Democracy


#985

I believe extreme inequality is the problem. The fact is, one can remove very large sums of money from the super-rich without affecting their lives in any meaningful way whatsoever – still leaving them far richer than their fellows and never needing to lift a finger to support themselves – and use that money to save and improve the lives of not just the needy, but the entire working class and even the middle class.

And those super-rich have more political influence than anyone else, which they can use to further secure their fortunes.

I agree there, and sorry if it looked like I was making my argument on that basis. But the general idea that people should be relatively equal doesn’t seem something you can attack on the basis of the founders’ own hypocrisy.


#986

I am all for universal basic income. I am all for the expansion of health-care services in the Obamacare model (but with much higher subsidies). Housing should be subsidized at lower incomes and we should eliminate zoning that arbitrarily caps the number of dwelling units with no regard for market demand. An open borders policy with minimal security vetting and e-verify for those security checks would also be extremely beneficial.

Basically, I want the maximum amount of personal freedom and a net to catch those who would be hurt by a system of maximum personal freedom. That also means that I strongly disagree with the archetypal anticapitalists in this thread and I am suspicious of the notion that political power must be held by majorities or diffused throughout the population.


#987

You are basically putting forth the idea that the economy is a zero-sum game. It is not. That basic macro 101.


#988

That is taken out of context, if you read the next sentence in the post the intent of what I’m saying should be clear enough.

I’m not saying that it’s zero sum, but it isn’t infinite either. And when the vast majority of the gains go to a very small group of people with no contributions back into the shared pool of resources the system breaks. We can’t just make more money to go around… and the idea of constant economic growth is not working out the way people imagined.

Edit to add: what I’m trying to say is simple — to create public support for people who need it we have to have a budget to pay for it. That money comes from somewhere (taxes, revenue, charities, etc). When the pool for shared resources is scarce because very few horde all their wealth and don’t pay into the system, the money to fund services is also very scarce.

This is compounded when the government/organizations who are delivering services are also failing to use the money they have to provide services either through mismanagement, corruption, or ideological priorities.


#989

You’re linking two disparate problems and ignoring major problems in defining who is wealthy.

I work in NYC. If you took 10 million bucks from every developer worth more than 100 million you’d destroy 10 million in collateral, and 100 million in leverage. Those 100 million are 100 million in construction jobs leading to more housing.

There is no need to do that when the US could basically print enough money to enact UBI without making a dent on inflation or while essentially borrowing that money from foreign powers that have little say in our politics.

The notion that this should be about redistribution and not about providing people with health, shelter and safety is what makes conservatives and moderates look really suspiciously upon progressives. Punitive measures are not always necessary to get your way.


#990

Weaving in the role of the Fed Bank, its unprecedented massive balance sheet, and QE into the current wealth inequality issue which is not something I fully understand but connects a few different points of view…

One take on it could be: we print money forcing rates down, we inject it by buying securities, savings rates plummet as banks aren’t deploying capital at historical proportions, securities markets become the preferable way to seek return on your money, those that benefit the most from this are those already at the top of the wealth ladder. Taxation isn’t the only answer although it could be part of a more holistic solution.

https://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm

https://seekingalpha.com/article/4240968-blame-thank-fed-meteoric-wealth-inequality


#991

This is a nice idea, but often isn’t what happens. In this specific example I don’t have enough knowledge to say either way, but generally wealth is accumulated not used to create jobs/economic stimulus.

“These estimates reveal a staggering failure,” says John Christensen of the Tax Justice Network. "Inequality is much, much worse than official statistics show, but politicians are still relying on trickle-down to transfer wealth to poorer people.

“This new data shows the exact opposite has happened: for three decades extraordinary wealth has been cascading into the offshore accounts of a tiny number of super-rich.”

And the other aspect of this, arguably a larger issue and crisis than individual wealth is corporate wealth and taxation. The corporatism rampant in the west causes immense inequality and benefits from a biased legal and economic system, still based on the core notions from “Reagonomics”…


#992

Calling income redistribution “punitive” implies that those incomes are deserved. Millionaires don’t work that much harder than construction workers. Jeff Bezos doesn’t work 20,000 times* more than I do. Those incomes are not deserved.

  • made up number, probably much higher than that

#993

A professor in my department realized that if you model wealth in an economy by having agents flip a fair coin and exchange wealth equal to a small fraction of the poorer agent, you always get one or two fantastically wealthy agents and everyone else trending downward. His contention is basically that market forces will tend to create inequity without some form of redistribution.


#994

Particularly in the case of inherited wealth, where the source of income is the wealth itself.

Also, I don’t believe the distribution needs to be at truly “punitive” levels. I don’t want to impoverish the rich, I want to flatten the curve some.

For an admittedly simplistic example: Jeff Bezos has a net worth of $131.4 billion. He employs 613,000 people. If you forced him to give each of his employees a one-time $200,000 bonus, he would still be a multi-billionaire and nothing at all about his lifestyle, his ability to do business, or his motivation to do business would change – but things would be massively better for every one of his employees.


#995

also, why are taxes only allowed to ratchet in one direction (always down)?

people make a big deal about increasing tax rates for the wealthy but then hearken back to the 'good ‘ol days’ when things were better…and the marginal tax rates for the super wealthy in the US were >90%.

this wouldn’t single-handedly fix the inequality problem (which I explicitly consider a problem) but it certainly wouldn’t hurt.

do we at least all agree that Amazon/Apple/etc should be actually paying taxes?


#996

Is there an argument against lowering the tax rate for C-Corps to virtually 0% and raising the tax rates on Dividends and Capital Gains proportionately (a lot)?

This is something I think about - would be interested in hearing arguments either way. It seems like we could repatriate capital to the US, firms would have demand to put the capital to work, the company can and should pay dividends or reinvest and the capital markets create pressure to do so, generational wealth is gradually redistributed or at least recaptured by the public at a greater rate over time, the influx of capital keeps long-term rates low in the short-term, banks should make more loans.


#997

This is really important to keep in mind. Basic math, doesn’t require ideology to understand.


#998

While I agree with you, many people that I work with (and interact with on a daily basis) don’t view this as a problem. To them, its not a flaw, its a feature… the “best ideas” and all that…


#999

Well, it’s flattering to oneself to apply survivorship bias and say “I had all the best ideas” (and in the process ignore luck, circumstance, context, history, etc) isn’t it?


#1000

It is. They are mostly concerned with themselves which can be understandable. As long as their situation remains unchanged, then the system is working. These guys are nowhere near the top of the wealth, they’ve just been conditioned to believe this and to your point, it is self-reinforcing. Any further discussion of the point is fightin’ words.


#1001

That’s why people start making jokes about guillotines. It’s sort of the logical conclusion of that particular fight.


#1003

Why do you care about those three people? The absolute poorest in this country are far better off than the average person in most other countries. Please visit some third world countries and witness how different life is there - I have.

I’m no fan of Bezos, but he employs thousands upon thousands of people in Seattle - people who might not have a job otherwise. Same for Gates’ company. Capital is what allows the same person to earn more money in the same amount of time, because capital investment improves efficiency.

The widening chasm that you speak about is due to the fact that The Federal Reserve prints money continually. Supply and demand - basic economics - explains that the more there is of something, the less it’s worth. Before 1970, they couldn’t create money out of thin air - we had a gold standard - so the gap wasn’t as extreme. Now, only the rich can keep ahead of inflation. The poor are increasingly left behind. Despite this being a democratic country, the books at The Fed are kept in secret - we can’t vote on facts that are hidden from us.


#1004

It doesn’t make a lot of sense to speak of inflation in general terms.


#1005

This is a great read. Thank you.