View Full Version : 39% for average, 275% more for wealthy - since 1970
CBS news said tonight that wealth has increased 39% for average americans since 1970 but 275% more for wealthy since 1970.
Gardenarian
10-26-11, 7:32pm
I am the 99% cow-hi
http://www.alternet.org/occupywallst/152811/the_shocking%2C_graphic_data_that_shows_exactly_wh at_motivates_the_occupy_movement_/
yep.
Yossarian
10-26-11, 8:49pm
Would you feel better if it was 5% for everyone?
The Milton Friedman Inspired perspective of "at least those at the low end have improved some" is insufficient.
We'd be much closer to creating a world that works for all if the differential between the least paid & the highest paid was considerably smaller.
The concentration of wealth in this country that is on par with the Gilded Age is bad for the majority of people. Time to change it.
Yossarian
10-27-11, 12:24pm
Got it. It's better if we all have less as long as we have about the same.
Got it. It's better if we all have less as long as we have about the same.
Currently the model is it's better if we all have less as long as a few end up with a lot more.
ApatheticNoMore
10-27-11, 12:36pm
Possibly, it depends on the extent to which disparity in wealth means disparity in power (in the American political system - oh boy ...), and the ability of the rich to entirely dominate important markets. If the rich dominate the market for yachts, diamonds, or expensive cars really it's not worth caring about. When it gets to the point that we want to import rich people from other countries just to prop up our housing market, and thus make sure houses stay quite unaffordable to the average person, well things that make you go hmm (and this is literally a bill being voted on).
Yossarian
10-27-11, 1:53pm
Currently the model is it's better if we all have less as long as a few end up with a lot more.
The fairy-tale Kingdom of Denmark has a GDP per capita PPP of $34,000, the US has $47,000. That's a lot more wealth to spread around.
So how does that affect the average person in each country? What's the median or "middle class" income? All the wealth in the US is in the hands of few you say so the middle class is worse off? Is it? What is the average or median family income in the US versus the European paradises? Denmark at a couple grand over $20,000 and the US at a couple grand over $30,000, depending on what metric you use. Same in France, same in all of those countries that are not island financial capitals or oil kingdoms. See http://en.wikipedia.org/wiki/Median_household_income (http://en.wikipedia.org/wiki/Median_household_income) or here http://en.wikipedia.org/wiki/Mean_household_income (http://en.wikipedia.org/wiki/Mean_household_income) or here http://super-economy.blogspot.com/20...s-than-in.html (http://super-economy.blogspot.com/2010/04/median-earnings-higher-in-us-than-in.html)
Is it worth giving up 1/3 of your income just so everyone can be more equal? I'm sure some of you say yes (kib, you want to come out of hiding?). Not me. To me the question is how do we provide the best standard of living for everyone. The priority should be on looking for ways to lift up the low earners, not just grabbing pie from the top and dragging them down (and maybe everyone else down with them).
I understand we're the fifth-highest in the world for income (or is it wealth?) disparity now. Soon we'll be able to call "We're number one!" on that milestone, at least.
Remember, back when the top earners were paying 91% on part of their income (the fifties) all of us prospered. It's not like the one percenters quit en masse in protest; they did OK, and so did everyone else. Federal taxes are historically, rock-bottom low, thanks to (IMO) misguided, trickle-down policies.
I am the 99% cow-hi
I am the 53%. rrrrr
ApatheticNoMore
10-27-11, 2:49pm
I am both. I once did an analysis (just looking at the tax code folks, not difficult) of what it would take to avoid paying income taxes, just out of curiosity for what I would have to do if I wanted not to pay them I guess :).
By my calculations a single person earning the CA MINIMUM WAGE working 40 hours a week, taking the standard deduction, would PAY federal income taxes. And this is INCLUDING things like the earned income credit! That is NOT a high income AT ALL.
So the people not paying are what, not even earning what a person working a full time minimum wage job does? Well there is no real blood to be gotten from that stone in that case! Really that is not a rich source of tax revenue there :). OR ... they are people taking lots of deductions beyond the standard deduction and with lots of kids. If the 53% percent are upset about that I think there are obvious solutions: get rid of many of the deductions and limit the amount of kids you can claim as depedents to maybe 2? So there you go a platform for the 53%, do they dare to push for it? Or are they all talk?
I understand we're the fifth-highest in the world for income (or is it wealth?) disparity now. Soon we'll be able to call "We're number one!" on that milestone, at least.
Remember, back when the top earners were paying 91% on part of their income (the fifties) all of us prospered. It's not like the one percenters quit en masse in protest; they did OK, and so did everyone else. Federal taxes are historically, rock-bottom low, thanks to (IMO) misguided, trickle-down policies.
I've never understood this fascination with other people's wealth. If we took away all wealth over a certain amount, say $1M, would it improve anyone's life?
While I don't count CBS News among any kind of trusted source I'm sure there is disparity in the net worth gains of the wealthy vs. those of average means. It has a lot more to do with what the wealthy do with their money than it does with what their tax bracket is. Wealth is often gained through creation. A small percentage create things like complex financial instruments that do nothing for anyone but themselves. The vast majority of people who have "struck it rich" have created something. A product, a service, a company providing something a lot of the rest of us want or need, etc. Think of the companies that have been created since 1970. Microsoft, Apple, Amazon, NetFlix, Home Depot, Google, Wal-Mart, and on and on.
In 1970 it took revenue of $1.15 billion to crack the Fortune 100 (Whirlpool was #100). In 2010 Amazon.com was #100 at $24.5 billion. The people who created those companies and the people who invested in them realized gains, I'm guessing, well north of 275% in those years. What a limited source like CBS fails to consider is how many people benefited from these creations. What they also fail to discuss is rewards. If you punch the clock for someone then the paycheck is the reward. Not much risk involved so not much premium on the reward side. If you take the risk to start something there is a chance you will fail, but that adds to the potential reward if you succeed. It takes something like $400,000 per year to be in the top 1% of earners in the US. I know a reasonable number of people in that range, but almost none of them work as "fat cat bankers". They are almost entirely small business owners who hire the 99% or the 53% or whoever it is that ranks somewhere below the 1%.
loosechickens
10-27-11, 3:16pm
Incidentally, the figures on the disparity in the U.S. came directly from a recent report by the nonpartisan Congressional Budget Office.
Which shows clearly that in the years since Reagan, and changes in regulations, laws and the tax system, the huge majority of the gains were gobbled up by the top 1%, who were the ones with the power, clout and campaign donations to ensure that politicians made and adjusted those regulations, laws and tax system changes gave the most benefit to them.
It's not the wealth in and of itself that is the problem. It's the way that wealth has been used to game the system in the past thirty years or so. That's where the problem is. And that is why the income disparity, slowly disappearing middle class, etc. in this country begins to resemble the patterns shown in Third World countries as opposed to other Western democracies.
The process continues. Even the vast majority of the 53% are slipping compared to the almost obscene growth in wealth of the top 1%. We've just been so divided by those with reason to divide us that we don't realize that most of that 53% is right in there with the rest of the 99%, just that the water in THEIR pot isn't as hot yet as it is for the "frogs" in the really hot water of poverty.
It's always good to remember that the top 1% in income is not the same as the top 1% in wealth. For example, we fit quite nicely into the top 10% in wealth in this country, but are barely coming close to the median in income.
When it comes right down to it, getting the money out of politics is really where change needs to happen. So long as the wealthiest and most powerful are able to have access and control the actions of politicians, this is going to be a problem. And because changes in laws, regulations and tax policy are what have created this huge disparity, which was NOT the case during our prosperous years from WWII until about 1980, that's where we need to look for change. Otherwise, the middle class in this country is going to disappear or become very small, as it is in most Third World countries, and we will become a country with a huge number of poor, some small middle class, and a few, almost insanely wealthy people who call all the shots.
It's time for the Tea Party and the Occupy Wall Street folks to recognize they are in the same pot of water that is slowly but surely going to heat up and boil them to death. We have the power to fight this, but we have to resist the folks whose bread and butter is making sure we remain divided and polarized, while they sweep the table and take all the chips.
I don't think most people are as fascinated by wealth as those who dedicate their entire lives trying to amass it think they are. My interest is in having government adequately funded, at least in part by those who benefit most from what it provides.
"When it comes right down to it, getting the money out of politics is really where change needs to happen. So long as the wealthiest and most powerful are able to have access and control the actions of politicians, this is going to be a problem. And because changes in laws, regulations and tax policy are what have created this huge disparity, which was NOT the case during our prosperous years from WWII until about 1980, that's where we need to look for change. Otherwise, the middle class in this country is going to disappear or become very small, as it is in most Third World countries, and we will become a country with a huge number of poor, some small middle class, and a few, almost insanely wealthy people who call all the shots. " (Loosechickens)
Exactly.
I don't think most people are as fascinated by wealth as those who dedicate their entire lives trying to amass it think they are. My interest is in having government adequately funded, at least in part by those who benefit most from what it provides.
"When it comes right down to it, getting the money out of politics is really where change needs to happen. So long as the wealthiest and most powerful are able to have access and control the actions of politicians, this is going to be a problem. And because changes in laws, regulations and tax policy are what have created this huge disparity, which was NOT the case during our prosperous years from WWII until about 1980, that's where we need to look for change. Otherwise, the middle class in this country is going to disappear or become very small, as it is in most Third World countries, and we will become a country with a huge number of poor, some small middle class, and a few, almost insanely wealthy people who call all the shots. " (Loosechickens)
Exactly.
If we're not fascinated by wealth, and it's simply a matter of unequal access to politicians, why are we concerned with wealth disparity when we should be concerned with our politicians?
We wouldn't be as concerned with "the best government money can buy" if we could get money out of the election process. Then all we'd have to concern ourselves with would be lobbyist revolving-door syndrome.
To me the question is how do we provide the best standard of living for everyone. The priority should be on looking for ways to lift up the low earners, not just grabbing pie from the top and dragging them down (and maybe everyone else down with them).
How are we defining "best standard of living to everyone?" because as far as I can tell, the standard of living here in NZ is really good (and people here work HARD for pretty low income per working hours-- i can find a lecture about it if you like that was about prosperity in NZ) and the taxes are high -- 15% on goods and services, ACC (health care) levy, and of course, pretty high Tax.
Standard of living is high, the market is free, and even though we are also in recession with everyone else, the country is more stable because of it. Likewise, the government doesn't have a lot of corruption, which s good (i can dig up a report on this, too, if you'd like, but then, you could be your own google monkey).
and it's simply a matter of unequal access to politicians, why are we concerned with wealth disparity when we should be concerned with our politicians?
is answered with
It's not the wealth in and of itself that is the problem. It's the way that wealth has been used to game the system in the past thirty years or so. That's where the problem is. And that is why the income disparity, slowly disappearing middle class, etc. in this country begins to resemble the patterns shown in Third World countries as opposed to other Western democracies.
I am the 53% (tax payers) and i'm the 99% -- people whose voice in government is no longer heard because the corporate-government connection/corruption that "gamed" the system against ALL of us.
Likewise, I run my own business to make money.
DH and I realized that the lifestyle that we wanted would never be afforded working for someone else. We simply could never get ahead getting the annual less-than-cost-of-living raise. We lived within our means, but when we had our son, we realized that we would not be able to educate him the way we wanted, or give him the life we wanted, and in fact, the lives we wanted.
And i'm not talking about anything fancy-pantsy, but we simply couldn't reach our financial goals.
So we took a very high-risk move. We cashed out, and moved to NZ, and started a business. We are living more frugally now than ever before, but it's happening.
I have a business plan. It starts with here, then becomes a franchise. I have what I can give -- my service -- and I provide space for others to provide their services (because not everyone wants to run the whole show). The franchise automates this process for people who want to run their own businesses like mine, but don't want to start from scratch, and want the security that a franchise can bring (and that's a fair bit, actually).
I have a mentor here, and I'm gaining another. Both female business women who have franchises. One created a dog-grooming franchise. her business is now reaching the $5mil mark. The other runs gyms here (high end, limited membership), and it's the fastest growing franchise in the county, heading toward $2mil this year.
So, I plan on my business making a lot of money -- providing people with the opportunity to work, creating jobs (there's an aspect of my business that i'm developing to create jobs for people who don't want to run their own businesses under then brand, but want to work in a field that they love without the added effort of making it their own business.
Even if I reach $50mil or $1bil with my business, and whatever other businesses I decide to go into if/when I decide to, will I be "gaming" the system to my advantage? Probably not. I will be working toward what I think works for my business AND for the good of everyone in my country.
And I'll still be part of the 53% (I currently am. Just paid my taxes to the IRD of NZ today -- my bimonthlies!), and I'm still part of the 99%.
iris lily
10-28-11, 10:49am
I've never understood this fascination with other people's wealth. If we took away all wealth over a certain amount, say $1M, would it improve anyone's life?
Let's take away that $1 million except for the people I like. That's seems fair. If I like them, they get to keep their money. If I don't like them, I get their money to spread around.
The first to go will be the sanctimonious Hollywood types who drive around the Canyon in their Prius but who jet weekly to exotic places. I'll bet that Alan could get behind that. I mean, since we are confiscating wealth, why not do it according to a hit list? It's just one step beyond.
Let's take away that $1 million except for the people I like. That's seems fair. If I like them, they get to keep their money. If I don't like them, I get their money to spread around.
In the present envirnoment of identity politics, that's pretty much the direction our official policies are heading. I'm guessing that Berkshire Hathaway can drag out payment of the $1B or so tax liability they currently owe for another decade or so as long as their chairman continues to support the President's desire to tax the rich.
The first to go will be the sanctimonious Hollywood types who drive around the Canyon in their Prius but who jet weekly to exotic places. I'll bet that Alan could get behind that.
Actually, I can't get behind that either. Rather than confiscate, I choose not to contribute to the wealth of people I don't agree with. I've been told I've missed some pretty good movies as a result.
I mean, since we are confiscating wealth, why not do it according to a hit list? It's just one step beyond.
You mean like corporate jet owners? That one had the additional benefit of killing another small industry. I heard this morning that Piper's small jet division is laying off people and shutting down some operations as a result of recent demagoguery. Time to move on to another industry Mr. President.
ApatheticNoMore
10-28-11, 1:12pm
The first to go will be the sanctimonious Hollywood types who drive around the Canyon in their Prius but who jet weekly to exotic places. I'll bet that Alan could get behind that. I mean, since we are confiscating wealth, why not do it according to a hit list? It's just one step beyond.
I hate hollywood. I think it's very destructive to the culture. Turn off the boob tube more often, stop consuming entertainment product, GET A LIFE (or if you don't get a life at least talk to real human beings on the intertubes)! :) So yes Hollywood is one profoundly destructive influence on our culture. Are banksters and their oftentime outright corrupt policies (I mean some real scams went on with housing you know, such as robosigning etc.) also destructive, well of course. But I really don't think either are the real issue when you are discussing the fact that some very very tiny fraction of the population controls most of the wealth on earth.
In the present envirnoment of identity politics, that's pretty much the direction our official policies are heading. I'm guessing that Berkshire Hathaway can drag out payment of the $1B or so tax liability they currently owe for another decade or so as long as their chairman continues to support the President's desire to tax the rich.
Actually, I can't get behind that either. Rather than confiscate, I choose not to contribute to the wealth of people I don't agree with. I've been told I've missed some pretty good movies as a result.
You mean like corporate jet owners? That one had the additional benefit of killing another small industry. I heard this morning that Piper's small jet division is laying off people and shutting down some operations as a result of recent demagoguery. Time to move on to another industry Mr. President.
What a load of horse hockey! Just because he "mentioned" corporate jets the industry is floundering? Who knew he had such incredible power! Gee, let's think of some other things he could mention. Maybe he could mention how cardiologist charge 200,000+ for a heart by-pass (kind of playing god, isn't it). Maybe that will force them to charge a more reasonable price, or maybe folks will stop getting heart by-passes. Or maybe he could mention the embarrassing wealth of the big oil, while we the tax payers still subsidize them. Maybe folks will stop buying their gas. Or maybe he could mention, by name, each and every congressperson who is for sale, and who bought them. Maybe people will vote their dead beat asses out of office. Oh oh, I know. he could mention how the greedy corporations have moved their factories off shore to hire workers for pennies, and sell their products here for an obscene profit. Maybe that would shame them into moving their business back to where they live and benefit from all the politicians they bought.
Wow, you might just be on to something here Alan! I'm sure we can come up with a long list of things he can mention. And while he's at it, he can explain to me how fair taxes from my income turns into confiscation when it comes from the wealthy. (don't you just love how people use these little catch words when they are trying real hard to convince you of something you know isn't true? Kind of like a dog whistle, isn't it)
I've also missed my share of "good" movies. DW tells me theater seats are more comfortable now than the recycled church pews we had in our home town theater when I was a kid. I wouldn't know.
What a load of horse hockey! Just because he "mentioned" corporate jets the industry is floundering?
No, because he singled out a specific consumer and product and promised to make it's ownership more expensive.
It's called cause and effect.
Or maybe he could mention, by name, each and every congressperson who is for sale, and who bought them. Maybe people will vote their dead beat asses out of office.
Oh, and by the way, do you know who's received more money from wall street than anyone else this election cycle? (Don't tell the OWS folks)
I don't want to give it away and take the pleasure of discovery away from you but I'll give you a hint, it's the same person who told us that he'd never accept money from lobbyists and yet has recently collected more than $5M from bundlers (http://www.nytimes.com/2011/10/28/us/politics/obama-bundlers-have-ties-to-lobbying.html?_r=1)who are active in the lobby industry.
But I'm with you on the vote em out thing, you'd make a good Tea Partier if you tried a little harder.
ApatheticNoMore
10-28-11, 2:09pm
Oh, and by the way, do you know who's received more money from wall street than anyone else this election cycle? (Don't tell the OWS folks)
Why do you think the OWS folks don't ALREADY know it? Oh you think they are Obama supporters? Bwhahaha. Funny. When I last went the only candidate anyone would openly advertise for was Ron Paul! (not that the movement doesn't lean left generally, it does, but then Obama is not left and he's not worth anyone's endorsement).
Anyway I really doubt many are particularly into Obama. Look if people were happy with Obama we'd have people dedicating their time to his reelection. If people were happy with Obama there would not be protests on the streets. You don't take to the streets if the answer to your problems lies in the ballot booth. You just don't.
And you don't protest the fundemental corruption of the system (which is one definite thrust behind OWS - that politics is HOPELESSLY corrupted by the influence of money on elections) if you think it is just a matter of electing the right party. But when you see how someone who is marketed as bringing change (and of course marketing is all it ever was), be nothing more than hopelessly corrupted themselves, then you take to the streets, because you see it really doesn't matter which party is elected (not that there aren't a few good politicians here and there, there are, but they don't run for the top office), that the corruption is SYSTEMATIC.
Now would be co-opters like "Move On.org", ok *they* are Obama supporters, but they aren't the grass roots. And yes it is possible some of the grass roots might be convinced Obama is the lesser of two evils to the extent they even buy in to "lesser of two evils" reasoning, which frankly I bet many don't.
Now Obama will give OWS what a Republican president might not. He will throw some bones that seem aimed at them, like some housing or student loans modifications, all the while carrying on business as usual with no reform on a real level.
CBS news said tonight that wealth has increased 39% for average americans since 1970 but 275% more for wealthy since 1970.
Are you talking "wealth" or "salary"? If wealth, as you state, does it take into consideration the amount of money someone like Warren Buffet had to invest compared to the amount of money some working class person had to invest? His million dollar investment is going to grow at a much higher rate (exponianally over those 40 years) then my $1 investment did in that same time period. His is able to grow an exponianally greater amount of wealth in comparision to mine. Bank interest rates for regular deposits in the '80 were thru the roof - over 15% in some cases - so what was it like for large investors? probably pretty spectaular. To compare the increases of wealth between a large investor and small investor doesn't make sense. Now if you are talking about income or salaries, then the percent differences might make more sense. If a plumber earned $5/hour in 1970 and a Fortune 500 CEO earned $100/hour in 1970 then you can make an accurate comparision between both. Did the CEO's $100/hour salary increase by 275% while the plumbers only increased by 39% during those 40 years?
