We Need Factories for Making Products and Not for Making Jobs

Unfortunately more time doesn't seem to help me carefully consider anything! I opt for wasting time and then rushing in the last minute anyway....

Actually the corporation is quite fundamental, it helps considerably in separating wealth accumulation from private persons and provides the "common man" a capacity to participate in the capital wealth creation, through pensions and institutional ownership of the shares, if not direct ownership.

No my problem is with inherited wealth, but saying that, I have no solution for it either. The only way one could create a true meritocracy is to insulate children from their parents at birth, which noone wants. Everything less are ineffective compromises.

 

Supply side certainly succeeded, not only does it result in low unemployment while still maintain average LFPR we see productivity gains as business tries to increase production in a tight labor market and the resulting high business activity and higher incomes all work to produce higher tax revenues while keep tax rates low.

 

In the most theoretical sense, that's true. But the IPO market is sealed off from anyone but investment banks. Even after the fact, investors are regularly mislead by those same banksters, and feeble accounting and reporting controls keep even the most dedicated away from any real knowledge of the corporate workings. All in the name of infinite growth.

Add to that the byzantine system of 'management fees', and HFT firms regularly front-running and outright ripping off the investor, and there is nothing resembling a 'free market' here. The modern corporation is simply a psychopathic pile of money, built to perpetuate itself, and allowed to completely dominate its environment.

As for inherited wealth, there is no effective control for this, nor is one needed. We could easily regulate the market back to sanity, and eliminate much of the problem from there.

 

Well I would beg to differ, without the ability of capital formation allowing people who have that capital to form corporations capitalism isn't going to go very far.

 

How would regulation affect the accumulation of wealth in the top 0.1%?

 

Perhaps if you had a degree, you'd think differently? Mine have changed my life fundamentally. And I see others with same degree levels who live better lives than those with no postsecondary education at all.

The 1Percenters are "making immense amounts of Wealth" because Reckless Ronnie reduced the upper-income tax regime to below 30%. Otherwise, they'd be paying around 70%. And before LBJ, they'd be paying in the 90% range (with all the foolhardy deductibles, of course).

The "Megabuck Wealth System" is derived from income taxation, and not anything else. Change taxation, and you change "motivation to make a quick megabuck". (With all its shortcuts like the SubPrime Mess that brought on the Great Recession in 2010, from which we are just recovering.)

Miraculously, people do make millions - just not billions. So what?

And this applies regardless of education level. People are motivated by money - nothing new in that. Except Reagan's consummate silliness to give his Hollywood friends an even bigger piece-of-the-pie. As if they weren't earning enough, and megabucks for a movie was somehow "better".

Money is a means to an existence, not the Intrinsic Purpose of Life and it seems that we cannot assimilate that lesson in the US. The Money Motivation is excessive and nobody asks questions like "What's the essential purpose of earning immense amounts of money?"

Just to give it all away? Taxation and purposeful reinvestment in societal betterment can do that more effectively than any philanthropy ...

 

You are very right. The Muslim culture was not always one like that of a murderous ISIS. And, having known a good many of them, I see no fundamental difference in attitudes or beliefs.

They conquered and ran Spain for centuries, and when thrown out, the Spanish continued to employ the same fundamental systems of law and education as the Moors had established.

I think Muslims need a "renaissance" very much like the Christians needed as well ...

 

Yes, but how often do you actually use your degree? Its mainly a badge for intelligence and commitment, which is true for poor students but not for rich ones.

Hence forcing people to get degrees is not going to make everyone wealthier, it just devalues the degree because it no longer acts as a signifier. New Labour tried it in the UK, the result was that demands for degrees went down the employment rungs until a basic pencil-pushing civil servant needed one. Ridiculous waste of resources....

 

They are in the middle of a renaissance, thats why its so painful....

 

Taxation is the "regulation of income".

And this below is what happened historically in the US. Give particular attention to upper-income tax rates in the 1980s - and the second and third "steps down". (Who was PotUS at the time? Reckless Ronnie.)

 

Sorry, I'm not sure what I'm supposed to read into that graph...

 

I presume you are writing about the Income Taxation infographic?

That the drastic reduction of Income Taxation during the 1980s (from 70% to 30%) produced the monumental increase in Wealth as seen in the Piketty diagram, as shown here:

 

The Sunni-Shiite standoff is producing unnecessary bloodshed. During the Ottoman Empire (that lasted centuries) the two sides got along just fine. They both fought to kick the Crusaders out of the Holy Land.

I can't see why both the Muslim religious factions cannot get back to that understanding of mutual coexistence ...

 

From the very beginning to the end. It got me into the IT business, which I never left.

It now allows me to teach economics. What more could I ask for ... ?

I don't think I said anything about "forcing people to get a degree". I simply mentioned the fact that doing so assured those who obtain an advanced degree a better income revenue and less chance of sustained unemployment.

Both are necessary for a good family foundation ...

 

OK, got you. SO you were seeing taxation as a form of regulation, and therefore the "de-regulation" contributing to the wealth gap?

I would suggest that personal income tax is potentially more at fault than the corporate rates, as the corporate tax savings should be reinvested. Therefore the regulation of companies will not diminish the wealth gap

 

Yes, taxation is part of the realm of "regulatory responsibility" of any nation.

