Brad Wardell's views about technology, politics, religion, world affairs, and all sorts of politically incorrect topics.
Published on March 3, 2013 By Draginol In Economics

Found this video here:

Even being familiar with the stats, it was a really fascinating and well put together illustration of the massive level of inequality in wealth we have in the United States.

I have two fundamental criticisms with it.

First, knowledge isn’t understanding. That is, the author gives me the impression that he thinks wealth is “distributed” by some..entity. That somehow wealth is being divied up by some sort of directed intelligence and that we, as a society (presumably through our government) could somehow alter this inequality.

Second, it doesn’t even try to explain how this inequality happened in the first place. At best, it sets up strawmen such as “does the CEO work 318X harder than the average person in their company?”  While working “hard” is often the difference between poverty and middle class, it has relatively little to do with why 1% of the population controls so much of the nation’s wealth. 

Wealth distribution is a macro-system. If it is to be understood, it needs to be looked at from a macro-level. Emotionally driven anecdotes of individuals or even generalizations of individual groups is worthless.

Your local grocery store

To understand what is happening at the macro level let’s look at something that is so basic to our day to day lives that has also transformed right in front of our eyes. Your local grocery store.

In 1983 the store owner would need to employ many cashiers. When checking someone out, they looked at individual price tags and rang them up on the cash register. Those price tags were placed on every product by employees with a price “gun”. You usually had a bagger. You also needed a lot of these people because checking out was a relatively slow process.  People paid by cash or (burrrrr) more often a personal check.   The goods being purchased had been stocked on the shelves by a small army of stockboys who practically lived in the warehouse in back trying to manually sort out all the goods that had come in from a vast array of different suppliers.

As a result of the above, the owner of the store’s relative wealth was limited because the wealth the store generated was distributed out to a small army of employees.

Fast-forward to today.

That same store owner now owns a much much larger store.  In fact, that store owner is actually a principle at a consolidated franchise company that owns many many stores.

Goods come in with a bar code so no price tagging is needed, eliminating those jobs and the associated expenses. The goods also come him from a tiny number of suppliers who have undergone the same automation and subsequent consolidation as the stores have.  The number of stock boys is far fewer because it’s so much quicker to put things up. Goods arrive in the store already organized by a just-in-time warehouse at a franchise distribution center.

Most of the cash registers are gone having been replaced by automated ones. What few human-run checkout lanes are now operated by people who simply move the bar-coded item through a scanner and the customer does their own bagging. The customer pays by simply sliding their credit card through. 

It would not be an exaggeration to say that the equivalent store generates more than 318X more wealth for the owners than for each employee.

Automation is nothing new. However, the rate and pervasiveness of automation continues to increase exponentially. As a result, the inequality we see is likely to continue to grow.  In fact, the rate is likely to increase.

Our government has actually set in policies that hasten this trend. Minimum wage laws, while well intended, result in these business owners eliminating positions and making cutting edge automation more attractive.  Getting rid of minimum wage laws wouldn’t eliminate this trend, it would merely slow it down. 

We also have increasing regulations and costs associated with hiring humans which create an incentive for the store owner to invest in more machines faster and his suppliers to outsource more overseas where regulations aren’t as tight.  Decreasing regulations, however, would only slow this trend, it wouldn’t stop it.

In another several years, the store owner will likely have machines that can automatically stock goods onto shelves via their RFID tag. Even fewer cashiers will be needed because the customer will be able to simply walk out of the store with their items in the cart and have all their items charged to their credit/debit account as they pass through an automated RFID scanner. Your favorite fast food joint won’t need people to take your order. You’ll simply tell it to a Siri-like order taker (or input it on a keyboard).

Thus, the “store owner”, that 1%-er (and again, at this point, the “store owner” of 1983 is long gone) will have an even greater share of the wealth than they do today.

What can be done?

I don’t really have an answer.  I don’t think anything can be done even though I often feel the same distaste for wealth inequality as most people do.

Overall, the lives of nearly all Americans are vastly better than they were 30 years ago.  And before someone points out a statistic on “purchasing power” I think you’d be hard pressed to find any sane person who would want to go back and live in 1983.  Life is far better now than it was 30 years ago for virtually everyone in the United States.

But the wealth inequality strikes most people as being fundamentally unfair. Having had some success myself I am no stranger to that tingle of envy at the advantages others got – especially when they are given kudos by a society that is oblivious that the biggest difference between those people and the hundreds, if not thousands, of others who had the same idea/ability/drive was that those people started out with massive massive advantages.