I once did an analysis (just looking at the tax code folks, not difficult) of what it would take to avoid paying income taxes, just out of curiosity for what I would have to do if I wanted not to pay them I guess :).
Yes but you have to remember that alot of non working, even wealthier people, aren't paying any taxes because they have their investments in things like Roth IRA's, and other tax deferred things. They may have alot of money emassed but live on the un taxable Soc. Sec (first $25K), and then supplinebt it with tax deferred things. I am in the zero % tax bracket but have an income and assets that is higher then the zero % bracket income.
ApatheticNoMore
10-28-11, 3:39pm
Yea that occured to me. Anyway, if someone really wants to start a 53% movement I think we really need to determine WHO is it that isn't paying income taxes. Probably NOT the people they think. The working poor? Maybe IF they have kids, they can maybe get the earned income credit to give them that. But without kids NO DICE. Even the earned income credit won't get you out of taxation with no kids or specialized deductions. So it's nothing so broad as "poor people" as such that aren't paying their share. Again the really poor (those trying to survive maybe working 20 hours a week on minimum wage AND no assets) aren't worth going after IMO, really squeezing a stone hard for blood at that point. So who? Those with lots of kids and deductions that might even pull down a decent income and avoid taxes (provided they can escape the AMT)? Yes well the tax code does have too many deductions and for some strange reason allows unlimited amounts of kids to be deducted. Outright tax cheats? Yes well they exist but the IRS already tries to go after them. Those with wealth and little income? Maybe some poor people with lots of kids? Who are the 47% not paying taxes?
Maybe we need an Occupy the AARP movement.
http://news.yahoo.com/age-gap-rises-economic-well-being-050133729.html
"It may be no surprise that older Americans are wealthier than younger ones. But a new study from Pew Research Center analyzed the economic well-being of current older and younger adults to those in the past and found that the age-based wealth gap skyrocketed 47:1 in 2009 compared to 10:1 in 1984."
iris lily
11-7-11, 10:57am
Maybe we need an Occupy the AARP movement.
http://news.yahoo.com/age-gap-rises-economic-well-being-050133729.html
"It may be no surprise that older Americans are wealthier than younger ones. But a new study from Pew Research Center analyzed the economic well-being of current older and younger adults to those in the past and found that the age-based wealth gap skyrocketed 47:1 in 2009 compared to 10:1 in 1984."
ha ha ha! I heard that on the news this morning.
When you look at the analysis of "wealth" it seems that the old folks gained wealth mostly from riding a real estate bubble or two. Of the $170,000 median of wealth, $145,000 is real estate equity.
I know that I was poor and without any means to buy real estate when I watched the last giant bubble of 1970's. I worked in a real estate office then and watched properties double in 3 years and man, did I want to buy real estate! But in my later years I cooled on real estate as an investment because I hate managing tenants and without a bubble, there's not fast & big money in it.
But I was lucky to be the right age for the recent bubble which pretty much got our house up to a level in price where we could actually make a profit on it. We had more money in it than we could get for it for a long time.
I'd like to see this country reclaim the affordable education, affordable housing, and affordable health care that made it possible for me to make a decent life for myself. Getting rid of the middle layer--the money changers--would be a good first step. Pitting generations against each other only serves the overlords.
Getting rid of the 'money changers' ! I like that.
Jesus was OWS before OWS was cool! :cool:
i think that's just what most people want, Jane. it's just that everyone is now arguing about how to get there.
flowerseverywhere
11-8-11, 11:52am
I'd like to see this country reclaim the affordable education, affordable housing, and affordable health care that made it possible for me to make a decent life for myself. Getting rid of the middle layer--the money changers--would be a good first step. Pitting generations against each other only serves the overlords.
Affordable housing would mean that the huge houses with three car garages complete with pools and professional landscaping around me would be replaced with smaller or attached houses. But would that be sufficient for people? And as far as health care goes, one of the big reasons it is so expensive now is the technology, testing and treatment is just so much more than ever before. Like those ads for hoverrounds, you can get it for free. No you can't. The cost will be passed on to the people who pay premiums. And all the MRI/CT technology, women get multiple 3-d ultrasounds during a pregnancy, cancer patients going for years with treatment, little tiny infants spending months in NICU and organ transplants have huge price tags. Affordable health care would mean reviewing all of these things and making hard decisions about what was medically necessary and prudent.
Flowerseverywhere has a point, and housing is a perfect example. Part of why home ownership is out of reach for so many people right now is because of what the average American house became. In these forums we've bounced around the idea that maybe the next generation needs to temper their wants and desires back to smaller, more efficient, etc. Its uncomfortable to say partly because we all want our kids to have it better than we did and heaven knows bigger is better in America. It also seems somehow unfair that we had the option to expand our whole lives and now it seems like their world might have to contract to keep things going. Whether its unfair or not doesn't matter in the end. Consumption habits need to change because the lifestyle most of us lead isn't sustainable economically or environmentally. The up and coming generation might have to get comfortable with downsizing, both physically and in terms of expectations.
i think the harder part for me is making that choice is that it is not supported by the parents.
eg, my sister has a massive old house (that she is renovating and that always leaves them "broke" -- but they spend money foolishly IMO), and i choose a small little house (well within our means), and i'm somehow deficient. Same with my husband. "why can't you work to afford a house in fancy-neighborhood x?" what if we don't want to live in fancy neighborhood x?
it's not so much that we can reduce our expectations -- we can -- but when we don't succeed by another's standards (even though we are exceeding by our own), everything gets criticized really fast.
Or are you just less critical? :D
ApatheticNoMore
11-8-11, 2:48pm
Affordable housing would mean that the huge houses with three car garages complete with pools and professional landscaping around me would be replaced with smaller or attached houses.
Affordable housing would mean that housing prices would FALL. And we can't have that can we? Older generations want to keep houses at very high prices and don't even seem to care that now younger generations can't buy. Although houses may well fall in value eventually anyway, gravity can't be defied forever perhaps.
A major reason housing is so expensive is that it is being deliberately propped up. The banks don't dare to carry houses on their books at their true market value, not to mention all the derivatives spun off housing, if true valuations kicked in, oh my ..... they HAVE to maintain these false asset values on their books. And I can't even claim to know the effect given all the housing derivatives out there.
So the illusion must be maintained at all cost. Houses exist for years without mortgages being payed and banks don't dare foreclose (would have to mark those houses to market value). This is more the case where valuations are very bubbly. Money for buying houses is given out like candy in order to prop up housing values (some of these have passed, but at one point both the federal government and the state of CA were doing this, even though CA was/is in utterly dire financial condition). The federal reserve deliberately keeps interest rates low (zero basically) in order to maintain housing values not to mention it also buys the dubious mortgage debt the banks issued at the cost of trillions. A pretty good chunk of mortgages are now issued through in effect the federal government (FHA and so on). You can get a house for 3% down through FHA. The problem is people are now defaulting on those loans (what defaulting even with a massive 3% commitment? :laff:). Now who backstops that? Taxpayers.
I don't know what housing should cost, ha as if I have some dollar figure, it's all so manipulated. Ideally within a middle class couples budget, although if there are a lot of rich people in an area costs could become distored (but that is THEORETICAL, most of the real distortions right now are government and Fed manipulation). Rentals are a way less manipulated market (rent control even on apartments is really not that widespread) so it is closer to true market value.
flowerseverywhere
11-8-11, 2:56pm
I certainly see your point, Apathetic, but many of us have no experience with the goings on in California. Liar loans, taking more of a mortgage than the house is worth, home equity loan up to the value of the house, I have heard about these things in California. A friend of ours just walked away from house #2, being so upside down after taking out huge home equity loans. But in my area housing prices have gone up very slowly and had little correction when the market fell apart. So I guess my view is very different than many areas of the country that saw huge booms then huge busts. Most of my friends and neighbors live in paid off houses and have nothing to do with loans- they put down a big down payment and paid it off as quickly as possible. It is very common to get an invite to a celebration that a house is paid off after 15 or 20 years around here. So while the big banks certainly weren't angels, supply and demand had a lot to do with housing prices.
also, after I was thinking about this I didn't want you to think that I was blaming people who got in a bad way with their mortgages. A lot of people thought they were doing the right thing when they were buying a house and just got on the wrong end of it through no fault of their own. I was watching a PBS special about mortgages and explaining about the derivatives and bundling and yes, many people did things that were really wrong. But I often think of all the people who made money through the process, such as real estate agents, banks who charged points, and other fees, and people who were lucky to buy low and sell high then move on. It really is a mess with many victims who only want to live in a house and have a life.
ApatheticNoMore
11-8-11, 8:15pm
Article on housing:
http://money.cnn.com/2011/11/08/news/economy/fannie_mae/index.htm?source=cnn_bin
- Fannie May requests another $7.8 billion from the Treasury Department.
- "Fannie Mae's (FNMA, Fortune 500) latest request for Treasury funding brings its total bailout to $112.6 billion. This will require an annualized dividend payment to the government of $11.3 billion, more than the company has ever earned in annual net income". (in other words that money is unlikely to be paid back, what taxes will be raised, programs cut, and deficit balooned for this?)
- "Federal regulators put Fannie Mae and Freddie Mac (FMCC, Fortune 500) into conservatorship during the financial meltdown in September 2008. The two companies now depend on government help to cover losses on the mortgages they own or guarantee" (no kidding).
-- "But they remain a vital source of liquidity to the American housing market. It's estimated that the two firms, along with the smaller Ginnie Mae, have collectively guaranteed more than 80% of the single-family mortgages originated since the start of 2009". (So the two firms are government backstopped and are responsible for 80% of single-family mortgages, part of the argument people make when they say the housing industry in america is socialized now and this particular socialization was never really enacted to benefit the consumer. It's a bailout to prevent the collapse of Fannie and Freddie and Ginnie.) Now of course the argument made is that these firms had a lot of bad losses from the past and the loans they make now are all good, a dubious claim IMO when they are still giving out loans for almost nothing down.
So another 7.8 billion. Ok, how much of Fannie Mae's bailout is really a bank bailout? These agencies bought billions of dollars of mortgage securities afterall.
http://blogs.wsj.com/deals/2011/09/02/fannie-mae-regulator-sues-the-world/
(wow look at the huge multinational entities on that list in that link, really quite a list there!)
No conclusion. Just that the money spent for bank bailouts didn't begin and end with TARP (far from it), not if we are still paying another 7.8 billion here and there to bail out government backed companies that bought toxic bank assets. And that the housing market is anything but a free market at present. And that well maybe we really should have just paid off everyone's mortgage (I have nothing to gain from this as a renter, of course), but with the money spent ....
Affordable housing would mean that housing prices would FALL.
....Rentals are a way less manipulated market (rent control even on apartments is really not that widespread) so it is closer to true market value.
Maybe the good old American dream of home ownership needs revision. Not every person in this country is equipped financially, intellectually or emotionally to own a home. Beyond that there are a lot of us that do own for less than sensible reasons. I like to be able to knock down a wall and change my space if I want to, or so my justification goes. The number of walls I have actually knocked down is quite low. More on point, how important is mass home ownership for our society?
i'm not sure how important it is, but it certainly provides a measure of security for the individual if you actually own the house.
I mean, look at it this way. If the economy totally tanks -- and it's zombie apocalypse -- the people who own homes will likely be in much better shape. So, say it tanks and no one is buying my services anymore. my business goes bust, and there are no jobs. I cannot pay the rent, so the landlord asks me to leave. I leave, and go. . . where?
If I owned the home -- like my MIL (she inherited hers form her father) -- then no one can kick me out. I at least have a roof over my head. KWIM?
I'm thinking about the camps that my great grandparents lived in during the great depression -- you get through (if you are lucky, i guess), and eventually have a roof over your head and millions of dollars from your careful saving after the depression ended.
That concept does scare me. My grandfather's parents all owned their homes/farms/ranches and were able to hold onto the land (even though farming was rough), and they had a much easier time during the depression than my grandmother's parents.
---
anyway, this is rambling.
I cannot pay the rent, so the landlord asks me to leave. I leave, and go. . . where?
I'm a landlord. If the economy tanks, and my tenants cannot pay the rent, it is unlikely I will be able to find other tenants who can. I still have costs of property taxes, insurance, and maintenance. I'd rather accept reduced rent, or labor maintaining the place and keeping it secure, than have an empty building sitting there.
If I owned the home -- like my MIL (she inherited hers form her father) -- then no one can kick me out. I at least have a roof over my head. KWIM?
Even if you fully own your home, when you don't pay those property taxes, your property is going to be sold on the courthouse steps, and you'll be doing the whole Grapes of Wrath thing. Ownership only provides you a slight extra bit of security. And if you have a mortgage, it's not a whole lot better than renting.
I think that to sacrifice mobility in our current economic state is almost nonsensical. Its one thing if you are established and well into a career, but for those of you at the beginning of working life it seems like home ownership could be a ball and chain. Say you buy a house and get a great deal because the market is so depressed. Great as long as you 1) have a job and 2) want to stay in that job for the foreseeable future. But if anything changes (loss of job, offer of better job somewhere else, get engaged to someone from somewhere else, etc.) then you become a seller in a depressed market. And things seem to change pretty fast these days. I don't know of any normal situations or markets where it is cheaper to own than rent so it often makes economic sense to rent, at least early in your working life. Anymore the sense of security in ownership is, for most people, false if you don't own the house free and clear.
I'm a landlord. If the economy tanks, and my tenants cannot pay the rent, it is unlikely I will be able to find other tenants who can. I still have costs of property taxes, insurance, and maintenance. I'd rather accept reduced rent, or labor maintaining the place and keeping it secure, than have an empty building sitting there.
Even if you fully own your home, when you don't pay those property taxes, your property is going to be sold on the courthouse steps, and you'll be doing the whole Grapes of Wrath thing. Ownership only provides you a slight extra bit of security. And if you have a mortgage, it's not a whole lot better than renting.
That's nice of you Bae (and smart IMHO). Too bad the banks and mortgage companies weren't willing to do the same for all the underwater and un/under employed people. They apparently think having thousands of empty, rotting houses just sitting there for months (years?) on end is better then working out an affordable mortgage payment plan for owners and getiing something back - as well as covering taxes and insurance and having upkeep done to retain the homes value. Nope, empty, rotting, rat infested, graffitized, piping and wiring robbed and vandelized is so much better than getting a small payment each month.
As far as owning a home vs. renting during the zombie apocalypse; well it depends. If your home is paid for and you have low taxes then you can ride out any financial storm much better then if you have an apt - especially if your taxes aren't due for a year. And even if your home isn't paid for, it usually takes months - sometimes years nowadays - to go thru the foreclosure process. During that time you can continue to live in your home. Where as most landlords aren't as nice as you and would kick you out on your behind within a month or two, but if you were behind on taxes it might take a year or longer for any accual action to be taken. Most counties just place a lien on the property and don't make you move/sell for several years. Also many places have tax-relief help for property taxes. And of course it also helps if your property taxes are low - as mine are. Here in Calif our property taxes are 1% of the purchase price and can't go up by any more than 2% a year (often times by less). So a person may owe less than $1000/year in prop taxes - and that means they would only go up by 2% ($20) per year. And you can also rent out rooms in your home for the income to cover that - something you can't always do in an apt. You can defer maintenance and even forgo using utilities to reduce expenses, and if your house in paid for, you can forgo insuring it too. Lots more flexibility in owning during the zombie apocalypse then in renting. Plus you'll have the needed extra storage for you anti-zombie arsenal :-)!
I agree with that, Gregg.
When we bought our house 10 years ago, we bought the last condo in the new neighborhood, at a good price (less than the cost of renting), and knew we would be there at least 5 years (we were there 10 or 11). DH had a job, and i was in law school and working a bit, and then working after. The benefit of doing was that we were building equity, the job market was still stable, and it cost us less than renting. The house was the last of it's price range to be built in an area that got really built up and had good schools, so I knew that the house was not going to depreciate much even if the market tanked. The house doubled in value over the 10 years, and when the bubble burst, the house only lost about $10k in value. We were able to sell it for that higher market value and sold it in *one* day. This is what allowed us to move to NZ.
Here in NZ, we are renting. We feel that this is the best idea, considering a similar bubble existed here. It's not, btw, as bad as in the US. There is a recession, but it's tempered by the government's actions. First, it's hard to fire people here, even for "redundancies." It is true that many people HAVE lost jobs, but there are also a lot of places hiring here as well. So, people have been able to maintain some stability. Additionally, many people shortened their work week to keep their fellow employees employed, and the banking system is quite regulated. Many people have also switched to the local (NZ) bank, as opposed to the Ozzie banks, and credit unions are starting to get a foothold.
But, speculation in the housing market has really increased the prices of houses. Our house is basically a shack, and it is probably at a current market value around $250k or more. A slightly larger shack down the street was $575k. Most of that in the water-front land value. BUt, because there isn't any capital gains on land, those who could afford it buy it up, use it as rentals, increase the prices, sell at a high price. Most people who live in wellington DO NOT own their own home. I know many who do, btu they are people who earn over $150k (NZ) per annum -- whether by one income or two. OR they are people who purchased over 15 years ago.
Mortgages are also different here. You have a 5 yr fixed term, and after that an ARM with a cap (usually 10%) for 5 years, and then you have to renegotiate (usually to another ARM with another, higher cap). So, if you want to buy a place here, best to have the cash and make sure you can pay it off in 5 years (imo). For us to be able to pay for our "shack" at $250k, we'd probably need about $150k saved up.
The median household income in NZ is $45k.
So, people here are not buying.
BUT, they are also a highly mobile society, so not buying is beneficial.
Yeah. That's the new right wing narrative. Let's get rid of the ownership society. It didn't work.
All government programs & tax subsidies that encourage individual home ownership should be eliminated because clearly there are too many folks out there who can't manage home ownership. This financial crisis had nothing to do with irresponsible policies in the financial sector.
So behold, this is the inception of a new right wing narrative, and it's funny how the right wing always comes up with #@) that benefits the 1%.
But in fact the financial crisis which inspired this OWS movement amounts to this at its simplest level: The fiinancial sector overleveraged collateral (mortgages) and also bifurcated the financial risks that came with originating loans and owning them, so that the incentive to originate loans was enormous despite the risks involved in lending 105% on properties in an overheated market. When some of those mortgages went into default, the whole thing collapsed. They leveraged mortgages by a factor of 30. So, they basically defrauded investors as well. They screwed over everyone. And in order to prevent a collapse of the entire financial system, the government intervened. And the folks at the top who engineered this stuff pretty much came out suffering few consequences. They still have their millions.
I know from personal experience working as a title agent that it is almost impossible for homeowners to get modifications or short sales through. The financial institutions were stuck in the mode of responding to defaults with foreclosure because this is what they have always done and this is what worked when the default rate was small. There was little adaptabililty or flexibility on the part of lenders when market conditions changed and going through with foreclosures was not necessarily the best option. So much for free markets working perfectly. The lenders just reflexively went to foreclosure rather than other options that may have saved them and homeowners both. And to add insult to injury, they took taxpayer money to remain solvent, at the same time they continued to reflexively resort to foreclosure and unworkable modificatioins.
The answer is to clean up the industry, including Fannie and Freddie and prevent these abuses, not to simply encourage rich folks to buy up the housing stock and become landlords. We need to change the bankruptcy law to allow modifications of mortgages and student loans.
The new narrative being injected into the mainstream by the right wing has these implications: Instead of an ownership society, we'll become a non ownership society. So that fewer and fewer average folks will be able to get loans and buy homes. So rich folks will come in and snap up the homes and become landlords. Hmm. Where have we seen this system in action? Gee, all through history. The feudal system. The serfs. Sharecroppers.
