Supply-Side Weirdness From Greg Mankiw
David Leonhardt and Geraldine Fabrikant write:
In the three decades after World War II, when the incomes of the rich grew more slowly than those of the middle class, the top marginal rate ranged from 70 to 91 percent. Mr. Piketty, one of the economists who analyzed the I.R.S. data, argues that these high rates did not affect merely post-tax income. They also helped hold down the pretax incomes of the wealthy, he says, by giving them less incentive to make many millions of dollars.
Greg Mankiw links to this approvingly under the banner “We Are All Supply-Siders Now.” And it’s true that this is Piketty pointing to a “supply side” effect. On the other hand, the distinctive contention of the supply-siders is that lower taxes on the rich are the key to economic growth. In reality, economic growth was much stronger in the 30 postwar years than in the past 30 years of the low-tax era.
125 Responses to “Supply-Side Weirdness From Greg Mankiw”
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August 22nd, 2009 at 8:38 am
But if the rich don’t have an incentive to earn even more millions of dollars, how is economic growth even possible?
Are you somehow trying to insinuate that the rich are not the primary engine of economic productivity?
August 22nd, 2009 at 8:38 am
Shut up, SHUT UP, SHUUUUUT UUUUUUUP!!!!!!!!!
August 22nd, 2009 at 8:43 am
Looking at several Fortune 50 companies, the take I get is that profits are increasingly being taken out of the company (in the form of executive comp and dividends) rather than being re-invested into R&D and labor force training. But of course this is entirely anecdotal. Are there any rigorous studies on how the tax code changes have impacted business spending and growth?
August 22nd, 2009 at 8:53 am
In reality, economic growth was much stronger in the 30 postwar years than in the past 30 years of the low-tax era.
Is that first figure corrected for (a) masssive pent-up consumer demand (both domestic and foreign) and (b) lack of serious foreign competitors for most manufactured goods? Claims that the economic policies of the postwar years were superior to other periods in American history are meaningless without adjusting for the fact that the underlying economic conditions were freakishly out of line with all historical norms.
August 22nd, 2009 at 9:00 am
Request – I’d like to see some comparison of the # of people employed by the US government over time as a % of the workforce. It’s fun to debate GDP growth but what people DO for work has changed dramatically over time and I think it’s worth acknowledging that along side the raw numbers.
Pols of both parties sold globalization, hi-tech and a service economy as a substitute for manufacturing and agriculture. So what are people supposed to DO now? It’s a big ocean of GDP but people are drowning in it.
August 22nd, 2009 at 9:04 am
Government supplies stuff also, a problem that supply siders have never grappled with. So they have a very difficult time being taken seriously when they only do studies on 65% of the economy, the private sector. It is like adding a 35% uncertainty in all their economics from the get go.
August 22nd, 2009 at 9:05 am
Of course, they are the engines of growth, they’re rich and therefor more productive. EMF proves this.
August 22nd, 2009 at 9:25 am
Wasn’t the entire dynamic of the world economy different as relates to your two thirty year time frames? In the first thirty the USA dominated the stage, our citizenry profiting and prospering off the backs of cheap foreign labor and products. Additionally there was the availability of cheap oil and less onerous and costly enviromental & safety regulations. In the last thirty years energy costs have risen steeply, other nations have become more competetive with U.S. firms in their product and service offerings, all the while doing this largely free of the aforementioned safety and enviromental regulations our corporations must (properly so) contend with. Add to that the ruinous U.S. expenditures on defense related matters and the reason for your dichotomy seem apparent. Far more than individual tax rates affect control over economic growth.
August 22nd, 2009 at 9:28 am
That argument is complete gibberish, and yet someone trots it out in every comment thread on this subject. Countries are not companies. When the US dominated world manufacturing, it means that other countries had nothing to trade. We were trading cars for wheat. This is supposed to be great for us? US economic growth in the early post-war era was big, despite the fact that we had no one to trade with, not because of it.
August 22nd, 2009 at 9:43 am
@9: a national economy grows fast when there is little or no foreign competition – that is gibberish to you? Are you stupid?
August 22nd, 2009 at 9:49 am
Also NOT discussed is how the Superrich have used the capital given them by low tax rates to invest IN OUR FOREIGN COMPETITORS over the past 3 decades.
Because the Superrich do not CARE if America is fucked so long as THEY get another 4 percent in profit.
Look at George W Bush’s patron, Michael Dell of Austin. His employees made him a BILLIONAIRE at a very young age. So he repaid them by throwing thousands of them out on the street like a piece of used toilet paper — while investing in production in CHINA and hiring over 10,000 FOREIGN employees.
See http://74.6.239.67/search/cache?ei=UTF-8&p=%22Enter+the+Dragon%3A+China%27s+Computer%22&fr=yfp-t-152&u=www.crito.uci.edu/GIT/publications/pdf/EnterTheDragon.pdf&w=%22enter+the+dragon+china%27s+computer%22&d=TGK4phlMTNRQ&icp=1&.intl=us
or Google “Enter the Dragon: China’s Computer Industry” for how US companies transferred US Taxpayer-developed computer technology to China.
Of course, US economists don’t discuss this economic treason — because US economists are craven whores who know where their grant checks come from.
August 22nd, 2009 at 9:52 am
And IBM, Hewlett Packard and Compaq have, in my opinion, been worse than Dell when it came to building up China’s computer industry.
August 22nd, 2009 at 10:05 am
Remember that $2 Trillion Bush gave the Superrich ? To “create American jobs”? Look at WHERE it went.
Can you say “Foreign Direct Investment”?
Well, some of it probably went into those 59,000 Swiss bank accounts.
August 22nd, 2009 at 10:07 am
Too bad we didn’t have a Democratic President in 1992-2000 to prevent the sellout of the American people after the Soviet Union collapsed and the way to EMPIRE was opened.
Oh, wait..
August 22nd, 2009 at 10:08 am
“So he repaid them by throwing thousands of them out on the street like a piece of used toilet paper — while investing in production in CHINA and hiring over 10,000 FOREIGN employees.”
We don’t have to send the factories abroad for cheap labor. We can just let the cheap labor come across the borders illegally – another favorite project of our GOPocratic elites.
August 22nd, 2009 at 10:13 am
Fortunately, CompUSA has lots of those Lenovo computers for sale. So we can still buy American.
http://www.compusa.com/applications/Category/category_tlc.asp?CatId=6&name=Desktop-PCs&cm_sp=LN-_-CO-_-NA
August 22nd, 2009 at 10:24 am
Seriously, I don’t know when it’s going to become fashionable to notice the plain fact that our overdependence on capital markets means our economy SUCKS at the efficient allocation of capital.
Wall Street pumped trillions of dollars into mortgages for people who couldn’t afford to pay them back. In their view, the best use of capital from 2000-2007 was to build a house of cards on bad mortgages. That’s insane, and a clear sign of a capital market that’s badly corrupted and that’s fundamentally run out of sane things to invest in.
At the same time Wall Street was financing “liar loans,” a bridge fell down in Minneapolis as trillions of dollars’ worth of aging public works continued to dangerously decay, people were dying because they couldn’t get healthcare, our electrical infrastructure was so cruddy that the entire Northeast blacked out for the better part of a week, alternative energy technology remained at basically 1978 levels, millions of Americans were locked out of 21st Century jobs because their primary schooling was deplorable or their secondary schooling unaffordable…and that’s off the top of my head.
Any of these investments are a far better use of our nation’s capital than Wall Street’s current schemes. But we can’t invest in things like this anymore because we’ve decided that rich people should have all the money because they know best how to invest it for America’s future growth.
