The Fed and Authoritarian Capitalism
Chinese authoritarian capitalism, on display this week in Beijing, has me thinking about America’s democratic capitalism and how we practice it.
Start with the U.S. economy’s most powerful government agency: The Fed, of course. Its decision this week to hold short-term interest rates steady was wrong, in my view; it should have lowered them because recessionary forces continue to increase while wage-price inflation doesn't exist. Wages are dropping in real terms. But my opinion and your opinion count for nothing. The Fed is not directly accountable to American voters, or even to Congress or the President.
Months ago the Fed decided to bail out major investment banks. That put billions of taxpayer dollars at risk without so much as a single act of Congress. Lately the Fed has been looking into the capital assets of these banks and telling them how to bolster their liquidity. Probably a good idea, but here again, nobody authorized the Fed to do this.
Now the Fed is issuing proposed regulations governing the credit-card industry – specifying when credit card issuers can increase interest rates on existing balances, and barring late fees on customers who weren’t given a reasonable amount of time to pay. Personally, I’d also want to stop them from marketing credit cards to people under age 21, and imposing extra charges for paying online.
But what I or you may want is irrelevant. The Fed’s proposal has draawn nearly 56,000 comments, yet the Fed isn’t compelled to read a single one of them. You see, the Fed is acting without congressional authority. Two weeks ago a congressional committee reported out a Credit Cardholder’s Bill of Rights with many of the features of the Fed's regulation, but the banking industry mounted such a lobbying effort against it there’s no way it will get enacted this year, or maybe ever.
In other words, Congress is so immobilized we have to rely on the Fed -- which operates mostly in secret, whose chair is appointed every four years but whose other governors have fourteen-year terms, and which doesn’t even depend on a congressional appropriation for its own funding but draws interest on the portfolio of Treasury securities it controls.
This isn’t Chinese-type authoritarian capitalism, of course, but nor is it, strictly speaking, what we’ve come to expect from a democracy.
Start with the U.S. economy’s most powerful government agency: The Fed, of course. Its decision this week to hold short-term interest rates steady was wrong, in my view; it should have lowered them because recessionary forces continue to increase while wage-price inflation doesn't exist. Wages are dropping in real terms. But my opinion and your opinion count for nothing. The Fed is not directly accountable to American voters, or even to Congress or the President.
Months ago the Fed decided to bail out major investment banks. That put billions of taxpayer dollars at risk without so much as a single act of Congress. Lately the Fed has been looking into the capital assets of these banks and telling them how to bolster their liquidity. Probably a good idea, but here again, nobody authorized the Fed to do this.
Now the Fed is issuing proposed regulations governing the credit-card industry – specifying when credit card issuers can increase interest rates on existing balances, and barring late fees on customers who weren’t given a reasonable amount of time to pay. Personally, I’d also want to stop them from marketing credit cards to people under age 21, and imposing extra charges for paying online.
But what I or you may want is irrelevant. The Fed’s proposal has draawn nearly 56,000 comments, yet the Fed isn’t compelled to read a single one of them. You see, the Fed is acting without congressional authority. Two weeks ago a congressional committee reported out a Credit Cardholder’s Bill of Rights with many of the features of the Fed's regulation, but the banking industry mounted such a lobbying effort against it there’s no way it will get enacted this year, or maybe ever.
In other words, Congress is so immobilized we have to rely on the Fed -- which operates mostly in secret, whose chair is appointed every four years but whose other governors have fourteen-year terms, and which doesn’t even depend on a congressional appropriation for its own funding but draws interest on the portfolio of Treasury securities it controls.
This isn’t Chinese-type authoritarian capitalism, of course, but nor is it, strictly speaking, what we’ve come to expect from a democracy.
posted by Robert Reich | 1:03 PM
130 Comments:
At the same time, its independence
is not absolute.
It must report to Congress, which
ultimately has the power to change the Federal Reserve Act.
Why do you persist on calling this Democratic Capitalism, Dr. Reich?
When was the last time an American voted for the President of the World Bank? The Chairman of the Fed?
If given a choice between Greenspan and Bernanke, what sort of a choice would such a vote have been?
How did Presidential elections impact whether Greenspan got to keep his job?
Does that seem "democratic" to you? In what sense?
but the banking industry mounted such an intense lobbying effort
I've asked before: how many banks have to collapse before the American Bankers Association runs out of lobbying money? One of the newest Fed governors, Elizabeth Duke, is a former president of ABA. Conflict of interest, anyone?
The credit card assets/revenue streams is highly profitable to banks, given how much they've lost in mortgages, until, of course, the card holders declare bankruptcy and stiff the banks, and it's a US phenomenon only. Per a Business Week graphic? US 5 cards per person; India 30 people per every one card; China 60 people for every one credit card.
On the other hand, there are bloggers discussing just not paying the monthly amounts and letting the banks collapse. Let the people working at the banks find real jobs.
You have highlighted another example of why we need lobby reform in this country. The lobby system is a bunch of ex politicians that continue to run this country without a democratic voice.
This same group is invested in some of the big government outsourcing companies like Halliburton & Blackwater. The Iraq war is bringing millions to this clandestine body labeled as "lobbyists".
We have lobbyists running our government and outsourced mercenaries fighting our oil wars.
It is too bad that our country has so many "red" states where ignorant and the religious right preside.
This demographic is blindly voting republican, which proves de-evolution is occurring as our democracy vanishes.
I want to echo b. dewhirst. I've got a lot of respect for your opinions, Prof. Reich, even when I disagree. But, I really can't understand your calling our system a democratic capitalism, unless you are being disingenuous to avoid alienating the know-nothings who think we have such a system.
Our economic system is responsive to multiple authorities:
1. The Fed -- which transfers debt burden from corporations onto the people (i.e. socializes economic loss to protect private gain) and over which the people have zero control.
2. The Executive -- which, de facto, can choose to be responsive or not without consequence. Our current executive has chosen to implement and preside over the most corrupt crony capitalism in our history. Congress and the judiciary have let it act without accountability.
3. The Legislature -- which may appear democratic, but, de facto, has been corrupted by lobbying money. The will of the people has NO power in the face of millions in lobby money. Oh, sure, people can vote, but only for the candidates the lobby money has put forward.
4. The Judiciary -- which, de facto, continues on its path of giving corporations more rights than people.
We may in some principle have a republican democracy that controls our economic system. But, in reality, we have a corrupted crony capitalism with authoritarian aspects.
Al the anti-capitalist wackos have turned this blog into a lunatics asylum.
You have not heard of "appointed" officials? You are truly saying that someone who controls monetary policy should be elected by the brainless and the toothless? Who vote for the guy who has stapled a flag to his chest? Or the guy who appears "likeable?" Or who has not cheated on his wife, as if that is related in the most remote sense to competence?
Please give us the total number of failed banks and please compare that number to the total. Are you serious? A couple of people in a town have the flu and you are calling it an epidemic?
Please cite whatever catastrophic decissions the Fed took in recent years. None?
Well, cite some pretty bad decsisions... hard to prove?
Now cite some catastrophic decisions by elected officials. A couple of huge ones spring to mind.
Imagine the prospective president of the Fed having to campaign and promise what?
Oh sweet Lord, give me strength to keep on reading...
The Raleigh News & Observer has a Sunday article that includes www.helpwithmybank.gov and a pending bill in Congress regarding the Consumer Financial Hotline Act for filing complaints. Wachovia and Bank of America, both located in Charlotte, were the impetus for the consumer complaints article.
Carl Levin (D-Mich) seems to have the best track record with credit card/bank CEOs, hauling them in front of Congress to testify, and kudos for going after UBS and their rich folks's illegal accounts. I saw today on Yahoo that UBS customers are fleeing to other banks. Let's hope Levin is tracking them. Honest, where does it end? As North Carolina's unemployment rate was recently listed as 6% on UNC-TV, North Carolina Now, I had to sit back and laugh. I received a reply from Elizabeth Dole (R-NC) stating that banks are going to change to font size and re-arrange the paragraphs to make the credit card interest rate charges as easy to read a cereal box. I saw the Fed website for credit card complaints; I didn't waste time filling it out. I'll stick with Carl.
Sometimes I think I'd like to see another Andrew Jackson ride his horse into the White House and give it to the aristocracy on behalf of the common man.
The fact that Federal reserve can set "interest rate" lower than inflation because they want to bail out big banks to save market mechanism" (aka, bailing out wallstreet buddies) at the expense of hardworking people's saving is obvious to anybody who is paying attention that the people have no control over the economy. They pour money on to big banks while ignoring inflation that burns average folks to save their buddies.
So what if One can freely buy 5 different type of breakfast cereals at grocery stores or 12 different big SUV at car dealers, but start talking about "real money supply, interest rate", free competition of capital and energy supply. the "freedom" ends there.
It's pretty obvious to everybody that when push come to shove, plutocracy is the order of the day. Preserving how status quo making their money is what really count.
Enron economy is freedom, sensible green energy policy is not.
Greenspan/Bernanke bailing out big banks is freedom, protecting average working people's wage & saving are not.
Corrosive neoliberalism trade policy exporting externalities to developing country is freedom, sensible trading is not.
Supporting gigantic military industrial policy is protecting freedom, creating peaceful international relationship is not.
HMO, health insurance are free market, sensible government health policy is not.
... etc etc.
The government is broken. It is utterly controlled by large corporations and bg money interest. (I mean seriously, just look at the wealth transfer from middle class to corporation and the super rich.)
--------
We'll see how it all plays once budget deficit reaches $1Trillion/year. Right now it's projected to be $700B+, before end of year crashing retail sector.
They are going to further lower the interest rate to defend, freedom and democracy I am sure.
Eat your inflation with Ketchup. It's what good democracy is about.
Wow. So, let me understand the conspiracy, because I'm just learning.
The Fed is part of a group of unelected Wall Street pals who are conspiring to lower wages and take away savings? And big business and lobbyists are behind all of this?
Holy crap! I'm going into the backyard right now to start digging the shelter.
Give me a break.
Letting Bear, Fannie, Freddie, etc. fail would result in an overall economic collapse that few of us (unless we were at least 10 or 12 years old in the 1930s) can fathom, despite what we've read in books or on the Internet.
And, at least in the case of Bear, it wasn't paupers who lost their savings/livelihoods. It was guys who were buying $150/lb lobster salad in the Hamptons a few years ago (and their $100k/year admin assistants). I know that few of the tender hearts on this blog are going to shed a tear for all of those people.
Now, let's talk about inflation and its causes. Basically (and I'm simplyfing here) you've got two kinds of inflation. The first is monetary-based when there are too many dollars floating around. The second is commodity-based, which is supply/demand related. Currency can be inflationary or deflationary depending on how one currency is performing against another, which is primarily due to interest rate parity.
Monetary-based inflation usually manifests itself in all goods, but is typically most observable in wage rates. This is when you will see the Fed getting concerned about inflation.
Supply-demand inflation occurs when demand increases or supply decreases. In our case, we have global GDP growing faster than the world's ability to supply oil--this has been happening for a few years. Think of the curves...prices go up. Oil is a part of our supply chain and in many of the products we purchase, which is causing input prices to rise. We also have food being diverted to fuel production, which is causing those prices to rise.
Another factor at work is Chinese economic development and social policy. Chinese factories are moving upstream to more value-added products, which is causing supply for cheaper goods to decline, thus causing prices to go up. China also has social insurance initiatives kicking in this year, which all employers must pay. This is getting passed along and since most of the plastic goods, shoes, apparel, and electronics you buy are produced in China you get price inflation.
The Fed, through its powers to manipulate rates, can do nothing about supply/demand inflation or Chinese economic development or social policy. You could make an argument for its ability to impact currency, but I would suggest that this is more a treasury policy issue than a central bank policy issue.
Finally, let's talk about wealth transfer. What about the transfer of wealth from the United States to Middle Eastern countries that don't like us very much?
I'm out of this blog. I like debate, but the irrational conspirist bent is becoming ridiculous.
Peace.
Anonymous Matt
Anonymous Matt,
You're right that it sometimes becomes more of an aberration to have rational, balanced discussions on this blog that confront pragmatic, creative solutions to our problems .... Austrian economic theory and a possible conspiracy here and another one there,, how does Joe Doe relate to these farcical concepts and paranoia let alone a graduate in advanced economics?
Dr. Reich should be explaining why the EU central bank is raising bank discount interest rate with inflation at 3.7% while he is suggesting even lowering this already very low rate rate in the US with an inflation rate of over 4.0%? How is a continuance of Greenspan's 5-year cheap money policy going to extricate us out of a possible long recession when cheap monetary policy caused all the Debt explosion and resultant housing crisis we're in today?
