The Death of Reaganomics

[miketheidiot]

Originally posted by: JS80

Originally posted by: Fern

You know the talking points: Regulation is the problem and deregulation is the solution. The distribution of income and wealth doesn?t matter. Providing incentives for the investors of capital to ?grow the pie? is the only policy that counts. Free trade produces well-distributed economic growth, and any dissent from this orthodoxy is ?protectionism.?

Isn't Chavez doing one h3ll of a good job at demonstrating how beneficial regulations and wealth redistribution are to an economy?

Originally posted by: miketheidiot
-snip-
actually at the moment we could use a raise in capital gains taxes

I'm wondering if that would be any help, given the depressed values of real estate and the stock market.

Fern

This is what will probably happen if they increase capital gains tax (all else equal):

1) A lot of bargains will be available after the market crashes this year. Investors pick up stocks at low price at same rate as if LTCG did not change. They will HOLD and not take capital gains when stocks rebound. Tax revenues from LTCG DECREASE.

2) Investors will pick up stocks at a lower rate because after tax rate of return is lower. Lower investments = lower tax revenue from LTCG.

Either way it will probably be a macro loss in revenue COMPARED to status quo. Actual dollar figure may go up or down.

Hedge fund and private equity managers will probably hold on to their carried interest and not realize any gains at Obama rates (unless it's a tax increase specifically targeted towards them).

you don't get it, the purpose of this tax is not to raise revenue, its to encourage ownership, rather than speculation. Instead of pursuing gains on capital, it woudl encourage more stable, long term investing on the fundamentals of the company (ie dividends)

 

[miketheidiot]

Originally posted by: Capitalizt

Originally posted by: JS80


It's the same as fiat currency, which is more effective because you can control the supply of it (i.e. increase it as the economy expands) whereas gold's supply is relatively fixed.

Which gives it PERMANENT VALUE regardless of the current "price" in paper. You can argue against a gold-backed currency...fine. But you can't argue that paper is a better store of wealth over time than gold. History proves this wrong. Countless paper currencies have come and gone...They have risen and fallen with empires, but gold hold has always held eternal..It will always be a safe and reliable way to store wealth because it is the only universal currency that does not depend on politicians or central bankers to maintain it's value.

investigate Spain in the 15th and 16th centuries.

 

[miketheidiot]

Originally posted by: Capitalizt
Legend...You don't get it. People don't like it because it's shiny and pretty. They like it because it is RARE. It is rarity that gives it permanent value. Rarity is what paper lacks.

being rare doesn't mean anything if people don't want it anymore.

 

[miketheidiot]

Originally posted by: BansheeX


I think you know you're lying on this one, and let me point out why. There is no way that you can personally believe that gold's recent 300% runup is a result of increased jewelry demand in a worldwide economic downturn. Gold is going up because people are concerned about worldwide inflation. That causes the price to go up higher than the inflation itself, but fear of inflation is still a result of inflation.

gold is going up for the same reasons ever other commodity is going up, because people are throwing their money at them because thats the cool thing to do now days.

This is why I hate your posts, you know you're being dishonest and fooling people into taking your side.

pot/kettle/black. You gold idiots throw around fud and disinformation like noone else.

Gold is a monetary asset with no counter-party risk. While diamonds do have rarity for them, they are a terrible monetary asset for the following reasons: their quality varies from diamond to diamond, they can be damaged, their synthetic alternatives are much more difficult to spot, their value relies on quality of a cut, and they cannot be recombined with one another after being cut.

gold is a productive asset, not a monetary asset. End of story.

 

[BansheeX]

Originally posted by: miketheidiot
There is a reason banks failed constantly and we had massive bank panics every 10 year under the gold standard, it simply didn't work.

You're making a crucial mistake here in proposing a idealist socialist solution to an inherent free market cost (bankruptcy) that inadvertently introduced greater costs than the runs themselves.

A bank is a business like any other. They will hold deposits for willing customers and loan that money out to others at interest, then give you a portion of that. That's how banks make money. They're not a free lockbox for your money. If you choose to deposit your money with such an institution in order to get that return on your savings, that is your risk to take. So if the bank in which you're deposting goes under, it's no different than if you had invested in a company that went bankrupt. You aren't entitled to have a government agency bail you out with other people's money. Naturally, bankruptcy is one of the things that businesses want to avoid as it's not a profitable venture. In order to follow prudent lending, one has to fear bankruptcy. In order to fear bankruptcy, bankruptcies have to happen from time to time as a reminder to customers and businesses trying to please them that the threat is very real.

There is no perfect system, no socialist utopia. So citing a cost in the system that was actually the highest beneft/cost ratio is not a good argument. The inflation, distortion, and occasional depressions enabled by a central bank's existence was not a step in the right direction, and history has proven it. Unfortunately, you've probably never lived through a depression and probably allow my Keynesian stalkers to rewrite history for you. Don't worry, you'll get your taste soon enough.