Tax policies and government/semi governmental agencies have helped to stabilize housing markets and interest rates and provide ways to standardize lending terms to help consumers. These policies have helped millions of people achieve the dream of owning their own homes. The vast majority of people have been helped, not hurt by these policies and are responsible homeowners.
I don't believe we should be starting down the path of discouraging homeownership on the grounds that average folks can't be trusted to be responsible, so we should convert everything to rich folks owning all the real property. Better an ownership society as it stands than an ownership society that benefits the very top.
That's what this movement is about. Policy matters. We need policies that help average folks. The wealthy don't need much help. They're already doing okay.
I am aligned with the 99%, no matter what my income because I want a society that works for everyone. I don't want to live in an oligarchy. I do care about public education. About public parks. Public libraries. Public health. Public arts. Wealth does not connote virtue. Poverty does not connote some sort of innate inferriority or immorality. Everyone deserves a decent life with decent opportunities.
......The 99 percenters know all this stinks. They know there are limited resources and that politics involves the distribution of resources in the form of government policies. They know that if they can't find decent jobs, have to pay regressive taxes, don't have access to health care or decent educational opportunities that this has to do with rich folks hoarding all the resources with the use of government subsidies, corporate strategies, tax policies etc.
Damned rich folks! Where's Robspierre when you really need him?
Let the reign of terror begin!!!
I think that there is a balance between the two. It's not like "yay, mortgages for everyone" vs "no mortgages for anyone!" but rather, something in the middle. Have policies that decrease what got us here, and likewise having perhaps higher qualifications for the mortgage.
But i already quoted that bit about austrian banking.
ApatheticNoMore
11-14-11, 7:32pm
Never mind that the policies often don't even acheive the results they are allegedly aiming for (at this point it may pay to ask: what is the real aim?).
Like low interest rates make mortgages affordable right? Well if all that matters in affording a house is the monthly payment, low interest rates just mean you can afford a more expensive principle (ie higher housing prices). Even the mortgage tax deduction probably just increases the cost of houses by as much as the mortgage tax deduction. Things like giving outright tax discounts to buy houses are deliberately pursued as a way of keeping housing prices up and come to think of it they use the keeping housing prices up argument for low interest rates too.
well, that's the thing, isn't it?
the aim of it.
in running my business, i have clear goals. i try something to achieve those goals, and perhaps it works in part and fails in part. then what? i jettison or adapt the part that isn't working, and emphasize the part that is and build on it. Then, reevaluate the whole, see if another policy might improve things, give it a go, observe, and adapt as necessary. Over and over and over.
what i see in politics now is not this clear observation, is it working, etc, but rather the "i'm right, you're wrong!" behavior. "This is not a truly FREE market. Deregulate and make it a truly FREE market, and all the problems will solve!" or "This market is too free, too deregulated, and we need to regulate it more!"
The question is, what do we want? I think that if the vision is clear on what we want -- and i think the most people can take it down to several principles -- then we can start to talk about how to get there. We can try this, then when it isn't working, try something else. And, it needs to happen a little more quickly.
In my business, I would say my turn around is about 6-8 weeks before new implementation. If something isn't working within 2 weeks, i'd adapted or jettisoned. No point in wasting energy on it. I know that, larger scale, things would take longer (obviously), btu i think that often things are too slow to adapt to what is happening, what is obviously happening right in front of us.
anyway, just something.
THe thing no one has mentioned here yet, is something that Planet Money touched on a couple of years ago, but IIRC, didn't really cut to the chase. Simply, there's too much money. The federal reserve, for decades, has been Keynesiansly pumping more and more money into the economy in an effort to stimulate it. The result of that is that there's a lot of idle cash that needs to be invested somewhere. There's not enough productive places like factories that need investment, so the money found it's way to wall st, where people were only too happy to make 'financial instruments' that would help you make money out of money without the pesky issue of having to acutally create something physically useful to people. The result was first a bubble in technology. Money flooding into tech companies that had no hope of ever being profitable, but heck, as long as someone else would buy the shares from you for more then you paid for them it was a success! After that bubble burst, then came the housing bubble. Again, fueled by wall street who happily securitized home mortgages for investors and the Federal Reserve keeping interest rates dirt cheap, soon prices on houses started going up because banks, now free to unload the mortgage as soon as it was made since wall street had found ready buyers of that debt, stopped worrying about whether people would pay them off. So lending standards got easier and easier, housing prices went up and up, and more and more people felt like they needed to GET A HOUSE NOW! BEFORE THEY GET TOO EXPENSIVE AND NO ONE CAN AFFORD ONE! But of course the supply of people to buy houses eventually ran out. So then that bubble burst too.
Neither the tech or housing bubble would've happened if there wasn't too much money floating around. But because we've off-shored much of our labor for things like factories the glut of money hasn't produced inflation in the US the way it did in the 70's, so the fed has been free to create more and more and more money. Instead of overall inflation in consumer prices (although anyone who goes to the grocery store knows that there's been this too, at least to some extent) the inflation has shown up in things like tech stocks and housing.
flowerseverywhere
11-14-11, 10:27pm
jp1 your post makes a lot of sense. What would turn things around? The labor that used to occupy our factories are long gone. People at the top of these big companies get gigantic bonuses while laying off the lower paying 99% and closing branches. We have gotten so used to a throw away society that well made goods have little value, it is quantity over quality. I would love to think there was a solution to all of this mess but I can't think of any. What would happen if they stopped printing so much money? What would happen if they raised taxes (which I think is inevitable one way or another)?
flowers, unfortunately I think the problem is systemic. It's fractional reserve banking. Think about it on the most basic level. You buy a widget with your credit card. No actual money is covering that purchase. it's simply a digital entry on your credit card's bank entry sheet. (money created out of nothing) If you don't pay it off that month you owe interest. Where does the money for the interest come from? It has to be created from somewhere. Otherwise that debt won't be paid off. So it feeds into the more and more money needs to be created issue. We're at the point where more and more money has to be created simply to keep the game going. Logically that can't last forever. And anything that can't last forever won't. And once it won't everything will fall apart. It's not a question of if, but just a question of when.
I think these cost me about $3-4 each.
https://lh6.googleusercontent.com/-fIlpEVVvNgo/Tl14E3ttScI/AAAAAAAADys/yj7AabuQk1E/s640/IMG_2700.JPG
I think they go for $35-$40 paper dollars each these days.
flowerseverywhere
11-15-11, 7:52am
I think these cost me about $3-4 each.
I think they go for $35-$40 paper dollars each these days.
What is the advantage of having those coins if the money system fails or we have hyperinflation? I never quite understood that.
What is the advantage of having those coins if the money system fails or we have hyperinflation? I never quite understood that.
The logical assumption with silver and gold coins is that the physical metal has value. Bae's silver dollars have a monetary value of $1. He could use them to buy a burger off the dollar menu at McDonalds if he wanted to. Beyond that they contain roughly 1 oz. of silver so have a value of whatever someone is willing to pay for that at any given time. Even if the fiat currency system fails those coins will still have a minimum value of whatever someone is willing to pay for the metal itself. Since silver has industrial uses (so does gold, but its priced too high for many of them right now) and because it is unlikely that civilization will collapse to the point where we're not using it anymore and salt is the currency of the day there should always be a demand for silver in all its various forms.
THe thing no one has mentioned here yet, is something that Planet Money touched on a couple of years ago, but IIRC, didn't really cut to the chase. Simply, there's too much money. The federal reserve, for decades, has been Keynesiansly pumping more and more money into the economy in an effort to stimulate it. The result of that is that there's a lot of idle cash that needs to be invested somewhere. There's not enough productive places like factories that need investment, so the money found it's way to wall st, where people were only too happy to make 'financial instruments' that would help you make money out of money without the pesky issue of having to acutally create something physically useful to people. The result was first a bubble in technology. Money flooding into tech companies that had no hope of ever being profitable, but heck, as long as someone else would buy the shares from you for more then you paid for them it was a success! After that bubble burst, then came the housing bubble. Again, fueled by wall street who happily securitized home mortgages for investors and the Federal Reserve keeping interest rates dirt cheap, soon prices on houses started going up because banks, now free to unload the mortgage as soon as it was made since wall street had found ready buyers of that debt, stopped worrying about whether people would pay them off. So lending standards got easier and easier, housing prices went up and up, and more and more people felt like they needed to GET A HOUSE NOW! BEFORE THEY GET TOO EXPENSIVE AND NO ONE CAN AFFORD ONE! But of course the supply of people to buy houses eventually ran out. So then that bubble burst too.
Neither the tech or housing bubble would've happened if there wasn't too much money floating around. But because we've off-shored much of our labor for things like factories the glut of money hasn't produced inflation in the US the way it did in the 70's, so the fed has been free to create more and more and more money. Instead of overall inflation in consumer prices (although anyone who goes to the grocery store knows that there's been this too, at least to some extent) the inflation has shown up in things like tech stocks and housing.
It's an interesting argument jp1. I'm curious about the correlation between money supply and wealth. If you limit, or more accurately if you stop increasing the money supply doesn't wealth at that point become a zero sum game? If there was only a certain amount of money in the system that could be passed around would that not also give incredible leverage to anyone who already had control of money? It seems like that would be a real way for the 'rich to get richer'.
Yossarian
11-15-11, 10:34am
Even if the fiat currency system fails those coins will still have a minimum value of whatever someone is willing to pay for the metal itself.
Not sure what the intrinsic value of silver is in a Mad Max scenario, but you might be better off investing in lead.
Not sure what the intrinsic value of silver is in a Mad Max scenario, but you might be better off investing in lead.
I prefer to solder with silver :-)
Not sure what the intrinsic value of silver is in a Mad Max scenario, but you might be better off investing in lead.
Thus the reference to salt, but lead in a usable form could also be valuable. That said, planning that allows you to maintain a relatively comfortable existence during extended periods when "normal" services are not available is prudent. See the current thread in the Open Forum, "Lessons learned from the power outage" as a reference. On the extreme end, I know where I would go in the case of a total societal collapse and I love post-apocalyptic movies , but I can't find any logical train of thought that leads me to believe that is where we are heading.
ApatheticNoMore
11-15-11, 12:43pm
It's an interesting argument jp1. I'm curious about the correlation between money supply and wealth. If you limit, or more accurately if you stop increasing the money supply doesn't wealth at that point become a zero sum game? If there was only a certain amount of money in the system that could be passed around would that not also give incredible leverage to anyone who already had control of money? It seems like that would be a real way for the 'rich to get richer'.
I tend to suspect that the existing monetary system leads to the rich getting richer. Haha, look at the results, but really I'm going to dig a little deeper than correlation: all money creation is done through the banks, that's the way money is created in a fractional reserve system, the banks then lend this created money out at interest (in fact lend it out many times over at interest). So really how much does that contribute to the banks, the FIRE economy, controlling everything? Then who do banks lend money to? Well lately they've been lending to every McDonalds worker who wants to buy a 1/2 million dollar McMansion apparently, but conventional wisdom and I'm sure it still has some truth is that banks lend to those who don't need to borrow. They'll lend to a huge corporation but a small business may not get that loan (why venture capitalists exist isn't it?). Now venture capitalists may give start ups a chance but the playing field is still not level. And the very process of banks lending first bids on created money to established corporations enforces the rich getting richer, doesn't it? And enforces the status quo.
I don't have some perfectly pat answer. It is widely believed among economists that the gold standard didn't work. Ok we don't need to go back necessarily. But is it also widely acknowledged among economists that the existing system isn't working? That debt in unlimited quantities for everything (household, corporate, government) has led to the whole world tettering on the edge of bankruptcy? Has led to chronically being within a whisper (maybe that whisper is the Euro?) of the whole stinking system and all it's millions of derivatives etc. etc. collapsing?
Yossarian
11-15-11, 1:11pm
lead in a usable form could also be valuable.
I was thinking a conical shape. With maybe a copper jacket.
http://upload.wikimedia.org/wikipedia/commons/5/58/5.56_x_45_mm_NATO.jpg
Damned rich folks! Where's Robspierre when you really need him?
This is no longer a laughing matter. This society is sick and it's not because of people fighting for their economic rights.
The point is if rich folks contribute to society by paying a fair share of taxes and not opposing a government policies that provide services to lower class folks we will be able to avoid a bloody revolution.
When the wealthy few suck up all the resources and power in society and act like sociopaths that inspires bloody revolutions. When resources are distributed in reasonable ways so that most folks have access to decent lives then average folks don't care about the rich. Let them have their mansions and polo ponies. Who ##))@ cares. It's when the entire system becomes rigged in favor of the rich that people get ticked off. When the rich make sure that even the last few crumbs are swept their way, that's when people wake up and see how the system is rigged against them and in favor of the very wealthy.
You seem to believe that the poor are waging the class war. They are just getting in it late in the game. The war is all but over and the rich have won. They've been waging it all along.
I'm a landlord. If the economy tanks, and my tenants cannot pay the rent, it is unlikely I will be able to find other tenants who can. I still have costs of property taxes, insurance, and maintenance. I'd rather accept reduced rent, or labor maintaining the place and keeping it secure, than have an empty building sitting there.
Even if you fully own your home, when you don't pay those property taxes, your property is going to be sold on the courthouse steps, and you'll be doing the whole Grapes of Wrath thing. Ownership only provides you a slight extra bit of security. And if you have a mortgage, it's not a whole lot better than renting.
Unfortunately the banks have been slow to adapt to market conditions the way that you have. Your response is reasonable and adaptive. They are not working with homeowners in the same way.
Yossarian
11-15-11, 2:39pm
when the entire system becomes rigged in favor of the rich
I am still hoping someone will explain what this means. What are concrete examples of this rigging?
I am still hoping someone will explain what this means. What are concrete examples of this rigging?
An interesting question. Looking forward to a response.
ApatheticNoMore
11-15-11, 2:51pm
How much has the Federal Reserve given to bail out the banks? I could say TARP but someone will make the argument that TARP was paid back. Someday I will compile an extensive list, others have but none that cover everything, it goes way beyond TARP.
And banks paid back the TARP money (only) but with all kinds of chicanery. They were literally borrowing money at a low interest rate, investing it in Treasuries at a higher interest rate and pocketing the difference. So money was created for the banks which was then lent to the government at interest. Isn't that crazy? Isn't that our money?
http://sanders.senate.gov/newsroom/news/?id=6878e892-f5ff-4ed6-9d71-a4edce2c94fa
How is this not the system rigged or corrupted at any rate, for the banks?
I was thinking a conical shape. With maybe a copper jacket.
Well, let's just say I've won the Army Department of Civilian Marksmanship "Customer of the Year" award a few times...
https://lh3.googleusercontent.com/-kOn_leh8tLo/TBGTvJbVakI/AAAAAAAACCY/XatLprrYtLY/s640/img_0207.jpg
https://lh4.googleusercontent.com/-x2_0T3JGSXc/TBGT2ex9mDI/AAAAAAAACCY/iMUo5EXmLvs/s640/img_0212.jpg
Yossarian
11-15-11, 3:53pm
How is this not the system rigged or corrupted at any rate, for the banks?
At the risk of sounding like an OWS'er, banks are not people. I'm not a fan of socialized risk, but the system got so f'ed up in 2008 that I don't think that is a good data point. If they had let the banks fail and the economy shut down leading to 25% unemployment, you'd be claiming the system is biased against the little guy because the government could have helped prevent all those job losses for the little people and didn't act. I've spent time working on living wills for a number of banks and the assumption is that going forward they will be allowed to fail. At the time in 2008 I thought they should have let them all fail but the benefit of hindsight and working on the living wills has led me to give the people (largely Democrats) credit for taking the Armageddon result out of play.
to be honest, had policies been different about 15-25 years ago, and we gone with a more conservative management of money in the US -- from interest rates to government spending to the printing of money, etc -- and if this had, in turn, affected the market positively (e.g., banks being more conservative, taking on less risk), then we likely wouldn't be in this mess.
it's the connection between banks and government policies that creates the problem, and i think that regulation will help.
i don't blame one political party -- i blame both. they are more interested in power and being right than in what is best for the country and doing right.
ApatheticNoMore
11-15-11, 4:48pm
I don't know, I just don't find: "the system is not rigged in any conceivable way exempting the biggest bailout EVER in the history of humanity maybe" to be a very convincing argument for anything. By the way there were definitely individuals that reaped those rewards, individuals behind all those corporations (even though corporations should not be classified as people). And if you think across time, if taxes are quite low so that rewards can be reaped in good times and yet bailouts occur in bad times, is it accidental or systematic? To be able to profit both from the risky bets in the boom and get bailed out when it all crashes, and both to a massive degree, is the kind of the thing that could change wealth distribution for a long time after (generations?).
"If all the world were paper, And all the sea were ink, If all the trees. Were bread and cheese, What should we have to drink?"
Gee ... I don't know.
"How many angels can fit on the head of a pin?"
That's the kind of ... counterfactual .... has nothing to do with actual reality ... I'd need to engage to put aside the bailouts ....
I am still hoping someone will explain what this means. What are concrete examples of this rigging?
Here's the bottom line. In a system where there are fewer and fewer jobs for regular workers, so that workers are willing to take *#) jobs at low wages, and the guys at the top are making more than ever, you don't need a degree in economics to know there's something wrong with the system. Just look around you. Open up your eyes.
What do you see?
1. Unfair Tax policies. Taxes on the wealthy have been cut to such an extent that they pay far less in taxes proportional to their income than lower income folks. This can be achieved by outright decreases in marginal rates or in the form of tax deductions. Corportions that have reported billions in profits pay NO taxes. What is wrong with that picture?
2. Policies that try to destroy or tear down the ability of unions to negotiate on behalf of workers. Unionized workers have better benefits overall due to their inclusion in collective bargaining. Destroy unions, lower worker costs, more money to shareholders and top executives.
3. Privatizing governmental functions. This puts a profit motive on institutions that should be managed for the common good, not for the profit of a few. The first thing privatized institutions do is get rid of unions, cut workers, cut worker benefits and salaries and cut corners on customer service. I don't think prisons should be run for profit. This creates an incentive for companies that are in that business to figure out ways to get more product (prisoners). Do we really want private prison companies involved in making public policy decisions such as what consitutes a crime and what criminal penalties should be. Then on top of that private corporations hire out prisoners to other private corporations at slave labor wages. Who makes money here? Do you see the potential for corruption here?
4. The trend in corporations toward excessive executive compensation at the expense of workers. Seems like worker benefits and compensation, work environment etc. are diminishing while the compensation packages of top executives are soaring. If you or I fail at a job, we get kicked to the curb with little to fall back on. Once you get to a certain level in corporate America, you can be assured of a very generous golden parachute even if you fail miserably. The people who made mistakes in overextending themselves on credit and have lost their homes to foreclosures really paid heavy penalties. The top executives at the firms that benefited from all the excesses in the system still have their millions. They haven't been evicted from their homes.
5. Privatizing profits/socializing losses. The bank bailouts are the prime example of this. Folks get kicked out of their homes, no relief, insufficient relief, banks are made whole. Bank executives and shareholders make out like thieves.
6. Cutting taxes on the wealthy to starve governments of the income necessary to pay for basic services such as public education and health. Republican governors all over the country have cut taxes on the wealthy, then used budget shortfalls as a pretext to cut services. Schools, libraries, parks, public health facilities, cops, firefighters. The rich can send their kids to private schools, can afford to buy big properties and set up playground equipment on grounds, they can buy books and cds and anything else without thinking twice, they can afford medical care, they can hire private security companies and live in compounds. Here's the thing: If you cut government to the bone and put in folks who are hostile to government to run it, you get bad government. Then the conservatives can say, see government sucks. If you fund government properly, put in competent people and have good oversight, then government doesn't suck. Who are the people who benefit from the notion that government sucks? Not poor folks who need government services.
