Capitalism Guarantees Rising Inequality

[Bombur]

No, they obviously don't work. According to Keynes, you can have high inflation or high unemployment. You can't have both. There is supposed to be a trade-off between one and the other.

That is correct.



High interest rates (set by central bank) do not mean high inflation. In 1982 the inflation was dropping like a stone (google "disinfaltion"), and that was goal was being achieved trough high unemployment.

Excuse me, I meant we had both high unemployment and high inflation. We also had high interest rates - a triple whammy. That's what the "misery index" referred to.



"It started to drop," but it still remained high while unemployment was sky high. I recall it very distinctly because I was unemployed at the time.



It sure as hell does because Keynes says that inflation relieves unemployment, but after that recession both unemployment and inflation came down. They should have gone in opposite directions, according to Keynes.

Also, in all the Latin American kleptocracies, they have had both for decades.

No, they haven't. What they have had is high natural rate of unemployment (google NAIRU), i.e. the rate that can't be lowered w/o rising inflation. That thing varies between societies.

ROFL! Where does Keynes ever refer to "natural unemployment?" Why should it be higher for one society than another? Keynes has no explanation.

I don't think you can really compare the inflation of the 1970's to anything Keynes was talking about with regards to inflation. The inflation of the 70's was a result of bad monetary policy as opposed to a more natural change in the effective money supply due to economic activity and employment relative to the natural employment rate.

Monetary policy is not a cure all. Neither is government debt spending during recessions. Both are meant to help soften the blow of economic corrections but they can't undo the need of a correction.

 

[Bombur]

See, that's the beauty of the free market... you don't have to do business with anyone who you don't want to do business with.[/B]

This, more that perhaps anything, is what's missing from the way most people think about capitalism.

That doesn't mean people have any control over the markets they are faced with. Nor does it mean that this will somehow result in the best outcome. The key to capitalism is not blind faith in whatever market we happen to have but a strong understanding of how markets work and why they generally produce great results but why they also fail at times.

Industrialized nations have all learned that prosperity depends on all sorts of things including things like infrastructure, an educated populace, well regulated financial markets, economic stability, and more.

When people say they are for "capitalism" I assume they are really talking about free market economics.

 

[dblack]

See, that's the beauty of the free market... you don't have to do business with anyone who you don't want to do business with.[/B]

This, more that perhaps anything, is what's missing from the way most people think about capitalism.

That doesn't mean people have any control over the markets they are faced with. Nor does it mean that this will somehow result in the best outcome. The key to capitalism is not blind faith in whatever market we happen to have but a strong understanding of how markets work and why they generally produce great results but why they also fail at times.

Industrialized nations have all learned that prosperity depends on all sorts of things including things like infrastructure, an educated populace, well regulated financial markets, economic stability, and more.

When people say they are for "capitalism" I assume they are really talking about free market economics.

I'm for freedom.

 

[gnarlylove]

Considering water is processed, distributed, and paid for at the local level [MENTION=46376]gnarlylove[/MENTION], why exactly do you need the federal government and the EPA???

I always know when someone is unqualified to discuss U.S. politics when they site local issues (water, police, fire, etc.) as their reason for supporting communism at the federal level...

I was having an esoteric convo with Todders. I was exaggerating for his benefit. I have no interest discussing the validity of the EPA of the federal govt right now, whether we disagree or not we are living under it and will undoubtedly continue to for the foreseeable future. That is not the topic anyway, it's fixing the inequality that harms people.

 

[gnarlylove]

In other words, gnarly here is too fuck'n love to actively pursue is own private pursuits - so he would rather petition government to force others to do what he himself is too fuck'n lazy to do...

See, that's the beauty of the free market... you don't have to do business with anyone who you don't want to do business with. You don't have that luxury with the federal government. Better still, the beauty of the free market is that you can build your own business and do it "right". If a company is providing clean water, you can build your own company that sells clean water.

The one caveat - it requires you to get up off your useless, lazy ass. Something liberals aren't willing to do.

In your infinite wisdom did it occur to you that you don't know the first thing about my work ethic or that I am highly successful at achieving my private interests and goals? Although generalizing that liberals are lazy is obviously false (I could list tons of hard working liberals) but I am beginning to wonder if all republicans aren't just total dicks and assholes with no mouth or brain. They have no common decency towards someone who opposes their viewpoints. All conversations with them immediately devolves into a childish name-calling/shouting match, not a debate among adults with the first instinct of respect. I refuse to participate in any more of your drivel.