It wasn’t true in 1929, and it’s not true now. Private capital markets are great, but they won’t invest in certain things that are critical to the nation’s sustained growth. The markets are not rational, they are GREEDY. Which is fine when the question is about investing in something with a clearly monetizable return. But educating other people’s kids? Building roads that anyone can travel on? Making sure the energy grid doesn’t collapse? Sorry, the private market has never done this and will never do this. The upfront costs are too high, and the returns wind up in too many people’s pockets.
Low taxes are the fundamental problem with our economy. We don’t have enough money to invest in common goods that are critical to our sustained growth. We can’t build a sustainable nation if the only things we’re willing to invest in are projects with a privatizable return. That’s fundamentally how South American economies work. And that’s why their economies suck, and why they swing so wildly from socialism to dictatorship. We need to get back on the middle road in the United States.
August 22nd, 2009 at 10:24 am
I know, I know. We can give China a few of our High Tech Lenovo computers in exchange for tons of their rice grown by low-tech peasant farmers. Isn’t that how Globalization works?
http://www.commondreams.org/news2006/1128-04.htm
August 22nd, 2009 at 10:27 am
@9, @10 – You’re both right. The economy grew fast because we were selling to the rest of the world, but the rest of the world had nothing to pay for those goods. The government stepped in to close the gap with the Marshall Plan. So the postwar period actually shows the key to high growth: Tax the producers, and give it to the consumers.
I’m not sure how serious I am with the above…
August 22nd, 2009 at 10:27 am
You’re a stupid person, abb1. Don’t expect to understand.
August 22nd, 2009 at 10:28 am
Right on, anon.
August 22nd, 2009 at 10:32 am
I think it was Galbraith who properly expressed the central tenet of supply-side economics. It was something like the main problem with the economy is that poor have too much money and the rich don’t have enough. (One day we will have the means to properly source half-remembered quotes in our homes. Until then I hope this is sufficient.)
August 22nd, 2009 at 10:37 am
Rather a telling little slip by Mankiw. He looks at the situation of the very wealthiest, and mistakes it for the economy as a whole.
Oddly enough, you won’t find many examples of Mankiw, or any conservative, really, making the same mistake by looking at the situation of the poor.
August 22nd, 2009 at 10:44 am
Indeed. I often see libertarians – anti-war, pro-capitalist, self-proclaimed-economic-expert libertarians – declaring that our economy got a huge boost after World War Two from the fact that the most productive facilities in our most important trading partners had been bombed into rubble.
August 22nd, 2009 at 10:48 am
Per 4 and 8, it’s very true that our post-WWII situation was unique and will probably never occur again. SImilarly, no one knows what affects economic growth anyway (Matt has pointed out in here that it seems to occur regardless of changes in policy deicisions). Certainly no one really knows what consequences policies have in the post-industrial world–it’s too new. And we may be into another post-post-industrial world by the time economic analysis catches up to the post-industrial world.
That’s a long way of saying that economic analysis is probably crap, no matter who is spewing it.
August 22nd, 2009 at 11:04 am
Lord, who are these people?
OK, um, wrong. What was important was that the most productive facilities in our most important trading competitors had been bombed into rubble.
After WWII, from who would anyone be able to buy steel? Aluminum? Aircraft? Automobiles? Appliances? Food? You name it. The whole world had to come to us. It wasn’t that some rich companies were poorer, it was that we were the only seller in a world full of buyers. Regardless of what else was happening, it was widly fortunate, unique, unprecedented, and will almost certainly never be duplicated.
It was not dissimilar to Britain’s 19th century domination of world trade by virtue of its dominantion of trade routes (Middle East and Suez, Dardanelles, Gibraltar, South Africa, India, Malaysia, Hong Kong, and so on). They didn’t make everything, but for a century or so nothing moved anywhere else in the world without them getting a cut.
August 22nd, 2009 at 11:07 am
@24: I often see libertarians…
One doesn’t need to be a libertarian to point out the obvious.
August 22nd, 2009 at 11:22 am
You’re not getting it. Countries are not companies. We were in a world of poor buyers, because they didn’t have any money, because they couldn’t make anything because their factories had been blown up. Sure, they had to come to us so to buy stuff, but they didn’t have anything to trade for it. So we had to sell all of those manufacturing goods for much cheaper than we would in a more ordinary environment.
August 22nd, 2009 at 11:29 am
What Daddy Love said @25. The point of critiquing Mankiw and supply siders is not necessarily to make a positive claim about what we know about economics.
Once it is established that nobobdy really knows very well the aswer to a lot of the macro questions, capitalist economists lose their unearned prestige and space opens up for a more contentious, democratic debate in this country.
August 22nd, 2009 at 11:31 am
They sell their IOUs, Walt. They become your debtors and your client states; you get to control their governments, like, for example, the Eisenhower administration did during the 1956 Suez Crisis.
August 22nd, 2009 at 11:36 am
So we had to sell all of those manufacturing goods for much cheaper than we would in a more ordinary environment.
It’s the opposite. It’s when there is competition you have to sell cheaper. When you’re the only one producing, say, aircrafts – then you can set any price you want.
August 22nd, 2009 at 11:40 am
You can? The income level of your customers has actually no influence on the price? Interesting, if true.
August 22nd, 2009 at 11:46 am
by giving them less incentive to REALIZE many millions of dollars
How stupid can one person get?
August 22nd, 2009 at 11:50 am
I am just a lowly engineer , so I tend to look at empirical data rather than lofty, esoteric economic theories revealed only to the cognoscenti.
Data I have for 1960 is that US exports were only $26 bil, US imports were only $22.4 Bil and US GDP was $526.4.
So I don’t see where post-WWII foreign trade mattered all that much to the enormous growth in the US economy. One exception might be cheap prices on raw materials like petroleum.
But the point is that we have the data — a detailed review would show the sources of growth. I suspect massive defense spending to fight the evil Commies might have had some effect, especially in Southern rural shitholes still struggling to recover from the destruction of the Civil War.
August 22nd, 2009 at 11:54 am
The boost that WWII gave to the US economy was that it got generations of Southern Democratic Members of COngress — with high seniority — hooked on the drug of federal defense contracts.
Hence the need for jihad against the godless Commies that had just sacrificed MILLIONS of their soldiers to protecting us from the Nazis.
August 22nd, 2009 at 12:01 pm
Well, if in 1960 the US has a healthy trade surplus, and in 2006 the US has the trade deficit of over $800 billion – that’s a lot of stuff not being produced in the US in 2006.
August 22nd, 2009 at 12:03 pm
Walt,
No, it’s still you not “getting it.” Countries are not companies, but more importantly they are not people. If you run out of money, you can buy on credit up to your limits, then you ahve to liquidate. Or you can get a second job, etc. to make more money.
Countries are different. For one thing, they print their own money. For another, they can do things like lease the use of their land or airspace, enter into treaties for the equivalent of monetary consideration, etc. And tax their people, or businesses that operate in their country. Simply put, they don’t face our limitations. And as abb1 pointed out, the US government stepped in as a credit source for them.
Yes, one could say that in a world less destroyed than the post-WWII world, we might have made more from richer nations. I weighed ading that to my post, but I didn’t and here’s why. Those rich(er) nations would also be competing with us. Ask you local CEO if he’d rather be in a very competitive environment with rich buyers or a monolopolist with poorer ones. Competition lowers margins. Remember, everyone was pretty sure that the world economy would grow again. Monopoly looked pretty good.