While I spent much of my childhood growing up in a 2 bedroom apartment with my single mother eating “shit on a shingle” a few times a week because that’s what we could afford to eat and saving and scraping from an early age so that I could work 3-jobs to afford to attend a minor state-school that wouldn’t even get me an interview at a major tech company,  I’ve watched people become more “successful” largely in thanks to them starting out with connections from Harvard or MIT or some other place their parents sent them.  My point is, I can relate to that unspoken feeling of unfairness.

However, someone less successful than I am can point out that I was raised by a mother who instilled responsibility and economic common sense from an early age and that I’m a white male thus I too have many advantages over many others. There’s always someone more disadvantaged than you.

Hence, envy or resentment is a futile path to take. You just have to let it go or it’ll poison you.

As a society, should we really care about this growing wealth inequality? And if we should care, we should have take a hard look as to why we care. Because if that reason boils down to envy or resentment then any solutions that spring up are likely to take us down a very dark path.

I personally don’t like the level of wealth inequality. It offends my sense of fairness. But I can’t think of any solutions to it that don’t essentially involve stealing from one group and handing it to another “just because”.  It’s one of the reasons why I don’t like a strong federal government, it just creates more opportunity for the gamification of our economic system (talk to a successful hedge fund manager – federal regulations make the hyper-wealthy financial managers of the world possible).

Besides, in another 30 years, we should reach the singularity and at which point, who will give a crap? Winking smile


Comments (Page 8)
on Apr 01, 2013

Glazunov1


Quoting Jafo, reply 103
Just to add.... I studied Sociology, Psychology and Philosophy .... as they were included in Architecture. 

 

And yet, we still have the Bauhaus everywhere.

 

 

 

If less is more, just think about how much more more would be.

on Apr 01, 2013

jackswift85
If less is more, just think about how much more more would be.

And just think, if you more or less had less and more and multiplied it by the count of more, you more or less have a lot more than you'd have less, unless you had equal parts of more and less and more or less divided them by less than the sum of more.

And like the constipated mathematician, I worked it out with my pencil.

on Apr 03, 2013

starkers


Quoting jackswift85, reply 106If less is more, just think about how much more more would be.

And just think, if you more or less had less and more and multiplied it by the count of more, you more or less have a lot more than you'd have less, unless you had equal parts of more and less and more or less divided them by less than the sum of more.

And like the constipated mathematician, I worked it out with my pencil.

Liking the intentional ambiguity there....

on Apr 05, 2013

thadianaphena
There indeed is more wealth, however all the wealth is at the top. There "might be" some kind of "potential" for wealth to be created on the bottom, however I highly doubt this will ever happen.

Gee, and I did not realize I was at the top.  But I am much more wealthy today than I was in 1983.  But I still cannot buy a Bill Gates.

 

thadianaphena
Hundreds of thousands? Don't make me laugh.

 

Laugh at your own peril.  It is a fact.  Microsoft made more millionaires than any company in history.  And a dozen Billionaires.

 

You may not like the fact that 80% of the rich in this country are first generation (which means they started with nothing and earned it all), but that is the fact.  Which means they do not "hoard" wealth as they had none to hoard initially. Nor do the wealthy hoard it since virtually all of them started from nothing and made their wealth.

 

Unlike you, I do not envy their money.  I earned what I have.  No government handouts ever.  So I know it is mine, and no one has taken it from me.

on Apr 05, 2013

His Copernicus/Job Creator comparison is a bit laborious, but the rest of his TED talk gets the gist of what those of us "on the left" (or whatever) are trying to get across.

 

on Apr 05, 2013

If lowering taxes on the rich created more jobs, we'd have had 4% unemployment ten years ago.  Oh, we did?  Where'd this hole in my theory come from...  Oh, hey, it's that really short term graph I used to misrepresent the trends between tax cuts and unemployment by using just the last several years where our Disaster in Chief has bloody well sunk the ship of state in massive deficit spending and regulatory roadblocks to the flow of money...

 

There's a reason they didn't even put this video up on TED until that hack hired a pr firm to start an uproar on the internet, it's political tripe.  Littered with inaccuracies and opened with a purely partisan statement, all to eschew a old false theory.

