Unequal distribution of wealth

[thereisnospoon]

They also speculate, usually with other people's money and always with a tax bias for debt rather than equity investment, which is largely responsible for loading down the US economy with debt.

This also encourages corporate raiding with junk bonds which adds interest to the cost of doing business.

As for job gains:

"The argument is made that 'The rich create jobs.'

"After all, somebody has to build the yachts.

"What is missing is the more general principle: Wealth and income inequality destroy job creation.

"This is because the wealthy soon reach a limit on how much they can consume.

"They spend their money buying financial securities – mainly bonds, which end up indebting the economy. And the debt overhead is what is pushing today’s economy into deepening depression."

Michael Hudson

SO Michael Hudson, blogger for some anti-capitalist website ralphs up some nonsense about speculation( one person's method of earning a living at great risk to the investor) and you take the bait.
Wonderful.
Please.
Yes, let's grab up all that money and let the government have it.
Surely politicians are the greatest stewards of the people's money.

"Michael Hudson is a former Wall Street economist.

"A Distinguished Research Professor at University of Missouri, Kansas City (UMKC), he is the author of many books, including Super Imperialism: The Economic Strategy of American Empire (new ed., Pluto Press, 2002) and Trade, Development and Foreign Debt: A History of Theories of Polarization v. Convergence in the World Economy.

"He can be reached via his website, [email protected]

Michael Hudson

Yeah. And John Murtha was a former marine who equated our soldiers with concentration camp guards. So what?
Hudson has an opinion. He doesn't like the system of "we earned it we keep it". That means he supports confiscatory taxes. He doesn't like speculation on commodities exchanges. That means the prices of these things has to be fixed by someone. Most likely given Hudson's apparent lean left, that someone would be government. Umm, no thanks..
The last thing we need is those knuckleheads fixing prices.

 

[georgephillip]

SO Michael Hudson, blogger for some anti-capitalist website ralphs up some nonsense about speculation( one person's method of earning a living at great risk to the investor) and you take the bait.
Wonderful.
Please.
Yes, let's grab up all that money and let the government have it.
Surely politicians are the greatest stewards of the people's money.

"Michael Hudson is a former Wall Street economist.

"A Distinguished Research Professor at University of Missouri, Kansas City (UMKC), he is the author of many books, including Super Imperialism: The Economic Strategy of American Empire (new ed., Pluto Press, 2002) and Trade, Development and Foreign Debt: A History of Theories of Polarization v. Convergence in the World Economy.

"He can be reached via his website, [email protected]

Michael Hudson

Yeah. And John Murtha was a former marine who equated our soldiers with concentration camp guards. So what?
Hudson has an opinion. He doesn't like the system of "we earned it we keep it". That means he supports confiscatory taxes. He doesn't like speculation on commodities exchanges. That means the prices of these things has to be fixed by someone. Most likely given Hudson's apparent lean left, that someone would be government. Umm, no thanks..
The last thing we need is those knuckleheads fixing prices.

Hudson's opinion on "we earned it we keep it" isn't based on personal preference. It's based on the fact that keeping what you've "earned" depends at least as much on tax bias (and campaign donations) as hard work.

In one generation, the richest 2% of US earners have nearly doubled their share of the returns to wealth (interest, dividends, rent and capital gains."

Do you think that's because the "happy 2 percent" of US earners are working twice as hard as a generation ago, or does it have more to do with the $13trillion Wall Street bailout elected Republicans AND Democrats provided?

Even knuckleheads might connect the dots between Republicans, Democrats, campaign donations, and the "happy 2 percent."

Michael Hudson

 

[Cecilie1200]

They also speculate, usually with other people's money and always with a tax bias for debt rather than equity investment, which is largely responsible for loading down the US economy with debt.

This also encourages corporate raiding with junk bonds which adds interest to the cost of doing business.

As for job gains:

"The argument is made that 'The rich create jobs.'

"After all, somebody has to build the yachts.

"What is missing is the more general principle: Wealth and income inequality destroy job creation.

"This is because the wealthy soon reach a limit on how much they can consume.

"They spend their money buying financial securities – mainly bonds, which end up indebting the economy. And the debt overhead is what is pushing today’s economy into deepening depression."

Michael Hudson

SO Michael Hudson, blogger for some anti-capitalist website ralphs up some nonsense about speculation( one person's method of earning a living at great risk to the investor) and you take the bait.
Wonderful.
Please.
Yes, let's grab up all that money and let the government have it.
Surely politicians are the greatest stewards of the people's money.

"Michael Hudson is a former Wall Street economist.