In short most rich folks have no need of public services and some of them seem to begrudge paying for them to benefit other folks who do need them. Why would you align yourself with the policies advocated by people like that? I don't need these services, so go #@ yourself, it's more important for me to keep every penny I "earn." They cover this with rhetoric about how we have to keep the "job creators" happy and how government sucks, and they try to distract and divide us with crap about the illegals and welfare queens, but at its core the message is this: I want to keep my vast wealth for myself and I don't want to pay a penny to help anyone else. Where on earth else, but this country, could a narrative about how teachers, cops and firefighters are greedy, lazy, takers who are bringing our country down take form and drift into our mainstream debate, while little attention is brougt to bear on people who make millions of dollars and produce NOTHING of value to society.
7. Cutting regulations that protect the environment, employees and consumers. Again, the very wealthy have the resources to protect themselves from the bad outcomes of poor regulation. They can just move if a toxic waste dump turns up on their doorstep. Poor folks cannot.
8. Allowing unlimited amounts of cash to corrode our political system so that the concerns and objectives of the wealthiest folks in this country are at the forefront in shaping national, state and local policies. Gobbling up media properties to be able to spew forth all sorts of confusing, distracting, divisive rhetoric so that folks don't even think about why they're voting the way they vote.
9. Crony capitalism. The folks who decry government benefits for "illegals" and "lazy unemployed losers" are often the same folks who make millions from no-bid government contracts.
In the meantime the quality of life continues to decline for the middle class. And all you have to do is look at other countries that are surpassing us in every index and you will see that they DO NOT have policies that favor the wealthy above all else.
flowerseverywhere
11-15-11, 7:10pm
Well, let's just say I've won the Army Department of Civilian Marksmanship "Customer of the Year" award a few times...
note to self: if the end of the world as we know it happens don't wander onto Bae's property to steal any chickens
Yossarian
11-15-11, 7:23pm
1. Unfair Tax policies. Taxes on the wealthy have been cut to such an extent that they pay far less in taxes proportional to their income than lower income folks.
That seems to be contrary to what I have seen places like this:
http://economix.blogs.nytimes.com/2009/04/08/how-much-americans-actually-pay-in-taxes/
If you don't have the inclination to read the article:
http://upload.wikimedia.org/wikipedia/commons/b/b1/USFederalTotalTaxRateByIncomeLevel.1979-2007.PNG
Certainly their share of federal taxes has gone up:
http://upload.wikimedia.org/wikipedia/commons/f/fa/USFederalTotalTaxShareByIncomeLevel.1979-2007.PNG
Anyone know where you can find similar analysis that includes state taxes? Of course that also begs the question of how much is the correct amount to pay and whether it's fair that some people have to pay so much more on a nominal or per capita basis.
Corportions that have reported billions in profits pay NO taxes. What is wrong with that picture?
Maybe nothing. Be more specific about your issue. There are good reasons why foreign profits aren't taxed in some cases and timing can have a lot to do with it when you have loss carry forwards or incentive depreciation.
2. Policies that try to destroy or tear down the ability of unions to negotiate on behalf of workers.
I won't say all unions are bad but the unions at my former company they drove it into bankruptcy so I personally am not very sympathetic on this one. YMMV.
3. Privatizing governmental functions.
Some functions can be privatized if they result in lower costs for taxpayers. Others should not be, but I don't see this as a huge factor in our economy.
4. The trend in corporations toward excessive executive compensation
Aligning management and shareholder interests was a good idea in principle but the division of benefits between stakeholders is always subject to fluctuation. If you have a good CEO that raises profits from 1 billion to 2 billion, what is his "fair" share for that? If shareholders want to incentivize that result, it's not crazy to have some big rewards flowing to him.
5. Privatizing profits/socializing losses. The bank bailouts are the prime example of this. Folks get kicked out of their homes, no relief, insufficient relief, banks are made whole. Bank executives and shareholders make out like thieves.
People are schizophrenic about this. What is your solution to the banking crisis?
6. Cutting taxes on the wealthy to starve governments of the income necessary to pay for basic services such as public education and health.
Are state and local tax receipts going down?
http://www.heritage.org/static/reportimages/E7409140FA50178A7524785D606C1EDE.jpg
8... all sorts of confusing, distracting, divisive rhetoric so that folks don't even think about why they're voting the way they vote.
I hear this one a lot. If only the poor misguided mass of voters were only smart enough to agree with someone as smart as you the world would be so much better off.
And all you have to do is look at other countries that are surpassing us in every index and you will see that they DO NOT have policies that favor the wealthy above all else.
But I don't see that. What I see are a lot of countries that are in need of reform. That's not to say we can't improve what we have, but we shouldn't kill the golden goose of the private economy.
It's an interesting argument jp1. I'm curious about the correlation between money supply and wealth. If you limit, or more accurately if you stop increasing the money supply doesn't wealth at that point become a zero sum game? If there was only a certain amount of money in the system that could be passed around would that not also give incredible leverage to anyone who already had control of money? It seems like that would be a real way for the 'rich to get richer'.
THe problem is that if we stopped increasing the money supply it's not a zero sum game. Because all money created by the federal reserve is loaned out into the economy at interest a flat money supply would actually be a contracting money supply as interest owed to the banks, and ultimately to the federal reserve, got paid. I agree that there would be winners and losers in that scenario, but it wouldn't necessarily be the people/corporations we think of as rich. Undoubtedly many (perhaps almost all) banks would fail in that scenario. Hence the federal reserve keeps pumping out indebted money. The winners would be people who have no debt and own outright some productive assets. They'd be able to directly invest their money into productive enterprises. The losers would be everyone with a negative net worth and the people/institutions whose assets are debts owed to them by others that would no longer be repaid.
It's for this reason that economists all insist that the economy must keep growing. As it currently stands this is true. The only way to change that would be to fundamentally change the way money is created from the current debt based structure to one where money is the reflection of an asset that has value, such as gold.
THe problem is that if we stopped increasing the money supply it's not a zero sum game. Because all money created by the federal reserve is loaned out into the economy at interest a flat money supply would actually be a contracting money supply as interest owed to the banks, and ultimately to the federal reserve, got paid. I agree that there would be winners and losers in that scenario, but it wouldn't necessarily be the people/corporations we think of as rich. Undoubtedly many (perhaps almost all) banks would fail in that scenario. Hence the federal reserve keeps pumping out indebted money. The winners would be people who have no debt and own outright some productive assets. They'd be able to directly invest their money into productive enterprises. The losers would be everyone with a negative net worth and the people/institutions whose assets are debts owed to them by others that would no longer be repaid.
It's for this reason that economists all insist that the economy must keep growing. As it currently stands this is true. The only way to change that would be to fundamentally change the way money is created from the current debt based structure to one where money is the reflection of an asset that has value, such as gold.
I agree with the idea that a flat money supply would act as if that supply were contracting in some ways, but rather than truly reducing the supply of money it would only serve to increase the amount of debt. In my mind debt is a significant contributor to our current economic woes. If the money supply was flat or contracting the debt least likely to be serviced would be debt held by those with limited income or resources. In other words, the middle class; assuming the poor have little in the way of either debt or resources. It is that group that would be systematically pushed toward default in that scenario. Those with more significant assets and/or income might take a few steps backwards, but should be able to hang on. You are probably right that someone with zero debt and outright ownership of an asset that produces something people need regardless of economic conditions (like food?) would fare pretty well. But what percentage of our population is in that position?
To some degree taking on debt to fund current growth, with repayment based on future earnings paid back with future dollars, makes sense. Unlimited growth and unbridled debt with no clear plan of investment doesn't make sense. A relatively steady increase in the money supply, conforming to increases in economic activity, is the only way I can see to provide an environment where the middle class has a chance to compete.
Regarding our money reflecting an asset with value... gold, IMO, is pure fallacy. It absolutely has industrial and medical applications, but most of what gets dug up ends up as jewelry. The price, or more accurately the demand, for bullion is driven by emotion, usually fear. For most people in most situations it is really a worthless commodity. If things hit the fan and the world goes all Mad Max I probably won't want to trade you my pound of lead or my pound of carrots for your pound of gold. As a country, if we want to back our money with more meat than just the "full faith and credit" of the US Treasury and have something more to show than a pile of metal sitting in a vault we should improve our infrastructure in ways that will make our future dollars more productive. That would be an investment that pays a dividend to offset the cost of borrowing and benefits everyone.
Well, gold has had monetary value for over 5,000 years, so there must be something worthwhile to it. Personally I'll trust that gold will continue to have value long after all of our dollars have been flushed down the toilet after being used for what they are actually truly worth. Perhaps part of what gives gold value is its rarity. It's a pain in the butt to get out of the ground and the amount in circulation only goes up by roughly 2-3% per year. It's never been used for much beyond money and, in a much smaller quantity, jewelry. Everything I've read indicates that pretty much all of it that's ever been dug up is still in circulation, so it must have some intrinsic value that no one has been able to truly explain. Personally I think a gold backed currency or other value backed currency is a good idea. Our dollars are not money in the true definition of money. Money needs to fulfill 3 objectives to actually be money. It needs to be a unit of account. It needs to be a medium of exchange. And it needs to be a store of value. Dollars meet the first two criteria, but certainly not the 3rd. Even the government's own inflation calculator on the BLS website will tell you that from the time the federal reserve was created to today it now takes $22.87 to purchase what back then cost $1. Hardly a store of value in my opinion. Gold, on the other hand, has done much better.
A bit of a history lesson for those who don't know. Paper money came about originally as a receipt for gold coins. One would deposit their coins with the goldsmith and get a receipt for them which could then be traded (spent) and accepted for the gold they represented. Fractional reserve banking came about when gold smiths realized they could give out more receipts then they had gold, on the assumption that there wouldn't be a run on them with everyone demanding their gold back all at once. At first this was fraud. Eventually it became acceptable practice. And now, ever since Nixon closed the gold window to stop the outflow of US gold that resulted from serious trade imbalances with other nations, we've managed to completely eliminate the store of value portion of the definition of money. Combined with the fact that interest rates are well below the real rate of inflation the result has been that the average man who manages to save a little money now needs to become a sophisticated "investor" in order to preserve the value of his hard work. This is great for Wall Street, but not so great for the rest of us.
I think the reality of gold's value was made plain just recently when Germany, a big proponent of the various schemes to help bailout Greece and various other drowning-in-debt European nations was asked to back the failing EFSF (European Financial Stability Facility) bailout fund with German gold and Angela Merkel's response was basically "not on your freakin' life." The fact that Germany is willing to do pretty much anything to help solve the Euro crisis EXCEPT put up its gold as collateral says a lot about the longterm relevance gold has and will continue to have as a store of value.
ApatheticNoMore
11-16-11, 10:35pm
Well, gold has had monetary value for over 5,000 years, so there must be something worthwhile to it.
I've heard it's often been government backed. What I mean is it has sometimes been legal tender yes, but more importantly it has at least been legally usable for taxes. That's implicit government backing. Clearly that was the case when the U.S. was on a full gold standard, but I've heard it was also the case historically elsewhere. And if the government took bushels of wheat to pay taxes would wheat be an implicitly government backed currency as well? Well yes, but food also has a value that is incontestable to anyone: it sustains life, enough said. Gold um, kinda looks pretty?
I think the reality of gold's value was made plain just recently when Germany, a big proponent of the various schemes to help bailout Greece and various other drowning-in-debt European nations was asked to back the failing EFSF (European Financial Stability Facility) bailout fund with German gold and Angela Merkel's response was basically "not on your freakin' life." The fact that Germany is willing to do pretty much anything to help solve the Euro crisis EXCEPT put up its gold as collateral says a lot about the longterm relevance gold has and will continue to have as a store of value.
I'm not entirely sure Germany is willing to do everything to solve the Euro crisis. Who are all those soverign bonds that are at risk of default owed to anyway? Aren't they owed to countries like Germany?
I've heard it's often been government backed. What I mean is it has sometimes been legal tender yes, but more importantly it has at least been legally usable for taxes. That's implicit government backing. Clearly that was the case when the U.S. was on a full gold standard, but I've heard it was also the case historically elsewhere. And if the government took bushels of wheat to pay taxes would wheat be an implicitly government backed currency as well? Well yes, but food also has a value that is incontestable to anyone: it sustains life, enough said. Gold um, kinda looks pretty?
I'm not entirely sure Germany is willing to do everything to solve the Euro crisis. Who are all those soverign bonds that are at risk of default owed to anyway? Aren't they owed to countries like Germany?
Widespread taxes that the majority of citizens of a country must pay are a relatively new phenomena. much newer then the acceptance of gold as money.
As for germany, it's important to differentiate between the german government/people and the german banks. Yes, german banks are owed a lot from the various soveriegn debtors. It's the german government, and by extension its people, that have the gold and aren't willing to use it as collateral for bailouts. Obviously one only has to look to the period after WWI to understand why the German people aren't interested in putting up their gold to bail out other nations. They understand, and remember, quite well that paper money can easily become completely worthless in a remarkably short period of time and destroy an entire country and theyr'e not willing to go through that agony a second time. The rest of us, who didn't live through that particular horror as a society, may not be so lucky.
ApatheticNoMore
11-17-11, 10:23am
Widespread taxes that the majority of citizens of a country must pay are a relatively new phenomena. much newer then the acceptance of gold as money.
Well whether or not it was widespread the existence of government has always depended on taxation pretty much and this legitimizes whatever currency is needed to pay it.
Really I'm basically in agreement about how an ever depreciating currency has made it nearly impossible for the average person to save up much of anything. I mean sure you can save some of your income, that's not what I dispute, I hardly think it's compulsory to spend every penny, it's just that over decades retaining the value of that which is saved ... yea you need to know a lot about investing at that point.
Moving beyond Joe Schmoe and his savings, even though the ability of the average person to secure their future by some means is VERY important (without that don't even call your system semi-functional imo - and yes things like social security can help *IF* they can be adequately funded), it seems the economic and yes the monetary system has failed on a systematic level in too many ways to count at this point. Failed to protect our true economic resources (natural resources) but those were never even part of it's model, it seems it may have even failed by it's own model, to maintain even any degree of short term economic stability. Where can we go from here? I don't know, it is THE question of our era, I guess.
Jp1, I will certainly concede that gold has intrinsic value. Some king 5,000 years ago liked it, thought it was pretty, knew that it was relatively rare and so was willing to trade more of what he had for it than he was willing to give for salt or oxen or corn and the market was created. Every civilization that followed since that time has just blindly followed along with the notion that gold was valuable. No real basis for that, its just that we've always done it that way. It is GOLD after all!!!
From Wikipedia:
"A total of 165,000 tonnes of gold have been mined in human history, as of 2009. This is roughly equivalent to 5.3 billion troy ounces or, in terms of volume, about 8500 m3, or a cube 20.4 m on a side. The world consumption of new gold produced is about 50% in jewelry, 40% in investments, and 10% in industry."
Assuming that's accurate, 90% of the gold that gets dug up is used for either ornamentation or worse, it sits in a bank vault (or under the bed) doing nothing. Only 10% of it actually gets used for something that could benefit anyone.
Gold is selling for right at $1,750/troy oz. today. That means all the gold ever dug up would have a "value" of around $9.275 trillion dollars. When I think of gold my mind goes right to that cube that is 20 m on a side. What would you do with that? What purpose would it serve? How would humanity benefit from that big lump of metal?
Producing assets were mentioned earlier in this thread. Well, for the same value as that metal cube you could fund the Medicare shortfall for 251 years (based on the 2010 shortfall of $37B). You could buy Wal-Mart 51 times. You could buy Pfizer 57 times. Exxon Mobile 22 times. Apple 29 times. You could buy a biotech outfit like Genzyme 462 times! How far could civilization advance if that level of resource was put to work rather than collecting dust in a vault or dangling from someone's ear lobes?
It's not that I think that all that gold should just be sitting in a bank vault somewhere gathering dust. Rather, I think that it should be money, or at least be the value backing up our money, so that the value of our money remains stable rather than in a perpetual state of decline as the federal reserve makes more and more of it. If the value of money remained stable then people could choose to either sit on it and it would maintain its value or, if the person to whom it belonged saw an opportunity to either loan it to or invest it in a business that they thought had merit they could potentially earn a profit. Gone would be the perpetual need to invest in something just to maintain one's money's value. So much of what has been invested in over the last couple of decades seem to be an effort to jump on the latest bubble in an effort to make money for little effort or productivity. If the value and quantity of money remained stable that wouldn't happen and we wouldn't have had the housing bubble or tech bubble and we wouldn't have seen commodity values skyrocket over the last several years. There's too much money out there chasing too few worthwhile productive investments and that has resulted in the casino we know as wall street. Investors are only acting logically. After all, growing a real, productive, honest business is hard work. Throwing money at an "investment" (or better yet, borrowing all of it) like an overpriced house that you think will become even more overpriced by next year isn't investing at all. It's simply gambling. But enough people have success with these "investments" that other people logically want to take part.
It's not that I think that all that gold should just be sitting in a bank vault somewhere gathering dust. Rather, I think that it should be money, or at least be the value backing up our money, so that the value of our money remains stable rather than in a perpetual state of decline as the federal reserve makes more and more of it. If the value of money remained stable then people could choose to either sit on it and it would maintain its value or, if the person to whom it belonged saw an opportunity to either loan it to or invest it in a business that they thought had merit they could potentially earn a profit.
Isn't there some value to allowing our economy to grow further than a fixed amount of gold would allow? Or, is it possible to continue acquiring enough gold to keep up with a booming economy, along with the needs of a growing population?
Imagine a small ship of ~30 people, led by a young Fletcher Christian, landing on a remote island to settle.
In the inventory of supplies on the ship, the colony has 300 silver crowns. The colonists, more peacefully than history recounts, hold a village meeting, and decide to adopt the silver crown as their money.
Now, let's assume things continue to proceed peacefully, and the colonists prosper, and 100 years later, there are 500 people living on the island happily. Still using their stable, fixed quantity of 300 silver crowns as their only currency...
What issues will arise, as the economy and population grows over the 100 years, but the supply of money remain fixed to some rare commodity? What happens another 100 years down the road?
(As an aside, I have a friend who runs a gold-mining outfit in Africa. His costs to bring gold to the market are running about $370/ounce these days, which is quite a bit lower than industry average, but there's significant risk due to the source.)
Imagine further still - what happens when a highly-productive silver mine is discovered on the island? Hint: look at the history of the issuance of the Morgan silver dollar...
Also interesting: look at various "local currency" efforts. Some use different backing.... (Ithaca "hours" for instance.)
If the value and quantity of money remained stable that wouldn't happen and we wouldn't have had the housing bubble or tech bubble and we wouldn't have seen commodity values skyrocket over the last several years. There's too much money out there chasing too few worthwhile productive investments and that has resulted in the casino we know as wall street.
The housing bubble was an anomaly in the larger real estate market caused by outside factors. If you claim those factors should be more closely scrutinized I would have to agree, but in the very long term real estate investment has been the vehicle that has elevated more people to a higher economic level than any other. Appreciation over time is probably the largest single reason for that. If the supply of money and the value of that money were to remain constant there would be no appreciation.
As far as the US as a country goes, I wish our investment strategy was geared toward infrastructure now that would increase our productivity for generations to come rather than bailing out institutions with poor business models. Regarding individual investors and the "casino" of Wall Street, however, it is true that complex financial instruments exist that were created to do nothing more than line the pockets of the creators. While those tend to get the soundbites and the wrath of the occupants most investment on Wall Street goes to companies that are engaged in legitimate, productive work. Those are investments that go toward discovering the next source of clean energy. Or finding a cure for cancer or AIDS or malaria.
Or developing grains that grow with less water. Or cleaner and more efficient modes of transportation. The list is endless, but the point is that any such advance is going to come out of the private sector and it will likely be funded by investors who bought stock in the company doing the r&d. Some reform is clearly called for, but let's not throw the baby out with the bath water.
One thing that scares me is the amount of money invested in instruments betting on failures and downturns. It creates a lot of incentive to have things go badly.
Would you destroy billions in wealth if you could away walk with millions in your own pocket afterwards?