 

Hanauer is just proof that even stupid people can become billionaires.  Not that he's a billionaire anymore, lost his shirt when things went south because he was too dumb to see that coming.  Captain Obvious has to be careful not to startle him.

 

Europe has substantially lower income inequality brought about by massive tax rates on the wealthy.  Europe has massively higher unemployment.  Our own economic history shows the exact same results.  Spending goes up, unemployment goes up.  Spending goes down, unemployment goes down.  You can juice the works by cutting taxes, but eventually your deficit catches up to you.  Spending is the all powerful metric by which nations rise and fall.

 

The more government spends, the shittier life gets.  If you want to fix your precious income inequality, it's real simple.  Learn your history and stop voting for the asshole that brings home the bacon.

on Apr 05, 2013

Under Eisenhower:

Marginal Tax Rate on Regular Income over $400,000: 92% - 91%

Maximum Tax Rate on Long-Term Capital Gains: 25%

 

Under Obama:

Marginal Tax Rate on Regular Income: over $372,950 - over 388,350: 35%

Maximum Tax Rate on Long-Term Capital Gains: 15%

 

Oh, yes. We really need to lower taxes on the wealthy immediately, because our economy is so tanking while charging them the exorbitant rate of 35%.

on Apr 06, 2013

Taxes are a minor, tertiary factor.  First is usually spending, second regulation.  Those complete fucking retards in Congress have, unfortunately, flipped that around to where regulation is actually causing even more damage than our insane level of deficit spending, but that's another argument.

 

The more money we have sitting in nice, safe government bonds, the less of it those evil rich people have to invest in risky ventures.  You know, the ones that get people hired.  The more money you tie up in something other than making money, the less productive your society becomes.  Food stamps might make you feel better, but when you spend money on a system that encourages people not to be productive, you're doing the exact opposite of what a market does.  You're weeding out productivity, instead of weeding out the unproductive.  Our government is currently spending almost a trillion dollars it doesn't have, while throwing a couple trillion more away in regulatory compliance costs.

 

It's very simple, the problem isn't even slightly complicated.  Government spending has tanked the economy by discouraging productivity and tying up massive amounts of capital in government bonds to do it.

 

While you congratulate yourself on such a clever reference to Eisenhower, do note that during his administration, outlays were under 18% and he had three years in the black.  Obama would still be looking at 7% of GDP for deficit spending, even with Eisenhower's tax revenues.  Better than 9%, but that's like saying it's okay if I cut your hand off because I really wanted to leave the stump a little further up your forearm.  It's economic suicide.

on Apr 06, 2013

Reminder....folks, once the topic side-slips from ECONOMICS and into POLITICS instead it will be relocated from "Everything else" to JoeUser's "Politics"...

on Apr 06, 2013

Eisenhower didn't have the difficulties Obama had.  The 1950s the US had a much larger competitive advantage than Today.  

 

Some of what is going on is inevitable once we opened the globalization genie up, but the problem is the middle and lower classes are getting the entire burden of globalization, which the rich are getting the benefits- they can take advantage of the opportunities where the other classes lack the disposable income.

 

 That is the fundamental reason we're having increased inequality.  It's not taxes or spending, it's globalization, and there's nothing we can do independently about the cause.  The only thing we can do (and are not doing) is handling the symptoms for a smoother transition (but some of that is also stymied by globalization- the rich have more options to evade their share of the burden than ever before)

 

 

on Apr 06, 2013

Actually, the US is in a similar state today as it was in the 40's after WWII.  Like then, Europe is in the middle of a massive fiscal crisis that dwarfs our own.  They have the opposite problem they had then, but it's severe.  Instead of a wasteland of bombed out industry and agriculture that lead to massive regional shortages, they have massive unemployment that makes our situation look peachy, a failing financial market and social strife in reaction to their socialist policies collapsing.  Productivity is taking a nose dive along with the median income.

 

In the 40's, the US was the last man standing, and got rich selling shit to everyone else.  Now we're just getting rich manufacturing everyone elses shit because we can get the component materials dirt cheap.  Manufacturing has made absurd productivity gains, and it's almost entirely a product of cheaper imports as the rest of the world falls off faster than we do.

 

We also have a similar resource advantage.  As then, the US has substantial energy reserves.  We import massive amounts of fuel every year only because our politicians are retarded and make it as hard as they can to produce it domestically, as they've done with most things.