"A Distinguished Research Professor at University of Missouri, Kansas City (UMKC), he is the author of many books, including Super Imperialism: The Economic Strategy of American Empire (new ed., Pluto Press, 2002) and Trade, Development and Foreign Debt: A History of Theories of Polarization v. Convergence in the World Economy.

"He can be reached via his website, [email protected]

Michael Hudson

Yes, and ALL economists and university professors are ALWAYS 100% correct. There's no chance a member of either group could possibly have his head up his ass.

 

[georgephillip]

Does Obama's Deficit Reduction Commission have its head up its ass when it argues to restrict the removal of tax favoritism for debt leveraging only for middle class homeowners but not for "absentee owners, commercial real estate investors, corporate raiders or other prime bank customers"?

"Since the 1980s, corporate raiders have borrowed high-interest 'junk bond' credit to take over companies and make money by stripping assets, cutting back long-term investment, research and development, and paying out depreciation credit to their financiers.

"Financially parasitized companies use corporate income to buy back their stock to support its price – and hence, the value of stock options that financial managers give themselves – and borrow yet more money for stock buybacks or simply to pay out as dividends.

"When the process has run its course, they threaten their work force with bankruptcy that will wipe out its pension benefits if employees do not agree to “downsize” their claims and replace defined-benefit plans with defined-contribution plans (in which all that employees know is how much they pay in each month, not what they will get in the end).

"By the time this point has been reached, the financial managers have paid themselves outsized salaries and bonuses, and cashed in their stock options – all subsidized by the government’s favorable tax treatment of debt leveraging."

Michael Hudson

 

[thereisnospoon]

Does Obama's Deficit Reduction Commission have its head up its ass when it argues to restrict the removal of tax favoritism for debt leveraging only for middle class homeowners but not for "absentee owners, commercial real estate investors, corporate raiders or other prime bank customers"?

"Since the 1980s, corporate raiders have borrowed high-interest 'junk bond' credit to take over companies and make money by stripping assets, cutting back long-term investment, research and development, and paying out depreciation credit to their financiers.

"Financially parasitized companies use corporate income to buy back their stock to support its price – and hence, the value of stock options that financial managers give themselves – and borrow yet more money for stock buybacks or simply to pay out as dividends.

"When the process has run its course, they threaten their work force with bankruptcy that will wipe out its pension benefits if employees do not agree to “downsize” their claims and replace defined-benefit plans with defined-contribution plans (in which all that employees know is how much they pay in each month, not what they will get in the end).

"By the time this point has been reached, the financial managers have paid themselves outsized salaries and bonuses, and cashed in their stock options – all subsidized by the government’s favorable tax treatment of debt leveraging."

Michael Hudson

Hudson is correct to a point. He also has an agenda and editors who want columns. so he writes what they think their readers want to read.
There were some large firms that were leveraged in the 80's. Eastern Airlines perhaps the largest. However, Eastern was doomed after the industry was deregulated. The government no longer had the authority to regulate fares. The legacy carriers heavily leveraged with union contracts and weighed down by inefficient routing and systems. Eastern Became a target of corporate raiders. The carrier became worth more for it's gates and aircraft because it's value as an airline was nil. Once a successful an profitable carrier, competition created by deregulation, crippled the company. Eastern could not shed it's union contracts nor could they change their business model. So the company was put into play and away we go.

Look, all publicly traded companies are subject to purchase and as a result could become worth more if the firm were broken up into divisions.
This is all very cold and straightforward.
I suppose you are going to ignore the vast numbers of companies that have merged to stave off hostile takeovers and of course to make themselves more profitable.
Profit. The primary function of a business to is produce a profit for the owners and investors.
Anything else is secondary.

 

[georgephillip]

Hudson might reply...

"The political axiom at work is 'Big fish eat little fish.'

"There’s not enough tax money to continue swelling the fortunes of the super-rich pretending to save enough to pay the pensions and related social support that North American and European employees have been promised.

"Something must give – and the rich have shown themselves sufficiently foresighted to seize the initiative.

"For a preview of what’s in line for the United States, watch neoliberal Europe’s fight against the middle and working class in Greece, Ireland and Latvia; or better yet, Pinochet’s Chile, whose privatized Social Security accounts were quickly wiped out in the late 1970s by the kleptocracy advised by the Chicago Boys, to whose monetarist double-think Obama’s appointee Ben Bernanke has just re-pledged his loyalty.

When you say "(t)he primary function of a business is to produce a profit for the owners and investors...", that seems to imply a democracy deficit when it comes to stakeholders' rights.

Possibly some of the execs and shareholders of Eastern Airlines prospered when the company was put in play; however, employees of Eastern and their families certainly didn't.

