gbaji wrote:
RedPhoenixxx wrote:
Two things:
1) I like how we've gone from "the gap is too wide" to "OMG you guys want rich people to give all their money to hmeless drunks."
Well. Technically, the issue was about some kind of glorification of the rich getting poorer, as though this was somehow a "good thing" for those who are not rich.
No, "technically", the issue was about the rich not getting as rich as quickly as previously. And Anna prefeced her OP with the question "So what do you think? Will it harm and slow wealth creation for the rest of us or will there be some redistribution of wealth amongst the rest of us?"
Hardly "glorification".
Quote:
I'll point out an interesting trend. Pretty much all the times in the last century in the US, when the rich lost money, the rest of the country was in even worse condition. Trickle down indeed!
Correlation =/= Causation.
Quote:
Far before you put a dent in the truly "rich", you'll kill upward mobility for the middle class. That's the real concern for me.
Totally untrue. Reversing the Bush tax cuts for the top 1% of earners would do nothing to "kill upwards mobility for the middle class".
Quote:
But for people who grew up in the latter half of the 20th century to continue to assume that the rich only get rich by taking from the poor shows a marked lack of understanding of how industrialism coupled with capitalism works.
No one in this thread said that the rich
only get rich from taking from the poor. Nice diversion, though.
Quote:
Companies make profits because they bring a better product to market at a lower price. This benefits everyone and absolutely involves employment.
Not necessarily. You know a great way of bringing a product to the market for a lower price? Shifting production to a country where costs are lower, thereby killing employment at home. Or you could cut the health care plans, to take a topical example, of your company. It is incredibly simplistic to assume that any gain in productivity benefits "everyone".
Quote:
Compare your standard of living today to someone making the exact same adjusted income as you from 50 or 100 years ago. Why is your life better? Because we're able to make more productive use of our total resources today than we used to. That's largely because of technological advances. And that in turn overwhelmingly occurred as a result of investment.
A) It might work if you take 100 years ago. It doesn't if you take 40 years ago. Middle-class wages have pretty much stagnated in the last 40 years. This isn't true for the highest bracket of earners.
B) Technological advances alone don't make life "better".
Quote:
Just because you didn't hire the person directly does not change the reality of how the money is working for you. Why do you think you get interest on the money? Think about it...
There are thousands of markets which are more profitable to banks than "small businesses in the US". A lot of the investments of US and European banks are not made at home, but abroad. They might create jobs in South-East Asia, but this doesn't do much for workers at home. Or they might be used to purchase existing businesses, restructuring them, and selling them off for profit. They might be used to buy commodities. Currencies. Securities. They are tons of ways to invest money and get a healthy return without creating a single job at home.
And all this hasn't even touched upont he fact that creating jobs is different to salary increases. A lot of hte theories you spout would be more accurate if the only market that existed was the American one. In today's world, this simply isn't the case anymore. Your economic views are completely inadequate in this age of global markets.
I'm not arguing for a complete overhaul of the system. I'm just pointing out the fact that when profits are made, salary increases for the low/medium-skilled workers are amongst the last things to get increased. Because there is an inherent tension in this system. The most efficient companies tend the ones with the biggest margins, the lowest possible operating costs. Low/medium-skilled workers salaries and benefits are some of the easiest thing to cut in order to decrease those operating costs and increase productivity.
You can argue that these things even out when there is an even-playing field, but there isn't an even-playing field when you can relocate so easily. Haven't we heard this argument in revese a million times? "omg, GM failed becaues its workers had so many perks and generous pensions, and we got screwed by the Japanese/German/INdian workers who can do the same work for a pittance!" How many times have we heard that union demands are what killed the US auto-industry? The logic behind all this is never that CEOs took too much home, or that sharehlders get too much returns compared to Japanese shareholders. No, it's always the lower end of the work force that gets blamed, and thereby hit. They're always the first ones to go.
The simplified version of the economic theories you espouse were not designed for the globalised reality we have today.
I don't have the perfect solution. I don't claim to. I'm not sure how you sqaure this circle. I'm not in favour of protectionism, I don't think we should have government-imposed salary caps. But little things like progressive taxation, the Tobin tax, governement benefits so that poorer people are not entirely dependent on the whims of a volatile market place would be good places to start. The end-goal of any system should be that as many people profit from it as possible, not that the top earners are as rich as possible. We seem to have gotten these two things mixed-up, partly because of the this erroneous belief that trickle-down actually works.