On October 06 2012 03:23 Biff The Understudy wrote:
On October 06 2012 03:06 Mohdoo wrote:
On October 06 2012 02:40 sam!zdat wrote: Doesn't Romney's plan involve one of those magical things where you cut taxes and the economy grows so you get more taxes? i.e. increase revenue by cutting taxes? Maybe that's the answer
Yup, its the same system that has been systematically dismantled by economists time and time again.
Cut taxes for the mega wealthy so that they decide they have too much money and thus decide to make up jobs for people to work. In the end, you get more jobs, since the ultra wealthy are not obsessed over their financial growth at all. In fact, they get tired of having so much money.
Trickle down economics was somehow relevant (although I don't think it ever worked the way Adam Smith - and now Mitt Romney - described it), before the stock market became a giant casino of speculation on derived products, raw materials, and other completely unproductive activities of that kind.
In other word, it all sounds good, and would make a bit of sense if capital was systematically invested in the real economy. Since it's not anymore, trickle down economics is a giant joke to justify the vertigineous and exponential rise of inequalities these last thirty years.
Say thanks to Reagan to have sabotaged his own theories with the massive deregulation of the financial sector.
Financial markets help capital reach the real economy quicker, not slower.
What we want is "more wisely," not "quicker."
They help with that too. In commodity markets they help keep prices stable as well.
On October 06 2012 03:44 Biff The Understudy wrote:
On October 06 2012 03:40 SkyCrawler wrote:
On October 06 2012 03:33 BluePanther wrote:
On October 06 2012 03:28 sam!zdat wrote:
On October 06 2012 03:23 Biff The Understudy wrote:
On October 06 2012 03:06 Mohdoo wrote:
On October 06 2012 02:40 sam!zdat wrote: Doesn't Romney's plan involve one of those magical things where you cut taxes and the economy grows so you get more taxes? i.e. increase revenue by cutting taxes? Maybe that's the answer
Yup, its the same system that has been systematically dismantled by economists time and time again.
Cut taxes for the mega wealthy so that they decide they have too much money and thus decide to make up jobs for people to work. In the end, you get more jobs, since the ultra wealthy are not obsessed over their financial growth at all. In fact, they get tired of having so much money.
Trickle down economics was somehow relevant (although I don't think it ever worked the way Adam Smith - and now Mitt Romney - described it), before the stock market became a giant casino of speculation on derived products, raw materials, and other completely unproductive activities of that kind.
"Adam Smith, doubtless with the speculative bubbles of the early eighteenth century in mind, regarded joint stock companies as licenses for irresponsible entrepreneurs to speculate with other people's money. The reluctance to sanction joint stock forms of organization except for large-scale semi-public works - canals, railroads, docks, etc. - derived precisely from such objections. The whole history of speculative crashes from the mid-nineteenth century to the present time suggests that the objections are far from unfounded, and that the 'finance' form of capitalism faces a perpetual problem of keeping its own house in order" - David Harvey (1982)
"Trickle down economics" is merely another way of saying "A rising tide lifts all boats."
All we disagree on is who is represented by the boats an who is represented by the tide. There are usually less boats than water.
It's a terrible analogy anyway.
Trickle down economics is saying: the most you give to the rich, the best for everybody. It's a flat lie out in todays coordinate.
Trickle down economics is not an economic theory. No economists advocate anything that goes by the name "trickle down." It is simply a pejorative, primarily designed to evoke anti-rich emotions. In addition, to support OR criticize trickle down economics is to necessarily take a simplistic zero-sum view of an economy, in which capital moves in the OPPOSITE direction as what actually occurs in practice.
