The difference between Dems and Repubs on 'Bush tax cuts'

[ElFenix]

I'm not acting like anything. The bottom line is that there is someone else out there willing to do the job for less. Do you dispute that? If American companies don't take advantage of the cheapest labor they can find (after accounting for transportation or other costs), then they will inevitably fail against global competitors who do make full use of cheap labor. I blame government for plenty, but they don't create reality.

right, they don't create the reality that 2 billion indians and chinese need jobs. and there is absolutely nothing that anyone in washington can do about the indian government and the chinese government wanting to putting their sla, ert, citizens to work. but the .gov could have put some brakes on US companies running off to employ them by demanding that imports be made to a semblance of labor and environmental standards, demanding that trade with china not be the subject of vast manipulation by the chinese .gov, etc. that should have been done in the 1990s by the clinton admin when the MFN status was made permanent for china and GATT became WTO. but he was getting money from the chinese .gov under the table so of course there was no insistence on anything.

 

[theeedude]

I was thinking about it. I don't really need a tax cut, I already have more money than I care to spend, and I can't in good conscience support it. But if GOP poor white trash wants to give me one, that's fine, more money to give to Democrats.

 

[CycloWizard]

right, they don't create the reality that 2 billion indians and chinese need jobs. and there is absolutely nothing that anyone in washington can do about the indian government and the chinese government wanting to putting their sla, ert, citizens to work. but the .gov could have put some brakes on US companies running off to employ them by demanding that imports be made to a semblance of labor and environmental standards, demanding that trade with china not be the subject of vast manipulation by the chinese .gov, etc. that should have been done in the 1990s by the clinton admin when the MFN status was made permanent for china and GATT became WTO. but he was getting money from the chinese .gov under the table so of course there was no insistence on anything.

They could do all of those things, but the US companies subject to these added constraints would be at a competitive disadvantage against companies not subject to these same restrictions.

 

[Throckmorton]

Craig, THE FUCKING FEDERAL RESERVE IS THE REASON THERE IS SUCH A LARGE GAP BETWEEN THE RICH AND THE POOR, OKAY?

IT'S NOT FUCKING FISCAL POLICY.

I'm not really knowledgeable about all this arcane monetary financial stuff, but aren't "THE FUCKING FEDERAL RESERVE" the people who do "FISCAL POLICY"?

 

[daishi5]

I'm not really knowledgeable about all this arcane monetary financial stuff, but aren't "THE FUCKING FEDERAL RESERVE" the people who do "FISCAL POLICY"?

Fiscal policy is the government, the FED handles monetary policy. Fiscal is the revenue/spending, monetary policy is the amount and cost of money.

 

[ElFenix]

They could do all of those things, but the US companies subject to these added constraints would be at a competitive disadvantage against companies not subject to these same restrictions.

why would they be? the US companies making things elsewhere to sell elsewhere wouldn't be subject to restrictions.

 

[Craig234]

right, they don't create the reality that 2 billion indians and chinese need jobs. and there is absolutely nothing that anyone in washington can do about the indian government and the chinese government wanting to putting their sla, ert, citizens to work. but the .gov could have put some brakes on US companies running off to employ them by demanding that imports be made to a semblance of labor and environmental standards, demanding that trade with china not be the subject of vast manipulation by the chinese .gov, etc. that should have been done in the 1990s by the clinton admin when the MFN status was made permanent for china and GATT became WTO. but he was getting money from the chinese .gov under the table so of course there was no insistence on anything.

That's a very reasonable post with good points - except one. You get the Clinton motive wrong, it wasn't about a cheap shot of 'Chinese money under the table'.

There was plenty of pressure from the US corporatocracy, and from Republicans who he could throw bones to and trade with, to explain this a lot better than treason.

 

[Craig234]

Craig, THE FUCKING FEDERAL RESERVE IS THE REASON THERE IS SUCH A LARGE GAP BETWEEN THE RICH AND THE POOR, OKAY?

IT'S NOT FUCKING FISCAL POLICY.

It's a combination of things.

You know, we had a Fed in the increased concentration of wealth peaking just before the Great Depression, when it decreased FDR-Carter, and when it's peaked again now.