 

[Toddsterpatriot]

In other words, gnarly here is too fuck'n love to actively pursue is own private pursuits - so he would rather petition government to force others to do what he himself is too fuck'n lazy to do...

See, that's the beauty of the free market... you don't have to do business with anyone who you don't want to do business with. You don't have that luxury with the federal government. Better still, the beauty of the free market is that you can build your own business and do it "right". If a company is providing clean water, you can build your own company that sells clean water.

The one caveat - it requires you to get up off your useless, lazy ass. Something liberals aren't willing to do.

In your infinite wisdom did it occur to you that you don't know the first thing about my work ethic or that I am highly successful at achieving my private interests and goals? Although generalizing that liberals are lazy is obviously false (I could list tons of hard working liberals) but I am beginning to wonder if all republicans aren't just total dicks and assholes with no mouth or brain. They have no common decency towards someone who opposes their viewpoints. All conversations with them immediately devolves into a childish name-calling/shouting match, not a debate among adults with the first instinct of respect. I refuse to participate in any more of your drivel.

They have no common decency towards someone who opposes their viewpoints.

Racist! Homophobe! Sexist!

Sorry, that's how liberals show their decency towards opposing viewpoints.

 

[P@triot]

Considering water is processed, distributed, and paid for at the local level [MENTION=46376]gnarlylove[/MENTION], why exactly do you need the federal government and the EPA???

I always know when someone is unqualified to discuss U.S. politics when they site local issues (water, police, fire, etc.) as their reason for supporting communism at the federal level...

I was having an esoteric convo with Todders. I was exaggerating for his benefit. I have no interest discussing the validity of the EPA of the federal govt right now, whether we disagree or not we are living under it and will undoubtedly continue to for the foreseeable future. That is not the topic anyway, it's fixing the inequality that harms people.

So in other words - you recognize that you have no defense for your support of unconstitutional government?

There is no "inequality". There never has been, there never will be. What harm's people is their lack of effort. We have an effort issue in America, not an "inequality" issue.

 

[P@triot]

In other words, gnarly here is too fuck'n love to actively pursue is own private pursuits - so he would rather petition government to force others to do what he himself is too fuck'n lazy to do...

See, that's the beauty of the free market... you don't have to do business with anyone who you don't want to do business with. You don't have that luxury with the federal government. Better still, the beauty of the free market is that you can build your own business and do it "right". If a company is providing clean water, you can build your own company that sells clean water.

The one caveat - it requires you to get up off your useless, lazy ass. Something liberals aren't willing to do.

In your infinite wisdom did it occur to you that you don't know the first thing about my work ethic or that I am highly successful at achieving my private interests and goals? Although generalizing that liberals are lazy is obviously false (I could list tons of hard working liberals) but I am beginning to wonder if all republicans aren't just total dicks and assholes with no mouth or brain. They have no common decency towards someone who opposes their viewpoints. All conversations with them immediately devolves into a childish name-calling/shouting match, not a debate among adults with the first instinct of respect. I refuse to participate in any more of your drivel.

Because the fact that you cry about private industry instead of creating your own private industry done in the way you believe is "just" or "right" proves beyond a shadow of a doubt that you're a typical lazy liberal who finds it easier to ask government to place a gun to the head of someone else and force them to conduct their affairs how you want them to.

As far as "participating" - of course you're not going to do that. I've completely shredded your entire weak argument in only two posts. If I were you, I too would run away (and fast).

 

[P@triot]

See, that's the beauty of the free market... you don't have to do business with anyone who you don't want to do business with.[/B]

This, more that perhaps anything, is what's missing from the way most people think about capitalism.

That doesn't mean people have any control over the markets they are faced with. Nor does it mean that this will somehow result in the best outcome. The key to capitalism is not blind faith in whatever market we happen to have but a strong understanding of how markets work and why they generally produce great results but why they also fail at times.

Industrialized nations have all learned that prosperity depends on all sorts of things including things like infrastructure, an educated populace, well regulated financial markets, economic stability, and more.

When people say they are for "capitalism" I assume they are really talking about free market economics.