That's not a problem for those who believe the greatest good for the greatest number is "Socialism."

Michael Hudson

 

[mdn2000]

Hudson might reply...

"The political axiom at work is 'Big fish eat little fish.'

"There’s not enough tax money to continue swelling the fortunes of the super-rich pretending to save enough to pay the pensions and related social support that North American and European employees have been promised.

"Something must give – and the rich have shown themselves sufficiently foresighted to seize the initiative.

"For a preview of what’s in line for the United States, watch neoliberal Europe’s fight against the middle and working class in Greece, Ireland and Latvia; or better yet, Pinochet’s Chile, whose privatized Social Security accounts were quickly wiped out in the late 1970s by the kleptocracy advised by the Chicago Boys, to whose monetarist double-think Obama’s appointee Ben Bernanke has just re-pledged his loyalty.

When you say "(t)he primary function of a business is to produce a profit for the owners and investors...", that seems to imply a democracy deficit when it comes to stakeholders' rights.

Possibly some of the execs and shareholders of Eastern Airlines prospered when the company was put in play; however, employees of Eastern and their families certainly didn't.

That's not a problem for those who believe the greatest good for the greatest number is "Socialism."

Michael Hudson

More from Chomsky's disciple, so what are you posting now, stuff directly from Chomsky or people who support Chomsky.

So the rich doubled their wealth is the same time period that the Hate-America-Chomsky quadrupled his wealth, it pays to hate America.

Maybe if the poor hated America they could be as rich as Chomsky.

 

[georgephillip]

"It is a reflection of how one-sided today’s class war has become that Warren Buffet has quipped that 'his' side is winning without a real fight being waged.

"No gauntlet has been thrown down over the trial balloon that the president and his advisor David Axelrod have sent up over the past two weeks to extend the Bush tax cuts for the wealthiest 2 per cent for 'just two more years.

"For all practical purposes the euphemism 'two years' means forever – at least, long enough to let the super-rich siphon off enough more money to bankroll enough more Republicans to be elected to make the tax cuts permanent."

Seen any evidence of class war yet?

Maybe you should ask the question in Spanish?

Chomsky already has.

Michael Hudson

 

[mdn2000]

"It is a reflection of how one-sided today’s class war has become that Warren Buffet has quipped that 'his' side is winning without a real fight being waged.

"No gauntlet has been thrown down over the trial balloon that the president and his advisor David Axelrod have sent up over the past two weeks to extend the Bush tax cuts for the wealthiest 2 per cent for 'just two more years.

"For all practical purposes the euphemism 'two years' means forever – at least, long enough to let the super-rich siphon off enough more money to bankroll enough more Republicans to be elected to make the tax cuts permanent."

Seen any evidence of class war yet?

Maybe you should ask the question in Spanish?

Chomsky already has.

Michael Hudson

Yes the Communist speak Spanish and Chomsky is very active. Thank you for acknowledging this.

 

[georgephillip]

"It is a reflection of how one-sided today’s class war has become that Warren Buffet has quipped that 'his' side is winning without a real fight being waged.

"No gauntlet has been thrown down over the trial balloon that the president and his advisor David Axelrod have sent up over the past two weeks to extend the Bush tax cuts for the wealthiest 2 per cent for 'just two more years.

"For all practical purposes the euphemism 'two years' means forever – at least, long enough to let the super-rich siphon off enough more money to bankroll enough more Republicans to be elected to make the tax cuts permanent."

Seen any evidence of class war yet?

Maybe you should ask the question in Spanish?

Chomsky already has.

Michael Hudson

Yes the Communist speak Spanish and Chomsky is very active. Thank you for acknowledging this.

Do you agree with Hudson that...

"Obama seems to be campaigning for his own defeat!

"Thanks largely to the $13 trillion Wall Street bailout – while keeping the debt overhead in place for America’s “bottom 98 per cent” – this happy 2 per cent of the population now receives an estimated three quarters (~75 per cent) of the returns to wealth (interest, dividends, rent and capital gains).

"This is nearly double what it received a generation ago.

"The rest of the population is being squeezed, and foreclosures are rising."

Agree?
Disagree?

Michael Hudson

 

[Gadawg73]

If we were to redistribute the wealth and believed it was the right thing to do who would we choose to do the redistributing?
The United States government?
Scary shit there folks.
Case closed.
Wealth is earned and redistributed when someone else has EARNED it also unless the person that earned it in the first place chooses to give it away to who they want to.

 

[georgephillip]

Does the Bush/Obama $13 trillion bail-out of the richest 2% of the population count as "redistributing" the wealth?

