Exceptional tax cuts for rich 'good for economy': practice fails - theory is broken

a reply to: Maxmars
You know if this thread would be any more longer it would be in the rant section. But interesting thoughts you have dude. I personally did not know people actually believed in trickle down economics, I mean I knew they believed it but I thought that was just a joke or something, I mean who would believe such silly nonsense, fairies and the boogieman are more likely to exist then trickle down economics does. I mean dont get me wrong it exists, for someone...somewhere. But that's only to keep the whole illusion going.

Crazy topsy turvy world we live in. And the fact is, well not now but some day the fact will be that this is the least of the crazy things going on on planet earth. This whole economic system really its just held together on IOU's written out on make-believe digital space generally in 0 and 1, broken promises and its all held together by scotch tape and chewing gum. Every new generation you need to prop it up least the whole thing fall down in shambles, but hey it works. It just keeps limping along, in circles.

I suppose it will go on for a few generations more, if you all are really lucky then it will noting but fall apart tomorrow. But you all are not so lucky. So...Expect more of the same ol. Besides its not so bad...Its just not good, or sustainable in any long term. But other then that? Well at least the TV people can buy have gotten bigger. So you see the system works, they get what they want most. The world you see around you.

a reply to: Stuship
Ah the illegals are whats keeping the farms going and operating at a profit. It was designed like that. I mean most of them skip back to Mexico after a while and even with what they earn they can still buy something there. But getting Americans to work on those mass farms for what constitutes as pennies to the dollar?

Ya! Good luck to you driving over 80 miles daily for a job which would pay you $5 an hour or if your lucky maybe even minimum wage. Working that job for about a month would drive you into poverty, # the gas bill alone will do that. Dam those lazy Americans eh? I mean who does not want to work at a job which makes you poorer daily, and not only that you will end up owing money and all for the privilege of just being there.

Ah that's got to love the internet. Sometimes you dont even know if people are trolls, or just so lets just say "ignorant" that they would classify as being a zombie. To put it nicely. But ya the farming industry has long ago sold out, you missed that train by a few hundred years I think. So look at it this way, your only a little bit late, not quite that slow in your assessment.

originally posted by: galadofwarthethird
a reply to: Stuship
Ah the illegals are whats keeping the farms going and operating at a profit. It was designed like that. I mean most of them skip back to Mexico after a while and even with what they earn they can still buy something there. But getting Americans to work on those mass farms for what constitutes as pennies to the dollar?

Ya! Good luck to you driving over 80 miles daily for a job which would pay you $5 an hour or if your lucky maybe even minimum wage. Working that job for about a month would drive you into poverty, # the gas bill alone will do that. Dam those lazy Americans eh? I mean who does not want to work at a job which makes you poorer daily, and not only that you will end up owing money and all for the privilege of just being there.

Ah that's got to love the internet. Sometimes you dont even know if people are trolls, or just so lets just say "ignorant" that they would classify as being a zombie. To put it nicely. But ya the farming industry has long ago sold out, you missed that train by a few hundred years I think. So look at it this way, your only a little bit late, not quite that slow in your assessment.

Honestly, I don't think we can say the farming industry "sold out" because they've been like that from the beginning. US agriculture was traditionally worked by slaves, indentured servants, and sharecroppers. And when slavery was abolished, it focused more on sharecroppers, prison farming/prison labor, and other cheap labor. Remember the infamous "Banana Wars" & subsequent "banana republics" were caused by our massive agricultural empires operations overseas.

Now they focus on illegal labor, because as you stated, it's far cheaper. Plus those workers have no rights & get no benefits or protections. The irony is that politicians claim they're anti-illegal immigrant & rave about closing borders. But they wind up in scandals where they're caught with illegal labor working for them, or are invested in companies that exploit that illegal labor pool. That's because they actually love cheap labor because it's good for their investments & personal budgets.

a reply to: Maxmars
Abolish the income tax. Tax breaks for everyone!

On another note, this whole article is likely BS. Not that "trickle down" as it's snidely referred to works, rather, there is only so much money the rich will let you take from them. Once they've hit that point they tend to move their money into tax havens. There have been many studies done on this and I believe the most any state (geopolitical) has been able to get is around 18%. Tax rates above this are ineffective due to tax havens, loopholes, etc.

jmo

There is the underlying theory, that the rich are greedy. In most cases, inherited wealth is gone in around 3 generations. So for people to get rich, they have to provide a service, that makes money. If they are greedy, why do they stop trying to make more money. Which would be providing a new service or expanding on an existing service. Unless the government is lowering their cost/benefits equations, there is no reason why greedy people won't expand and create new ways to make money.

a reply to: Maxmars I'm not an economist or statistician, but I'm curious as to what you think the incentive would be for companies that employ thousands of people to stay in any one place... say, the United States. If they can pay less taxes somewhere else, they'll go there. We see it all the time. They move from state to state, and sometimes out of the country altogether. If I was wealthy I know I'd be most inclined to live, work, or start a business in a place that demanded the least amount of my money as possible. It would seem to be that the goal isn't so much to get the wealthy to invest more, but to keep them investing at all. But I suppose no one else is an expert at this either. All I seem to hear is that it doesn't work, not what might work instead.

