Several former treasury secretaries have a bit of a laugh over income inequality

[IronWing]

And why is that, pray tell?

Because the rich feel entitled to cheap labor and have used their wealth to manipulate the political system to make it easier to send capital out to find cheap labor and to repatriate the profits.

 

[Doc Savage Fan]

Because the rich feel entitled to cheap labor and have used their wealth to manipulate the political system to make it easier to send capital out to find cheap labor and to repatriate the profits.

That's part of it...NAFTA and GATT are significant drivers. Also, extremely high corporate taxes are a significant factor as well. Corporations have zero incentive to bring back good paying jobs that would help to substantially reduce the wealth gap.

 

[IronWing]

That's part of it...NAFTA and GATT are significant drivers. Also, extremely high corporate taxes are a significant factor as well. Corporations have zero incentive to bring back good paying jobs that would help to substantially reduce the wealth gap.

Count me as one who would gladly eliminate corporate taxes entirely... if we can find a way to tax the owners through regular personal income tax collections no matter where they live.

 

[realibrad]

Because the rich feel entitled to cheap labor and have used their wealth to manipulate the political system to make it easier to send capital out to find cheap labor and to repatriate the profits.

Do you mean to use the world entitled? Costs go down when you cut costs. So if all things are equal, and you cut the cost of labor, then you can do many things. You can make more for yourself, or you can continue to stay in business because the reduced costs allow you to make a profit.

I know that some use their wealth to manipulate the system, so I dont want to mislead.

 

[bshole]

That's part of it...NAFTA and GATT are significant drivers. Also, extremely high corporate taxes are a significant factor as well. Corporations have zero incentive to bring back good paying jobs that would help to substantially reduce the wealth gap.

So corporate taxes are the reason that corporate leaders assign more and more of companies to themselves? Does that really make sense? It certainly is not happening in Western Europe where corporate taxes are even higher.

Here in Milwaukee, the taxpayers are still paying for a Stadium built for a billionaire and are now on the hook for part for a new Arena about to be built for a billionaire.

We need a new labor movement. It will come as soon as the middle class can't buy what it needs to on credit...... a point in time rapidly approaching.

 

[IronWing]

Do you mean to use the world entitled? Costs go down when you cut costs. So if all things are equal, and you cut the cost of labor, then you can do many things. You can make more for yourself, or you can continue to stay in business because the reduced costs allow you to make a profit.

I know that some use their wealth to manipulate the system, so I dont want to mislead.

Yes, the word entitled fits the situation perfectly. It is the slave-owner mentality prettied up for the modern age.

 

[Doc Savage Fan]

So corporate taxes are the reason that corporate leaders assign more and more of companies to themselves? Does that really make sense? It certainly is not happening in Western Europe where corporate taxes are even higher.

Here in Milwaukee, the taxpayers are still paying for a Stadium built for a billionaire and are now on the hook for part for a new Arena about to be built for a billionaire.

We need a new labor movement. It will come as soon as the middle class can't buy what it needs to on credit...... a point in time rapidly approaching.

I'm primarily talking about multinationals who effectively "shelter" their off-shore income by not bringing it into the US. I should have been clearer on this point.

Western Europe has higher corporate taxes than the US? This is news to me.

 

[glenn1]

Because the rich feel entitled to cheap labor and have used their wealth to manipulate the political system to make it easier to send capital out to find cheap labor and to repatriate the profits.

Hey but don't worry, we got Obama elected to fix that! Eskimospy and other are twisting themselves in knots trying to figure out how increasing GINI under (D) control is somehow a good thing. So long as the politician with the correct party is overseeing it then it's cool; just gotta make the appropriate noises to appease the base about how everything would be made better if only they could raise taxes on the evil rich. You might not have a job anymore, but we can damn well ensure that some rich guy in Boston making $260k in household income can't be allowed to keep enough money to hire a nanny to watch their kids instead of putting them in daycare like the common folk do. That would be elitist of them.

 

[Spungo]

What in the world are you on about?

Instead of me arguing the logic of why productivity causes prices to fall, I want you to give me 1 example where increased productivity would make something more expensive.

This is the problem with modern economic theory. Nobody ever applies logic to anything. Economists say that having 1% deflation would cause people to stop spending. According to economists, credit cards don't exist, rent to own stores don't exist, convenient stores don't exist, outrageously expensive ATMs don't exist. Why would I buy a washing machine today when I could get it $20 cheaper a year from now? If I'm willing to hand wash dishes for a year to save a couple percent, there's no way any human would pay 10-20% annual interest just so they can buy something a month sooner.

Western Europe has higher corporate taxes than the US? This is news to me.

Same here. Corporate tax in Sweden is only 22%.

