Capitalism simply isn't working

GURPS

GURPS

INGSOC
PREMO Member
Capitalism simply isn't working and here are the reasons why
Economist Thomas Piketty's message is bleak: the gap between rich and poor threatens to destroy us
Thomas Piketty interview: capitalism just doesn't add up


Inequality of wealth in Europe and US is broadly twice the inequality of income – the top 10% have between 60% and 70% of all wealth but merely 25% to 35% of all income. But this concentration of wealth is already at pre-First World War levels, and heading back to those of the late 19th century, when the luck of who might expect to inherit what was the dominant element in economic and social life. There is an iterative interaction between wealth and income: ultimately, great wealth adds unearned rentier income to earned income, further ratcheting up the inequality process.
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that right there [in Red] tells me the guy is a Moron and is not to be trusted with economic policy
when one starts spouting off about home much his neighbor makes ....



Nor does it seem likely that human beings' inherent sense of justice has been suspended. Of course the reaction plays out differently in different eras: I suspect some of the energy behind Scottish nationalism is the desire to build a country where toxic wealth inequalities are less indulged than in England.

The solutions – a top income tax rate of up to 80%, effective inheritance tax, proper property taxes and, because the issue is global, a global wealth tax – are currently inconceivable.

But as Piketty says, the task of economists is to make them more conceivable. Capital certainly does that.
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Wealth Confiscation is always the answer with these guys ...
well with an 80% tax rate where is the incentive to do better than working at McDonald's
 
Larry Gude

Larry Gude

Strung Out
Capitalism IS working. The issue here is whether or not that is a good thing. I could not find where the author defines what GOOD looks like. His focus is solely on the way things are and are becoming and he really doesn't even declare that, in and of itself, bad but, just implies that it's bad.

What is it supposed to look like? The game Monopoly is really helpful here. Capitalism, at it's best, is like the beginning and middle stages of Monopoly. In a 'balanced' economy, you have equal opportunity and no one has any advantage. Slowly, through 'work' and 'sacrifice' (playing the game to the exclusion of anything else) you start to be rewarded with some fruits of your labor. You gain a few possessions that, in turn, produce a little income. All is, mostly, well as long as chance isn't too rough on you and you keep passing go. Before long, you start thinking of more. Adding value to what you have, put up some houses, increase rents, maybe a hotel or two at some point and really get things going. Again, if things go fairly well, each player is doing alright but, advantage starts to build. This person put up houses sooner and it started working. This player had a few bad rolls and it cost him or her. In the middle phase, you start to own a lot of houses, properties and so forth.

All through this, the dealing starts, trade you this for that. Give me that instead of rent. Mid phase, a player drops out either through boredom or bad luck or a deal or two that blew up in their face. Then, it accelerates. Capitalism gets at it's worst. The penalties, rents, get worse and the game reaches a climax where one person has it all. Everyone else is a loser.

THAT is capitalism, the relentless pursuit of more. The roll of the dice and the cards substitute for chance and good and bad luck which, in real life, some can avoid by better timing, better research, better decision making and so forth. The game tends to frustrate people who are good capitalists because they know, in real life, they can make up for a lot of bad luck or poor decisions, or what have you, with working harder and getting it right the next time. The game doesn't allow for that, working harder and decisions and deals outside it's framework but, it gets the basics down.

That's our economy today, too big to fail. Less and less winners and more and more losers. In good times, there are plenty of alternatives for the losers. To try again. To change jobs. To seek and find opportunities elsewhere. In bad times, that becomes harder and harder and, like the game, losers fall by the wayside and winners, again, emerge. Too much immigration in time of tight job market makes things worse. Basic living expenses being very high exacerbates the problems (energy and food). The loss of wealth as a buffer, the housing collapse, make things worse. Global competition makes things worse. Through it all, more people who were in the game fall by the wayside. Less and less winners have more and more, consolidating strength, finding ways and opportunities to protect what they have. They reach the level of having to do less and less deal making and start to be able to dictate more and more due to shear size and power.

Too Big To Fail, with the relentless pursuit of more that is capitalism, winning, becomes what we had in the robber baron era. That IS capitalism. That's what happens. Is that good for the nation?