I don't think anyone actually 'believed' in this system. It was simply a sell-able rationalization used to allow the rich/elite to consolidate wealth. The 'commoners' looked to their leaders to come up with a fair plan to help the economy across the board. They cooked-up the whole 'trickle down' fantasy as a way to package it for the masses. Trust us, they said, this will create jobs and spread the wealth. Meantime the elite went on a rape and pillage that has been unprecedented in history as they accumulated vast amounts of wealth in a very short period of time. And during that time they crashed the economy, destroyed the middle class, and ruined the country forever. This is what has led to the militarization of police, The Patriot Act, the War on Terror, etc. They know what they've done, they know we're catching-on and they're scared.

When Reagan and Thatcher talked about "trickle-down economics" they were talking about piss. Amazing that people believed it, and still believe it. I guess most people blindly follow authority.

Great post Max!

Voodoo economics was the sword swinging one way - depriving the working class of upward mobility and stagnating the economy by not investing in anything that would create jobs.

Now the sword is swinging back - with "economic injustice" the byword; convincing the poor that it's the fault of working classes that they remain indigent and trapped in a vicious cycle of poverty breeding hatred, resentment and envy.

The cleverness of the ruse is self-evident. First, they increase the incomes of the wealthy through tax breaks and run the Nation into bankruptcy. Then they blame it on the middle class through endless memes of racism and class warfare while telling the middle class the poor are so because of "laziness or ineptitude" and the endless welfare gravy train is being paid for at their expense.

Yet the elites are somehow held blameless lest we interfere with their "freedom" and the free market (which we know is a rigged game guaranteed to make money flow upward). No, they are rich because they worked harder and are smarter than you are and you are simply jealous of their success. Just don't remind them of the TARP bailouts where more than a trillion dollars were shoveled their way to prevent the collapse of the banks they had bled dry. What a wonderful farewell gift from Dubya to his cronies and partners as he left office.

Think of the Republicans and Democrats as a wrecking ball, swing to the right then back to the left smashing everything in it's path. Fascism or Socialism? Which is your flavor? They offer no middle ground and the last time anyone made a serious attempt to bring their scam to the attention of the people was when Ron Paul sought the Presidential candidacy and the GOP elephant stamped out every effort by hook, crook and just plain changing the rules mid-game.

I realized at that point that the people could never vote their way back in to any real power in Washington. Sadly, we are left with but 2 options I believe - one, a general strike and two, the unthinkable and unmentionable. The ship of state is starting to founder badly and lest action is taken we shall all go down with the ship - except for those with prepaid tickets for the lifeboats protected by armed guards paid for by the soon-to-be drowned commoners. If you do not see the tragedy and irony in this situation I pity you for they have blinded you to the ugly end financed by your own hard work.

originally posted by: thinline
There is the underlying theory, that the rich are greedy. In most cases, inherited wealth is gone in around 3 generations.

Who says? Links? I've never heard that. Do you mean in terms of people, or money? The Normans that invaded England in 1066 would disagree with you.

originally posted by: Maxmars


Lookie here! Yet another mid-level op-ed about the “surprising” observations that supply-side economics (also referred to as “trickle-down,” “Reaganomics, or my personal favorite – “Voodoo Economics”) actually does not work, and in fact has not worked anywhere -ever - in any western nation that adopted it.

You forgot it's original name "Horse and Sparrow" economics when it was first briefly tried in the 1890's and led to the panic of 1896.

You feed the horse enough oats and the sparrows will have something to pick out of the horse droppings on the roadway

Even the modern day term gives the hoax away...even IF it worked it is TRICKLE down...and as history has repeatedly and consistently proven, even that "trickle" does not occur.

originally posted by: Dfairlite
a reply to: Maxmars
Abolish the income tax. Tax breaks for everyone!

