Capital in the 21st Century by Thomas Piketty

Doubters of r > g DEARS

One does not need Piketty's numbers or anyone elses' to note
that r > g is qualitatively true by being self evident.

"r", and r > g is the basis of the Judeo Economic Model adopted by Christians in the Renaissance which unlike Muslim Economics or Old Time Christian Economics, allows "r".


Moi

r > g
yes it is

No ​

 

Conservative economic policies have been such a drag on the economy for the past 3 or 4 decades. It puts existing wealth in front of innovation, and holds back growth. That's why the US has generally done better under the leadership of Democrats than Republicans.

 

Look at the transistor, microchip, computers, internet and other things that came out of government run or funded R&D programs. He's listing the ones that had the largest interventionism.

 

It's yet another instance of the right being unable to bring forth valid arguments in support of their economic ideology, or to attack economic writing that does identify the problems the world faces with inequality dragging down growth.

 

BS for multiple reasons. The US has been steadily moving away from actual conservative economic policies since the 1930's. Today we operate as an oligarchy, cronyism rules the day. http://www.princeton.edu/~mgilens/G...ens and Page 2014-Testing Theories 3-7-14.pdf

There is minimal difference between the "progressives" running the D party and the Republican establishment. They each publicly speak different words to maintain the illusion of a 2 party system, but their actions clearly show they have the same agenda. The Repub establishment is just on slightly slower train to the same destination.

We are in the current mess because of "progressive" policies, not conservative policies. Wake up, see through the propaganda.

 

Oligopoly is a conservative ideal. It was liberal policies that reduced those oligopolies' impact on Western style governments.

I always know when someone is being lazy intellectually when they say "both sides are the same" when they have widely divergent views, goals and results. If you're decrying that our nation's voters are picking widely divergent representatives, who cancel each other out, then I'd respect the thought, as it's based in reality and less on sloppy thinking.

I am, which is why I'm trying to help you see through the BS you're repeating.

It's not progressive policies advancing deregulation that brings on huge market failures, like the Great Depression or Great Recession. It was a conservative ideology goal to do that. Yes, many Democrats got sucked into helping it along. But, look at how they've since rejected it in favor of better regulation that fosters growth without the huge, systemic failures of conservative ideology.

 

The US is an oligarchy, not oligopoly. They are not the same.

And I know when someone is lazy when they confuse oligarchy and oligopoly.

And I did not say "both sides are the same", I wrote " the "progressives running the D party and the Republican establishment" were the same. The moderates and true liberals in the D party are powerless small minorities at this point with no future. The true conservatives in the R party are weak but attempting to grow.

You have to get beyond the rhetoric and public games of the "progressives" and the establishment Republicans and focus on their actions. That's the difference between us, I see through the rhetoric and focus on their actions, you are stuck in the rhetoric designed to misdirect your attention.

More propaganda.

 

two different conservative ideals.

A mistake. At least it's not a belief in provably wrong economic ideals like Austrian School or Neoclassical macroeconomics.

meh. You're calling them minorities, then not minorities. Sloppy and lazy of you.

You're parroting the rhetoric. You're parroting empty words that have no relevance to dealing with the economic realities of today. I'm not the one needing to get past the rhetoric. I'm looking at the policies.

parrot that again for me. I haven't gotten my fill of your empty rhetoric. .

 

To advance your thinking you need to leave the linear political model behind and step up to 2 dimensional thinking. Spend some time on something like this
http://www.politicalcompass.org/analysis2
or look up the Nolan Chart

The linear "right v left" or "conservative v liberal" thinking is obsolete. Oligarchy is statism, and there are multiple ways to get there.

 

Political compass? LOL. A neat toy, but it really doesn't even get to all of the nuances of political ideology. There's not really a truly good way to categorize political thinking.

That said, for the purposes of the discussion, conservative being used for those who advocate for failed ideas like Neoclassical economics, Austrian School, and Real Business Theory (I know... RBC flamed out rather quickly, didn't it?). Just a decade or two ago, Milton Friedman was considered a conservative lion. Now? He'd be laughed out of a room of Republicans. In the meantime, the more liberal/progressive factions of politics are trying to correct for the market failures using tried and true methods. Conservatives are up at arms and trying their damnedest to muddy the waters.