 

If we were energy independent now, which would be the case without the various acts of stupidity we've had since that infernal EPA was created, the US would be the largest exporter in the world, and Europe and China would have already collapsed.  Knock a couple trillion in compliance costs out of this economy, and we'd be screaming even now.

 

Globalization isn't screwing us over, we get $500 50 inch tv's in return for our stagnant wages.  The net gain to our society has been quite substantial.  A guy making 15 grand a year can eat better, with more, nicer toys, than someone making twice that in the 80's could have.  When VHS came out, it would set you back a thousand bucks to get a player, and the typical color tv was several hundred bucks.  Getting something big meant a few grand for a projection TV.

 

I like globalization.  Spending weeks to get a business license you shouldn't even need to get in the first place, that's the kind of thing that hurts the economy.  Our global position would be fantastic if we weren't assuming the position for Uncle.

on Apr 06, 2013

psychoak

Taxes are a minor, tertiary factor.

 

Raising revenues are always important, and taxes are an important factor in that, as I'm sure a really smart guy like yourself realizes. Because revenue when it is spent transparently and in a way that benefits a nation, reflective of taxpayers' desires, is a very good thing. It makes an economy move better, faster, stronger. And although my quote of Eisenhower and Obama numbers didn't show it (it was really only a conversation starter; the realworld is a lot more complex)), I'm fully in favor of capital moving quickly. I have no patience with those who think it's eeeevil, but it isn't good, as well: it simply is. It is the treatment of money as a commodity, and people who don't like that or its results at all are welcome to go off on a commune somewhere and eat carrots til their own legs take root. But I think that, by that same token , capitalism doesn't simply mean "What's good for General Motors, is good for the USA," as Charles Erwin Wilson never really said--but others understand to be true.

 

The more money we have sitting in nice, safe government bonds, the less of it those evil rich people have to invest in risky ventures. 

 

And yet, the Eisenhower years saw enormous productivity where it counts, and all those rich people (if you think them eeeevil, you shouldn't hang around them, you know; send them to me, as I've liked working closely with very rich, well-organized people in the past) never jumped shipped, but had plenty of capital with which to hire. Personally, I'd like to see the money *do things.* Safe bonds aren't safe at all; they don't value up at a rate sufficient to accomplish anything unless you're twenty years old and want to provide for an old age in well, 80 years or more. But subsidizing industries that already show tremendous profits isn't a good investment of federal money either: it's just a political fiat. And a lot of federal money relative to some other programs is spent this way--certainly money that in any case should be put to real use as economic grease. If you're a government and you're looking to get the economy moving, there are far better ways to do so than sticking it in safe bonds or giving it to an specific series of businesses already extremely well off because Senator Gluteus Maximus wants to smile. Right? My point being that dissing safe bonds doesn't automatically mean there's only one other solution. Many are offered to the problem of how a government should use the money it collects. Some are bad--such as subsidies to very successful industries, as a political bribe--and others are good, such as using money to build and maintain highways. But I'll get into that a bit more, further down.

 

First is usually spending, second regulation.

 

That's pretty binary. Government spending isn't automatically a bad thing. It depends on what it does. Government spending puts police on the streets; it supports road construction and maintenance. It supports fire departments, finances troops in wartime and peacetime, encourages stem cell research, studies and visits the solar system. Government spending on regulation can be a problem but it can be good, too, because industry self-regulation has been a failure in every attempt made at it, and nuclear power plants aren't a good thing to ignore and "hope" they stay safe with fingers crossed behind one's back. (And I like nuclear power a lot, as long as it's safely managed.) We need regulation to make sure standards are maintained in so far as certain activities impinge on what has been called the common weal. Interestingly, industry regulation in many areas relative to the federal budget is at a low since pre-Reagan years when indexed for inflation and national growth. Cut regulation? By all means. But let's target specifically what we want to cut, and examine how poorly they're doing, instead of making sweeping generalities. And let's make sure what we want to have regulated is funded enough to do so effectively, and staffed competently. Otherwise, it's money that's going to waste. And note: one of the biggest wasters of federal money is the Pentagon. There are many good reasons to keep an active military, but a wasteful one on that scale isn't good for any nation. Pentagon spending? Needs to be carefully and above all sensibly regulated. Yet it really isn't. At all.

 

It's very simple, the problem isn't even slightly complicated.  Government spending has tanked the economy by discouraging productivity and tying up massive amounts of capital in government bonds to do it.