One example (I forget who) bundled bad mortgages, were able to pass them off as a solid investment to buyers, then bet on them to fail - which, of course, they did. NPR (On Point) also had discussion this week on how congressmen are not held to the same standard when it comes to insider trading in terms of what they plan/do in Congress that would affect markets.
ApatheticNoMore
11-21-11, 3:14pm
NPR (On Point) also had discussion this week on how congressmen are not held to the same standard when it comes to insider trading in terms of what they plan/do in Congress that would affect markets.
It could be argued that the returns congress people see on their investments are only possible with insider trading (they are way beating the market, most money managers don't). Depends on the degree of your belief in efficient market theory and the like I guess but .... if it were possible to suspect if not exactly prove insider trading mathematically, congress people are looking very suspicious. Ho hum though just another minor corruption in a den of such things.
One thing that scares me is the amount of money invested in instruments betting on failures and downturns. It creates a lot of incentive to have things go badly.
Would you destroy billions in wealth if you could away walk with millions in your own pocket afterwards?
One example (I forget who) bundled bad mortgages, were able to pass them off as a solid investment to buyers, then bet on them to fail - which, of course, they did. NPR (On Point) also had discussion this week on how congressmen are not held to the same standard when it comes to insider trading in terms of what they plan/do in Congress that would affect markets.
Why is taking a short position any less ethical than going long on an asset? Absent fraud, you have a willing buyer and a willing seller for every transaction, each responsible for his own due diligence. Asset bubbles would be even bigger problems than they are if there weren’t some clever people trying to make a buck on the Emperor not having any clothes. If a guy like George Soros thinks the United Kingdom is supporting its currency at an unsustainably high level, let him take his chances against the Bank of England in the marketplace.
I’ve got nothing against hedging. I don’t even have anything against speculation, per se, as long as you don’t expect the taxpayers to cover your losses.
Why is taking a short position any less ethical than going long on an asset? Absent fraud, you have a willing buyer and a willing seller for every transaction, each responsible for his own due diligence. Asset bubbles would be even bigger problems than they are if there weren’t some clever people trying to make a buck on the Emperor not having any clothes. If a guy like George Soros thinks the United Kingdom is supporting its currency at an unsustainably high level, let him take his chances against the Bank of England in the marketplace.
I’ve got nothing against hedging. I don’t even have anything against speculation, per se, as long as you don’t expect the taxpayers to cover your losses.
I didn't say anything about ethics - I just said it creates more incentives to see things fail.
I didn't say anything about ethics - I just said it creates more incentives to see things fail.
I don't see it that way. If he doesn't believe an asset is or will be overpriced, a short is throwing his money away. In housing, for instance, where we had government providing cheap money, banking regulations, loan guarantees and tax incentives aimed at increasing homeownership, the eventual collapse of housing prices was more or less a foregone conclusion. The shorts may have hastened it, but they didn't cause it. And how much worse might it have gotten if it had run a few more years? I think its healthy to have a system where you need to convince self-interested professional skeptics that the asset you're pushing is viable. In the long run, that will tend to kill the dumber ideas earlier to the benefit of everyone.
The majority of the real estate loans were made by banks and mortgage companies for the fees they made!!! It was private market system at it's worst. The government did not force the private market system to make the loans. Greed did!!
The majority of the real estate loans were made by banks and mortgage companies for the fees they made!!! It was private market system at it's worst. The government did not force the private market system to make the loans. Greed did!!
Of course, but they couldn't have done so without the high demand fueled by government and the market in motrgage securities supported by the government's moral hazard. Blaming the mortgage crisis on the banks strikes me as a bit like blaming the croupier for your gambling losses.
The majority of the real estate loans were made by banks and mortgage companies for the fees they made!!! It was private market system at it's worst. The government did not force the private market system to make the loans. Greed did!!
You're right, the government didn't force them to make those loans, it simply incentivized them. As I understand it, making those risky loans under the Community Reinvestment Act guidelines gave banks the opportunity to open up additional lines of business that would be denied them otherwise.
It was a sort of 'carrot - stick' approach.
There is always benefit to hindsight if it allows us to figure out what went wrong. I think most people agree that the mortgage market went wrong. The blame, like with most analysis that relies on statistics, can be focused toward just about any party who was involved to fit the needs of whoever is performing the analysis. Yes, the government did just about all it could to "promote bad behavior" (as Rick Santelli said in his now famous 'speech'). Yes, the banks were driven by greed and their resulting actions in many cases were flat out criminal. But ultimately it was the buyers who were responsible. They took the loans, they bought too much house and too many houses. They signed all the paperwork saying they would repay the money they borrowed. Personal responsibility isn't very popular these days, but if those buyer/borrowers had acted responsibly there would have been no bubble to burst.
ApatheticNoMore
11-22-11, 3:15pm
I think the moral hazard with Fannie and Freddie was there but was limited because it was not a given the government would step in. That was then. Right now I think the danger with these two is large, but that is due to all that has happened since (and the government did indeed step in).
A lot was low interest rates and lack of regulation. The Federal Reserve could have stepped in to regulate (in addition to monetary policy, raise those rates!) at any time when the bubble was blowing, it did not. The CRA was minor in it's effect. Much of the middle class was jumping off the cliff while shouting "weeeee!!!" and buying overpriced houses and we want to blame the problem on a few poor people. Most of those mortgages in trouble were not poor people, sure subprime was a disaster, but so is the whole mortgage market all the way up the prime scale at this point.
Really there is plenty of data on the banks and their guilt. And the government and especially the Fed definitely let the bubble happen. In truth I have little doubt they WANTED a bubble, needing something to boost that economy after the last recession.
At this point drawing a line between banks and government is a distinction without a difference IMO, they are all the same people moving in and out of government and investment banks anyway, and they all have each others backs. OWS!
I think the moral hazard with Fannie and Freddie was there but was limited because it was not a given the government would step in. That was then. Right now I think the danger with these two is large, but that is due to all that has happened since (and the government did indeed step in).
A lot was low interest rates and lack of regulation. The Federal Reserve could have stepped in to regulate (in addition to monetary policy, raise those rates!) at any time when the bubble was blowing, it did not. The CRA was minor in it's effect. Much of the middle class was jumping off the cliff while shouting "weeeee!!!" and buying overpriced houses and we want to blame the problem on a few poor people. Most of those mortgages in trouble were not poor people, sure subprime was a disaster, but so is the whole mortgage market all the way up the prime scale at this point.
Really there is plenty of data on the banks and their guilt. And the government and especially the Fed definitely let the bubble happen. In truth I have little doubt they WANTED a bubble, needing something to boost that economy after the last recession.
At this point drawing a line between banks and government is a distinction without a difference IMO, they are all the same people moving in and out of government anyway, and they all have each others backs. OWS! :)
I strongly recommend The Big Short by Michael Lewis for an understanding of that period. The interesting thing to me was how many people knew things couldn't go on as they were but kept playing anyway.
Its hard to imagine much of an impact coming from OWS, long-term. Apart from busting a lot of police overtime budgets and fouling a lot of public toilets, they don't seem to be gaining much traction with the great majority they claim to represent.
Really there is plenty of data on the banks and their guilt. And the government and especially the Fed definitely let the bubble happen.
Just curious how anyone would feel if the policy to own a home was pretty strict at 20% down and payments that don't exceed, say... 30% of AFTER tax income? I don't have stats on how people in that group behaved after the bubble burst, but I bet the default rate was still very close to nonexistent.
For the record I think ANM is right about the middle class being a ball and chain. My old neighborhood is in a very expensive resort area. About 1/3 of the houses/people in that neighborhood are in foreclosure, including the people who bought ours. Almost without fail the people living there are high earners and upper-middle class and above.
Just curious how anyone would feel if the policy to own a home was pretty strict at 20% down and payments that don't exceed, say... 30% of AFTER tax income? I don't have stats on how people in that group behaved after the bubble burst, but I bet the default rate was still very close to nonexistent.
I write private mortgages, and that's roughly the guideline I follow. I also only loan on homes that I believe are good deals, not overpriced speculative real estate - homes that I wouldn't mind owning myself if the borrower defaults. I only loan to people with history in the community who have demonstrated an ability to thrive here. Oddly, I've never had so much as a late payment over the last 12 years, even during The Recent Unpleasantness.
I am getting out of this business entirely though. There's a local group loudly arguing for a debt jubilee, and there's the OWS movement, and I'm just not going to put my capital out there exposed to that sort of political/social risk.
In the 1980s when I first started underwriting home loans the standard advance ratio was 80%. You could go up to 90% but you had to have private mortgage insurance. The advance ratios were 25% for the housing ratio and 35% for total debt service ratio. The 25 and 35% were based on gross income. We also verified everything on the credit report and verified income. We also got a straight salary. No commissions for the number or amount of loans we made. We did not use credit scores I am not sure there was such a thing as credit scores at that time.
That all changed after 2000. Banks and mortgage companies would make 100% or more advances. Housing and debt service ratios would go over 50% of gross income. The worst part is loan underwriters got commissions based on the number and amount of loans they made. That is crazy! There were fees to be made through out the crazy mortgage system.
The people getting the mortgages have to carry some of the blame. But they are not the so called experts so when a so called loan officer who is a commissioned sales person (same as a used car sales person) tells them they can afford the loan they believe them. The high flying MBAs carry a lot of the blame. When they started to move into banking they did not like the low steady single digit returns of banking. They wanted double digit returns and took the risks needed to make double digit returns.
flowerseverywhere
11-22-11, 7:07pm
What would happen if there was a debt jubilee? What happens in your case Bae to the property? It is a shame you are getting out of the business. It sounds like you were making solid loans to solid people.
Actually our friend from California explained that when he bought his last house they offered him $100,000 more than a 100% mortgage then allowed him to borrow against the raising value. However several hundred thousand dollars later the house value dropped down to when he bought it so he walked away from several hundred thousand dollars of underwater loans, money he spent on toys, eating out, travelling and staying in top notch suites. It sounded so deceitful to us to behave that way but everybody was doing it according to him. His neighborhood looks like a ghost town and some of the houses have drug dealers and squatters. Someone, somewhere is due money so I just don't get it.
Although he feels he was the victim of predatory lending I think he knew exactly what he was doing and betting the housing market would continue to climb. Most people around here buy a house with a good down payment and pay it off. Seems easy to me. You borrow money you pay it back. If hard times hit you do everything you can to make things good.
ApatheticNoMore
11-22-11, 7:20pm
Its hard to imagine much of an impact coming from OWS, long-term. [snip tiolet talk] they don't seem to be gaining much traction with the great majority they claim to represent.
Well I feel due to awareness raised by OWS I can mention things like systematic corruption involving both government and investment banks and hope people might actually know what I'm talking about.
What would happen if there was a debt jubilee? What happens in your case Bae to the property?
I am uncertain. And prudent retirement capital flies from this sort of uncertainty, when there are other options available.
iris lily
11-22-11, 9:19pm
CBS news said tonight that wealth has increased 39% for average americans since 1970 but 275% more for wealthy since 1970.
how much has wealth* increased for the Federal government? Quite a big more than for the wealthy, I'd wager.
*Annual income. As we all know, our Federal Government, and hence us, the citizens, have negative net worth.
Thinking about the idea that if banks had only made "prudent" loans with 20% down/payments of no more than 30% of income gets back to one of the points I brought up earlier, which was made by Planet Money a couple of years ago. There's too much money sloshing aruond the financial system, thanks to overly loose monetary policy by the fed. The banks figured this out and realized that if they securitized mortgages they could get the bad loans off their books and simply make money off of initiation fees for loans and let someone else worry about whether the loans got repaid. "investors" were happy to have something new to "invest" in and everyone was happy. At least until the pool of people desperate to take part in the bubble ran out. And then it all came crashing down.
I have a hard time blaming the buyers of overpriced houses, at least entirely. Yes, they should've known that they were taking out loans they couldn't afford, at terrible floating rate terms and whatnot, but they were told that it would just be a matter of refinancing to a more affordable loan later, and after all, if things get bad for you just sell, pay off the loan and pocket the profit! What could possibly go wrong? And if a "real estate expert" is telling you this, why should an average joe shmoe doubt him. I work with a guy who got sucked into the whole "got to get into real estate now before it gets too expensive" mindset. He's rediculously upside down in his mortgage but still able to pay it since he's still employed and at least didn't get a floating rate loan. He's a smart guy who is otherwise quite good with his money. If he could get sucked into the whole real estate mania I don't find it at all surprising that millions of other people did too.
flowerseverywhere
11-22-11, 10:56pm
I am uncertain. And prudent retirement capital flies from this sort of uncertainty, when there are other options available.
well that is a shame. I understand the whole 99% thing as well as how people took advantage of the mortgage fiasco (both consumers and lenders). Unfortunately good people that are not scammers will be hurt by your decision. And by your I don't specifically mean you, but all people and honest institutions who are willing to lend good money to deserving hard working people.
Apatheticnomore, I am not sure that OWS has raised that much awareness. It seems like pepper spraying (a despicable scene), and the right to pitch tents and assemble is dominating the news. Wall street marches on, bonuses are handed out and our Super committee has not come forward with a deal. It seems to me much of the same old same old. Everyone blaming each other because their piece of the pie might get a tiny bit smaller.
You're right, the mainstream media seems much more interested in focusing on the unimportant details of the occupy protests, like tents and pepper spray and homeless people joining the camps to get free food (which frankly seems ok and right to me. After all, the homeless are certainly part of the 99% and not the 1%. How sad it would be if the occupy protesters thought they were too good to allow the truly poorest people in our society to join them). Since the media are all owned by the 1% it's certainly understandable that they'd want to take the approach of trying to minimize what's going on and make it look like it's just a camping party for lazy slackers. And it's also just easier, lazier reporting, much the same way they treat presidential elections like horse races and ignore any serious discussions of actual policy planks of the candidates.
But the fact that people like us are even having discussions about the occupy protests and what they're protesting, what we wish the protests would accomplish, etc, is a good thing and shows that at least on a certain level the protests are having an effect at refocusing the discussion.
The fairy-tale Kingdom of Denmark has a GDP per capita PPP of $34,000, the US has $47,000. That's a lot more wealth to spread around.
So how does that affect the average person in each country? What's the median or "middle class" income? All the wealth in the US is in the hands of few you say so the middle class is worse off? Is it? What is the average or median family income in the US versus the European paradises? Denmark at a couple grand over $20,000 and the US at a couple grand over $30,000, depending on what metric you use. Same in France, same in all of those countries that are not island financial capitals or oil kingdoms. See http://en.wikipedia.org/wiki/Median_household_income (http://en.wikipedia.org/wiki/Median_household_income) or here http://en.wikipedia.org/wiki/Mean_household_income (http://en.wikipedia.org/wiki/Mean_household_income) or here http://super-economy.blogspot.com/20...s-than-in.html (http://super-economy.blogspot.com/2010/04/median-earnings-higher-in-us-than-in.html)
Is it worth giving up 1/3 of your income just so everyone can be more equal? I'm sure some of you say yes (kib, you want to come out of hiding?). Not me. To me the question is how do we provide the best standard of living for everyone. The priority should be on looking for ways to lift up the low earners, not just grabbing pie from the top and dragging them down (and maybe everyone else down with them).
I'm just gonna say...for me, you picked the wrong country. MIL is from Denmark, we have a LOT of friends who live there. They are happy, well-adjusted, have a ton of vacation, spend their money freely on their long vacations (including 3 month world tours), work about 37 hours per week, shop almost daily, bike to work...
Yeah, I gotta say, there are definitely some appealing things about the Danes and their lifestyle.
Yossarian
11-27-11, 10:27am
They are happy, well-adjusted, have a ton of vacation, spend their money freely on their long vacations (including 3 month world tours), work about 37 hours per week, shop almost daily, bike to work...
Except for the biking to work it sounds like a lot of my friends in the US too.
Except for the biking to work it sounds like a lot of my friends in the US too.
What do your friends do for a living? I think I'd like their job. They must be either retired, self-employed or school teachers since pretty much no one in the US gets 3 months vacation period, much less is able to take 3 months off all at once.
What do your friends do for a living? I think I'd like their job. They must be either retired, self-employed or school teachers since pretty much no one in the US gets 3 months vacation period, much less is able to take 3 months off all at once.
So 3 months off all at once is typical in Denmark?
freein05
11-27-11, 11:52am
Most European countries provide 6 to 7 weeks of vacation. That is the norm. They do not understand the American work to you die work ethic.
Most European countries provide 6 to 7 weeks of vacation. That is the norm. They do not understand the American work to you die work ethic.
See this link (http://www.nationmaster.com/graph/lab_vac_min_vac_tim_aro_the_wor_leg_req-time-around-world-legally-required)for minimum vacation time required by law in various countries. What I find odd is that most of the world is so highly controlled by governments that they even decide how much vacation time their citizens must enjoy.
I get 6 weeks plus 8 holidays without the government mandating it.
loosechickens
11-27-11, 3:12pm
well, aren't YOU lucky, Alan.......but that amount of vacation time is certainly not the norm in this country for most workers. When we lived in a small fishing village on the Pacific coast in southern Mexico, the tourists that came there were mostly European, and often were on several months or more of holiday.....they usually had 6-8 weeks of vacation, and sometimes would combine that with other time off owed them, to be traveling in Mexico for three months. The Americans who came there, usually came for a week, sometimes two weeks, but seldom more.
Maybe it's kind of like health insurance in this country. When you have it, and your health issues are taken care of nicely, that seems the "norm" to you, regardless of the facts for most others. Vacation time may be the same sort of thing.
Most Europeans certainly don't envy us Americans, especially Western Europeans. They consider their lives to be much better, their quality of life to be much higher, their level of anxiety much less, and their security in areas like health and retirement to be far superior. Our Canadian friends feel the same way for the most part, although they DO enjoy the warmer parts of the U.S. in the winters, as we do as well.
True, alan.
The Fair Labor Standards Act (FLSA) does not require payment for time not worked, such as vacations, sick leave or federal or other holidays. These benefits are matters of agreement between an employer and an employee (or the employee's representative). (Dept of Labor (http://www.dol.gov/dol/topic/workhours/vacation_leave.htm), source).
the question is how much you can negotiate for, and whether or not you'll get it once you do. This is something that my husband learned early on. When he was getting a low raise (usually do to "budget constraints"), he would ask for more vacation time in reciprocation, considering his reviews were so good. Usually, he would get it. He wouldn't ask for a lot, he would figure out how much the time "cost" relative to the raise that he "might have" gotten.
One year, they were only giving out 1% across the board, and COL of course is usually considered 2-3%, so he figured out what the difference would be in hours and asked for that in vacation time. He presented this to his manager and HR, and nearly always got it.
By the time he left, he had more vacation than a lot of folks that he was able to use, and because we were frugal, we were able to travel.
Most people, though, think that two weeks os the mandatory minimum by law (it isn't), and that you have to wait on the company to "give" you more.
When my husband was looking to switch jobs (locally), one of the things was that he would "start at the bottom" of the vacation rung -- which was two weeks until you reached 5 years. But, he simply asked that his current vacation time be matched as part of the package. At the time, that was 4 weeks (20 days) plus the usual holiday/sick leave that his company gave (10 days). So, he asked for that to carry over -- a total of 30 days. They were open to it, but hit a hiring freeze just before they offered him the position.
Then we moved to NZ.
We currently take about two weeks vacation, but we work every day of the year pretty much. Of course, we also work from home on weekends, usually take friday's off (i do work two hours on fridays). I sometimes work weekends. Anyway, the work is fluid. :)
i consider the quality of life in europe, and here in NZ, to be much better.
Most Europeans certainly don't envy us Americans, especially Western Europeans. They consider their lives to be much better, their quality of life to be much higher, their level of anxiety much less, and their security in areas like health and retirement to be far superior. Our Canadian friends feel the same way for the most part, although they DO enjoy the warmer parts of the U.S. in the winters, as we do as well.