Plus our capitalists had the US military to force other markets to open, suppress or destroy competitors or nationalist movements, and so on again. Heck, we’re still doing that.
August 22nd, 2009 at 12:06 pm
what seems to be missing from this “analysis” is the fact that these numbers are based on “pre-tax” income, suggesting that their basis is Federal income tax numbers. And if that is true, certainly people in high tax brackets used all available tax shelters to avoid claiming money as income. This is nether good nor bad, because a tax shelter is the way government encourages investment into
specific “worthwhile” areas. If we could trust the government to use shelters for the general public’s health/wealth we would all love to see many such tax shelters. These days, most of us think of such shelters as benefitting not the general public, but the politicans special interest donators.
However, either way, when taxes are high, people will find ways to report as little income as possible. That doesn’t mean they don’t have as much income, only that it is worth their while to shelter as much of it as possible.
August 22nd, 2009 at 12:07 pm
Joe: their facilities got destroyed. Ours didn’t. The boost wasn’t the war per se, but our resulting industrial position — and being the new empire didn’t hurt. That gave the US decades of advantage.
The only problem with pro-capitalist “libertarians” bringing that up is they don’t think through the implications of it. If they did, they’d realize the contradiction in claiming to oppose government while co-signing an economic order that only exists because of violence, upon which they’d either switch to being anti-capitalist libertarians or drop libertarianism entirely.
August 22nd, 2009 at 12:12 pm
With their economies in tatters, just how much steel, aluminum, aircraft, automobiles, and appliances do you think they were able to buy? Let me give you a hint: we needed to implement the Marshall Plan to avoid starvation there.
August 22nd, 2009 at 12:13 pm
As a matter of fact, it was very different, in that the consumer economies at the other end of those trade routes were growing and producing a great deal of demand.
August 22nd, 2009 at 12:14 pm
[...] Matthew Yglesias [...]
August 22nd, 2009 at 12:22 pm
To make this an accurate comparison, make sure to point out that “poor” in this case means “without any purchasing power, and the CEO would have to lend them the money they’d use to buy his goods.”
b-psycho,
I don’t dispute that we were in a better position to meet the non-existent demand for consumer goods in those countries than were those countries themselves.
August 22nd, 2009 at 12:29 pm
The Marshall Plan (as well as the NATO) was a way to stop them from electing communists. Any effect on the US economy was mostly coincidental.
August 22nd, 2009 at 12:32 pm
It’s not even so much about selling US goods abroad. It’s about selling US-produced goods in the US itself. Guess where the shirt you’re wearing now had been produced, Einstein.
August 22nd, 2009 at 12:49 pm
“the non-existent demand for consumer goods in those countries”
Joe, you really have no idea what you’re talking about. Western Europe’s economies grew incredibly fast between 1947-1973, which meant that over time there was a sharp boom in demand for consumer goods. It’s just a fantasy to think that in the 1950s or early 1960s, the French were not demanding consumer goods. And the biggest producers of those goods were American companies.
August 22nd, 2009 at 12:51 pm
I have been saying for some time that high marginal rates force corporate executives and financiers to earn their money by long-term productive enterprise, rather than making the quick buck by some kind of speculation. If net incomes in the financial industries were not so high, those industries probably would not not attract so many smart people, just as supply-siders claim – and maybe those people would be forced to use their intelligence in productive industries instead of swindling others.
August 22nd, 2009 at 1:02 pm
I didn’t by my shirt in the post-WW2 period, champ. Nor did Pakistan and Indonesia receive any Marshall Plan money.
The ignorance on this thread is astounding.
That’s because we spent billions of dollars on the Marshall Plan! How can you accuse me of not knowing what I’m talking about, and not know this?
August 22nd, 2009 at 1:06 pm
The US was a huge net exporter to continental western Europe before WW2.
You people are arguing that massive unemployment, the idling of factories, and sharp plummets in the GDP of your customers helps boost exports.
August 22nd, 2009 at 1:12 pm
I didn’t buy my shirt in the post-WW2 period, champ.
Exactly, Einstein. If you did, it would’ve been produced in the US.
August 22nd, 2009 at 1:18 pm
And if I’d bought it BEFORE World War 2, it also would have been produced in the US.
You’re making no sense.
The migration of the textile industry from the US to Pakistan and Indonesia doesn’t have even the slightest connection to the state of western Europe’s economy in the 40s and 50s.
August 22nd, 2009 at 1:21 pm
For one thing, it happened in the 80s and 90s.
For another thing, neither of those countries are European.
For a third thing, virtually none of the textile industry that migrated out of the United States went to western Europe.
You’re just reaching into a box of protectionist talking points and throwing out whatever you find there.
August 22nd, 2009 at 1:25 pm
Foreign trade has never been a big piece of the US economy. In the period 1950 to 1970 exports and imports were both about 5% of GDP. They are double that now.
http://fraser.stlouisfed.org/publications/erp/page/8156/download/47129/8156_ERP.pdf
August 22nd, 2009 at 1:32 pm
ABB1,
While you’re right about the current economy’s too great a dependence on imports, you just won’t admit how relatively little trade was the source of our economic well-being after the war, will you? Facts have a distinctly liberal bias, so who cares about them?
The “healthy trade surplus” in 1960 you tout was $3.4 billion dollars! Sure, that’s better than a deficit, but it’s only 0.64% of the economy at that time. Two-thirds of one percent. Total exports were only 5%, a bit more than half the percentage they are today (11%).
America is rich because we have a higher percentage of productive arable land than any other large country, we have oceans on three sides making trade easy and convenient, we are a pragmatic and inventive group of people (at least, we used to be), and we were the only technologically advanced country in the late 19th century that had its own petroleum resources. No other country had that bountiful combination of attributes. As a result, at the START of World War II we manufactured about 40% of everything produced in the world. Why Hitler and Tojo thought they could beat us is beyond me.
August 22nd, 2009 at 1:32 pm
A bit less than half the percentage they are now.
August 22nd, 2009 at 1:35 pm
A few points.
1. The U.S was already the leading industrial power, long before WWII; you could see this as early as WWI, when the U.S industrial machine bankrolled the Allies. So it’s not like the U.S had been previously suffering from terrible trade competition.
2. The disincentive argument has never made sense, and most empirical studies have shown that rich people like making money, beyond just the material benefits; it becomes a status symbol, a way of “keeping score.” Thus, if you up the marginal rate on top incomes, while you do get some tax evasion (although that certainly hasn’t changed as rates have declined), but you also get rich people who work more and harder to make even more money.
3. Anon at 17 is quite right; if you get too much money flowing into investment and not enough into consumption, the rate of profit declines, and the number of profitable investments relative to demand for investment vehicles declines. Hence, people come up with new, riskier vehicles for people to invest in and the economy heads towards a crash – it’s no different if we’re talking about tulips, radio stocks, or asset-backed securities and credit default swaps. Redistribution makes the economy more stable, by boosting consumption relative to investment.
August 22nd, 2009 at 1:42 pm
I should have excluded France from the statement about productive arable land. Nearly all of France is farmable and is farmed. It’s why they have such a resilient economy; even in global downturns like the Great Depression and the current problems they are relatively little scathed.
Now, I do think it makes them a little complacent…..
August 22nd, 2009 at 1:58 pm
Now I really don’t know wtf, but it seems plausable that:
1) lack of international demand for US goods
was balanced/off set by
2) lack of competition for supplying what goods were in demand.
This points to the (serendipitous?) genius of the Marshall plan, which would ameliorate 1. and so take advantage of 2.