 

Allow me to offer something equally simple: if the government hires people, people who were otherwise unemployed get jobs, therefore more money for their households. More spending means more money circulating in the economy. This is an extremely good thing. Governments are a notable driver of economies through employment at a specific level. It's been shown to be the case time and again. Would you like plenty of figures with your whine and cheese?

 

In the 40's, the US was the last man standing, and got rich selling shit to everyone else.  Now we're just getting rich manufacturing everyone elses shit because we can get the component materials dirt cheap.  Manufacturing has made absurd productivity gains, and it's almost entirely a product of cheaper imports as the rest of the world falls off faster than we do.

 

Complete agreement. It's a steep shot off a severe cliff. I have my opinions, but how would you suggest dealing with this, while allowing for the way so many economic, social, and political issues are entangled together in a way that sets one screaming?

While you congratulate yourself on such a clever reference to Eisenhower,

 

Oh, no--you're far cleverer than I am, by focusing entirely on government deficits without breaking it down into shortterm and longterm deficit spending, two very different things in most respects, and ignoring the elaborate variety on the revenue side of the equation completely, to direct the conversation towards economic austerity. I think we're better served not by treating regulation like some monolithic boogeyman, anymore than industries are, or government spending, or any of the myriad interrelated issues involved in this subject.

on Apr 06, 2013

Raising revenues are always important, and taxes are an important factor in that, as I'm sure a really smart guy like yourself realizes. Because revenue when it is spent transparently and in a way that benefits a nation, reflective of taxpayers' desires, is a very good thing. It makes an economy move better, faster, stronger. And although my quote of Eisenhower and Obama numbers didn't show it (it was really only a conversation starter), I'm fully in favor of capital moving quickly. People who don't like capitalism are welcome to go off on a commune somewhere and eat carrots til their own legs take root, as far as I'm concerned.

 

This is true.  However the premise has a rotten foundation.  When has such ever occurred for more than a few years at a time?  In the entire history of mankind, do we have a single solitary example of a long running, efficient government policy at anything resembling the scale of the Federal government?  I don't believe humanity is capable of it.  The history of our government is one of continual expansion of both power and spending, with few stops in the progress, and none of them lasting long.

 

If government spent transparently, in a way that benefits the nation, reflective of the taxpayers desires, a difficult qualification to meet.

 

And yet, the Eisenhower years saw enormous productivity, and all those rich people (if you think them evil, you shouldn't hang around them, you know; send them to me, as I've liked working closely with rich people in the past) never jumped shipped, but had plenty of capital with which to hire. Personally, I'd like to see the money *do things.* Safe bonds aren't safe at all; they don't value up at a rate sufficient to accomplish anything unless you're twenty years old and want to provide for an old age in well, 80 years or more. But subsidizing industries that already show tremendous profits isn't a good investment of federal money either: it's just a political fiat. And a lot of federal money is spent this way. If you're a government and you're looking to get the economy moving, there are far better ways to do so than sticking it in safe bonds or giving it to an specific series of businesses already extremely well off because Senator Gluteus Maximus wants to smile. Right? My point being that dissing safe bonds doesn't automatically mean there's only one other solution. Many are offered to the problem of how a government should use the money it collects. Some are bad--such as subsidies to very successful industries, as a political bribe--and others are good, such as using money to build and maintain highways. But I'll get into that a bit more, further down.

Oh, no--you're far cleverer than I am, by focusing entirely on deficit spending without breaking it down into shortterm and longterm deficit spending, and ignoring the revenue side of the equation completely, just to focus on your point. I remember the Eisenhower years, and there was no real talk at the time of "socialist spending" outside of red-baiting politicos, because social spending was almost nonexistent in Europe following the war--unless you want to call ration cards social spending, which is a really tremendous reach. Much of Western Europe was engaged in programs of rebuilding and commercial and industrial expansion relative to the losses of the 30's and 40's. Socialism in any case is a pejorative used for anything and everything, just as capitalism is for another set: such horror! Medicare is socialism. Public schools are socialism. Low income housing is socialism. So is a strutting idiot who pretends he leads a Socialist Party that matters to no one and nobody. These aren't the same, plenty of subsidiary issues are involved as you're well aware, and the word should be used in a specific sense if having a meaningful conversation is the goal. If it isn't, well, what do you think of them Lakers, huh?

 

Thank you for arguing my point?  Eisenhower had relatively balanced budgets, two thirds the size of our current ones...