The only markets that fail are one's in which the government got unconstitutionally involved. We never had a "failure" in the housing market until Bill Clinton essentially forced banks to make bad loans with his 1997 Community Re-Investment Act (through Fannie & Freddie).

What liberals are too dumb/idealistic/naive to realize is that the private industry creates pressure. You must produce results or you go out of business. You must produce a great product at a great price or you lose to your competitor.

The moment you introduce government - all of that disappears. Before Clinton stuck his nose where it doesn't belong (because like all idiot liberals he felt everyone "deserved" a home if they didn't earn it), banks wouldn't make risky loans. But the minute they were forced to do so and promised that Fannie and Freddie would back the risk loans, they started making them. And that resulted in the predictable way that government interference always ends - in collapse.

In short - the reason liberal policy always ends in collapse is because of their ignorant "safety nets". You want people working the hardest, focused the sharpest, and producing at the highest? Take away the safety nets. As long as you guarantee them that you will bail out their failure, you will end up with failure.

 

[ilia25]

"It started to drop," but it still remained high while unemployment was sky high. I recall it very distinctly because I was unemployed at the time.

No, it didn't remained high, it was falling. The relationship is not with absolute level of inflation. Unemployment level affects how inflation is changing. If unemployment shoots up when inflation is in double digits, as it was at the and of 70s, of course it would take some time to cut it in half.

It sure as hell does because Keynes says that inflation relieves unemployment

Keynes would never say such things. First, the causality goes in opposite direction -- the unemployment affects inflation, not the other way around. And, again, it's not about absolute levels, the unemployment affects how the inflation changes. If a crisis starts when inflation is high, then you will have a period when unemployment has already risen, but inflation is still high.

but after that recession both unemployment and inflation came down

No, when unemployment started to drop in 1983 inflation stabilized around 4%. It was at 3.5% in 1987.

ROFL! Where does Keynes ever refer to "natural unemployment?" Why should it be higher for one society than another? Keynes has no explanation.

LOL, NAIRU changes in the same country with time. It depends on a lot of social factors. Also I don't think you understand what Keynes theory is about.

Before Keynes everyone believed that economy is always at full employment, with exception of short periods of adjustments. What Keynes showed, however, is that economy, given powerful enough shock, can shift to another equilibrium, the one with high unemployment, and remain in that state for a long time (a.k.a depression). And Keynes didn't really believed that rising inflation could help to pull economy out of depression simply because it is really hard to rise inflation when interest rates are already at zero. That is why he suggested fiscal stimulus instead.

Anyway, Keynes theory was about depression and the ways to fight it and prevent it -- but the same policies would not work at full employment. E.g. fiscal stimulus would only cause inflation, rather than a permanent drop in unemployment. Some people in 60s/70s were trying to do just that -- apply Keynesian policies to an economy already at full employment, and it didn't work as they expected (the result was called stagflation, but it is misleading term, the economy was not "stagnating", it was at full employment and growing pretty fast -- but the inflation was indeed rising).

But don't blame Keynes for that, he was writing about a depression, which only happened twice in the past 100 years -- in 30s, and after 2008.

 

[gnarlylove]

I'm for freedom.

I'm sure you mean individual freedom. But when we ask ourselves was this the initial goal of humans who banded together in hunter-gather tribes and eventually created chiefdoms we find a different goal. It was survival. They were willing to subordinate to sometimes harsh treatment by chiefs and higher-ups so they had the security of food and protection in numbers.

I think this holds light for us today. Our goal should not be greater privacy or liberty per se, it should be survival first. Indeed we a race we fail at this daily. Millions die each year from easily preventable issues while billions suffering from the lack of basic human needs. The rest of us have move beyond the need for mere survival and recognize self-actualization and comfort/satisfaction as the goal. This is a natural step towards a healthy personhood. You might argue "If only we could get everyone to where we are. (ie more freedom)"

This is flawed however. We will never attain a time when no one is overtly exploited so long as we rely on cheap labor, a staple of capitalism. Wage labor has been synonmous with slave labor since its origins. While wage laborers are not strictly slaves, they are essential for the production rates we see with the costs we pay. I'm not saying capitalism is the worse idea ever, it has indeed improved the lives of billions.