The very idea that profits “trickle down” to workers depicts the economic sequence of events in the opposite order from that in the real world. Workers must first be hired, and commitments made to pay them, before there is any output produced to sell for a profit, and independently of whether that output subsequently sells for a profit or at a loss. With many investments, whether they lead to a profit or a loss can often be determined only years later, and workers have to be paid in the meantime, rather than waiting for profits to “trickle down” to them. The real effect of tax rate reductions is to make the future prospects of profit look more favorable, leading to more current investments that generate more current economic activity and more jobs. Those who attribute a trickle-down theory to others are attributing their own misconception to others, as well as distorting both the arguments used and the hard facts about what actually happened after the recommended policies were put into effect. -Thomas Sowell
“The produce of the soil maintains at all times nearly that number of inhabitants which it is capable of maintaining. The rich only select from the heap what is most precious and agreeable. They consume little more than the poor, and in spite of their natural selfishness and rapacity, though they mean only their own conveniency, though the sole end which they propose from the labours of all the thousands whom they employ, be the gratification of their own vain and insatiable desires, they divide with the poor the produce of all their improvements. They are led by an invisible hand to make nearly the same distribution of the necessaries of life, which would have been made, had the earth been divided into equal portions among all its inhabitants, and thus without intending it, without knowing it, advance the interest of the society, and afford means to the multiplication of the species. When Providence divided the earth among a few lordly masters, it neither forgot nor abandoned those who seemed to have been left out in the partition.”
On October 06 2012 03:44 Biff The Understudy wrote: Trickle down economics is saying: the most you give to the rich, the best for everybody. It's a flat lie out in todays coordinate.
No, that's not at all what it means. It means you amass wealth first, and worry about distribution later. A rich upper class is more beneficial to poor people than a poor upper class.
On October 06 2012 03:44 Biff The Understudy wrote: Trickle down economics is saying: the most you give to the rich, the best for everybody. It's a flat lie out in todays coordinate.
No, that's not at all what it means. It means you amass wealth first, and worry about distribution later. A rich upper class is more beneficial to poor people than a poor upper class.
How rich do they need to be? The gap between rich and poor has been growing at an exponential rate and jobs are still an issue. There is still not enough money in the economy. People are still fighting to feed their children, to fund schools etc. How much more money does the rich need before it starts to get trickled down?
On October 06 2012 03:44 Biff The Understudy wrote: Trickle down economics is saying: the most you give to the rich, the best for everybody. It's a flat lie out in todays coordinate.
No, that's not at all what it means. It means you amass wealth first, and worry about distribution later. A rich upper class is more beneficial to poor people than a poor upper class.
Don't play with words. It means it's better to leave money to the rich rather than trying to redsitribute it in any way because with this money the richs will create jobs that will benefit everybody.
It's undeniable that it takes a pool of wealth to create jobs. If 100 people have $1,000 each, nobody has enough to open a business. If one person has $100,000, that money could potentially open up a small shop that could employ a number of people. That person may decide to use that money elsewhere, but at least the potential is there, whereas it is otherwise not.
Progressive taxation takes money from those that can potentially create jobs, and redistributes it to those that cannot (and often to completely unproductive members of society). The more redistribution you have, the less efficiently your economy runs. What is the maximum tolerable inefficiency? No liberal has ever dar0d to define this since socialism fell out of fashion.
On October 06 2012 03:23 Biff The Understudy wrote:
On October 06 2012 03:06 Mohdoo wrote:
On October 06 2012 02:40 sam!zdat wrote: Doesn't Romney's plan involve one of those magical things where you cut taxes and the economy grows so you get more taxes? i.e. increase revenue by cutting taxes? Maybe that's the answer
Yup, its the same system that has been systematically dismantled by economists time and time again.
Cut taxes for the mega wealthy so that they decide they have too much money and thus decide to make up jobs for people to work. In the end, you get more jobs, since the ultra wealthy are not obsessed over their financial growth at all. In fact, they get tired of having so much money.
Trickle down economics was somehow relevant (although I don't think it ever worked the way Adam Smith - and now Mitt Romney - described it), before the stock market became a giant casino of speculation on derived products, raw materials, and other completely unproductive activities of that kind.
In other word, it all sounds good, and would make a bit of sense if capital was systematically invested in the real economy. Since it's not anymore, trickle down economics is a giant joke to justify the vertigineous and exponential rise of inequalities these last thirty years.
Say thanks to Reagan to have sabotaged his own theories with the massive deregulation of the financial sector.
Mitt isn't really advocating trickle down economics. He's not offering a tax cut to the rich to grow the economy.
Financial markets help capital reach the real economy quicker, not slower.
Oh yeah?
Explain me how speculating on derived product, or any purely financial speculative movement helps capital to reach anything at all? I'm not talking of raw materials: I know it's supposed to make the market more fluid, which would actually be very true if it was done in reasonable proportions, which is far from being the case.