 

[Attic]

It's interesting how inequality explodes immediately after leaving the gold standard in 1971. Rich people own stocks, and stocks rise in value under a fiat system. Poor people are paid in paper, and paper loses values under a fiat system. As Elizabeth Warren, a democrat, pointed out, minimum wage would be about $22 per hour if wages kept up with productivity. Economies are naturally deflationary, so prices of things should be falling every year as productivity rises. Areas with the fastest productivity advancements see the highest deflation, such as cell phones getting better and cheaper every year. Areas with flat productivity, such as housing, keep getting more expensive, and wages never keep up with inflation.

houses are more unaffordable than ever. Now economists are saying we should go to negative interest rates. If you liked paying $300,000 for a house, you'll love paying $600,000 for one.

For the record, I hope we do go into negative interest rate territory. I already own real estate, so the high inflation tends to make me wealthier while making everyone else poorer.

Leaving the gold standard was just a clever deception used to hand more power and control the bureacracy and wall street who could now more easily control the flow of money.


In a nutshell it allowed much more debt. One of the outcomes of this debt fueled expirment was a huge uptick on income inequality,.. which makes sense given how much control was handed to the few and taken from the many when we left the gold standard.

It's a critical concept to remember that these folks who take so much, would rather have total destruction, rather than give up even the tinniest fragments of wealth and control (i'm talking about wall street and their government lackeys). This is why our situation is so difficult/dangerous... the inequality is growing in our debt fueled experiment. The egos of the men involved in this experiment are massive, ie) we are in trouble because these douche-bags are infallible.


Cliffs: Leaving the gold standard was critical. I think the results imply it was largely a way to confiscate wealth away from the many to hand to the few. Leaving the gold standard set the tracks, the engine fueling inequality along those tracks is exponential debt increases created and "spent" by government. Workers will never be able to compete justly with entities who can confiscate trillions of dollars through debt creation with the flip of a pen.

 

[fskimospy]

Hey but don't worry, we got Obama elected to fix that! Eskimospy and other are twisting themselves in knots trying to figure out how increasing GINI under (D) control is somehow a good thing. So long as the politician with the correct party is overseeing it then it's cool; just gotta make the appropriate noises to appease the base about how everything would be made better if only they could raise taxes on the evil rich. You might not have a job anymore, but we can damn well ensure that some rich guy in Boston making $260k in household income can't be allowed to keep enough money to hire a nanny to watch their kids instead of putting them in daycare like the common folk do. That would be elitist of them.

What are you babbling about? When did anyone say increasing income inequality under Obama was a good thing?

 

[Spungo]

In a nutshell it allowed much more debt. One of the outcomes of this debt fueled expirment was a huge uptick on income inequality,.. which makes sense given how much control was handed to the few and taken from the many when we left the gold standard.

'tis no experiment. It has been known for centuries than printing money and giving it to friends effectively steals wealth from the lower class and hands it to the upper class.

One of the interesting things about economics is that you can never tell when something was written. It's always the same story. It could be today, yesterday, 20 years ago, 3000 years ago. It never changes. For example:

Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become "profiteers,", who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.

That's interesting how he uses the words "gamble" and "lottery" to describe a system that has been ravaged by inflation. Sounds a lot like Wall Street doesn't it. Gone are the days of buying a company because it makes things and has free cash flow. Today, people buy stocks just because they think someone else will buy it at a higher price. That's the kind of lottery Keynes is talking about. This was published in 1919, but it's just as true today as it was then. He wrote that when the war was still fresh in his mind. This is what he saw happening as a result of unchecked deficit spending.


Similarly, Warren Buffet's favorite book was published in 1934. Absolutely nothing has changed since then. People try to value companies by mouse clicks or eye balls, but in the end, it still comes down to simple things like free cash flow divided by enterprise value.

 

[Mai72]

IMO, the problem is many Americans have just gotten too comfortable. We don't know what it means to work more than 40 hours anymore. I talked to a guy from Egypt 2 weeks ago. He has only been here for 5 years, yet he owns 2 businesses. I live in a resort area so many businesses are closed in the winter. He also works 2 jobs in the winter. There is no doubt in my mind that he's going to be successful. The frekin dude works like an immigrant. Puts in sweat equity and is making something of himself.

We should be ashamed of ourselves. We live in America and the only thing we are good at is complaining. There is so much money out there, but many of us will never see it because of our attitudes towards money and the wealthy.

The average American reads one book a year. The most successful CEO reads 5 books a month. You want to become wealthy? Start doing things wealthy people do, because they do things differently than most Americans. Take TV as an example. Many Americans watch anywhere between 30-40 hours of TV a week. You want to waste a life? Watch TV. You want to start making money? Get off your asses and stop complaining. Learn to operate a business. Do something that can translate to more money. It's really not that difficult.

 

[Knowing]

It reminds me of the people who said gas was like $1.80 a gallon when Obama came into office.

