoHo wrote:On March 01 2014 02:51 WhiteDog wrote:On March 01 2014 02:39 JonnyBNoHo wrote:On March 01 2014 02:21 WhiteDog wrote:
[quote]
You didn't understand my point, and it does not go against your views. What I was implying is that we are in a society where capital is overflowing, by opposition to labor and production. In this situation, capital is cheap (and the low interest rates are a good exemple of that).
With an overflowing capital and less regulations on capital accumulation / investment, it is normal that a huge part of dormant capital will be invested in risky loan. To say it in another way, when the production is not growing enough to assure a high return on investment, then capital will naturally find other ways to gain a high return, and the subprime is the kid of this situation of overflowing capital and a slow economical activity (what Ben Bernanke called a saving glut). There is a reason why all major economic bubble (1930 and the 2007 subprime crisis) happened in economic situations where the inequalities were at their highest and where the cpaital expressed in % of the revenu were also at their highest.
That the effect of the bubble were bigger with the sub prime than with other kind of bubble is another subject. I do understand your point. BUT - if you want to talk savings glut, a lot of that came from overseas... and then the debt came back when credit insurance was triggered (good bye AIG). Afaik, it wasn't an internal accumulation by class situation, though I'll welcome data that says otherwise. It came from overseas meaning there were no outlet overseas because demand was (is) low in country with high growth in production and they had (have) an under developped financial system. It does not mean that the capital was only coming from oversea. OK, sure, some came from within the US too, but that's arguing the tail wagged the dog. Internally our savings rate hit an all time low and interest rates and equity returns were low. I don't see how, internally, too much capital was being accumulated. Meanwhile flows to the US were ballooning to all time highs. That seems the more powerful answer. America's low saving rate, and its big size are the two main reasons why the capital overall in the US is less than in Europe (as I said 400% of the national income in one year to 600 % average in europe) but it doesn't mean there are no capital at all. Plus the savings were low before the crisis, exactly because capital was cheap. It's true that the US is different as it has also a great inequality in labor income, but that doesn't mean the patrimony part does not exist. + Show Spoiler + I still think you're arguing that "it's an issue" rather than "it's a driving issue". The other issues I cited just seem so much more important. Everything you cited is linked to the biggest macroeconomic trend I'm talking about. Just look in the graph, the 2007 subprime crisis is easy to spot. The correlation is pretty clear... Every bubble are on that graph actually, more or less, but what's most interesting is the global trend of capital being more and more important in our societies, which was my first point. Wolfstan came up with the 2007 crisis like it was a perfect explanation of why you should not tax capital (or give capital to poor) and I just responded that it is the lack of capital taxation that is directly linked to the crisis. I'm not saying there are no specific questions about the financial market, the way it function, the lack of regulation, etc. that explains the subprime crisis, like you are trying to argue. I'm merely saying capital is part of the problem : to say it in another way, you talk about the specifics of the crisis, while I'm talking about the macroeconomic context. A rising amount of capital isn't an "over" accumulation though... a big part of how modern economies grow is by intensifying capital use. It's only a problem if you don't have anywhere to put the financial capital... which was a problem external to the US (mainly). When the return on capital is systemically higher than production growth (5 to 2% a year), you know that there is a concentration of capital in a few hands that is not sustainable in the long run. When the level of accumulation is the same as the beginning of the XXth century in Europe, it is a big problem. You don't know it, because you're from the US and it is not part of your culture (you never had a such a level of over accumulation for various reasons). But in France, and most of western Europe, between 1890 and 1930, a big part of the population were rentier who gained their money just because of their patrimony. Also, a big part of how modern economies grow is by... using human capital. Yes there are studies about that. Capital accumulation is useless by itself : "il n'y a de richesse que d'hommes". First, where are you getting your 5% and 2% numbers? Second, some of the capital accumulation is related to human capital.
From the book you should read. And 5% is on average, for financial market the return on capital gain is around 7-8 % (more risky). The 2% is just an average growth of GDP.
Second no. Unless slavery is legal again.
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On March 01 2014 05:08 WhiteDog wrote:Show nested quote +On March 01 2014 05:00 JonnyBNoHo wrote:On March 01 2014 04:53 WhiteDog wrote:On March 01 2014 04:43 JonnyBNoHo wrote:On March 01 2014 04:20 WhiteDog wrote:On March 01 2014 03:41 JonnyBNoHo wrote:On March 01 2014 03:19 WhiteDog wrote:On March 01 2014 03:12 JonnyBNoHo wrote:On March 01 2014 02:51 WhiteDog wrote:On March 01 2014 02:39 JonnyBNoHo wrote:
[quote]
I do understand your point.
