NationStates Jolt Archive

who here believes in supply side economics? This is alos known as Reaganomics, trickle-down economics, and voodoo economics.

I sure as hell don't.

Um you better get used to supply side economics, there has been a lot of talk lately of doing completely away with income tax lately and replacing it with a consumption tax i.e. a national sales tax.

Maybe we can just not like the government involving itself in economics?

I like that idea. Practically efficient and (more importantly) morally perfect.

Ok, from my limited knowledge of economics "supply side" policies have worked really well sometimes... and caused massive problems other times.

Frankly I don't know.

What I don't get though is why you never hear of "trickle-up" economics. Give all the poorest people more money and the entrepeneurs will smell that money, and make stuff for the poor people to buy.

Why don't the rich businessmen who decide economic policy talk like this? Cos they ain't poor for one, but also they aren't entrepeneurs any more... the reason they're in the position they are now, deciding national economic policies, is cos they have worked their whole lives so that they now make money thru the minimum possible effort. Giving them the free time to make policy.

They sure aren't gonna market some new product to poor people, that's too much work! The EASIEST way to make loads MORE money is to cut upperclass tax rates. So so simple! No work at all, and loads more cash.

Maybe we can just not like the government involving itself in economics?

Well having a flax tax and an abolishment of income tax would be less government involvement.

There are advantages and disadvantages to both stimulative methods. What is used should be decided based on specific circumstances. There is no universal right and wrong way to stimulate the economy.

Ok, from my limited knowledge of economics "supply side" policies have worked really well sometimes... and caused massive problems other times.

Frankly I don't know.

What I don't get though is why you never hear of "trickle-up" economics. Give all the poorest people more money and the entrepeneurs will smell that money, and make stuff for the poor people to buy.

Because they want to make money. This means that with your system if they ever start making serious money with their idea then they will immediately have the living shit taxed out of them. Thus there is limited to no interest in entreprenuering enterprises.

1) Bad poll choices.

2) Supply-side economics are like communism. Nice idea, but assumes human nature doesn't exist. If businesses were fair and cared about -people-, it would be the perfect system. How many big companies do you think give a flying poodle about -people-?

1) Bad poll choices.

2) Supply-side economics are like communism. Nice idea, but assumes human nature doesn't exist. If businesses were fair and cared about -people-, it would be the perfect system. How many big companies do you think give a flying poodle about -people-?


Supply side economics is a cheap excuse to pump billions into the pockets of the rich. Spending is the engine for economic growth, without strong demand business's will not bother investing and the rich will just sit on their mountains fo cash.

Because they want to make money. This means that with your system if they ever start making serious money with their idea then they will immediately have the living shit taxed out of them. Thus there is limited to no interest in entreprenuering enterprises.

Yeah there is.

I'm starting out in business. Just out of Uni, where I've been on under-the-table jobs & govt. handouts. Low low low tax rate. But poor.

Now I'm starting to build a business. The pseudo-left-wing government just raised upper-income tax rate from 33% to 39%.

So at some point in the next few years, if all goes to plan, I'll be giving 6% more of my income to the government.

It ain't gonna stop me now though! Cos then, I'll still be well off. Now I'm poor, and sick of being broke.

Now say 10 years down the line, I'm doing ok, got some businesses that other people run for me. Some political party wants to drop the rate back down 6%. Hell yeah! I'm gonna be better off, for no work at all.

Because they want to make money. This means that with your system if they ever start making serious money with their idea then they will immediately have the living shit taxed out of them. Thus there is limited to no interest in entreprenuering enterprises.

Not entirely true.

The problem with only supply-side is that corporations have a tendancy just to take the money the government gives them and keep it, making the corporation richer, but doing nothing to help the poor. That was what Reagan did.

Taxes actually aren't even involved in the systems, its just how the government tries to stimulate the economy. Demand-side is giving money to the poor in the hopes they will buy things with it. Supply-side gives money to the rich hoping they invest it. Neither usually happens which is why we have the intermediary range of economics ehich is where the US is normally.

As for the taxes, abolishment is simply a stupid idea. What happens when the government goes bankrupt and dissolves itself? The income tax is a pretty good idea. After all, you owe the government for everything they give you.

I also don't think the government will ever get rid of income tax - its too profitable for them. I think Bush might want to, but it will never pass congress. They'd also have to go around the Progressive Income Tax amendment.

will ever get rid of income tax - its too profitable for them. I think Bush might want to, but it will never pass congress. They'd also have to go around the Progressive Income Tax amendment.

There is a Progressive Income Tax amendment? What are you referring to?

Well, I ask myself this...

If I was one of those incredibly rich and powerful people who awards himself share options and tax breaks, and makes sure there's a pyramid with an eye in it on banknotes, would I want to "trickle down" any portion of my wealth?

Erm...no.

So, if I know I wouldn't why would anyone else?

Therefore it can't possibly work.

There is a Progressive Income Tax amendment? What are you referring to?

I think its amendment 19 - progressive income tax. It set up the tax code the US has now. Bottom level income earners pay 10-16% in taxes, top levels pay 35-39% in taxes. It can be seen as soaking the rich, the more you make, the more you pay in taxes.

There is a Progressive Income Tax amendment? What are you referring to?

That's the Sixteenth Amendment:

The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.

That's the Sixteenth Amendment:

I am looking at my book on constitutional law right now but unfortunately it doesn't seem to go into the 16th amendment. Damn! How does it require progressive taxation? It looks like it just gives Congress the power to create an income tax.

I think we will definitely have some kind of sales tax before bush is done. He kept talking about using his "political capital" to change the tax code. Reagan worshipping republicans all think that problem with our economy is the rich are unfairly penalized for their sucess ignoring the fact that inequality is greater than any time since the gilded age.. Of course they also repealed the "Death tax" so as to not penalize trust fund brats for being rich born fabulously wealthy so their justifcations don't always stay consistent.

College republicans push on me all the time "Cut taxes, it will stimulate economy, eventually, tax cuts increase government revenue, blah blah blah"

Problem is, if you cut taxes by a lot, revenue has to climb up a big hole just to break even. Let's use a nice, round example.

