Of Tides, Boats, and Risings Up

Comments

1. Tam O’Tellico - December 13, 2007 @ 9:32 pm

   I am reminded once again of Ralph Nader’s insightful quip: “A rising tide lifts all yachts.” I am also reminded just how foolish the public is to have twice blown their precious vote on a propagandist and panderer, a Robin Hood in reverse, a facile Fagin who picked the pockets of the “Stupid for Jesus” crowd clean.

   As I’ve said in this forum more times than I can count (speaking of statistics), anyone who seriously believes Free-Market Capitalism alone can solve the social and economic problems of a complex modern society is utterly daft. That goes for all the Ayn Rand acolytes and so-called geniuses like Milton Friedman who have done nothing more than dress up Trickled-On Economics in scholarly subterfuge.

   All their high-toned economic theories are no more than excuses for the same old politics of greed. They are whores who suck at the same teat as me-first corporate corruption. Their only bottom line is that there is no bottom, no depth to which they not descend to satisfy their greed.

2. Austin Buddy, Mr. Whatevah - December 13, 2007 @ 11:24 pm

   ah, my wonderful soak-the-rich liberal friends…

   thanks for the latest on that dastardly trend.

3. KC - December 13, 2007 @ 7:42 pm

   That makes me want to puke.

4. lonbud - December 13, 2007 @ 11:35 pm

   i’m not so sure “soak the rich” is an accurate description of my economic philosophy. i don’t begrudge the wealthy their options for excess, and i understand that even in a completely neutral policy environment the magic of compound interest allows wealthy folk to grow more wealthy in their sleep than it allows less-wealthy folk to do the same.

   however, 25 years of CBO data make it fair to draw the conclusion milton friedman and the supply-side theorists were wrongheaded charlatans, that the so-called “trickle down” effect is not unlike getting pissed on.

   at what point do we seek, as a society, a different route toward liberty and justice FOR ALL?

5. Mike Fleming - December 14, 2007 @ 7:46 am

   To quote, (from the Reagan era) “The only trickle down ever got me was p*ssed off”. And on apparently.

   Mike

6. Tam O’Tellico - December 14, 2007 @ 8:06 am

   Mr. Whatevah, the dearly departed Michael, Mr. Friedman, Miss Rand, Mr. Bush, Mr. Cheney, and the whole jungle ethic clan never cease to amaze me. NeanderCons, like NeanderChristians, are part of an increasingly dangerous ideological drift not toward Conservatism, but toward radical Fundamentalism. Call it tribalism on steroids.

   That ought to be particularly troubling for those who claim to follow the communal teachings of Jesus Christ, teachings they claim provide the moral underpinnings of this so-called christian nation. But alas, they ignore the charge to “Feed the poor” — their credo is “to each according to his ability to snatch milk from the mouth of babes.”

   If the threat of eternal damnation isn’t sufficient to enforce ethical behavior in these Neo-Con-Men, one wonders what might. Logic doesn’t seem to be of any use either, for these pseudo-conservatives and religious wingnuts all fail to understand that there are perfectly rational conservative arguments for fulfilling our social responsibility

   Thomas Hobbes, the ultimate conservative much admired and oft quoted by NeanderCon AG John Mitchell back in the Nixon years, stated the first fundamental truth every true conservative must fully comprehend and however reluctantly accept: Every man must eventually sleep. Hobbes warned that the consequence of unmitigated greed and lack of care and concern for the Commonweal would lead to the same Clockwork Orange/Soylent Green world that now besets us.

   For NeanderCons who can’t read, and apparently they are legion, listen to the words of the great 20th Century philosopher Roger Waters of Pink Floyd:

   “With, without, and in the end, that’s what the fighting’s all about.”

   Shallow pseudo-conservatives better gather together all that wealth they’ve snatched from the poor and get ready to give it all to the Blackwater Stormtroopers who, having brought democracy to Iraq, are now about to bless Amerika with the same jungle justice. Come the new holocaust, the blackshirts will protect the rich — at least till the money and the food runs out. And when there is nothing left to eat, the jungle ethicists and economic imperialists will say: Let ’em eat snake oil.

7. Austin Buddy, Mr. Whatevah - December 14, 2007 @ 8:20 am

   oh i agree.

   the cia had/has a rule of thumb in trying over throw unfriendly nations or promote instability: when the top 10% control 90% of the wealth, coups are easy to incite.

8. Jhell - December 14, 2007 @ 11:16 am

   “Seems about right to me, but I guess we’d need to be living in a democratic society to know for sure.”

   Very key!