I favor this sort of policy discussion than subtly feeding the paranoia of Authoritorian Capitalism, for example, which only brings out disjointed, divisive, useless conspiracy hyperbole... utterly divorced of factual content.
Art, Notsovast, Athena, Kayxyz, Matt and many Others:
Some of us have addressed each in his or her own way the "ME" vs. "WE" dilemma in American culture that appears to be one of the prime root causes of our divisions and inability to communicate across idealogical lines to come to equitable societal and economic policy programs benefitting Mainstream as well as Upstream Americans.
Some of our posts have suggested in so many words that in a 360 degree circle where the higher range is "ME" (the individual) and the lower range is "WE" (society as a whole), America has left the 180 degree point and is pushing the 320 degree level... while Europe is in the 120 to 180 degree range as a cultural norm ... the latter resulting in a more unified economic-social society in contrast to out `Two economy, Broken Society´ so well diagnosed by Mike Hudson recently.
Well, David Brooks has just written a very thought-provoking version of this cultural dichotomy with the Asian `WE´ choices. He alludes to latter´s novel potential positive dimensions vs. the discordant path we are on in an excellent essay published yesterday entitled, `HARMONY AND THE DREAM´.
His reflections are also a small microcosm of Europe´s social-economic-political harmony where the usual robotic snap cliches of `Socialism´ have no relevance whatsoever ... contrary to the propaganda of radical pundits or conservative dogmatists. Capitalism with a Social Conscience is working well in the Old Continent.
If you haven´t read this article already, dear people, then I highly recommend it!
Frank Thomas, The Netherlands
Readers,
Miner Correction: 2nd paragraph, next to last sentence: `out´ should be our.
Readers:
Correction: Mike Hudson should, of course, be Mike Whitney.
Handing economic management over to central banks is not only undemocratic. It leads to a set of decisions with profound distributional consequences. Price stabilisation policy means allowing or helping the value of assets held by the rich to rise and stepping in to tighten policy whenever wages show a sign of catching up. This provides a macro ratchet increasing inequality and boosting the share of national income going to profits. The US is not alone in this. Indeed, the ECB is even worse in some ways
Anonomous:
You have highlighted another example of why we need lobby reform in this country. The lobby system is a bunch of ex politicians that continue to run this country without a democratic voice.
If you were given a job for $300,000.00 to lobby for an industry like a lot of ex politicians who know congress would you turn that salary or payoff down and not advocate for the ABA?
Also, if you were a senator and a congressman trying to raise money for re-election and the ABA approaches you, wines and dines you, and convinces you that you will be re-elected by an appropriate contribution to your campaign, would you turn the ABA down knowing that if you did not vote for that bill of theirs, they would not only not give you a campaign contribution, they would use a little more money just to get rid of you by contributing to your opponents.
Bill Moyer’s highlighted one Oregon congresswoman who essentially helped ccontractors with several million dollar military contracts and only ended up with contributions from those companies in the range of $1000.00. So, she sold her office to these contractors and caused the taxpayer to spend millions on products the military did not even want. Those people who wined and dined her did not care about the American taxpayer. The congresswoman did not care about the American people. She was concerned about her re-election. This is what Ernest Fritz Hollings was talking about in his new book.
Hey, let's stop all these negative remarks about our governement. Without a doubt the US has the best politicians money can buy. If you want to change things, save your money, get rich and then buy yourself a senator or two. It's the American way.
It is central banking itself that is authoritarian. The only logical option is a gold standard, but I'm sure Dr. Reich would not favor that since he thinks interest rates should be lower now. Those who favor more government will never endorse a gold standard because it would limit government spending.
And whoever said in an earlier comment that there are two kinds of inflation, well, I'm sorry but you're wrong. Inflation is always monetary. Even the commodity inflation we see today is monetary. Changes in supply/demand only affect relative prices and do not cause inflation, if you define inflation as a general rise in prices. Of course, inflation is actually defined as an expansion of the money supply but that's an argument for another day.
Dr. Reich apparently believes that the way to solve inflation is to have some more. He's probably right that wages would rise, but if the rise isn't real (more than inflation) what have you accomplished?
Replacing the folks running the Fed will not solve the problem. More oversight from politicians is not the answer since as many of you point out, they are corrupt. The only answer is to remove this power of men to manipulate our money. We do not need inflation for growth. We need stable money and fiscal policy that encourages saving and investment rather than consumption.
Joe,
God bless you, your last comment is RIGHT ON THE MONEY!
Whatshisface and Athena:
Whatshisface,
“Are you living in America, Aly K or somewhere in the middle east”
Can you please explain to me if that comment was meant to be sarcastic? And I encourage you to not be shy if it was :) And if it wasn’t, what the hell did you mean by it (ie. there are ‘Aly’s’ living all over the world)?
Athena,
Besides the link to the paper that I already posted (critiquing Thomas Friedman’s book), if you have time, you should check out Dani Rodrik’s (of Harvard) perspective (http://ksghome.harvard.edu/~drodrik/Saving%20globalization.pdf) on the matter, in a paper titled “How to save globalization from its cheerleaders” (T. Friedman being one of the biggest).
For those noting my caution towards people like T. Friedman and Naomi Klein (in general), I refer you to this small but wise blog entry I came across a while back (http://ipeatunc.blogspot.com/2008/01/musings-on-naomi-klein-problem.html). Friedman is a good writer, but the foreign affairs correspondent’s understanding of foreign affairs is so immature that he was a STRONG supporter of the Iraq invasion – an issue where debate has been reduced to: was it one of America’s worst foreign policy disasters, or THE worst? T. Friedman’s conclusions in the area of economics are no better.
Aly K
Dr. Reich,
Talk about an IMMOBILIZED and DYSFUNCTIONAL Government -- the US Senate for the 8th time this year has just refused to sign a bill extending Investment Tax Credits for installing SOLAR energy systems and Production Tax Credits for building WIND TURBINES and other efficient, renewable energy systems.
As Thomas Friedman notes, McCain never appeared to vote for or against this bill all eight times. Yet, his campaign team has developed an ad running during the Olympics showing a number of Wind Turbines. Obama also indefensibly did not show up for recent vote but, to his credit, voted positively for extension of the Tax Credits in some earlier votes taken this year.
These credits are critical until firms developing new renewable energy systems are selling at a scale where costs come down to at least a breakeven point and/or are competitive with fossil fuels.
What kind of a crisis do we need to stop government undermining the welfare and security of all Americans because of an arrogantly divisive two-party system incapable of uniting on one of the most critically fundamental issues facing our nation ... clean energy independence?
It's quite obvious our US Senate doesn't care a hoot about the necessity of a Marshall Plan investment attack strategy incorporating Alternate Fuels. Some cherry pick the Tax Credits they favor depending on political affiliations, e.g., McCain favors credits for developing 45 Nuclear plants "immediately", (toxious waste disposal being of secondary concern) which, not surprisingly, most Senate Republicans favor and most Senate Democrats do not favor.
So much for bi-partisanship on broad-based job generation investments in renewable clean energy innovation. This is all pretty disgusting, demoralizing behavior by our nation's do-nothing Representatives.
If there's a compromise idea to get out of this morass, then may I humbly offer one and welcome those who have a better idea or two:
Extend the Tax Credits for 4 years (to give innovative firms planning time stability) with proviso credits extended directly to corporations must be refunded interest-free over 10 years once a firm's Pre-Tax Profit (excluding any Loss Carry-Forwards) results in a 10% Return on its Equity Capital, as reported in independently certified annual reports.
Any Tax Credits offered to individuals for buying alternate energy efficient systems would expire in 4 years. At same time, our government should consider doubling the Fuel Tax on vehicle gasoline (except trucks, perhaps) to help pay for Infrastructure Investments and to encourage quick conversion to clean renewable energy efficient cars and investments in Alternate Fuels (e.g., solar, wind, biofuels, natural gas, hydrogen, possible liquefaction of coal and possible nuclear energy expansion).
Karl Marx
“Democracy is the road to socialism.”
Rothschild Brothers of London communiqué to associates in New York June 25, 1863
"The few who understand the system, will either be so interested in its profits, or so dependent on its favors that there will be no opposition from that class, while on the other hand, the great body of people, mentally incapable of comprehending the tremendous advantages...will bear its burden without complaint, and perhaps without suspecting that the system is inimical to their best interests."
Milton Friedman
A society that puts equality ahead of freedom will end up with neither equality nor freedom.
Alan Greenspan - “Gold and Economic Freedom” 1967
"An almost hysterical antagonism toward the gold standard is one issue which unites statists of all persuasions. They seem to sense – perhaps more clearly and subtly than many consistent defenders of laissez-faire – that gold and economic freedom are inseparable, that the gold standard is an instrument of laissez-faire and that each implies and requires the other. . . . This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights."
The Dear Dr is of course just one of the 4000+ or so CFR, TriLats or BB's that run America. The multinatl CEO's, Deans, Dept Heads, Media moguls, Talking Heads, that tell Americans what they want them to think. Why else compulsory govt education? As Lenin said "Give me four years to teach the children and the seed I have sown will never be uprooted."
Lenin also said "The way to crush the bourgeoisie is to grind them between the millstones of taxation and inflation."
Basically the whole Progressive Era was one of financial and industrial elite takeover of our govt. The very special interest cartelization of every major industry and "self" regulation as barriers to competition from banking to railroads.
The myth was/is that TR busted any trusts. The elites concocted for themselves, before the income tax w/which to pay the Fed cartel it's interest, a system of tax free foundations and trusts that perpetuate their vast wealth at the expense of the common man.
This is one sick corrupt pusshole of a govt run by private club members who meet in strict secrecy to plan our futures and their next power and money grabs.
Athena - do you really think Congress will give up their unlimited CC of re-elections that accrues to legions of unborn voters who have no say?
Americans are about as UP on politics, our history and economics, because they are lied to everyday and for the past hundred years of educrat propaganda.
We the People are the voters. WE should be able to give to, or say anything we want to in electing legislators. But the General, in gen'l welfare means just that. ALL govt expenditures must meet the "general" definition and benefit equally ALL taxpayers or it is not general but specific. And specific is special interests NEVER contemplated in the constitution as being any kind of legal beneficiary off the people's purse.
IE a battleship meets the rule if built in constitutional defense of American shores - whereas a Steven's "bridge to nowhere" never could. Nor no bid contracts for elite special interest wars of aggression against those who did not attack us.
Wiki CFR, see who runs the country, look at the inter-relationships and interlocking board memberships.
Best yet read "Wall Street, Banks & American Foreign Policy" at http://www.lewrockwell.com/rothbard/rothbard66.html
This will open most eyes to what only their gut may have been telling them - but never mentioned in the lamestream media that always attempts marginalizing critics of the Leviathan State and it's cheerleaders who's teat they are firmly latched onto.
Joe nails it perfectly!
Inflation is PURELY a function of the printing press, IE the increase in the quantity of money units.
Prices do not rise but under constrained supplies. But more dollars printed, which debase themselves and all others extant, each now purchase less.
First users of the "fresh" money generally benefit from it's full purchasing power - but as the volume of money works into economies it bids up prices - leaving last users with a nasty haircut in purchasing power.
Govt, high finance, and elites w/good credit get the benefit of cheap money who spend it first, by the asset price inflation their own spending of the expanded currency creates.
Ponzi would be so proud; whether the socialist Fed or SS. Both contrived to benefit the few who produce nothing on the backs of the many producers who pay.
Fred & Fannie are perfect examples. Their managements made millions in individual compensation - they should give it all back.
There is a cure - absolutely vote OUT all incumbents. A giant enema of the power elites from govt, replaced with citizen legislators w/the conviction to cut govt back down to its nightwatchman of our rights status. It's very size virtually guarantees ANOTHER century of endless wars and unpayable debt.
Joe nails it perfectly!
Inflation is PURELY a function of the printing press, IE the increase in the quantity of money units.
Prices do not rise but under constrained supplies. But more dollars printed, which debase themselves and all others extant, each now purchase less.
First users of the "fresh" money generally benefit from it's full purchasing power - but as the volume of money works into economies it bids up prices - leaving last users with a nasty haircut in purchasing power.
Govt, high finance, and elites w/good credit get the benefit of cheap money who spend it first, by the asset price inflation their own spending of the expanded currency creates.
Ponzi would be so proud; whether the socialist Fed or SS. Both contrived to benefit the few who produce nothing on the backs of the many producers who pay.
Fred & Fannie are perfect examples. Their managements made millions in individual compensation - they should give it all back.