 

With half the revenue we take in now, we could fully fund a stronger military, S.S. and Medicare programs that scaled with lifespans like they should have to begin with, all the interstate roadwork we can come up with, and a massive amount of oversight well in excess of anything truly necessary

 

As ~80% of the rich are newly minted, first generation, self made individuals, why would anyone want government to collect their money to pick and choose how to spend beyond those basic functions?  Whether in bonds, all soon to be 17 trillion of them, or added tax revenue(assuming an increase in rates actually got us more revenue, as I said it's historically flat over the massive swings in rates), the effect would be the same.  Money being spent in a comparatively poor fashion.  They more closely resemble the homeless drunk that puts everything into booze, than someone capable of creating wealth.

 

Government spending isn't automatically a bad thing. It depends on what it does. Government spending puts police on the streets; it supports road construction and maintenance. It supports fire departments. Government spending on regulation can be a problem but it can be good, too, because industry self-regulation has been a failure in every attempt made at it, and nuclear power plants aren't a good thing to ignore and "hope" they stay safe with fingers crossed behind one's back. (And I *like* nuclear power a lot, when it's safely managed. As I do some new developments that have made great strides in coal efficiency.) Traffic controllers? Need regulation to make sure standards are maintained. Airlines themselves need somebody looking over their shoulder; there have been too many documented instances of regulators finding severe faults in planes that subsequently led to planes being grounded, and owners fined. (Did the loss of the plane hurt the airline? Yes. But it's a benefit if your passengers survive.) Regulation relative to the federal budget is at a low since pre-Reagan years when indexed for inflation and national growth. Cut regulation? By all means. But let's target specifically what we want to cut, instead of making airy generalities. And let's make sure what we want to have regulated is funded enough to do so effectively. Otherwise, it's money that's going to waste. And note: one of the biggest wasters of federal money is the Pentagon. There are many good reasons to keep an active military, but a wasteful one on that scale isn't good for any nation. Pentagon spending? Needs to be carefully and above all sensibly regulated. Yet it really isn't. At all.

 

The Federal government, in return for a few percent of their budgets, puts idiotic requirements on construction projects, fire and police departments, the education sector, the list goes on.  Because of Uncle, we have fire fighters that are completely incapable of doing the job, as well as completely incompetent otherwise.  Why?  Between gender and race norming(Affirmative Action says minorities and women are stupid), the only way a government agency doesn't hire a moron is if a geniunely suitable candidate is available, fitting an equally advantageous profile.  They can't fire them either, we have known pedophiles "working" in school districts because they'd have to wait for them to actually rape a kid to get a prosecution going before they can fire them.  Instead they just give them a desk job doing nothing in the administration.  Then there's construction.  We have hundreds of little airports all over the country built just so this or that congressman didn't have to drive two hours to the nearest airport.  We have thousand foot bridges to sand bars populated by a dozen people.  55 miles per hour?

 

Industry regulation is another hilariously bad performer.  When Alaska Airlines Flight 261 went down, the FAA had already been warned repeatedly.  The whistleblower had been fired in return for contacting the FAA, and the FAA relaxed the Manufacturer specified maintenance requirements after finding out from Boeing what the bare minimum maintenance would require.  When Alaska Airlines continued to fail to maintain even those lax levels, the FAA was again warned and did nothing.  They weren't even keeping the jackscrews lubricated.  The typical plane groundings are done by the Airlines themselves, actual maintenance checks by the FAA are extremely rare.  Other inspection agencies are much the same.  The USDA does routine inspections of food processing plants, visual inspections.  They walk in, look around, and leave.  The only time they shut down a plant is when people get sick.  You mention nuclear power plants, yet Three Mile Island, the only meltdown of a reactor not being run by the Federal government, happened under strict regulation.  The several other nuclear meltdowns that have happened in this country were all caused by government operated reactors, three of them by the same group and covered for by the Department of Energy.

 

You trust them to do a better job than people scared of a lawsuit will?

 

Regulation relative to the federal budget is at a low since pre-Reagan years when indexed for inflation and national growth.

 

This is hilarious enough I just had to pull it out by itself...

 

We surpassed 8% of GDP in 2010, that's before Dodd-Frank and the Affordable Care Act came into play.  The FDIC said it would be too expensive to find out how expensive Dodd-Frank is, so we still don't have any idea how high the costs for it are.  The Affordable Care Act isn't even finished writing.  Several thousand pages of new regulations from two bills, and 2010 was a new record.