The government gets (in the hypothetical example) $4 trillion in income tax when national income receipts are $10 trillion. Thus, the tax rate is 40%, and I'll assume it's a flat tax (something conservatives would loooooooooooove) for easy calculations.

The hypothetical government wants to cut taxes in half, to 20%. This is done. Revenue falls to $2 trillion.

In order for the government to break even, national income would have to double to $20 trillion. Only then would the government retain its $4 trillion in tax receipts (20% of $20 trillion=$4 trillion).

Sure, national income will grow a bit, but it probably won't double as a result of supply-side economics. :rolleyes: It would make individuals better off until they ended up with crappier roads, their kids ended up with crappier schools, they have to pay more for stuff previously subsidized by the government (energy privatization, anyone?) and so on. If the government doesn't cut spending, then We the People get nailed with having to service the national deficit. The Reaganomic argument that cutting taxes increases tax revenue because people find ways to evade high taxes is bunk---the black market must be very big indeed for a doubling in reported income to show up as the result of a tax cut. :rolleyes:

That's the Sixteenth Amendment:

Thanks, I couldn't remember which amendment.

Not entirely true.

The problem with only supply-side is that corporations have a tendancy just to take the money the government gives them and keep it, making the corporation richer, but doing nothing to help the poor. That was what Reagan did.

Taxes actually aren't even involved in the systems, its just how the government tries to stimulate the economy. Demand-side is giving money to the poor in the hopes they will buy things with it.
My point was only that the system he wanted would have to tax the up and coming rich to give to the poor. The truly rich are generally no longer involved in the income tax scheme.

thats why you tax people that have a personal wealth as well, not just ones that have high incomes. Then you can really soak the rich.

What the hell is demand-side economics?

Maybe we can just not like the government involving itself in economics?Gee, there's a novel idea.

College republicans push on me all the time "Cut taxes, it will stimulate economy, eventually, tax cuts increase government revenue, blah blah blah"
You're talking about the Laffer curve. As tax rates increase so do tax revenues, but it is not a straight line. With each percent of rate increase, revenue increases less and less. Eventually, it peaks and begins to decrease. To maximize tax revenue, you have to find the peak. The Republican thinking is that the peak is below the current rate of taxation. They're right, but I'm not sure what's so great about maximizing tax revenue. It would be much better to be at the peak than to be past it, but it's still too much tax to keep me happy.

Keynesian economics for me :)

who here believes in supply side economics? This is alos known as Reaganomics, trickle-down economics, and voodoo economics.

I sure as hell don't.

Hahahaha Trickle Down Theory is the most absurd economic theory ever devised. It was invented by AMERISCUM what do you expect from the land of the free market, poverty, homelessness and no healthcare. Down with AmeriKKKa.

Hahahaha Trickle Down Theory is the most absurd economic theory ever devised. It was invented by AMERISCUM what do you expect from the land of the free market, poverty, homelessness and no healthcare. Down with AmeriKKKa.

Oddly enough, supply side is a french idea. But nevermind.

Oddly enough, supply side is a french idea. But nevermind.
But do they use it?

But do they use it?

They used to. Everyone did. It hasn't been used anywhere since the twenties. Reaganomics wasn't really supply side because Volker didn't run the money supply that way. If anything, Reaganomics worked out as being demand side (Keynesian) if anything.

Maybe Thatcher a bit in the early 80s.

Supply side economics works--the question is, what are you trying to accomplish? If you're trying to get more money into the hands of big corporations and increase the divide between the rich and the poor, then supply-side is nearly perfect (laissez-faire is better for that, but supply-side is more doable). But if you're trying to actually stimulate a sagging economy for anything more than the very short term, and if you're trying to run a fiscally responsible government that offers any kind of social program or infrastructure building whatsoever without going into extreme debt, then supply-side economics is a disaster waiting to happen.

You're talking about the Laffer curve. As tax rates increase so do tax revenues, but it is not a straight line. With each percent of rate increase, revenue increases less and less. Eventually, it peaks and begins to decrease. To maximize tax revenue, you have to find the peak. The Republican thinking is that the peak is below the current rate of taxation. They're right, but I'm not sure what's so great about maximizing tax revenue. It would be much better to be at the peak than to be past it, but it's still too much tax to keep me happy.

I've heard Republicans mention this, but they've never showed it to me. I'm not an economist by any means...hell, the last econ class I took was in high school. I'm assuming the Laffer curve has something to do with calculus and that's why they don't teach it that early. Would you be kind enough to enlighten me? :)

who here believes in supply side economics? This is alos known as Reaganomics, trickle-down economics, and voodoo economics.

I sure as hell don't.

Why not, Clinton and the whole country sure benefited from the results!

Um you better get used to supply side economics, there has been a lot of talk lately of doing completely away with income tax lately and replacing it with a consumption tax i.e. a national sales tax.
Really? Who's talking about it?

Supply side economics is the dominant theory since the 1980s. Thatcher and Reagan for example implemented economic programs which were focused on the supply side.
This was the major switch from demand side economics (Keynesianism) which was dominant in till the 1970s to supply side economics.
This shift was needed and necessary because demand side economics was ruining the economy (too high labour costs).
The reason why the US and Britain have relatively robust economies today is because of the reforms on the supply side.
Countries which are almost without such reforms (like France) or with little reforms in that area (Germany) have therefore stagnant economies.
I see the economic stagnation in "Old Europe" (old EU members on the continent) mainly as a result on a lack of reforms on the supply side. Therefore the competetivness towards East Asia ( but also the US, UK and especially towards Eastern Europe) is decreasing more and more.
I believe more reforms on the supply side (tax cuts for companies, less social security payment for companies, deregulation of markets, less regulations, deregulation of the labour market, lower incomes for unqualified workers) is going to help our economies.
The best form of social security is to have a competitive economy. And the best way to have a competitive economy is to offer good opportunities for companies (and low taxes).
What is good for business is therefore in many cases also good for society as a whole.
Instead of that attitude unfortunately an anti-big business attitude is growing in Old Europe. Sad ´examples of wrongdoings of individuals in the business sector is used to generalize that issue. That leads to false conclusions due to this left-wing populism.
In fact we need more and real reforms which include deep cuts in the welfare state and tax cuts for companies.
That is going to lead to more competivness on the global market, more exports and that is going to create more jobs and in return also more domestic demand.
The key to the solution of the economic problems of Old Europe is clearly on the supply side.