There is a cure - absolutely vote OUT all incumbents. A giant enema of the power elites from govt, replaced with citizen legislators w/the conviction to cut govt back down to its nightwatchman of our rights status. It's very size virtually guarantees ANOTHER century of endless wars and unpayable debt.
robert reich proud purveyor of fine third reich liberal economics and pinko commy political observations;as well as all things strange!We salute your reich to be damned,if you so wish!
anonymous 8/14:
There is a cure - absolutely vote OUT all incumbents. A giant enema of the power elites from govt, replaced with citizen legislators w/the conviction to cut govt back down to its nightwatchman of our rights status. It's very size virtually guarantees ANOTHER century of endless wars and unpayable debt.
It would appear that your statement begs the question of who does what and to whom and whence do they commence to do that? Do we elect corrupt politicians or do they become corrupt after they become infected by the system? Are they all corrupt, self-interested megalomaniacs or are there decent, caring, intelligent ones who can't muster enough support to buck the system?
One of the fallacies in term limits was that while you weed out the incompetents; the greedy, those huddled masses yearning to be rich, you also eliminate the good ones, those sincerely interested in the welfare of all, of a better way, few though they may be.
Chances are that the system corrupts them as they enter it. It is highly unlikely that all who run on a platform of government reform; of changing the way government works, are lying or cajoling us. Granted it is a universal selling point available to the determined and the less candid but how are we to decide which is which?
Even if we throw out all the incumbents, then we elect a new group and they too will succumb to the pressures of the system and end up no better than those they replaced. We could invoke term limits but it will just shorten the conversion process, it will not change it.
It has oft been posited that democracy relies on an informed populace. Do you see where we have that? Politics has so dumbed down the dialogue, netting complex decision making to nothing more than cute sound bites, that even some of those "informed" can't see the forest for the trees. The very nature of democracy, giving strong consideration to minority interests, leads to compromise solutions. Compromised solutions may be fair, all things considered, but seldom are they the best solutions. They often can be viewed as best only when in the context of what was achievable.
I do believe that our founders envisioned a citizen legislature. They were familiar with ruling class structures and rued the power sought by a select few. At the same time you'd be hard pressed to find among our founders, a cobbler, a store clerk, a family farmer. They wrestled mightily over direct voting; over vesting too much power in the hands of an uninformed populace. They accepted direct voting for our version of the House of Commons but the vaunted Senate, our version of the House of Lords, were to be appointed not elected. The Presidency was too important to allow direct votes or appointments so they conjured up the Electoral College System which continues as a bane today.
Throwing out all incumbents because you are disgusted with their performance will probably only lead to a new group to be disgusted with.
Keep in mind the musings about power and corruption. Better yet keep in mind the musings of Pogo.
Art,
Well said, Art. I know you know my high appraisal of Joe's piece related primarily to his very last comment(sentence) ... a point close to my heart he might have expanded more on.
Frank:
Thanks.
I did realize and you stated it, that most of Joe's ruminations were not consistent with most of your views, other than the his last statement.
Art, over the last few election cycles, I've watched as candidates that have a record of bucking the system and going with the rule of Law and Constitution, have been sidelined by their parties, in favor of tainted candidates that talk like rebels, but vote like corporate drones.
Unless corporate vetting of candidates ends, then whenever we vote incumbents out, we're only getting a new politician that has been pre-screened by the same interests that the old politician represented.
Knowing this, I'm struggling with the problem of trying to understand if voting in a rigged system, means anything at all.
On the one hand, I'm not voting for a candidate that represents me or my interests. I'm voting against a candidate that has proven that he or she will sell me out for a few bills.
On the other hand, by voting in an election where I can choose between Kang or Kodos, I'm making it clear that I approve of this system that is destroying my country.
In effect, I'm coming to believe that I am betraying my country by voting in sham elections.
weaseldog:
I feel your pain. Can find nothing in your post that is not sound wisdom.
I have, in a few local and Congressional elections, been able to vote for someone, but agree, generally, especially in national elections, it is a vote against.
Certainly contrary to the original dream but perhaps continuing to vote against, until such time as we can figure out how to right the ship (right, definitely not intended here as a political direction) may be our only salvation.
Should we attempt some meaningless protest by not voting, we create an even worse scenario.
When your car is sliding on the ice, letting go of the steering wheel garners you no advantage.
Can you imagine what Dumbya would have tried had he really had a mandate from the voters?
Matt:
...You are truly saying that someone who controls monetary policy should be elected by the brainless and the toothless? Who vote for the guy who has stapled a flag to his chest? Or the guy who appears "likeable?" Or who has not cheated on his wife, as if that is related in the most remote sense to competence?
Now I resemble that first remark.
Damn Matt, if you take away all those criteria how the hell do we know whom to vote for?
You did leave open, "have a beer with" though, but I don't drink beer.
Welcome to democracy! ;) ;)
The papers and their paid critics say that voting for third parties is "throwing your vote away!"
I say that voting for the least of two evils is also throwing your vote away.
There are many third parties that can't BUY airtime and remain quite invisible to the public. Ralph Nader is one and Al Franken is another. They know that this system is under the control of Banks and corporations and special interest groups like AIPAC.
They represent a viable alternative to our government feeding at the trough of the moneyed classes. I'd rather throw my vote to Ralph Nader than see another democrat or republican. And, if he ruins it for Obama, fine.
how did I get here? Not sure- but I have you bookmarked-
Words of wisdom for all to read.
TipToe (wherever you may be),
As I recall your complaints about your soaring electric bill, recall this article, review this chart presented in this post and just imagine how wide the disparity is today.
Personally, I am happy to report that my (reasonably priced) electricity is produced from coal that is mined right here in Routt County at one of the largest coal mines in the world.
P.S.) If you want cheaper Natural Gas, then join me in advocating for “Drill Here, Drill Now”.
The US far from being Democratic Capitalism or "free market" capitalism is actually corporate socialism. Other countries such as Norway, for example, have strong central governments fully integrated with central banks and sovereign wealth funds which tap their oil wealth for the benefit of their citizens in contrast to the US which simply gives its oil wealth away to Big Oil for Big Oil's exclusive profits. While other countries accumulate capital (and thus I would characterize them as state capitalist economies), the US accumulates nothing but debt and leaves its citizens to fend for themselves while lowering corporate taxes and bailing out large corporations. See Sovereign Wealth Funds, State Capitalism and Corporate Socialism
To: John Lawrence,
Couldn't agree more with your remarks about our "Corporate Socialism" vs. "European State Capitalism." Excellent summary on your part!
I've been in the offshore oil business operating out of Rotterdam, Holland in the 70s, when the big discoveries were being made offshore UK and Norway (and later some smaller discoveries offshore the Netherlands). Since that time, I've always been appalled at how naive and irresponsible our government has been in its relations with oil companies, specifically concerning the tax concessions and the paltry lease deals made with oil firms for onshore drilling acreage, particularly for offshore drilling on oil-gas sites.
Now Washington seems to want to repeat the same mistakes with offshore tracts that appear very, very promising ... unlike Norway which has formed a 50-50 partnership for development of their offshore fields ... a business arrangement all parties are happy with whereby one party's equity input is the potential oil-gas Site (owned by the taxpayers of Norway) and the other party's equity input are the exploration and production development costs to bring oil and/or gas flows on stream to shore for refining.
This profoundly sensible business arrangement has made Norway energy independent while filling their Treasury coffers with considerable funds ... further enhanced by fact they are in addition net exporters of fossil fuels.
As for US Corporate Tax Rates vs. European Corporate Tax Rates, many ill-informed pundits claim (on prime-time TV stations) European rates are higher than US rates ... using this as an excuse to promote for EVEN LOWER corporation tax rates (e.g., McCain). This is typical devious propaganda permeating our political-social discussions in America that has little basis IN FACT.
Firstly, corporate taxes paid in America today are already at a miniscule level of less than 12% of all US taxes paid! Secondly, a recent study by a Congressional committee led by Carl Levin has confirmed that more than 65% of all corporations in America with sales of $50 Million to $250 million pay NO taxes due to special privileges and tax avoidance structures, e.g., involving tax evasion transfer pricing gimmicks to report no profits from US operations. The majority of Foreign firms operating in the States also pay little or NO taxes for same reasons. Thirdly, when taking these factors into account (including favorable tax concessions to oil firms and other larger firms), US EFFECTIVE Corporate Tax Rates are well BELOW European Corporate Rates.
Holland is an example of country that practices "State Capitalism" in many different ways. For example, the economy is going much slower now, so people are saying the government should not increase the current 19% Value Added Tax as planned. Government officials are listening and note that this will lead to a Euro 2 Billion(+-$3 Billion) Deficit in next year's budget. Will this Deficit amount be accepted and funded with Debt Borrowing? ABSOLUTELY NOT! Officials will find a way to cut spending somewhere because it's a Golden Rule here NOT to borrow for Spending shortfalls unless critically necessary ... Borrowing should be only for Long-term Investments.
Thus, Financial Prudence balanced against Social Protection Priorities is alive and well here. I look upon it as prudent "Capitalism with a Conscience," but I also like your phrase, John, "State Capitalism," but I would add, "Combined with Private Capitalism".
Amazing how we Americans continue to allow ourselves to be manipulated by self-serving ideological skulduggery, lobbyist insiders indirectly controlling the purse strings, and pure gross mismanagement of taxpayer monies and assets.
When is enough going to be ENOUGH? Optimistically, no doubt, I'm placing my bets on CHANGE in the next election where a measure of integrity, transparency, and leadership will hopefully return that focuses on the general welfare of ALL Americans.
To: John Lawrence
Correction: 3rd paragraph form last:
John, "State Capitalism," but I would add, "Combined with Balanced Capitalism."
To; John Lawrence
Correction, sorry: 1st paragraph:
Couldn't agree more with your remarks about our "Democratic Capitalism" vs. ...ect.
Yes, coming soon.
We'll pay the oil industry to pump the oil off our coast. We'll pay them to sell the oil to China. Then we'll watch them invest that money in Dubai.
weaseldog:
Ain't globalization grand?
I can't wait to benefit from the increased GDP. To say nothing of the increased tax revenue.
Good GOD, I hope you fools don’t get control of our government!
But, if you do, it won’t take long for the American people to remember just how bad things can REALLY get when Dims have absolute control.
Ah, the good old days of Jimmy Carter.
It’s time for all you haters of capitalism to expose yourselves to substantiated facts on corporate taxes (here and here).
To: John Lawrence
What the article "Sovereign Wealth Funds, State Capitalism and Corporate Socialism" says about Norway's unique management of its national Wealth, especially from its offshore oil-gas developments, is entirely true. Today, they are only partially using the substantial annual Interest Earned on their gigantic accumulated Funds and preserving the base principle for future generations. In my offshore oil-gas entrepreneurial activities in the 70s, I had many commercial and personal meetings with established Norwegian businesses (quite a number being family owned for generations past and present).
I was always utterly impressed with their down to earth combination of human sensitivity, fairness, and pragmatic business sense. Found the same qualities in the Dutch, so I feel very fortunate. Wish we Americans could rediscover these qualities but am afraid our massive Debt situation places constraints on our imagination and ideological flexibility for how to come out of our convoluted excesses in a balanced, equitable way.
Dr. Reich,
I see the idiot psychopath, Sbvor, is back again calling all posters to your blog Marxists, Socialists, Lenin Communists, distorted liberal wacko Americans again. How boring! Big Brother Sbvor is about to resurrect us from his charge of Anti-Capitalist indoctrination with his homemade cocaine of gibberish! Where's the man with the butterfy net? We have a speciman requiring a lot of careful attention.
Frank:
I knew it was too good to be true that sbvor was gone forever but it was a pleasant respite.
My theory is that since he was failing so miserably at gaining converts here his employer forced him to take a refresher course in bullsh-t production. He spent the week on a cattle ranch.
His employer fails to understand that he has no capacity for learning. His talents are limited to links and infinite repetition.
Notwithstanding your hope and optimism sbvor is exhibit #1 of the problems America faces. Not that he represents a majority, no where near, but he and his ilk create enough havoc to make progress on any front difficult and time consuming.
He is a shining example of our founder's concerns regarding an informed populace.
Frank,
In the “special” world of Dims, is an utterly unsubstantiated charge of “idiot psychopath” more politically correct than objectively describing what several in this forum have, themselves, admitted?
Let me remind you:
1) So far we have commentators NotSoFast and B. Dewhirst who admit to being Socialists.
2) Art has said:
“Communism is a beautiful system”
Well, I guess beauty is in the eye of the beholder.
At this stage in human history, for ANYBODY to fail to understand that, even at a theoretical level, Communism is pure evil is just utterly inexcusable!
