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The Crisis of the Middle Class and American Power

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Re: The Crisis of the Middle Class and American Power

#111

Post by roel_v »

sliverstorm wrote: post #82
maratd wrote: post #68

Earlier quoted context omitted.

> US has no shortage of zombies who don't think on their won. A human being is at the most juvenile when he encounters a view contrary to his own and ascribes it to stupidity. If only everyone was as enlightened, as educated, as brilliant as he ... then everyone would understand. No. Grow up. I will never be wealthy and I will still continue to vote for a fair tax system. A flat tax system. Because everyone should pa…

I will never be wealthy and I will still continue to vote for a fair tax system. A flat tax system. Because everyone should pay the same, regardless of status or income. Trouble with a flat tax system is the poor can't afford the tax rates the nation's current expenditure would require. It would work O.K. if the expenditure was much lower, but I see no way to get from here to there. Aside from that, I've come to beli…

"The less income someone has, the more taxes cut into basic living expenses (because a greater portion of that person's income is spent on basic needs)."

Covered by Milton Friedman's proposal of a flat tax with a minimum standard of living deductible, e.g. 10k USD. Furthermore, those making less than that 10k would get the 'refund' as some sort of social security. Developed in his book "Capitalism and Freedom".

"I'm not very good at describing this idea yet,"

What your describing is, as far as I can tell, the concept of "marginal utility".

Re: The Crisis of the Middle Class and American Power

#112

Post by roel_v »

rdtsc wrote: post #99
vor_ wrote: post #83

Earlier quoted context omitted.

Calling people names because they disagree with a progressive tax structure or mandated health insurance isn't a convincing argument for your side. There are arguments to be made for and against these policies. In fact, it would be helpful for you to recognize that you are simply one side of a two-sided issue, each side of which believes they are obviously correct and that the other side is too uneducated to know how…

From a rational point of view I can understand how someone with a high income is against a progressive tax structure. How someone how has millions of dollars stashed in an account votes against a socialized basic care. I don't understand why someone living on government's check, and having poor health due to a financial inability to go the doctor, is voting against it. That is the issue. The problem I am describing i…

"I don't understand why someone living on government's check, and having poor health due to a financial inability to go the doctor, is voting against it."

Because maybe these people actually see the immorality of taking from others by force?

"The problem I am describing is people being manipulated to vote against their own interest."

So morality has no bearing on your position? "Fuck morality and others, as long as I get mine, and then some?" Seems like your position is in direct contradiction with the values you claim to defend.

Re: The Crisis of the Middle Class and American Power

#113

Post by yk »

kamaal wrote: post #47
anigbrowl wrote: post #36

Earlier quoted context omitted.

Basically workers create $240 of wealth every eight hour work day, but are only paid $200 a day. But workers don't create that much wealth in a day by themselves; they need plant and material to create the product or service that is sold. The buildings they work in, the machinery that they use, the raw material they consume, are equally important inputs to production and it is these which are supplied by the capitali…

I think Marx went into over simplification when it came to issues like these. Even in this case, and in most cases. The workers are actually are super fortunate to even have and opportunity to make $200 without taking any risks at all. Everything is built ready, all the investments and risks are born by somebody else. All you do is work(Im not saying that's easy or insignificant, but it is individually insignificant…

Marx was actually not so much concerned with fair compensation as with fair distribution of power ( of which money is one aspect).

> The workers are actually are super fortunate to even have and opportunity to make $200 without taking any risks at all.

I think the most important point about Marx analysis is, that this statement may or may not be true. There is nothing in the 'capitalist production process,' which guarantees that the workers are treated well ( or even survive their workday). If the bourgeois gains a advantage by treating his workers well, he will do it. On the other hand, if he gains a advantage by hurting his workers then he will either do it, or be replaced by someone who is willing to hurt his workers.

Re: The Crisis of the Middle Class and American Power

#114

Post by wybo »

scarmig wrote: post #84
maratd wrote: post #68

Earlier quoted context omitted.

> US has no shortage of zombies who don't think on their won. A human being is at the most juvenile when he encounters a view contrary to his own and ascribes it to stupidity. If only everyone was as enlightened, as educated, as brilliant as he ... then everyone would understand. No. Grow up. I will never be wealthy and I will still continue to vote for a fair tax system. A flat tax system. Because everyone should pa…

A flat tax? That's a bit too socialist for my tastes... should a man making $100k per year really be forced to pay twice as much as a man making $50k per year, just for being more productive? Wouldn't a head tax be better, since everyone would then pay equally? Plus you would not have the disincentive effect on marginal labor of your "make twice as much, pay twice as much" scheme. Also, why should I be forced to pay…

I assume/hope scarmig is being sarcastic here? ;) But yes historically (middle-ages and before) head-based tax systems were considered fair.

Anyhow, non-progressive taxation and market-based health-care is a waste of human capital, not to mention that it leads to grossly inhumane situations.