Although individualism has brought many welcomed opportunities, it has also led harmful effects. For example, today more than ever people have lavish egos and it doesn't take a psycho-analyst to identify the problems with inflated egos. Our individualism has led to a loss of personal accountability so that for example, when we drive our car we never think about if we could bike or do better: we are doing what we feel like and as long as I can afford it that's all that counts.

This has resulted in environmental degradation on massive scales whether one affirms climate change or not (Michigan study found 50% of America was covered in forests, now only 10% remains). Anecdotally I've seen a resistance to responsibility, even an inability on the behalf of youths to know anything about nature or be able to live in nature without a supermarket. Having worked with teens in the Utah Desert and Colorado forests, I can say it takes weeks for kids to come to grips with basic survival principles. This has implications for all sorts of things with such huge emphasis on individualism over the classic public good. It reduces critical thinking skills because as long as you can fake it to make it, as is the strategy of many kids in school, there's no reason to actually learn it. I'm not saying kids don't learn but their interest are elsewhere (TV, social life, phone). And we have "no right" to think they should do anything that makes them less free.

Moreover, fallacies are rampant on TV and the nightly news. It's pathetic but very influential. I think this has a source in the entertainment transition to news and information in general. People avoid bad stuff and gravitate good stuff, this tends to not solve problems. These all come from the ceaseless emphasis of individual liberty. Turns out individuals don't always make the best decisions with the a lot of freedom. Don't construe this to mean I think that freedom is bad. It is good (and bad) within its context.

I'd say we need to strengthen our ideas about community, togetherness, unity (its on all our coins E Pluribus Unum) because we've seen the effects of refusing to agree: gridlocked congress and tensions are high. We are making little to no progress on solving national or global problems. This stems from individualism and the idea we all just need more freedom which trumps compromise.

So I challenge this goal of freedom and replace it with the goal of removing all barriers that prevent us from viewing one another as essentially the same. All lives are one life having come from the same source and are made up of the same material (star dust from billions of years ago).

Our appearances and thoughts help identify us but should not be our sole evaluation. Ignoring our infinite similarities in favor of our tiny differences made dramatic makes for a divided society--one that struggles to work together (not referring to the labor force). So long as everyone views everyone as essentially different, some totally separate entity, then there is no reason we should treat one another with sympathy, empathy, compassion or love. Such a radical vision of the sameness of humanity might inspire great strides in reducing inequality without ever having to make a policy change. Of course I think changing policy alongside this foundational outlook would be good. This speaks to the reality that attitudes structure our society and the way we treat one another.

We are all One and all deserve to be treated as we treat our self. This idea was first recorded in Tao Teh Ching and has been pronounced in all major religions yet we can't seem to acknowledge it. We prefer our overgrown egos to respect (I know I did for the longest time and still fight it today).

 

[Bombur]

This, more that perhaps anything, is what's missing from the way most people think about capitalism.

That doesn't mean people have any control over the markets they are faced with. Nor does it mean that this will somehow result in the best outcome. The key to capitalism is not blind faith in whatever market we happen to have but a strong understanding of how markets work and why they generally produce great results but why they also fail at times.

Industrialized nations have all learned that prosperity depends on all sorts of things including things like infrastructure, an educated populace, well regulated financial markets, economic stability, and more.

When people say they are for "capitalism" I assume they are really talking about free market economics.

The only markets that fail are one's in which the government got unconstitutionally involved. We never had a "failure" in the housing market until Bill Clinton essentially forced banks to make bad loans with his 1997 Community Re-Investment Act (through Fannie & Freddie).

What liberals are too dumb/idealistic/naive to realize is that the private industry creates pressure. You must produce results or you go out of business. You must produce a great product at a great price or you lose to your competitor.

The moment you introduce government - all of that disappears. Before Clinton stuck his nose where it doesn't belong (because like all idiot liberals he felt everyone "deserved" a home if they didn't earn it), banks wouldn't make risky loans. But the minute they were forced to do so and promised that Fannie and Freddie would back the risk loans, they started making them. And that resulted in the predictable way that government interference always ends - in collapse.

In short - the reason liberal policy always ends in collapse is because of their ignorant "safety nets". You want people working the hardest, focused the sharpest, and producing at the highest? Take away the safety nets. As long as you guarantee them that you will bail out their failure, you will end up with failure.