BUT - if you want to talk savings glut, a lot of that came from overseas... and then the debt came back when credit insurance was triggered (good bye AIG). Afaik, it wasn't an internal accumulation by class situation, though I'll welcome data that says otherwise. It came from overseas meaning there were no outlet overseas because demand was (is) low in country with high growth in production and they had (have) an under developped financial system. It does not mean that the capital was only coming from oversea. OK, sure, some came from within the US too, but that's arguing the tail wagged the dog. Internally our savings rate hit an all time low and interest rates and equity returns were low. I don't see how, internally, too much capital was being accumulated. Meanwhile flows to the US were ballooning to all time highs. That seems the more powerful answer. America's low saving rate, and its big size are the two main reasons why the capital overall in the US is less than in Europe (as I said 400% of the national income in one year to 600 % average in europe) but it doesn't mean there are no capital at all. Plus the savings were low before the crisis, exactly because capital was cheap. It's true that the US is different as it has also a great inequality in labor income, but that doesn't mean the patrimony part does not exist. + Show Spoiler + I still think you're arguing that "it's an issue" rather than "it's a driving issue". The other issues I cited just seem so much more important. Everything you cited is linked to the biggest macroeconomic trend I'm talking about. Just look in the graph, the 2007 subprime crisis is easy to spot. The correlation is pretty clear... Every bubble are on that graph actually, more or less, but what's most interesting is the global trend of capital being more and more important in our societies, which was my first point. Wolfstan came up with the 2007 crisis like it was a perfect explanation of why you should not tax capital (or give capital to poor) and I just responded that it is the lack of capital taxation that is directly linked to the crisis. I'm not saying there are no specific questions about the financial market, the way it function, the lack of regulation, etc. that explains the subprime crisis, like you are trying to argue. I'm merely saying capital is part of the problem : to say it in another way, you talk about the specifics of the crisis, while I'm talking about the macroeconomic context. A rising amount of capital isn't an "over" accumulation though... a big part of how modern economies grow is by intensifying capital use. It's only a problem if you don't have anywhere to put the financial capital... which was a problem external to the US (mainly). When the return on capital is systemically higher than production growth (5 to 2% a year), you know that there is a concentration of capital in a few hands that is not sustainable in the long run. When the level of accumulation is the same as the beginning of the XXth century in Europe, it is a big problem. You don't know it, because you're from the US and it is not part of your culture (you never had a such a level of over accumulation for various reasons). But in France, and most of western Europe, between 1890 and 1930, a big part of the population were rentier who gained their money just because of their patrimony. Also, a big part of how modern economies grow is by... using human capital. Yes there are studies about that. Capital accumulation is useless by itself : "il n'y a de richesse que d'hommes". First, where are you getting your 5% and 2% numbers? Second, some of the capital accumulation is related to human capital. From the book you should read. And 5% is on average, for financial market the return on capital gain is around 7-8 % (more risky). The 2% is just an average growth of GDP. Second no. Unless slavery is legal again.
Are those numbers apples to apples (real vs real, after tax)? Do they account for labor components of capital at all? 2% seems low for US too...
Umm, no. Human capital should have an affect on some asset classes. Ex. as worker's human capital and income rises, the value of housing stock should rise as well.