I've heard Republicans mention this, but they've never showed it to me. I'm not an economist by any means...hell, the last econ class I took was in high school. I'm assuming the Laffer curve has something to do with calculus and that's why they don't teach it that early. Would you be kind enough to enlighten me? :)
I don't know that anyone's taken enough effort to define the Laffer curve using any sort of calculus. Picture a 2D graph. The X-axis is the tax rate from 0 to 100 percent, the Y-axis is relative tax revenue. The curve starts at (0, 0). Moving to the right it should look a hill. I don't know if anyone's managed to calculate a mathematical model more descriptive than that. It should be obvious that by the time tax rates reach 100% there is no incentive to have any taxable income and tax revenue is 0 (or possibly less than 0). The top of the hill is the maximum possible tax revenue. It's thought to sit over about the 25% mark on the rates. It should also be obvious that there are a great number of factors deciding where the peak is.
http://www.investopedia.com/terms/l/laffercurve.asp

Well, I ask myself this...

If I was one of those incredibly rich and powerful people who awards himself share options and tax breaks, and makes sure there's a pyramid with an eye in it on banknotes, would I want to "trickle down" any portion of my wealth?

Erm...no.

So, if I know I wouldn't why would anyone else?

Therefore it can't possibly work.

The rich don't have to make a conscious decision for trickle down to happen. Trickle down is what happens naturally when everyone goes about their normal economic activities unhindered by government.

The rich don't have to make a conscious decision for trickle down to happen. Trickle down is what happens naturally when everyone goes about their normal economic activities unhindered by government.
Focus on the word "trickle" for a second. What that implies--and is an accurate description of--is that the vast majority of the wealth stays at the top, with only a very small amount slowly making its way down to those below, and the farther down you are, the less reaches you, because everyone above you is taking their share of the trickle before it gets to you. Meanwhile, the person at the top is splashing around in his or her golden bathtub that the people at the bottom made it possible for him or her to acquire and fill. Like I said in an earlier post--trickle down is good if you're on top, not so good if you're anywhere else. It's the feudal system disguised as capitalism.

If you look at countries such as Sweden and Finland, which are among the top ten most economically competitive countries in the world with Finland in first place, you'll see that demand side economics is better that supply side.

I don't know that anyone's taken enough effort to define the Laffer curve using any sort of calculus. Picture a 2D graph. The X-axis is the tax rate from 0 to 100 percent, the Y-axis is relative tax revenue. The curve starts at (0, 0). Moving to the right it should look a hill. I don't know if anyone's managed to calculate a mathematical model more descriptive than that. It should be obvious that by the time tax rates reach 100% there is no incentive to have any taxable income and tax revenue is 0 (or possibly less than 0). The top of the hill is the maximum possible tax revenue. It's thought to sit over about the 25% mark on the rates. It should also be obvious that there are a great number of factors deciding where the peak is.
http://www.investopedia.com/terms/l/laffercurve.asp
Except no one knows for sure where exactly we fall on the laffer curve...

Ok, from my limited knowledge of economics "supply side" policies have worked really well sometimes... and caused massive problems other times.

Frankly I don't know.

What I don't get though is why you never hear of "trickle-up" economics. Give all the poorest people more money and the entrepeneurs will smell that money, and make stuff for the poor people to buy.

Why don't the rich businessmen who decide economic policy talk like this? Cos they ain't poor for one, but also they aren't entrepeneurs any more... the reason they're in the position they are now, deciding national economic policies, is cos they have worked their whole lives so that they now make money thru the minimum possible effort. Giving them the free time to make policy.

They sure aren't gonna market some new product to poor people, that's too much work! The EASIEST way to make loads MORE money is to cut upperclass tax rates. So so simple! No work at all, and loads more cash.


Because that's consumerist Marxism. Anything Marxist cannot make it into American Politics, which is why I'm planning on moving to Cuba with stolen design ideas for products, let Communists get in on the world market, and watch how well it does.

What I don't get though is why you never hear of "trickle-up" economics. Give all the poorest people more money and the entrepeneurs will smell that money, and make stuff for the poor people to buy.


Specifically because for 'trickle down' the government is not having to 'give' money to anyone.

Supply side economics is the dominant theory since the 1980s. Thatcher and Reagan for example implemented economic programs which were focused on the supply side.
This was the major switch from demand side economics (Keynesianism) which was dominant in till the 1970s to supply side economics.
This shift was needed and necessary because demand side economics was ruining the economy (too high labour costs).
The reason why the US and Britain have relatively robust economies today is because of the reforms on the supply side.
Countries which are almost without such reforms (like France) or with little reforms in that area (Germany) have therefore stagnant economies.
I see the economic stagnation in "Old Europe" (old EU members on the continent) mainly as a result on a lack of reforms on the supply side. Therefore the competetivness towards East Asia ( but also the US, UK and especially towards Eastern Europe) is decreasing more and more.
I believe more reforms on the supply side (tax cuts for companies, less social security payment for companies, deregulation of markets, less regulations, deregulation of the labour market, lower incomes for unqualified workers) is going to help our economies.
The best form of social security is to have a competitive economy. And the best way to have a competitive economy is to offer good opportunities for companies (and low taxes).
What is good for business is therefore in many cases also good for society as a whole.
Instead of that attitude unfortunately an anti-big business attitude is growing in Old Europe. Sad ´examples of wrongdoings of individuals in the business sector is used to generalize that issue. That leads to false conclusions due to this left-wing populism.
In fact we need more and real reforms which include deep cuts in the welfare state and tax cuts for companies.
That is going to lead to more competivness on the global market, more exports and that is going to create more jobs and in return also more domestic demand.
The key to the solution of the economic problems of Old Europe is clearly on the supply side.
Don't expect a reply. Dealing with reality is too difficult on the imaginary world most liberals here live in.