Markets have failed for all sorts of reasons but I think the Constitution allows the government to get involved so I am not sure if you have a point.

The financial collapse wasn't because of CRA although it is hilarious that you think the entire financial system collapsed because of it.

The market had failures that are far more traditional problems with markets. For one information was not perfect. In fact financial decisions were being made with really bad information provided to them by ratings agencies. The creation of the securities was based off of an equation that was meant to make them A rated but they weren't.

 

[Bombur]

This, more that perhaps anything, is what's missing from the way most people think about capitalism.

That doesn't mean people have any control over the markets they are faced with. Nor does it mean that this will somehow result in the best outcome. The key to capitalism is not blind faith in whatever market we happen to have but a strong understanding of how markets work and why they generally produce great results but why they also fail at times.

Industrialized nations have all learned that prosperity depends on all sorts of things including things like infrastructure, an educated populace, well regulated financial markets, economic stability, and more.

When people say they are for "capitalism" I assume they are really talking about free market economics.

I'm for freedom.

So am I but for some reason I think we have much different ideas for what it takes to actually have freedom in a society today.

 

[jasonnfree]

What in question is how we distribute economic power, particularly whether we do it via voluntary, individual decisions, or through coercive state mandate.

We need to keep in mind that the current state of affairs in the launching pad for developing a better, more equal and just society, economy etc. I subscribe to Noam Chomsky's attitudes on this matter which are found in "On Anarchism." The better we do at providing genuine representation I think we will naturally seek a just system. What's feasible and what should be are often radically different yet they can lead to the same end.

We can agree our current system is designed to provide more power to those with money so that as society evolves we can expect to see these trends continue. I think the trends since the 80s has been abysmal for equality. More super market choices and brands does not lead to greater satisfaction with one's life, in fact, as I posted above, it has the opposite effect!

Chomsky's worth reading. I Hope there are some school teachers who introduce Chomsky's essays to their students.

 

[P@triot]

I'm for freedom.

I'm sure you mean individual freedom. But when we ask ourselves was this the initial goal of humans who banded together in hunter-gather tribes and eventually created chiefdoms we find a different goal. It was survival. They were willing to subordinate to sometimes harsh treatment by chiefs and higher-ups so they had the security of food and protection in numbers.

I think this holds light for us today. Our goal should not be greater privacy or liberty per se, it should be survival first. Indeed we a race we fail at this daily. Millions die each year from easily preventable issues while billions suffering from the lack of basic human needs. The rest of us have move beyond the need for mere survival and recognize self-actualization and comfort/satisfaction as the goal. This is a natural step towards a healthy personhood. You might argue "If only we could get everyone to where we are. (ie more freedom)"

This is flawed however. We will never attain a time when no one is overtly exploited so long as we rely on cheap labor, a staple of capitalism. Wage labor has been synonmous with slave labor since its origins. While wage laborers are not strictly slaves, they are essential for the production rates we see with the costs we pay. I'm not saying capitalism is the worse idea ever, it has indeed improved the lives of billions.

Although individualism has brought many welcomed opportunities, it has also led harmful effects. For example, today more than ever people have lavish egos and it doesn't take a psycho-analyst to identify the problems with inflated egos. Our individualism has led to a loss of personal accountability so that for example, when we drive our car we never think about if we could bike or do better: we are doing what we feel like and as long as I can afford it that's all that counts.

This has resulted in environmental degradation on massive scales whether one affirms climate change or not (Michigan study found 50% of America was covered in forests, now only 10% remains). Anecdotally I've seen a resistance to responsibility, even an inability on the behalf of youths to know anything about nature or be able to live in nature without a supermarket. Having worked with teens in the Utah Desert and Colorado forests, I can say it takes weeks for kids to come to grips with basic survival principles. This has implications for all sorts of things with such huge emphasis on individualism over the classic public good. It reduces critical thinking skills because as long as you can fake it to make it, as is the strategy of many kids in school, there's no reason to actually learn it. I'm not saying kids don't learn but their interest are elsewhere (TV, social life, phone). And we have "no right" to think they should do anything that makes them less free.

Moreover, fallacies are rampant on TV and the nightly news. It's pathetic but very influential. I think this has a source in the entertainment transition to news and information in general. People avoid bad stuff and gravitate good stuff, this tends to not solve problems. These all come from the ceaseless emphasis of individual liberty. Turns out individuals don't always make the best decisions with the a lot of freedom. Don't construe this to mean I think that freedom is bad. It is good (and bad) within its context.