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On March 01 2014 05:12 JonnyBNoHo wrote:Show nested quote +On March 01 2014 05:08 WhiteDog wrote:On March 01 2014 05:00 JonnyBNoHo wrote:On March 01 2014 04:53 WhiteDog wrote:On March 01 2014 04:43 JonnyBNoHo wrote:On March 01 2014 04:20 WhiteDog wrote:On March 01 2014 03:41 JonnyBNoHo wrote:On March 01 2014 03:19 WhiteDog wrote:On March 01 2014 03:12 JonnyBNoHo wrote:On March 01 2014 02:51 WhiteDog wrote:
[quote]
It came from overseas meaning there were no outlet overseas because demand was (is) low in country with high growth in production and they had (have) an under developped financial system. It does not mean that the capital was only coming from oversea. OK, sure, some came from within the US too, but that's arguing the tail wagged the dog. Internally our savings rate hit an all time low and interest rates and equity returns were low. I don't see how, internally, too much capital was being accumulated. Meanwhile flows to the US were ballooning to all time highs. That seems the more powerful answer. America's low saving rate, and its big size are the two main reasons why the capital overall in the US is less than in Europe (as I said 400% of the national income in one year to 600 % average in europe) but it doesn't mean there are no capital at all. Plus the savings were low before the crisis, exactly because capital was cheap. It's true that the US is different as it has also a great inequality in labor income, but that doesn't mean the patrimony part does not exist. + Show Spoiler + I still think you're arguing that "it's an issue" rather than "it's a driving issue". The other issues I cited just seem so much more important. Everything you cited is linked to the biggest macroeconomic trend I'm talking about. Just look in the graph, the 2007 subprime crisis is easy to spot. The correlation is pretty clear... Every bubble are on that graph actually, more or less, but what's most interesting is the global trend of capital being more and more important in our societies, which was my first point. Wolfstan came up with the 2007 crisis like it was a perfect explanation of why you should not tax capital (or give capital to poor) and I just responded that it is the lack of capital taxation that is directly linked to the crisis. I'm not saying there are no specific questions about the financial market, the way it function, the lack of regulation, etc. that explains the subprime crisis, like you are trying to argue. I'm merely saying capital is part of the problem : to say it in another way, you talk about the specifics of the crisis, while I'm talking about the macroeconomic context. A rising amount of capital isn't an "over" accumulation though... a big part of how modern economies grow is by intensifying capital use. It's only a problem if you don't have anywhere to put the financial capital... which was a problem external to the US (mainly). When the return on capital is systemically higher than production growth (5 to 2% a year), you know that there is a concentration of capital in a few hands that is not sustainable in the long run. When the level of accumulation is the same as the beginning of the XXth century in Europe, it is a big problem. You don't know it, because you're from the US and it is not part of your culture (you never had a such a level of over accumulation for various reasons). But in France, and most of western Europe, between 1890 and 1930, a big part of the population were rentier who gained their money just because of their patrimony. Also, a big part of how modern economies grow is by... using human capital. Yes there are studies about that. Capital accumulation is useless by itself : "il n'y a de richesse que d'hommes". First, where are you getting your 5% and 2% numbers? Second, some of the capital accumulation is related to human capital. From the book you should read. And 5% is on average, for financial market the return on capital gain is around 7-8 % (more risky). The 2% is just an average growth of GDP. Second no. Unless slavery is legal again. Are those numbers apples to apples (real vs real, after tax)? Do they account for labor components of capital at all? 2% seems low for US too... Umm, no. Human capital should have an affect on some asset classes. Ex. as worker's human capital and income rises, the value of housing stock should rise as well.
Between 1970 and 2010, the GDP growth in the US was, on average and per capita, 1.8 %. The US has a better GDP growth than Germany or France, but with a demographic growth of 1% a year since 1970, so when you take the demographic growth in the addition, the GDP growth is always between 1.6 and 2.0 in the entire western world between 1970 and 2010 (Italy at 1.6% and Japan at 2%, with US, Germany, UK, France, Canada and Australiain in between). Those are all real term.
The return on capital is also real after tax. He also gives the differences between various components of capital in the book but you know it is a fucking 1000 page book so you should buy it and see for yourself :/
Why would the value of housing stock should rise ? This is just theory.
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"Read this 1000 page book" is a really bad argument.