This is about one important issue - who is representing the extreme, irresponsible, unaffordable policy to enrich the richest even more when they're already getting far more than 'their share' of wealth - 80% of new wealth from growth in the US the last 25 years has gone to the top 1% - and who is representing the public interest.

The Fed is part of the picture, but who is appointed to the Fed is a political issue.

 

[Craig234]

So you are saying the govt knows best on how to spend the money of the wealthy.

Some of that money, yes.

I don't think that with no government, WWII would have been fought as well by the wealthy spending their money to win it. The wealthy spending their money wouldn't build roads as well for the public interest, run the FBI, regulate polluters, run schools, provide medical insurance or social security.

For some things, the government - representing the public interest - knows better.

And this is why a lot of sane wealthy people agree with that view, and are happy to live under democracy and pay taxes, while prospering under the system.

On the other hand, in all the prosperous Libertarian countries, - er, wait.

 

[ElFenix]

This is about one important issue - who is representing the extreme, irresponsible, unaffordable policy to enrich the richest even more when they're already getting far more than 'their share' of wealth - 80% of new wealth from growth in the US the last 25 years has gone to the top 1% - and who is representing the public interest.

i don't have from 1985 and 2010, but i do have data for 1983, 1989, and 2007. note that 2007 was before the stock market plunged and the housing bubble burst.

from the data i have, the top 1% as of 2007 (34.6%) was up a bit over 1983 (33.8%), but down a lot from 1989 (37.4%). and they were fairly flat through the 2000s (2001 - 33.4%, 2004 34.3%).

where the wealth actually went was to the 4% right behind them, from 22.3% (1983) to 27.3% (2007). the 80s and 90s were flat for this group (the 21 and 22 percent range through 1998), but the 2000s they did well: 2001 - 25.8%, 2004 - 24.6%, and 2007 27.3%.

source:
http://www.levyinstitute.org/publications/?docid=1235

now, he has a prelim update for 2009 based on the fall of the stock market and reports on home value from realtors. however, as of now the s&p 500 is well away from its bottom at the start of 2009 (though still down ~17% from 3 years ago) [this factor increases wealth distribution inquality as shares are largely owned by the top percentages]. home prices are still down from 2007 and will probably stay there for a while. but the nice thing about houses is that you can live in them, they're not like a stock where the only thing it's good for is its value. a 3 bedroom 2.5 bath house in 2007 is still a 3 bedroom 2.5 bath house in 2010. so wealth may be down but utility is the same for that same house. also, there's a selection bias because the places that were hardest hit are going to be the volume leaders in forced sales and upside down mortgages, strategic defaults and what not. and that just continued to snowball (as the comps decreased in value the other houses in the area decreased in value, more people found themselves upside down, rinse, repeat).

i'll also throw in my usual concerns about household granularity increasing (that is, i'm fairly certain that household size is smaller than it was 25 or 30 years ago due to people spending less of their lives married, whether due to waiting longer to get married or higher divorce rates) which serves to dilute 'household wealth'. conversely, we've been losing households since the start of the recession due to people getting roommates.



much bigger concern to me than wealth distribution is the huge increase in the income:debt ratio for middle income quintiles. it went from 100% in 2000 to 157% (i think, i saw the number in the report as i skimmed it but can't find it again) in 2007. that's a huge increase in debt load. there's the fuel for the housing bubble right there.

 

[CycloWizard]

why would they be? the US companies making things elsewhere to sell elsewhere wouldn't be subject to restrictions.

So only people buying stuff in the US would be penalized. How does that help us?

 

[BoberFett]

Craig thread. LOL.

 

[ElFenix]

So only people buying stuff in the US would be penalized. How does that help us?

have more jobs and no lead toys

 

[CycloWizard]

have more jobs and no lead toys

So more expensive goods leads to more jobs? How much more expensive does that toy need to be before $1/hour labor is a worse alternative than $7.15/hour labor?

 

[matt0611]

I was thinking about it. I don't really need a tax cut, I already have more money than I care to spend, and I can't in good conscience support it. But if GOP poor white trash wants to give me one, that's fine, more money to give to Democrats.

