Trickle down economics is a lie, the proof !

[F3SS]

If you all don't know that the financial markets were deregulated in the 1980's I don't know why I am talking to you all. Its history - go read about it.

Br Cornelius

My first conclusion stands though, right?

[Guest]

Piketty's hockey stick graph isn't holding up to independent scrutiny. .. yes BR.. just like Michael Mann's global temperature hockey stick graph.

the fact that Piketty chimes with just about every credible economist saying that income inequality is growing - suggests that the financial industry is attempting to do a hatchet job on him. Now where have I seen that tactic used to discredit uncomfortable information ? oh yes Michael Mann, it would be funny if it wasn't tragic.

Br Cornelius

[Guest]

My first conclusion stands though, right?

Ii already said that this had nothing to do with general regulation - why do you insist on me repeating simple statements - do they not sink in.

Br Cornelius

[Guest]

So let me get this straight, you are ONLY advocating for more regulation in the financial markets? You only have a problem with the financial sector, and everything you stated earlier is to be applied to the financial market system and no other sector of the economy? Because if that is what you are saying, then I actually agree with you to a point.

The markets are what we are talking about here - the use and accumulation of capitol. That's all we are talking about.

Br Cornelius

[Einsteinium]

The markets are what we are talking about here - the use and accumulation of capitol. That's all we are talking about.

Br Cornelius

Okay, but the financial markets, stock market, banks (credit markets), etc. Are the primary players in the use and accumulation of capitol.

I think that the deregulation of the financial markets was a bad idea. Some of those regulations were put into place because of the great depression and those regulations were repealed and I think that was a huge contributing factor to what caused the crisis and recession the started in 2007-2008. But regulations have since been put into place because of that crisis that will at least help prevent another crisis. The splitting up of savings/credit consumer banking and investment banking is very good thing.

I don't think massive sweeping new regulations are going to do much good, we need to give time for the current regulations to have an effect. The book you cited originally sadly is in fact proving to be somewhat of a farce. Yes income inequality is rising, but not as much as your book states it is. Income inequality rises and falls due to natural market cycles anyways. The rich, whether you realize it or not, are in fact for the most part highly educated and financially savvy. When the market scares mom and pop investors out of it the smart people know that it could be a good time to buy. If you bought certain stocks after they collapsed in 2008 and held onto them until now you would have increased your wealth quite dramatically (if you had a lot invested). The rich have a lot to invest, and hence they overwhelmingly made a killing in the market. But that is just timing and having the capitol to do it with.

Taxing and forcing the rich to pay more to a corrupt government that is working for the bankers anyways is not going to solve anything.

[Guest]

Okay, but the financial markets, stock market, banks (credit markets), etc. Are the primary players in the use and accumulation of capitol.

I think that the deregulation of the financial markets was a bad idea. Some of those regulations were put into place because of the great depression and those regulations were repealed and I think that was a huge contributing factor to what caused the crisis and recession the started in 2007-2008. But regulations have since been put into place because of that crisis that will at least help prevent another crisis. The splitting up of savings/credit consumer banking and investment banking is very good thing.

I don't think massive sweeping new regulations are going to do much good, we need to give time for the current regulations to have an effect. The book you cited originally sadly is in fact proving to be somewhat of a farce. Yes income inequality is rising, but not as much as your book states it is. Income inequality rises and falls due to natural market cycles anyways. The rich, whether you realize it or not, are in fact for the most part highly educated and financially savvy. When the market scares mom and pop investors out of it the smart people know that it could be a good time to buy. If you bought certain stocks after they collapsed in 2008 and held onto them until now you would have increased your wealth quite dramatically (if you had a lot invested). The rich have a lot to invest, and hence they overwhelmingly made a killing in the market. But that is just timing and having the capitol to do it with.

Taxing and forcing the rich to pay more to a corrupt government that is working for the bankers anyways is not going to solve anything.

I do not think that the Piketty's book is in any danger at the moment, one rushed out blog post is not a refutation and the conclusions drawn in his book are in line with the economic consensus in the field. The only difference of late is that people have started to question the virtue of the principle of trickle down economics and the wealth disparity it breeds. up until very recently it was seen as the dynamo of the economy - and its negative aspects were been denied. That is changing and the big question been asked in all quarters - is such gross wealth disparity really good for the economy and ultimately sustainable. the evidence is starting to trickle in that it causes instability in the greater economy because of the distortions in capitol investment it encourages.

His prescriptions are unlikely to gain traction - but highlighting the problem is an essential first step to solving it. There is a problem - do not doubt it.