 

[mdn2000]

Does the Bush/Obama $13 trillion bail-out of the richest 2% of the population count as "redistributing" the wealth?

Does Chomsky say its so, because if Chomsky says it is who am I to disagree.

I like to point out Chomsky where ever I see George post, its the only way to understand what George is saying. George is second hand Chomsky.

diary of an anti-chomskyite

Chomskyite Billionare Pleads Oppression
Its always a bit odd when extremely powerful and influential people, such as Ivy League professors, nationally televised commentators, ex-presidents and internationalist gozillianaires claim to be laboring under the yoke of brutal oppression and terror. For oft-discussed reasons, this phenomenon seems to manifest itself almost constantly when Israel and its enemies are involved. George Soros, perhaps the richest Chomskyite in the world, has unsurprisingly penned his own sob story, which appears in -- where else? -- the New York Review of Books. The irony is thick on the ground when one of the richest men in the world claims to be the aggreived victim of brutal repression. His bone to pick is, of course, American policy in the Middle East and its "discussion", claiming that "The current policy," of which Soros of course disapproves, "is not even questioned in the United States. While other problem areas of the Middle East are freely discussed, criticism of our policies toward Israel is very muted indeed. The debate in Israel about Israeli policy is much more open and vigorous than in the United States." This is amusing if only because Soros' quite stridant criticism is appearing in the same publication which publishes a near constant stream of anti-Israel opinion and even played host to Tony Judt's call for the dismantling -- i.e. destruction, for those uninterested in euphemism -- of the Jewish State itself

 

[georgephillip]

Israel and Palestine

Does the Bush/Obama $23 trillion bailout qualify as redistribution of this nation's wealth?

 

[amrchaos]

There is no "true" premise if you mean a complete redistribution that does not allieviate the underlining circumstances that lead some devoid of means of providing for themselves.

In many ways, "wealth redistribution" already occurs if the society is assisted with organizations that aid the misfortunate and teach code of ethics/morality. Also, there is no evil inherent in the current system if it is one based on economic/social reward and punishment due to ones personal actions.

On the other hand, the term "wealth redistribution" suggests a sinister plan. Who is to determine who gets what? On what system and who is to say that the new system is even better? The people who institute it? Of course they are going to say their way is just, because to say otherwise means they don't know what they are doing!

With the current social systems and access to skill improvements that exist in our nation, the talk of more "wealth redistribution" may not be merited.

Focus on the economy and the fuel problem. It is not like we Americans are just going to throw this country away for an extremists "Grand and noble" idea.

 

[thereisnospoon]

Hudson might reply...

"The political axiom at work is 'Big fish eat little fish.'

"There’s not enough tax money to continue swelling the fortunes of the super-rich pretending to save enough to pay the pensions and related social support that North American and European employees have been promised.

"Something must give – and the rich have shown themselves sufficiently foresighted to seize the initiative.

"For a preview of what’s in line for the United States, watch neoliberal Europe’s fight against the middle and working class in Greece, Ireland and Latvia; or better yet, Pinochet’s Chile, whose privatized Social Security accounts were quickly wiped out in the late 1970s by the kleptocracy advised by the Chicago Boys, to whose monetarist double-think Obama’s appointee Ben Bernanke has just re-pledged his loyalty.

When you say "(t)he primary function of a business is to produce a profit for the owners and investors...", that seems to imply a democracy deficit when it comes to stakeholders' rights.

Possibly some of the execs and shareholders of Eastern Airlines prospered when the company was put in play; however, employees of Eastern and their families certainly didn't.

That's not a problem for those who believe the greatest good for the greatest number is "Socialism."

Michael Hudson

Hudson might say?...Who cares. This guy is an anti establishment blogger. He has an opinion with which you agree. End of story..
This quote makes me want to crack up...."pay the pensions and related social support that North American and European employees have been promised."...
Is that a joke? Maybe the Euros in their fervor to be the most entitled people on the planet believe that, but here? Umm , NO...There is no free lunch.
One of the prominent reasons why Western European socialist economies are on the verge of collapse, is because of womb to tomb socialism.
In any society where business is encourage to profit and people are educated and challenged to achieve, socialism ALWAYS fails. It must. Once the tipping point of taxation to regulate labor in private business( Think Frances no fire policy) on those who earn above average wages, and small business owners, the well dries up and government ends up going into impossible debt. The system either has to be rescued , creating more debt or it collapses. Either way, it fails.
Now, before you jump up screaming put your head through the ceiling...Look here.
I think SS should be replaced with a Canadian type system. That system charges employers and employees 4% each. The money is HELD in trust for the worker. That worker then receives stipends after their retirement. The difference is the money that was paid by the employer(s) and the worker are HIS. The federal government could not take the money and use it for other purposes. No ponzi scheme because unlike the US fed govt no one could steal the money and pay for other crap.