I'd say we need to strengthen our ideas about community, togetherness, unity (its on all our coins E Pluribus Unum) because we've seen the effects of refusing to agree: gridlocked congress and tensions are high. We are making little to no progress on solving national or global problems. This stems from individualism and the idea we all just need more freedom which trumps compromise.

So I challenge this goal of freedom and replace it with the goal of removing all barriers that prevent us from viewing one another as essentially the same. All lives are one life having come from the same source and are made up of the same material (star dust from billions of years ago).

Our appearances and thoughts help identify us but should not be our sole evaluation. Ignoring our infinite similarities in favor of our tiny differences made dramatic makes for a divided society--one that struggles to work together (not referring to the labor force). So long as everyone views everyone as essentially different, some totally separate entity, then there is no reason we should treat one another with sympathy, empathy, compassion or love. Such a radical vision of the sameness of humanity might inspire great strides in reducing inequality without ever having to make a policy change. Of course I think changing policy alongside this foundational outlook would be good. This speaks to the reality that attitudes structure our society and the way we treat one another.

We are all One and all deserve to be treated as we treat our self. This idea was first recorded in Tao Teh Ching and has been pronounced in all major religions yet we can't seem to acknowledge it. We prefer our overgrown egos to respect (I know I did for the longest time and still fight it today).

Wow.....I mean, wow... Pure, unadulterated, disturbing communism. Fuck freedom, what is good for the collective.

I've got news for you junior, your collectivist utopia is not coming.

And you're not doing a very good job of "fighting" your ego. Your arrogance that you know what is "best" for all of us is pretty appalling. The entire point of freedom is survival. One misguided arrogant man (such as yourself) doesn't get to collapse the entire nation. With freedom - your bad choices only effect you. They don't take me down with you.

 

[gnarlylove]

Rot, it basically comes down to striking a balance between our freedoms and subordination/cooperation for the sake of non-zero sum games that benefit us all. You clearly are disgusted with me and so anything you read by me is filtered through a lens of hate or other raw emotions. I understand you don't like opposition and have a hard time dealing with people who disagree with you in a productive manner. you think I'm trying to ruin society but how can unity come to ruin society. If you failed to read my whole post, I encourage you to re-read it so you get a better idea of what I'm saying. I love liberty too and do not think this is a low priority.

But in truth, I didn't say I know what's best for everyone, just read the whole post. It doesn't take much to realize unity on some level is essential in life. It's how we operate as a society. It's how our fiat money works--we all agree it has value. Encouraging unity over petty disagreements can help strengthen communities.

E Plurbus Unum is on all of our coins and its Latin meaning "Out of the many is One." This is all I intended to say. Though we are diverse and all have unique characteristics, these differences are outweighed by the number of our similarities. From dust we come and dust we return. No one escapes this. So it makes sense to acknowledge the humanity in all people. Their ideas about the world are less important than the fact that they are in the world.

 

[bripat9643]

What in question is how we distribute economic power, particularly whether we do it via voluntary, individual decisions, or through coercive state mandate.

We need to keep in mind that the current state of affairs in the launching pad for developing a better, more equal and just society, economy etc. I subscribe to Noam Chomsky's attitudes on this matter which are found in "On Anarchism." The better we do at providing genuine representation I think we will naturally seek a just system. What's feasible and what should be are often radically different yet they can lead to the same end.

We can agree our current system is designed to provide more power to those with money so that as society evolves we can expect to see these trends continue. I think the trends since the 80s has been abysmal for equality. More super market choices and brands does not lead to greater satisfaction with one's life, in fact, as I posted above, it has the opposite effect!

Chomsky's worth reading. I Hope there are some school teachers who introduce Chomsky's essays to their students.

Chomsky is a totalitarian Maoist asshole. He's also the world's biggest nutburger.

 

[Andylusion]

The banking crisis which had a prominent feature in the market did indeed have a major role in the welfare state where the welfare state relieved many CEOs of making responsible actions on credit default swaps and the like. Capitalism as it operates today is massively tied into the government and directly so. Subsidy programs are huge, totaling billions of tax payer money. Capitalism likes these incentives. Your idea that they can work separately is unfounded.