As to waiting to see how the new minimal regulations pan out - it has not checked the speculative trading, it has not stopped the rampant market manipulation, it has not rained in gross bonuses, it has not even touched on the crisis represented by trillions of dollars worth of junk derivatives which have not gone away and make the rest of the economy largely irrelevant. I think they have done almost nothing to rectify the causes of the 2008 crash and the simple reason is there are so many financial lobbyists either embedded in Washington or whispering in politicians ears with brown envelopes under the desk.

I think your cosy optimism is unfounded.

Br Cornelius

[Einsteinium]

I do not think that the Piketty's book is in any danger at the moment, one rushed out blog post is not a refutation and the conclusions drawn in his book are in line with the economic consensus in the field. The only difference of late is that people have started to question the virtue of the principle of trickle down economics and the wealth disparity it breeds. up until very recently it was seen as the dynamo of the economy - and its negative aspects were been denied. That is changing and the big question been asked in all quarters - is such gross wealth disparity really good for the economy and ultimately sustainable. the evidence is starting to trickle in that it causes instability in the greater economy because of the distortions in capitol investment it encourages.

His prescriptions are unlikely to gain traction - but highlighting the problem is an essential first step to solving it. There is a problem - do not doubt it.

As to waiting to see how the new minimal regulations pan out - it has not checked the speculative trading, it has not stopped the rampant market manipulation, it has not rained in gross bonuses, it has not even touched on the crisis represented by trillions of dollars worth of junk derivatives which have not gone away and make the rest of the economy largely irrelevant. I think they have done almost nothing to rectify the causes of the 2008 crash and the simple reason is there are so many financial lobbyists either embedded in Washington or whispering in politicians ears with brown envelopes under the desk.

I think your cosy optimism is unfounded.

Br Cornelius

My cosy optimism is a result of my acceptance that whatever happens, I will survive, I will weather any storm and I have the skills necessary to make it even if the entire system were to come crashing down around me. I do not rely on govt. handouts for anything, I am smart, and I think that FDR was spot on when he said, "The only thing we have to fear, is fear itself."

I don't think things are as bad as you seem to think they are. I think that the point you are missing is that ALL economic systems since the dawn of time are rigged in favor of the rich and/or powerful. If you think you are going to change that by blogging about it when the people/entities you are fighting have trillions of dollars and unimaginable power and influence then you are simply delusional. There will always be rulers and serfs and that is for better or worse the way it as always been. Yes there will be instability, yes there will be crises, yes there will be suffering, but that is life, and I am as prepared as one can be for it.

I am doing just fine in the current system. I grew up in a lower middle class family and I graduated high school with a C average, then I went to tech school and worked hard, graduated with honors and was invited to speak at graduation, I then got a job in engineering and am just about to finish my bachelors degree. I worked all through college and paid my own way. I took out loans but made sure I would be able to pay those loans back comfortably. I made sure the skills I was learning were marketable and that I would be able to make a good living. I make a great living now, yet I remember where I came from. The people I know, the system I know from the inside, works for me, and works for hundreds of other people I know. I don't see this horrible wealth disparity causing society to crumble. I see people around me attaining success in this system. I see regulations stifling small businesses and I see government overwhelmingly causing problems not solving them. People who work in small business, who deal with the regulations and the issues, they know what works and what doesn't. I work with job creators and I see them struggle and I see how many of them care deeply for their employees and want to do the best they can for their employees.

Then I see people like you saying these things, and you are just totally off base, you don't understand the real issues. You don't get it. The majority of economists do not understand the real issues here, they study charts and graphs and numbers and come up with theories, but they are not working with the small business owners, the middle class workers, most of them do not understand the real issues going on. That is why you and them naively suggest that more regulations and more government and redistribution will solve the problem. It won't, the people who know what will work are demonized and made out to be the bad guys. It is truly sad.

Edited May 27, 2014 by Einsteinium

[+DieChecker]

In other words, he made it up. Falsifying data to pursue an agenda. Here's the kicker, he's conning people out of their money to line his pockets like the evil capitalists he makes a living pouncing on. What a scum bag. Progressives will never live in the world they prescribe for you.

Income Inequality causes AUTISM!!!!

Dude... That'z a factz!!

(NOT) :no: :no: :no: :no:

[+DieChecker]

Income inequality has risen steadily since the 1980's as a consequence of NeoLiberal economics.

Do not DOUBT people.... Chant the Mantra..... (Sarcasm)

Edited May 28, 2014 by DieChecker

[Frank Merton]

Br, why do you blame 'trickle down' economics for the wealth disparity that you claim keeps increasing, when there are so many other factors at play? What makes you so sure that 'trickle down' is the major reason for this?