If a company's stock price goes up it makes it easier / cheaper for them to raise money. That means more real investments the company can make become viable, and so more real investment happens. The converse is true that if a company's stock goes down it makes it harder for them to make real investments. But that's not necessarily a bad thing - obviously we don't want companies over investing any more than we want them under investing.
Derivatives like calls and puts play similar but different roles. Ultimately the derivative will do the same thing - the buying or selling of a stock. But the structure of the derivative gives the market greater efficiency in price discovery - finding the 'right' price for a financial asset that will limit both under and over investing.
On October 06 2012 04:17 jdsowa wrote: It's undeniable that it takes a pool of wealth to create jobs. If 100 people have $1,000 each, nobody has enough to open a business. If one person has $100,000, that money could potentially open up a small shop that could employ a number of people. That person may decide to use that money elsewhere, but at least the potential is there, whereas it is otherwise not.
Progressive taxation takes money from those that can potentially create jobs, and redistributes it to those that cannot (and often to completely unproductive members of society). The more redistribution you have, the less efficiently your economy runs. What is the maximum tolerable inefficiency? No liberal has ever dar0d to define this since socialism fell out of fashion.
And yet, reality laughs in the face of your anecdote, as the gap between the rich and poor widens each and every day. No conservative has dared define just how much profit it takes to make one a "job maker" because ultimately, that would limit potential future profit. Thanks for the snarky partisanship though.
On October 06 2012 04:17 jdsowa wrote: It's undeniable that it takes a pool of wealth to create jobs. If 100 people have $1,000 each, nobody has enough to open a business. If one person has $100,000, that money could potentially open up a small shop that could employ a number of people. That person may decide to use that money elsewhere, but at least the potential is there, whereas it is otherwise not.
Progressive taxation takes money from those that can potentially create jobs, and redistributes it to those that cannot (and often to completely unproductive members of society). The more redistribution you have, the less efficiently your economy runs. What is the maximum tolerable inefficiency? No liberal has ever dar0d to define this since socialism fell out of fashion.
That's why you need good financial markets - so that those 100 people can easily pool their resources into productive endeavors
Well, yes in your example that is true, nobody could create jobs if everyone had 1k each. Except that's not what the US has right now. You have a very small handful with almost all of the money. They will create the jobs, and get rid of the jobs, and play with the jobs, as they see fit, as long as it makes them money. They aren't going to make a job that loses them money overall.
To make your example a bit more accurate you have millions upon millions who have 1k, and a few hundred who have billions who are doing all they can to make sure they increase, or at least maintain their wealth. That might involve making jobs (trickle down). Or it might involve keeping it in a bank, or investing it, or putting it in a big pile and trying to swim through it. Trickle down is just one option, and, frankly, it has been shown time and again not to work for a country as a whole.
On October 06 2012 03:59 Biff The Understudy wrote:
On October 06 2012 03:49 JonnyBNoHo wrote:
On October 06 2012 03:23 Biff The Understudy wrote:
On October 06 2012 03:06 Mohdoo wrote:
On October 06 2012 02:40 sam!zdat wrote: Doesn't Romney's plan involve one of those magical things where you cut taxes and the economy grows so you get more taxes? i.e. increase revenue by cutting taxes? Maybe that's the answer
Yup, its the same system that has been systematically dismantled by economists time and time again.
Cut taxes for the mega wealthy so that they decide they have too much money and thus decide to make up jobs for people to work. In the end, you get more jobs, since the ultra wealthy are not obsessed over their financial growth at all. In fact, they get tired of having so much money.
Trickle down economics was somehow relevant (although I don't think it ever worked the way Adam Smith - and now Mitt Romney - described it), before the stock market became a giant casino of speculation on derived products, raw materials, and other completely unproductive activities of that kind.
In other word, it all sounds good, and would make a bit of sense if capital was systematically invested in the real economy. Since it's not anymore, trickle down economics is a giant joke to justify the vertigineous and exponential rise of inequalities these last thirty years.
Say thanks to Reagan to have sabotaged his own theories with the massive deregulation of the financial sector.
Mitt isn't really advocating trickle down economics. He's not offering a tax cut to the rich to grow the economy.