 

Regulatory compliance is how much it costs to comply with them, not how much it costs the government to write them.  Comparing the cost of regulation to an ever expanding federal budget isn't very helpful either.  Screwed twice is still screwed even if you get screwed twice as hard from one.

 

Allow me to offer something equally simple: if the government hires people, people who were otherwise unemployed get jobs, therefore more money for their households. More spending means more money circulating in the economy. This is a good thing. Governments are a notable driver of economies through employment. It's been shown to be the case time and again. Would you like plenty of figures with your whine and cheese?

 

Consumption of wealth does not create wealth.  Technological advance and plain old lying has been utilized to hide massive amounts of inflation brought about by consumption driven keynesian policy.  When government hires more people, more people become unemployed.  This bears out in history, as well as the present.  Government expansion largely creates jobs without wealth, typically jobs that actively destroy wealth beyond the consumption of the wage earners.  In some things, it's a tradeoff, physical wealth in the form of more food, energy, durable goods, for added security.  Emergency services, the military.  In others, there is no tradeoff.  The ATF is an entity completely without purpose, that spends more resources committing crime than it does preventing it.  At the same time, these tradeoffs, and not so tradeoff expenditures, are not made out of a vacuum.  The money is either taken out of the economy to begin with, and thus has a maximum effect of zero, or it is printed, hence the inflation.

 

Bankruptcy is the only place you end up.  The EU is already there, Japan got there a long time ago, so did Russia and Mexico, we're next.

 

Complete agreement. It's a steep shot off a severe cliff. I have my opinions, but how would you suggest dealing with this, while allowing for the way so many economic, social, and political issues are entangled together in a way that sets one screaming?

 

I'm just waiting for society to collapse, then I can sit on the porch and shoot looters.  I bother with argument because it amuses me, I suffer no delusions.  The sheeple will continue driving civilization off the cliff, completely oblivious to how utterly screwed they are.

 

A theoretical solution, short of violent revolution?  Instead of gutting the politicians(I'd prefer to do this anyway just on principle), just wipe out every discretionary federal agency but the NTSB, FBI and CDC, wipe out the civilian contracting in the military, and use those pea brains to tie medicare and social security to life expectancy.  Lawsuits keep people more honest than regulatory oversight, no one would even notice of the FDA disappeared, and most of the regulatory bodies are just an outright drag on society.  The only thing they really do is after the fact investigations, and almost all of those already are or could be handled between those three agencies.

 

As I see zero chance of either party passing even the most obvious and necessary change regarding life expectancy, I'll continue to look forwards to the modern day fall of Rome here in the next 10 to 15 years.  We could put it off for longer if we get serious about resource development, but I'm not that optimistic.

on Apr 06, 2013

I have a way to alleviate wealth inequality.  Give starkers money... lots of it.

Also accepted, winning lottery ticket numbers for the next draw... as are Powerball numbers, stocks and shares, investment portfolios and gov't bonds.

I will also take loose change, bad cheques, anything.... give me some money... give me some money.....

I'll even take downtown real estate, uptown girls.... used luxury cars with low mileage and good rubber.

And for those with all their capital tied up in business, partnerships in manufacturing, pharmaceuticals, farming, movie and music studios are perfectly acceptable substitutes for money... just put it in writing and state my 60/40 share for the record.

Oh yeah, and I'll have a secretary with a good head for figures [as well as having one] to help keep an eye on all this wealth, plus a chauffeur and a butler, a maid and a gardener.... oo...oo...oo...oo, and a bodyguard.

See, I'm not greedy!  I'll distribute my wealth by employing people to cook, clean, drive me around and wipe my bum.

on Apr 06, 2013

psychoak
This is true.  However the premise has a rotten foundation.  When has such ever occurred for more than a few years at a time?  In the entire history of mankind, do we have a single solitary example of a long running, efficient government policy at anything resembling the scale of the Federal government?  I don't believe humanity is capable of it.

 

I'm inclined to agree with you on this. The larger the government, historically, the more corrupt and less efficient it has gotten. At the same time, we forced to work with large governments. They never give up power, unless something very unpleasant happens to a great many people, such as a successful invasion. Which means we have to deal with large governments--or sit back, and let whatever happen, happen. I don't suggest hope. (Much less Mr. Hopey-Changey.) I do think there is still the possibility through persistence of making some changes on the level of local or even state government.With a lot of effort, and with no expectation of anything significant in the short run.