9. Tam O’Tellico - December 14, 2007 @ 1:37 pm

   I don’t believe it is “soaking the rich” to insist that the wealthy pay their fair share based on the inordinate opportunity and obscene benefits corporate capitalism provides them under our supposedly democratic, free-market system. They clearly do not pay their fair share now — many would pay no taxes at all without the Alternative Minimum Tax.

   To cite one example of inequity, social security taxes on wages will be capped at $102,000 in 2008. By what logic are those who most benefit from our inequitable economic system allowed to escape their social obligation (it is after all called the social security system) on the hundreds of thousands and millions they earn in addition?

10. Hey Skipper - January 3, 2008 @ 10:51 pm

    A few points are worth questioning.

    Between 2003 – 2005, $400 billion in pre-tax dollars was [sic] shifted from the bottom 95% of households to those in the top 5%

    Just how were $400 billion pre-tax dollars shifted? Beware the passive voice. This particular conclusion is completely vacuous. The top 5% of households did not, in fact, take money from from the bottom 95%. Nor, in fact, is there any attempt to explain how the gains among the top 5% came at any expense at all to the bottom 95%.

    Additionally, this point, and all that follow it, is rendered even more suspect by completely ignoring the way immigration skews income distribution.

    On a pre-tax basis, by 2005 the top 1% held a greater percentage of the entire economy’s income (18.1%) than did the bottom 40% (12.5%), more than doubling the percentage of the whole earned by the top 1% in 1979

    And? The writers, and you, I presume, are asserting some moral case: there is some (unstated) morally correct distribution of income, which these statistics presumably offend mightily.

    However, the writers, and you, neglect to state what that morally desirable target is. Consequently, you have unburdened yourselves of having to explain just what policies you would pursue to attain that goal. Which, in turn, also relieves you of having to ponder any consequences.

    Over the entire range of the study (1979 – 2005), after-tax income for the bottom 20% grew 6%, or $1,800; the middle fifth’s income grew 21%, or $11,000; the top 1% saw its income grow a whopping 228%, or $781,000

    And?

    Absent a completely confiscatory tax regime, what do you propose? Other, that is, than insisting successful people be less successful.

    Keeping in mind that the current tax regime is already very progressive:

    Consider the other end of the income range – the top quintile. Using the assumptions about allocation of tax burden noted above, the CBO found that households in the top quintile (whose average income in 2003 was $184,500) paid 25 percent of their income in all federal taxes in 2003. Moreover, the top quintile’s share of all federal taxes paid by everyone was a whopping 65.7 percent. This last estimate is probably a few percentage points too high because of the above-noted assumption the CBO makes about the distribution of the corporate-tax burden. Still, a correct estimate of the top quintile’s share of taxes would surely be above 60 percent, and a correct estimate of their income paid in taxes would surely be above 23 percent.

    The author of the EPI analysis concludes, “such concentration of income is unsustainable in a democratic society.”

    Based upon what evidence? What concentration of income is sustainable? Isn’t it more important that everyone view the economy as being meritocratic than somehow flattening distribution?

    By what logic are those who most benefit from our inequitable economic system allowed to escape their social obligation (it is after all called the social security system) on the hundreds of thousands and millions they earn in addition?

    By the logic of the social security system itself, which is, BTW, a Ponzi scheme that would be illegal if anyone but the government was running it.

    It is demographically unsustainable, and deprives people of the ability to earn a much greater return on their money if they could invest it instead of giving it to the government to give to someone else.

11. lonbud - January 4, 2008 @ 2:57 am

    Well, Hey Skipper, I wasn’t really making a statement about the federal tax system, or about the social security system, nor was the EPI report I referred to about either of those topics, but thanks for stopping by nonetheless.

    The commentary was about income inequality.

    While I’m all for considerations of relative tax burdens, I don’t know that I’m up to going into it in detail at this moment. So, I’ll just say this: the people who earn the most money in our society should shoulder the most tax burden.

    Forget about whether you’re happy with your rate of investment return or whether you agree with the government’s priorities in distributing tax receipts. I know I have bones to pick on both of those fronts.

    If you make 25% of the income produced by “the system” you should be paying 25% of the taxes that go toward making that income possible. By that measure, the top quintile, which earned 55% of all income in 2005, is only paying slightly more than its “fair share” (if you take Mr. Henderson’s analysis at face value and you don’t account for state taxes, sales taxes, and payroll taxes, all of which impact the lower-earning quintiles disproportionately).

    But, again, we were talking about income inequality, where the top 5% of income earners’ share of the same-sized pie shifted $400 billion to the plus side, and the other 95%’s slice got $400 billion smaller between 2003 – 2005.

    We are witnessing a growing divide in our land between the haves and the have-nots that cannot continue without, as you suggest, a confiscatory tax regime, or, as I fear, the threat of class warfare.