On another note, this whole article is likely BS. Not that "trickle down" as it's snidely referred to works, rather, there is only so much money the rich will let you take from them. Once they've hit that point they tend to move their money into tax havens. There have been many studies done on this and I believe the most any state (geopolitical) has been able to get is around 18%. Tax rates above this are ineffective due to tax havens, loopholes, etc.

jmo

I don't think the article is BS; I think it makes the same assumptions most people make. Trickle down theory doesn't work: but the trickle down theory didn't include a private gambling circle called derivatives happening in the background where people who own all the wealth (yes I am generalizing that if you own 99% of all the wealth you may as well sat you own it all) get to clump up all the wealth in the pool and gamble on rigged banking controlled games of chance.

In the case of the theory... I suspect Keys assumed the wealth in the model was not being virtually virtualized in the background - in truth the idea was that the whole of the wealth was free to flow... not cloistered in a make-believe world for the whims of bankers who prance around governments like they are above the law... which they are... and their owners more so.

But we must always remember - we are never by the 'experts' reminded in these public discussions that the total REAL wealth in the world is already absconded away.. and in reality all our angst and clenched-hearts comes from a pathetic mind game with 'credits' and; 'tokens' representing fake wealth (which they own) ... and magically - through their diligent control - they have managed to keep 99% entirely away from people..

So when you wax on about how much money there is think of this - there IS no money. The citizens have had their rights to OWN their own money away - as it was given to a private bank to hold a monopoly over the people FOREVERMORE. They squeeze the available 'currency' by withdrawing it from circulation and create a middle-class decimating effort. The banks make ALL of this happen by their administration on behalf of their owners... the politicians create theater and misdirection with their clown-like antics and their self-aggrandizement.

Meanwhile the poor are vilified, the middle class is ground down into despair - and the remainder of the world is "told" by the glitzy and charismatic talking heads that we need to fear each other... and buy, buy, buy - financing now available for healthcare!

originally posted by: thinline
There is the underlying theory, that the rich are greedy. In most cases, inherited wealth is gone in around 3 generations. So for people to get rich, they have to provide a service, that makes money. If they are greedy, why do they stop trying to make more money. Which would be providing a new service or expanding on an existing service. Unless the government is lowering their cost/benefits equations, there is no reason why greedy people won't expand and create new ways to make money.

Yes there is a reason they won't expand their wealth by direct investments into an actual constructive enterprise. But first I want to say:

There are as many lazy poor people as there are greedy rich. Greed isn't really the problem, it's systemic greed. People who are greedy are all recognized by the world for who they are. There are no "secretly" greedy people. People greed can be offset by the society in which they live... systemic greed is mechanical, often imbued with the power of immortality and institutional protection - there is 'apparently' no guilty "party" - just a faceless operator who does nothing other than absolve humans of responsibility (and therefore liability) for exploitation and abuse which brings the owners some profit or benefit.

There is a reason the wealthy keep their wealth from the remainder of the world... the banks guide policy makers make isolating wealth the best way to perpetuate their wealth.

It is not the place of as government to "make" people invest (or spend for that matter) - the market is supposed to exist based on the natural interaction people have - investment into a real venture is "supposed" to make sense. Sitting on a mountain of gold makes no one richer... it's common sense... you have to actually "do" something with it.. that's logical. Through policy and bizarre alchemy banks created a magical place where they can literally "play" with the world's money. Think I'm lying? Guess where 99% of this fake bank wealth is located.... the answer: "elsewhere."

The magnitude of the scam is only exceeded by the abusive situation we are faced with now, where people - not complicit in the scam itself - actually seek to justify and protect the scam. There are two possibilities that occur to me as to why this would happen: a) these non-conspirators actually believe that they will benefit from honoring the system; or b) they know if the system is restructured their own wealth will vanish along with the virtual "virtual" 99% it's diluted into. The threat will be the single hardest selling point to affirm: the system can't change. A clever gambit, but still based upon our the continued ignorance of the actual citizenry as to the make-believe nature of the terrible yoke the establishment burdens 99% of their citizens with.

originally posted by: thinline
There is the underlying theory, that the rich are greedy. In most cases, inherited wealth is gone in around 3 generations. So for people to get rich, they have to provide a service, that makes money. If they are greedy, why do they stop trying to make more money. Which would be providing a new service or expanding on an existing service. Unless the government is lowering their cost/benefits equations, there is no reason why greedy people won't expand and create new ways to make money.

You know, I have actually heard this urban legend being passed around before. But generational 'fate' is probably as real as "poor people are lazy," "rich people are greedy," and "make the rich richer and we'll all be on easy street."