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On March 01 2014 05:22 WhiteDog wrote:Show nested quote +On March 01 2014 05:12 JonnyBNoHo wrote:On March 01 2014 05:08 WhiteDog wrote:On March 01 2014 05:00 JonnyBNoHo wrote:On March 01 2014 04:53 WhiteDog wrote:On March 01 2014 04:43 JonnyBNoHo wrote:On March 01 2014 04:20 WhiteDog wrote:On March 01 2014 03:41 JonnyBNoHo wrote:On March 01 2014 03:19 WhiteDog wrote:On March 01 2014 03:12 JonnyBNoHo wrote:
[quote]
OK, sure, some came from within the US too, but that's arguing the tail wagged the dog. Internally our savings rate hit an all time low and interest rates and equity returns were low. I don't see how, internally, too much capital was being accumulated. Meanwhile flows to the US were ballooning to all time highs. That seems the more powerful answer. America's low saving rate, and its big size are the two main reasons why the capital overall in the US is less than in Europe (as I said 400% of the national income in one year to 600 % average in europe) but it doesn't mean there are no capital at all. Plus the savings were low before the crisis, exactly because capital was cheap. It's true that the US is different as it has also a great inequality in labor income, but that doesn't mean the patrimony part does not exist. + Show Spoiler + I still think you're arguing that "it's an issue" rather than "it's a driving issue". The other issues I cited just seem so much more important. Everything you cited is linked to the biggest macroeconomic trend I'm talking about. Just look in the graph, the 2007 subprime crisis is easy to spot. The correlation is pretty clear... Every bubble are on that graph actually, more or less, but what's most interesting is the global trend of capital being more and more important in our societies, which was my first point. Wolfstan came up with the 2007 crisis like it was a perfect explanation of why you should not tax capital (or give capital to poor) and I just responded that it is the lack of capital taxation that is directly linked to the crisis. I'm not saying there are no specific questions about the financial market, the way it function, the lack of regulation, etc. that explains the subprime crisis, like you are trying to argue. I'm merely saying capital is part of the problem : to say it in another way, you talk about the specifics of the crisis, while I'm talking about the macroeconomic context. A rising amount of capital isn't an "over" accumulation though... a big part of how modern economies grow is by intensifying capital use. It's only a problem if you don't have anywhere to put the financial capital... which was a problem external to the US (mainly). When the return on capital is systemically higher than production growth (5 to 2% a year), you know that there is a concentration of capital in a few hands that is not sustainable in the long run. When the level of accumulation is the same as the beginning of the XXth century in Europe, it is a big problem. You don't know it, because you're from the US and it is not part of your culture (you never had a such a level of over accumulation for various reasons). But in France, and most of western Europe, between 1890 and 1930, a big part of the population were rentier who gained their money just because of their patrimony. Also, a big part of how modern economies grow is by... using human capital. Yes there are studies about that. Capital accumulation is useless by itself : "il n'y a de richesse que d'hommes". First, where are you getting your 5% and 2% numbers? Second, some of the capital accumulation is related to human capital. From the book you should read. And 5% is on average, for financial market the return on capital gain is around 7-8 % (more risky). The 2% is just an average growth of GDP. Second no. Unless slavery is legal again. Are those numbers apples to apples (real vs real, after tax)? Do they account for labor components of capital at all? 2% seems low for US too... Umm, no. Human capital should have an affect on some asset classes. Ex. as worker's human capital and income rises, the value of housing stock should rise as well. Between 1970 and 2010, the GDP growth in the US was, on average and per capita, 1.8 %. The US has a better GDP growth than Germany or France, but with a demographic growth of 1% a year since 1970, so when you take the demographic growth in the addition, the GDP growth is always between 1.6 and 2.0 in the entire western world between 1970 and 2010 (Italy at 1.6% and Japan at 2%, with US, Germany, UK, France, Canada and Australiain in between). Those are all real term. The return on capital is also real after tax. He also gives the differences between various components of capital in the book but you know it is a fucking 1000 page book so you should buy it and see for yourself :/ Why would the value of housing stock should rise ? This is just theory.
Well, I don't see why you'd go per capita if you aren't also going per capita for capital... that's apples to oranges. More people should mean both more GDP and capital.
GDP Growth Rate in the United States averaged 3.24 Percent from 1947 until 2013 source
That's getting pretty close to that 5% number, which probably contains some labor elements.
Recent bubble being an exception, house prices tend to move along with income. I also see no reason why other capital assets wouldn't rise in value along with a growing economy. Why wouldn't the value of Coca-Cola's brand rise along with a growing population / economy?
Edit: what book anyways?
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On March 01 2014 05:32 Simberto wrote:
"Read this 1000 page book" is a really bad argument.
You're serious? He is asking me to give details since one page, just asking question. At some point if he is that interested, he can read a book, or look at any video on the subject. I gave plenty of arguments btw, don't be that guy.
