The Language of Looting (how the word free market became twisted)

[Prime Junta]

Ack, I can't stop myself.

About that class war thing:

MOBILE EXECUTION BUS FLEETS: THE SOLUTION TO AMERICA’S BANKER PROBLEM

 

[magerette]

Yes, this topic is like probing a sore tooth, painful but impossible to resist. In many ways it reminds me of the unending, annoying "What is the definition of an RPG" discussions game geeks used to be so fond of.

I like the solution above--especially this part:

But wait, that’s not all: not only is it cheap, fast and efficient, but it’s green! Yes, the executed bankers’ bodies can be recycled and put to use by more responsible citizens.

 

[Alrik Fassbauer]

Interesting that this exact sort of reasoning was used prior to WW2 to justify the oppression of the Jews and continues to be used by anti-Semitic groups to this day. But it's OK this time around...

In fact this is part of the results of a study I read a few days ago.

It says that the earnings of the management in big companies cannot be controlled as they should, because the board of directors / board of management doesn't control them as they should, because they all tend to belong to the same social class.

Here, it is currently widely discussed that the earnings of the management are so high - which sounds quite weird if the management people belong to almost collapsed banks and still demand millions of Euros as their earnings. (Currently in the case of Georg Funke of the Hypo Real Estate bank - which is held upright only with Billions of the German government !)

The study argues that a management could work more effectively - a try to reduce corruption - if it was better controlled.

For such a control there's usually responsible the board of directors.

But - as the study says - this kind of control is not effectively enough. It should be more rigid, the study says, so that decisions of the management can be properly analysed whether they make sense or not.

In the case of the management earnings, they are not discussed thoroughly enough, the study says, which in fact means that the earnings rise despite making sense.

This applies not only on the management, but on all parts of a company, of course, if corruption should be battled effectively.

 

[Prime Junta]

More class war goodness:

 

[Benedict]

The top 50 hedge fund managers made $29 billion last year--$29 billion for 50 individuals. Those who are able to work the stock market and amass huge fortunes on capital gains are paying a lower tax rate than their secretaries. That’s not fair.

So he's legislating his vision of "fair" by specifically targetting the CEOs for the benefit of the secretaries. That's class warfare.

Hahahah . . . . what kind of idiot has a definition of fair that includes people earning hundreds of millions paying a lower tax rate than their secretaries? I don't think Obama's being massively controversial with that.

 

[Benedict]

Interesting definition of socialism. I would say though at least that taxing the rich more is moving towards socialism, if not outright socialism.

It's definitely a buzz word that is used, but then it's only one of about a million that politicians on both sides of the divide use to incite their masses.

Not a hugely interesting definition of socialism . . . . take pretty well any of these

Taxing the rich more is a more left wing form of progressive taxation within a capitalist framework. It still assumes that the rich are good at being rich and generating wealth and even if a bit more is skimmed out of their salary to provide a better standard of living for those with weaker wealth generation skills (whether through nature or past opportunities) it still trusts them with wealth generation rather than the state.

 

[Benedict]

(1) Economic policy affects income distribution.
(2) Income distribution diverged very quickly under presidents Reagan, Bush 1, and Bush 2, but stayed more or less constant between the end of WW2 and president Reagan, and during the Clinton interlude.

Therefore, it follows that Reagan's and Bush's economic policies caused, or permitted, this to happen.

And BN, aren't you of the opinion that recessions contract the income inequalities because they disproportionately impact the rich, and hence that the income inequality growth is because we haven't had a recession for a while? No recessions under clinton . . .

 

[Benedict]

I think our country has done a better job at that than just about any other.

.

Hahah! How cute.

We're not really any better admittedly

 

[dteowner]

Hahahah . . . . what kind of idiot has a definition of fair that includes people earning hundreds of millions paying a lower tax rate than their secretaries? I don't think Obama's being massively controversial with that.

This statement of Buffett's is strictly false, and has been used out of context by the left for years and years. Buffett's talking effective rate of taxation, not codified tax rate. Big difference, folks. It stems wholly from the sources of his income. Plus, at the capital gains rate you lefties like to throw out (25%), Buffett's statement would likely still be true. Get over it, folks. Move on.