People that don't get that should look at the stats and/or study some basic economics. For example, how does the UK spend only about half as much on healthcare, and still has a higher life-expectancy than the US?

Re: The Crisis of the Middle Class and American Power

#115

Post by InclinedPlane »

scarmig wrote: post #21
InclinedPlane wrote: post #18

Earlier quoted context omitted.

Government policies are what created gargantuan financial firms who were in a position to overleverage themselves because they didn't think there was any risk in it. And low and behold governments bailed their asses out. In a more diversified market the companies that had overleveraged themselves would simply have gone under. More so, in a situation where the government had not put pressure on lenders to give loans t…

See "Did Affordable Housing Legislation Contribute to the Subprime Securities Boom?" at http://research.stlouisfed.org/wp/2012/2012-005.pdf Abstract: No.

That's a pretty interesting paper but I'm not convinced that the evidence presented backs up its conclusions. One of the things they do is measure various parameters relative to 7 different affordable housing goal criteria (such as loans to census tracts with median income of 80% or less than the median income of the metropolitan area). However, the authors don't seem to address the problem of separating the effects of each different criteria. Also, the data is fairly limited (only from 3 years, in 2 states) and they make some pretty strident assumptions. For example, they can't seem to find a possible causal link between the state of the real estate market in the mid 2000s and an increase in mortgages spurred by affordable housing legislation several years prior to their 2004-2006 window.

To me though it seems obvious that putting more people into the housing market, especially while it is experiencing a moderate boom would simply amplify that boom, as folks who managed to end up with some positive equity would work to maintain it, "flip" their properties, etc. As long as the market was always going up and people could generate positive equity just by sitting on their ass defaults were rare, because it would have been easy for people to sell their properties if they couldn't make payments in the future. Also, a lot of these mortgages were designed for flipping, having low payments early on before balloon payments later, making it easier to avoid default in the early years. On the other side of the equation, investors ate up securitized mortgages while the market was going up because they thought there was no risk. If people defaulted on their mortgages the properties would just be foreclosed on and since the property would inevitably have a higher market value than the mortgage, there was no downside for the investors. Which works just fine until the market reaches its breaking point and stalls out, after which people start going underwater on their mortgages, defaults increase, valuations fall, and everything goes to hell, as we saw.

The paper addresses the proposition of affordable housing legislation causing an excess in sub-prime lending just prior to the peak of the real estate boom. However, it fails to address the more important and more basic question of whether affordable housing legislation injected an excess of "unqualified" buyers into the housing market, distorting the market and leading to a bigger boom and a bigger bust.

However, as I mentioned, that whole mess (regardless of its cause) has only contributed a comparatively small amount to the much larger sovereign debt crisis that the world is facing now, which would take a lot of stretching to blame on the market.

Re: The Crisis of the Middle Class and American Power

#116

Post by wybo »

roel_v wrote: post #112
rdtsc wrote: post #99

Earlier quoted context omitted.

From a rational point of view I can understand how someone with a high income is against a progressive tax structure. How someone how has millions of dollars stashed in an account votes against a socialized basic care. I don't understand why someone living on government's check, and having poor health due to a financial inability to go the doctor, is voting against it. That is the issue. The problem I am describing i…

"I don't understand why someone living on government's check, and having poor health due to a financial inability to go the doctor, is voting against it." Because maybe these people actually see the immorality of taking from others by force? "The problem I am describing is people being manipulated to vote against their own interest." So morality has no bearing on your position? "Fuck morality and others, as long as I…

Morality has a bearing on it. Not letting die, or for that matter, enabling a minimally humane life for everyone, is as important, or more important than the dictum against (potentially unjust) taxation.

I see why in the US one might be against this, as I've lived there (working at a great IT job in central San Francisco), and have seen the poverty, and the human suffering (not to mention the smell of bums on the bus). Probably feels like there'll be no end to it, and then, in order not to feel guilty or bad, one closes ones eyes to it by believing it's their own fault; 'lazy smelly bastards!', but that doesn't change the moral reality of it.

When judging oneself, feel free to be ruthless like Ayn Rand, when judging others, please be considerate, and take into account more than economics alone.

In a way I evaded it too. Not by borking up my morality, but by voting with my feet when the opportunity presented itself. I am back in the UK now, and happy to be part of a society that treats it's weakest members well (or ok-ish at least).

I wonder what it is between the US and Europe, that we have such different notions of (social) justice. Perhaps it is because Europe has more history, that we have seen over and over that wealth is often gained (and lost) by luck, that often it accumulates over dozens of generations in the hands of the few. While the US is only now developing it's own aristocracy. I even heard a British nobleman once vehemently argue that wealth is not deserved.

So yes, being pragmatic we do allow the market to flourish, and do allow the wealthy to enjoy their wealth, but we don't confuse economics with morality, and moderate it's excesses through progressive taxation, some redistribution, and universal health-care. Human life and happiness trumps justice on the economic plane.

