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The 99 percent

economist.com

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Re: The 99 percent

#71

Post by macov »

colanderman wrote: post #67

Here's why the rich get richer: because the 99% produce too damn much. Consumerism worked for a while to keep things even, but we've reached a plateau. People can only buy so much crap. But we're more productive now than ever [1]. So where does all that extra money go? The people at the top take it. CEOs don't give their employees raises, and pocket the rest. Bankers play games with your excess money you've dumped in…

You are so wrong. Less work?

There is no cure for cancer, no clean energy, no cheap housing, no good education. There are so many things to do.

Re: The 99 percent

#72

Post by brc »

guimarin wrote: post #2

Five points for the OWS guys. 1. Transparency. We need to see where every dollar of the US federal gov't is spent. It needs to be on the internet, and it needs to be easily accessable. An exception can be made for classified spending in specific, but not so categorically (IE we spend X on classified stuff). Additionally, just like there is a Surgeon's General Warning on cigarette packages, there needs to be a link on…

I agree with most of your points except for 3. As long as the income from the transactions are conducted legally, then you'll get the tax money for them. If you try and tax each transaction, you'll just move the transactions offshore. Communications technology means that a derivative market can be conducted anywhere.

I think what you want is for derivatives to not have the chance to bring down entire sectors of the economy. That's fine, and your point in (2) would acheive this. There is also a case to be made for larger capital and margin requirements for trading firms above a certain size - ie, anyone who trades over X,000 contracts per year.

Derivatives traders can fail as much as they want as long as the failure doesn't threaten stability. It's when they bet too large, and use depositors money, that the problems start. Introducing capital and margin requirements keeps the size of the bets down and isolating trading from banking keeps them from using depositors money.

Re: The 99 percent

#73

Post by flourpower »

guimarin wrote: post #61
yummyfajitas wrote: post #59

Earlier quoted context omitted.

Regarding 3, why do you want to raise the bid/ask spread to $0.10? Regarding 4, specifically "to realize losses in the US and gains in a foreign country", how do you propose companies avoid this situation? Should they deliberately lose money overseas as well? What would this accomplish?

to answer 3. I don't want to raise the bid/ask spread. Only that there is a tally of the number of instruments you traded and the number of times. and you pay $.10 for trades*times. to answer 4. The point of this is to stop companies from making subsidiaries in another country to realize gains, and then wait for a tax holiday for repatriation.

3 would necessarily raise the bid/ask. If you charge everyone 10 cents to transact, then nobody will act as a market maker at a bid/ask narrower than 20 cents.

Re: The 99 percent

#74

Post by rapind »

mhartl wrote: post #51

Second, that the people at the top have made out like bandits over the past few decades, and that now everyone else must pick up the bill. I have no idea what The Economist could possibly mean by "pick up the bill" in this context. They know as well as anyone that wealth isn't conserved. If my company makes twice as much money next year as this one, I've added to the world's wealth, not subtracted from it.

I assume it's a reference to bailouts.

Re: The 99 percent

#75

Post by ppereira »

colanderman wrote: post #67

Here's why the rich get richer: because the 99% produce too damn much. Consumerism worked for a while to keep things even, but we've reached a plateau. People can only buy so much crap. But we're more productive now than ever [1]. So where does all that extra money go? The people at the top take it. CEOs don't give their employees raises, and pocket the rest. Bankers play games with your excess money you've dumped in…

Strangely enough, because of the way the EITC is tied with wages and already distorting the economics at the bottom, raising the minimum wage could result in net transfer of wealth from the rich to the poor and therefore reduce inequality.

I had more relevant comments here: http://news.ycombinator.com/item?id=3120123

Re: The 99 percent

#76

Post by alastairpat »

brc wrote: post #69
colanderman wrote: post #67

Here's why the rich get richer: because the 99% produce too damn much. Consumerism worked for a while to keep things even, but we've reached a plateau. People can only buy so much crap. But we're more productive now than ever [1]. So where does all that extra money go? The people at the top take it. CEOs don't give their employees raises, and pocket the rest. Bankers play games with your excess money you've dumped in…

Hoo boy are you wrong. You are so, so wrong. I was hoping you were being ironic, but apparently you're serious. Raising minimum wage and cutting working hours will drop productivity like a stone. You're effectively saying that all workers are equal, and interchangeable. You want to forcibly stop the more productive ones from working, so that their tasks and livelihoods can be given to others. In the case of a softwar…

You're exactly right - by killing productivity and massively increasing employment without reason, you're going to have massive increases in exogenous consumption.

Fantastic, except where are all of these consumed goods going to come from? You'll see huge inflationary pressure which means tighter monetary policy; higher interest rates and reduced borrowing and lending. Yes, there will be economic growth and increased GDP on paper, but there won't be any benefit to society. Furthermore, inflation actually helps the '1%' through arbitrary redistribution of wealth.