On March 01 2014 05:35 JonnyBNoHo wrote:Show nested quote +On March 01 2014 05:22 WhiteDog wrote:On March 01 2014 05:12 JonnyBNoHo wrote:On March 01 2014 05:08 WhiteDog wrote:On March 01 2014 05:00 JonnyBNoHo wrote:On March 01 2014 04:53 WhiteDog wrote:On March 01 2014 04:43 JonnyBNoHo wrote:On March 01 2014 04:20 WhiteDog wrote:On March 01 2014 03:41 JonnyBNoHo wrote:On March 01 2014 03:19 WhiteDog wrote:[quote] America's low saving rate, and its big size are the two main reasons why the capital overall in the US is less than in Europe (as I said 400% of the national income in one year to 600 % average in europe) but it doesn't mean there are no capital at all. Plus the savings were low before the crisis, exactly because capital was cheap. It's true that the US is different as it has also a great inequality in labor income, but that doesn't mean the patrimony part does not exist. + Show Spoiler + I still think you're arguing that "it's an issue" rather than "it's a driving issue". The other issues I cited just seem so much more important. Everything you cited is linked to the biggest macroeconomic trend I'm talking about. Just look in the graph, the 2007 subprime crisis is easy to spot. The correlation is pretty clear... Every bubble are on that graph actually, more or less, but what's most interesting is the global trend of capital being more and more important in our societies, which was my first point. Wolfstan came up with the 2007 crisis like it was a perfect explanation of why you should not tax capital (or give capital to poor) and I just responded that it is the lack of capital taxation that is directly linked to the crisis. I'm not saying there are no specific questions about the financial market, the way it function, the lack of regulation, etc. that explains the subprime crisis, like you are trying to argue. I'm merely saying capital is part of the problem : to say it in another way, you talk about the specifics of the crisis, while I'm talking about the macroeconomic context. A rising amount of capital isn't an "over" accumulation though... a big part of how modern economies grow is by intensifying capital use. It's only a problem if you don't have anywhere to put the financial capital... which was a problem external to the US (mainly). When the return on capital is systemically higher than production growth (5 to 2% a year), you know that there is a concentration of capital in a few hands that is not sustainable in the long run. When the level of accumulation is the same as the beginning of the XXth century in Europe, it is a big problem. You don't know it, because you're from the US and it is not part of your culture (you never had a such a level of over accumulation for various reasons). But in France, and most of western Europe, between 1890 and 1930, a big part of the population were rentier who gained their money just because of their patrimony. Also, a big part of how modern economies grow is by... using human capital. Yes there are studies about that. Capital accumulation is useless by itself : "il n'y a de richesse que d'hommes". First, where are you getting your 5% and 2% numbers? Second, some of the capital accumulation is related to human capital. From the book you should read. And 5% is on average, for financial market the return on capital gain is around 7-8 % (more risky). The 2% is just an average growth of GDP. Second no. Unless slavery is legal again. Are those numbers apples to apples (real vs real, after tax)? Do they account for labor components of capital at all? 2% seems low for US too... Umm, no. Human capital should have an affect on some asset classes. Ex. as worker's human capital and income rises, the value of housing stock should rise as well. Between 1970 and 2010, the GDP growth in the US was, on average and per capita, 1.8 %. The US has a better GDP growth than Germany or France, but with a demographic growth of 1% a year since 1970, so when you take the demographic growth in the addition, the GDP growth is always between 1.6 and 2.0 in the entire western world between 1970 and 2010 (Italy at 1.6% and Japan at 2%, with US, Germany, UK, France, Canada and Australiain in between). Those are all real term. The return on capital is also real after tax. He also gives the differences between various components of capital in the book but you know it is a fucking 1000 page book so you should buy it and see for yourself :/ Why would the value of housing stock should rise ? This is just theory. Well, I don't see why you'd go per capita if you aren't also going per capita for capital... that's apples to oranges. More people should mean both more GDP and capital. Show nested quote +GDP Growth Rate in the United States averaged 3.24 Percent from 1947 until 2013 sourceThat's getting pretty close to that 5% number, which probably contains some labor elements. Recent bubble being an exception, house prices tend to move along with income. I also see no reason why other capital assets wouldn't rise in value along with a growing economy. Why wouldn't the value of Coca-Cola's brand rise along with a growing population / economy? Edit: what book anyways?
No ? Omg can you focus ? Of you course you need to go per capita because you a measuring capital accumulation and concentration, so if you don't take into consideration the number of people, you are not measuring that... And of course the demographic play a role (again it is another indicator that set the US aside, there are various).
I don't understand your point at all, assets rising through the market means they gain value, this has no link with human capital. And of course one impact on the other, but that is irrelevant to the matter... Your argument mean nothing.