I believe in supply side economics.
I believe that Dubya is a good man.
I believe muslims can go to heaven.
I believe in Santa Claus.

see?

College republicans push on me all the time "Cut taxes, it will stimulate economy, eventually, tax cuts increase government revenue, blah blah blah"

Problem is, if you cut taxes by a lot, revenue has to climb up a big hole just to break even. Let's use a nice, round example.

The government gets (in the hypothetical example) $4 trillion in income tax when national income receipts are $10 trillion. Thus, the tax rate is 40%, and I'll assume it's a flat tax (something conservatives would loooooooooooove) for easy calculations.

The hypothetical government wants to cut taxes in half, to 20%. This is done. Revenue falls to $2 trillion.

In order for the government to break even, national income would have to double to $20 trillion. Only then would the government retain its $4 trillion in tax receipts (20% of $20 trillion=$4 trillion).

Sure, national income will grow a bit, but it probably won't double as a result of supply-side economics. :rolleyes: It would make individuals better off until they ended up with crappier roads, their kids ended up with crappier schools, they have to pay more for stuff previously subsidized by the government (energy privatization, anyone?) and so on. If the government doesn't cut spending, then We the People get nailed with having to service the national deficit. The Reaganomic argument that cutting taxes increases tax revenue because people find ways to evade high taxes is bunk---the black market must be very big indeed for a doubling in reported income to show up as the result of a tax cut. :rolleyes:
How many people have to say this: Supply-side economics has nothing to do with income tax. That is fiscal policy. Using the Aggregate supply/Aggregate demand diagram, Supply-side economics affects AS whilst fiscal policy, Monetary policy, and wages policy (not the right name for it) affect AD. Supply side does things like subsidise businesses or anything to increase the ability of firms to produce. By the mark, you cannot use Supply-side economics alone, you need fiscal policy to get all the taxation revenue. But they are definitely separate

What I don't get though is why you never hear of "trickle-up" economics. Give all the poorest people more money and the entrepeneurs will smell that money, and make stuff for the poor people to buy.
What do you think we're doing now in America? You might now realize it if you talk to lefties all the time, but the poor in this country don't pay any income tax while the rich pay as much as a third of their income for tax. 'Trickle-down' is a pejorative term for supply side economics, but in reality we haven't had a trickle-down system since the Gilded age.
And by the way, Longton is right that supply-side economics is about businesses and has nothing to do with income tax. Of course, not knowing what something is doesn't seem to stop people from deciding they hate it.

How many people have to say this: Supply-side economics has nothing to do with income tax. That is fiscal policy. Using the Aggregate supply/Aggregate demand diagram, Supply-side economics affects AS whilst fiscal policy, Monetary policy, and wages policy (not the right name for it) affect AD. Supply side does things like subsidise businesses or anything to increase the ability of firms to produce. By the mark, you cannot use Supply-side economics alone, you need fiscal policy to get all the taxation revenue. But they are definitely separate

According to whom? Low taxes is the cornerstone of ss-economics.

What do you think we're doing now in America? You might now realize it if you talk to lefties all the time, but the poor in this country don't pay any income tax while the rich pay as much as a third of their income for tax.

The lowest tax bracket is 10%. And that's only if you make under $7k.

I just went to the IRS website... apparently we were both wrong. The lowest rate is 10% for people making under 12k, the highest rate is 38.6%. But the fact that we have a 'progressive' income tax is proof of 'trickle-up'. You know where I first heard the progressive tax proposed? The Communist Manifesto, by Karl Marx. And of coruse, according to the IRS (http://www.irs.ustreas.gov/pub/irs-soi/01in01ts.xls) , the infamous top 1% of income earners pay 33.9% of all income tax, while the top 50% of wage earners pay 96% of all income tax. Does that sound like 'trickle-down' to you?

Focus on the word "trickle" for a second.

Trickle isn't a literal description of how much wealth goes from top to bottom. No wealth goes from top to bottom, bottom to top, or in any other direction. Its about the expansion of wealth at all levels. The rich get richer, the poor get richer, etc

I just went to the IRS website... apparently we were both wrong. The lowest rate is 10% for people making under 12k, the highest rate is 38.6%. But the fact that we have a 'progressive' income tax is proof of 'trickle-up'. You know where I first heard the progressive tax proposed? The Communist Manifesto, by Karl Marx. And of coruse, according to the IRS (http://www.irs.ustreas.gov/pub/irs-soi/01in01ts.xls) , the infamous top 1% of income earners pay 33.9% of all income tax, while the top 50% of wage earners pay 96% of all income tax. Does that sound like 'trickle-down' to you?

Boo hoo poor rich bastards have to pay taxes. The rich are parasites who live off the surplus value of the workers' labor. Does the Walton family deserve its billions that it earns by paying its workers $6.00 and devestating small town america with its monstrous wal-mart super centers and Sam's clubs? Hell no!
When they don't give their worker's health insurance who picks up the tab? We do because then they need to go on medicaid and probably food stamps as well which means the tax payer picks up the tab.

We should jack the top income tax rate up to 75 percent, bring back the estate tax, throw the board or directors of Walmart in jail for rampant violations of labor law, raise the minimum wage to $8.00/hr and reunionize the American workforce.

So basically, we should go back to the way things were in 1979. You know, double digit inflation, interest rates and unemployment.

I just went to the IRS website... apparently we were both wrong. The lowest rate is 10% for people making under 12k, the highest rate is 38.6%. But the fact that we have a 'progressive' income tax is proof of 'trickle-up'. You know where I first heard the progressive tax proposed? The Communist Manifesto, by Karl Marx. And of coruse, according to the IRS (http://www.irs.ustreas.gov/pub/irs-soi/01in01ts.xls) , the infamous top 1% of income earners pay 33.9% of all income tax, while the top 50% of wage earners pay 96% of all income tax. Does that sound like 'trickle-down' to you?