Financial markets help capital reach the real economy quicker, not slower.
Oh yeah?
Explain me how speculating on derived product, or any purely financial speculative movement helps capital to reach anything at all? I'm not talking of raw materials: I know it's supposed to make the market more fluid, which would actually be very true if it was done in reasonable proportions, which is far from being the case.
If a company's stock price goes up it makes it easier / cheaper for them to raise money. That means more real investments the company can make become viable, and so more real investment happens. The converse is true that if a company's stock goes down it makes it harder for them to make real investments. But that's not necessarily a bad thing - obviously we don't want companies over investing any more than we want them under investing.
Derivatives like calls and puts play similar but different roles. Ultimately the derivative will do the same thing - the buying or selling of a stock. But the structure of the derivative gives the market greater efficiency in price discovery - finding the 'right' price for a financial asset that will limit both under and over investing.
You can start by watching this video:
And then, you will have everything you need to know about how wonderful speculation is and how much it helps society: http://www.finance-watch.org/
On October 06 2012 04:17 jdsowa wrote: It's undeniable that it takes a pool of wealth to create jobs. If 100 people have $1,000 each, nobody has enough to open a business. If one person has $100,000, that money could potentially open up a small shop that could employ a number of people. That person may decide to use that money elsewhere, but at least the potential is there, whereas it is otherwise not.
Progressive taxation takes money from those that can potentially create jobs, and redistributes it to those that cannot (and often to completely unproductive members of society). The more redistribution you have, the less efficiently your economy runs. What is the maximum tolerable inefficiency? No liberal has ever dar0d to define this since socialism fell out of fashion.
One could argue if those 100 people had $1,000 each, they could spend it on American made goods or services.
On October 06 2012 04:17 jdsowa wrote: It's undeniable that it takes a pool of wealth to create jobs. If 100 people have $1,000 each, nobody has enough to open a business. If one person has $100,000, that money could potentially open up a small shop that could employ a number of people. That person may decide to use that money elsewhere, but at least the potential is there, whereas it is otherwise not.
Progressive taxation takes money from those that can potentially create jobs, and redistributes it to those that cannot (and often to completely unproductive members of society). The more redistribution you have, the less efficiently your economy runs. What is the maximum tolerable inefficiency? No liberal has ever dar0d to define this since socialism fell out of fashion.
First of all, obviously bullshit.
Second of all, did you ever concider that people can pool money together?
On October 06 2012 04:17 jdsowa wrote: It's undeniable that it takes a pool of wealth to create jobs. If 100 people have $1,000 each, nobody has enough to open a business. If one person has $100,000, that money could potentially open up a small shop that could employ a number of people. That person may decide to use that money elsewhere, but at least the potential is there, whereas it is otherwise not.
Progressive taxation takes money from those that can potentially create jobs, and redistributes it to those that cannot (and often to completely unproductive members of society). The more redistribution you have, the less efficiently your economy runs. What is the maximum tolerable inefficiency? No liberal has ever dar0d to define this since socialism fell out of fashion.
One could argue if those 100 people had $1,000 each, they could spend it on American made goods or services.
On October 06 2012 03:59 Biff The Understudy wrote:
On October 06 2012 03:49 JonnyBNoHo wrote:
On October 06 2012 03:23 Biff The Understudy wrote:
On October 06 2012 03:06 Mohdoo wrote:
On October 06 2012 02:40 sam!zdat wrote: Doesn't Romney's plan involve one of those magical things where you cut taxes and the economy grows so you get more taxes? i.e. increase revenue by cutting taxes? Maybe that's the answer
Yup, its the same system that has been systematically dismantled by economists time and time again.
Cut taxes for the mega wealthy so that they decide they have too much money and thus decide to make up jobs for people to work. In the end, you get more jobs, since the ultra wealthy are not obsessed over their financial growth at all. In fact, they get tired of having so much money.
Trickle down economics was somehow relevant (although I don't think it ever worked the way Adam Smith - and now Mitt Romney - described it), before the stock market became a giant casino of speculation on derived products, raw materials, and other completely unproductive activities of that kind.
In other word, it all sounds good, and would make a bit of sense if capital was systematically invested in the real economy. Since it's not anymore, trickle down economics is a giant joke to justify the vertigineous and exponential rise of inequalities these last thirty years.