Do they? I'd go up against anyone in the world re: quality of life, health, safety, happiness, etc.
But then again, I'm a conservative. We're generally happier people.
Here's an idea - let's cut our military spending 90%, and shut down most of those overseas bases, and quit subsidizing European security. Those higher-quality-of-life countries with their three month vacations can certainly afford to defend themselves, and heck, they are probably so enlightened they don't need a military anyways, they hardly ever have conflicts over there.
Then we could afford all sorts of fun stuff here in the USA.
Here's an idea - let's cut our military spending 90%, and shut down most of those overseas bases, and quit subsidizing European security. Those higher-quality-of-life countries with their three month vacations can certainly afford to defend themselves, and heck, they are probably so enlightened they don't need a military anyways, they hardly ever have conflicts over there.
Then we could afford all sorts of fun stuff here in the USA.
Bae for President!
Since the military is more tightly woven into the fabric of our government than the oil industry, I doubt we will see this soon. I am surprized that some ambitious and intelligent politicians have not see how ripe we are for a third party (that is not the tea party).
Yossarian
11-27-11, 7:25pm
Most Europeans certainly don't envy us Americans
It's hard to deal with generalizations but the Europeans we have had come through our neighborhood on assignment have loved it here and were looking for ways to stay. And other than our odd predilection with Victorian sexual standards they considered the living to be much more comfortable here. But even if you are correct I don't think it is decisive, or it is at least premature. While our housing crisis allowed some people to have higher living standards than they could afford, many entire European societies are living on borrowed time and are not sustainable. Let's see where we are in 20 years. I'll put my bet on work ethic and productivity being a better bedrock than ponzi scheme social programs (here or there) and mandated inefficiency. We all know how that works out in the long run.
http://bloghopenchangery.files.wordpress.com/2010/03/story-ant-grasshopper.jpg
loosechickens
11-27-11, 11:25pm
Originally Posted by loosechickens
Most Europeans certainly don't envy us Americans, especially Western Europeans. They consider their lives to be much better, their quality of life to be much higher, their level of anxiety much less, and their security in areas like health and retirement to be far superior. Our Canadian friends feel the same way for the most part, although they DO enjoy the warmer parts of the U.S. in the winters, as we do as well.
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Do they? I'd go up against anyone in the world re: quality of life, health, safety, happiness, etc.
But then again, I'm a conservative. We're generally happier people (Alan)
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Yep, you probably are quite happy, Alan. I am as well, (although certainly wouldn't describe myself as a conservative, especially as conservative is defined these days, somewhat to the right of the old John Birch Society) .....but I suspect part of your wellbeing comes from having had a good career, having sufficient money, knowing you have access to medical care when needed, so actually in our own lives, (yours and mine), we DO have the quality of life that most Europeans enjoy. It's just that in this country, we represent far less than the majority, and In Europe that lack of anxiety, feelings of "enough", and security about access to medical care is more universally available.
I'm sure my friend who is waiting with the clock ticking in her chest for her heart condition to worsen to "emergency status" so she can get her heart operation (hopefully without having the emergency come and finish her off before she can get to the hospital) would feel that same quality of life that you feel, if she were in the position that you were in when you had YOUR heart issues..........
Life just looks SO different when you're comfortable, have sufficiency of resources, ability to access quality health care when needed, and a secure retirement. I feel pretty high quality of life myself because of those reasons. But I sure know a whole lot of people in this country who do not.
I'd much prefer the European version, where I would know that my neighbors and others know a certain level of security as well as myself. It isn't enough for me to just have "gotten mine". I want others to have it, too. YMMV, I have no way of knowing.
loosechickens
11-28-11, 1:11am
Hmmm...isn't THIS interesting.....from Scientific American. One might argue that sometimes, denial of reality, especially if it isn't the "reality" being experienced by that particular person, may be really helpful to conservatives in maintaining that sunny outlook. Who would have thought?
"Conservatives are happier than liberals. This according to a 2006 Pew Research Center survey cited in a paper published this month in Psychological Science.
But New York University researchers set out to isolate the reasons why right-wingers would have greater subjective well-being than left-wingers.
They collected data from nearly 1,200 people from the 2000 American National Election Study and found that above the effects of gender, marital status, income, religion and age, the reason for this happiness disparity can be distilled to the separate ideologies of liberals and conservatives.
The authors argue that a conservative belief acts as a psychological buffer in a world of increasing inequality. The idea is that conservatives tend to rationalize inequality as the result of a fair process in a meritocracy, whereas liberals tend to see inequality as inherently unjust.
Analyses with data from 9,000 people across 10 countries uncovered the pattern that, not only do right-wingers report greater life satisfaction across cultures, but the gap widens in those countries where quality of life is low.
Finally, the authors looked at U.S. data spanning the past 30 years, and found that increasing economic inequality is associated with the decrease in the nation’s overall happiness. But noted they found that liberals’ self-reported happiness decreased more steeply than that of conservatives."
iris lily
11-28-11, 8:03am
Hmmm...isn't THIS interesting.....from Scientific American. One might argue that sometimes, denial of reality, especially if it isn't the "reality" being experienced by that particular person, may be really helpful to conservatives in maintaining that sunny outlook. Who would have thought?
"Conservatives are happier than liberals. This according to a 2006 Pew Research Center survey cited in a paper published this month in Psychological Science.
But New York University researchers set out to isolate the reasons why right-wingers would have greater subjective well-being than left-wingers.
They collected data from nearly 1,200 people from the 2000 American National Election Study and found that above the effects of gender, marital status, income, religion and age, the reason for this happiness disparity can be distilled to the separate ideologies of liberals and conservatives.
The authors argue that a conservative belief acts as a psychological buffer in a world of increasing inequality. The idea is that conservatives tend to rationalize inequality as the result of a fair process in a meritocracy, whereas liberals tend to see inequality as inherently unjust.
Analyses with data from 9,000 people across 10 countries uncovered the pattern that, not only do right-wingers report greater life satisfaction across cultures, but the gap widens in those countries where quality of life is low.
Finally, the authors looked at U.S. data spanning the past 30 years, and found that increasing economic inequality is associated with the decrease in the nation’s overall happiness. But noted they found that liberals’ self-reported happiness decreased more steeply than that of conservatives."
Isn't The Google and the internets great!!?? Anyone can find any expert to back up any position.
Hmmm...isn't THIS interesting.....from Scientific American. One might argue that sometimes, denial of reality, especially if it isn't the "reality" being experienced by that particular person, may be really helpful to conservatives in maintaining that sunny outlook. Who would have thought?
"Conservatives are happier than liberals. This according to a 2006 Pew Research Center survey cited in a paper published this month in Psychological Science.
But New York University researchers set out to isolate the reasons why right-wingers would have greater subjective well-being than left-wingers.
They collected data from nearly 1,200 people from the 2000 American National Election Study and found that above the effects of gender, marital status, income, religion and age, the reason for this happiness disparity can be distilled to the separate ideologies of liberals and conservatives.
The authors argue that a conservative belief acts as a psychological buffer in a world of increasing inequality. The idea is that conservatives tend to rationalize inequality as the result of a fair process in a meritocracy, whereas liberals tend to see inequality as inherently unjust.
Analyses with data from 9,000 people across 10 countries uncovered the pattern that, not only do right-wingers report greater life satisfaction across cultures, but the gap widens in those countries where quality of life is low.
Finally, the authors looked at U.S. data spanning the past 30 years, and found that increasing economic inequality is associated with the decrease in the nation’s overall happiness. But noted they found that liberals’ self-reported happiness decreased more steeply than that of conservatives."
So, ignorance IS bliss.
Yossarian
11-28-11, 8:48am
So, ignorance IS bliss.
Funny, I would have said anyone who thinks people are equally productive are the ignorant ones. But I would agree with the generalization that conservatives focus more on having a fair set of rules and are willing to accept disparate outcomes while liberals are more eager to focus whether the outcomes fit their ideals.
Funny, I would have said anyone who thinks people are equally productive are the ignorant ones. But I would agree with the generalization that conservatives focus more on having a fair set of rules and are willing to accept disparate outcomes while liberals are more eager to focus whether the outcomes fit their ideals.
...and LC's point is made!
Dehumanizing those who disagree with us makes it so much easier to sleep at night after we send them to the camps.
So, ignorance IS bliss.
Funny, I would have said anyone who thinks people are equally productive are the ignorant ones. But I would agree with the generalization that conservatives focus more on having a fair set of rules and are willing to accept disparate outcomes while liberals are more eager to focus whether the outcomes fit their ideals.
...and LC's point is made!
And somehow, that equates to ignorance? Was that the point LC was making or just your interpretation?
Hmmm...isn't THIS interesting.....from Scientific American. One might argue that sometimes, denial of reality, especially if it isn't the "reality" being experienced by that particular person, may be really helpful to conservatives in maintaining that sunny outlook. Who would have thought?
On the other side of the coin it wouldn't be that difficult to argue that believing unlimited borrowing can be sustained to perpetuity is denial of reality well beyond the individual level. Kool-aid anyone?
Here's an idea - let's cut our military spending 90%, and shut down most of those overseas bases, and quit subsidizing European security. Those higher-quality-of-life countries with their three month vacations can certainly afford to defend themselves, and heck, they are probably so enlightened they don't need a military anyways, they hardly ever have conflicts over there.
Then we could afford all sorts of fun stuff here in the USA.
Can't say I disagree...
Dehumanizing those who disagree with us makes it so much easier to sleep at night after we send them to the camps.
Okay, I'll bite. What's your point? In the context of this conversation?
ApatheticNoMore
11-28-11, 3:00pm
6 weeks vacation? Bwhaha, working for the government? Ok well I've never worked for the government and the most vacation I've ever had was 4 weeks and that was after I had 5 years at a company. Now I'm back to two, after 5 years here I would have 3 weeks. I find quality of life very poor, but I think that is mostly for local reasons (although yea the lack of vacation doesn't help).
Okay, I'll bite. What's your point? In the context of this conversation?
Oh, never mind. Now I see what you mean.
http://mediamatters.org/blog/201111260001
http://menso.files.wordpress.com/2010/08/maoist-thought-brightens-the-path-of-the-great-proletarian-cultural-revolution.jpg
http://menso.files.wordpress.com/2010/08/an-evil-counter-revolutionary-getting-exposed.jpg
ERG,
Here is the relevant point that is "proven" (or demonstrated) by your statement:
The idea is that conservatives tend to rationalize inequality as the result of a fair process in a meritocracy, whereas liberals tend to see inequality as inherently unjust.
I would re-write it myself, to keep it more "balanced" in it's expression by saying: The idea is that conservatives sent to see inequality as a result of a fair process in meritocracy, whereas liberals tend to see inequality as inherently unjust.
The term "rationalize" is very loaded. It might also be said: The idea is that conservatives sent to rationalize inequality as a result of a fair process in meritocracy, whereas liberals tend to rationalize inequality as inherently unjust.
What I like about this second one is that -- taking out the social weight of "rationalize" having a connotation of "forcing something to fit their views" -- rational thought and thereby "rationalizing" is a good thing.
The reality of the situation is that each person is taking a particular philosophical view. One person believes in meritocracy, the other person does not. Based on this fundamental belief, their interpretation of information is inferred from this perspective.
I would say that we could talk about the relative merits of this fundamental belief, but what I think is more interesting is the construct of "happiness." (next post)
I will likely ramble here.
I consider myself to be happy. I have a very good life. I had a very, very good life in the US, and I have a very, very good life here in NZ.
I am of mixed belief in regards to liberal/conservative. I do not believe in "absolute meritocracy" but I also do not believe in "absolute inequality = injustice." I actually come in somewhere around the middle.
Here are my influences.
1. I know people on welfare.
A. Some of these people are just normal people on hard times utilizing welfare in order to help fill the gaps until they are up and running again.
B. I know people who are "using the system." They can work, and have the time to work, but instead of being productive to their capacity, they purposefully work less so that they can maintain a certain level of benefits.
2. Part of my background is quakerism, which takes the more liberal ideology that the inequality is unjust, and that injustice is what leads to violence.
Quakers seek to reverse/overcome/minimize injustice via active peace-action, which for quakers is situated in every aspect of their lives, including simplicity. By making certain that everyone has a certain quality of life, the inequality is decreased, and therefore also is violence, and peace is achieved.
Wealth (or lack thereof) is not inherently problematic -- many notable quakers were wealthy by their own efforts (John Woolman, NJ, was a very prosperous general store owner, who owned multiple ones in several NJ towns) or inheritance (William Penn, founder of Pennsylvania) -- so long as you are living simply and giving freely to those in need, then you are doing your moral duty.
One aspect, though, where quakers get all kinds of liberal is in political action. They don't look at it as "government is bad, and shouldn't provide these services" but rather that it's the natural human state to commune, to form some form of government, and provide these services for each other based on this communion.
Quakers, of course, function on consensus (similar to GAs at the OWS movement -- though notably these are "democratic consensus" with a higher quorum than a typical quorum as we understand it). So, their government would be much more localized to facilitate this, with much less "higher up" power, but with anyone being able to participate at the "larger" levels of "governance."
The religion itself is run this way -- both in spiritual and social/political questions -- and as such requires a *great deal* of personal and group dedication. It is not an easy process by any means.
Most quakers that I know assert that government is simply another human tool for overcoming oppression and creating peace. This is why they end up "liberal leaning."
That basic quality of life seems to be: housing, food, clothing, education, medical care, and community. It might also include "consensus government" or "a people's government" wherein pooled resources are distributed to aid these ends, to keep a basic standard of living to develop a peaceful society.
Now, here is where political views get interesting.
Libertarians assert that the best means for this is to have minimal (or no) government, and minimal (or no) taxation, and have everything managed privately. They might assert that this is wholly how quakers work -- each is voluntarily participating in simplicity, in peace action, in their meetings and the governance therein, as well as choosing how much to donate to the meetings and when, as well as how much to give away freely to private individuals or charitable groups. They do just fine and dandy without a massive government.
(it should be noted, also that quakers have "clerks" who are volunteers who run the various administrative needs of the given meeting, and some are paid by their meetings a modest amount for the effort that they put in. this cost is also managed by the meeting.)
I can see the value in this interpretation, though I would follow closely to the minarchist-libertarian, rather than the anarcho-libertarian, because there is an administrative "government" aspect to quaker meetings.
Socialists assert that the best means is to have a representative government that has functions to spread the funds via taxation across the whole (wealth distribution), and that taxation as a civic duty to help others is beneficial. Like our tax system, some assert that it could be rated based on income, etc, while others assert a flat tax idea (here in NZ, our GST is a sibilance of "flat tax" since everyone pays GST on everything, and it is this GST that actually covers a lot of costs of the government and it's "socialist" programs).
As far as I can tell, there are not any libertarian governments in affect for us to compare (unless you would speak to areas where there are not functional governments of any sort), but there are several social-democracies that we can compare to.
Like the quakers whom I know and similar communities that utilize a "social" component -- of spreading wealth around or making certain that everyone has a certain quality of life -- the societies are more peaceful overall. They are also considered "very happy" societies -- as denmark has been considered the "happiest country on the planet" by whatever criteria that group developed to study it.
They have representative government, and they chose as a community to flatten the inequality by creating services from their pooled resources -- pooled via taxes. This has lead to a certain measure of comfort and happiness for the group. The question is whether or not they have "liberty" or if they feel that the "infringement" on liberty of their taxes is outweighed by the wider, social benefit. It might also be noted that denmark also has both wealthy and poor people, but with a larger "middle" class.
It would certainly seem to demonstrate how the quakers function in a larger group setting, as they are electing -- as danes are -- to raise funds to support their own actions.
I think that it is possible for the quaker-libertarian possibility to exist, but I think it requires far more dedication than most people realize -- including libertarians.
one of my good friends was an anarcholibertarian and I suggested that he check out the quaker meeting as a perspective of this sort of non-governance. He felt that quakerism was "too difficult" because of the level of personal and communal dedication. Even though libertarianism -- like quakerism -- is based on the belief that people are inherently good and not prone to corruption per se (it's only due to the inequality for quakers; for the lack of liberty for libertarians), he began to recognize that the average person -- including himself -- was not really interested in the intensity of practice and dedication that this form of government would require.
He asserted to me that, in fact, it requires far more dedication to the common good, and far more self-policing for the seeds of greed and corruption in oneself in the process, than the process of creating a representative government that basically seeks to meet the needs. He's still libertarian, but his perspectives on how "easy" or "possible" it is to implement. And, he has moved toward a more "left (http://www.all-left.net)" form of libertarianism because of it -- one that calls for various kinds of government involvement in wealth distribution while still holding to most of the libertarian values.
Anyway, a lot of people look at me as being "all over the map" but i tend to mostly be analytical and adaptable, simply looking at the situation as i "see" it.
Yossarian
11-28-11, 5:51pm
The reality of the situation is that each person is taking a particular philosophical view. One person believes in meritocracy, the other person does not.
Yes, I agree with that.:)
But not so much this:
Here is the relevant point that is "proven" (or demonstrated) by your statement:
Loosechick's premise was that somehow the difference in dispositions was the result of "denial of reality" by conservatives. I think you had it right the first time that there can be legitimate philosophical differences, no denial of any reality required.
I am more interested in equivalence of opportunity (tempered by a social safety net) than equivalence of outcome. Let's say you and I both work at BigCo for $40,000 a year and you quit to be (X) a PR consultant and make $42,000/yr, or (Y) invent the Flux Capacitor and make $40 million. I still make $40,000 a year, and by some thinking here the world is better off if you picked X over Y and never invent something and by virtue of adding that value make 1,000 times more than me, we are better off if you never succeed at inventing something and we make approximately the same. From my POV, what's more important is that we both have the opportunity to succeed, not that we have equal success.
And there are some legitimate criticisms and things we can improve about equal opportunity. Unequal results may be a reason to look to see what's driving the differences, but the "to each according to his need" should only be taken to a base level of needs, there is no intrinsic need to be equal with your neighbor. If you want it, work for it.
http://menso.files.wordpress.com/2010/08/maoist-thought-brightens-the-path-of-the-great-proletarian-cultural-revolution.jpg
http://menso.files.wordpress.com/2010/08/an-evil-counter-revolutionary-getting-exposed.jpg
Since you hate it so much when people draw inferences from your postings, please tell us EXACTLY what you mean to say by posting photos of the cultural revolution in China? I didn't think we were talking about China.
ERG,
Your explanation demonstrates the "fair play in meritocracy" construct. The thing is, that in that example, we are not dealing with the "unjust inequality" construct that liberals are considering in their positions.
I'm sure that everyone -- liberal and conservative -- agrees with the idea that you put forth. That everyone has the opportunity to stay where they are, find a higher paying position, and succeed/fail at a risky venture based on their own drive and merit. Certainly, I have no problem with this, and agree with you.
Where the inequality principle comes up is when you have two people of equal merit (education, background, whatever), who -- through no fault of their own -- end up on hard times, and then those hard times are compounded by the social policies of the area.
Medical care is a good example, imo.
universal health care works as a social safety net for all citizens.
Taking your example, two citizens are employed at the same amount, but due to the economy, one looses his job and therefore health benefits. Both fall ill with lymphoma. One has coverage, and while there are additional costs, his continued employment makes it possible for him to pay that off. The other doesn't have benefit, and therefore has far greater debt. Ultimately, the second citizen must file for bankruptcy.
Now, i suppose that it can be argued that the one person had more merit. Perhaps a hair's more. I find that difficult to judge in abstractions vs particulars, but we are functioning in abstractions and assumptions here, so i'm going with the idea that they were -- for all intents and purposes -- equal.
If they are equal, then the inequality and injustice from that inequality befalls them when they both are diagnosed with lymphoma -- something that happens through no fault of their own.