 

With half the revenue we take in now, we could fully fund a stronger military, S.S. and Medicare programs that scaled with lifespans like they should have to begin with, all the interstate roadwork we can come up with, and a massive amount of oversight well in excess of anything truly necessary.

 

The bloat at the top is terrible, but I think we need to consider the largest areas of funding, the military and surveillance apparatus, above all. Both could be reduced dramatically and rendered a lot stronger and more responsive. Would you agree?

The Federal government, in return for a few percent of their budgets, puts idiotic requirements on construction projects, fire and police departments, the education sector, the list goes on.  Because of Uncle, we have fire fighters that are completely incapable of doing the job, as well as completely incompetent otherwise...

 

Let me ask you, yes or no: would you completely deregulate the nuclear fuel industry? If you wouldn't, what industries would you agree need to be regulated, and to what extent?

 

This is hilarious enough I just had to pull it out by itself...

 

It gets better. I was discussing the cost of federal regulations, and you were discussing the bureaucracy of it. The fact that regulatory agencies are still handing out all that paperwork while their layoffs lead to obviously mediocre result is one you apparently agree with, because you wrote: "The typical plane groundings are done by the Airlines themselves, actual maintenance checks by the FAA are extremely rare.  Other inspection agencies are much the same." True; and the agencies have become more inept, because agency directors have been out-sourced to political cronies. Baby, bathwater. Streamlining regulatory agencies, fully funding those that are needed, putting in place good people, firing those that aren't: this is what should be done. What we have now is mendacious kleptocracy, but self-regulation has never worked in the slightest.

 

You mention nuclear power plants, yet Three Mile Island, the only meltdown of a reactor not being run by the Federal government, happened under strict regulation.  The several other nuclear meltdowns that have happened in this country were all caused by government operated reactors, three of them by the same group and covered for by the Department of Energy.

 

Even on the face of it that doesn't make sense, because you're in effect arguing that since many nuclear plant accidents have not occurred, therefore those plants need not have been regulated. We don't get rid of the police if crime goes down, because we know crime will go up if we remove them. And strict regulation doesn't mean accidents will never occur, if that regulation is handled competently; it means accidents will be far less likely to occur, and that those due to negligence--as in the case of the Davis-Besse nuclear power station--will be followed by prosecution and penalties that make a chance of recurrence is slim.

 

Consumption of wealth does not create wealth.

 

It's about moving wealth. If the government hires people, they have more money, not less, because they're no longer living on their relatives, or on the government dole, while sitting around, or looking for work they haven't found. If they work, they get paid, and that money is used to buy things--which means more replacement inventory is needed, and the transfer of that inventory, as well. If enough people are hired by the government in an area, local stores find it sometimes necessary to hire more people to provide services as a result. To argue they are jobs without wealth is counterintuitive, because wealth is moving through the economy. If it doesn't stagnate, there is benefit. I get employed, so I drive to work and buy gas; I have more wear on my car, so I get it repaired; I buy more luxury goods, I buy clothes for my kids (or grandkids, or grand nieces and nephews) where they would have had to make do before, I send them to the doctor more often if they come down with something, etc. As I mentioned earlier, there's plenty of evidence for the government as a powerhouse to tazer a sluggish economy into greater action.

 

I'm just waiting for society to collapse, then I can sit on the porch and shoot looters.  I bother with argument because it amuses me, I suffer no delusions.  The sheeple will continue driving civilization off the cliff, completely oblivious to how utterly screwed they are.

 

We share a somewhat similar view of society. I think people are wonderful, taken individually, filled with experiences, emotions, ideas, goals, tragedies, and the ability to go beyond them. Just like you, and me. They are also capable of enormous denial of the obvious, and a willingness to close their minds to make believe that everything will be perfectly marvelous while all around them the world is collapsing. We are the best thing and the worst thing that ever happened, and we will succeed in killing ourselves off or ending once again in caves to prove the latter. -Hopefully not soon; but I do not doubt this will happen. In the meantime, empires will rise, and fall.

 

As I see zero chance of either party passing even the most obvious and necessary change regarding life expectancy, I'll continue to look forwards to the modern day fall of Rome here in the next 10 to 15 years.  We could put it off for longer if we get serious about resource development, but I'm not that optimistic.

 

Optimism is for children, poets, and mad folk. We are playing with ideas, since the people who rule us have bigger games to play in which we have no role.

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