Say thanks to Reagan to have sabotaged his own theories with the massive deregulation of the financial sector.
Mitt isn't really advocating trickle down economics. He's not offering a tax cut to the rich to grow the economy.
Financial markets help capital reach the real economy quicker, not slower.
Oh yeah?
Explain me how speculating on derived product, or any purely financial speculative movement helps capital to reach anything at all? I'm not talking of raw materials: I know it's supposed to make the market more fluid, which would actually be very true if it was done in reasonable proportions, which is far from being the case.
If a company's stock price goes up it makes it easier / cheaper for them to raise money. That means more real investments the company can make become viable, and so more real investment happens. The converse is true that if a company's stock goes down it makes it harder for them to make real investments. But that's not necessarily a bad thing - obviously we don't want companies over investing any more than we want them under investing.
Derivatives like calls and puts play similar but different roles. Ultimately the derivative will do the same thing - the buying or selling of a stock. But the structure of the derivative gives the market greater efficiency in price discovery - finding the 'right' price for a financial asset that will limit both under and over investing.
And then, you will have everything you need to know about how wonderful speculation is and how much it helps society: http://www.finance-watch.org/
I don't see what the problem is. Ten years ago we were complaining how speculators made prices too low. Now we're complaining that prices are too high. Speculators bet that prices will both go up and down... they help find the right price and reduce volatility. Unless you can present some evidence that the market prices is the wrong price then I don't see where the discussion can go.
On October 06 2012 03:44 Biff The Understudy wrote: Trickle down economics is saying: the most you give to the rich, the best for everybody. It's a flat lie out in todays coordinate.
No, that's not at all what it means. It means you amass wealth first, and worry about distribution later. A rich upper class is more beneficial to poor people than a poor upper class.
Don't play with words. It means it's better to leave money to the rich rather than trying to redsitribute it in any way because with this money the richs will create jobs that will benefit everybody.
Considering how much the ultra rich have benefited the last thirty years, we should live in some kind of paradise right now.
Mmm, we kind of do live in a paradise compared to 30 years ago.
Think of it the other way around. Bangladesh is a much less unequal society than the US. But would I trade places with a person from Bangladesh? No. Hell no.
You have to look at absolute wealth as much as relative wealth.
On October 06 2012 04:44 JonnyBNoHo wrote: the wrong price
Aha!
What is a right price?
The one that works. Minimize shortages / surpluses.
But what does it mean?
edit: "Objects of utility become commodities only because they are the products of the labour of private individuals who work independently of each other. The sum total of the labour of all these private individuals forms the aggregate labour of society. Since the producers do not come into social contact until they exchange the products of their labour, the specific social characteristics of their private labours appear only within this exchange. In other words, the labour of the private individual manifests itself as an element of the total labour of society only through the relations which the act of exchange establishes between the products, and, through their mediation, between the producers. To the producers, therefore, the social relations between private labours appear as what they are, i.e. they do not appear as direct social relations between persons in their work, but rather as material [dinglich, or thing-like] relations between persons and social relations between things." Marx
On October 06 2012 04:17 Biff The Understudy wrote:
On October 06 2012 04:11 BluePanther wrote:
On October 06 2012 03:44 Biff The Understudy wrote: Trickle down economics is saying: the most you give to the rich, the best for everybody. It's a flat lie out in todays coordinate.
No, that's not at all what it means. It means you amass wealth first, and worry about distribution later. A rich upper class is more beneficial to poor people than a poor upper class.
Don't play with words. It means it's better to leave money to the rich rather than trying to redsitribute it in any way because with this money the richs will create jobs that will benefit everybody.
Considering how much the ultra rich have benefited the last thirty years, we should live in some kind of paradise right now.
Mmm, we kind of do live in a paradise compared to 30 years ago.
Think of it the other way around. Bangladesh is a much less unequal society than the US. But would I trade places with a person from Bangladesh? No. Hell no.
You have to look at absolute wealth as much as relative wealth.
Your basis of comparison is Bangladesh, an incredibly unique country facing a host of idiosyncratic challenges in addition to being ranked 1st worldwide in number of starving children? Come on, you can do better than that.
EPT
