Brad Wardell's views about technology, politics, religion, world affairs, and all sorts of politically incorrect topics.
More battles at the political fringes
Published on September 25, 2007 By Draginol In World Trade Issues

Over at a fringe left-wing site, a discussion on economics recently came up. It was very interesting to see some of the viewpoints on how wealth is created and used and so forth.

Here are some of the highlights:

Income has nothing to do with it really. Income is only a derivative, the real culprit is WEALTH. Income comes in two ways, (1) from work i.e., being paid for your labor or (2) from WEALTH applied over time, whether you call it rent, interest, capital gains, property appreciation, or whatever. Those whose only income comes from work will never become wealthy.

On the other hand, the wealthy have gotten away for far too long, saying "who, me??" when it is time to cough up money for the common good. They all nod in agreement that wealth will trickle down, then they install an impermeable barrier to reduce that trickle to mere molecules.

I would propose something along the lines of Jonathan Swift's comments on children as to how the wealthy should be treated -- we should eat them! Every time I see a picture of Carlos Slim, I think that he's not slim at all, nice amount of marbling on that meat, he would be great barbecued. Maybe a little adobada marinade and then just plop him on the asadero --yum! The only drawback I can see is at first there would be a lot like Sumner Redstone and Kirk Kirkorian; way past their prime and tough and stringy. You would have to stew them a long time to make them palatable. But once all the old goats have been consumed, there would be better pickings among the ones left.

There is a certain logic in having them give back to humanity while they are alive, er make that shortly after they are alive, as it would just be a waste to let them be cremated way past the point of well done. If they wanted, they could even be memorialized with a plaque on the barbecue.

Next time you go to WalMart and see all those barbecues out front, think how nice it would be if one of Sam's kids was there, slow cooking with a spicy rub. Nothing like jerked rich jerk to whet the appetite.

Here you see someone who doesn't understand how the wealthy got wealthy and thinks that the wealthy don't give back to the "common good". This person is apparently unaware the the wealthy are the ones who pay most of the taxes. The top 1% pay over a third of the taxes. Moreover, the wealthy are the ones who overwhelmingly contribute the most to charity (ironically, statistically the very rich and the working poor are the two groups that give the most, even accounting as a % of income).

Another person has made an argument for having a cap on how much someone can make and then "force them out of the system":

I've always been partial to a "career cap" instead of an annual cap, upon which point one is kicked out of the system so that that accumulated mega-wealth then can't be used to further undermine the common good or manipulate the system further via lobbying, deregulation campaigns, anti-environmental propoganda, stockholder/board influence, RW thinktanks, accumulated interest, kickbacks to regulators/investigators, etc.

When I argued that a cap on income would create disincentives for people to work the response was:

Most inventors invent for the same reason musicians make music -- because it's what they do. Saying they couldn't become more than multi-millionaires probably wouldn't stop them.

The obscenely wealthy Walton family has done nothing of value for the country or the world -- once Sam died. The Walton children are now just parasites who make money by treating other people as shit.

Most people who have made valuable contributions to society made those contributions long before they would have hit any income cap.

Most of the people in the financial industry make money by gambling with other people's money -- not by producing anything of value to the country.

Most of the CEOs who run the giant corporations aren't necessarily any better than other people. They just belong to a very exclusive club that rewards failure. Fuck up one company and you'll be hired by another within a month. Look at George Bush -- screwed up every business he every touched, and was bailed out repeatedly, until he got his hands on the big enchilada and he's flushing that down the toilet, using both hands.

The idea that an income cap would stifle creativity and inventiveness is just corporatist crap. It's actually the other way around. A lot of inventiveness is stifled because the corporatists have made the cost of entry so high.

So the idea here is that the rich are hogging the wealth.  Wealth is produced by the people and the rich are people who are stealing this wealth. If we could kick these people out of the system, then other people would have their turn.

Or as one person wrote:

Make the income tax progressive again with no limit on the top marginal rate. Let it rise above 100%. It would be a polite way of asking the biggest pigs to step away from the trough and let the others have a chance.

In their reality, the Bill Gates or the Henry Fords of the world are easily replaced. Everyone can do what they did if they just got a chance instead of being held down by these "pigs".

Another person, arguing against my position that caps on income would remove the incentive for the most productive to keep working wrote:

You're assuming money is the reason extraordinary people do extraordinary things. I doubt that. Take away the money and extraordinary people would still do extraordinary things. Maybe more so.

Sociologists have known for a long time that in a "gift society" the motivation for greatness is still there - just different. The incentives are tribal status, self-fulfillment and altruism.

Obsessive money lust is pervasive nowadays, but societies without it have functioned fine.