Yes, I understand you want to change the accepted norms of use for the word "conservative". No, I won't play along. Let's stick to the merits of Piketty's work, and why arguments against it are falling apart.

 

Why?

How is our infrastructure keeping us behind other nations? How is it hampering wealth creation now?

"Invest" you mean spend more? Prove spending more will improve education, we are spending more than ever and education spending as regularly outpace inflation.

Please tell us how they are being restricted

How does that help anything, we are now finding out the harm the 99 weeks of unemployment has cause to the labor force as since it has been ended the unemployment rate is dropping.

What laws and strengthening how?

What happened to supporting business and commerce and free markets and investment to create jobs and put people back to work so they don't need safety nets can put the education they receive to work don't need unions to take their money to line their pockets and can start earning top incomes and creating their own wealth?

 

No I am completely right

http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=161

 

To keep deficits low and to increase spending on infrastructure construction and maintenance, education, and other stuff that keeps the US competitive in the global markets. That includes safety net spending, and even R&D programs.

Other nations are able to, or becoming able to, move goods and people faster and more efficiently. And this is even starting to become true with electronic means of communication. Another issue is energy costs, where the transmission system we have is falling behind other developed nations in some cases. If we can make the costs cheaper for businesses, then the money tends to get reinvested to some degree. Coupled with higher Wages for working people, consumption gets increased and profits rise.

Other nations are able to educate their citizens effectively and cheaply compared to the US, particularly in higher education. There would be chances to reduce costs as well in some areas.

the NLRB has tended to only allow majority representation to make a union the bargaining unit. The Wagner Act allowed for smaller bargaining units to be recognized. And, to limit the company thuggery in curtailing votes for unions, there should be a shorter window to setting up the election. Card check is also an option that makes a lot of sense.

There was no harm from the extended unemployment benefits, and they helped quite a bit. And the unemployment rate has partly fallen because they were simply not counted as unemployed, because they officially dropped out of the labor force. Often, that means people on welfare, early retirements made far earlier and with less money for the golden years (hurting demand for decades). The conservative economic ideal is to see more poverty and less prosperity. The PPACA has lowered the rate of inflation in health care costs, but more could be done if the GOP stops obstructing that, too.

Wage theft has been a huge problem with companies like Walmart. So, strengthening penalties against companies that steal from their workers is a smart thing to do, by making sure that all hours and compensation are properly paid to employees, or the company facing serious penalties of repayment with interest and penalty payments to employees. Stronger protections for benefits and pensions (defined benefit pensions outperform defined contribution plans in the vast majority of cases). As above, allowing people to freely join unions. Protections against unjust firings.

Republicans and economic conservatives oppose that, for some reason. Keynesian policies generally allow that, but as was shown in the post-WWII economy, regulations that promote growth and don't stifle it, stronger benefits and pensions, less inequality, and works best.

There have to be jobs to go to.

As proven by the past three decades, unions are needed now more than they have since before WWII. And they don't "line their pockets" with dues. The dues cover expenses for the representation the unions provide to members (and freeloading non-union members).

Frankly, you're trying to live a pipe dream that has never happened in history. The years of strongest growth and best prosperity were in the age of high top marginal income and corporate taxes, high unionization, and high infrastructure spending g, to put the US ahead of everyone else. We're falling behind as the effects of trickle down continue to fail.

 

Carter and Volcker ended the Nixon/Ford malaise (and much of it was just because oil shocks in the 1970s caused stagflation). Reagan was just there to take the credit for policies that started before he was even elected to President.

There's no policy that Reagan enacted that ended the mess of the late-1970s.

- - - Updated - - -

Carter and Volcker ended the Nixon/Ford malaise (and much of it was just because oil shocks in the 1970s caused stagflation). Reagan was just there to take the credit for policies that started before he was even elected to President.

There's no policy that Reagan enacted that ended the mess of the late-1970s.

 

If a man walks into mission control during a launch and says to the team "I have been watching you work for years and I want to lead this team through this launch", the whole room would laugh out loud and then throw the bum out on his ear. If an architect drawing up plans for a 400 story building was forced to have his plans reviewed by a finish carpenter, I am sure he would quit on the spot. Say a heart surgeon had to give the scapel to a butcher during a heart transplant, would you feel better if you were the patient? Economics of the type Piketty has practiced is a very, very technical discipline. Unless you have a PHD in Economics and have done the research and submitted your findings to peer review, you are as able to critique him as the laymen I just described. Science is best left to scientists and economics as complex as this is best left to the experts. As with climate science, this issue has become politicized not by the experts but by the expert political hack.