For the book, watch video linked by Oneofthem.
And your number is a fraud, please. It start at 1947 of course it is going to be higher. There is a reason why I start at 1970... Plus is it real term ? Not sure.
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I'm surprised no one's talking about this:
The Fourth Amendment generally requires the police to obtain a warrant before searching a home, though that requirement may be avoided if the homeowner consents to the search. But happens when two (or more) people reside in the same home, and only one of them consents to the search while the other refuses? Do the police have sufficient consent to conduct a warrentless search in that instance?
http://reason.com/blog/2014/02/25/supreme-court-broadens-police-power-to-c
http://www.supremecourt.gov/opinions/13pdf/12-7822_he4l.pdf
What intrigues me was the vote. All the conservatives (so that wasn't too much of a surprise) but also the "moderate" (Kennedy) and the justice who the left touts as a great justice on civil rights, Justice Breyer, were on the same side.
I haven't finished reading it yet, but it seems like a tricky situation.
Today, the Supreme Court returned to this subject with a new ruling in favor of law enforcement. At issue in Fernandez v. California was a 2009 search by the Los Angeles Police Department of the home of a robbery suspect. When the officers first arrived, suspect Walter Fernandez denied them entry, but because his girlfriend Roxanne Rojas exhibited signs of recent injury, Fernandez was arrested on separate charges of domestic violence. While Fernandez was being booked, one of the officers returned to the apartment and gained Rojas’ permission to conduct a search, which soon turned up evidence linking Fernandez to the robbery.
On the one hand you have to ask if his earlier refusal still applies. But secondly, you have to ask about the consent given by the girlfriend later.
At this point in my reading I would always err on the side of the person who refuses, but maybe my further reading will reveal more. The fourth amendment is now so fraught with exceptions and conditions that deal with particular circumstances...especially in the area of consent to a warrantless search.
So the question is: when one person refuses and the other accepts, does the refusal still hold when the one who refused is no longer present?
xDaunt, you have any knowledge you can share?  You always seem to have something to say about these court decisions.
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On March 01 2014 05:50 Introvert wrote:I'm surprised no one's talking about this: Show nested quote +The Fourth Amendment generally requires the police to obtain a warrant before searching a home, though that requirement may be avoided if the homeowner consents to the search. But happens when two (or more) people reside in the same home, and only one of them consents to the search while the other refuses? Do the police have sufficient consent to conduct a warrentless search in that instance? http://reason.com/blog/2014/02/25/supreme-court-broadens-police-power-to-chttp://www.supremecourt.gov/opinions/13pdf/12-7822_he4l.pdfWhat intrigues me was the vote. All the conservatives (so that wasn't too much of a surprise) but also the "moderate" (Kennedy) and the justice who the left touts as a great justice on civil rights, Justice Breyer, were on the same side. I haven't finished reading it yet, but it seems like a tricky situation. Show nested quote +Today, the Supreme Court returned to this subject with a new ruling in favor of law enforcement. At issue in Fernandez v. California was a 2009 search by the Los Angeles Police Department of the home of a robbery suspect. When the officers first arrived, suspect Walter Fernandez denied them entry, but because his girlfriend Roxanne Rojas exhibited signs of recent injury, Fernandez was arrested on separate charges of domestic violence. While Fernandez was being booked, one of the officers returned to the apartment and gained Rojas’ permission to conduct a search, which soon turned up evidence linking Fernandez to the robbery. On the one hand you have to ask if his earlier refusal still applies. But secondly, you have to ask about the consent given by the girlfriend later. At this point in my reading I would always err on the side of the person who refuses, but maybe my further reading will reveal more. The fourth amendment is now so fraught with exceptions and conditions that deal with particular circumstances...especially in the area of consent to a warrantless search. So the question is: when one person refuses and the other accepts, does the refusal still hold when the one who refused is no longer present? xDaunt, you have any knowledge you can share? You always seem to have something to say about these court decisions.
Why wouldn't the cooperation of one not be enough to issue a warrant? >_> that seems like a fair way to go about it.