A coupla points haven’t been adressed. To what extent was the post-war US economy’s growth due to:
-productive investment into stock in expectation of growing international demand (I suspect very little since domestic demand and its expected increase would clearly dwarf this number, but still, low demand in W. Europe is not analogous w/ low demand in sub-Saharan Africa.)?
-an inability for US owners to threaten to move production oversees, depress industrial-sector wages, and dampen demand-led growth?
The simplest explanation for the golden-age of US growth is historical: as of the mid-20’s, new technologies and a vast urbanization/education of the US workforce provided lots of opportunity for amazing gains in productivity and wealth creation. Opportunities for large and broad-based growth were subdued by speculative mis-allocation of capital in the late 20’s, then ruined by the ensuing Great Depression, then forced to further wait during the War, during which time pent up demand further primed the pump. Productivity and wealth then exploded due, not only to deferred-investments and demand, but to post-War stimulative industrial policy.
The question then becomes not why for the golden age, but why did it stop? By the 70’s 1 & 2 were still balancing factors, productivity gains were still to be realized? The causes of the 40-s through 60’s boom can not be a separate question of the causes of the 70’s to present era of slowing growth and stagnating incomes (for the majority).
August 22nd, 2009 at 2:03 pm
StevenAtwell @ 56:
I guess what I wanna know is, can we explain the 70-s to present era of decreased growth and stagnating incomes as, to a relevant degree, stemming from a suboptimal spread of investment and consumption? This is where my ideology wants to go, but I don’t know if there’s a case for it.
August 22nd, 2009 at 2:04 pm
Anandakos, I don’t quite understand what the disagreement is here.
Are you arguing (like a couple of idiots above) that the devastation in Europe (and elsewhere) negatively affected the post-war US economy? Like, in the 1950s, if there existed full-blown equivalents of today’s Airbus, VW, BMW, Toyota, Honda, etc. – then the US economy would’ve been growing faster?
You can’t be saying this, can you? Certainly not, it would be too ridiculous. So, then, what are you saying? What exactly do your liberally biased facts tell you?
August 22nd, 2009 at 2:18 pm
The big difference that started coming about in the 1980s was the shift in relative returns from labor to capital, i.e. money started earning a lot more than labor.
If you wanted to personify the situation, you could pick Jack Welsh of GE (neutron Jack) who decided that GE couldn’t make enough profit from washing machines and such and so closed that business and invested in financial services instead.
Or Henry Kravis (Gordon Gekko), who bought manufacturing businesses with borrowed money (public money BTW) and then bled the assets for cash.
Or Robert Rubin (Andrew Mellon), who forced a strong dollar policy and thus put US manufacturing at a disadvantage vis a vis foreign firms.
The result has been a doubling in the size of the financial sector – which produces nothing of redeeming social value.
August 22nd, 2009 at 2:41 pm
Don,
Another clanger, it was Michael Dell’s customers, who bought his product, not his employees that made him rich. I have yet to work in civil industry where the employees pay the owners. Certainly, my current employer does not require me to fork over to the Boss.
About consumption being a stabilizer–BULLSHIT. An economy must invest in order to produce goods and services. Consumption is the reward for the investment in production. Americans have been over-spending and under-producing, using debt to cover the difference. The new budget estimates of an additional $2 Trillion in debt over the next 10 years is NOT good news for anyone.
Somehow, I cannot see Chinese laborers saving 30%-40% of their incomes, in an economy with poor health care and no pensions, putting in the banks so that it can be loaned to the US Treasury at 3% returns so Americans can enjoy free health care and old age pensions. This it NOT sustainable. I have been to China and seen their way of life, no poverty level American would tolerate what their workers live like.
August 22nd, 2009 at 2:41 pm
abb1,
You can’t be this dense, you are clearly being deliberately obtuse.
What the “liberal facts” tell us is what people have told you repeatedly in this thread. Trade in total was 5% of our GDP in 1960, it was a trivial factor in the post war economic growth.
August 22nd, 2009 at 2:54 pm
b9n10nt:
I’m not an economist, so I’m not sure how the evidence fits together, but if you look at wealth and income since 1973, the minimum wage since ‘73, investment/profit as a share of gdp compared to wages, I think the parts are there for a case of “suboptimal spread of investment and consumption.”
August 22nd, 2009 at 2:57 pm
I have never seen the post-WWII industrial situation posed as the main reason the US economy did so well in that period; as others have pointed out, increased competition benefits everyone, so decreased competition should leave everyone worse off compared to the alternative. The part of the economy that benefited from the lack of industrial production in the rest of the world was American low-skill labor, who could unionize in great numbers with no fear of being undercut by foreign workers and so could demand wages that far exceeded their worth. In turn, the more equal distribution of wealth helped boost consumption among the affected workers. So if you leave the rich, all non-Americans, women shut out of the workplace, minorities shut out of the unions, and economic efficiency out of your analysis, you might conclude that the period was good economic times overall. In other words, if you are only concerned with lower and middle class white men, the ’50s & ’60s were great. Otherwise, we are better off today.
August 22nd, 2009 at 3:22 pm
increased competition benefits everyone
I don’t think this is true in general, but even if it were – it’s not as if only foreign companies could provide competition; there can be plenty of it in the domestic market as well. And, of course, too much competition is not good for anyone.
August 22nd, 2009 at 3:30 pm
You’re right. I should have written “increased production,” with some qualifier for distribution of production. Competition is a natural outgrowth of that, but it isn’t the important part.
August 22nd, 2009 at 3:30 pm
Ultimately, economic growth is bounded by technological improvement. It is therefore wrong to think of growth as something that should stay stable under ideal conditions. It seems perfectly reasonable that we were still benefiting from the industrial revolution in the 30 post-war years, hence getting industrial-revolution style growth the way China is getting now. We got another quick boost by the arrival of the information age, but even that pales in comparison to the industrial evolution. There is absolutely no reason to expect that growth will continue to magically compound in the absence of actual technologocial innovation. And this is true regardless of tax or other economic policy.
August 22nd, 2009 at 3:33 pm
Re Mike K at 62: “Don,
Another clanger, it was Michael Dell’s customers, who bought his product, not his employees that made him rich.”
————
That, of course, is utter bullshit.
It was not Michael Dell who built Dell Computers — it was the aggregate hard work of thousand of Dell employees over decades, laboring under the con game that they were building something called a “career”.
Mike K tells us that he spent 29 years in the US Air Force. I find it hilarious that someone who had taxpayer-provided healthcare for 3 decades yells so strongly against “socialist healthcare” and someone who sucked on the federal teat for 3 decades is such a strong proponent of working for the “free market”.
Of course, Air FOrce officers who spend $300 Million of our tax dollars for a single jet fighter are best qualified to lecture us on why we should “compete” in the business environment.
In REALITY, there is not that much difference between how the US Air Force is organized and any other communist organization. Including having commissars who are full of shit.
August 22nd, 2009 at 3:37 pm
Clarification: I should have said “FAT , WELL-FED commissars who are full of shit”.
August 22nd, 2009 at 3:38 pm
Trade in total was 5% of our GDP in 1960, it was a trivial factor in the post war economic growth.
Right. Or maybe they counted a bunch of stuff produced and shipped abroad as foreign aid or military acquisitions, or something.
August 22nd, 2009 at 3:40 pm
What I want to know, is what happened to the family wage in the early sixties? And why has rent gone up more than wages? Seems to me that Americans have increased our working hours, and more workers have been working for wages and getting less and less in return over time, since the sixties, when money was relatively cheap.
Millionaires used to be remarkable. Now it’s billionaires. Wages haven’t gone up exponentially. Working people aspired to be middle class, not Donald Trump.