First year macroeconomics - I seriously think it should be a prerequisite to adulthood.

Re: The 99 percent

#77

Post by rapind »

suivix wrote: post #53

Perhaps it is necessary for the 1% to have huge sums of money and income compared to the rest in a flourishing economy. For one, it means they can spearhead the direction of capital. If you look at the graphs, everyone is doing better. It also leaves out many products that you can get now for less money or with more features. Everyone uses the same iPhones, college students and the rich. There is not an inherent prob…

The problem is that the staples are rising in cost (healthcare, housing, food), while middle class salaries aren't keeping pace. It's called the middle class squeeze. It's real and has been happening in North America for a while now.

I don't use an iPhone myself by the way. The smartphone plans are ridiculously expensive here in Canada. Any middle class family bearing iPhones are making other non-trivial sacrifices to do so... like education or retirement savings.

Re: The 99 percent

#78

Post by veyron »

guimarin wrote: post #64
veyron wrote: post #46

Earlier quoted context omitted.

"Suffice to say, there were/are pros and cons to having a specialist." Let's not go there. Specialists were accused of favoritism: filling orders that certain traders submitted and ignoring requests from other traders. More generally, the advancements, both in technology and in pricing, actually helped everyone. SOES (small order entry system) helped smaller traders to quickly trade. Decimalization really helped redu…

yes and sophisticated HFT systems screw large funds from moving into and out of positions with relative ease/fairness. This cuts both ways, thus pros and cons. At least with a specialist, everyone was relatively even in that regard. Now, measuring the distance to the server in micro-seconds of fiberoptic wires, I can literally create an unfair system by owning the closest supercomputer. I disagree with your point and…

"yes and sophisticated HFT systems screw large funds from moving into and out of positions with relative ease/fairness." "At least with a specialist, everyone was relatively even in that regard." "I can literally create an unfair system by owning the closest supercomputer." "my 'compromise' tax is pretty damn fair considering" "I'm arguing that there was a cost to removing the specialists, it's obvious now, and we should fix it." "the system is just as corrupt now as it was then, just differently." http://news.ycombinator.com/item?id=2835656 )

Re: The 99 percent

#79

Post by kb101 »

harryh wrote: post #28
guimarin wrote: post #24

Earlier quoted context omitted.

When people bring up this argument, I feel like I'm screaming in a room full of people and everyone is ignoring me. You cannot make it easy for people and corporations to be interchangeable and then have differing tax rates for each. They MUST have the SAME rate. eg. I 'own' all my rental properties through LLCs which are themselves 'owned' by a corporation of which I am the sole benefactor. Travel? expensed. Living…

If you are actually doing what you describe then you are breaking the law and will eventually be caught and hit with a gigantic bill for back taxes plus a hefty fine.

Not at all. Setting up trusts like this is what family offices do for wealthy people. The goal is to legally structure everything so that the total tax bill is minimized. High net worth individuals never just have a big fat bank account and a stock portfolio, there is always an array of trusts typically set up as LLC's to minimize tax exposure. It's unfortunate that he's being downvoted into invisibility (presumably due to the irritated tone of his post) but the fact is that he is correct in his assertion.

Re: The 99 percent

#80

Post by brc »

guimarin wrote: post #4
russell wrote: post #3

Earlier quoted context omitted.

3. I'm not so sure about the effectiveness of the tax on financial instruments. I think it might be more effective to require reserves to be held by the issuer, maybe a few percent They are already required in some cases. A bank is required to to hold a percentage of deposits as capital. An insurance company is required to hold reserves against losses. At the time of the crash there was something like $60 trillion in…

The point of the tax is not to regulate the derivatives market. There are valid reasons for derivatives, and arbitrarily imposing a reserve requirement on a class of instruments that is ever changing and by definition, represents different alpha and beta is a bad idea. The point of the tax is to mitigate HFT strategies. In my view they don't add anything to the system when considered from the point of view of 'why' s…

It is impossible to regulate a derivatives market. You and I can start trading derivative on anything tomorrow on the phone if we want.

If you tax transactions, the transactions will just disappear off into another location. A derivatives market with modern communications could be run out of a third world country in Africa using Warlords to protect the office. And the traders could still sit in New York offices.

If people want to do HFT, then let them, except where they might injure the general economy from large failures. If you think HFT is just for the pros, work out a way to bring it to the man in the street via a startup and make a fortune .

The only thing that should be done with derivatives is ensure that large financial institutions are not brought down by bad trading decisions (ie Lehman), and that small firms cannot seize up market liquidity through overleveraging (ie LTCM)

This can be covered off quite ably with capital and margin requirements. That's fair enough, and quite accepted throughout many other fields.

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