3) “Political Correctness” is, itself, an undeniably Marxist doctrine created by self-described Marxists.
But, by all means, please continue to describe me as the “idiot psychopath”. It only serves to further substantiate what sensible people already fully understand.
Idiot Psychopath,
What Frank Thomas is saying -- although understandably difficult for you to understand -- is that you constantly have used the terms Socialist, Communist, Marxist terms in many prior posts with overt intention to insult, to be derogatory, to demean the positions of others on this blog. I've seen no evidence Mr. Thomas is an anti-Socialist or anti- anything except our obviously self-destructive directions as a nation.
Anonymous,
Anybody who fails to see the anti-Capitalist attitude which is pervasive throughout this blog is nothing short of willfully blind.
It's hard to tell what Sbvor actually believes.
From what I can gather, he believes that human beings are only worth what's in their bank accounts.
Or to put it more simply, corporations and the super rich are to be loved and worship. they should have all manner of powers granted to them.
Human beings in general lowly, to be despised, to be downtrodden and only worth what you can steal from them.
This is what I believe he means when he talks about capitalism. If you don't like this definition, then you're anti-capitalist.
Sbvor,
If your concept of Capitalism is humungus debt, rampant housing bankruptcies, no health care for 45million Americans, a decayed infrastructure and elementary/high school systems, stagnant wages for over 60% of wage earners, 85% of household wealth concentrated in top 10%, poverty level unemployment compensation, corporate lobbyists in major control of our politicians' use of our tax money (call it taxation without representation), then you are beyond help at the best institution for the insanely delusional.
sbvor:
Aside from the fact that it is customary, when quoting someone else to either include their entire statement or use ellipses or footnotes or some other notation to reflect that you are taking a statement out of context.
Cons are great at taking things out of context and never denoting same.
That said; maybe you can point out to me which of the countries from your linked table were "pure communist" countries; were practising communism in its final envisioned form; were anything other than dictatorships using the name of communism as a ruse to appear as a country concerned with the welfare of its masses.
Unfathomable that you spend innumerable hours searching the net for "substantiation" of your clownish views only to settle on data that does not come close to proving your premises.
You fail to secure any adherence to your views, except from other feeble minds, because most of us, religious or not, recall the warnings regarding "false prophets".
anonymous:
sbvor has no concepts. He lacks the mental capacity to comprehend ideas.
He is, at best, a parrot, a mimic, offering nothing but comic relief.
Weasel,
What I believe is very easily understood.
In the ideal, I believe in free minds and free markets operating under the rule of law and a democratically elected government. In short, I am a “ Classical Liberal ” (a term which is almost entirely antithetical to what we know today as “American Liberalism”).
In practice, I understand that entirely free markets are not optimal. And so, some degree of government regulation is necessary and appropriate.
The air pollution regulations imposed to date on coal-burning power plants seem, in general, to fit that mold. But, any and all CO2 regulations are clearly an example of a step too far which is not even remotely supported by the peer reviewed science (only by the political science, as exemplified by the purely political IPCC).
In general, the degree of government intervention into free markets advocated in this blog is clearly many, many, MANY steps too far!
Art,
1) I quoted you accurately.
2) I provided a direct link to your complete statement.
3) I reiterate that:
“At this stage in human history, for ANYBODY to fail to understand that, even at a theoretical level, Communism is pure evil is just utterly inexcusable!”
If you care to retract any portion of your previous statement, feel free to do so. If not, OWN IT!
sbvor:
Once you get past Reading 101 you will at least know that I did not say you quoted me inaccurately just incompletely. At that point it is doubtful you will understand the difference any better though.
I do not wish to retract what I said. I should retract because I am confronted by an idiot? Mais non!
Anonymous,
The “humungus [SIC] debt” you refer is driven by Entitlement spending.
1) In fact, we first began to lose control of government spending shortly after the implementation of LBJ’s massive new Entitlement programs (Medicare & Medicaid) took hold.
2) Prior to those new Entitlements (excepting for World War II, which is not covered in this database), only two recessions produced ANY deficit spending.
3) Subsequent to LBJ’s Entitlement binge, deficit spending became the norm. The only significant exception to this new norm was brought about by the single largest speculative bubble ever known to humanity (the dot.com bubble). Clinton was the unwitting beneficiary of unprecedented revenues from day traders paying a small fortune in short term capital gains taxes.
4) The substantial decrease in “Net Government Saving” from 2000 through mid 2003 was directly related to:
A) The years long deflating of the NASDAQ bubble.
B) The terrorist attacks of 9/11.
C) The associated recession.
5) This chart more clearly shows the correlation between LBJ’s entitlement programs kicking in and the loss of control over government spending.
It also clearly demonstrates that the only significant exception to deficit spending as a function of Entitlement spending was brought about by the single largest speculative bubble ever known to humanity (the dot.com bubble).
6) If we do not reduce spending on the big three Entitlement programs, it WILL kill us!
Creating NEW Entitlement spending (under Obama) will kill us that much faster!
Blame the Dims (as usual)!
Anonymous,
As for your class warfare arguments about the poor victim underachievers in our society, see this.
Socialism does nothing but drag the entire population down to the same level of misery.
If that is your idea of egalitarianism, I want nothing of it!
P.S.) If Socialism was a great system, then our public school system (built on a Socialist paradigm) would prove it. As you readily admit, that Socialist paradigm has proven to be an abject FAILURE (as ALWAYS).
VOUCHERS! NOW!
anonymous:
Omitting the expense of the Vietnam War from his assertions does nothing to defame sbvor's arguments. He just prefers the myopic view.
sbvor believes in brevity even if it means leaving out pertinent facts.
Sbvor
Pure communism and what was practiced by Stalin, Lenin, Mao, Castro and the likes were two different things. Although I personally reject its pure form as well, I do acknowledge that the pure form as envisioned by Marx was not dictatorial. It included a vaguely defined system of universal justice and equality. He used the term "dictatorship of the proletariat" but in his time the term did not mean what it means today. Hal Draper has written that Marx, and the conservatives of his time, called the most thoroughgoing democracy as a "dictatorship." It was the dictatorship of the people over the propertied classes. Draper has discussed how the meaning of the word "dictatorship" has evolved to mean authoritarianism. And since you are going to reject Draper because he is one of the most famous American socialists and therefore according to your perception his interpretation "biased" , let me add what Engels wrote on the matter: "Dictatorship of the proletariat is a rule by a democratically elected popular majority." In principle therefore, the "dictatorship" Marx described is the same as the decision-making process of a town meeting or of a parliamentary majority. That "dictatorship" had nothing in common with a one-man party or a party dictatorship.
Finally
I totally disagree with Marx, because I oppose his economic model. But I do understand where he is coming from. Marx lived during the take-off of the Industrial revolutiuon in Europe, a period of shameful human rights abuses, a period in which the "enlightened" Great Britain was sending 4-year olds to work in mines because their little bodies could fit easily in the tunnels. If I lived in those times, I would be prone to accept such an economic model. Plain and simple.
But, if you lump together "communism in its pure form" with communism as practiced by the previously mentioned butchers, then you might as well throw genocidal Congo into the group of democratic nations since its official name is "Democratic Republic of Congo"
Readers,
Given Sbvor's LIES above, it's appropriate to set out the FACTS about DEFICITS under Republican and Democratic administrations since Johnson. These Deficits include Soc.Security/Medicare and would not change much in relative terms among different administrations if Soc.Security/Medicare were not included.
__________________________________
TABLE 2: DEFICITS AS A % OF GDP
___________________________________
Johnson...1963-68..........-1.1%
Nixon.....1969-73..........-1.0%
Ford......1974-76..........-2.7%
Carter....1977-80..........-2.4%
Reagan....1981-88..........-4.3%
Bush Sr...1989-92..........-4.0%
Clinton...1993-2000........-0.8%
Bush Jr...2000-08..........-2.3%
..........2008 Estimate....-3.5%
___________________________________
SUMMARY:
Carter/Clinton Years.......-1.3%
Reagan/Bushes'Years........-3.5%
___________________________________
Johnson/Carter/Clinton.....-1.3%
Nixon/Ford/Reagan/Bushes...-3.0%
___________________________________
DEFICITS under Democratic administrations have been far below those for Republican administrations. Both Reagan and Bush Jr. exploded Defense expenditures while at same time reducing taxes going primarily to top 10% of society that did not result in a compensating increase in Tax Revenues. Result: a DOUBLE HIT of Defense expenditures increases with tax cuts that did not lead to compensating Tax Revenue increases. Reagan saw this happening and cancelled his 2nd planned tax cut.
Svor
In the ideal, I believe in free minds and free markets operating under the rule of law and a democratically elected government. In short, I am a “ Classical Liberal ” (a term which is almost entirely antithetical to what we know today as “American Liberalism”).
In no case has America operated its free market system under the rule of law.The economy has been trashed because of predators in the Market getting away with wholesale robbery using all sorts of gimmicks. Another aspect of the WTC was that it may have been destroyed by Bush and Israel because it represented the memory of the world financial system. When the US launches covert and overt wars throughout the world, this is done for economic reasons that encourage the free market? The economic war displayed by Sanctions and Loan policies is not free trade but illegal warfare against other nations who are deemed to be our enemies. George Bush and his capitalism has not reflected a will to abide by any law. In fact, he has a bunch of lawyers always willing to find loopholes around any constitutional matter or international law so that he can defy all of us and throw it in our faces. There is no law anymore being followed by capitalist nations. There is no law that every got in George Bush's way. This is free trade?
Frank,
1) The ONLY thing you’ve done is PROVE my thesis (with utterly unsubstantiated assertions).
2) Let’s ASSUME your figures are accurate.
A) The only way the disaster of Entitlement spending can be even slightly mitigated is by gutting our military. On balance, ever since FDR (who created Social [in]Security) defense spending, as a percentage of GDP, has declined. Republicans have simply given our military a little CPR after each cycle of extreme gutting of our military by Dims.
B) But, gutting our military is in the interest of World Socialism.
C) The QUANTITATIVE DATA PROVE that tax revenues are essentially UNCHANGED whether we set the marginal tax rate at 91% or 28%! But, reducing the marginal tax rate has clearly resulted in lower unemployment rates and less severe recessions. So, other than to indulge your utterly counterproductive Class Hatred, what benefit is there to a higher marginal tax rate?
WhatsHisFace,
The rule of law will never eliminate criminal behavior. But Socialism institutionalizes criminal behavior (by putting the fox in charge of the hen house).
If you think Capitalists who operate outside the law get away with it, ask Ken Lay (or many other examples).
If anything, the prosecution of Capitalists in recent years has been overly zealous (a carefully chosen word). But, generally speaking, don’t expect the media to inform you of that.
I suspect that, like all “good” little Socialists, you view ALL Capitalist behavior as “criminal”. Right?
Athena,
Since you seem well versed in Marxism, perhaps you can show me where “The Communist Manifesto” is in sharp contrast with the ideology of American Liberalism.
Personally, I find the two ideologies to be virtually indistinguishable.
Sbvor,
As I said long ago, chaps like you are so obsessed with their own bazarre twisting of facts and reality that they have little credibilty with me. Not surprisingly, your last post comes up with more FABRICATIONS, namely:
A. Democrats have gutted the Defense spending in past years.
In Carter /Clinton years Defense expenditures (including Vet. Benefits) averaged a respectable 4.5% of GDP and rose a sensible 3.4% a year. This compares to Defense expenditures at 5.6% of GDP in Reagan/Bushes´ years and an average annual increase of 7.3% ... much higher than the Democratic average of 3.4% a year due to 9.3% average increase by Reagan (no war), dropping to 1% by Bush Sr. and then explosively increasing to 8.6%a year by Bush Jr. during his term in office (due to costly military misadventure in Iraq and now a worsening military adventure in Afghanistan).
So, the Democrats have not had a history of GUTTING Defense expenditures, contrary to your propaganda.
B.Are you saying we shouldn´t have Soc.Security/Medicare which I note you describe with that favorite conservative word `ENTITLEMENTS´.
Gosh, I always thought FDR was right that our people should have (are entitled to) Soc.Security and Medicare. Don´t you?
Or are you saying these trust funds need to be fixed because costs are out of control? This is always a discussable by well-meaning people. The basis can be improving entire Medicare system along lines of Canada or Europe where the premiums are One-Half US premiums for better coverage, cutting inefficiency out where it exists, and/or raising payroll taxes (also to cover 45 million uninsured, many of whom can´t pay all of the premium cost). This all takes bright leadership to reform the system´s weak areas.