Awkward.


The Philadelphia branch of the Federal Reserve published a paper that said that the redistributive properties of their policies might be impossible to avoid but that it's probably okay. Queue surprise.

https://research.stlouisfed.org/fred2/series/M2V

All that money that has been dumped on the market and curiously it's moving less than it has at any other time since statistics were kept. Perhaps if they do the same thing even harder and expect different results this policy won't be insane.

 

[Jhhnn]

Awkward.


The Philadelphia branch of the Federal Reserve published a paper that said that the redistributive properties of their policies might be impossible to avoid but that it's probably okay. Queue surprise.

https://research.stlouisfed.org/fred2/series/M2V

All that money that has been dumped on the market and curiously it's moving less than it has at any other time since statistics were kept. Perhaps if they do the same thing even harder and expect different results this policy won't be insane.

Please. The velocity of money would be a lot lower if it were scarcer, kinda like 1931. It'd be way, way lower if the financial community had succeeded in creating the near total collapse & liquidity hoarding that always follows the manic greed phase of over extension of credit. It's the story of every financial crisis in history.

The FRB & the govt. entered uncharted territory when they allowed such concentrated power in banking & in saving the banks at such a massive & systemic scale. That served debtors, most of America, a helluva lot more than it served the financial elite, lenders & holders of vast liquidity.

It's the only way that debt slave suckers caught any kind of a break.

We're also fortunate that redistribution & the little bit of wealth still in the hands of the masses allows for a low labor participation rate & low U3 at the same time.

We settle for less is what it amounts to. We didn't get here without the leadership of the financial elite, either, so it seems only just that they should join us in that.

 

[realibrad]

Instead of me arguing the logic of why productivity causes prices to fall, I want you to give me 1 example where increased productivity would make something more expensive.

Jesus, is that what you got out of it? What I did was show that an increase in productivity would not lead to a decrease in price. My example did not mean that the productivity lead to the increase in price. This is what economics call an externality.

This is the problem with modern economic theory. Nobody ever applies logic to anything.

Lol, yes, economics does not use logic.

Economists say that having 1% deflation would cause people to stop spending.

Only in a world where everything else held constant. If the value per dollar was increasing, you would be more likely to hold off buying something until you felt the value would flatten out. This is because if you wait, your money will increase in value and you would be able to purchase more. But, if it were just 1%, you would see a very small change as any investment that gave less than 1% return adjusted for inflation would not be worth investing in. Only an idiot would invest for a return of less than 1% when holding cash would give you more.

According to economists, credit cards don't exist, rent to own stores don't exist, convenient stores don't exist, outrageously expensive ATMs don't exist.

What the fuck are you talking about? What economists does not factor in those things? That is very stupid.

Why would I buy a washing machine today when I could get it $20 cheaper a year from now?

Because the $20 is worth less to you than the increase of utility of a new machine. Holy shit that was simple right?

See, if something gives me more value than holding cash, and I don't have another opportunity to buy something that gives more utility than the washing machine, its logical for me to buy it. If there is something else I could spend my money on that gave a greater return, I might buy that thing instead. Again, this is basic economics.

If I'm willing to hand wash dishes for a year to save a couple percent, there's no way any human would pay 10-20% annual interest just so they can buy something a month sooner.

You will need to explain this more, because it seems not to make sense to me. I think you might be talking about credit cards, but I am not sure.

 

[fskimospy]

Awkward.


The Philadelphia branch of the Federal Reserve published a paper that said that the redistributive properties of their policies might be impossible to avoid but that it's probably okay. Queue surprise.

https://research.stlouisfed.org/fred2/series/M2V

All that money that has been dumped on the market and curiously it's moving less than it has at any other time since statistics were kept. Perhaps if they do the same thing even harder and expect different results this policy won't be insane.

Why is that awkward?

I think you have a poor grasp of economics.

 

[Mai72]

But but...

I wanna be able to get outta college, make $100k a year and play video games while working as little as possible. My momma says I'm precious. ��

The reality is immigrants are 3-4x more likely to become millionaires than people who are born here. The fact is people who come to America aren't worried about income inequality. They just wanna work their ass off. They want to become wealthy and are willing to do anything and everything to get there, while many Americans talk a good game. But, that's about it.

IMO, we are witnessing a huge shift. The middle class is going to get much much smaller. The wealthy are going to get larger, but the largest group in America is going to be the working poor. We are going to see this group increase in size. Many people who were previously getting by are going to slip into working poverty. I'm observing the trend already. The amount of young people on food stamps is alarming, and once you start taking stuff from the US government it becomes a slippery slope. You become dependent on their assistance and it becomes that much harder to get off.

