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Crony capitalism may be cannibalizing productive capitalism in the U.S.

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Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.

#201

Post by grasshopperpurp »

Shivetya wrote: post #194
grasshopperpurp wrote: post #183

Earlier quoted context omitted.

"taxes in the US are far more progressive than they used to be." How do you figure? Between 1936 and 1989, the tax rate for the top income bracket varied between 63% and 91%. https://qz.com/74271/income-tax-rates-since-1913/

because tax rate on income is meaningless when they don't have income and when tax rates were high their incomes vanished. that is the true history and true facts

Post I responded to said, "taxes in the US are far more progressive than they used to be."

A progressive tax rate is one that increases as the taxable amount increases.

So, I could be missing something, but I don't see how your post addresses my response. Saying it's meaningless doesn't change the definition of a progressive tax rate.

https://en.wikipedia.org/wiki/Progressive_tax

Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.

#202

Post by harryh »

dv_dt wrote: post #180
harryh wrote: post #145

Earlier quoted context omitted.

- There is plenty of free capital in the economy. More than ever really. To the point that the "capital glut" is a regular topic of discussion in economic news. - I don't know how old you are but both Clinton and Obama significantly increased taxes on the rich. Federal tax receipts as a % of GDP are fairly constant going back to WW2. https://fred.stlouisfed.org/series/FYFRGDA188S

Tax receipts are largely on income flows, but capital (wealth) itself is much more imbalanced than even the gilded age. Economic inequality has collected a huge amount of capital into very few hands that ultimately don't seem to know how to apply it productively over the whole system.

While wealth is more concentrated in the US, access to capital is probably at an all time high. Interest rates on loans are tiny and equity markets have never been deeper.

Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.

#203

Post by bostonscott »

sharemywin wrote: post #184
bostonscott wrote: post #155

Earlier quoted context omitted.

Disagree. It is our current system, which increasingly empowers opportunists over capitalists, that will create "corporate fascism." Current system: 1) Big companies pay minimal or negative taxes. Small companies are taxed at the individual rate (and increasing). If Company A pays 0% at top bracket, and Company B pays 50%, Company B is unlikely to out-compete Company A. Read: our tax system creates "monopolies." 2) O…

1. Competition drives down prices and profits. 2. Restated, monopolies earn more short term profits than companies in a competitive market. 3. stock investors look to maximize short term profits. 4. stock investors are offering a premium for monopolistic companies. 5. The stock market is rewarding this behavior without government intervention. "starving the beast" will just feed another beast.

1. Half true. Competition drives down prices, but not necessarily profits. For example, you can lower your prices using innovation, by achieving economies of scale, etc.

2. Over long-term, probably true. In short-term, not true. Often monopolies are formed and initially sustained by keeping prices aggressively low.

3. If you said stock investors look to maximize profits, i'd agree. Short-term? Not necessarily. Value investors like Warren Buffet are not motivated by short-term profits.

4. Stock investors offer a premium for profitable companies who can protect themselves against "threats." Government protection is one such way, I guess. Building sustainable competitive advantage is another (merit-based).

5. Your thesis rests on a premise that the government doesn't intervene in the stock market? Really? Have you heard of quantitative easing?

If you don't like the fact that big companies have a lot of power, I suggest you spend time thinking about why they have so much power, before you randomly proscribe solutions.

Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.

#204

Post by xxSparkleSxx »

Stryder wrote: post #148

I was 20, naively unaware of the ways of the real world, and nearly overnight, I lost everything and everyone I cherished in my life. Over the next 6 months, it slowly dawned on me that those who survive and thrive are those willing to screw other people over for their own benefit without as much as blinking an eye, as long as it suits them. "This is the way of the world", I thought to myself. Over the next decade, I…

I agree, but can we honestly put all the blame on those at the top.

Many of of us in the middle and at the bottom are just as complicit. We go to work for companies we know make the world a worse place, we work under horrible people and hand them part of the value we create every week.

Those in the middle and below do not have as much power as those on the top as an individual, but as a collective we have much more power. We can sit down and choose not to work, we can choose not to contribute to certain companies or to certain individuals.

We can say "NO!" But most do not because money. The same reason those at the top do immoral/awful things are the same reasons those in the middle and below do immoral/awful things (those at the top just have a bigger impact).