There are also a few obvious ideas for putting Soc.Security on a firm basis ... without too much pain to those who are `entitled´to it. I´ve addressed some solutions as well as others. Heard nothing from you though. Lots of factual panhandling in all directions from you on many things, but no intelligent, viable answers to problems.
Would like to remind you that Federal Outlays excluding Soc.Security/Medicare/Medicaid in Carter/Clinton years increased only slightly more (6.6%) than during Reagan/Bushes´years (6.1%).
Including these costs, Federal Outlays in Carter/Clinton years increased less (6.1%) vs. (6.9%) during Reagan/Bushes´years. Latter reversal is due mainly to jump in Defense expenditures by Reagan and Bush Jr.
As far as Marginal Tax rates are concerned, you say reducing the rate has resulted in LESS SEVERE recessions. Where´s your evidence behind this Hogwash! Surely you don´t call the Savings/Loan disaster that induced a recession in 1990-94, nor the 2000-03 slowdown, nor this current recession joy rides because of low taxes for the top 20%? The current recession is very severe for Mainstream America and could get much more so depending on, for example, Fannie Mae and Freddie Mac final mortgage writedowns dand related prolongation of the credit crunch.
Trickle Down is a euphemism by the top 20% to disquise what´s actually happening which is ... TRICKLE UP! FACT: 85% of household Wealth is concentrated in top 20% of households.
Therefore, INCREASING the marginal rate from 35% to 40% for those earning above $250,000 a year and eliminating at same time most of the exotic tax-avoidance provisions in the Tax Code (that only the top 10% can afford to exploit) to offset somewhat the tax revenue losses from simultaneously DECREASING tax rates for those earning less than $150,000 a year makes sound, equitable financial sense.
Again, contrary to your misinformation, lower and middle class wages earners (60-70% of households) have experienced stagnant wages the past two decades. Either gross incomes have to go up for these groups or taxes down if standard of living for most workers in our society is not to disintegrate further ... leading very likely to a Japan like 10-12 year economic collapse with consumption falling sharply and unemployment easily rising to ±7% range.
Sbvor,
All my historical data on our government´s financial performance comes from the White House Office of Management and Budget.
As I said long ago, chaps like you are so obsessed with their own bazarre twisting juxterposition of facts and reality that they have little credibilty with me. Not surprisingly, your last post comes up with more FABRICATIONS, namely:
A. Democrats have gutted the Defense spending in past years.
In Carter /Clinton years Defense expenditures (including Vet. Benefits) averaged a respectable 4.5% of GDP and rose a sensible 3.4% a year. This compares to Defense expenditures at 5.6% of GDP in Reagan/Bushes´ years and an average annual increase of 7.3% ... much higher than the Democratic average of 3.4% a year due to 9.3% average increase by Reagan (no war), dropping to 1% by Bush Sr. and then explosively increasing to 8.6%a year by Bush Jr. during his term in office (due to costly military misadventure in Iraq and now a worsening military adventure in Afghanistan).
So, the Democrats have not had a history of GUTTING Defense expenditures, contrary to your propaganda.
B.Are you saying we shouldn´t have Soc.Security/Medicare which I note you describe with that favorite conservative word `ENTITLEMENTS´.
Gosh, I always thought FDR was right that our people should have (are entitled to) Soc.Security and Medicare. Don´t you?
Or are you saying these trust funds need to be fixed because costs are out of control? This is always a discussable by well-meaning people. The basis can be improving entire Medicare system along lines of Canada or Europe where the premiums are One-Half US premiums for better coverage, cutting inefficiency out where it exists, and/or raising payroll taxes (also to cover 45 million uninsured, many of whom can´t pay all of the premium cost). This all takes bright leadership to reform the system´s weak areas.
There are also a few obvious ideas for putting Soc.Security on a firm basis ... without too much pain to those who are `entitled´to it. I´ve addressed some solutions as well as others. Heard nothing from you though. Lots of factual panhandling in all directions from you on many things, but no intelligent, viable answers to problems.
Would like to remind you that Federal Outlays excluding Soc.Security/Medicare/Medicaid in Carter/Clinton years increased only slightly more (6.6%) than during Reagan/Bushes´years (6.1%).
Including these costs, Federal Outlays in Carter/Clinton years increased less (6.1%) vs. (6.9%) during Reagan/Bushes´years. Latter reversal is due mainly to jump in Defense expenditures by Reagan and Bush Jr.
As far as Marginal Tax rates are concerned, you say reducing the rate has resulted in LESS SEVERE recessions. Where´s your evidence behind this Hogwash! Surely you don´t call the Savings/Loan disaster that induced a recession in 1990-94, nor the 2000-03 slowdown, nor this current recession joy rides because of low taxes for the top 20%? The current recession is very severe for Mainstream America and could get much more so depending on, for example, Fannie Mae and Freddie Mac final mortgage writedowns dand related prolongation of the credit crunch.
Trickle Down is a euphemism by the top 20% to disquise what´s actually happening which is ... TRICKLE UP! FACT: 85% of household Wealth is concentrated in top 20% of households.
Therefore, INCREASING the marginal rate from 35% to 40% for those earning above $250,000 a year and eliminating at same time most of the exotic tax-avoidance provisions in the Tax Code (that only the top 10% can afford to exploit) to offset somewhat the tax revenue losses from simultaneously DECREASING tax rates for those earning less than $150,000 a year makes sound, equitable financial sense.
Again, contrary to your misinformation, lower and middle class wages earners (60-70% of households) have experienced stagnant wages the past two decades. Either gross incomes have to go up for these groups or taxes down if standard of living for most workers in our society is not to disintegrate further ... leading very likely to a Japan like 10-12 year economic collapse with consumption falling sharply and unemployment easily rising to ±7% range.
Sbvor,
Correction: 1st sentence, 5th paragraph from bottom:
Would like to remind you that Federal Outlays excluding Soc.Security/Medicare/Medicaid and Defense expenditures in Carter/Clinton years...
Frank,
1) Regarding the gutting of our military by Dims, the chart tells the entire story.
2) Owing to our Leftist media, no politician would dare suggest that the “Big Three” Entitlements (Social Security, Medicare and Medicaid) should never have been created.
But, as I am not a politician, I can safely say that all three represent not merely the very worst legislation EVER, but actually represent what will become the very DEATH of this great nation. If Obama is elected, and Dims control both houses of Congress, enormous new Entitlement spending combined with higher taxes will only hasten that death.
In this matter, I side with James Madison when he said:
“I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents.”
More concisely, charity is neither a proper nor a Constitutional role for government! Charity should be undertaken ONLY by the PRIVATE SECTOR! What passes for “charity” in the public sector is nothing more and nothing less than the forcible redistribution of wealth (aka theft). Today, increasingly, two of the Big Three Entitlements (Social Security & Medicare) represent stealing from the poor to give to the rich! Gee, THANKS DIMS!
3) The evidence for less severe recessions is found in the links included in my prior comment. Are you unable to read a chart or unable to click a link? Must I do EVERYTHING for you?
Democratic capitalism? Oh, sure.
What we really have is a plutocracy with the illusion of a democracy.
Bill Gates and his ilk have a much, much bigger vote than I do, and that is just a simple fact.
sbvor:
In this matter, I side with James Madison when he said:
One could only hope you would pay James a visit, and soon.
But, as I am not a politician, I can safely say that all three represent not merely the very worst legislation EVER, but actually represent what will become the very DEATH of this great nation.
It is readily clear to most of us here that you are not much of anything, intellectually speaking.
Try tinkering with anyone one of the three and you will surely see the DEATH of this great nation.
The evidence for less severe recessions is found in the links included in my prior comment.
Now Frank, if you view these links you will find a chart depicting recession dips that show Dumbya's recession dipping less than Bush I's and less the Reagan's and Bush I's was less than Reagan's in spite of a tax hike in the middle of it.
Now this chart makes no reference nor includes any data on tax cuts or hikes but our imbecilic genius says to himself, "well, Dumbya decreased taxes and his recession reflected a lesser drop in GDP, therefore the cause must have been the tax cuts". His original thought was to tie it to the price of oil but tax cuts looked better.
Of course he fails to mention that during Clinton's 8 years there were no recessions and Clinton raised taxes. My conclusion from that fact would be that maybe tax cuts lead to less severe recessions but raising taxes leads to no recessions at all. Which taxing option would you chose?
As for unemployment rates, Dumbya never got close to Clinton's lowest rate nor did Reagan or Bush I. In fact Clinton had the lowest rate since Nixon. Clinton began his 8 years at near 8% unemployment and got down to below 4%. Dumbya started a little above 6% and never bested 4.5%.
Them tax increases are looking better all the time.
sbvor is great at finding charts and graphs. At analysis or understanding data, well, not so much.
The Internet is a marvelous thing. It affords many reasonably bright and logically thinking people a platform to express their thoughts and ideas. The price? It affords the morons the same right.
Is there no justice anywhere in this world?
I think it worked best with sbvor when he was ignored. He loves to joust, even though he's so feeble a jouster. Many of you are quite talented in this endeavor and make me laugh, but the dreariness we get back from sbvor is not worth it.
Frank:
Oh my! I thought better of you.
...due to 9.3% average increase by Reagan (no war)...
You have totally forgotten one of the great wars of our history, Grenada. Occurred under Reagan, it justifies all his increases in defense spending. It was a classic surely to appear in future War College textbooks. It was much more difficult than "Mission Accomplished" in Iraq.
Were you having a senior moment?
I wear all the hatred, bile and vitriol emanating from so-called “Liberals” as a badge of honor.
Keep it up Libs! Here on the net, the entire world has the opportunity to see your true colors!
mimi:
No doubt you are wiser than most of us, but getting things off our chests feels so good.
You're right, we will pay a hefty price, but then again: "What Price Glory?"
There will be ample time to ignore him. He is like a MRSA infection, he never goes away.
“no war”?
“Grenada”?
Do so-called “Liberals” REALLY imagine that winning The Cold War against the Evil Empire did not count?
ABSOLUTELY AMAZING! WORST YET!
Art,
Thank you for reminding Mimi that, with so-called “Liberals” it’s always all about the feelings (and nothing more).
sbvor:
Gracious! Ever the martyr! Problem is you wear cow manure as a badge of honor as well.
There is no accounting for taste.
You should hope that those in the entire world that side with me never meet on the battlefield with those in the entire world that support you. You will be sorely outnumbered. Of course you can always throw money at us.
Art,
My TABLE 8 showed annual year-end (Q4) Unemployment rates under different Presidencies. Reagan's term ended with an unemployment rate at 5.4% with tax cuts for top 20%, Bush Sr. at 7.4% with a tax increase, Clinton with 3.9% with a tax increase, and Bush Jr. 5.7% with a tax cut for the top 10%. It would be a full-time research job to unclue the cause and effect relationship on unemployment levels with tax cuts or increases.
I favor readjustment in tax rates for simple, clear evidence of concentration of wealth in top 20% as well as evidence of greater share of Reagan and Bush Jr.s tax cuts going to the very wealthy.
The Center of Budget and Policy Priorites not long ago published results of their study of Bush's 2002-03 tax cuts:
___________________________________
TABLE 10: EFFECT OF 2000-03 BUSH TAX CUTS ON HOUSEHOLD INCOME GROUPS
___________________________________
INCREASE IN HOUSEHOLD INCOME:
Lowest 20%..............0.4%
Middle 20%..............2.3%
Top 20%.................4.6%
Top 1%..................6.8%
Incomes Over $1Million..7.6%
___________________________________
COMMENTS:
Bush's tax cuts appear to have been Regressive as higher income households retained a much higher share of nation's household income.
The top 1% ended up paying a slightly larger share of total income taxes while getting a massive tax cut. In short, changes in the percentage of taxes paid have NO connection to tax progressivity, which relates how taxes affect the distribution of income. Nor does an increase in the percentage of taxes that a Group pays(e.g., top 10% of income earners) mean the Group is shouldering a larger tax burden.
"TRICKLE DOWN" conservatives argue that the rich should get richer because they pay most of the nation's taxes. This is very logical and self-fulfilling if the Tax Code and Bush cuts are keeping the bottom 40% poor as well as the Economic System keeping lower and middle class (80% of households) wages stagnant, as has happened last two decades -- thereby contributing to people resorting to DEBT "en mass" (in order to keep standard of living from declining further) thanks to Greenspan's cheap money policy during 2003-06.
It's a great formula and piece of propaganda for justifying making over time the top 20% RICHER AND THE REST RELATIVELY POORER ... illustrating Mike Hudson's description of our broken economic system as "THE TWO-ECONOMY SOCIETY."