I know you guys don't believe me, but as I stated before the only person who is going to get out of this is you. There are no easy shortcuts unless you hit the lottery, or your uncle leaves you a million dollars. Work 2-3 jobs if you must. Open your own business. Do something that generates additional revenue. Our grandfathers worked their asses off when they arrived in America. Why can't we do the same?

 

[glenn1]

Our grandfathers worked their asses off when they arrived in America. Why can't we do the same?

Americans aren't supposed to work hard, that's for Mexicans. If you do a full-time job, even if it's some menial task a 6 year old in Sri Lanka can do, then you're entitled to have a "living wage." Because otherwise it's unfair that someone else might be a billionaire.

 

[ivwshane]

Americans aren't supposed to work hard, that's for Mexicans. If you do a full-time job, even if it's some menial task a 6 year old in Sri Lanka can do, then you're entitled to have a "living wage." Because otherwise it's unfair that someone else might be a billionaire.

By all measures it would appear that most Americans do in fact work their asses off.

Maybe you guys are only equating hard work with physical work?

 

[glenn1]

By all measures it would appear that most Americans do in fact work their asses off.

Maybe you guys are only equating hard work with physical work?

As an employer I care about results and not how hard you work. You can go all John Henry vs. the steam hammer for all I care, your pay will reflect the value you create and how much the job is worth doing along with how many other suppliers of the same labor you're competing against.

 

[ivwshane]

As an employer I care about results and not how hard you work. You can go all John Henry vs. the steam hammer for all I care, your pay will reflect the value you create and how much the job is worth doing along with how many other suppliers of the same labor you're competing against.

So your real complaint isn't about hard work, it's about cheap labor. Got it.

 

[Mai72]

As an employer I care about results and not how hard you work. You can go all John Henry vs. the steam hammer for all I care, your pay will reflect the value you create and how much the job is worth doing along with how many other suppliers of the same labor you're competing against.

To get the results you normally have to work hard. People always say "he was lucky." Bull. He or she made their luck because they worked hard.

There is value in hard work.

 

[Knowing]

Please. The velocity of money would be a lot lower if it were scarcer, kinda like 1931. It'd be way, way lower if the financial community had succeeded in creating the near total collapse & liquidity hoarding that always follows the manic greed phase of over extension of credit.

That's still happening. The stock markets hit all time highs on massive PE ratios based on buy backs and other accounting gimmicks while the companies were laying people off.

http://www.mercurynews.com/business/ci_28818260/hp-lay-off-up-30-000-people
http://investorplace.com/2014/10/hpq-stock-buyback-emc-merger/
http://www.factset.com/websitefiles/PDFs/buyback/buyback_3.16.15
http://www.streetinsider.com/Press+...+for+Hewlett+Packard+Enterprise/10894523.html

The FRB & the govt. entered uncharted territory when they allowed such concentrated power in banking & in saving the banks at such a massive & systemic scale. That served debtors, most of America, a helluva lot more than it served the financial elite, lenders & holders of vast liquidity.

What are you on? I'd like some.

http://www.federalreserve.gov/pubs/bulletin/2014/pdf/scf14.pdf

Only families at the very top of
the income distribution saw
widespread income gains
between 2010 and 2013,
although mean and median
incomes were still below
2007 levels

Remember, it was Eric Holder that created the "too big to jail" paradigm. I'm not so sure that Lynch will be any better.

http://www.bloomberg.com/news/artic...eding-it-prosecutes-corporate-crime-all-wrong

I am so certain that this new paradigm won't result in more basement dwelling day traders being hauled in for being the singular cause of events like the multi billion dollar flash crash. Perhaps you should ask yourself if Navinder Singh has a billion dollar account balance or why no one from Waddel and Reed are wearing dayglo orange jumpers.

We're also fortunate that redistribution & the little bit of wealth still in the hands of the masses allows for a low labor participation rate & low U3 at the same time.

Here I thought it was a bad thing that even with millions more population than 2007, we still don't have the same number of full time jobs. I suppose it's good that we have all these part time jobs to keep the U3 rate down. I hope they're bootstrapping with multiple part times and no sleep. They could also be augmenting their income with some SSDI.

I'm sure they'll shore up the trust now that the economy is firing on all cylinders (but not quite enough for even a 25 bps rate hike). Then Yellen talked about how they didn't seriously consider NIRP today. Per the FOMC's insipid "dot plot" someone is considering it.

http://www.cnbc.com/2015/09/17/take-a-look-at-the-new-fed-dot-plot.html

Since the Federal Reserve has literally explicitly said that only the top of the income distribution saw gains I'm wondering why you're in love with nouveau trickle down.

Why is that awkward?

You said it was stupid, I'm sure you have a clever reason why it's okay when democrats do it.

 

[Zorkorist]

Pretty sure we should end this Government that spends us all into more and more debt.

It's not my debt. It's not my spending.

-John