 

There's a problem with this kind of thinking.

Look at John Taylor, who holds a PhD in Economics, or Art Laffer, or Greg Manikw. They consistently show their lack of economic understanding in their statements and writings. Holding the PhD is great, but the knowledge and ability to see the subject clearly is what counts. Many economists earn PhDs in microeconomic studies, then make pronounce nets on macroeconomic issues. Some understand macro, while others do not.

An understanding of the economic history, and understanding of the empirical evidence, is what really separates economists. Joe Stiglitz, Paul Krugman, Brad DeLong, Jared Bernstein, among others, get it on macro.

 

Well you are quite accurate here which is why these men have conferences and debates among peers which tend to sort them out. When a Laffer becomes part of the political wing of economics by participating in ideological debates and movements, they lose whatever reputation they once earned and become just hacks in a sea of hacks. The Piketty research has been open, fully documented and explained. He is not hiding anything. This is how research is done. Laffer made his famous curve a darling of Ronnie and was adopted as a means of justifying austerity measures without any real research, data or proof for his assertions. His idea was pure math, theory instead of practice. This reveals the fallacy of logic which anyone can fall into by using logic and math instead of data, research, test and analysis. If you start with an idea that you think is true and then use that to prove a logical progression, you will get bad results. I believe that a PHD is necessary to be a real critic of these types of very complex issues but that does not mean that some kid somewhere with a giant mind is not capable of critiquing them, it just means that it takes a giant mind to really critique another giant mind.

 

That r > g is out of balance with "their" numbers and the world is evidenced by the difference in all the recent recoveries between Main St. and Wall St.
All "their" numbers serve Wall St.

It doesn't get more self evident than that.


Moi

r > g
Is Out Of Balance !

No ​

 

There were no merits and apparently he is admitting the merits are lacking and referring to other works now

Why Piketty's Wealth Data Are Worthless
Private retirement plans rose to $12.4 trillion in 2012 from $875 billion in 1984. None of it is reported on tax returns.

By ALAN REYNOLDS
July 9, 2014 6:39 p.m. ET
No book on economics in recent times has received such a glowing initial reception as Thomas Piketty's "Capital in the Twenty-First Century." He remains a hero on the left, but the honeymoon may be drawing to a sour close as evidence mounts that his numbers don't add up.

Mr. Piketty's headline claim is that capitalism must result in wealth becoming increasingly concentrated in fewer hands to a "potentially terrifying" degree, on the grounds that the rate of return to capital exceeds the rate of economic growth. Is there any empirical evidence to back up this sweeping assertion? The data in his book—purporting to show a growing inequality of wealth in France, the U.K., Sweden and particularly the United States—have been challenged. And that's where the story gets interesting.

In late May, Financial Times economics editor Chris Giles published anessay that found numerous errors in Mr. Piketty's data. Mr. Piketty's online "Response to FT" was mostly about Europe, where the errors Mr. Giles caught seem minor. But what about the U.S.?

Mr. Piketty makes a startling statement: The data in his book should now be disregarded in favor of a March 2014 Power Point presentation, available online, by Mr. Piketty's protégé, Gabriel Zucman (at the London School of Economics) and his frequent co-author Emmanuel Saez (of the University of California, Berkeley). The Zucman-Saez estimates, Mr. Piketty says, are "much more systematic" and "more reliable" than the estimates in his book and therefore "should be used as reference series for wealth inequality in the United States. . . (rather than the series reported in my book)."

Zucman-Saez concludes that there was a "large increase in the top 0.1% wealth share" since the 1986 Tax Reform, but "no increase below the top 0.1%." In other words, all of the increase in the wealth share of the top 1% is attributed to the top one-tenth of 1%—those with estimated wealth above $20 million. This is quite different from the graph in Mr. Piketty's book, which showed the wealth share of the top 1% (which begins at about $8 million, according to the Federal Reserve's Survey of Consumer Finances) in the U.S. falling from 31.4% in 1960 to 28.2% in 1970, then rising to about 33% since 1990.