___________________________________
Yes, I forgot Reagan's Granada War as it never made an impression on me (wonder why)... but it did indeed cause him to go crazy with Defense spending which Bush Sr. corrected by increasing Defense spending only 1% a year during his administration (facts Sbvor conviently ignores in his wacky comedy of logical thinking and confronting real problems).
Art,
I forgot to mention VP Cheney likes to say Reagan brought Russia to its financial collapse by heavily increasing Defense spending. Of course, more of the duplicitous monologue in our social-political system to manipulate the uninformed. A reader of Russian economic history, as I was and still am, could see the utter banruptcy of Russia beginning in the 60s and 70s
and peaking in the 80s.
Art,
Of course it's tiresome to repeat this, but other main causes of the concentration of Wealth in the hands of a few households are (as Dr. Reich has highlighted) the gobbling up of Capital by big money that invests it globally ... and the cancerous growth of the lobbying industry that's also looking out for the few in the form of special interest
"earmarks" in legislation by Congressional members.
A reputable writer has spoken of this process as the incarnation in different ways of the eternal evil: "the subordination of democracy to money." So deep is the virus that the best politicians end up tinkering with our broken system rather than really coming together on constructive change.
Whoever is the most shrewd and brutal in demonizing the other party wins the legislative battles. Fortunately, on the positive side, in major policy contests the Left often prevails over the anti-government right as, for example, in the Social Security privatization and private school vouchers' battles.
Frank,
One more time…
The QUANTITATIVE DATA PROVE that tax revenues are essentially UNCHANGED whether we set the marginal tax rate at 91% or 28%!
So, other than to indulge your utterly counterproductive Class Hatred, what benefit is there to a higher marginal tax rate?
ANSWER THE QUESTION!
Sbvor,
I think I understand Mr. Thomas' reasoning. Simply framed, if the bottom 80% have more income by lowering tax rates they can pay back debts, try saving a little eventually which will help the liquidity in our banking system, and eventually be able to make the proper down payment on a home so that they can increase their Wealth rather than going backwards in this respect. But I guess this makes no sense to you because you could give a damm for the underclass (reaching more than 60% of our country) who in your mind are leaches for wanting a sound Soc.Security system and efficient Health Care system that all decent developed countries (like Canada) have without hesitation.
Sbvor,
Mistake: you don't give a damm for the
Anonymous,
In 2005 (the most recent year available from the CBO), the top 20% paid almost 70% of the total Federal tax burden.
I personally created and uploaded the above chart. The data used in the above chart are found in this spreadsheet downloaded from this page
The share for the top 20% has been trending up while the share for the bottom 80% has been trending down.
The bottom 80% are paying a smaller share of the Federal tax burden while they are making more money.
Where is the problem?
If you think Obamanomics will help the Middle Class (or anybody else), think again!
Sbvor,
You are either a screwball, a born confuser or lier. Mr. Thomas' data submissions on our country's past financial performance, as confirmed in 15-16 tables in other posts, are facts from the White House Office of Management and Budget. Table 16 shows the growth in Income between 1983 and 2004, with Edward Wolff as the information source. I believe he's a reliable researcher of US economic performance as an esteemed Professor at Bard College in NY.
Table 16 reveals top 20% of households experienced a 41% growth in Income in this 21 year period. The next 80% had a low 8% increase in Income during this period, including only 6% for bottom 60%. This is stagnant wage growth below the rate of inflation.
You claim Income grew for this Group significantly. Prove it with clarity with which Mr. Wolff proves the opposite as do most other independent studies.
You do not have my confidence in anything you dogmatically and inhumanly put forward on this blog. With respect, don't waste any more of my precious time.
Here are some more quantitative facts to chew on.
Arduous though it has been, sbvor is exhibiting some signs of learning curve theory. In most of his links he has dropped the pompous modifiers of "objective" and "substantiated". He has learned that those two assertions were mostly wrong.
His use of "quantitative" is innocent enough since all numerical presentations are "quanitative". He needs lots of work though on "FACTS". The numbers he posts are generally factual but the conclusions he draws from them fall under the heading of fantasy. That's being kind because most of them appear stupid.
Perhaps if we can all suffer through a little longer, there is light at the end of tunnel. Ok, I admit, it still looks awfully dark down there.
Art,
Here, for your viewing pleasure, is a synthesis of OBJECTIVE, SUBSTANTIATED, QUANTITATIVE FACTS!
sbvor:
LOL! LOL! ROFLMAO!
I can't quite decide whether your problem is a complete inability to understand data or a severe limitation in understanding the English language.
Objective? Substantiated?
It is fairly easy to ascertain from your linked sources the political bent of the authors. The Tax Foundation economist relies heavily on the analytical article from American.com.
The American.com article purports to derive it's conclusions from a Tax Policy Center Study, which was labeled right up front as requiring numerous assumptions and a filling in of the blanks since the proposals of both Senators, Obama and McCain, at this point are sketches not fully complete plans. At that the American.com article seems to come to entirely opposite conclusions, regarding Obama's plan, than those of the Tax Policy Center.
A simple example provides insight into the political ideology of the reporters at American.com:
For example, consider a worker in the 10 percent bracket with $1,000 of tax liability before credits who claims $1,200 in credits. The tax impact of earning an extra $100 depends on whether the credit is refundable. If it’s not refundable, there’s no tax penalty on earning the extra $100 because the worker’s tax liability stays at zero. But if the credit is refundable, earning the extra money pushes the tax up from negative $200 to negative $190—that’s a 10 percent penalty on earning income.
Now we all know that percentages are a wonderful tool but one which often obscures more than it clarifies. As portrayed, a 10 percent penalty on earning income, is clearly a damning proposition. Now the example, assuming it is accurate, is true. The emphasis however is skewed. If I am only in the 10% tax bracket and I have a chance to increase my earnings by $2000 but it costs me all of the $200 tax credit refund I am entitled to, which choice do you think I will take?
If I am at the midpoint of taxable income in the 10% bracket, the $2000 increase is a 50% increase. Even net, after giving up the $200 tax credit, it's still a 45% increase in taxable income, I doubt an increase many of those in that tax bracket would sneeze at.
Worst case scenario, which I'm surprised the authors didn't mention; if I'm at the upper limit of the 10% bracket then the $2000 increase, assuming it would all be taxable income, would slide me into the 15% tax bracket and not only would I lose the $200 tax credit but would see my tax liability increase by another $300. I lose $500 in total to taxes netting only $1500 from my $2000 increase. Notwithstanding that folks in the 10% bracket do not make economic decisions based on tax implications, I'll propose this to you; you send me $2000 and I'll euphorically be happy to send you $500 back.
If to recieve that $2000 increase, I, or my wife, have to take a second or third job or work longer hours, I may decline the opportunity but my decision is now based on different criteria.
Now the authors at American.com present us with a pretty graph and they tell us that is is based on the Tax Policy Centers figure's but they don't show us how they got from A to B. Did they make further assumptions? The Tax Policy Center uses a specified "normal" family, restrictive for establishing a universal premise. They also admit to needing to make numerous assumptions due to a lack of completeness in the offerings to date.
We end up with a summary of a summary of an assumption set with essentially conflicting conclusions.
Application for Objective, Substantiated, denied!
Quantitative?
Congrats! Score one for your side!
Facts?
Can filling in the blanks with assumptions be considered "facts"?
Application denied again!
One would think that at some point you would learn that your assertions are faulty and you would attempt to improve your methodology. On the other hand, there are some so learning-impaired that improvements are just not in the cards.
Verdict overruled!
The facts stand!
sbvor:
More of your naivete. You can't overrule my verdict, you must appeal it. The appeals court is made up of the posters to this blog.
Good luck! BTW, is the check in the mail?
Art,
Wrong again.
The real jury (informed or not) will rule on November 4th.
Meantime, I can (and will) overrule you at will.
The facts stand!
sbvor:
I would be remiss if I don't point out one more failing in your analytical abilities.
The QUANTITATIVE DATA PROVE that tax revenues are essentially UNCHANGED whether we set the marginal tax rate at 91% or 28%!
Now this chart doesn't address "tax revenues" specifically but rather views them as a percent of GDP. One could posit that "tax revenues" as a percent of GDP should remain fairly constant as an indicator that tax policy was not damaging GDP growth.
As with many things posed by partisan groups the chart parameters reflect an almost straight line for "tax revenues" as a percent of GDP when actually they fluctuate and given the size of GDP a .5% change in the tax/GDP ratio is not insignificant bucks.
During Reagan, GDP increased by 83% and "tax revenues" increased by 64%. If we subtract the $2.1 trillion of increased deficits from Reagan's history the GDP growth is only 8%, the "tax revenue" growth, as a percent of the revised GDP performance, would be gigantic but I have no way of adjusting "tax revenues" for the impact of the deficit spending. This should not be surprising since Reagan authored the largest tax increase in the history of the US.
During Clinton's term, we see GDP growth of 55% and "tax revenue" growth of 111%. You cannot see it by the chart but for 1998 - 2000 we see annual "tax revenue" growth as a percent of GDP of, 9.6%, 9.6%, 10.3%.
I did not adjust Clinton's GDP growth for his net deficit since it was only $324 billion over 8 years. These numbers are "nominal" figures. For this kind of comparison not much is gained by using "real", inflation adjusted, calculations. Also the "tax revenues" are only individual income tax receipts.
BTW, under Dumbya, GDP grew 41%, unadjusted for outlandish deficits, and "tax revenues" grew by only 16%.
From 1960 through 2007 GDP grew 2523% and "tax revenues" grew 2758%
The point being that, once again, you are making an assertion, linking to "quantitative proof" when in fact that proof does not support your claim. It doesn't even address your claim.
Is that surprising? Given your history, not in the least.
Art,
Bottom line?
1960 - Marginal Tax Rate = 91%, Tax Revenues = 7.9% of GDP
2008 - Marginal Tax Rate = 35%, Estimated Tax Revenues = 8.5% of GDP
The facts stand!
Dr. Reich, Art Layman:
To illustrate how manipulative and complex are data and discussions on marginal and effective tax rates for the uninitiated and Joe Doe public, here is some summary data on Current vs. Historical Tax Rate Averages compiled by Greg Mankiw in 2007. He is Professor of Economics at Harvard College.
A new Congressional Budget Office Report provides the Effective federal tax rate by income group. These numbers include all federal taxes, not just income taxes. They are expressed as a percentage of household income.
The first number below is for 2005 and the second number in parentheses represents the average Effective rate from 1979 to 2005.
EFFECTIVE TAX RATES:
All Households: 20.5%---(21.6%)
Lowest 20%:------4.3%----(7.2%)
2nd 20%:---------9.9%---(13.2%)
Middle 20%:-----14.2%---(17.1%)
Fourth 20%:-----17.4%---(20.1%)
Highest 20%:----25.5%---(26.1%)
TOP 10 percent--27.4%---(27.6%)
TOP 5 percent---28.9%---(29.0%)
TOP 1 percent---31.2%---(31.7%)
All groups are paying Lower Effective tax rates than the historical average. Contrary to conventional wisdom, it would appear that this decline is not concentrated within just the Top income groups.
But this is where Sbvor would go logically haywire in interpreting such data. First, the drop in the Effective rate for the Bottom 80% is mainly due to the stagnant wage growth of this group which moves them into the lower marginal tax rate bracketts.
The fall in the Effective Tax rate for the Upper income groups is due to a rise in income concentration which you would think would shift income toward a higher marginal tax brackett. Real brackett creep doesn´t happen because the high absolute increase in income for the Top 80% comes from a shift to Capital Gains income (which has lower tax rates than other forms of income). Also, the Bush tax cuts regressively favored the Top 20% as shown in my Table 10 above.
So lower tax rates for next 60%group has been a basic necessity for survival in the past two decade climate of stagnant income growth.
My Table 18 not surprisingly shows (see prior post) how the Wealth of the Top 1% and next 19% in 2004 came 76% and 42% respectively from (a)corporate stock, financial securities, mutual funds, personal trusts, and (b) uncorporated other businesses, real estate ... compared to 12% for the next 60% of households below the Top 20%. A much heavier proportion of Top 20% group´s income comes from sources with Lower tax rates. The next 60% doesn´t have the cash to take advantage of much wealth diversity.
To add to the complexity, the share of total taxes paid by the Top 1% and 20% groups rose even though their Effective rates declined modestly. This is because their share of Pretax Income also rose far more sharply than the bottom 80%. This is a small taste of the cause and effect analysis that SBvor ignores in his mismash of data sources and confusing financial harangues.
The Big Picture tying the above together comes out when one sees that in 2004 the Top 1% and next 9%owned 71% of our nation´s private Wealth ... more than the combined Wealth of the Bottom 90%!!