Re: The Crisis of the Middle Class and American Power

#117

Post by mimog »

maratd wrote: post #68
rdtsc wrote: post #52

> The expectation of rising real incomes was built into the American culture Ah that's the classic propaganda line: "I am not poor, I am just pre-wealthy." ...So I sure don't want to vote for anything that would jeopardize my wealthy position when I get there. The key in all of this is ability to manipulate the people into believing and voting in a particular way. US has no shortage of zombies who don't think on thei…

> US has no shortage of zombies who don't think on their won. A human being is at the most juvenile when he encounters a view contrary to his own and ascribes it to stupidity. If only everyone was as enlightened, as educated, as brilliant as he ... then everyone would understand. No. Grow up. I will never be wealthy and I will still continue to vote for a fair tax system. A flat tax system. Because everyone should pa…

> But how dare you ascribe my beliefs to ignorance?

Because they do seem to stem from ignorance with regards to the purpose of a society. Why should I refrain from robbing you if I am sick and hungry whilst you seem to have more than you need? We have entered into a society in order to protect ourselves, which means that even the poorest in our society must have healthcare and food on the table, which again requires all of us to pay a certain amount of our money for things we might not directly need. You might not need healthcare, roads, public transportation etc. but you do need to not be killed and robbed by people who have nothing.

Re: The Crisis of the Middle Class and American Power

#118

Post by gutnor »

roel_v wrote: post #112
rdtsc wrote: post #99

Earlier quoted context omitted.

From a rational point of view I can understand how someone with a high income is against a progressive tax structure. How someone how has millions of dollars stashed in an account votes against a socialized basic care. I don't understand why someone living on government's check, and having poor health due to a financial inability to go the doctor, is voting against it. That is the issue. The problem I am describing i…

"I don't understand why someone living on government's check, and having poor health due to a financial inability to go the doctor, is voting against it." Because maybe these people actually see the immorality of taking from others by force? "The problem I am describing is people being manipulated to vote against their own interest." So morality has no bearing on your position? "Fuck morality and others, as long as I…

"immorality "

That is a strange moral system you have in the US. In other countries, it is morally acceptable to take from the rich and redistribute to the poor.

The reason is that in those countries, wealth and lack of wealth is thought to be a great part influenced by factor outside your control (chance). That is even backed by studies, if you are born in a poor families, you will have less opportunities than a rich kid in a rich family.

Taxing the rich to help poor people in those circumstances is not to punish hard work to reward lazyness(=immoral), it is perceived as balancing unfairness in nature.

On the other hand, there are other reason why a poor could be against taxing the rich that have nothing to do with some fluid concept like morality. It could be, for example, that they agree with the numbers and the theories presented by the party disagreeing with the taxes. After all, trickle down economic could work as described, why not, it is supported by important AND qualified people.

What is missing in US politics (and generally in politic) is a scientific approach to the proposition. The level of proof required to submit political proposition as important as tax level is much lower than what you need to convince your wife to let you buy an XBox. That is the problem, voters are provided with vague theories with nothing to back them.

Re: The Crisis of the Middle Class and American Power

#119

Post by macavity23 »

mcantelon wrote: post #80
pinaceae wrote: post #67

Related to this, Showtime is currently airing a rather brilliant set of documentaries narrated by Oliver Stone called the 'Untold History of the United States'. It basically puts this article into broader context, from the entry to WW2 onward. Would be interesting to know how much different the reception of those documentaries is for a US-educated citizen. They definitely fit to the overall history being taught over…

I'm currently watching that series... interesting stuff. Another must, for any who haven't seen it, is the British documentary series "Century of the Self", about American conditioning specifically.

'Century of the Self' is indeed amazing (as is everything else by Adam Curtis) and can be found for free here: http://topdocumentaryfilms.com/the-century-of-the-self/

It's not specifically about American conditioning though... it starts with Freud (Austria, then UK), wanders off to Edward Bernays (Austria, the US), talks about the US PR/Advertising industry for a while (totally fascinating to bear in mind while watching 'Mad Men' IMHO) and then ends up with Tony Blair (UK) via Bill Clinton.

Thanks for the Showtime documentary pointer - will look that up.

Re: The Crisis of the Middle Class and American Power

#120

Post by adamauckland »

wybo wrote: post #116
roel_v wrote: post #112

Earlier quoted context omitted.

"I don't understand why someone living on government's check, and having poor health due to a financial inability to go the doctor, is voting against it." Because maybe these people actually see the immorality of taking from others by force? "The problem I am describing is people being manipulated to vote against their own interest." So morality has no bearing on your position? "Fuck morality and others, as long as I…

Morality has a bearing on it. Not letting die, or for that matter, enabling a minimally humane life for everyone, is as important, or more important than the dictum against (potentially unjust) taxation. I see why in the US one might be against this, as I've lived there (working at a great IT job in central San Francisco), and have seen the poverty, and the human suffering (not to mention the smell of bums on the bus…

In other news, the UK now has the greatest divide between rich and poor in the west.

http://www.independent.co.uk/news/uk-most-unequal-country-in...

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