And some of those in the middle that just accept the status quo because "I've got a mortgage! I've gotta eat! I made these crappy kids and now I have to do awful things so they can eat!" will go on to be those at the top who continue the same behavior.

Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.

#205

Post by bostonscott »

sharemywin wrote: post #112
bostonscott wrote: post #83

Earlier quoted context omitted.

It's not the endgame of all capitalists. Actual capitalists, limited in number as they are, prefer free markets (e.g. no cronyism) because they'll make more money that way over time. Opportunists are the ones who thrive when things are rigged. They can't survive on their own. But yes, many capitalists (and non-capitalists alike) "buy" regulatory advantages. Some leverage their dollars (buying) Some leverage their num…

I would argue all corporation are rent seekers. Markets which enable assets to be traded buy all and expose assets true value to all participants. corporations hide assets behind private contracts.

So a doctor who decides to solve the problem of , and proceeds to raise $500 million over the next 15 years to develop a solution, get it approved, and commercialize it...

is a "rent seeker" ?

Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.

#206

Post by NTDF9 »

Stryder wrote: post #148

I was 20, naively unaware of the ways of the real world, and nearly overnight, I lost everything and everyone I cherished in my life. Over the next 6 months, it slowly dawned on me that those who survive and thrive are those willing to screw other people over for their own benefit without as much as blinking an eye, as long as it suits them. "This is the way of the world", I thought to myself. Over the next decade, I…

I want to know more. As a late 20s person, I am experiencing everything you described.

Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.

#207

Post by nunyabuizness »

dragonwriter wrote: post #200
bostonscott wrote: post #198

Earlier quoted context omitted.

You doubt people act in their rational self-interest? Smart, hard-working people who consistently exercise good judgement, prefer merit-based systems. They do better in merit-based systems than systems that reward those who are born lucky, who have access, or who cheat and lie. Is a citation really needed?

> You doubt people act in their rational self-interest? Yes the rational choice model is well-established to be false. They may act in their perceived self-interest, but rational self-interest involves a lot more than that.

> Yes the rational choice model is well-established to be false.

Citation? I hear this a lot, and it seems to stem from a misunderstanding of the word "rational" in this context, which I believe is supposed to mean "perceived" - how else would you objectively define rational?

Is it rational for a thirsting person to prefer gatorade to water (it is for them, if that's the choice they want to make)? Do you have more perfect information to justify your opinion on the matter as more "rational"?

Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.

#208

Post by dv_dt »

harryh wrote: post #202
dv_dt wrote: post #180

Earlier quoted context omitted.

Tax receipts are largely on income flows, but capital (wealth) itself is much more imbalanced than even the gilded age. Economic inequality has collected a huge amount of capital into very few hands that ultimately don't seem to know how to apply it productively over the whole system.

While wealth is more concentrated in the US, access to capital is probably at an all time high. Interest rates on loans are tiny and equity markets have never been deeper.

And why isn't productivity increasing if capital required to develop enhancements is available? And a related question if capital and access to it is at an all time high, then why do we have stagnant economic growth?

Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.

#209

Post by jondubois »

vkou wrote: post #176
refurb wrote: post #153

Earlier quoted context omitted.

We have become stagnant in the last 100 years. Are you serious? Do you know how much mankind has accomplished since 1917?

They should go to India, or China, or Vietnam, or Nigeria, and, with a straight face, tell people there that we've become stagnant over the last century.

That's actually a very good point. Globalization has been great for developing countries and terrible for developed countries. People from developing countries have a much better life outlook as a result.

As a westerner, I am much worse off than my parents were and so my perception of life is very cynical. The lifestyle that I had in my childhood and the idea of life which my parents projected onto me was so much better than today's reality. It's quite a depressing feeling.

Re: Crony capitalism may be cannibalizing productive capitalism in the U.S.

#210

Post by bostonscott »

antisthenes wrote: post #168
bostonscott wrote: post #83

Earlier quoted context omitted.

It's not the endgame of all capitalists. Actual capitalists, limited in number as they are, prefer free markets (e.g. no cronyism) because they'll make more money that way over time. Opportunists are the ones who thrive when things are rigged. They can't survive on their own. But yes, many capitalists (and non-capitalists alike) "buy" regulatory advantages. Some leverage their dollars (buying) Some leverage their num…

Nope. Historically proven false multiple times. Free markets lead to regulatory capture over time.

Example?
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