Enlarge Image

David Gothard
In any event, the Zucman-Saez data are so misleading as to be worthless. They attempt to estimate top U.S. wealth shares on the basis of that portion of capital income reported on individual income tax returns—interest, dividends, rent and capital gains.

This won't work because federal tax laws in 1981, 1986, 1997 and 2003 momentously changed (1) the rules about which sorts of capital income have to be reported, (2) the tax incentives to report business income on individual rather than corporate tax forms, and (3) the tax incentives for high-income taxpayers to respond to lower tax rates on capital gains and dividends by realizing more capital gains and holding more dividend-paying stocks. Let's consider each of these issues:

• Tax reporting. Tax laws were changed from 1981 to 1997 to require that more capital income of high-income taxpayers be reported on individual returns, while excluding most capital income of middle-income savers and homeowners. This skews any purported increase in the inequality of wealth.

For example, interest income from tax-exempt municipal bonds was unreported before 1987—so the subsequent reporting of income created an illusory increase in top incomes and wealth. Since 1997, by contrast, most capital gains on home sales have disappeared from the tax returns of middle-income couples, thanks to a $500,000 tax exemption. And since the mid-1980s, most capital income and capital gains of middle-income savers began to vanish from tax returns by migrating into IRAs, 401(k)s and other retirement and college savings plans.

Balances in private retirement plans rose to $12.4 trillion in 2012 from $875 billion in 1984. Much of that hidden savings will gradually begin to show up on tax returns as baby boomers draw them down to live on, but they will then be reported as ordinary income, not capital income.

Tax law changes, in summary, have increased capital income reported at the top and shifted business income from corporate to individual tax returns, while sheltering most capital income of middle-income savers and homeowners. Using reported capital income to estimate changing wealth patterns is hopeless.

• Switching from corporate to individual tax returns. When individual tax rates dropped from 70% in 1980 to 28% in 1988, this provoked a massive shift: from retaining private business income inside C-corporations to letting earnings pass through to the owners' individual tax returns via partnerships, LLCs and Subchapter S corporations. From 1980 to 2007, reports the Congressional Budget Office, "the share of receipts generated by pass-through entities more than doubled over the period—from 14 percent to 38 percent." Moving capital income from one tax form to another did not mean the wealth of the top 1% increased. It simply moved.

• Tax rates and capital gains. There were huge, sustained increases in reported capital gains among the top 1% after the capital-gains tax was reduced to 20% from 28% in 1997, and when it was further reduced to 15% in 2003. Although more frequent asset sales showed up as an increase in capital income, realized gains are no more valuable than unrealized gains so realization of gains tells us almost nothing about wealth. Similarly, a portfolio shift from municipal bonds, coins or cash into dividend-paying stocks after the tax on dividends fell to 15% in 2003 might look like more capital income when it was merely swapping an untaxed asset for a taxable one.

In his book, Mr. Piketty constructed estimates of top wealth shares, decade by decade, melding and massaging different kinds of data (estate tax records, the Federal Reserve's Survey of Consumer Finances). These estimates are suspect in their own right; but as we now learn from Mr. Piketty's response to Mr. Giles, we can ignore them.

Yet Mr. Piketty's preferred alternative, the Zucman-Saez slide show, is also irreparably flawed as a guide to wealth concentration. Mr. Piketty's premonition of soaring U.S. wealth shares for the top 1% finds no credible support in his book or elsewhere.

http://online.wsj.com/articles/alan-reynolds-why-pikettys-wealth-data-are-worthless-1404945590

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ROFL oh please don't tell us you actually still give Krugman any credence.

 

Already dealt with in post 61 - http://www.politicalforum.com/showthread.php?t=357154&page=7&p=1064032340#post1064032340

 

Not True bobov
Sure you offer the usual Wall St. serving economic numbers showing everything is "great",
but you do not explain the discrepancy of the Clinton/Bush/Obama recoveries between Main St., and Wall St.

Have we hit the limits of Judeo Capitalism as it was adopted by "The West" ?
http://www.barnesandnoble.com/listing/2691613718802?r=1&cm_mmc=GooglePLA-_-Book_15To24-_-Q000000633-_-2691613718802
Remember -<see link below>
http://www.motherjones.com/politics/2011/02/income-inequality-in-america-chart-graph
I bet if this article were updated today it would be worse at a logarithmic pace since the original article.