Feel free to give the difference to the treasury. They accept money 24/7. LMAO

 

[piasabird]

You can not really go by straight income charts becase a lot of liberal people are not married so it brings single wage earning families down, and it makes dual income earning families look like they are doing better than they are. Just being married makes a big difference in stability if the family has 2 wage earners. You also cant just look at wages, you need to look at housing costs. Often people who make more have to live in locations where housing is sometimes 3 or 4 times more expensive.

 

[ElFenix]

So more expensive goods leads to more jobs? How much more expensive does that toy need to be before $1/hour labor is a worse alternative than $7.15/hour labor?

don't know but it's probably only a fraction of the cost of the toy and it's certainly a small fraction of the $6.15 split. the cost to the consumer may not increase at all.

the people that pick tomatoes get paid about a 1.5 cents a pound. cost at the grocery store: 99 cents a pound. if you pay the tomato pickers an extra cent, that extra cent a pound makes literally no difference to me the consumer, but makes a huge difference to the guy out in the field picking.

 

[CycloWizard]

don't know but it's probably only a fraction of the cost of the toy and it's certainly a small fraction of the $6.15 split. the cost to the consumer may not increase at all.

the people that pick tomatoes get paid about a 1.5 cents a pound. cost at the grocery store: 99 cents a pound. if you pay the tomato pickers an extra cent, that extra cent a pound makes literally no difference to me the consumer, but makes a huge difference to the guy out in the field picking.

Then feel free to pay more to buy things that are produced in the US. Of course, you will have a hard time finding things made in the US. This indicates to me that you're lowballing the price effect due to labor, and that it's still cheaper to import crap from China than pay the inflated wages required to support unskilled labor in the US.

For example, let's say we have a worker in China and a worker in the US making $1/hour and $7.15/hour, respectively, and each can produce something using a fixed value of raw materials per man-hour. Even if we neglect shipping within the US and allow $5 for that one man-hour of Chinese products (quite generous in your favor in my estimation), the price Chinese product is still $1.15 cheaper, representing close to 20% of the variable costs of the final product. While I'm obviously fudging numbers here, evidence for this effect is everywhere you look.

 

[dank69]

don't know but it's probably only a fraction of the cost of the toy and it's certainly a small fraction of the $6.15 split. the cost to the consumer may not increase at all.

the people that pick tomatoes get paid about a 1.5 cents a pound. cost at the grocery store: 99 cents a pound. if you pay the tomato pickers an extra cent, that extra cent a pound makes literally no difference to me the consumer, but makes a huge difference to the guy out in the field picking.

You've got to remember that just because a company can produce something cheaper, doesn't mean they will lower the price. They will price items according to demand, and enjoy increased profits. But, if you increase the cost to produce an item, a company isn't going to just eat the loss to their profit margin. They will increase the price accordingly.

 

[ElFenix]

You've got to remember that just because a company can produce something cheaper, doesn't mean they will lower the price. They will price items according to demand, and enjoy increased profits. But, if you increase the cost to produce an item, a company isn't going to just eat the loss to their profit margin. They will increase the price accordingly.

well no crap they'll produce where they maximize profit. but increasing price may not necessarily allow them to maximize profit. the producer may be price constrained.

and even if they do increase price it's very rare that the whole increased cost can be passed directly to the consumer in the price.

Then feel free to pay more to buy things that are produced in the US. Of course, you will have a hard time finding things made in the US. This indicates to me that you're lowballing the price effect due to labor, and that it's still cheaper to import crap from China than pay the inflated wages required to support unskilled labor in the US.

For example, let's say we have a worker in China and a worker in the US making $1/hour and $7.15/hour, respectively, and each can produce something using a fixed value of raw materials per man-hour. Even if we neglect shipping within the US and allow $5 for that one man-hour of Chinese products (quite generous in your favor in my estimation), the price Chinese product is still $1.15 cheaper, representing close to 20% of the variable costs of the final product. While I'm obviously fudging numbers here, evidence for this effect is everywhere you look.

you're the one that provided the wage figures, not me. it'd be interesting to see how many man-hours of labor are needed to produce various products between various countries, but we don't have that information. and i never made the claim that importing stuff from china wasn't cheaper for the producer. nice of you to set that straw man up and then knock it down.

all i know is that new balance shoes don't seem to cost any more than nike.