Can you link that? According to this, it's 7k...and the highest rate is 35%.

I think you are quoting out of date numbers, because it used to be 38.6%.

http://www.irs.gov/newsroom/article/0,,id=118995,00.html

Boo hoo poor rich bastards have to pay taxes. The rich are parasites who live off the surplus value of the workers' labor. Does the Walton family deserve its billions that it earns by paying its workers $6.00 and devestating small town america with its monstrous wal-mart super centers and Sam's clubs? Hell no!


Parasites?
You mean providing jobs to thousands while providing the public with rock-bottom prices (meaning we have more money to spend on other things).

You're right... I should have remembered that it just got lowered. I was using the data from '03.

who here believes in supply side economics? This is alos known as Reaganomics, trickle-down economics, and voodoo economics.

I sure as hell don't.

So it's a trick, played by the Man on the unsuspecting populace? Um. Ok. I disagree. Economists, to their credit, understand the legitimacy of supply side economics and back it up with numbers, something we engineers and scientists like. The only problem with economics is that it is really, really hard. That's why they give out Nobel Prizes.

This isn't a plot by the rich to oppress the poor people. Rich people don't sit around in high-backed chairs laughing deviously while planning how to stick it to Joe Blue Collar.

It's economics. There's NO morality involved. Giving to the poor sometimes works. Giving to the rich sometimes works. Fiscal policy is always somewhere in between, but while it may seem mean or cruel to give to the rich, it's not a moral decision- it's an economic one.
*****

MOREOVER, perhaps I should start a new thread with this idea, but am I the only one who's getting sick and tired of the role of morality in public decisions? Use your morality in your personal life. Use it to lead. Use it to help others and use it to get things done. But it shouldn't determine policy.

You know what should determine fiscal policy? Economics. You know what should determine national health care or prescription drugs? Economics and health policy. You know what should determine foreign policy? The state of world affairs and a plan for success. We shouldn't offer universal health care if it will cripple our country. We shouldn't invade other countries because it's the "right thing to do."

I just want a country that works! If this country will work better if I stand on my head, then order the presidential decree. If it works better if we all do jumping jacks at the same time, let's go. I firmly believe there are solutions to the problems facing this country, and a solution isn't moral or immoral- it's a solution!

Trickle isn't a literal description of how much wealth goes from top to bottom. No wealth goes from top to bottom, bottom to top, or in any other direction. Its about the expansion of wealth at all levels. The rich get richer, the poor get richer, etc
Except that right now, the poor aren't getting richer. At best, they're holding even, which is another way of saying the bottom is stagnant. And the bottom is getting larger, because the middle class is disappearing, while all the time the rich are indeed getting richer. As I said in my original post on this subject, supply-side works for some people, just not for most people.

Boo hoo poor rich bastards have to pay taxes. The rich are parasites who live off the surplus value of the workers' labor. Does the Walton family deserve its billions that it earns by paying its workers $6.00 and devestating small town america with its monstrous wal-mart super centers and Sam's clubs? Hell no!
Yes, yes they do deserve how much money they have. They would not have that money if people didn't shop there, they are not holding a gun to anyone's head saying shop at Walmart or else. You can still go to the local shop if you want. Consumers decide where they want to shop. If they shop at Walmart the Waltons make money. If they shop at the local shop the owner makes money. It is all up to the individual consumer.

We should jack the top income tax rate up to 75 percent, bring back the estate tax, throw the board or directors of Walmart in jail for rampant violations of labor law, raise the minimum wage to $8.00/hr and reunionize the American workforce.
What the f*ck is wrong with you? You realize if you do that then almost all labor jobs will leave America, increasing unemployment for the poor and middle class. Along with that all the rich people would just ship more money into overseas tax shelters, and end up just paying the same amount of taxes as they do now. And while unions do have their place, they are more screwing over the workforce than helping now, demanding ludicruous wages for menial tasks, this is the primary reason that labor jobs got sent over seas.

Yes, yes they do deserve how much money they have. They would not have that money if people didn't shop there, they are not holding a gun to anyone's head saying shop at Walmart or else. You can still go to the local shop if you want. Consumers decide where they want to shop. If they shop at Walmart the Waltons make money. If they shop at the local shop the owner makes money. It is all up to the individual consumer.




Not everyone has the money to shop places besides walmart, and walmart uses its ability to undercut prices to knock out its competition.

So yes, people are *forced.*

Not everyone has the money to shop places besides walmart, and walmart uses its ability to undercut prices to knock out its competition.

So yes, people are *forced.*

So Walmart is sticking it to us with their low prices? Ahhh! Damn them! That's the last thing we need in America!

Not everyone has the money to shop places besides walmart, and walmart uses its ability to undercut prices to knock out its competition.

So yes, people are *forced.*
And what is wrong with low prices? See, this is how the economy works, the producers set prices, consumers find the lowest price and buy from that (unless they are lazy, then they just go with the first price that looks good), and producers must adjust prices or face the risk of going out of busines (I know this is overly simplistic, but I am just too tired to set up a good example).

And what is wrong with low prices? See, this is how the economy works, the producers set prices, consumers find the lowest price and buy from that (unless they are lazy, then they just go with the first price that looks good), and producers must adjust prices or face the risk of going out of busines (I know this is overly simplistic, but I am just too tired to set up a good example).
There ain't so such thing as a free lunch. In order for you to have that low price, someone in the US--if they're lucky--has to make do with a wage they can't live on to produce that product. More often than not, the person in the US isn't making the product if we're talking about Wal-Mart--it's being made in Honduras or China or elsewhere where some poor schlub makes pennies a piece to do it. The simple fact is that in terms of labor costs, the US can't compete with most of the rest of the world, and as a result, our manufacturing labor force is being decimated.

But what's more important is this: Wal-Mart could have their low prices and also pay their workers a living wage if they were willing to accept a slightly--and I emphasize the word slightly--lower profit margin. They wouldn't have to lose money; hell, they wouldn't even have to lower their dividend (assuming they pay one). Costco does just fine competing with Sam's Club--is kicking their ass as a matter of fact--and pays their employees handsomely in the process because they don't believe that the stockholder is more important than the guy actually doing the work for them. If more companies acted that way, the country would be a lot stronger economically than it is right now.