I remember collecting coke bottles to help pay the rent when I was a kid. Seems wages have been stagnant and rent has gone up considerably. In all these catastrophic talks about affordable housing, who talks about rent being 25% of your income anymore? The costs of college have gone through the roof.
Somebody sucked up the monetary value of our increased productivity, and I suspect it was the rich.
August 22nd, 2009 at 4:02 pm
Nope, the poor. The short-term effect of opening up to increased foreign trade, additional immigration, and lower levels of economic discrimination against women and minorities have lifted billions out of poverty. Wages for the wealthier should stagnate as long as there is an underclass, unless steps are taken to keep them from participating in the economy. The entrance of women into the workplace was in some ways worse, since there was no commensurate increase in consumption, but as long as the poor in other countries use the new wealth they are generating, the overall short-term effects can still be relatively good even for those who losing now (or were unfairly benefiting under the previous arrangement, depending on your outlook).
August 22nd, 2009 at 4:07 pm
Women started entering the workforce writ large when the family wage system broke down. Feminism was a response to the shitty way women were being treated in the workplace.
August 22nd, 2009 at 4:16 pm
I think you could argue that they affected each other. Even if a fall in real male wages was the main factor in the influx in women, the influx in women would still have a stifling impact on real male wages. New workplace equality regulations coupled with a small recession and a cultural bias against stay-at-home dads would have been more than enough to set off a feedback effect leading to the new equilibrium of the two-income household.
August 22nd, 2009 at 4:27 pm
Er.. 74 and 75 overlook the fact that most young mothers would much PREFER to stay home and raise their babies. And Fuck the Feminists.
It is because of our economy that they have to push away crying toddlers every morning at childcare and go off to work — something their mothers didn’t have to face in the 1950s.
The Rich got richer from the influx of lower wage workers/increased labor supply and the toddlers without a political voice got fucked.
But fuck the kids, eh? THEY don’t write campaign checks and the little fuckers puke on you when your try to kiss them for the news photographers.
August 22nd, 2009 at 4:33 pm
Just like today — we can have YEARS of political debate re gay marriage, hetero marriage, yada yada and NO ONE ever fucking asks what arrangement society should make to ensure young kids are reared and cared for.
Even though that is the ONLY reason the government should ever poke its nose into the marriage institution.
Who gives a fuck what childless gay couples or childless hetero couples do — it is gay couples and hetero couples raising children who need laws helping them out and ensuring everyone meets his responsibilities.
August 22nd, 2009 at 5:06 pm
Williams
i also have about 12 years in civil industry, including being an ALPA rep at Eastern Airlines. So, I know about business. Dell Company paid those workers a wage both parties voluntarily agreed to, no one had a gun at anyone’s head. Dell made a economic profit by producing something customers wanted and would voluntarily pay for. The employees did not make Michael Dell or his stockholders rich, just as you don’t make your company’s stockholders rich. They pay you for your labor and talent as a cost of doing business. Labor is on the P&L sheet, not on the Balance Sheet.
I quite agree that the AF, and the entire US government, is a socialist system. As you are so ill-informed on how it works, NO office in any service “buys” anything for his/her service. CONGRESS does, you idiot. In fact, DoD did not want to buy Nancy Pelosi her own Boeing jet, Congress did and would have if not for the hew and cry in the WSJ. Congress buys loads of pork the services do not want. For example, we thought basing C-5s at Martinsburg, WVA was a hideous waste, but Bobby Byrd didn’t think twice wasting $250 million in mil construction. The AF Reserve doesn’t want to to do hurricane hunting, but that fair weather Republican Trent Lott did, so a useless mission continues. Satellites could do 99% of it. That’s why it is in the AFR.
Look at BRACs. The Generals wanted to close slews more bases, but Congress won’t let them. Look at the awful Post Office, Barack is right–it is a mess.
So, STFU. By the way, I have a name–”SIR” Use it.
August 22nd, 2009 at 5:22 pm
I have to agree with your assessment of the child-rearing issue being important, Don—especially from infancy to the age of three. I don’t see “fucking the feminists” as being a necessary part of that argument. Finding an arrangement that is egalitarian shouldn’t be that hard. There are many countries in which women compromise very little of the work force, and without breadwinning males, they stay at home and starve with the children.
Many European nations make it relatively easy for mothers to stay home with very young children without “fucking” the feminists, who make this discussion possible.
Fuck insecure men and the cartoon image of “feminists” they carry around in their head to better focus their fucking misogyny.
August 22nd, 2009 at 6:45 pm
Sigh. Through no fault of her own, a woman finds that a broken fan belt has left her stranded deep in the desert and doomed to die a slow death from dehydration. A ‘good Samaritan’ happens along, and offers to give her a lift back to civilization ninety miles away . . . for $200,000 and access to her favors for the next ten years, starting now in the back seat of his jeep.
According to Mike K, this transaction is 100% voluntary. No one is holding a gun to her head, and there is no coercion involved.
Uh-huh. I would suggest instead that Mike K’s opinion on these sorts of matters are of very little value.
August 22nd, 2009 at 6:46 pm
The framing and logic of this discussion is all wrong in any number of ways- First; The total number of participants in the economy has a positive effect on total productivity per capita via increased oppertunities for specialization and larger economies of scale in production – so adding foreigners or women to the workforce allows higher, not lower wages. – And this is what happened in any number of (first world) countries during the 70s and 80s. The reason the median wage has not increased in the US lately has absolutely nothing to do with trade, and a hell of a lot to do with politics.
The minimum wage : Is set by congress.
Reshaping the tax system to favor the rich: Congress.
“Right to work” laws: State Legislatures.
Ever larger factions of corporate profits going to executives: Eh.. Actually, Im not sure who to blame for this one, “incompetent/corrupt corporate boards”? But its idiocy of the highest order in any case because it reduces the return on both investment and labour.. Still politics! – If you dont belive me, look up what top french executives are paid to run titanic industrial corporations. Get value for money, invest in France!
Anyway, back to my basic point. The reason the american economy has been getting more and more unequal in the past decades is not globalization, immigration or any of the other usual bugbears. Its been getting more unequal because the rich have been waging class warfare tooth and nail, and they are winning.
August 22nd, 2009 at 6:50 pm
And they have been making being rich the primary pipe-dream of the world as they make being middle class more rare. The media is a big dream machine dominated by myths of wealth and class. Most people have no idea how unbelievably fucking rich the top percent is—they think wealth is having lots of expensive things and don’t understand the extraordinary power that comes with filthy-richness.
August 22nd, 2009 at 7:15 pm
as much as I would like to “blame” it on the rich, I truly believe what ails our economy is a lack of belief in long range value, and its permanent inferior status to short range profits. it is a problem in the way our markets were created that there is more money to be made speculating on poor business models than investing in successful ones, and an entire generation has been raised to believe that such behavior is productive and moral.
Until businesses are created and run by people seeking to create something (including but not limited to profits) and not for the purpose of fund managers looking for (ie. demanding) quick growth, we will continually see poor management of our businesses and redistribution of income to the more well off.
August 22nd, 2009 at 7:40 pm
Scent of Violets
Wake up and smell the coffee. The case of a person, of any background, stranded in danger is in NO way comparable to employees of a business enterprise. You and your comparison is full of S@@T and you know it.
BTW, Don the BS Artist, medical care for military members is part of the employment contract, just as His Messiah, the Obama is proposing it. The methods may differ the employee-employer relationship is identical.
The posters here are great examples of why Obama Care is in deep doo-doo.