Having not followed the ins and outs of the last 50 pages, I apologize in advance if this is no longer our topic. But I think the following graph may help

Image from this interesting read

To deny capitalism concentrates wealth is to deny its basic principles. One must have capital to make capital, a very fundamental economics saying. However, certain levels of inequality are harmful to society. Without government, without a regulator, we have free markets, and free markets do not have subsidy programs without government. In a free-market we can expect social castes and classes to be entirely rigid where you are born is where you die. We see low social mobility in America, among the lowest in any developed nation. I'm not necessarily advocating for a larger government for the sake of big government but to lack regulation on the market allows it to do funky things. The fundamental premise that Alan Greenspan ran the economy on for 4 decades, he admitted, was "fundamentally flawed." in a hearing on Oct. 23 2008. This Fact taken together with the idea that certain levels of inequality harm a society, we might want to give some credit to the original post for pointing out a source of harm for society. We might want to give more credit to regulation as benefiting the public interests over private gain. I don't expect anyone to read the link but on the off chance you do, I think you'll have learned something (like I did).

Is inequality bad for economic growth?

The problem is, the graph, and those who calculate 'social mobility', fail to factor in choice, and failed to factor in the scale of mobility.

For example, Country A, a maximum wage of $100,000, and Country B has a max of $300,000, and two people both earning $20,000 a year.

Five years later, Person in Country A, is earning $60,000 a year, and person in Country B is earning $80,000, which has more social mobility?

In theory, the person in Country A has greater social mobility, because he's in the upper middle of the scale. Yet the Person in Country B, actually had the greater increase in wage, and is enjoying a greater standard of living.

The other aspect is that of choice. Back in the 90s, when I was in high school, I worked for minimum wage at a fast food joint. One day a lady showed up, and announced to us, that she intended to only work long enough to qualify for welfare again. She even told us the day in which she qualified, and sure enough, on that day she stopped showing up for work.

Does that graph include people like this? Of course. But does this person reflect an social economic system that prevents moving up the income scale, or does it rather show a choice by the individual to refuse to advance themselves?

That's a choice of the individual, not a problem with our economic system. If anything, our welfare, and social programs, have setup a system of incentives to encourage people to not advance up the income ladder, and then you use the resulting statistics to justify more of the same programs that caused those statistics.

Further, no one is denying Capitalism concentrates wealth.

What we do in fact deny, is that this is bad.

If I refuse to get an education, or get an education in something that has no value, or refuse to do what is needed to advance my career, and become more productive... I choose to not concentrate wealth. Back to the prior example of the lady who only worked long enough to get back on welfare. You do realize that 75% of all McDonald's Franchise owners, started out working minimum wage as a crew member? They are rich, because they worked to advance themselves, by choice. She'll be poor till she dies, by choice.

The reason people have nothing, is because they spent all my money, and didn't save and invest.

I call this the difference between the Pinball people, and the Beer Pong people.

This comes from the story of Warren Buffet. If you read about Warren Buffet, you'll find that when he was in High school, he worked a paper route. He saved up money from the paper route, and bought a PinBall machine. He placed the PinBall machine in a local business, where it earned more money. Buffet, invested his money, and made more money.

What do most people do? I can't speak for absolutely everyone, but when I was in high school, the popular thing to do, was to buy a keg of beer, and take it to someone's home whose parents were away, and have a party, and play Beer Pong. Thus they consume their money, and are broke.

That's the difference between the Beer Pong people and the PinBall people. That's why rich people are rich, and poor people are poor.

You realize that if you save, just a mere $100 a month, every single month from age 20, to retirement, you'll retire a millionaire (or close to it)? But people don't. They buy movie tickets, premium cable TV, smart phones, eat out at restaurants every day, and buy cars and other financial boat anchors that sink in value like a rock, and then complain how the wealthy the rich people are.

There's a reason for this. Actions have consequences. Even Michael Jackson, who made over a billion dollars in his career, was on the verge of bankruptcy just before his death. In fact, it was likely because of the stress of his world wide tour, and the pressure from all his creditors and lawsuits, that drove him to his death.