 

[CycloWizard]

you're the one that provided the wage figures, not me. it'd be interesting to see how many man-hours of labor are needed to produce various products between various countries, but we don't have that information. and i never made the claim that importing stuff from china wasn't cheaper for the producer. nice of you to set that straw man up and then knock it down.

What exactly are you arguing then? If it's more expensive for the producer to produce it here, it will be more expensive for the consumer to buy it here.

all i know is that new balance shoes don't seem to cost any more than nike.

The equivalent New Balance running shoe does cost more than the Nike. I still buy it because it's a better shoe and I got stress fractures running in the only pair of Nike running shoes I've ever owned. But who is most adversely affected by a market with more expensive products? Those with less money to throw around. Since the raw materials are purchased on a world market, companies earning a higher profit margin can afford to pay more for raw materials, thereby driving up prices of those commodities in every nation, including those with protectionist policies which artificially inflate labor costs. This will drive up the price of the product. This is a big reason why New Balance is tiny compared to Nike - they simply can't compete on a larger scale with a company using cheaper labor. That's their decision and I'm glad they are sticking to it, but the reality of the situation is that it constrains their growth and will probably cause them to die out in the long run.

 

[BoomerD]

Guys...MOST New Balance shoes are Made in China...it's only a dwindling few that are still Made in the USA.

I prefer New Balance because they actually make shoes wide enough to fit my "Flintstone Feet," but more and more of their manufacturing is going to China...yet prices for their "better quality" lines aren't going down a bit...still over $100/pair.

 

[shira]

I'm still waiting for them to cut a check to the US Treasury. Until then, it's meaningless to use them as an example.

So your "principle" is that if a person advocates a change in policy that would be detrimental to them, that advocacy is meaningful only if the person acts as though the policy is already in place? Even if that premature act puts the person at a competitive disadvantage to others not bound by the not-yet-in-force change?

Examples of your "principle" at work:

Bill Gates cannot meaningfully advocate higher taxes for corporations unless Microsoft begins paying higher taxes right now, even if that behavior puts Microsoft at a competitive disadvantage to other corporations who continue to pay the current, lower tax rate.

I cannot meaningfully advocate that the mortgage-interest deduction be eliminated unless I right now begin to NOT deduct mortgage interest from my personal income tax, even if that makes purchasing a house unaffordable to me. Whereas in a market where no one was allowed to deduct mortgage interest the price of housing would fall and make it affordable even without the deduction.
​

And you stand behind your statement, right?

 

[CycloWizard]

So your "principle" is that if a person advocates a change in policy that would be detrimental to them, that advocacy is meaningful only if the person acts as though the policy is already in place? Even if that premature act puts the person at a competitive disadvantage to others not bound by the not-yet-in-force change?

Examples of your "principle" at work:

Bill Gates cannot meaningfully advocate higher taxes for corporations unless Microsoft begins paying higher taxes right now, even if that behavior puts Microsoft at a competitive disadvantage to other corporations who continue to pay the current, lower tax rate.

I cannot meaningfully advocate that the mortgage-interest deduction be eliminated unless I right now begin to NOT deduct mortgage interest from my personal income tax, even if that makes purchasing a house unaffordable to me. Whereas in a market where no one was allowed to deduct mortgage interest the price of housing would fall and make it affordable even without the deduction.
​

And you stand behind your statement, right?

I can already see the strawman brewing in your pea brain. In this case, it's obviously true that one person can directly support their own desired policies by increasing their personal tax burden. If instead that person gives the money to charity (as opposed to government), they obviously believe that the charity will do more to achieve their desired ends than would the government with the same amount of money.

 

[dmcowen674]

First thing they will do is scream wealth redistribution..sadly they are right but in the opposite direction..

Republicans will get their wealth re-distributed