The simple fact is that in terms of labor costs, the US can't compete with most of the rest of the world, and as a result, our manufacturing labor force is being decimated.

It's been happening for 20 years. Nothing new. Generally, manufacturing jobs suck. There are bigger, better jobs on the way. White collar. We need jobs like that, not crappy jobs where you stick the pin joint in the widget for 10 hours a day.

That's why it's a great thing that there are more Americans in college than ever before. If we can't compete with other nations, why bother? Let Mexico make our goods, and we can provide great new hightech watches and computers. We come out ahead.

There ain't so such thing as a free lunch. In order for you to have that low price, someone in the US--if they're lucky--has to make do with a wage they can't live on to produce that product. More often than not, the person in the US isn't making the product if we're talking about Wal-Mart--it's being made in Honduras or China or elsewhere where some poor schlub makes pennies a piece to do it. The simple fact is that in terms of labor costs, the US can't compete with most of the rest of the world, and as a result, our manufacturing labor force is being decimated.

But what's more important is this: Wal-Mart could have their low prices and also pay their workers a living wage if they were willing to accept a slightly--and I emphasize the word slightly--lower profit margin. They wouldn't have to lose money; hell, they wouldn't even have to lower their dividend (assuming they pay one). Costco does just fine competing with Sam's Club--is kicking their ass as a matter of fact--and pays their employees handsomely in the process because they don't believe that the stockholder is more important than the guy actually doing the work for them. If more companies acted that way, the country would be a lot stronger economically than it is right now.

Don't kid yourself - the stakeholders are the most important thing. Period. If managers are not doing their best to maximize current sharholder wealth they lose their jobs.

Walmart has an incredible inventory and quality control system in place. Wages are not the only thing that dictates the price of goods.

How would they be able to lower profits and keep their dividend the same (their margins are already very low)? Please explain.

But what's more important is this: Wal-Mart could have their low prices and also pay their workers a living wage if they were willing to accept a slightly--and I emphasize the word slightly--lower profit margin. They wouldn't have to lose money; hell, they wouldn't even have to lower their dividend (assuming they pay one). Costco does just fine competing with Sam's Club--is kicking their ass as a matter of fact--and pays their employees handsomely in the process because they don't believe that the stockholder is more important than the guy actually doing the work for them. If more companies acted that way, the country would be a lot stronger economically than it is right now.
The stockholders are the most important people in the company seeing as they own the damn thing. A business with no owners is non-existant. If Walmart were to start lowering their profits their stock value will fall. That's not good.

In my personal opinion, the stockholders are the least important part of any business, and I believe this in part because when a company goes belly up, they get fucked the hardest and most. A company can exist without stockholders--it can't exist without the actual people doing the damn work. Stockholders may be a necessary evil, but they're far from being the most important group in any given company.

As to the claim that if Wal-Mart lowered its profit margins--profit margins that are considerable, by the way The Force Majeure--that their stock would fall, perhaps it would, but it wouldn't be a precipitous fall, and it certainly wouldn't do as much harm to the national economy as the good they could do by giving their employees a 20% raise across the board and providing reasonable health insurance benefits. It certainly hasn't hurt CostCo in any way--except in the eyes of stock analysts who think they ought to fuck over their employees for the benefit of the stockholders (who aren't producing a goddamn thing). No--if you want economic health in this country, you have to take care of the little guys, because they'll take care of the big guys.

In my personal opinion, the stockholders are the least important part of any business, and I believe this in part because when a company goes belly up, they get fucked the hardest and most. A company can exist without stockholders--it can't exist without the actual people doing the damn work. Stockholders may be a necessary evil, but they're far from being the most important group in any given company.

They get screwed the same way every owner does when their company fails. And that doesn't change the fact that managers are looking out for the stakeholders first and foremost. It actually gives reason why they would keep a close eye on the managers; they have the most to lose.



As to the claim that if Wal-Mart lowered its profit margins--profit margins that are considerable, by the way The Force Majeure--that their stock would fall, perhaps it would, but it wouldn't be a precipitous fall, and it certainly wouldn't do as much harm to the national economy as the good they could do by giving their employees a 20% raise across the board and providing reasonable health insurance benefits. It certainly hasn't hurt CostCo in any way--except in the eyes of stock analysts who think they ought to fuck over their employees for the benefit of the stockholders (who aren't producing a goddamn thing). No--if you want economic health in this country, you have to take care of the little guys, because they'll take care of the big guys.

The margins vary widely for each item. They have some that generate a good amount of profit, but also some that just make pennies. If they had such high margins, then how are they squeezing out their competitors?

They get screwed the same way every owner does when their company fails. And that doesn't change the fact that managers are looking out for the stakeholders first and foremost. It actually gives reason why they would keep a close eye on the managers; they have the most to lose.That's not the point--the stockholders add nothing to the company of any intrinsic value. They don't produce any product, and lately it seems they're not providing any sort of oversight of the management--the small stockholder doesn't have any of that sort of power anyway. All they provide is capital, and they're taking a risk when they do that. In my opinion, they ought to be considered last in the pecking order as a result.

The margins vary widely for each item. They have some that generate a good amount of profit, but also some that just make pennies. If they had such high margins, then how are they squeezing out their competitors?
They do it in part by destroying small competition when they first move into an area. Because they're so big, they're able to run a store at a loss if necessary at first in order to get rid of competition and then increase their prices later on. It's predatory, plain and simple.

Yes, yes they do deserve how much money they have. They would not have that money if people didn't shop there, they are not holding a gun to anyone's head saying shop at Walmart or else. You can still go to the local shop if you want. Consumers decide where they want to shop. If they shop at Walmart the Waltons make money. If they shop at the local shop the owner makes money. It is all up to the individual consumer.