But the idea that somehow it's our economic system that is holding people back, is just absolutely ridiculous. Phil Robertson, regardless of anything else, is proof our system gives the most opportunity to the lowest of people. Here's a drunk, a complete drunk guy, living in a shack, whittling duck callers, and now he's a national brand, multimillionaire with his own TV show.

1-800-GOT-JUNK, was started by a high school student, who bought a beat up pickup truck for $800, and a hand painted sign. Now he's a multimillionaire of an international company.

Allen Greenspan lost all his credibility. He claimed to believe in market principals, but in practice, he himself tried to direct and control the markets.

You can't say that "self regulating markets doesn't work" when *YOU* are the guy directing and regulating the markets. Sorry, false premise.

 

[theHawk]

Where is Democracy to be found in a world where the three richest individuals have assets that exceed the combined GDP of 47 countries?

A world where the richest 2% of global citizens "own" more than 51% of global assets?

Ready for the best part?

Capitalism ensures an already bad problem will only get worse.

"The Organization for Economic Cooperation and Development (OECD) states that income inequality 'first started to rise in the late ‘70s and early ‘80s in America and Britain (and also in Israel)'.

"The ratio between the average incomes of the top 5 per cent to the bottom 5 per cent in the world increased from 78:1 in 1988, to 114:1 in 1993..."

"Stiglitz relays that from 1988 to 2008 people in the world’s top 1 per cent saw their incomes increase by 60 per cent, while those in the bottom 5 per cent had no change in their income.

"In America, home to the 2008 recession, from 2009 to 2012, incomes of the top 1 per cent in America, many of which no doubt had a greedy hand in the causes of the meltdown, increased more than 31 per cent, while the incomes of the 99 per cent grew 0.4 per cent less than half a percentage point."

Spotlight on Worldwide Inequality

There are alternatives that don't require infinite "growth."

Do us all a favor and move to North Korea.

Let us know how awesome no capitalism is.

 

[georgephillip]

Simple to say but hard to get into policy, DB.

Basically there's two ways to deal with this growing inequity

1. AT the place of employment (workers take a larger share of the profits) or

2 By progressive taxation which spreads the wealth around through policies that either put money into the hands of the workers or creates beneficial policies that take the burden cost of living down, like supporting public transit, education and health care.


Those are the two avenues to fixing this inequity.

There are countless policies that might be done leading down those avenues.

Whiuch is the better of the two?

NUMBER 1

Why?

Because then the inequity is dealt with by the workers and employers and the GOVERNMENT doesn't get its hands on the money.

Why don't we do that?

We destroyed that ability when conditions started killing UNIONISM.

Without unions, perhaps we should learn to share?

"This policy primer from Shareable and the Sustainable Economies Law Center catalogues innovative local policies that city governments have used to help residents share resources, co-produce, and create their own jobs.

"Focusing on food, housing, transportation, and job sharing, this guide is intended to help cities build community wealth and develop more resilient and democratic local economies.

"More broadly, the sharing economy highlights how governments can structure infrastructure, services, incentives, and regulations to support this new economy."

Policies for Shareable Cities: A Sharing Economy Policy Primer for Urban Leaders | Community-Wealth.org

Public banks are another viable substitute for Wall Street.

Public banks? Awesome!
Just what Illinois needs, another way for our crooked politicians to reward their friends.

Illinois should go Red

"But North Dakota is also red in another sense: it fully supports its state-owned Bank of North Dakota (BND), a socialist relic that exists nowhere else in America.

"Why is financial socialism still alive in North Dakota?

"Why haven't the North Dakotan free-market crusaders slain it dead?

"Because it works.

"In 1919, the Non-Partisan League, a vibrant populist organization, won a majority in the legislature and voted the bank into existence.

"The goal was to free North Dakota farmers from impoverishing debt dependence on the big banks in the Twin Cities, Chicago and New York.

"More than 90 years later, this state-owned bank is thriving as it helps the state's community banks, businesses, consumers and students obtain loans at reasonable rates.

"It also delivers a handsome profit to its owners -- the 700,000 residents of North Dakota.

"In 2011, the BND provided more than $70 million to the state's coffers.

"Extrapolate that profit-per-person to a big state like California and you're looking at an extra $3.8 billion a year in state revenues that could be used to fund education and infrastructure."

Why Is Socialism Doing So Darn Well in Deep-Red North Dakota? | Alternet

Awesome, right?