August 22nd, 2009 at 7:51 pm
Sigh. No, Mike, it isn’t. You want to declare by fiat that if someone “doesn’t hold a gun to their head”, the transaction is somehow ‘voluntary’.
Er, no it’s not, not by a long shot, as my example has just proven. In fact, one of the biggest problems we have in the U.S. is that the labor markets are broken. A 27-year-old living in his parents basements and delivering pizzas part time added more value to the economy than Angelo Mozilo. But one received less than $10K a year, the other over $100 million. In no way does this suggest that accurate ‘price signaling’ is setting the correct value for labor.
August 22nd, 2009 at 8:14 pm
The 27-year old may have limited choices, but he has choices. What would you propose, government direction? Build a wall around to America and keep out immigrants and competition? Steal from the productive and give to the rest?
Considering how many people, including politicians got housing financed thru Mozillo and Countrywide Bank, he produced something. Ask the people living in houses acquired thru those loans what his bank was worth to them? I don’t the bank that held my mortgage was a thief. Is the fellow who sold you food today, a thief? NO.
Mozilo got a lot of his money paying off the likes of Chris Dodd. By working with Fannie and Freddie, I agree he got an unfair advantage. Guys like Gates and Dell put an entirely new product and added value to people’s lives, so deserve their wealth. Mozillo got preferred treatment from government and deserves little. I’ll bet the present administration will make just as many deals with corporate America as the Bush administration did. I’ll also bet every Senator and Representative are also getting their “cut’ on corporate America.
The answer–take Government power away, minimize it to its limits under the Constitutiion.
August 22nd, 2009 at 8:14 pm
You think the ruling class doesn’t fight such a common-sense vision tooth and nail? They’ve had all this money. Who has discouraged them from investing in genuinely useful and productive industry? Business schools? Maybe. But what drives those?
The last decade has been one huge ponzi scheme promising working middle class people the chance to get rich—Is that the same car he was driving yesterday? (he, he, he)—buying financial instruments from people who lied, cheated, and stole. Clever accounting, offshore accounts, front companies to better launder the money with and hide assets, tax evasion, Phds in math to model the ultimate money-grubbing schemes FOR THE SHORT TERM (though it had already been demonstrated that such mathematical models would result in a severe crash), and then holding the whole country for ransom.
It’s much more than a failure to be sensible enough—it’s highway robbery and looting the treasury.
August 22nd, 2009 at 8:30 pm
I don’t know whether it’s deliberate or not, Mike, but you seem to be missing the point: in contrast to your unsupported belief that there is some market mechanism that determines the ‘best’ or optimal price for labor, that no one is ‘coerced’ into accepting less than fair market value for their work, the reality is that this is simply not the case. I’ve given both a theoretical example and a real-life one to show this; and no, Mr. Mozilo has ended up costing all of us billions of dollars. That’s not some ‘liberal’ cant, that’s the reality as measured in foreclosures and falling home values.
The reality is that productive gains have flowed upward, not just to the richest ten percent, which obscures the how lopsided the distribution has become, but to the richest one tenth of one percent, and incidentally almost entirely bypassing those below this magic level.
August 22nd, 2009 at 8:56 pm
From 86:
“Guys like Gates and Dell put an entirely new product and added value to people’s lives, so deserve their wealth.”
OK, fellow Uranians, there’s a softball for you.
August 22nd, 2009 at 8:58 pm
Scent of Violets
You are the one missing the point–the willingness of an employer to pay and the willingness of the employee to work for the agreed upon wage IS the fair market price. The transaction IS voluntary, how else can you describe it? Employers that do not pay market wages, don’t have employees. Employers that pay too much (i.e. the auto industry) have too many employees. Employees that would rather not work or move for work because they are held by “golden handcuffs” of a union contract that pays above-market wages.
August 22nd, 2009 at 9:01 pm
Scent of Violets
Your example of the stranded woman is not a free market exchange, but kidnapping and a violent crime. No government, nor I, would condone or enforce a contract such as that. The perp should be hung in the village square. Again, you know that example is pure BS and rhetorical nonsense.
August 22nd, 2009 at 9:17 pm
Thanks, Mike, for demonstrating just how far out of touch with reality you are – you’ve just said that by definition any wages agreed upon are ‘fair market’ wages, the best, most optimal setting on the economics engine.
Most people in the reality-based community, otoh, look at data outside of the axioms. The reality is that there have been some extremely highly paid people who made very poor decisions and supported very bad policies that ended up costing not just the stockholders, but the American taxpayer hundreds of billions of dollars. In no way could they be said to be ‘worth their pay’, contrary to what you would have us believe.
This isn’t a matter of ideology, or party, or applying some theoretical model. This is just a fact, and people like you who deny them are extreme right-wing ideologues; it’s not the rest of us, the majority of the American people as it turns out, who are ‘liberal’.
I suspect that there is some tie-in between this observation and a recent poll that indicated only 6% of all scientists self-identified as Republicans, and only 9% self-identified as ‘conservative’.
August 22nd, 2009 at 9:21 pm
Er, no, read what I wrote again. The ‘good Samaritan’ isn’t a kidnapper and didn’t even know of the woman’s existence until he happened across her while he was out in the desert as well. I suspect that this is not a case of poor reading comprehension per se, but rather, reading what you want to in what other people write. Note again that the woman is perfectly free not to take the Samaritan up on his offer and he is not holding a gun to her head. There is not one scintilla of ‘coercion’ as a libertarian defines it involved.
August 22nd, 2009 at 9:27 pm
Scent of Violets
Exactly how many people have you hired, fired, advanced or been responsible for providing their income?
Most polls have twice as many people identifying themselves as “conservative” than “liberal”. Have you visited any parts of the “flyover” country? If you really believe that statistic, how would you explain the fact that Clinton was the first two-term Democrat President since FDR, how the conservative revolution represented by Reagan and 3 Bush administrations? Oh, that’s right Americans are just stupid!
August 22nd, 2009 at 9:29 pm
There is indeed coercion, as anyone would understand it. No one can be forced to those terms, legally it is called “under duress” and is not enforceable. Get a better example.
August 22nd, 2009 at 9:31 pm
When one’s health insurance and the coverage for one’s children depends on one’s employer, the employer has a big gun. I don’t care whether a libertarian defines it as “coercion”, because life and death matters aren’t word games.
August 22nd, 2009 at 9:58 pm
1) I think bringing market commercial transactions into this issue is a bullshit red herring. The issue is: what are the duties of US citizenship and what are the privileges?
2) The US survives because whenever a foreign entity threatens our billionaires’ money, Congress claims the right to draft us into the Army and Marine combat units and MAKE us serve — up to giving our life, if need be. REAL wars are not fought and won by blow-hard Air Force officers — they are fought and won by the candy-ass civilians.
3) When we told to register for Selective Service, we are NOT allowed to negotiate the terms, conditions or pay. And someone in uniform is NOT allowed to respond to an order by saying “so how much are you going to pay me if I do that?”
4) The same applies to all the other DUTIES of citizenship. George W Bush did NOT negotiate with me when he stole $3 TRILLION out of the Social Security accounts of myself and other Americans. I was not allowed to negotiate how much I want to pay to support his fucking stupidity. Nor did I have any say when he, Ronald Reagan and George H Bush dump $9 Trillion in debt on me.
5) IF I am called up to serve on jury duty , I get $9 a fucking DAY — or a jail sentence. My choice.
6) SO I am kinda tired of all this deceitful bullshit from Republicans that billionaires have a GOD-GIVEN right to bribe Congress, write laws that move $TRILLIONS from the US Treasury into their fucking pockets, take most of the wealth OUR sweat produces
and then owe the rest of US NOTHING in return.