 

[Benedict]

And finally: I tried dipping a toe back in here, but it's making me as irritated as ever, so I'm back out until it stops having this effect on me. I trust mags and Benedict to hold the fort against you Huns until then. Ta.

But I'm almost out of boiling oil & arrows!

 

[Benedict]

So, is the first $250,000. not being taxed any higher then? ( If so, this is even crazier.)

Indeed, it's absolutely insane. It is only the marginal tax rate on income over 250k that is even being proposed to be changed.

 

[Benedict]

This statement of Buffett's is strictly false, and has been used out of context by the left for years and years. Buffett's talking effective rate of taxation, not codified tax rate. Big difference, folks. It stems wholly from the sources of his income. Plus, at the capital gains rate you lefties like to throw out (25%), Buffett's statement would likely still be true. Get over it, folks. Move on.

Really? Thanks for explaining that to me because I'm generally slow with financial stuff.

How is it strictly false? Sounds to me like it's absolutely true, he pays a smaller proportion of his overall earnings in the year as tax than his secretary.

I agree, the Buffett example doesn't demonstrate that income taxes taken in isolation are regressive. I'm sure some people will read it like that, but then most people are bloody idiots who already know what they think and will ignore, distort and filter all "reality" as needed to prove themselves right (EDIT - myself included some of the time I'm sure). It does however demonstrate that the aggregate effect of the whole tax structure including capital gains as well hits a point where it becomes regressive, which is bloody stupid.

IMO the whole income tax vs capital gains thing is frustrating even here. Why should money made from money be taxed at a lower rate than money made from actually working every day? Seems to me to be a stupid system that favours inherited wealth over actual productive utilisation of talent.

Particularly annoying here because we did have quite a well designed system, the capital gains tax rate tapered down with time so that long term investors, people who've built companies from scratch etc all ended up paying relatively low tax rates where investors & speculators who deployed their capital for short term opportunities paid a reasonably high rate (although still lower than higher rates of income tax). Now they've flattened it all out.

 

[dteowner]

Particularly annoying here because we did have quite a well designed system, the capital gains tax rate tapered down with time so that long term investors, people who've built companies from scratch etc all ended up paying relatively low tax rates where investors & speculators who deployed their capital for short term opportunities paid a reasonably high rate (although still lower than higher rates of income tax). Now they've flattened it all out.

Not a bad system, that. I'll admit some dissonance because I've got some real heartburn with short term investors and the damage they do (both directly and indirectly). The unfettered free market is generally going to encourage short term positions. Not quite sure how to get around that without screwing the pooch in the process.

The risk, obviously, is to deter investment. It's fine for the rich to have buttloads of money as long as they dump it right back into the system (which presumably makes them more money, all you income disparity hawks). It's when tax code prompts them to sit on their phat lewt that we run into problems.

Which leads to a question I have for the econ junkies here. Are mutual funds and bonds sufficiently fluid to keep the money "circulating"? With the baby boomers all sitting on bond-heavy retirement portfolios, there's a tremendous amount of capital that's being saved. I understand that those bonds are, in one way or another, paying for something, but do they suffer from a smaller multiplier than more traditional "get yer check and go spend it" mechanisms? I'm just wondering if all those individual nest eggs are a hidden drag on the system.

 

[Benedict]

It was a good system, I can see economic arguments for simplifying taxes in general but there's so many other things that would do better with simplification I'm not sure why they picked on that.

Ultimately the rich do keep it in the system one way or another, whether it's giving the banks the savings needed to lend or giving companies the ability to raise money through bond issues to grow or whether it's directly going into stocks or property. No real difference where they keep it, wherever it is it still constitutes a contribution to supply of capital.

The problems can occur when people save rather than spending, i.e. cause a reduction in demand. The types of savings are less important, it's good to have a balance because different entities at different times benefit from different capital raising options, but it's not a major issue AFAIK.