I think that the evidence quite clearly shows that globalism and cheap labor overseas becoming readily available is the primary cause of this rise in wealth disparity.

Labor overseas is not cheap, especially when you add in transport, duties, local corruption and other extractions, lower worker productivity from health, absenteeism, turnover, lack of education. It sometimes gets where the local labor has overpriced itself to the point of overcoming all these things.

I think what is really happening to all the middle-level jobs is they are being displaced by automation. The process doesn't close factories the way an outsourcing decision does, but it reduces jobs across the board, each year by a percent or two. For example nowadays my employer emails me problems customers are having. I often know exactly what needs to be done and email the customer, or I may email them asking for more information or a data feed. It eliminates my need to travel so much (although sometimes the customer regardless needs personal hand holding, but they don't need an engineer for that) so that even though I'm housebound I can still work, and several secretaries, employees of the post office and mail delivery services, and lots of others are displaced -- just because of email.

In a few years self-diagnosing equipment will be out there and they won't need me.

[+DieChecker]

Labor overseas is not cheap, especially when you add in transport, duties, local corruption and other extractions, lower worker productivity from health, absenteeism, turnover, lack of education. It sometimes gets where the local labor has overpriced itself to the point of overcoming all these things.

I think what is really happening to all the middle-level jobs is they are being displaced by automation. The process doesn't close factories the way an outsourcing decision does, but it reduces jobs across the board, each year by a percent or two. For example nowadays my employer emails me problems customers are having. I often know exactly what needs to be done and email the customer, or I may email them asking for more information or a data feed. It eliminates my need to travel so much (although sometimes the customer regardless needs personal hand holding, but they don't need an engineer for that) so that even though I'm housebound I can still work, and several secretaries, employees of the post office and mail delivery services, and lots of others are displaced -- just because of email.

In a few years self-diagnosing equipment will be out there and they won't need me.

I've read that there is a trend that corporations are actually moving back to the US because after all the expenses of manufacture overseas, they also have a higher quality failure. And in some instances it is actually cheaper to make your product in the US then in China, Taiwan or Mexico.

[Yamato]

The middle class being displaced by the automatons.

[+DieChecker]

The middle class being displaced by the automatons.

Is it just me, or does Harry Reid like like about 1/3rd the way to being a zombie?

[Guest]

My cosy optimism is a result of my acceptance that whatever happens, I will survive, I will weather any storm and I have the skills necessary to make it even if the entire system were to come crashing down around me. I do not rely on govt. handouts for anything, I am smart, and I think that FDR was spot on when he said, "The only thing we have to fear, is fear itself."

I don't think things are as bad as you seem to think they are. I think that the point you are missing is that ALL economic systems since the dawn of time are rigged in favor of the rich and/or powerful. If you think you are going to change that by blogging about it when the people/entities you are fighting have trillions of dollars and unimaginable power and influence then you are simply delusional. There will always be rulers and serfs and that is for better or worse the way it as always been. Yes there will be instability, yes there will be crises, yes there will be suffering, but that is life, and I am as prepared as one can be for it.

I am doing just fine in the current system. I grew up in a lower middle class family and I graduated high school with a C average, then I went to tech school and worked hard, graduated with honors and was invited to speak at graduation, I then got a job in engineering and am just about to finish my bachelors degree. I worked all through college and paid my own way. I took out loans but made sure I would be able to pay those loans back comfortably. I made sure the skills I was learning were marketable and that I would be able to make a good living. I make a great living now, yet I remember where I came from. The people I know, the system I know from the inside, works for me, and works for hundreds of other people I know. I don't see this horrible wealth disparity causing society to crumble. I see people around me attaining success in this system. I see regulations stifling small businesses and I see government overwhelmingly causing problems not solving them. People who work in small business, who deal with the regulations and the issues, they know what works and what doesn't. I work with job creators and I see them struggle and I see how many of them care deeply for their employees and want to do the best they can for their employees.

Then I see people like you saying these things, and you are just totally off base, you don't understand the real issues. You don't get it. The majority of economists do not understand the real issues here, they study charts and graphs and numbers and come up with theories, but they are not working with the small business owners, the middle class workers, most of them do not understand the real issues going on. That is why you and them naively suggest that more regulations and more government and redistribution will solve the problem. It won't, the people who know what will work are demonized and made out to be the bad guys. It is truly sad.

Extrapolating from your Middle class position is hardly enlightening and why individual cases make bad laws. Economists look at trends so that we can shape the future and avoid the worst outcomes.