At this point, the liberal person takes the position that it is this injustice that must be solved, and that one way to solve it is to create universal health care. Because in countries where there is universal health care, the same situation could happen to two people with exact same merit, but neither person goes bankrupt, which allows the person who would have gone bankrupt to forgo that harrowing experience. They also forgo the experience of having to choose food vs medicine, for example, or having to go into extreme debt in the first place for health -- debt that they may not be able to get out of.
This does not imply that both people must be paid equally, or that all jobs must pay equally, or that people cannot succeed and fail on their own merits.
Simply, it asserts that the society as a whole believes that everyone deserves a certain quality of life, that providing this is important for the society as a whole (the fiscal, physical, social, etc health of the society), and that it allows people more freedom and security such that they can become more productive, happier citizens.
It goes without saying, of course, that there may be other methods of achieving this that do not require a government, universal health care initiative. But so far, that is what has worked for other countries, when the insurance situation is not working that well for the US, as it creates massive inequalities. It might be argued because this system is not truly free market, etc, and I think that those arguments can also be valid. I haven't seen them actually at work, btu I have seen socialized systems at work, and I've seen the level of security and thereby happiness that it can provide.
ApatheticNoMore
11-28-11, 10:50pm
I get the argument that the price system (price discovery etc.) is useful for many things. That makes sense as far as it goes but some things can't be priced. Rhetorically: what is the price of the last bluefin tuna?
Anyway what I will never get is monetary worth equated with moral worth. For a wider context: pretty much all religions have drawn the distinction between the two. Anyway if you don't equate them it makes discussions like the above totally irrelevant I think. You can of course still argue that a policy might be a disincentive or incentive to this or that, behavioral economics, fine. And you can argue various ideological cases. But you don't fall into a "cosmic" discussion of what two people of equal merit somehow deserve ..... by um the invisible hand of god? (because in reality of course the results of the market don't really match almost anyone's moral code.)
Yes, I agree with that.:)
But not so much this:
Loosechick's premise was that somehow the difference in dispositions was the result of "denial of reality" by conservatives. I think you had it right the first time that there can be legitimate philosophical differences, no denial of any reality required.
I am more interested in equivalence of opportunity (tempered by a social safety net) than equivalence of outcome. Let's say you and I both work at BigCo for $40,000 a year and you quit to be (X) a PR consultant and make $42,000/yr, or (Y) invent the Flux Capacitor and make $40 million. I still make $40,000 a year, and by some thinking here the world is better off if you picked X over Y and never invent something and by virtue of adding that value make 1,000 times more than me, we are better off if you never succeed at inventing something and we make approximately the same. From my POV, what's more important is that we both have the opportunity to succeed, not that we have equal success.
And there are some legitimate criticisms and things we can improve about equal opportunity. Unequal results may be a reason to look to see what's driving the differences, but the "to each according to his need" should only be taken to a base level of needs, there is no intrinsic need to be equal with your neighbor. If you want it, work for it.
Now this is a totally disingenuous portrayal of the liberal position. Kind of denial of reality!;) Perhaps a more careful reading of LC's post, and what zoe has posted would be a better starting point for real discussion rather than this Fox-like hyperbole.
I think the main point, as i see it is, conservatives get their 'happiness' from believing that everything they have, and the good health they enjoy, is totally of their own doing. They completely take the credit for everything they have, and did it all themselves. Furthermore, if they can do it, so can anyone else. No excuses.
Liberals know this isn't true. They know that inequality isn't really about the money (for conservatives it seems to always be about the money!) Liberals know inequality starts even before you are born, and continues with who your parents are, whether they even wanted you, the schooling you received, the health care, the extended family, teachers, the color of your skin, and on and on, way before you even get to the money.
No one expects equal outcomes. Even religious nutters know that only a very small number of them will be 'raptured'! :0!(now there's a contest!) But equal opportunity isn't an irrational desire. One that universal health care would greatly help with. Free or low cost school lunches also help. Equal opportunity in education as well. There are so many more little programs that try to help level that playing field so equal opportunity is truly equal.
I believe this is the point of the article, but that's just my opinion.
No one expects equal outcomes. Even religious nutters know that only a very small number of them will be 'raptured'! :0!(now there's a contest!) But equal opportunity isn't an irrational desire. One that universal health care would greatly help with. Free or low cost school lunches also help. Equal opportunity in education as well. There are so many more little programs that try to help level that playing field so equal opportunity is truly equal.
Despite the accusations of "Fox-like hyperbole" equal opportunity has been a mantra of mine (and of several of the other conservatives on this board) for a very long time. The division between left and right isn't very significant when we are talking about our kids should having basics like health care and a solid education. We all realize the value of such things without regard to party affiliation.
Liberals know this isn't true. They know that inequality isn't really about the money (for conservatives it seems to always be about the money!) Liberals know inequality starts even before you are born, and continues with who your parents are, whether they even wanted you, the schooling you received, the health care, the extended family, teachers, the color of your skin, and on and on, way before you even get to the money.
What some libs seem to not realize is that it really IS all about the money. Control of our money through program administration is what the government DOES. To a very large degree the job description of our Congressmen involves spending our money. The good ones do it in a way that reflects the values of their constituents.
I lean to the right specifically because I think conservative politicians are more likely to realize we are spending money we don't have. I could easily swing left because of what I see as social baggage on the right, but won't any time soon because I believe the (well intentioned) overspending on the left will lead to even greater problems than we have now. I would certainly like to see the military budget cut rather than education, but the very first step is to put the brakes on the spending train as soon as we can and in almost any way we can. Its out of control and has to be stopped before its too late or else health care and education will be every man for himself because we won't have a functioning country left. If that happens you will see the true meaning of inequality.
Yossarian
11-29-11, 9:52am
No one expects equal outcomes. Even religious nutters know that only a very small number of them will be 'raptured'! :0!(now there's a contest!) But equal opportunity isn't an irrational desire. One that universal health care would greatly help with. Free or low cost school lunches also help. Equal opportunity in education as well. There are so many more little programs that try to help level that playing field so equal opportunity is truly equal.
I believe this is the point of the article, but that's just my opinion.
So here's a chance to work together where there is general consensus- let's focus on equal opportunity. As for the risks of life, I'm OK socializing risks where there is no private market alternative or subsidizing access to the private markets where there is a compelling societal interest. But I disagree that the liberal beef is all about opportunity, I think (even going back to the genesis of this thread) the focus is on equalizing outcomes. LC's unlinked blurb is just from a podcast so it's hard to tell much on that one, http://www.scientificamerican.com/podcast/episode.cfm?id=BABCDEA5-D180-499B-094168CBE5442468 but overall the criticisms raised are based on simple conclusory comparisons of ultimate disparities without any thought or analysis of the underlying paths that produced them.
As for the risks of life, I'm OK socializing risks where there is no private market alternative or subsidizing access to the private markets where there is a compelling societal interest.
Which areas do you feel hold compelling social interest?
While it may also be true that some liberals focus on equalizing outcomes. But, I don't think that's the majority opinion of "liberals" or it would make most "liberals" (like myself in this context, i guess) into "conservatives" de facto when they don't believe in equalizing outcomes.
I, personally, do not believe in equalizing outcomes, but I don't think that makes me de facto conservative.
Besides, I'm probably moderate. LOL
So here's a chance to work together where there is general consensus- let's focus on equal opportunity. As for the risks of life, I'm OK socializing risks where there is no private market alternative or subsidizing access to the private markets where there is a compelling societal interest. But I disagree that the liberal beef is all about opportunity, I think (even going back to the genesis of this thread) the focus is on equalizing outcomes. LC's unlinked blurb is just from a podcast so it's hard to tell much on that one, http://www.scientificamerican.com/podcast/episode.cfm?id=BABCDEA5-D180-499B-094168CBE5442468 but overall the criticisms raised are based on simple conclusory comparisons of ultimate disparities without any thought or analysis of the underlying paths that produced them.
I don't believe equal outcome has ever been a goal of mainstream liberals. It's a completely unrealistic expectation in just about any circumstance. I believe your confusion comes more from the "republican spin" of what liberals want, and not the actual goals. Yes, we can agree on equal opportunity, although even that is not attainable in reality-world. But we can sure try. If you look at most of the programs that liberals like, you will see they are specifically designed for EQUAL OPPORTUNITY, not equal outcome. No one ever demanded for every job to be equal with equal pay and benefits. What we do expect is equal pay for equal job description/responsibility/duties, etc....But only at the same company, since different companies offer different benefits. Where the liberal comes in on this is when you have two people, same job, same responsibility/duties, days worked etc...all the same except one gets 10,000 more because he happens to have something swinging between his legs. Now, although this does still happen, it doesn't happen as often, thank goodness, and discrimination is not as prominent as it once was.
People still have to work for what they get, but in a race, making one jump over 5 hurdles while the other jumps over only 2 isn't fair. Equal opportunity removes the other 3 hurdles. Doesn't move the finish line, just gives both runners the chance to reach it.
Perhaps your confusion comes from liberal support for subsidized food and housing. Welfare. This certainly isn't equal outcome. Not even equal opportunity, really, just a little help, no strings attached (although I think there now are) for people, our neighbors, who have way more hurdles than they can jump. It's just the right thing a compassionate, progressive society should do for the poorest of it's citizens.
this thread isn't about equalizing outcome. It's absolutely about opportunity. Our government has been bought by the wealthiest and it is only their voice that is being heard. In corporate welfare, tax breaks and even the very programs that were set up to benefit us, we the people, everything is being slanted to benefit the wealthy 1%. I don't think the answer is to throw out the government, or drown it in a bathtub, but to take it back. To have it represent us again. We are the government and the government is us! If we stop this bickering and listening to divisive voices (who, by the way, benefit from us being divided) we just might do this. The 99% should have 99% of the voice.
I lean to the right specifically because I think conservative politicians are more likely to realize we are spending money we don't have. I could easily swing left because of what I see as social baggage on the right, but won't any time soon because I believe the (well intentioned) overspending on the left will lead to even greater problems than we have now.
Like you, I want a fiscally responsible government. Unfortunately, I don't think either side has cornered the market on this practice at this point.
When the right seeks to balance the budget, they seek to maintain military/etc (military industrial complex stuff) spending, while cutting social services. when the left seeks to balance the budget, they want to cut military spending (military industrial complex, not support of veterans and active duty military services).
And this is what leads to the impasse.
I lean to the right specifically because I think conservative politicians are more likely to realize we are spending money we don't have. I could easily swing left because of what I see as social baggage on the right, but won't any time soon because I believe the (well intentioned) overspending on the left will lead to even greater problems than we have now.
Like you, I want a fiscally responsible government. Unfortunately, I don't think either side has cornered the market on this practice at this point.
When the right seeks to balance the budget, they seek to maintain military/etc (military industrial complex stuff) spending, while cutting social services. when the left seeks to balance the budget, they want to cut military spending (military industrial complex, not support of veterans and active duty military services).
And this is what leads to the impasse.
Conservatives seem to have won the PR battle on this one, but it really is hogwash that they care about fiscal responsibility.
Prime Example A: Ronald Reagan
Prime Example B: George W. Bush
Come on. Let's get real, shall we? Conservatives only moan and groan about the deficit when Democrats take office. Seriously. Were they wringing their hands when Ronald Reagan, of blessed memory, ran up the debt? No. Were they marching on D.C. when Bush took the managable deficit left to him by Bill Clinton and blew it up?
No, they only care when Democrats spend money on stuff they can't tolerate, which seems to be just about anything and everything that actually helps people live in dignity and security. I have seen this cycle played out over and over again.
What is the first thing Bush did when he came in? Cut taxes on rich folks. Was that really what our country needed? Has it resulted in a better economy? Did it result in a balanced budget? No, quite the contrary. Yet, I see no acknowledgement of that reality by movement conservatism. Indeed, they seem to want to double down on it. Just the mere idea of going back to the tax structure in place during the Clinton administration brings on whining and gnashing of teeth and cries of "socialism!," communism," "class warfare," and on and on. That has nothing to do with fiscal responsibility. It has to do with playing on people's fears and invoking their tribalism to protect the interests of the benefactors and beneficiaries of the conservative movement.
There is no reasonable debate in this climate.
What is the first thing Bush did when he came in? Cut taxes on rich folks. Was that really what our country needed? Has it resulted in a better economy? Did it result in a balanced budget? No, quite the contrary. Yet, I see no acknowledgement of that reality by movement conservatism.
The reality most conservatives I know acknowledge contains some pretty sobering facts. When President Bush (II) took office the national debt was $5.768 trillion. When he left office it was $10.626 trillion. That's an increase of just over $607 billion per year. According to the National Debt Clock we now stand at $15.069 trillion. That is an annualized average increase of right at $1.5 trillion. I will agree with anyone who says part of that increase is caused by carry over from past policy because part of it is. Beyond that I'm really not interested in playing the blame game. It doesn't fix anything. I'm really tired of all the crying about how the other guys screwed the country up and will happily cast my vote for the candidate that has the kahunas to tell people that we need to raise taxes and cut spending (both) and even with that it will take a long time to get us out of this mess. Unfortunately that candidate isn't easy to find.
I do think that understanding where the deficit comes from *is* important -- including which political party is doing said actions.
I agree with rosebud's assessment, but lets also say that I would like to move forward away from "whose it was" and into "how we gonna fix?"
I would prefer an isolationist approach -- pull back on international stuff, take care of our citizens and clean house a bit -- and then when we have excess, we can help outside.
This is the fiscal approach in my home and business. I am not currently donating to charities because -- guess what? If i do, then i'll need charity. So, when i have extra income, I will donate to charity. UNtil then, no. It's just not prudent.
The reality most conservatives I know acknowledge contains some pretty sobering facts. When President Bush (II) took office the national debt was $5.768 trillion. When he left office it was $10.626 trillion. That's an increase of just over $607 billion per year. According to the National Debt Clock we now stand at $15.069 trillion. That is an annualized average increase of right at $1.5 trillion. I will agree with anyone who says part of that increase is caused by carry over from past policy because part of it is. Beyond that I'm really not interested in playing the blame game. It doesn't fix anything. I'm really tired of all the crying about how the other guys screwed the country up and will happily cast my vote for the candidate that has the kahunas to tell people that we need to raise taxes and cut spending (both) and even with that it will take a long time to get us out of this mess. Unfortunately that candidate isn't easy to find.
Great. Fine.
We'll put all that behind us. Roll up your sleeves. What do you propose to cut? What tax increases do you propose?
I do think that understanding where the deficit comes from *is* important -- including which political party is doing said actions.
+1. It didn't "just happen."
Great. Fine.
We'll put all that behind us. Roll up your sleeves. What do you propose to cut? What tax increases do you propose?
Can I play? 10% across the board. Everyone gets hurt. Just do it.
When I have confidence that you've done that (demonstrated and measured) then we will talk about tax hikes. Since I think hikes are necessary, I will go with them. But first, you have to prove to me that you are serious.
Can I play? 10% across the board. Everyone gets hurt. Just do it.
My opening salvo:
- Cut defense spending to the sum of the next 4 largest military budgets, China, France, the UK, Russia. That's surely "enough" to be the biggest kid on the block still, and would be a ~60% cut. If you want to cut more, and decide you are happy simply matching the next biggest spender, China, you can put in a ~85% instead.
- Cut farm subsidies, industrial subsidies, and corporate welfare, say by 100%. Charge fair market value for public land/resources made available to industry, and don't subsidize the sale or exploitation of our public resources.
- Cut 10% from everything else.
- Charge high tariffs on imported goods that don't meet our environmental standards in their production practices, to avoid having American consumers foist off the environmental costs of their consumption patterns on other people.
My opening salvo:
- Cut defense spending to the sum spent by sum of the next 4 largest military budgets, China, France, the UK, Russia. That's surely "enough" to be the biggest kid on the block still, and would be a ~60% cut. If you want to cut more, and decide you are happy simply matching the next biggest spender, China, you can put in a ~85% instead.
- Cut farm subsidies, industrial subsidies, and corporate welfare, say by 100%. Charge fair market value for public land/resources made available to industry, and don't subsidize the sale or exploitation of our public resources.
- Cut 10% from everything else.
- Charge high tariffs on imported goods that don't meet our environmental standards in their production practices, to avoid having American consumers foist off the environmental costs of their consumption patterns on other people.
This sounds like a pretty good plan to me. Sadly I'd put the likelihood of any of it happening (much less all of it happening) at pretty much 0%.
I can get on that, too, bae. i think that farm subsidies may still be functional IF they were not so specific, but otherwise, yeah. farms here in NZ are not subsidized -- food is much more expensive because of it, but you make it work. simplicity helps.
My opening salvo:
- Cut defense spending to the sum of the next 4 largest military budgets, China, France, the UK, Russia. That's surely "enough" to be the biggest kid on the block still, and would be a ~60% cut. If you want to cut more, and decide you are happy simply matching the next biggest spender, China, you can put in a ~85% instead.
- Cut farm subsidies, industrial subsidies, and corporate welfare, say by 100%. Charge fair market value for public land/resources made available to industry, and don't subsidize the sale or exploitation of our public resources.
- Cut 10% from everything else.
- Charge high tariffs on imported goods that don't meet our environmental standards in their production practices, to avoid having American consumers foist off the environmental costs of their consumption patterns on other people.
I can agree with this. I would cut the defense, the farm subsidies, and charge the tariffs, but I would look at everything else on a case by case basis. Some programs simply can not be cut because of an increasing population and need. After all, we're not trying to make life miserable here, this is the US, but I think the first 3 would certainly ease such things as medical, SS and other safety net programs, and leave plenty over to increase some programs like R&D in alternative energy, and deal with the deficit.
There's plenty to work with here but like jp1 said, chances of it happening are low. Now here is a good goal for the OWS!
Great. Fine.
We'll put all that behind us. Roll up your sleeves. What do you propose to cut? What tax increases do you propose?
I think bae tossed out some excellent starting points above. I totally agree that a slash in military spending is a logical place to begin. Lets close most of our military facilities outside the US for a start. The Army alone has 57 facilities listed in just Germany! Seems like we could knock that down to...one? Plus maybe keep the Ramstein Air Force base, but sell of the rest to German developers. Do the same in all the rest of the world, keeping only the most strategic listening posts for our own security. As long as we're cutting European military operations, lets get the hell out of NATO. We can keep the alliances, just sell the members planes and ships instead of (basically) paying them to take it. An interesting side study would be to see how long it takes 8 week European vacations to shrink to 2 when they have to fend for themselves.
Corporate subsidies? End them. Yes, phase them out over 3 or 4 years so the markets don't crash on the news, but that's it. It's sink or swim after that. The military is probably the biggest subsidy of all and that's already been addressed, but other established industries, like agriculture and banking, need to return to the free markets. And no more bail outs. For any company. Ever. One possible exception: we could back up our ag products on the world market until a bushel of wheat trades for a barrel of oil, straight up.
Incentivize education. Good teachers should be able to make good money. Bad teachers should do something else. Limit any school districts administration line items to say 15% of the total budget. Clear out the top heavy dollar suck and put the resources to work in the classroom. This will not save a huge amount, but it should result in a vastly more dynamic future tax payer base (remember, we have to have increasing revenue along with reducing spending).
End most foreign aid. Keep humanitarian aid following disasters because we should be the kind of people that do that, but cut most of the rest. Israel can stand or fall on its own. We don't need to be in the middle when they bomb Iran. Pakistani generals and the remaining totalitarian dictators can line their pockets with yuan instead of dollars, who cares? We don't have to become total isolationists, but lets let the world balance itself out without our thumb on the scale.
Legalize pot. Ok, it sounds silly, but it isn't. Yea, we would generate revenue from taxes and yea, we would clean up the streets a little and yea, we could cut our prison budget in half by releasing all the young black men that sold a dime bag. More importantly, we would take a lot of the power away from the Central American drug cartels. If we are going to pull in the reigns on our far flung enterprises we need secure borders and strong trading partners close to home. We need Mexico to be stable, but right now they are on the verge of collapse. We don't want to live next to a state that degrades to that point.