The issue I take here is that what exactly is a "gift society".  Our society certainly doesn't match that.  Motivated people tend to be competitive whether that be in sports, business, or elsewhere.  Competitive people want recognition for their achievements. In athletics, we give trophies, medals, ribbons and other marks of success.  Our soldiers win medals and ribbons for bravey, tours of duty, etc.  And yes, successful businessmen buy things that demonstrate their success.  Perhaps if successful businessmen weren't so profoundly villainized in the media and in society in general but instead rewarded them with accolades, medals, etc. then the incentive for successful businessmen to purchase their own rewards would be lessened.

I argued that no one is 100% altruistic. There are limits.  I may enjoy writing software but there comes a time where it's not fun or I have to sacrifice something in order to achieve my objective. To do things that aren't fun, people have to be compensated. That's why I wrote the article "Robots of Capitalism" to illustrate this point.

But the response was that by my logic, garbage men should make a lot more money than CEOs because a garbage man's job is a lot less fun than that of a CEO.

To which I wrote:

A garbage man doesn't make as much as a professor (usually anyway) because the number of people who can be a garbage man are far more than the number of people who can be a professor.

As I mentioned elsewhere, the reason why CEOs and pro basketball players make so much is because only a tiny percentage of the population can do what they do at their level.

So what makes people mega rich? Again, it boils down to supply and demand: In a capitalistic system, how much we make is tied to how much wealth we produce combined with the competition for people who can produce that wealth.

The value of what we produce is determined by other people (which is what makes capitalism work in the first place). Bill Gates doesn't get to decide he's rich. Society does by valuing what he does enough to pay him for the products and services he provides.

The responses I got to this included:

If only the selfish personal motive is what you recognize that drives people because your mindset is authoritarian or 'free market' disciple, rather than elevating the common good out of common concern, you're not really equipped to be living in, or contributing to, a democratic society with the collective wellbeing in mind. A rising tide should lift all boats, not just the fanciest 5 ships in the marina; -especially if the rising tide or productivity is generated by those being cut out of their corresponding contribution.

To which I say: Yea, I don't like to do things I don't want to do. So sue me. If I'm doing things I find unpleasant, then I expect to get something out of it. But the nice thing in a capitalistic system is that by being rewarded for doing things that I don't enjoy, I might choose to produce things that I'm better at doing than other people rather than spending my time playing frisbee or something. And if the things I'm good at producing are valued by society, society does in fact benefit.

Human nature is pretty straight forward on this point: We want to do the things we want to do and we don't want to do the things we don't want to do.  Capitalism works reasonably well as a way to motivate people to do what they're good at rather than doing just what they want to do.

 


Comments (Page 2)
on Sep 26, 2007
In addition, today much of that new investment has taken place in other countries which has not helped American workers earn the added wages with which they can buy more goods and services


lets examine this

other countries spending money goes up when we export phone jobs, computer jobs. these people will spend their new wealth on new things more food, computers for home, TVs,or whatever.

these new jobs will require new phones, new computers, and other things that we build here thus increasing exports. thus creating new jobs here. the last time i looked a manufacturing job pays more than a phone job or a computer job. there are exceptions to this.

now gene will argue that we are losing more jobs than we are getting. problem with that is unemployment is under 5%. which in general means that those people in this group are looking for a better paying job.

the last depression was brought to you by there not being enough workers. the companies couldn't keep up with orders and the orders slowed down.

as much as i would like to blame this on Clinton i cant. mainly because Clinton didn't do anything. that depression was brought on by Reagan. Clinton could have slowed it down maybe stop it but as i said Clinton didn't do anything

you see gene the problem with giving credit for the good things or the bad things in in a presidents first term is he didn't do it. most major policy changes take place in 5 years. which means when Clinton took office is when we started to feel reagonomics. which Clinton tried to destroy his first 5 days in office with that tax increase.
on Sep 26, 2007
“now gene will argue that we are losing more jobs than we are getting. problem with that is unemployment is under 5%. Which in general means that those people in this group are looking for a better paying job.”


Unemployment in the late 1990's was as low as 3.9% however the unemployment rate is not the entire story- It is the quality of the jobs we are creating. On the average, the new jobs pay less with fewer benefits then the jobs that are being lost. That means there is LESS total money to spend and when more workers must also pay more or all of their health insurance they have even less to spend on goods and other services.

All the plus and minus elements net out and what we have scene is a NET increase in the National Debt. If the supply side economics worked, we would not have a NET increase in the debt.

As The Comptroller General proved, we only get $.50 cents in new tax revenue from every Dollar of tax cuts. We need to do ALL the things I listed to SOLVE the problem. To Balance the Budget and generate a REAL surplus to pay down the debt would require something in the range of $700 Billion EVERY YEAR. That will not be produced with any one or any two of the suggested changes I made. If we could cut $50 Billion in Pork and Earmarks, add $250 Billion with stronger collections we would still need $400 Billion to finish the Job. Those that say we can solve the budget problem and repay the debt with JUST spending cuts live in a dream world and have not taken a good look at just what we spend the $2.7 Trillion annual budget on in this country!
on Sep 26, 2007
the last depression was brought to you by there not being enough workers.


