A Hedge Fund Republic?

[Ducimus]

http://www.nytimes.com/2010/11/18/op...stof.html?_r=1

So many big words...........he must be smart or...hiding his not so smart.

The folks would rather be spoken to like people than pussified ivy league.

People are tired of being talked down to.

[Takeda Shingen]

Yes, if he'd only use 'refudiate'.

Originally Posted by Takeda Shingen

Yes, if he'd only use 'refudiate'.

Or that there are 57 states.

[Takeda Shingen]

Bottom line is that if that an op-ed on the problem is too difficult for you to read, you probably don't have any business discussing it.

[mookiemookie]

Originally Posted by Ducimus

http://www.nytimes.com/2010/11/18/op...stof.html?_r=1

And if you want to know why politics is the way it is, you simply follow the money.

I heartily recomment Matt Taibbi's Griftopia. Reading it now and loving it:

The financial crisis that exploded in 2008 isn’t past but prologue. The stunning rise, fall, and rescue of Wall Street in the bubble-and-bailout era was the coming-out party for the network of looters who sit at the nexus of American political and economic power. The grifter class—made up of the largest players in the financial industry and the politicians who do their bidding—has been growing in power for a generation, transferring wealth upward through increasingly complex financial mechanisms and political maneuvers. The crisis was only one terrifying manifestation of how they’ve hijacked America’s political and economic life.

[tater]

Pretty stupid op-ed.

One way to examine that decision is to put aside all ethical considerations and simply look at where tax dollars will do more to stimulate the economy. There the conclusion is clear: You get much more bang for the buck putting money in the hands of unemployed people because they will promptly spend it.

In contrast, tax cuts for the wealthy are partly saved — that’s both basic economic theory and recent history — so they are much less effective in creating jobs.

The unemployed will spend it at walmart—your fave place. I guess that stimulates China to buy more T-bills, so maybe he's right.

The rich, he says, will "save" the money, not "spend" it. How, pray tell, will the rich save the money? Stuff it into fine linen mattresses? Cause that's what they'd have to do for it not to be spent. That MUST be what he means. If they invest the money it is spent by the companies to grow their business (you know, hire people, buy raw materials, etc). Maybe they WILL waste it by putting it someplace safe—like T-bills or munis. What else might they spend their disposable money on (it is THEIR money, after all we are talking about, just money not confiscated by the feds)? Another house? Who remodels the house? Who builds the furniture? Do they buy stuff to furnish from China at walmart? Do they buy chinese melamine cabinets at lowes? No, they hire a cabinet maker. They buy higher end stuff—the stuff expensive enough that Americans can make money doing the work—craftspeople.

That article is rubbish.

[mookiemookie]

Originally Posted by tater

Pretty stupid op-ed.



The unemployed will spend it at walmart—your fave place. I guess that stimulates China to buy more T-bills, so maybe he's right.

The rich, he says, will "save" the money, not "spend" it. How, pray tell, will the rich save the money? Stuff it into fine linen mattresses? Cause that's what they'd have to do for it not to be spent. That MUST be what he means. If they invest the money it is spent by the companies to grow their business (you know, hire people, buy raw materials, etc). Maybe they WILL waste it by putting it someplace safe—like T-bills or munis. What else might they spend their disposable money on (it is THEIR money, after all we are talking about, just money not confiscated by the feds)? Another house? Who remodels the house? Who builds the furniture? Do they buy stuff to furnish from China at walmart? Do they buy chinese melamine cabinets at lowes? No, they hire a cabinet maker. They buy higher end stuff—the stuff expensive enough that Americans can make money doing the work—craftspeople.

That article is rubbish.

The idea that trickle down economics works is rubbish.

[tater]

Originally Posted by mookiemookie

The idea that trickle down economics works is rubbish.

It works just fine. That's how all economies would be naturally. Any other system is only possible at gunpoint. Black markets are "natural" economies. What do they look like?

My definition of "works" of course is likely different. I have no particular social goal in mind at all other than people get to keep what they earn.

[Ducimus]

I have to admit, i don't see how trickle down works. Not when your 401K match is stopped. You recieve no more raises, no more bonuses, no more nothing. Meanwhile, the big exec types are rolling in clover. Explain that trickle down to me again? Oh right.. i should be grateful im employed at all. I could be in a cardboard box.

[tater]

Originally Posted by Ducimus

I have to admit, i don't see how trickle down works. Not when your 401K match is stopped. You recieve no more raises, no more bonuses, no more nothing. Meanwhile, the big exec types are rolling in clover. Explain that trickle down to me again? Oh right.. i should be grateful im employed at all. I could be in a cardboard box.

Every penny earned by anyone is spent unless it is literally shoved in a hole in the ground or in a mattress.

That exec ends up employing many people outside his actual business employees, just via this spending. He has employees that mow their own lawns... he has 3 lawns, and pays people to mow all of them. The employee hires 0 people, he hires 3! His trophy wife spends a gajillion bucks redecorating the perfectly fine (super nice!) house they just bought in Aspen... the remodellers in Aspen get work redoing a house that doesn't even need to be redone. He has multiple cars. Many made in the US (even if they are a Benz, etc). He buys artisanal cheese, and overpriced organic food, grown locally. The list goes on.

The employee buys stuff fresh off the cargo container at walmart. Go china!

[mookiemookie]

Originally Posted by Ducimus

I have to admit, i don't see how trickle down works. Not when your 401K match is stopped. You recieve no more raises, no more bonuses, no more nothing. Meanwhile, the big exec types are rolling in clover. Explain that trickle down to me again? Oh right.. i should be grateful im employed at all. I could be in a cardboard box.

That's the whole point. Proponents say that giving financial incentives to the highest earners are supposed to somehow help out everyone.

If you take money away from someone (i.e. higher taxes) they work harder to replace it. Trickle down economics also relies on the idea that wages have a direct correlation to hours worked - which is not true. Wages are inelastic to hours worked. The majority of people work salaried jobs where their hours are set. A change in wages are not going to equate into a change in hours worked.

Trickle down proponents also say that inequality is supposed to motivate lower earners to work harder to bridge the gap - that doesn't happen. Studies have shown that higher rates of income inequality lead to lower growth rates. Indeed, it's been found that higher equality leads to higher growth rates: http://www.dallasfed.org/research/ec...08/el0801.html

Not to metion that any metric of tax rates, both top marginal and effective (lord knows tater and I have gone round and round about that) do not have any measurable or meaningful correlation to any generally accepted metric of economic prosperity (GDP, wage growth or employment). If you want to weasel around that and use your own strange metric where tax rates do show a correlation, know that it doesn't hold water according to meaningful economic theory.

Trickle down theory fails in terms of both empirical and historical evidence, along with generally accepted economic theory.

Bottom line is if you don't know how many states are in the union you are more than queer. It is much worse than coining refudiate.

[Takeda Shingen]

Originally Posted by The Third Man

Bottom line is if you don't know how many states are in the union you are more than queer. It is much worse than coining refudiate.

Hey, you're the one whining about big words. Refudiate that.

[tater]

In the context of STIMULUS, (the OP op-ed's point re: tax dollars), then I think trickle down is spot on. The poor will spend the money on cheap crap, disproportionately imported from China (even FOOD these days).

This doesn't help the American economy much IMO.

Maybe it's because I have friends who do work like kitchen remodels, or cabinet makers, artists, tile makers, yard work, etc. Their customer base is all people with disposable income, and they and their employees have kids to feed.

I'd be interested to see the breakdown of what % of a given dollar value spent stays in the US for given income ranges, and if it leaves, to which countries... that would be fascinating.