So, the premise of the article is wrong but, the point stands. Poorly made but, it stands.
 
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tommyjo

New Member
GURPS said:
that right there [in Red] tells me the guy is a Moron and is not to be trusted with economic policy
when one starts spouting off about home much his neighbor makes ....


Wealth Confiscation is always the answer with these guys ...
well with an 80% tax rate where is the incentive to do better than working at McDonald's
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Of all the things that have been written in the past month about Mr. Piketty's book "Capital in the 21st Century", this is what you come up with? This book as been a topic of significant discussion and debate...like most things of importance, you missed that too, huh? The Blaze didn't tell you about it?

Yet all you can do is post, incorrectly as usual, that the author "starts off spouting about what his neighbor" makes??? He doesn't start off "spouting" about. Had you bothered to read the source article or any of the economic articles about the book, you would have known that income/wealth inequality gaps in capitalism is the foundation of the book.

"I began with a straightforward research problematic," he says in elegant French-accented English. "I began to wonder a few years ago where was the hard data behind all the theories about inequality, from Marx to David Ricardo (the 19th-century English economist and advocate of free trade) and more contemporary thinkers. I started with Britain and America and I discovered that there wasn't much at all. And then I discovered that the data that did exist contradicted nearly all of the theories including Marx and Ricardo. And then I started to look at other countries and I saw a pattern beginning to emerge, which is that capital, and the money that it produces, accumulates faster than growth in capital societies. And this pattern, which we last saw in the 19th century, has become even more predominant since the 1980s when controls on capital were lifted in many rich countries."

So, Piketty's thesis, supported by his extensive research, is that financial inequality in the 21st century is on the rise, and accelerating at a very dangerous pace. For one thing, this changes the way we look at the past. We already knew that the end of capitalism predicted by Marx never happened – and that even by the time of the Russian revolution of 1917, wages across the rest of Europe were already on the rise. We also knew that Russia was anyway the most undeveloped country in Europe and it was for this reason that communism took root there. Piketty goes on to point out, however, that only the varying crises of the 20th century – mainly two world wars – prevented the steady growth of wealth by temporarily and artificially levelling out inequality. Contrary to our perceived perception of the 20th century as an age in which inequality was eroded, in real terms it was always on the rise.
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http://www.theguardian.com/books/20...-failed-world-french-economist-thomas-piketty


And you conclude with the truly idiotic....as usual.
 
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czygvtwkr

Guest
It is amazing how many people that I meet that think this way, however they think it only applies to people that make more than they do. As soon as that magic number hits them they back off.
 
Larry Gude

Larry Gude

Strung Out
czygvtwkr said:
It is amazing how many people that I meet that think this way, however they think it only applies to people that make more than they do. As soon as that magic number hits them they back off.
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That capitalism isn't working unless they're doing well?
 
Larry Gude

Larry Gude

Strung Out
czygvtwkr said:
That are against capitalism, think the rich should have the hell taxed out of them, but that rich falls just above them.
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Gotcha.

See, the thing is, it is way wrong to just confiscate the 'winnings'. The mechanisms exist through which the middle class can be rebuilt, rebuild itself if given the motivation AND allow the rick to continue to do well.

We wipe out debt, get food and energy costs way down, raise interest rates and redo the limits, like Glass/Steagal, on the Heads we win, tails you lose casino of Wall Street.

Wipe out student debt, consumer debt, mortgage debt and let folks spend that money on new business. Let a new pick up go from $40,000 and zero percent to $20,000 at 7%. Let a house go from $300k and empty, no payments being made or, low interest, to $150,000 at 7-8%. let students shed themselves of owing $100k for that 6 year psych degree and go back to school on $10,000 tuition's they're paying as they go instead of $20,000 they can't pay.

The debt is the thing. Write it off and allow investors and banks to earn REAL profits on loans rather than virtually nothing BUT have LARGE numbers on their balance sheets that they are all sitting on, terrified to spend a dime.
 
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czygvtwkr

Guest
Larry Gude said:
The debt is the thing. Write it off and allow investors and banks to earn REAL profits on loans rather than virtually nothing BUT have LARGE numbers on their balance sheets that they are all sitting on, terrified to spend a dime.
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That is a very good way to make the people that actually controlled themselves and did without very resentful.
 