 

[First]

Originally posted by: BansheeX

Originally posted by: miketheidiot
There is a reason banks failed constantly and we had massive bank panics every 10 year under the gold standard, it simply didn't work.

You're making a crucial mistake here in proposing a idealist socialist solution to an inherent free market cost (bankruptcy) that inadvertently introduced greater costs than the runs themselves.

A bank is a business like any other. They will hold deposits for willing customers and loan that money out to others at interest, then give you a portion of that. That's how banks make money. They're not a free lockbox for your money. If you choose to deposit your money with such an institution in order to get that return on your savings, that is your risk to take. So if the bank in which you're deposting goes under, it's no different than if you had invested in a company that went bankrupt. You aren't entitled to have a government agency bail you out with other people's money. Naturally, bankruptcy is one of the things that businesses want to avoid as it's not a profitable venture. In order to follow prudent lending, one has to fear bankruptcy. In order to fear bankruptcy, bankruptcies have to happen from time to time as a reminder to customers and businesses trying to please them that the threat is very real.

There is no perfect system, no socialist utopia. So citing a cost in the system that was actually the highest beneft/cost ratio is not a good argument. The inflation, distortion, and occasional depressions enabled by a central bank's existence was not a step in the right direction, and history has proven it. Unfortunately, you've probably never lived through a depression and probably allow my Keynesian stalkers to rewrite history for you. Don't worry, you'll get your taste soon enough.

rofl. Gotta love free market laymens.

 

[Craig234]

Originally posted by: Xonoahbin
On the subject of Reaganomics, which is what this thread is about, there is little defense for that school of thought. Many Republicans don't even believe in it; in fact, I tend to think that only the wealthy favor Reaganomics. It seems to me that it's the case because Reaganomics obviously focuses on the wealthy, but obviously also shafts the not-so-wealthy. It's an interesting train of thought, but it's just that. Like Communism is a train of thought that doesn't typically work well, so is Reaganomics. If people weren't so greedy, both processes would probably have merit, but the wealthy will always like to be wealthy and frequently don't give a damn about the lower classes. That is the failing of Reaganomics, that it relies on goodwill from the wealthy to provide better services, product and support for the infrastructure and populous beneath them.

That is partially why capitalism seems to fail as well; the wealthy even get together, merge or conspire to make more money. If competition seems like it would get in the way of more money, which very well may be the case, there is a reason for the wealthy and the powerful to screw the smaller person. Reagan was about the individual, but the people that Reagan relied on were not. Capitalism follows the same suit; it's not capitalism that is failing. It is the people and the corporations that fail us. I greatly favor the thought of capitalism and a free market where growth is encouraged by giving corporations the tools to better serve the people, in theory. I can't favor that thought if it fails us as much as it currently is doing. People may have seemingly loony ideas, but keep in mind that their ideas might be good in theory. Perhaps you can see that they're not practical in the world in which we live, and perhaps the person with the "loony" idea can't. But the same goes for any idea. I think we all need to think about that.

Every economic theory has followers who view it as 'serving the best interests of society', from communism to fascism to capitalism to scialism.

Each requires examination about first, what the goals are, and second, how well it fits human nature to meet the goals.

One good measure of an economic system is for it to incent the most productivity from the most people as possible.

Not surprisingly, there are situations where 'the most wealthy making the most possible' and 'the most productivity from the most people' are in conflict.

You noted some examples of how - when competition makes less profit for the owners, then you have them against competition, for example.

What we get now is the very wealthy wanting to push policies good for them and bad for others, and because it's a democracy, they have to fool 51% of the people into agreeing - or at least voting for other reasons for people who will push those policies. So if you get them to vote for your guy because of guns or gays or religion, who cares? If you get them to believe the propaganda for the economics, that's fine too. How is that done? A few major think tanks that are propaganda machines on how to promote these policies.

It's all laid out for people who are willing to get a little informed. Reagan entered politics because he was pissed off at how much taxes he had to pay as a movie star - his first political action was to be the national spokesman against 'socialist' Medicare (which passed anyway). His economic advisors, like Milton Friedman, had decades of experience in 'screw the public for the interests of the wealthy'. The slogans were manufactured (e.g., 'tricke-down economics') and they were ready to go.

The rest is history - never in perhaps American history has the wealthy class (the top part of the top 1%) taken so much of the nation's wealth before than in the last 25 years.

The nation has had a healthy economic growth in those 25 years - and basically 0% after inflation has gone to the bottom 80%. The top 0.1% are up hundreds of percent.

That is the redistribution of wealth by the government, it is class warfare - things many in the public can't notice because they've been innoculated to those phrases as *liberal*.

Just accuse the vitims of the class warfare of wanting to wage class warfare