So was TARP a mistake in 2008? Should we have allowed the banks to fail? Or...was bank failure just BS and wasn't really going to happen anyway? I don't know, this is just my economic ignorance showing through.

originally posted by: neveroddoreven99
a reply to: Maxmars I'm not an economist or statistician, but I'm curious as to what you think the incentive would be for companies that employ thousands of people to stay in any one place... say, the United States. If they can pay less taxes somewhere else, they'll go there. We see it all the time. They move from state to state, and sometimes out of the country altogether. If I was wealthy I know I'd be most inclined to live, work, or start a business in a place that demanded the least amount of my money as possible. It would seem to be that the goal isn't so much to get the wealthy to invest more, but to keep them investing at all. But I suppose no one else is an expert at this either. All I seem to hear is that it doesn't work, not what might work instead.

If they can make more money with a different business model - why the hell should we force them to make less. That really doesn't serve anyone. Our misstep is in thinking it a matter of someone "doing something" to keep something from happening.

Markets operate as they do based upon the premise that natural evolutionary process apply to market behavior; I think that is not really valid. Everything commerce is about lies around actively influencing (in any way possible) the market a certain way... so the market never exists in some pristine bubble.

We would have to convince the merchants to stay - not force them to. If we were to actually compete - unimpeded - hundreds of thousands of businesses (mostly small) would dry up or be absorbed into a larger body of businesses. Why does it cost so much to pay workers here..., oh yeah, we're not ignorant or desperate enough (getting there though) to collectively say... "... sure - us ten thousand workers deserve NO PART of the fruits of our labor... but the CEO should get $140 million per year to retain his or her god-like presence." No greater incentive to organize against commercial exploitation exists.

So business profit more where ignorance and desperation forces people to accept what would be illegal wage levels where the business calls home... hmmm... this is smart business right?

The traditional media doesn't ever chastise us for being consumer whores who will claw each others eyes out over slave-labor brand-name products... right? We don't get to be clear about just how much subsidy some foreign entity gets to compete unfairly with us..., even if it does victimize our local citizens...; aren't "treaties" based on secret negotiations nice?

The answer - as almost always in these cases - is in exercising a prerogative - remove our ignorance;... we are after all allowed to "know" the laws we are being subject to... (another "logic" thing.) "Informed" consumers are the bane of exploitation commerce.

As for the people who are left behind when American business abandon their communities... hey, your employers - your real employers... who actually consider you a drain on the profit margin are not concerned with the widgets in the spreadsheet that can be replaced with other widgets ad infinitum.... Business can be a partnership... tomorrow figure out if they really think of you as a partner... if not - be aware that your future well-being is very far removed from their equations.

originally posted by: akaal
So was TARP a mistake in 2008? Should we have allowed the banks to fail? Or...was bank failure just BS and wasn't really going to happen anyway? I don't know, this is just my economic ignorance showing through.

No TARP was two things...

1) The definitive exposition of just how "we" are the banking cartel's bitches, and
2) The final lesson for Senators and Congressmen teaching then that they are as guilty as the banks are.

This was not a "surprise".... don't believe the fairy-tale that "no one knew" or "it was a banking "crisis." It was as much a "crisis" as having yourself mugged is a "crisis" to the mugger.

There was no "Banking" crisis... it was a "tax-payer" crisis. We were blackmailed into filling up the teat they emptied.

Once the dominoes fall - there is always someone who wants to convince the rest that they shouldn't be held responsible - you can usually gauge their level of responsibility by the amount of effort they put into denying, deflecting, and misdirecting....

... "we never saw it coming..." yeah... you're still rich though, right?

oops

DP

a reply to: Maxmars

For me, the greatest revelation of TARP was the exposure of how utterly and completely government is in cahoots with the banks.

They allowed a rigged system where the banks "gambled" in a fixed system where they won if they won and won if they lost...and when the pyramid scheme finally reached an apex and collapsed under it's own weight..And the average American wisely took what very, very little money they had left after the banks swindled the rest...and chose to stop "investing" in those banks.

The banks then went to government and said hey...Americans suddenly stopped giving us their money for some reason...If they no longer trust us and the money stops flowing...how about you seize those funds from them and hand them over to us? AKA Tax payer funded Bailouts...our money at a time when we REALLY needed it.

The banks never lose a bet..The one time they did after nearly collapsing our economy and their corruption was laid bare for all to see, the gov. stepped in and just directly gave them our money.

The Gov. should have instituted controlled demolition for those corrupt, failed institutions and clawed back what funds it could out of their carcasses and returned it to the investors..peoples pensions, 401ks, taxpayers etc.

Instead those banks were actually rewarded for "risky" aka criminal Investment practices. Who wouldn't take big bets if you could never lose? And when they pull the chips off the table it's the average investor saving for retirement that is sitting on the other side.

Meh...I gotta let it go or it will drive me insane.