Corporate marginal rates in the US are supposedly too high at 38.9%. Well, of course, any CEO would say that, wouldn't they. The worldwide average top corporate income tax rate, across 188 countries and tax jurisdictions, is 22.5 percent. After weighting by each jurisdiction’s GDP, the average rate is 29.5 percent.

So, yes, American rates are 10% higher. Big Deal.

But is that any reason to keep profits offshore? Nope, and they should be fined for doing so. They only problem is "where are the profits"? I'd start with the Caymans. A battalion of Marines in George Town would change local minds about their "sovereignty" as a nation.

More than likely they're in Ireland, because that country has a "special tax relationship" with Apple.

France will now, finally, tax all profits made in France of Apple. Up to now, they charged high "transfer rates" (internal billing of "subsidiaries" that made them break even) so they could declare no profits. It was a patent scam.

It's about time, the illicit taxation has been going on for a donkey's age ...

 

I have a degree, and it got me into Tech as well. However, I've never used a single bit of that actual classroom knowledge since I left school. The only point of it was to "credential" me into a new career.

Present-state, yes of course a degree is important. That's not what I was talking about. I was stating that the actual class-time, degree, certification, whatever serves no other purpose than to make your resume attractive to an employer. You've already forgotten 80% of the knowledge within 6 months, so all that remains is a signal that you are willing to go deeply into debt, for the privilege of a new job.

Also, I don't think tax rates have much of anything to do with the problem. Those are a patch on the problem, after the fact. The real issue is that politicians are still incredibly susceptible to being misled or bought by big money, and crafting ever-increasing protections for industry, at the expense of the constituents.

Exhibit A: Ag-gag laws.
Exhibit B: ISP's able to sell your entire life, without your approval.

 

Now, please explain why that "wasn't enough".

You were lucky. Given the stats, you were one of a very privileged few.

 

Nonsense! It taught you how to THINK!

Dammit, that's what's important. Not the job-interview and an invitation to accept a mind-boggling salary. (If that is what you wanted.)

So, start THINKING and show your capacity to do so in this forum ... !

 

It was plenty. I'm not complaining about having to go to college, even though it cost the equivalent of a new house in debt, at an age that I could never have made any payments on it.

The point is that, while enjoyable for me personally, the actual knowledge gained was useless for any sort of employment. The accreditation was all that has mattered in the real world.

 

Some of us don't need 4 years of structured education, in order to THINK! It was a very enjoyable, enlightening experience. But I may as well have majored in underwater basket weaving, for all of the use I've gotten from facts learned there.

 

Perhaps, but that is just a complaint. I could ask if you were looking in the right places or a whole host of other questions pertinent to finding a job.

What's important in your message is that it cost you the "equivalent of a house". Why in hell should anyone have to start their career with a debt burden caused by Tertiary Education necessary nowadays to find a decent job at a decent pay.

Ask that of Donald Dork, the guy You-The-People elected to lead the country coming out of the worst recession since the 1930s!

If Donald is half the smart-ass he thinks he is, he'll start another war that will require massive government spending! Watch THAT put America back to work!

Of course, that might also cause a war casualty rate of a few thousand, but, so what ... ?

 

Most people do require an education to think - given the mind-boggling TV they've been brought upon.

Get out of the US - see how the rest of world works. It will amaze you.

And maybe you wont go back ...

 

I didn't vote for Trump, and certainly don't support him. You're right about the war though - we appear to be invading Syria next week.

 

http://evonomics.com/economists-stop-defending-milton-friedmans-pseudo-science/

As a result of the centrality of Friedman’s understanding of science within the discipline of economics, the discipline has become dominated by a nineteenth century, Walrasian free-market ideological view of reality that, at its core, consists of a logically consistent and mathematically elegant paradigm of market behavior that describes how an ideal system of human interaction in a hypothetical free-market society is supposed to work, as well as the prerequisites for such a system to actually work, that is totally out of touch with reality.

Is it any wonder that the assumptions on which this paradigm is based has provided the foundation for mainstream economist to delude themselves into believing in a world in which markets are efficient; expectations are rational; there is no need to regulate international capital flows; speculative bubbles are a figment of the imagination; the economic system automatically adjusts to achieve full employment; fraud is not a problem given the efficacy of market discipline; factors of production receive the value of their marginal products; monopolies, monopsonies, and oligopolies are irrelevant as is an increasing concentration of income and a rising debt relative to income; increasing the propensity to save increases economic growth to the benefit of all; trade deficits are inconsequential; and in which financial institutions are fully capable of regulating themselves for the good of all humanity due to the enlightened self interest of bankers?

I have seen the question asked, how would Friedman have explained the GFC (if he had lived a few more years) with his belief in the efficient allocation of capital in financial markets, and also his expectation that quantitatve easing by central banks would result in inflation?

So of course with your 'world' view (anything but, actually) there are
3 items you have failed to answer:
Where did Paulson's $4 billion 'earned' windfall come from, in the GFC?
Why should some graduates set out on their careers burdened by 'crippling debt'?
You still persist in blaming the Great Derpression, the GFC and the 4 decade long pauperisation (and actual phyical destruction) of Detroit, on demand side economics.

Neither side has the complete answer; the field is too complex to give the defintive explanation, similar in this respect to 'climate science'.

Obviously some pragmatism and policy flexibility is required