7) FUCK THAT — CITIZENSHIP is a two-way street. I know some things that the Russians and Chinese would like to know — but I don’t think I can fuck this country by going off and SELLING that information. Aldrich Ames and Robert Hannsen believed in the “Free Market”.
If Warren Buffet, Bill Gates, and the other fucking billionaires want their money protected from Russia , China and the Mexican drug cartels, then let them hire the fucking protection. Dick Cheney wants a war to grab some oil deposits — give HIS fat ass a M16.
And if some poor person blows Mike K’s fucking head off and takes his wallet — well, that’s just the free market in action. Mike K should have transacted better.
Works for me.
August 22nd, 2009 at 10:11 pm
Actually, the neocons have tried this. That’s why Blackwater was so busy in Iraq. I don’t want that either, as long as they’re still calling it a U.S. government intervention. Corporate mercenaries should fly under their own flags and see how many Raptors and tanks the free-market will provide them.
August 22nd, 2009 at 10:16 pm
Don,
That is so far off my or any conservative libertarian’s position as to be laughable.
I just want government in its proper place–domestic tranquility that is, police and common law regarding crime are certainly proper. Read the Constitution, for once, especially Article I. I do NOT in anyway want to get rid of the ENTIRE GOVERNMENT. Get your facts straight and your argument out of the stupid gutter range.
Your are right about one thing, being in the military is not NEGOTIABLE! There is no draft, veterans do not want a draft. I would get rid of Selective Service. In the service, you only volunteer once.
How about BHO’s campaign donations, where did they come from?
Wiley–that is precisely why I want MY health insurance, subject only to me, not my employer, not the government.
August 22nd, 2009 at 10:18 pm
Don
In your planet, do they call murder–free market activity?
Scent–with your understanding of law and economics, are you the pizza delivery guy?
August 22nd, 2009 at 10:23 pm
…and your dollars are your votes, blah, blah, blah. We could agree to disagree, but I wish libertarians would go fuck themselves on that floating island of libertarian utopia in the Atlantic somewhere. Good luck with that.
August 22nd, 2009 at 10:36 pm
Re Mike K at 99: “Read the Constitution, for once, especially Article I.”
———-
How about you read the Declaration of Independence on which this country was founded?
“We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed,
— That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.”
———-
Only fucking Morons –and those making over $50 Million a year — would support a government with 400+ Billionaires and 45 million citizens without healthcare. And a distribution of income resembling South American kleptocracies.
August 22nd, 2009 at 10:43 pm
Re Mike K at 100: “In your planet, do they call murder–free market activity?”
———
Murder? Isn’t that something defined by GOVERNMENTS? I thought we wanted to scrap Governments as evil. No government — no murder.
If , on the other hand, we want to go with the idea of establishing government as a set of fair rules defining relations between civilised men, then I would suggest that “murder” might not be a bad response to attempts to impose slavery by corruption, mass media deceit, legalized bribery on a massive scale, and two-faced legal sophistry.
August 22nd, 2009 at 10:43 pm
You don’t get a dog to do tricks for you by giving him a lifetime supply of bones.
Marginal incentive to work decreases with wealth, for the simple reason that the more money you have, the more valuable leisure time is to you relative to time spent making more money. Remeber that the real goal in life isn’t making money, it’s spending it. If I already have enough money to live comfortably for the rest of my life, why would I choose to spend my time working when the marginal benefit of an hour of work is less than that of an hour of leisure?
August 22nd, 2009 at 10:53 pm
Don’t forget promoting the general WELFARE.
Oh and if we’re concerned about enforcing property rights, when are we going to get around to those reparations? I believe Ron Paul’s family owes Jesse Jackson’s family some back wages. Oh, and don’t forget to include interest.
August 22nd, 2009 at 11:00 pm
RE Mike K at 99: “Wiley–that is precisely why I want MY health insurance, subject only to me, not my employer, not the government.”
————–
I’m confused. If someone spends 29 years in the Air Force, isn’t their healthcare provided by the government for the rest of their life in retirement? VA,etc.
Or did you refuse to accept such socialist medical care because it offended your libertarian sensibilities?
I didn’t think so.
August 22nd, 2009 at 11:08 pm
Not all veterans use their benefits. Seems most that due were enlisted, but 29 years in the military is 29 years on the government tit. A libertarian lifer? Say it ain’t so.
August 22nd, 2009 at 11:23 pm
Now that it’s mentioned, I can see a lot of military officers being libertarian. It was all too common for them to consider themselves smarter than the enlisted because they went to college and, of course, they went to college because they were smarter. Just full of merit, these guys—born with it, endowed with it, imbued with it. Natural rulers, these guys.
And the most stupid things I ever saw anyone do in the military were done by officers. In Operations, the only stupid things I’ve ever seen done were done by officers. Most officers were cool and competent, but some were entirely too special to be believed.
August 22nd, 2009 at 11:30 pm
Don,
You might not think so, but I did not have government, you just do not know what you are talking about. Everyone is eligible, but I have cover thru my present civil employer. So there!
I have repeatedly stated that I do NOT want to eliminate government, just keep it to its proper roles.
NONE of you have served or understand government employment, so don’t be like Obama and express opinions on things you know NOTHING about.
Slavery is involuntary servitude, not corruption, not media BS, not bribery. Second, Mr Jefferson who wrote that passage thought the Federal Government was far too powerful and centralized THEN. Do you know anything about Jefferson?
The government does not have 400 billionaires and 45 million w/o health care, the US population does and they are not the property of the US Government.
“General Welfare” is NOT a power given to Congress. Article I Section 8 says Congress will provide for the General Welfare by using the 14 powers listed there in.
August 22nd, 2009 at 11:42 pm
General Welfare is in the Preamble and is not a power given to the Congress or the President. Think of it this, the Preamble says the Constitution will provide domestic tranquility, general welfare, etc by the Federal Government following the Constitution.
Jefferson wrote the Declaration and was hardly a supporter of strong central government. He supported the large plantation holding class and agrarian society. You should be quoting Hamilton and Marshall
August 23rd, 2009 at 12:08 am
I served. So what?
Many lawyers and constitutional scholars do not see any conflict with the Constitution and single-payer, even. Just because your religion is Libertarian doesn’t mean that the United States needs to be ruled by your philosophy. The founding fathers were on the cutting edge of liberal philosophy in their time, I see no conflict with doing the same in the 21st century.
Spending ones days sucking the cocks of long dead Early Americans is a supreme waste of time.
August 23rd, 2009 at 12:12 am
Re Mike K at 109: “Don..do you know anything about Jefferson?”
——————
I graduated from the University Thomas Jefferson founded.
You don’t know shit about Jefferson.
If he could come back from the dead and meet you , he would flog the living shit out of you with his riding crop.
He DESPISED people like you.
“The general spread of the light of science has already laid open to every view the palpable truth, that the mass of mankind has not been born with saddles on their backs, nor a favored few booted and spurred, ready to ride them legitimately, by the grace of God.” (to Roger Weightman,
1826 Jun. 24. )
“The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants. It is it’s natural manure.” (to W. S. Smith, 1787 Nov. 13. )
August 23rd, 2009 at 12:15 am
Simple then, amend it! It is not a religion, it is a political philosophy. Many lawyers and scholars do, by the way.
In any case, what are the limits of Federal power? I have asked two Congressmen and they saw NONE! Is that right? They could pass any law they wanted and considering the last 8 years, they might be right.