Further, the Top 1% and Top 20% saw their After-Tax Incomes grow during 1979-2004 by 176% and 87%, respectively, vs. 22% for the next 60% (2nd,3rd, 4th quintiles).
I´ll put this informaion in more detailed TABLEs later. Meanwhile, for mee the Sbvor types are remain an Enigma wrapped in a
Mystery. (Source: Economic Policy Institute, State of Working America, 2006-07 Table 5.1, citing Prof. Edward) Wolff.
So, I admire your efforts, Art, to pull togerther all the information and common sense you can for a complete insight into his wild assertions ...so he doesn´t put anything over anyone on this blog. Stay calm, though, as your blood pressure is the final priority.
Frank:
Excellent rendition.
Not to worry about my blood pressure. As I've said before, sbvor is nothing more than comic relief.
I don't make it a practice of laughing at stupid folks, except when they hold themselves out as brighter than the rest of us. Or when they can't seem to have an, "Oh yea, you're right, moment".
On the other hand sbvor is not stupid, just completely unskilled at that which he fancies himself an expert.
Dr. Reich cc: Art Layman
Here is a TABLE 19 where the source data comes from the Congressional Budget Office, Historical Effective Tax Rates, 1979-2004:
___________________________________TABLE 19: % CHANGE IN AFTER-TAX INCOME BY INCOME HOUSEHOLD GROUP, 1979-2004
___________________________________
BOTTOM 20%...............+6%
Less than $17,300
2nd 20%.................+17%
$17,300 to $29,400
MIDDLE 20%..............+21%
$29,400 to $43,200
4th 20%.................+29%
$43,200 to $64,300
TOP 20%.................+69%
$64,300 and Higher
NOTE:
TOP 10%.................+87%
$87.500 and Higher
TOP 5%.................+106%
$116,400 and Higher
TOP 1%.................+176%
$266,800 and Higher
-----------------------------------
COMMENTS:
Above clearly shows accelerated Income After-Tax growth for Top Income Groups. My TABLE 16 in prior post confirms similar trend for Before Tax Income and Net Worth.
Little wonder these same Top groups pay an increasing absolute amount of total individual taxes each year. They should. Their incomes from all sources are rising substantially faster than the Bottom 80% of US households.
I'd dub the U.S. system "corporatist-authoritarian capitalism", because corporations are largely authoritarian dictatorships.
FACT (using the very data cited by Dr. Mankiw):
When those making the highest incomes paid the lowest effective federal taxes (early to mid 1980s) is when the Federal Government collected the most revenues.
Source for the first chart (which I created):
This CBO spreadsheet downloaded from this CBO page (exactly what Dr. Mankiw used).
The facts stand!
The Marxist Class Warfare of the Dims does NOTHING but indulge their Marxist Class Hatred (to the DETRIMENT OF ALL)!
sbvor:
In this particular case I have no problem with the "facts" that are presented it is merely your misinterpretation of what they say.
When you spend your career dealing with figures you learn very quickly not to state "facts" that your figures don't support. Of course you wouldn't understand that.
These are the facts regarding before tax and after tax income for the bottom 80%.
ONLY the bottom 20% have seen relatively flat growth in income. BUT…
Marxists propagate the myth that all Americans (or even a substantial percentage) spend their lives in a single quintile and are doomed (or blessed) at birth to do so. The very large majority move freely among these quintiles over the course of their lives. Only the very least ambitious among us live their entire lives (by choice) in the bottom quintile.
That “evil” top 20% are overwhelmingly small business owners who employ the large majority of Americans. Isn’t it “ODD” that Dims would hate this employer class SOOO MUCH! (Well, not really.)
The facts stand!
P.S.) As before, the source for the first two charts in my previous comment are:
This CBO spreadsheet downloaded from this CBO page
What class oriented Marxists describe as a growing income disparity is, in reality, a growing incentive to work harder, produce more, contribute more and prosper more.
Leaping from the 4th quintile to the 5th quintile represents a growing incentive to start your own business, create new jobs and prosper more than ever.
THAT, is a GOOD THING.
Sbvor,
Your reputation as a Fabricator is not in danger with your latest harebrained remarks! Congratulations.
You just said:
"When those making the highest incomes paid the lowest effective Federal Taxes (early to mid 1980s)
is when the Federal Government collected most revenues," whatever that snap-shot of information means??
Wonder why you sneakily picked just the exact first 4 years of Reagan Presidency to make an oblique point noone understands.
Let's look at the history of Federal Government Revenues posted some time back on Dr. Reich's blog in my TABLE 3:
__________________________________
TABLE 3: AVERAGE ANNUAL PERCENTAGE INCREASE IN FEDERAL OUTLAYS/RECEIPTS,DEFICITS IN $Bil/.
___________________________________
........Outlays..Receipts..Deficits
Carter....12.2%....14.5%..$57 Bil.
1977-80
Reagan.....7.6%.....7.1%..$167 Bil.
1981-88
Bush Sr....6.8%.....4.6%..$233 Bil.
1989-92
Clinton....3.0%.....8.0%..$-10 Bil.
1992-2000
Bush Jr....6.2%.....3.3%..$271 Bil.
2001-08___________________________________
CONCLUSIONS:
Gosh, under Reagan, Bush Sr., and Bush Jr. Federal Tax Revenues started to fall sharply from Carter's high while Spending remained at rather high levels (albeit below Carter's level by far) causing sky high annual
DEFICITS.
Also notice that when Clinton increased taxes he also controlled Spending at a very low levels. And of course Federal Tax Revenues came back to rather impressive levels--compared to Bush Jr. miserly rise in Tax Revenues of 3.3% with his gigantic tax cuts going mainly to Top 20% as occured under Reagan -- and guesswhat, the DEFICITS disappeared at the end of Clinton's Presidency.
So much for your chaotic, abitrary claims that low effective tax rates caused a boom in Tax Revenues in early years of the
1980s. You've proved nothing except a gift for selective use of data to engineer your distorted ideas with what's Out-of-Balance in our Economic model.
And I see again that whenever you're desperate when confronted with facts put in the proper logical perspective (unfavorable to your nonsense), you start calling people MARXISTS. No wonder you love one of the nastiest characters in our political history, Joe McCarthy ... a true American Fascist if there ever was one.
You are so indoctrinated with pre-conceived ideas about things that your brain is on autumatic pilot...
making you incapable of interrelating a mixture of ideas and facts around problems to come up with balanced solutions. Now, please don't call me a Communist.
Frank,
Your absolute numbers (aka “nominal” numbers) are NOT adjusted for inflation!
I wonder why anybody who was NOT a “Fabricator” would fail to adjust for inflation and not even NOTE IT!
Unfortunately, the Fed does not currently offer Federal Government receipts either adjusted for inflation OR as a percentage of GDP. However, one can examine the inflation component of this chart and EASILY find the LIE in your argument!
The FACTS, as asserted in my prior comment, STAND!
P.S.) Nobody called you a Communist, EVER!
Readers,
To properly understand Federal government receipts, outlays and deficits:
1) Dims save on the spending side almost exclusively by gutting our military. Republicans (generally) only PARTIALLY rebuild our military after each gutting. This is a suicide spiral!
2) On balance, the ever escalating federal spending is a function of the ever escalating MANDATORY SPENDING, required by law, on Entitlements.
That spending is almost exclusively a simple function of demographics.
Both Social Security AND Medicare, with EVER INCREASING FREQUENCY, often result in robbing the poor to pay the rich! WHY, other than an utterly irrational obsession with “cradle to grave” Socialist ideology, would those who claim to speak for the “little guy” so fanatically defend ROBBING THE POOR to PAY THE RICH? WHY?
3) History QUANTITATIVELY PROVES that we cannot tax our way out of this SPENDING problem!
The ONLY solution is to REDUCE our Entitlement spending! Obama promises MASSIVE new Entitlements. Those massive new entitlements will only HASTEN the death of this great nation!
4) The facts stand!
sbvor -
2 questions.
what would you propose for solving your country's debt?
what do you think about Mr. McCain's foreign policy ideas?
Aly K
Dr. Reich,
CNN pundits, including Wolf Blitzer, continue to ignorantly allow conservative guests and McCain to say that Obama's economic plan will increase worker taxes and that American corporations are overtaxed... when nothing can be further from the truth in both statements.
Obama is proposing LOWER taxes for those earning $150,000 or less and modestly HIGHER taxes for those earning above $250,000. This is to help offset tax revenue loss and to readdress inequitable tax structure favoring growing Wealth concentration by top 20% of our society now having a higher percentage (85%) of Household Wealth! The top 10% has +70% of total Household Wealth, more than the bottom 90%!
Both of the above falsehoods are repeated OVER and OVER in papers and TV media with result many Americans start to naively believe such deceit.
I've always thought it's the role of journalism to get to the real FACTs and SUBSTANCE in discussions.
But no, the media keeps up the old soap of tantilizing slander, sound byte innuendoe and political distortions ... excruciatingly empty dialogue, pitch-fork battle exchange style intensified by partisan guests, repeating melodramatic headlines and bequiling brain-thin video ads... all culminating in dire one-liner rhetoric like, "who's the BETTER Christian?." "Who's the BETTER Commander on Chief?" etc., etc.
One writer, Steve Almond, said it perfectly,
"As anyone who's had to watch CNN in an airport for more than 30 minutes can tell you, political coverage as it now exists is crushingly boring, an echo chamber of SMEARS and COUNTERSMEARS."
McCain and Republican establishment, pleading for TAX CUTS to relieve onerous taxes on corporations is duplicitous comic satire which also insultingly assumes a simpleton viewing public. The irony is if such lies and insinuations are repeated often enough (Sigmund Freud's technique of convincing his patients to accept his advice was to use the French expression "Frappez Toujour, Frappez Toujour" -i.e., keep drilling it into them), many people adopt the typical loose statements noted above as facts.
The MEDIA assists greatly in this phony indoctrination... a paradox of conscious misinformation so pervasive in our political and cultural communication processes.
Hopefully, the coming political debates between Obama and McCAIN (in concert with an elucidating array of non-partisan experts) will go profoundly deep into the serious issues confronting us ... void of all the TV baamboozle soap showbiz and cliches. But I'm not holding my breath!
As a recent study by the GAO concludes, TWO-THIRDS of American corporations with sales above $50 million or assets of $250 million pay NO taxes! In FACT, the study shows that the percentage of taxes paid out on total corporate profits in 2006 was the LOWEST level since the 1930s!
CNN staffs have lots of hefty paid reporters but spend peanuts on articulate, careful research. If they had on done their homework on just this one issue, then their answer to a guest that misleadingly says that US corporations have HIGHER TAX RATES than their European counterparts would obviously be ... NOT TRUE! Due to a complex of tax avoidance schemes available to US corporations, US EFFECTIVE tax rates are LOWER than those in Europe.
President Harry Truman had it right when he said: `If you think somebody is telling a big lie, the only way to answer it is with the whole truth.´
Aly K,
1) I outlined (and proved) the only solution to deficit spending in this comment.
2) I strongly prefer McCain’s foreign policy ideas over Obama’s. Obama favors surrender in Iraq. McCain favors victory in Iraq (which is absolutely achievable).
The surge has been an overwhelming success. And, anybody who believes invading Iraq was a mistake places far too much faith in what they read from so-called “journalists”. A very brief proof of this fact is found here.
Frank,
1) You don’t seem to understand the difference between what Obama says for the cameras and the policies he has proposed to allegedly achieve those goals. The two do NOT MATCH UP!
2) No matter how much propaganda you spew regarding worldwide corporate tax rates, it will never change the SUBSTANTIATED FACTS!
3) According to this recent study:
“corporate taxes are found to be most harmful for growth, followed by personal income taxes, and then consumption taxes”
4) You can express your hatred for Capitalism through calls for even HIGHER corporate tax rates. But, those taxes get passed on to high income and low income consumers at EXACTLY THE SAME RATE! Not very “progressive” of you!
The facts stand!
Art,
Did Sbvor just say all U.S. Taxes should be ELIMINATED?
Did I in my essay say that U.S. Corporate taxes should be INCREASED?
Or did I say they are already effectively very low ... even lower than European effective corporate tax rates ... therefore no need to reduce them further as McCain & Company are proposing?
Boy, the propaganda garbish this man preaches is beyond the absurd.
My characterization he's an Idiot Psychopath STANDS AS A FACT!
Art,
Correction: GARBAGE (not garbish)
Frank,
I appear to stand corrected as regards my suggestion that you called for higher corporate tax rates, BUT…
If you oppose lower corporate tax rates, that is the same as saying you prefer to see the existing corporate taxes passed on to both high income consumers and low income consumers at EXACTLY the same rate.