I have not and never will say that the world is not made up of rich and poor and that it will always be that way. What I am simply pointing out is that history tells us that when the divide grows to wide, as it is growing now, society suffers as a whole and we enter a period of great instability which often leads to revolution and collapse. Those are the lessons of history and saying I am alright jack is hardly enlightening to the discussion.

Br Cornelius

Edited May 28, 2014 by Guest

[Guest]

Labor overseas is not cheap, especially when you add in transport, duties, local corruption and other extractions, lower worker productivity from health, absenteeism, turnover, lack of education. It sometimes gets where the local labor has overpriced itself to the point of overcoming all these things.

I think what is really happening to all the middle-level jobs is they are being displaced by automation. The process doesn't close factories the way an outsourcing decision does, but it reduces jobs across the board, each year by a percent or two. For example nowadays my employer emails me problems customers are having. I often know exactly what needs to be done and email the customer, or I may email them asking for more information or a data feed. It eliminates my need to travel so much (although sometimes the customer regardless needs personal hand holding, but they don't need an engineer for that) so that even though I'm housebound I can still work, and several secretaries, employees of the post office and mail delivery services, and lots of others are displaced -- just because of email.

In a few years self-diagnosing equipment will be out there and they won't need me.

That is exactly what is happening to my brother who is a telecom engineer specializing in exchanges. At one time these exchanges were peopled by scores of highly skilled engineers keeping very complex machines going. Now days its him and a few others rattling round multiple exchanges pulling boards which have self reported faults and plugging in replacement. Soon it will be possible to do most of his job from an office. He gets paid mighty well for doing the job he is doing - but he has probably replaced the work of 10 engineers.

Again - you can accept this, as I do, but it doesn't change the fact that those 10 engineers are now not employed and the economy at the bottom has shrank whilst the economy at the top (bosses and share holders) has expanded. What do you do about that is the question ? Certainly trickle down economics seems a very poor answer to this crisis of labour.

Br Cornelius

[Space Commander Travis]

So do people still love microsoft & Google?

[Frank Merton]

Millions of people were displaced by the mechanization of agriculture, even though it was a major contributor to the great depression. Agricultural prices were depressed forcing people off the land.

In time society adjusted. Those very same low agricultural prices gave people enough extra money to buy other things and this ended up employing them in manufacturing and service jobs. There was indeed a trickle down although it took a couple of decades. (This is the States and Europe I'm talking about. In Vietnam there has been rapid urbanization as people eagerly leave the drudgery boredom of the countryside, leading to significant urban underemployment where the society provides something of a job for everyone, mostly by making self-employment and small retail and service enterprises the center of employment).

Where the next wave of jobs will come from I cannot see. Enterprise ownership is the only escape. In the West this has always been in highly concentrated hands, so a class war could develop, but I am not Marx and can see other routes history could take. They would all, however, involved distribution of ownership in some way.

[Frank Merton]

Kinda interesting. With my company I was always the only person doing this particular job. What automation did was eliminate all the traveling and allow me to diagnose from home via emails and sometimes setting up direct feeds. Several support people (a file clerk, a secretary, and support staff to do things like arrange itineraries) are no longer needed, but the big thing was in travel, and the airlines seem to be doing okay anyway. I can figure that out though without too much trouble -- they always had wealthier people as their main customers, who now have more money for things like travel.

I guess that's a major reason Vietnam is pushing so hard on developing its beaches and resorts -- about the only reason anyone would come here, but the beaches are enough.

[Einsteinium]

That is exactly what is happening to my brother who is a telecom engineer specializing in exchanges. At one time these exchanges were peopled by scores of highly skilled engineers keeping very complex machines going. Now days its him and a few others rattling round multiple exchanges pulling boards which have self reported faults and plugging in replacement. Soon it will be possible to do most of his job from an office. He gets paid mighty well for doing the job he is doing - but he has probably replaced the work of 10 engineers.

Again - you can accept this, as I do, but it doesn't change the fact that those 10 engineers are now not employed and the economy at the bottom has shrank whilst the economy at the top (bosses and share holders) has expanded. What do you do about that is the question ? Certainly trickle down economics seems a very poor answer to this crisis of labour.

Br Cornelius

What trickle down economics? We are in an era of Obamanomics right now, liberal policies, taxes have been raised, handouts have been extended for the poor. The defense budget has been cut. The ACA has been put into effect. Government cannot solve this systemic issue you talk about. It is not caused by trickle down, trickle down was one theory as to how to solve the issue, not the cause of the issue. I agree with Frank, technology is making many jobs obsolete.