Larry Gude

Larry Gude

Strung Out
czygvtwkr said:
That is a very good way to make the people that actually controlled themselves and did without very resentful.
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yeah. Guess we should keep doing what we're doing. We can always expect different results. So no one gets...resentful...

I'd much rather my neighbors house sits empty and rots, maybe move in some section 8 or some speculators. That'll show 'em.
 
GURPS

GURPS

INGSOC
PREMO Member
Larry Gude said:
Capitalism IS working. The issue here is whether or not that is a good thing. I could not find where the author defines what GOOD looks like. His focus is solely on the way things are and are becoming and he really doesn't even declare that, in and of itself, bad but, just implies that it's bad
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Business Week Article:

Still, Piketty’s global tax has features that make it worth pondering as a thought experiment if nothing else. For one thing, it gets the incentives right. If a global tax on capital were imposed, owners of valuable assets such as empty lots might be more likely to put them to good use, or sell them to someone who could, to cover the tax bill. (American writer Henry George had the same idea in the 19th century with his famous single tax on land, designed to reward development but not speculation.) For another, a wealth tax captures resources that other taxes miss. The income tax doesn’t cover unrealized capital gains, which represent the bulk of the wealth of people such as Gates, Warren Buffett, and Carlos Slim. Stanford University economist Ronald McKinnon wrote a 2012 Wall Street Journal op-ed called “The Conservative Case for a Wealth Tax.” (He now says his tax would be lower than Piketty’s, and flat, not rising with wealth.)
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we arrived at to big to fail, because of ?
Corporations buying influence, not because capitalism doesn't work

[air quotes] we the people [/air quotes]

have allowed the socializing of risk ...
... aka the gov will bail out your business, rather then letting the failure happen and workers be laid off


GM should have been allowed to crash and burn, but instead we get another political payoff for the UNION
.... in the form of a Gov Rescue .... GM Labor Contracts I might add helped get GM into that situation, in the 1st place



yeah a Global Tax on Wealth will fix things ... and WHERE does that money go .... the business week article says Piketty does not think the money should fund a new expansion of GOV. but WHO Gets the MONEY

the article also mentions:

With the approach of the 2015 deadline for accomplishment of the United Nations’ Millennium Development Goals, such as halving extreme poverty and reducing child mortality, some activists are pressing for a post-2015 agenda that shifts the focus from reducing poverty to reducing inequality. “As inequalities widen, the social fabric of our societies is both stretched and strained,” UN Secretary General Ban Ki-moon proclaimed in February on the World Day of Social Justice. Without taking a position on the post-2015 agenda, he added, “There is nothing inevitable about inequality.”
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more socialist 'lets make life fair' / be jealous of others success ... the best one can hope for is a semi level playing field

Equal Opportunities ... not Equal Outcomes

.... empires rise and fall

... where are the Rail Roads today ? Steam Ships ? ... TWA, Branif, Pan AM ?

that's right someone else came along with a better idea and the old guys FAILED to Adapt

Montgomery Wards - Gone
Sears & Robuck - a shell of its former self from its former Mail Order Catalog Self



In March, New York Times columnist Paul Krugman wrote that Piketty’s 685-page tome “will be the most important economics book of the year—and maybe of the decade.”
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Yeah Krugman's opinion ...
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so Taxes on the VALUE on what you own - [sounds like Virgina's Car Tax ....] if you do not want high taxes, drive a chevette, instead of a Corvette ....
and Taxes on the income you earn ...
 
GURPS

GURPS

INGSOC
PREMO Member
Terence Corcoran: The straw dogs of Thomas Piketty’s capitalism


Piketty rampages through two centuries of economic data and graphs, plunders ideas and theories from hither and yon, fills pages with pop culture references and CEO compensation lore, before settling down to contemplate his “utopian” idea: A global annual capital tax of maybe 2% on the assets of the rich and a marginal tax rate of 80% on incomes above maybe $500,000 — all necessary to ward off “the violent political conflict that inequality inevitably instigates.”

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Indeed not. Instead of high theory, Capital is a tour-de-force combination of deep economic jargon, pop-culture analysis (how many other serious economic texts drop references to Dirty Sexy Money and other American TV shows) wrapped around a neo-Marxist class-warfare view of the world economy.