August 23rd, 2009 at 12:56 am
Well, in terms of political philosophy, Jefferson foresaw the modern age — in which citizens are no longer INDEPENDENT farmers but rather are cogs in massive corporations and government is ruled by a few extremely wealthy men.
Jefferson to James Madison, Dec 20, 1787:
“I think our governments will remain virtuous for many centuries; as long as they are chiefly agricultural; and this will be as long as there shall be vacant lands in any part of America. When they get piled upon one another in large cities, as in Europe, they will become corrupt as in Europe.”
Jefferson’s support of agrarian society was not so much support of being a farmer — he thought that men could not be independent citizens of a republic if the economic system did not also allow them independence when it came to making a living.
August 23rd, 2009 at 1:29 am
In both his letter to James Madison On Dec 20, 1787 and in his letter to Alexander Donald on Feb 7, 1788; Thomas Jefferson argued that the Constitution should have a Bill of Rights which included — in addition to the ones eventually adopted — a protection of the people from economic monopolies.
Yet Healthcare companies have defacto monopolies in many sections of the USA. That is why they can screw US citizens like dogs:
“WASHINGTON – One of the most widely accepted arguments against a government medical plan for the middle class is that it would quash competition — just what private insurers seem to be doing themselves in many parts of the U.S.
Several studies show that in lots of places, one or two companies dominate the market. Critics say monopolistic conditions drive up premiums paid by employers and individuals.”
http://news.yahoo.com/s/ap/20090823/ap_on_bi_ge/us_health_care_insurance_competition
August 23rd, 2009 at 1:11 pm
Everyone else is to blame except me
So says the Angry White Liberal
August 23rd, 2009 at 1:17 pm
“So says the Angry White Liberal”
————-
“The Rich are paying too much taxes and not getting enough Money”
— so says the asskissing , moronic sycophant.
At least the FOX News guys have the brains to get paid for their blowjobs.
http://en.wikipedia.org/wiki/File:United_States_Income_Distribution_1947-2007.svg
August 23rd, 2009 at 1:31 pm
A couple points of clarification:
1. Evidence regarding relative wage growth and productivity show fairly clearly that the wealthy have been grabbing more of the increase in GDP than the rest of us, while it also being true that a lot of that happens through increased health costs and profits rooted there.
2. Regarding women in the workforce – people need to remember that working class women ALWAYS worked. The major shift after WWII (picking up in the 60s and after) was that MIDDLE class women who previously had worked, then gotten married and retired, were instead getting married and still working.
3. Mike – regarding “fair market wages,” you really need to take into account the relative power imbalance between employer and employee. It’s right there in Adam Smith:
The coercion is right there – workers have to work to eat, employers don’t. To take the classical example of a shape-up outside the factory gates, if 90% of the men outside the factory gates know that they’re going to be doomed to working poverty if they accept less than a dollar a day, and 10% of the men know this but are so desperate that they’ll take 50 cents a day, the employer can lower the cost of wages, and the 90% are essentially remotely coerced – either they agree to the wage cut or they go out of work.
3. Regarding investment versus consumption, Mike K, you have it on its head – all profits from investment result from consumption of some kind; someone has to buy what the investment creates, be it a person (as in the case of consumer goods) or a business (as in the case of capital goods). Without sufficient consumption, the rate of profit falls, you get what’s called overproduction/underconsumption, and the economy crashes. Similarly with your argument about over-consumption and under-production – without a consumer to buy the product, the product has no economic value.
What we have seen in the American economy over the last decade at the very least is a situation where wages and therefore consumption have been largely stagnant and/or declining, which means overproduction/underconsumption – except that there have been several periods where credit has been made cheap enough to create bubbles that temporarily hid this – essentially creating artificial consumption by getting people to lay down huge credit card debt and treat their houses as ATMs to make up for an otherwise insufficient demand.
What we need, therefore, isn’t less consumption, but more consumption done on wages and less consumption done on credit. Which requires boosting wages.
August 23rd, 2009 at 4:51 pm
I feel like I’m beating up on a one-armed octagenarian. In response to my discussion about axioms vs. testable propositions:
Mike sez:
I have no idea what the connection is. All I can figure out is something like, “If you’re a scientist, how come you don’t hire or fire people?” That doesn’t seem to make a lot of sense on the face of it, but maybe someone else can figure out what Mike is getting at. Further:
I have no idea what Mike is getting at here either. The statistic that I’m supposed to ‘really’ believe is none other than the recent Pew Poll which says:
Looking at the embedded findings, we also see that according to this poll, only 9% of all scientists view themselves as ‘conservative’. Sorry, Mike, it’s not what I ‘really’ believe, it’s what a very respected polling organization has found.
And since we are talking about a point of science – insofar as economics can be credited as a science, and amenable to scientific methods – perhaps this says something about your views on market pricing as an axiom. Most scientists would say that is an assertion that should be tested as a matter of empiricism, not derived from some sort of libertarian dialectical analysis.
August 23rd, 2009 at 4:55 pm
Chuckle. Right, there has to be coercion involved, because you have said so, twice, and very emphatically. I guess we can all go home now.
How about this instead? Why don’t you explain how there is coercion involved in the case of the stranded woman, but no coercion in the case of employees negotiating for their wages? If you can do it without your head exploding, that is.
August 23rd, 2009 at 10:25 pm
Scent of Violets
The employees are able to find other employers that need their skills. The employees may not receive what they want (no one does), but they have the ability to take it or leave it. I have done so a number of times. Having been on strike, I know whereof I speak. The “good samaritan” is facing a moral issue and failing at basic morals. A human in a hopeless situation warrants assistance without conditions. As the Aussies were told by Uncle Sam when it proposed charging for sea rescues, “people at peril at sea are rescued by the adjoining state at no charge, it is the law of the sea.” Yes, this is a place for government.
I am libertarian, not immoral, but then you have no understanding of morals or humans.
August 23rd, 2009 at 10:28 pm
And what in hell does the political party affiliation of scientists have to do with the price of wheat?
August 23rd, 2009 at 11:23 pm
…. which is obvious if you look at the marginal utility of money and the propensity to spend money.
The marginal utility of money and the propensity to spend money are both higher the poorer you are. In plain English, poor people spend more of the money they get, and they get more useful things for the “next dollar” they receive (food instead of yachts, for instance).
Accordingly, setting up economic incentives so that money flows to the poor rather than the rich causes the money to flow through the economy faster and to be used for more productive activities. Therefore it causes better economic growth than giving money to the rich.
This is frighteningly Econ 101 material, stuff you’re supposed to learn *BEFORE* you learn supply and demand (not kidding). The nature of “utility” is basic. But the supply-siders don’t get it.
August 24th, 2009 at 12:50 pm
1. This assumes perfect competition for labor, whereas in many areas, there is more of a monopsony for labor.
2. This assumes that the ratio between openings and applicants is 1-1. The ratio is currently 6-1, which dramatically reduces the ability to find a new job.
3. This assumes perfect mobility of labor; in the real world, it takes money to move from one place without jobs to another place with jobs.
4. This assumes perfect information; in reality, many if not most job openings are advertised internally as opposed to externally.
5. The ability to improve ones’ position via a strike action or any other collective action depends on the relative organization and power of workers versus employers. In a situation where the labor market is glutted, where the costs of outsourcing/offshoring are low, and where collective action is hampered by deficiencies in modern labor law, employers can and do have an advantage over employees that cannot be countered by a threat to find employment elsewhere.
August 24th, 2009 at 12:51 pm
* in point two, it should be applicants to openings.