That's better in bobov world.

Moi

r > g
Look at Main St. vs Wall St !

No ​

 

It's an old story that big businesses grow at the expense of small businesses. That's because they can offer more for less. Wal-Mart was built by millions of customers fleeing good ol' mom and pop stores for the lower prices, greater selection, and better quality of Wal-Mart. Nothing sinister about "Wall Street vs. Main Street." People who are only sentimental hobbyists about business may have trouble understanding.

Have you read your link to Barnes & Noble? You, a Jew, refer to an anti-Semitic pre-WW1 German screed to mischaracterize capitalism? I think/hope you're just trying to be provocative.

As if primitive German anti-Semitism were not enough, you turn to the idiot lefty scandal-sheet "Mother Jones." The subtitle of your linked article explains it all - "Eleven charts that explain what's wrong with America." People who think they already know there's something wrong with America and now just want the details are not exactly good people.

The article only says two things - some people have more money than others, and this is bad. But they're wrong. Inequality is good because people are unequal in what they do, so a society which enforces equality is unjust. The only people who want enforced equality are those who know they can't cut it, so their best hope is to invent an upside down morality which rewards people for breathing.

Shame on you, Moi, for passing off this tripe as serious thought.

 

I have Werner's book on my book shelf. So does my history co study friend.
The commentary you cite is written after WW2. The book was written before WW1.
Consider how P.C. changed when referring to Jewish history.

While I watched Eugen Weber's World History (Christian European History) on PBS, I contacted him while he was a professor of History at UCLA. I stated his history lacked history when the Italian Banks just appeared in the renaissance with no reference to "Jewish" bankers fulfilling this un-Christian profession previously. Did the Italians just, de novo, invent Banks ?
After a time we spoke again and Dr. Weber agreed and gave me the Werner S book and another as a reference.

When you find an objectionable passage in the book, please let me know.
But, don't lay your PC,secondarily referenced tripe on Moi, unless it is in a bowl of menudo !

For you Texas people, I also have an old copy of, "The Raven" by Marquis James.
And I also have a 1911 copyright Encyclopedia Britannica.
Jews and Modern Capitalism fits right into my prized, old books.


Oh, bobov
Why Is There mismatch between the recoveries on Wall St. and Main St. ?
Don't obfuscates or prevaricate on that anymore nor
make these, your actions, the topic - and further these behaviors by doing so.
Simply, why the mismatch of recoveries ? Main St. vs Wall St.
If you say it ain't so - you are so alone on the political spectrum.


Moi

r > g

No ​

 

You're right, Moi. Before WW1 anti-Semitism was approved by polite society. I guess that makes it OK. I won't speculate as to why you and your friend have the book, but you know that in our generation there were many anti-Semitic Jews who changed their names, displayed Christmas trees, etc. There were even "patriotic" Jews who supported Hitler.

Banking, whatever it was called, has always been necessary. Even the bible mentions "moneylenders" - with disapproval. Banking wasn't invented in the renaissance. The Code of Hammurabi, the first written law, deals largely with rules of commerce. I remember seeing a PBS special called "Onka's Big Mokka" about a New Guinea tribesman who conducted a "mokka" - a public ceremony in which he repaid a loan of pigs by returning a greater number of pigs. So even a society without currency has interest-bearing loans. Jews have no special role. Christianity has a perverse disapproval of lending at interest (despite the Vatican Bank), so Christians who wanted and needed banks served themselves while remaining "pure" by forcing Jews to be bankers. So one might say that Christians invented the Jewish banker.

Regarding recoveries, I've pointed out some of the differences between large and small businesses. The big businesses, which are those served by Wall Street, can prosper even as small Main Street businesses die. As I explained, this is the people's choice because they prefer what big businesses give them. The nature of capitalism is to respond to the marketplace - the people. Only in the centralized economies of socialism can government planners ignore the needs and wishes of the people. And that's neither tripe nor menudo. It's the truth.

 

Find me an offensive line in the book and stop parroting
what someone may have written long ago and endlessly regurgitated.
The book lays out that Europeans learned capitalism from the Jews. How anti Semitic. How true.
Dr. Eugen Weber, Professor of History, UCLA discovered I was right and referred me to that book.

Am I right folks or am I right ?

Moi

r > g
regardless of bobov

No ​