What the f*ck is wrong with you? You realize if you do that then almost all labor jobs will leave America, increasing unemployment for the poor and middle class. Along with that all the rich people would just ship more money into overseas tax shelters, and end up just paying the same amount of taxes as they do now. And while unions do have their place, they are more screwing over the workforce than helping now, demanding ludicruous wages for menial tasks, this is the primary reason that labor jobs got sent over seas.

First of all most people work in the service sector not in manufacturing.
How are you going to spend a wal-mart greeter, a burger flipper or a gas station pumper's job overseas? Huge chain stores drive down the value of labor increasing poverty they don't alleviate it. Wages in the united states have dropped steadily in the last three years.
Remeber all the strikes in the Supermarkets in CA last year? All the supermarkets were slashing wages and driving down benefits to stay competitive with Wal-Mart. You had the huge supermarkets like Ralph's destroying middle class $17-18/hr jobs and replacing them with barely minimum wage jobs to compete with the the great beast Wal-mart.

Furthermore like I said earlier all these great values at wal-mart and other corporate dystopias are paid for by the tax payer because their benefits are so hellishly dismal that many of their employers ussually qualify for food stamps, medicaid and welfare benefits which are paid for by the tax payers. If we forced them to pay semi living wages, say $8hr and provide healthcare we would in economic terms be "internalizing the externalities", basicaly forcing them to pick up the tab for keeping their workers alive rather than shifting it on to the government. They can't possibly ship a stockboy job overseas so whats the worry.

Labor unions demand ridiculous wages for menial tasks is what is destroying the country? That is rich, we have a whopping 12 percent unionization rate in the United States which is only around 5 percent if you only count the private sector. Big employers like Wal-Mart just ignore labor laws pay trivial fines for doing so and carry out their merry task of driving down the value of labor in the entire economy. Other's like the airlines demand massive give backs by the unions or declare bankruptcy and have their labor contracts voided. In the few areas where labor is stong like las vegas for example even dishwashers make like $12 an hour and can live comfortable lives.

Your plan for a strong economy seems to be to drive down wages so low that we can actually compete with china and mexico? That is bloody brilliant, we already have 45 million americans with out health insurance, around 30 millions americans who go hungry each year and your plan is basiclly to do away with unions because they drive the cost of labor up and reduce worker's outrageous wages. How are people supposed to survive on less wages then the pitances that they recieve now? Do you want people to live in cardboard shacks like in the maqilladora zones of mexico or the shanty towns all around china's major cities?
Durring the 50's the US had a unionization rate of more than 50 percent and a top income tax rate of over 92 percent and the economy did awesome. Now we have a unionization rate of 12 percent a top tax rate of 34 percent and the economy is utter shit.

Oh yeah and the local shops bit, studies show that when a walmart moves in towns lose on average like 35 local business which ussually are businesses locally owned which kept the money in the community.

Durring the 50's the US had a unionization rate of more than 50 percent and a top income tax rate of over 92 percent and the economy did awesome. Now we have a unionization rate of 12 percent a top tax rate of 34 percent and the economy is utter shit.


If you ignore the three recessions during that decade. The economy is far from 'shit.'

If you ignore the three recessions during that decade. The economy is far from 'shit.'
The current economy? Whatever strength seems to be in this economy is a facade--we're looking an Argentina style meltdown in the face and doing nothing as a country to stop it.

On the plus side, if we do get massive inflation, my student loans will wind up being about a month's pay. Got to look for the bright side, after all.

It's been happening for 20 years. Nothing new. Generally, manufacturing jobs suck. There are bigger, better jobs on the way. White collar. We need jobs like that, not crappy jobs where you stick the pin joint in the widget for 10 hours a day.

That's why it's a great thing that there are more Americans in college than ever before. If we can't compete with other nations, why bother? Let Mexico make our goods, and we can provide great new hightech watches and computers. We come out ahead.

No, we need more manufacturing jobs. They are generally unionized and at least decent paying. The reason the quality of jobs and wages has gone down recently is a large shift to the retail sector in the US. This is causing an even greater difference between the wealthy and poor in this country.

No, we need more manufacturing jobs. They are generally unionized and at least decent paying. The reason the quality of jobs and wages has gone down recently is a large shift to the retail sector in the US. This is causing an even greater difference between the wealthy and poor in this country.

But where are the manufacturing jobs going to come from? In general, americans will not buy american products, if given a choice. Nor will anyone else.

Given that, what are all these people going manufacture, and who will but it if they do.

But where are the manufacturing jobs going to come from? In general, americans will not buy american products, if given a choice. Nor will anyone else.

Given that, what are all these people going manufacture, and who will but it if they do.

Actually with the low level of the dollar right now, American products are rather popular.

Manufacturing jobs will come whenever the government offers benefits to companies who keep jobs in the US.

But where are the manufacturing jobs going to come from? In general, americans will not buy american products, if given a choice. Nor will anyone else.

Given that, what are all these people going manufacture, and who will but it if they do.Actually, we don't know that, as there hasn't been much of a push by American manufacturers to raise the level of consciousness about American-made to the consumer. I'd pay more for an American made product, and often do, even if it means I buy fewer items and buy them less often.

But a better way to level the playing field would be to actually enforce the voluntary labor provisions of our trade agreements, the ones that are there for show. If we forced our trade partners to pay living wages to their labor forces, we could narrow the difference in production cost to such a point where US manufacturing could compete in at least some arenas. But we can't compete with slave labor or prison labor or child labor in China.

Actually, we don't know that, as there hasn't been much of a push by American manufacturers to raise the level of consciousness about American-made to the consumer. I'd pay more for an American made product, and often do, even if it means I buy fewer items and buy them less often.

But a better way to level the playing field would be to actually enforce the voluntary labor provisions of our trade agreements, the ones that are there for show. If we forced our trade partners to pay living wages to their labor forces, we could narrow the difference in production cost to such a point where US manufacturing could compete in at least some arenas. But we can't compete with slave labor or prison labor or child labor in China.

To a certain extent that is true. But look at manufacturing sectors that require a first world (or near first world economy), i.e, heavy machinery, machine tools, aircraft, automobiles etc.