 

[skavenhorde]

Just like public health care -- in most advanced capitalist countries anyway. There may be a few where there are no private clinics, I suppose, but not a great many; I certainly can't think of any off the bat. Generally speaking it works more or less as Benedict described -- the public system provides a basic but more or less sufficient standard of care that's available to everyone, and private clinics provide fancier stuff for people who are able and willing to pay for them. The details vary; in Britain the NHS is known for its rude doctors and crowded wards, which means that there's more demand for private clinics than in France, which is known for excellent doctors making house calls for free. But in either country, if you get seriously ill or have an accident, you won't be bankrupted by the medical fees, whatever your circumstances. That's the thing that really matters.

This was said awhile ago, but I wanted to add Taiwan to that list with a similiar health care system. It works out great for me. If I want to go to the doctor for a check-up or I have the flu, it costs next to nothing. But I always have the choice to go to any clinic or hospital, no HMO forcing you to certain hospitals. Plus most of the medicine is covered with a nominal fee that I have to pay, but certain medicines will cost a little extra. Even when you have to pay more it's nothing compared to what it costs in America. The doctors are very good (even speak English since they have to go to America to become a doctor) and the wait isn't as bad as everyone thinks it would be. It's no longer than any doctor visit I had in America.

Here something funny that I learned a few months ago. The health care system will even partially pay for traditional Chinese medicine like acupuncture. Not really relevant to the discussion at hand, but I thought it was interesting that it would and could pay for some of the non-western medical services.

 

[Benedict]

Here something funny that I learned a few months ago. The health care system will even partially pay for traditional Chinese medicine like acupuncture. Not really relevant to the discussion at hand, but I thought it was interesting that it would and could pay for some of the non-western medical services.

We get some stuff like that on the NHS too. Even my private health cover doesn't fully pay for everything like that, we're allowed a certain number of "complementary" therapies per year (irritatingly chiropracty is considered complementary voodoo).

 

[Prime Junta]

We get some stuff like that on the NHS too. Even my private health cover doesn't fully pay for everything like that, we're allowed a certain number of "complementary" therapies per year (irritatingly chiropracty is considered complementary voodoo).

That's because it hasn't been clinically shown to work. This may be because (a) it doesn't, or (b) chiropractors don't have the kind of financing to run massive double-blind trials to prove it does. There are probably plenty of alternative therapies out there that do work; we just don't have solid scientific evidence about it.

 

[Benedict]

That's because it hasn't been clinically shown to work. This may be because (a) it doesn't, or (b) chiropractors don't have the kind of financing to run massive double-blind trials to prove it does. There are probably plenty of alternative therapies out there that do work; we just don't have solid scientific evidence about it.

There have been several clinical trials & meta analysis of a number of clinical trials that suggest that chiropractic treatments work for lower back pain. They're even recommended here in the UK for back pain by our Clinical Standards Advisory Group. They're very well established in Australia too apparently, even at school age people are assessed for scoliosis and referred for chiropractic treatment (which is why my australian partner has a very straight spine and I have a fairly twisted one).

 

[vanedor]

The doctors are very good (even speak English since they have to go to America to become a doctor) and the wait isn't as bad as everyone thinks it would be. It's no longer than any doctor visit I had in America.

A 28 millions people country cannot train its own doctors?

Unbelievable.

 

[magerette]

Back to the language of looting and the free market and stuff:

Top Exec Pay Train Runs Full Steam Ahead

Not familiar with this source but you have to love the concept of "golden coffins" no matter which side of the question you're on:

For example, the total pay of Verizon Communications Inc. CEO Ivan Seidenberg fell 30% last year, to $18.6 million. But some shareholders are peeved that his heirs stand to collect up to $35 million payable upon Mr. Seidenberg's death—an unusual benefit known as a “golden coffin.”

Arguing that shareholders shouldn't be saddled with a payment for which no service can be rendered, the Philadelphia city employees' pension fund and another public pension fund have filed a shareholder resolution for Verizon investors to vote on the perk.

Verizon insists that golden coffins are necessary to retain key employees.

But the pension funds wryly retort that “in our opinion, death defeats this argument.”