While Capital was translated from the 2013 French edition and Piketty is now a professor at the Paris School of Economics, he isn’t new to North America. He taught at M.I.T. and co-authored a 2010 study on the rise of inequality in America with Emmanuel Saez, the Berkeley economist who is the leading intellectual guru of the U.S. inequality movement. Piketty and Saez are guiding lights to scores of politicians, from President Obama to Canadian Liberal MP Chrystia Freeland, Justin Trudeau’s chief economic advisor. The 2010 Piketty/Saez study and the whole inequality myth were subject of three commentaries on this site here, here and here.

There’s a lot in Capital, but the book has three basic foundations. There’s the Marxist Set Up, the Capitalist Straw Dog and the Utopian Tax Plan. All the rest is elaborate if sometimes fascinating filler.

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Much data is presented, but the real question is not whether any or all of Piketty’s graphs, tables and 600-pages of inequality analysis are true. The question is: Why does it matter? Never discussed are the underlying assumptions that inequality is morally, politically, ideologically or socially wrong. With no supporting argument, Piketty claims inequality is “quite disturbing” and “may be high enough to be destabilizing.” The long-term dynamics of wealth distribution are “potentially terrifying.”

If true, it would only be the result of economists and others constantly fanning the old standard human emotion: envy.
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as I said, what business is of of yours how much your neighbor makes
 
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czygvtwkr

Guest
Larry Gude said:
yeah. Guess we should keep doing what we're doing. We can always expect different results. So no one gets...resentful...

I'd much rather my neighbors house sits empty and rots, maybe move in some section 8 or some speculators. That'll show 'em.
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Ever think they just built too damn many houses? Where are all these displaced people from all of these empty houses?

If people want to blame someone or something else for their financial misgivings they are just going to be in the same situation down the road, what you want to create is section 8 with another name. People pissed away their financial security because they want they want they want that is their own damn problem. I could have went to a more expensive school, i could have bought a nicer house, I could have a new car every few years but I didn't do those things and nobody held a gun to their heads and forced them to either. Businesses should not have been bailed out and individuals shouldn't be either.
 
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somdwatch

Well-Known Member
The bailout should have been focused on We the People. The government is what caused the banks to make bad loans starting with Carter. If Banks did business without government telling them who to loan to the housing bubble would never have happened. GM, just pure greed. Still functioning the same way. Which by the way, isn't that part of the government's fault seeing they were part owners?
 
Larry Gude

Larry Gude

Strung Out
czygvtwkr said:
Ever think they just built too damn many houses? Where are all these displaced people from all of these empty houses?

If people want to blame someone or something else for their financial misgivings they are just going to be in the same situation down the road, what you want to create is section 8 with another name. People pissed away their financial security because they want they want they want that is their own damn problem. I could have went to a more expensive school, i could have bought a nicer house, I could have a new car every few years but I didn't do those things and nobody held a gun to their heads and forced them to either. Businesses should not have been bailed out and individuals shouldn't be either.
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Not at all. Wipe the slate clean. Reset the rules so the bubble doesn't get blown up again.

You're not wrong to feel indignant about the whole thing. The issue is contagion and how to get out. It does you know good to live a clean and virtuous life and self righteously sneer at the people around you who did not while they, slowly, infect you. The economy doesn't happen in a vacuum. It still impacts you. And, while you're being smug, I'd wager that you benefited from the bubble too, just like virtually everyone did.

So, don't think of it as rewarding poor decision making. Think of it as protecting the good decisions you've made.

Write it off. Set the rules to make it less likely to happen again. You should be outraged at how the banks and insurers and other nations made out at your expense. At least I am your fellow countryman. What helps me back on my feet, ultimately, helps you, too. Not so when our dollars and credit go overseas.

:buddies:
 
Larry Gude

Larry Gude

Strung Out
SamSpade said:
I've always loved that story. It tells a great point, but it is silly enough to enjoy, like a lot of Vonnegut.
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Ugh. I HATE it. Despise it. Fear it's where we are headed, full speed. That book is so bleak, I had to read Angela's Ashes afterwards to cheer me up.

:jameo:
 
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