Every year the US share of these market segments seem to fall, without the global market increasing much. Part of the problem is that no-one wants to purchase america products, even when they are comparible in quality and price. Just look at the auto market: How many people do you know who are really holding out for an american luxury sedan and not a German or Japanese one.

In the corporate sector there are similar problems. Airbus now delivers more aircraft than Boeing, despite the fact that Boeing still turns out basically better planes, and has a more flexible approach to satisfying customer needs. (I used to work for a European legacy carrier, so I know this is true.)

There is a fundamental lack of interest in most american finished goods. The only area where america still seems to lead the world is turning out crappy fashions. (Basically stiching labels to random items of clothes made by child labor in S.E. Asia, then marking it up 20,000%. I doubt if calvin kline or tommy hilfiger could even recognize 90% of their own lines if you took the label off).

I agree with you about enforcing the living wage provisions of trade agreements though.

To a certain extent that is true. But look at manufacturing sectors that require a first world (or near first world economy), i.e, heavy machinery, machine tools, aircraft, automobiles etc.

Every year the US share of these market segments seem to fall, without the global market increasing much. Part of the problem is that no-one wants to purchase america products, even when they are comparible in quality and price. Just look at the auto market: How many people do you know who are really holding out for an american luxury sedan and not a German or Japanese one. <1>

In the corporate sector there are similar problems. Airbus now delivers more aircraft than Boeing, despite the fact that Boeing still turns out basically better planes, and has a more flexible approach to satisfying customer needs. (I used to work for a European legacy carrier, so I know this is true.) <2>

There is a fundamental lack of interest in most american finished goods. The only area where america still seems to lead the world is turning out crappy fashions. (Basically stiching labels to random items of clothes made by child labor in S.E. Asia, then marking it up 20,000%. I doubt if calvin kline or tommy hilfiger could even recognize 90% of their own lines if you took the label off). <3>

I agree with you about enforcing the living wage provisions of trade agreements though.

Problem 1] American goods have an image problem. Somehow, 'made in the USA' does not beat 'Deutsche Industrie Norm'. Might it somehow be related to the fact that the US has a penchant for higly impopular policies?

Problem 2] Who on earth wants to buy American equipment when America has a penchant for trade-embargoes? You never know if you will have a problem with spareparts so time down the road.

Problem 3] An extension of problem 1] The perception of US quality suffers when its very name becomes attached, or stitched to shoddy, bad-looking products. This particularly stupid outlook seems to be spreading to other nations though: I present the Smart Car as evidence that even All-German Mercedes can be unsmart.

No, we need more manufacturing jobs. They are generally unionized and at least decent paying. The reason the quality of jobs and wages has gone down recently is a large shift to the retail sector in the US. This is causing an even greater difference between the wealthy and poor in this country.

But if China can beat the pants off us in manufacturing, why bother? White collar jobs really are the way to go. Get a job in engineering, or business, or accounting, or biology, or whatever. There are better jobs there than in manufacturing. We've done manufacturing for the past 150 years. It's time to do something new and have the 'jobs of Tomorrow' today.

But if China can beat the pants off us in manufacturing, why bother? White collar jobs really are the way to go. Get a job in engineering, or business, or accounting, or biology, or whatever. There are better jobs there than in manufacturing. We've done manufacturing for the past 150 years. It's time to do something new and have the 'jobs of Tomorrow' today.

We've been doing that for a while. After the 1950's America turned to a service based industry. That's why we don;t have a huge manufacturing/finished product sector anymore. We're going to have to accept other nations beating us out in manufacturing simply because the U.S. focuses more on service than it does putting out products.

There are plenty of products still made in America. Don't overlook that. The service industry has grown at a faster rate, in large part because there are more services to offer.

Great manufacturers: TXN, Dell, Intel, Ford, General Mills, Altria, Boeing, etc. etc. etc. They all make stuff - tangible stuff.

Great service providors: Citigroup, Pixar, Oracle, Verizon, Disney, etc. They do stuff. provide the intangible.

But if China can beat the pants off us in manufacturing, why bother? White collar jobs really are the way to go. Get a job in engineering, or business, or accounting, or biology, or whatever. There are better jobs there than in manufacturing. We've done manufacturing for the past 150 years. It's time to do something new and have the 'jobs of Tomorrow' today.
Let's be honest with ourselves here--not everyone is cut out to get a job in engineering or business or accounting or biology. They just don't have the stuff for it. So should they be condemned to live in the sewers as a result? part of what made our country great in the past was the chance for a person of average intelligence and ability to still become a part of the middle to upper-middle class simply by persevering and doing an honest day's work. Sorry if that seems passe to you, but I think we still ought to try, as a country, to keep that possibility alive.

Let's be honest with ourselves here--not everyone is cut out to get a job in engineering or business or accounting or biology. They just don't have the stuff for it. So should they be condemned to live in the sewers as a result? part of what made our country great in the past was the chance for a person of average intelligence and ability to still become a part of the middle to upper-middle class simply by persevering and doing an honest day's work. Sorry if that seems passe to you, but I think we still ought to try, as a country, to keep that possibility alive.
Last I checked plumbers, HVAC, electricians, refridgerator salesmen, loan officers and even journalists were not living in sewers.
(though plumbers may work in them at times...) :)

Last I checked plumbers, HVAC, electricians, refridgerator salesmen, loan officers and even journalists were not living in sewers.
(though plumbers may work in them at times...) :)
True--but those are still skill professions (except for the salesmen, and some of them are living in sewers). By the way--try getting a job as a loan officer these days without at least a Bachelor's in Business. But I'm talking more about the guy on the assembly line or the manufacturing plant, people who have never been drawn to college, or who would have done very poorly if they had been forced to go in order to get a job. There are some people who just have neither the desire nor the ability to succeed at higher education, and they shouldn't be told that there's no place for them in the work force other than at McDonald's or Wal-Mart. The US can have a successful manufacturing base if we use our leverage as the world's biggest market to force higher labor standards around the world and stop letting multi-nationals rape third-world countries while simultaneously fleecing us. We just have to want to do it, andit won't happen as long as multi-nationals put billions of dollars collectively every year into our electoral system.