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I looked at the opinion. It is very fact-specific as these Fourth Amendment cases often are. For what it's worth, I think that they got it right. It has long been held that co-occupants/tenants can unilaterally admit law enforcement onto the property when the other occupants/tenants are absent, and that any evidence found can be used against the absent occupants/tenants without a warrant. The only new twist here was whether a warrantless search can be conducted when one occupant objects and is later lawfully arrested, and then law enforcement secures permission to enter the premises after the arrest. The Court says yes, though, in dicta, it does suggest that the result could be different if the objector was unlawfully arrested/removed from the premises. In other words, this decision does not give the police license skirt warrant requirements just by having the objector haphazardly "removed."
Long story short, I don't think that this decision is a big deal or that it dramatically departs from past law. That said, Fourth Amendment jurisprudence is a mess in general, and this decision definitely doesn't simplify things.
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On March 01 2014 06:39 aksfjh wrote:Show nested quote +On March 01 2014 05:50 Introvert wrote:I'm surprised no one's talking about this: The Fourth Amendment generally requires the police to obtain a warrant before searching a home, though that requirement may be avoided if the homeowner consents to the search. But happens when two (or more) people reside in the same home, and only one of them consents to the search while the other refuses? Do the police have sufficient consent to conduct a warrentless search in that instance? http://reason.com/blog/2014/02/25/supreme-court-broadens-police-power-to-chttp://www.supremecourt.gov/opinions/13pdf/12-7822_he4l.pdfWhat intrigues me was the vote. All the conservatives (so that wasn't too much of a surprise) but also the "moderate" (Kennedy) and the justice who the left touts as a great justice on civil rights, Justice Breyer, were on the same side. I haven't finished reading it yet, but it seems like a tricky situation. Today, the Supreme Court returned to this subject with a new ruling in favor of law enforcement. At issue in Fernandez v. California was a 2009 search by the Los Angeles Police Department of the home of a robbery suspect. When the officers first arrived, suspect Walter Fernandez denied them entry, but because his girlfriend Roxanne Rojas exhibited signs of recent injury, Fernandez was arrested on separate charges of domestic violence. While Fernandez was being booked, one of the officers returned to the apartment and gained Rojas’ permission to conduct a search, which soon turned up evidence linking Fernandez to the robbery. On the one hand you have to ask if his earlier refusal still applies. But secondly, you have to ask about the consent given by the girlfriend later. At this point in my reading I would always err on the side of the person who refuses, but maybe my further reading will reveal more. The fourth amendment is now so fraught with exceptions and conditions that deal with particular circumstances...especially in the area of consent to a warrantless search. So the question is: when one person refuses and the other accepts, does the refusal still hold when the one who refused is no longer present? xDaunt, you have any knowledge you can share? You always seem to have something to say about these court decisions. Why wouldn't the cooperation of one not be enough to issue a warrant? >_> that seems like a fair way to go about it.
In the case that they are both present, I can understand why the refusal would stand. You can't waive the 4th amendment right for another person. To me, that seems to be what consenting to a warrantless [stupid spell correct] search is.
I think it would also be fine if she was the only one home, as she lives there too and can agree.
But the problem here is that Fernandez already refused earlier, but the cops came back after they booked him and asked again. he already refused, but they went back when he was not there...so the real question is not about just the cooperation of one, but if that consent can undermine an already given refusal on the basis of location/status.
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On March 01 2014 06:43 xDaunt wrote:
I looked at the opinion. It is very fact-specific as these Fourth Amendment cases often are. For what it's worth, I think that they got it right. It has long been held that co-occupants/tenants can unilaterally admit law enforcement onto the property when the other occupants/tenants are absent, and that any evidence found can be used against the absent occupants/tenants without a warrant. The only new twist here was whether a warrantless search can be conducted when one occupant objects and is later lawfully arrested, and then law enforcement secures permission to enter the premises after the arrest. The Court says yes, though, in dicta, it does suggest that the result could be different if the objector was unlawfully arrested/removed from the premises. In other words, this decision does not give the police license skirt warrant requirements just by having the objector haphazardly "removed."
Long story short, I don't think that this decision is a big deal or that it dramatically departs from past law. That said, Fourth Amendment jurisprudence is a mess in general, and this decision definitely doesn't simplify things.
That's kind of what I took from it. I don't mind inhabitants letting people on to the owner's property, but the thing that concerned me was the fact that Fernandez had refused earlier. Thanks for your input.
Edit:
though, in dicta, it does suggest that the result could be different if the objector was unlawfully arrested/removed from the premises.
Interesting. Guess we'll have to wait for another case to see!
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