Infrastructure. My personal soapbox. We need to spend some of the savings from things above on our infrastructure. We have to vastly improve the ways we generate and use power, including developing every available domestic energy source. The grid has to get smart. We need everyone here to have access to the internet, preferably at high speeds. We need our rail system to be the envy of the world. We need to fix our roads and bridges and dams. All that is an investment in our future and needs to be viewed as such. It will increase mobility and make us more productive for generations to come. Increased productivity means increased revenue, we need that. Having an infrastructure that functions at a high level means an increased quality of life, we want that.
There are a whole lot of things I'm leaving out. We obviously need to address domestic spending on things like healthcare, social security, entitlement programs of all kinds, etc. But hey, you gotta start somewhere. Do the things above sound like a solid start or the rantings of a lunatic? From my house I can't see much downside to any of those, but see a significant potential upside in all of them. The exception might be not knowing what the world will look like without the US as policeman. What do you think?
iris lily
12-2-11, 10:33am
...
Incentivize education. Good teachers should be able to make good money. Bad teachers should do something else. Limit any school districts administration line items to say 15% of the total budget. Clear out the top heavy dollar suck and put the resources to work in the classroom. This will not save a huge amount, but it should result in a vastly more dynamic future tax payer base (remember, we have to have increasing revenue along with reducing spending)...
What do you think?
I think this is not the business of the Feds and its this kind of thinking that got us into this mess to begin with.
Care to explain?
Added: I think the responsibility to balance budgets goes far beyond just the Fed level. It won't do us much good to be a federation of 50 bankrupt states.
ApatheticNoMore
12-2-11, 1:04pm
I think this is not the business of the Feds and its this kind of thinking that got us into this mess to begin with.
actually basically had the same thought when passing through, believe it or not.
But not bad plans (especially Baes), I'd vote for it. Of course the *actual* choices I have to vote for not in fantasy land, but here in reality, are horrible (I'm not including 3rd parties in this). And the *actual* political situation so bleak that I don't know, it's really just depressing (and no wonder people are camping out in tents). Hell in a handbasket :~)
I think your ideas are solid, Gregg, including the school ideas. All our working towards being stronger, better won't mean squat without a well educated workforce to push it forward and into the future. Sometimes, Iris, investing in other people's kids will make your future better.
I think bae tossed out some excellent starting points above. I totally agree that a slash in military spending is a logical place to begin. Lets close most of our military facilities outside the US for a start. The Army alone has 57 facilities listed in just Germany! Seems like we could knock that down to...one? Plus maybe keep the Ramstein Air Force base, but sell of the rest to German developers. Do the same in all the rest of the world, keeping only the most strategic listening posts for our own security. As long as we're cutting European military operations, lets get the hell out of NATO. We can keep the alliances, just sell the members planes and ships instead of (basically) paying them to take it. An interesting side study would be to see how long it takes 8 week European vacations to shrink to 2 when they have to fend for themselves.
Corporate subsidies? End them. Yes, phase them out over 3 or 4 years so the markets don't crash on the news, but that's it. It's sink or swim after that. The military is probably the biggest subsidy of all and that's already been addressed, but other established industries, like agriculture and banking, need to return to the free markets. And no more bail outs. For any company. Ever. One possible exception: we could back up our ag products on the world market until a bushel of wheat trades for a barrel of oil, straight up.
Incentivize education. Good teachers should be able to make good money. Bad teachers should do something else. Limit any school districts administration line items to say 15% of the total budget. Clear out the top heavy dollar suck and put the resources to work in the classroom. This will not save a huge amount, but it should result in a vastly more dynamic future tax payer base (remember, we have to have increasing revenue along with reducing spending).
End most foreign aid. Keep humanitarian aid following disasters because we should be the kind of people that do that, but cut most of the rest. Israel can stand or fall on its own. We don't need to be in the middle when they bomb Iran. Pakistani generals and the remaining totalitarian dictators can line their pockets with yuan instead of dollars, who cares? We don't have to become total isolationists, but lets let the world balance itself out without our thumb on the scale.
Legalize pot. Ok, it sounds silly, but it isn't. Yea, we would generate revenue from taxes and yea, we would clean up the streets a little and yea, we could cut our prison budget in half by releasing all the young black men that sold a dime bag. More importantly, we would take a lot of the power away from the Central American drug cartels. If we are going to pull in the reigns on our far flung enterprises we need secure borders and strong trading partners close to home. We need Mexico to be stable, but right now they are on the verge of collapse. We don't want to live next to a state that degrades to that point.
Infrastructure. My personal soapbox. We need to spend some of the savings from things above on our infrastructure. We have to vastly improve the ways we generate and use power, including developing every available domestic energy source. The grid has to get smart. We need everyone here to have access to the internet, preferably at high speeds. We need our rail system to be the envy of the world. We need to fix our roads and bridges and dams. All that is an investment in our future and needs to be viewed as such. It will increase mobility and make us more productive for generations to come. Increased productivity means increased revenue, we need that. Having an infrastructure that functions at a high level means an increased quality of life, we want that.
There are a whole lot of things I'm leaving out. We obviously need to address domestic spending on things like healthcare, social security, entitlement programs of all kinds, etc. But hey, you gotta start somewhere. Do the things above sound like a solid start or the rantings of a lunatic? From my house I can't see much downside to any of those, but see a significant potential upside in all of them. The exception might be not knowing what the world will look like without the US as policeman. What do you think?
Thank you. I really like what you wrote and agree with most of it in principle. We want the same things. Better educational return for the money we put into school systems, more investment in infrastructure (and I like how you defined infrastructure), an end to the pointless and costly "war on drugs," an end to needless corporate subsidies, a re-evaluation and reduction in military entanglements and obligations. All sound good. I really appreciate the time you spent answering the question, and you are right. There is much we can agree on and we can have a real conversation about without tribalistic bickering.
Agree about ending the war on drugs which, along with treating drug abuse with medical care vs. mandatory long-term prison sentences, will save money and many lives.
All of this is great, and I agree with most of it. But politiicians need money for the next election. Ending the war on drugs, and the prison industrial complex, or ending 80% of the military industrial complex's slush fund budget, is not going to happen anytime soon because the politicians need the money from these sources to support their next re-election. And they won't get the money from these sources unless the agree to keep the scam going. Obama twice put up web surveys where "real" people could say what they thought was the most important issue of the day. Twice those surveys showed that "real" people wanted to end the stupid drug war and decriminalize pot. Two times those surveys got taken down and disappeared faster then a potential terrorist going to gitmo. The only way any of these ideas will have even a minimal hope of happening is if we implement true public financing of elections so that politicians have no reason to suck at the tits of all the special interests out there.
So 3 months off all at once is typical in Denmark?
The typical vacation is indeed 6 to 7 weeks. My friends have extended that by taking 3 months off - in some cases, using leaves of absences. IN some cases, combining it with "work" (in the case of a newsman), and in other cases, of taking their 3 months starting in November, so they use 6 weeks at the end of the year and 6 weeks at the beginning of the next year.
In all cases, my friends were well established - in their 30's - 50's, by the time they took more than 6 weeks at a time.
I kinda feel bad, really. We never visit them. I've been to Denmark 2x (1994 and 2002). Which are also the last 2x my spouse has been (though he grew up going). The Danes visit the US every 2-3 years, and when the do, they VISIT the US. It's not uncommon for them to start in NY (where DH's family is), visit DC, fly or drive to the Grand Canyon, then drive to So Cal to visit us, then drive to San Fran... I love seeing them when they come, but feel bad that we simply can't return the favor.
I get 18 days off per year and 9 holidays. We are now on the school schedule (my son is in kindergarten). I can cobble together enough vacation to take a 2-week stretch every 2 years, and those years we visit the East Coast (family). That leaves a 1-week vacation every year, and that's a long trip from California.
The typical vacation is indeed 6 to 7 weeks. My friends have extended that by taking 3 months off - in some cases, using leaves of absences. IN some cases, combining it with "work" (in the case of a newsman), and in other cases, of taking their 3 months starting in November, so they use 6 weeks at the end of the year and 6 weeks at the beginning of the next year.......
That's what I suspected. We've done the same on one of our trips to Europe.
I don't think it's that unusual for many U.S. workers to do the same for extended vacations.
That's what I suspected. We've done the same on one of our trips to Europe.
I don't think it's that unusual for many U.S. workers to do the same for extended vacations.
I'd be curious what your definition of many is. Personally I have only known two categories of Americans who could take more then 2 weeks at the absolute most for any one vacation: school teachers and people between jobs. Perhaps I've always worked in the wrong industries or consorted with people who aren't sufficiently established to be able to take that much time. Personally I have monthly goals that will always exist, as do my boss, my boss's boss, etc. For any of us to be gone longer then a couple of weeks would require that the company have someone else actually doing our job while we're out. My experience is that most American corporations aren't willing to pay that expense. YMMV.
I'd be curious what your definition of many is.
I'd say it's about the same as mm1970's definition of "a LOT".
MIL is from Denmark, we have a LOT of friends who live there. They are happy,
well-adjusted, have a ton of vacation, spend their money freely on their long
vacations (including 3 month world tours)....
Personally I have only known two categories of Americans who could take more then 2 weeks at the absolute most for any one vacation: school teachers and people between jobs. Perhaps I've always worked in the wrong industries or consorted with people who aren't sufficiently established to be able to take that much time. Personally I have monthly goals that will always exist, as do my boss, my boss's boss, etc. For any of us to be gone longer then a couple of weeks would require that the company have someone else actually doing our job while we're out. My experience is that most American corporations aren't willing to pay that expense. YMMV.
Yes, my mileage does vary. As a long time manager, with a well trained and motivated staff, I can easily afford to be away from the office for long periods of time, albeit with the minor inconvenience of routine check-ins via email and cell phone (company provided, of course). I don't find that terribly unusual.
As a self-employed person (hate that moniker, but at least most people understand what it is intended to mean) I can fairly easily decide to take an extended leave from daily duties. Day to day operations can be, and usually are, efficiently handled by professional contractors and/or a very few key employees. Any required direction from me can be delivered as easily through email or by phone as in person. I don't take advantage of the opportunity simply because our youngest DD is still in high school. When she is off to college that will change. That situation is completely by design and is something many business owners and professionals in any number of occupations could establish with only a little creativity and planning. It would be difficult for anyone who is paid hourly or who's position requires them to be physically present to pull off, but there are literally tens of millions of people in the US that could do this if they learned how. Europe does not have a monopoly on R&R, only a heightened sense of entitlement about it (IMO).
Reality defined by people who don't really live in it. !thumbsup!
Toward the end of my working years, I had between six weeks and two months off (paid vacation plus extra paid individual days). It never seemed enough, somehow...But then I was one of the lucky ones with union benefits--a vanishing breed.
ApatheticNoMore
12-6-11, 4:54pm
4 weeks after 5 years is the most generous vacation policy I've ever encountered in my employment. No no union, not government work.
Really peggy? You're just going to wave the snark wand and write off that pesky third of the country that would choose to get things done without the benefit of another program? I say do so at your own (party's) peril.
Here's a quick question (as long as we keep circling back to comparisons with Europe)... Of the 28 current members, which one pays the highest percentage of their GDP for NATO defense expenditures? Not the highest gross amount, that would be too easy because we all know that is the USA. Oh wait, its a trick question! The USA pays the highest percentage of their GDP at 5.4%. The Danes we've kind of singled out lately pay 1.4%. Pretty easy to live the life of Riley when someone else is paying the bills. Its time to admit that a lot of those bucolic little 'burgs are happy places because their lifestyles are heavily subsidized by the US (and to a lesser degree by the larger European economies). It seems other people's money really can buy happiness.
Another interesting twist on the Euro crisis- it seems the the profligate PIIGS have been propping up unsustainable lifestyles not just in their own countries but also in countries like Germany. Apparently a lot of that over-borrowed (and from a PIIG currency point of view, over valued) money is used to buy stuff from places like Germany, and Germany's export economy is supported by loaning people money to buy stuff they can't afford. Will be very interesting to see where all this shakes out over the next decade or so.
http://online.wsj.com/article/SB10001424052970203611404577046532948487236.html
http://www.washingtonpost.com/blogs/ezra-klein/post/austan-goolsbee-on-why-the-euro-zone-wont-survive/2011/08/25/gIQAZGvaCO_blog.html
ApatheticNoMore
12-6-11, 6:02pm
The USA pays the highest percentage of their GDP at 5.4%. The Danes we've kind of singled out lately pay 1.4%. Pretty easy to live the life of Riley when someone else is paying the bills. Its time to admit that a lot of those bucolic little 'burgs are happy places because their lifestyles are heavily subsidized by the US (and to a lesser degree by the larger European economies). It seems other people's money really can buy happiness.
But how much is the U.S. lifestyle subsidized? Well that's a very open question which could go in many directions, let's cut it down a bit. How much is it subsidized by having reserve currency status (really wonder what the U.S. would be without this and I can't not see this as a subsidy although one that won't be permanent). Is this what allows the Fed to float enough currency to bail out anything and everything in the U.S. and the world? How much is it dependent on that very military that costs more than all the other countries in the world combined? The military certainly represents a potential claim on resources (that definitely are not gotten by wonderful free market trade).
If you want to make the case that the U.S. is what .... on more stable footing? If so it would only be because the U.S. has a bigger military probably. Europe is the crisis du jour, for sure, but that is just du jour.
So Europe is a mess, the U.S. is a mess, yea I don't know that you will find a very stable long term economy in either of them, probably have to look elsewhere.
But how much is the U.S. lifestyle subsidized?
That really is the question, isn't it? There are a significant number of people in this country that want to cut back on subsidy at pretty much any level. To corporations, to individuals, to other countries. It might not make sense to swing an axe and cut them all off at the knees, but it gets pretty hard to justify borrowing money to keep any of them going. I look at the military more as a vehicle than as an end of its own. Its a very big and very expensive tool. The capacity of our military, or the threat of retaliation by those forces, allows us to do a lot of things. Interesting thing is that if we stop doing them we wouldn't need the military any more. Before we cut that part of the budget by 80% or whatever we better get the rest of our house in order so we don't need that level of defense. That's my only real reservation when it comes to that type of budget cutting.
ANM, I think you are totally correct that currency manipulation can work in favor of the US and certainly reserve currency status does. It doesn't seem to fit my own definition of a subsidy, but I suppose you could make a point that everyone who deals in dollars gets a bailout under this system. Seems like a stretch to me, but right now I just don't have a clear enough understanding of how its all tied together to form a really solid opinion.
One of the ways that being the reserve currency seems to have enabled the US lifestyle to be subsidized is that Fed over-creation of money has enabled us to have an ongoing huge trade deficit with China, to the tune of over a trillion dollars at this point. Back under the Bretton Woods system we simply couldn't have run this kind of trade deficit. Now we can because the Fed prints limitless quantities of money and the Chinese government then recycles that money back into Treasuries. Essentially the CHinese govt swaps the dollars its industries have received from us for Chinese yuan and then loans that money back to us. The US consumer benefits by being able to buy cheap chinese goods that have, in a roundabout way, been paid for by loans to the US government. As long as they keep buying treasuries this can continue. If/when the day comes that they decide they don't need us anymore they could simply flood the market with Treasuries and destroy, or at least seriously damage, our economy quite quickly.
In the meantime, until they get to that point where they don't feel they need us anymore they seem to be buying up physical resources around the world with as many dollars as they can spend. if we didn't have the world's reserve currency, and hence most commodity goods like the chinese are buying are priced in dollars, it's likely China would have already reached the breaking point where they didn't want any more dollars. FOr now, though, they loan enough of their dollars back to us to keep the game rolling and spend the rest on every 'real' thing they can get their hands on.
Really peggy? You're just going to wave the snark wand and write off that pesky third of the country that would choose to get things done without the benefit of another program? I say do so at your own (party's) peril.
Here's a quick question (as long as we keep circling back to comparisons with Europe)... Of the 28 current members, which one pays the highest percentage of their GDP for NATO defense expenditures? Not the highest gross amount, that would be too easy because we all know that is the USA. Oh wait, its a trick question! The USA pays the highest percentage of their GDP at 5.4%. The Danes we've kind of singled out lately pay 1.4%. Pretty easy to live the life of Riley when someone else is paying the bills. Its time to admit that a lot of those bucolic little 'burgs are happy places because their lifestyles are heavily subsidized by the US (and to a lesser degree by the larger European economies). It seems other people's money really can buy happiness.
You are mistaken Gregg. Or rather you mistake me. I never said i wanted the government to 'mandate' vacation. That would be about the silliest thing ever, wouldn't it. Free market competition, and unions, should be the ones to hash this out. I was just commenting on the 'reality' that millions of Americans could take weeks and weeks of vacation while just phoning in their jobs. That's the part that's, in my opinion, not really based in reality. Unless, of course, you are counting retired Americans. or unemployed Americans. or very wealthy Americans, although it has been my experience they are even more tied to their jobs. But among the working Americans, precious few can take a month or more (or really more than 2 weeks) vacation, even if they phone it in. Don't mistake my admiration for the European system as some kind of blind belief that it's perfect. It's not. I know, i lived there.
That really is the question, isn't it? There is a significant number of people in this country that want to cut back on subsidy at pretty much any level. To corporations, to individuals, to other countries. It might not make sense to swing an axe and cut them all off at the knees, but it gets pretty hard to justify borrowing money to keep any of them going. I look at the military more as a vehicle than as an end of its own. Its a very big and very expensive tool. The capacity of our military, or the threat of retaliation by those forces, allows us to do a lot of things. Interesting thing is that if we stop doing them we wouldn't need the military any more. Before we cut that part of the budget by 80% or whatever we better get the rest of our house in order so we don't need that level of defense. That's my only real reservation when it comes to that type of budget cutting.
ANM, I think you are totally correct that currency manipulation can work in favor of the US and certainly reserve currency status does. It doesn't seem to fit my own definition of a subsidy, but I suppose you could make a point that everyone who deals in dollars gets a bailout under this system. Seems like a stretch to me, but right now I just don't have a clear enough understanding of how its all tied together to form a really solid opinion.
I think like 40 cents on the dollar for government spending is funded on debt? If that's not a subsidy I don't know what is.
This country is going to look very different if/when we knock out that 40 cents - even more so if we ever go after the debt.
You are mistaken Gregg. Or rather you mistake me. I never said i wanted the government to 'mandate' vacation. That would be about the silliest thing ever, wouldn't it. Free market competition, and unions, should be the ones to hash this out. I was just commenting on the 'reality' that millions of Americans could take weeks and weeks of vacation while just phoning in their jobs. That's the part that's, in my opinion, not really based in reality. Unless, of course, you are counting retired Americans. or unemployed Americans. or very wealthy Americans, although it has been my experience they are even more tied to their jobs. But among the working Americans, precious few can take a month or more (or really more than 2 weeks) vacation, even if they phone it in. Don't mistake my admiration for the European system as some kind of blind belief that it's perfect. It's not. I know, i lived there.
Fair enough peggy. Seems like we're talking around each other again. I don't believe you, or anyone else who is sane, wants to mandate vacation time. They don't even do that in Europe (well, not exactly anyway). There are lots of angles to this. Maybe its as simple as defining what a vacation is. To me, if I'm on a beach in Mexico and spend an hour a day emailing and making a few calls then go fishing and toss back a few Coronitas the rest of the day, that's a vacation. I don't need to have time that is completely disconnected and, in the work sense, unproductive in order to recharge. YMMV, but millions of small business owners, consultants, accountants, lawyers, researchers, writers, artists, etc. can do the same thing.
One spot we like to head to always has a large number of French tourists "escaping" for their holiday. I have come to know quite a few of them. The situation I described above (where they remain connected) is the norm in that group, not the exception. They've figured out how to make things work without being physically present all the time. To say everyone in the US could do it would not be reality. To say a huge number of Americans can is reality, and that's all I said. It definitely favors the higher end of the education curve and non-service, non-manufacturing oriented sectors of the economy, but solving that part of the equation needs a thread of its own.
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