 

[thereisnospoon]

Does the Bush/Obama $13 trillion bail-out of the richest 2% of the population count as "redistributing" the wealth?

Now you're off the charts.
What $13T bail out of richest 2% of the population.
Look, you and this Hudson fella need to go to a brothel and get some action.
The two of you are some of the most bunged up sticks in the mud seen in modern mankind.
You're so hard up in your attempt to convince you are correct (based on your new found BFF , Mr Hudson) that you'll say or post anything even if it's false.
Good luck and good night.

 

[MikeK]

If we were to redistribute the wealth and believed it was the right thing to do who would we choose to do the redistributing?
The United States government?

In some areas, yes. But there are other ways to more equitably distribute the economic resources of this Nation, outstanding among which is via wages in corporate structures. Consider the fact that salaries and bonuses of corporate executives have risen dramatically for the past three decades while wages of the workers have remained stagnant, a situation which began when the union-busting corporate puppet, Ronald Reagan, came to power. That phony, dimwitted sonofabitch was a committed enemy of the middle class and the effects of the direction he pointed America in are manifesting today.

I believe the best thing that could happen for America is to establish equitable profit-sharing for corporate employees in proportional levels from the CEO all the way down to the janitor -- and impose a twenty million dollar limit on the amount of personal assets that any individual may accumulate.

That would spread the wealth very nicely and bring an end to the financial nobility which has arisen in recent years. There would be no American billionaires but lots of millionaires and well-paid American middle class workers would once again be the envy of the developed world.

 

[georgephillip]

There is no "true" premise if you mean a complete redistribution that does not allieviate the underlining circumstances that lead some devoid of means of providing for themselves.

In many ways, "wealth redistribution" already occurs if the society is assisted with organizations that aid the misfortunate and teach code of ethics/morality. Also, there is no evil inherent in the current system if it is one based on economic/social reward and punishment due to ones personal actions.

On the other hand, the term "wealth redistribution" suggests a sinister plan. Who is to determine who gets what? On what system and who is to say that the new system is even better? The people who institute it? Of course they are going to say their way is just, because to say otherwise means they don't know what they are doing!

With the current social systems and access to skill improvements that exist in our nation, the talk of more "wealth redistribution" may not be merited.

Focus on the economy and the fuel problem. It is not like we Americans are just going to throw this country away for an extremists "Grand and noble" idea.

Consider the possibility that for thousands of years before anyone coined the word "socialism" ALL governments existed to socialize cost (primarily through war and private debt) and privatize profit for a fortunate few.

Even today with "democratically" elected governments I would argue "wealth redistribution" in one direction or the other is a given. For the last 35 - 40 years wealth has been moving steadily upwards, driven partly by a tax bias in favor of (private) debt financing rather than equity investment:

"The IRS permits mortgage interest to be tax-deductible on the pretense that it is a necessary cost of doing business. In reality it is a subsidy for debt leveraging.

"This tax bias for debt rather than equity investment (using one’s own money) is largely responsible for loading down the U.S. economy with debt.

"It encourages corporate raiding with junk bonds, thereby adding interest to the cost of doing business.

"This subsidy for debt leveraging also is the government’s largest giveaway to the banks, while causing the debt deflation that is locking the economy into depression – violating every precept of the classical drive for 'free markets' in the 19th-century.

'(A “free market” meant freedom from extractive rentier income, leading toward what Keynes gently called 'euthanasia of the rentier.'

"The Obama Commission endows rentiers atop the economy with a tax system to bolster their power, not check it – while shrinking the economy below them.)

Michael Hudson

 

[MikeK]

There is no "true" premise if you mean a complete redistribution that does not allieviate the underlining circumstances that lead some devoid of means of providing for themselves.

In many ways, "wealth redistribution" already occurs if the society is assisted with organizations that aid the misfortunate and teach code of ethics/morality. Also, there is no evil inherent in the current system if it is one based on economic/social reward and punishment due to ones personal actions.

On the other hand, the term "wealth redistribution" suggests a sinister plan.

[...]

You seem to believe that redistribution of our Nation's economic resources (wealth) is a new and arcane concept. It isn't. FDR's New Deal was nothing but a plan for redistributing wealth and it brought about the most prosperous and economically stable period in our history. But the end came about when the emerging corporatocracy managed to have it's puppet, Ronald Reagan, installed as President. And the rest is more recent history.

Wealth redistribution is not a bad thing. It is a good thing. And it is something that needs to be done if we are to preserve the American middle class.