What do we do about it? I don't think government can solve this. This will have to run its course, it will be painful for millions of people. Where some jobs disappear, new jobs will appear in other areas. People will have to retrain themselves for a new economy.

[Guest]

What trickle down economics? We are in an era of Obamanomics right now, liberal policies, taxes have been raised, handouts have been extended for the poor. The defense budget has been cut. The ACA has been put into effect. Government cannot solve this systemic issue you talk about. It is not caused by trickle down, trickle down was one theory as to how to solve the issue, not the cause of the issue. I agree with Frank, technology is making many jobs obsolete.

What do we do about it? I don't think government can solve this. This will have to run its course, it will be painful for millions of people. Where some jobs disappear, new jobs will appear in other areas. People will have to retrain themselves for a new economy.

the Government is the only one who can address this since they define the economic rules. We still live under supply side economics and liberalized markets - the pendulum has not swung back in any meaningful way and all the interventions of the past 6 years have simply been disaster control on a sinking ship. Nothing has fundamentally changed from the structures which caused the crisis.

As to mechanization, what are we going to replace the skilled jobs with ? How many pool cleaners and dog walkers do the super rich need. I can see a growth in private security as they start to get worried about their stash of cash. If you accept that those jobs are gone for good - do you advocate letting those millions starve to death - since that is the pain you are talking about. If the new reality is less employment for everyone - how do you make that work in a stable society ?

All difficult questions which trickle down economics does nothing to address.

Br Cornelius

[regeneratia]

I liked Jude Wanniski. He was a supply-sider. He was wrong in a couple of places tho. He really took people to task.

http://www.polyconom...&id=7&Itemid=30

But when the economy is so manipulated, where even the supply/demand curve doesn't work anymore, there is something so wrong with today's economic society.

Edited May 28, 2014 by regeneratia

[Einsteinium]

the Government is the only one who can address this since they define the economic rules. We still live under supply side economics and liberalized markets - the pendulum has not swung back in any meaningful way and all the interventions of the past 6 years have simply been disaster control on a sinking ship. Nothing has fundamentally changed from the structures which caused the crisis.

As to mechanization, what are we going to replace the skilled jobs with ? How many pool cleaners and dog walkers do the super rich need. I can see a growth in private security as they start to get worried about their stash of cash. If you accept that those jobs are gone for good - do you advocate letting those millions starve to death - since that is the pain you are talking about. If the new reality is less employment for everyone - how do you make that work in a stable society ?

All difficult questions which trickle down economics does nothing to address.

Br Cornelius

That is the beauty of capitalism and the free market. People will come up with new businesses and new ideas that will be spawned from the new technology and automation that will create new skilled jobs. The demand for energy will keep increasing, resulting in more jobs for those in the energy industry, green energy or otherwise. It is individuals with idea's and an appetite for risk that will create jobs for people. People who are willing to get training and have ambition will be in demand. The free market is the BEST solution ever discovered so far at creating jobs for individuals and elevating people out of poverty. The internet created millions of jobs that did not exist before, new technologies that new companies are developing will create jobs. Government needs to create an environment that is conducive to this. Government needs to get out of the way of people who have good idea's and want to act on them and create companies. Government needs to set fair rules and have as simple and few regulations as reasonably possible.

Your solution will lead to economic stagnation and a slow decline over time. Sure it will help people in the here and now, but it will do so to the detriment of future generations. If we want to stay on top of the innovation game worldwide we need to let the free market do its thing. It is what made us the economic superpower that we are, and it is the only thing that will keep us strong into the future. Central economic planning never has done a good job at maximizing marginal utility for individuals across the board in society. The free market is by far the best at that.

[Space Commander Travis]

have we found anyone yet still willing to argue that people choose to use micro Soft and google because they like them?

[Einsteinium]

have we found anyone yet still willing to argue that people choose to use micro Soft and google because they like them?

I like Google and that is why I use them. Google chrome is my favorite browser, I never use internet explorer because I simply do not like it. In the past I used Mozilla Firefox but I like Chrome better. I use facebook because I like it (vs. Google circles or Myspace), I use Windows because I like it better than Apple, but I use Linux for some things as well.

If something better comes along I would switch to it and use it.

Edited May 29, 2014 by Einsteinium

[F3SS]

^^ Which is exactly how and why corporate giants can fall. They won't make it easy but some day someone will trump their tech. Anyhow, what about their products is bad Admiral? Or are you talking about their practices? Who has a better more user friendly word processor or search engine?