Unemployment in the late 1990's was as low as 3.9%


on Sep 26, 2007
we only get $.50 cents in new tax revenue from every Dollar of tax cuts.




again you idiot the word new means more not less.

to give it to you in a better way


tax income is now $10. with bushes tax cut you lose one dollar and you get new income.

that means we are now getting 10.50 in taxes.

remember the phrase new income means income you didn't have before.
on Sep 26, 2007
From 2000 to 2002 most brackets dropped by one percent, and there was a new low bracket added for the "lucky duckies" at the very bottom. In 2003 most brackets got an additional cut of two percent with a special gift for the "other" lucky duckies, the ones at the top. But note that the rich still paid more in 2003, and everybody else paid less, than was the case in 1992. Now if we could just balance the budget...


see the rich are paying more than they were when clinton raised taxes.
on Sep 26, 2007
ColGene:
The supply side economics that was tried in 1981 resulted in a $3 Trillion Dollar increase in the debt and added to the interest American tax payers must pay on that increased Debt. We made the same error in 2001 when we did the same thing as in 1981 and it produced an increase of $4 Trillion in the debt and added even more interest.


Idiot! Supply side economics has given us the single longest period of sustained growth in US history. Spending by Congress has nothing to do with growth in the economy.

Supply side economics also gave Congress more revenue than it has ever had before. The fact that they couldn't stomach any kind of limits to their overbloated spending doesn't change that fact in the least.

Supply side economics has worked EVERY TIME is has been tried. On the other hand, your fantasies of "taxing into prosperity" has NEVER worked.

I now return you to your crackpipe, already in progress.
on Sep 26, 2007
“We only get $.50 cents in new tax revenue from every Dollar of tax cuts.




again you idiot the word new means more not less.

to give it to you in a better way


tax income is now $10. with bushes tax cut you lose one dollar and you get new income.

that means we are now getting 10.50 in taxes.

remember the phrase new income means income you didn't have before.”

What we have done is given up twice as much tax revenue( from the tax cuts) then we added in NEW revenue!


I am not sure if you just do not understand or refuse to accept the truth.


If I were to cut your income by $100 per month and give you a $50 per month reduction in your taxes would you be better off? Hell NO! Bottom line you would have $50 LESS per month.

The Tax Cuts reduced federal revenue by 2 times as much is it increased taxes from the growth in jobs and business. The fact is that in 1981 and 2001 the Supply Side Economic policies INCREASED the DEBT not REDUCED or KEPT the debt the same.
on Sep 26, 2007
The Tax Cuts reduced federal revenue by 2 times as much is it increased taxes from the growth in jobs and business. The fact is that in 1981 and 2001 the Supply Side Economic policies INCREASED the DEBT not REDUCED or KEPT the debt the same.


you are wrong period.
on Sep 26, 2007
you are wrong period.


Arguing with Col Klink is like arguing with a tiger. You will never win, and just get mauled in the process.
on Sep 26, 2007
Arguing with Col Klink is like arguing with a tiger. You will never win, and just get mauled in the process


yea but i am already depressed so what harm can it do
on Sep 26, 2007


“Arguing with Col Klink is like arguing with a tiger. You will never win, and just get mauled in the process.”

That is the Conclusion of the Comptroller General, Mr. Walker and he knows a lot more then you will ever know about how our economy works. I guess you will also tell us that we have not increased the national debt since 1981?

WHAT A COMPLETE IDIOT YOU ARE!
on Sep 26, 2007
WHAT A COMPLETE IDIOT YOU ARE!


No need to shout or call names. Unless you have no argument. Oh, sorry, I see you dont. I guess we know who is what now.
on Sep 26, 2007

“No need to shout or call names. Unless you have no argument. Oh, sorry, I see you don’t. I guess we know who is what now.”

Just calling a spade a spade. Anyone that would tell me the Comptroller General does not know what he is talking about when it comes to the financial operation of the U.S. is an IDIOT!
on Sep 26, 2007
Just calling a spade a spade. Anyone that would tell me the Comptroller General does not know what he is talking about when it comes to the financial operation of the U.S. is an IDIOT!


No, you are just using insults since you have no arguments. I rely on professional experts like Friedman, Greenspan, Volcker, and now Bernanke. Not a political hack. With an agenda.

And sorry, I will not argue with you. I dont do one trick ponies.
on Sep 26, 2007
Gene's solution to everything is just to raise taxes on every successful American regardless of the consequences that has been shown to him countless times.  Nothing else matters, but placing more of the tax burden on one class of people, just because Gene and his socialist thinking believes that he can decide how much income is "enough" for them.