That is STILL “not very ‘progressive’ of you”!
AND, the FACT remains that, according to this recent study:
“corporate taxes are found to be most harmful for growth, followed by personal income taxes, and then consumption taxes”
Frank:
sbvor is not interested in truth or "facts", he is only interested in data that he thinks supports his arguments and seldom does.
His diatribe about military spending and Dems vs Reps is comical. First of all he links to another chart that shows defense spending as a percent of GDP. A little simple math will explain that if the denominator rises at a faster rate than the numerator the resultant percentage relationship will decline.
His chart displays a peak of defense spending as a percent of GDP of 9.5%, of course reflecting the heighth of Vietnam War spending and then drops off dramatically during Nixon (a Republican by the way) and Carter administrations. Now in 1968, the year of the 9.5% of GDP, defense spending was $89.3 billion. By the end of 1980 defense spending was $168 billion (all in "nominal" dollars) During this same period (1969-1980) GDP grew by 206% and defense spending by 88% and was 4.9% of GDP in 1980. Ergo, defense spending falls by ~50% when compared to GDP. All that happened is that GDP grew twice as fast as defense spending. I missed that part of the budget requirements stating that defense spending must be maintained at a constant % of GDP in order to not be considered as having decreased.
Now looking at Reagan's performance we see a peak of 6.2% of GDP for defense spending occurring in 1986. However, GDP had increased by only 60%, and that includes Reagan's deficits, while defense spending increased by 97%. Through 1988, Reagan experienced GDP growth of 83% versus defense spending growth of 111%, contributing to those deficits. Once again when the denominator goes up at a lower rate than the numerator the comparative ratio goes up.
If we were to look at Reagan's stats as the increase in defense spending as a percent of the increase in GDP we see an 8% defense spending ratio, in peacetime.
Defense spending peaked in 1991 under Bush I at $383.2 billion. In 1992, also under Bush I, $6.3 billion was trimmed off as we began to lower defense spending after the "Cold War" ended. Though we dipped further, by 2000, defense spending was back to $370.3 billion, decreased by $12.9 billion from its historical high and half of that decrease was attributable to Bush I. The ratio to GDP was down to 3% but GDP had increased by 55% during Clinton's terms and by 92% since the end of Reagan's last term.
These statistics, ex the percents to GDP, come from the BEA GDP annual reports, "nominal" basis. Admittedly some of the Clinton comparisons would be better served by inflation adjusted numbers but I don't have the time to worry with it. The net picture would change little.
Titillation over who loves defense spending the most, historically, has been a ping pong ball. Until the mid 60s Dems favored increased defense spending and Reps disdained it. During that period the pendulum was swinging the other way and when movement conservative got in with Reagan they tended to go berserk and we are still paying for it.
When establishing any discretionary budget you go with what you think is necessary, given a goal set based on future needs. You wouldn't want to tie the budget to some arbitrary constant like a specific percent to GDP. The lag time alone could kill you. In the 90s all polls showed that the American public, duly concerned over budget deficits, spurred on by Perot, desired a decrease in defense spending. Are we not predicated on a government of the people, by the people, for the people?
To your point, Reagan winning the "Cold War" by himself is folly. He may have hastened it but it had been happening for years and was likely closer than he thought. We could have been spared a lot of frivilous spending and deficits in the interim. The bad news? GDP growth might have been slower.
To Frank Thomas:
Thanks for your comments. Could I have your permission to use them as a post on my , blog?
Also, I take it you're located in the Netherlands. I'm trying to locate people in other nations who would be interested in being guest bloggers to get an international perspective on my blog.
You can email me at j.c.lawrence@cox.net.
Art,
Thanks much for your careful analysis from another perspective of Sbvor's financial manipulation tactics regarding Defense spending and inflation adjustment side trip ... his usual divide and confuse factual/assumption trickery and ignoring real problems of bottom 80% of society.
For your own records and to confirm what we are both saying using White House Office of Management and Budget Historical Tables that document in detail the our economy´s performance under different Presidencies, I include another Table 22 which has some small corrections to mistakes I made in Table 3 posted wayu back ... errors which do not change the trend conclusions though.
Agree with you, Art, that adjusting all this data for inflation won't change results of our summary trends using White House Office of Management and Budget data. It's part of Sbvor's cunning, duplicitous tricks to confuse people and place the integrity of other providers of published FACTS in question.
I'm getting involved far more than is my character because people like him do such grave damage to give and take intelligent discussion and interpretation of our financial situation past and future in the States ... such professional give and take and double check I´ve found generally extremely normal and expected as in my second adopted country, Holland.
-----------------------------------
TABLE 22: HISTORICAL AVERAGE ANNUAL DEFENSE OUTLAYS (Including Veterans Benefits), GDP WITH % INCREASES AND % of GDP RESULTS: 1977-2008
-----------------------------------
NOTE: All Data is on an AVERAGE ANNUAL Basis for Each Presidential Term!!
CARTER 1977-80
Defense Outlays........$133 bil.
% Increase.............6.0%
% of GDP...............5.6%
GDP....................$2,355 tri.
GDP % Increase.........11.5%
DEFICIT................$69.2 bil.
% of GDP...............2.9%
REAGAN: 1981-84
Defense Outlays........$220 bil.
% Increase.............13.0%
% of GDP...............6.5%
GDP....................$3,390 tri.
GDP % Increase.........9.0%
DEFICIT................167 bil.
% of GDP...............4.9%
REAGAN: 1885-88
Defense Outlays........$302 bil.
% Increase.............6.0%
% of GDP...............6.6%
GDP....................$4,552 tri.
GDP % Increase.........6.8%
DEFICIT................$256 bil.
% of GDP...............5.6%
BUSH Sr. 1989-92
Defense Outlays........$324 bil.
% Increase.............1.0%
% of GDP...............5.6%
GDP....................$5,827 tri.
GDP % Increase.........5.5%
DEFICIT................$346 bil
% of GDP...............5.9%
CLINTON 1993-1996
Defense Outlays........$315 bil.
% Decrease............-2.0%
% of GDP...............4.4%
GDP....................$7,139 tri.
GDP % Increase.........5.4%
DEFICIT................$285 bil.
% of GDP...............4.0%
CLINTON 1997-2000
Defense................$320 bil.
% Increase.............3.0%
% of GDP...............3.6%
GDP....................$8,926 tri.
GDP % Increase.........6.1%
DEFICIT................$81.7 bil
% of GDP...............0.9%
BUSH Jr. 2001-04
Defense................$432 bil.
% Increase............10.2%
% of GDP...............4.0%
GDP...................$10,693 tri.
GDP % Increase.........4.2%
DEFICIT................$406 bil.
% of GDP...............3.8%
BUSH Jr. 2005-08 (Est.2008)
Defense................$590 bil.
% Increase.............4.0%
% of GDP...............4.5%
GDP...................$13,155 tri.
GDP % Increase........4.1%
DEFICIT...............$520 bil.
% of GDP..............4.1%
SUMMARY:
CARTER/CLINTON YEARS
Defense...............$256 bil.
% Increase............2.3%
% of GDP..............4.5%
GDP % Increase........7.7%
GDP %Inc.Excl.Carter 5.8%
DEFICIT...............$145 bil.
% of GDP..............3.8%
REAGAN/BUSHES´ YEARS
Defense...............$374 bil.
% Increase............6.7%
% of GDP..............5.4%
GDP % Increase........5.9%
DEFICIT...............$339 bil.
% of GDP..............4.9%
-----------------------------------
COMMENTS:
As noted in earlier Tables I´ve posted to Dr. Reich, Republican administrations show much higher Defense Outlays, particularly during Reagan and Bush Jr. terms. Both also reduced taxe goind largle to top 10% which contributed as a DOUBLE HIT to considerable DEFICIT explosion during their Presidencies.
Bush Sr. and Clinton held Defense expenditures relatively constant for some years in view of enormous increases during Reagan´s term, 12 years of HIGH Deficits under Bush Sr. and Reagan, and Clinton´s aim to bring Deficits eventually to a Surplus in last years of his term.
GDP growth rates have averaged much higher under Democratic administrations when including soaring inflation that started in Ford´s Presidency and continued into Carter´s Presidency.
Excluding Carter´s term of abnormal inflation, the GDP average annual growth rates are about the SAME for Republican and Democratic administrations at around 5.8%
However, in 2008 of Bush´s final term in office, GDP growth rate is forecast to reach a 32 year LOW of ±1.5%. This is due to housing crisis, accelerating energy/commodity prices, and resultant credit crunch. Things could get worse depending on Fannie and Freddie´s ultimate sub-prime mortgage and derivative losses.
I think we both are doing our best to put the performance of our economy in proper perspective for readers ... in the hope of achieving some equitable, balanced strategic decision making in the interests of ALL Americans.
Art,
Correction: comments, 1ST paragraph, 4th sentence±
...reduced taxes that largely benefited the top 10% which ...
good
Comparing apples to apples (spending as a percentage of GDP), it is obvious that Entitlement spending (not defense spending) is the problem:
1) Defense Spending
2) Entitlement Spending
It is also intuitively obvious that Medicare & Medicaid (both signed into law in 1965) are what sent this country on a path to never ending deficit spending.
Prior to those new Entitlements (excepting for World War II, which is not covered in this database), only two recessions produced ANY deficit spending.
3) Subsequent to LBJ’s Entitlement binge, deficit spending became the norm. The only significant exception to this new norm was brought about by the single largest speculative bubble ever known to humanity (the dot.com bubble). Clinton was the unwitting beneficiary of unprecedented revenues from day traders paying a small fortune in short term capital gains taxes.
4) The substantial decrease in “Net Government Saving” from 2000 through mid 2003 was directly related to:
A) The years long deflating of the NASDAQ bubble.
B) The terrorist attacks of 9/11.
C) The associated recession.
P.S.) The [non-partisan] Congressional Budget Office understands my previous points as well as anybody.
Has Mr. Hubbard been reading my comments? Hope so!
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"The benefits of policies that promote economic freedom extend far beyond good scores and bragging rights. For instance, a one-point increase in economic freedom results in an increase of $32.13 in venture capital investment per capita; an increase in the number of patents by 8.2 per 100,000 population; and an increase of 4.2 percent in the growth of sole proprietorships."
SBVOR, that was a lovely word salad. Care to pass the olive oil and vinegar?
This "economic freedom" is clearly not enjoyed by everyone in America. It is a privilege afforded to some at the expense of others.
In our society women, older job-seekers, minorities, the disabled, and those from the botom socio-economic rung have been - and still are - disproportionately discriminated against for all the good jobs (Note: every woman or minoritiy sent home poor and empty-handed due to job discrimination - NOT merit - translates to not having money to afford life's most basic necessities such as food, health/dental care, shelter, life sustaining utilities, and clothing). And they're not being socially and economically excluded because they're less meritous or deserving than privileged white males (unless the bona fide occupational quota requires white skin and a penis).
Clearly, our "competitive capitalist" society is about as competitive as shooting fish in a barrel - due to unfair enrichment and benefits conferred by UNEARNED middle/upper class white male privilege.
Unearned privilege has accorded certain members of our society social prizes and rewards over others - similar to the way steroids confer an unfair advantage for the cheating atheletes over those who play by the rules. The only difference is that atheletes found guilty of using steroids get disqualified from the competition. They don't get rewarded with getting to grab all the prizes.
Adding insult to injury is that the poor (most whom are women)are robbed of what little income they get a chance to make via unfair rate tiering policies aimed at making the poor pay more than the middle and upper class.
"Those with the least income to afford anything are socked with utility rates 25% - 50% higher than those who aren't poor and can easily afford their bills.
Utilities for residential heating and cooling costs eat up an average of 20% of the annual incomes of those in the bottom economic quintile. In contrast, the same utility costs consume only 3% of the annual incomes of households that are middle and upper class.
Many gas and electric utility companies across the nation collect billions of taxes from their customers for the utilities' corporate taxes - which they keep instead of sending it to the government. Surprisingly, this is legal in most states." ["Classism For Dimwits", pp.322 - sources cited in footnotes and biblio]
"There is no liberty in starvation...no freedom in debt peonage, and no justice in poverty." ["Classism For Dimwits", pp. 96]
"For those lucky enough to get a middle class job with health and dental benefits, someone else did NOT get that job - someone who needed it just as badly, if not more so. Someone who was just as deserving and qualified.
In a capitalist society where supply and demand does not operate in a vacuum, where markets are artificially manipulated and controlled by the rich and powerful, there exists unearned privilege for certain members of society at the expense of others." ["Classism For Dimwits", pp. 74-75]
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