12. Hey Skipper - January 5, 2008 @ 2:16 pm

    Hey Skipper, I wasn’t really making a statement about the federal tax system, or about the social security system, nor was the EPI report I referred to about either of those topics, but thanks for stopping by nonetheless.

    Gosh, that’s funny. Each of your bullet points uses either the term pre- or post-tax. How silly of me to think you weren’t making statements about the tax system.

    Also, you should have noted that Tam made a pointed reference to social security, and it was to that I was replying.

    The commentary was about income inequality.

    About which you actually said very little, and completely failed to take on board my response:

    “And? The writers, and you, I presume, are asserting some moral case: there is some (unstated) morally correct distribution of income, which these statistics presumably offend mightily.

    However, the writers, and you, neglect to state what that morally desirable target is. Consequently, you have unburdened yourselves of having to explain just what policies you would pursue to attain that goal. Which, in turn, also relieves you of having to ponder any consequences.”

    In other words, your commentary had no content.

    And We are witnessing a growing divide in our land between the haves and the have-nots that cannot continue without, as you suggest, a confiscatory tax regime, or, as I fear, the threat of class warfare. doesn’t really count.

    Granting, for the moment, that income inequality will lead to class warfare, then clearly you think this problem to be extremely serious.

    Yet you say not one word about what constitutes an acceptable distribution, and what you would do to get there. Which means you have let yourself completely off the hook for defending the consequences of whatever your notion might be.

    And that completely ignores whether your thesis holds any water at all. Surely US income inequality is far greater than that of, say, Sweden’s. Consequently, there must be much greater class conflict in the US, right? If not — and “not” is the correct answer — then you are taking as true that which is nowhere near proven.

    … income inequality, where the top 5% of income earners’ share of the same-sized pie shifted $400 billion to the plus side, and the other 95%’s slice got $400 billion smaller between 2003 – 2005.

    That is simply wrong. The pie got bigger between 2003 and 2005. US GDP growth rates over that period ranged from 2.7% to 4.2%. All earners saw an increase over that period; however, the upper quintiles saw a much greater increase.

    Which reiterates why passive voice is something to be distrusted — the use of the term “shifted” here says, charitably, absolutely nothing.

13. lonbud - January 5, 2008 @ 9:40 pm

    Hmm. Let’s see if I can be more succinct. You are hot on the trail, Skipper, admitting that while the whole pie got bigger between 03 and 05 the upper quintiles saw a much greater increase in their slice.

    To whit, when adjusted for inflation and expressed in constant dollars, the size of the slice enjoyed by the top 5% grew by $400 billion, while the size of the slices shared among the other 95% was smaller by that amount.

    What is a fair distribution of income throughout a society as large and diverse as ours in America? Well, if had had the answer to that I guess I’d be in line to advise Barack Obama on economic policy in 2009 and beyond.

    But I can say without compunction that when, over a 25 year period of time income for the bottom 20% grows 6%; the middle fifth’s income grows 21%; and the top 1% sees its income grow a whopping 228% ,something is wrong.

    Personally, given the relative comfort in which the various quintiles live today, over the next twenty five years, I think the top 1% would do quite well with a 6% increase in their annual income. And if we could manage a way to increase the income of the bottom quintile by 228%, well, that would be something to be proud of.

14. Hey Skipper - January 7, 2008 @ 9:41 am

    Skipper, admitting that while the whole pie got bigger between 03 and 05 the upper quintiles saw a much greater increase in their slice.

    That is merely to acknowledge the obvious.

    What you haven’t taken on board, though, is that saying $400 billion was “shifted” is completely vacuous. The only way to give that term meaning is to get rid of the passive voice — which I’ll bet neither you nor the authors can do.

    In other words, there was no agent, plan, policy, nor even any intent to obtain this outcome. It just happened.

    But I can say without compunction that when, over a 25 year period of time income for the bottom 20% grows 6%; the middle fifth’s income grows 21%; and the top 1% sees its income grow a whopping 228% ,something is wrong.

    Well, you can say that without compunction, but you can’t necessarily say that with any analytical coherence.

    If the increase in inequality is due solely to technological changes favoring raw intellectual talent, and that talent, thanks to nature, is itself distributed very unevenly, then there is simply no avoiding this outcome.

    Without sacrificing considerable freedom, and, thereby, penalizing success, that is.

    “Something” is wrong only with respect to the available alternatives.

    There aren’t any that would produce superior results.

15. lonbud - January 7, 2008 @ 1:33 pm

    …there was no agent, plan, policy, nor even any intent to obtain this outcome. It just happened.

    Au contraire, mon frère. George W. Bush came into office with the intent, if not the plan. The agents were rife throughout his administration. It was always and ever the policy of his government to ensure the concentration of as much wealth as possible in the upper reaches of our society. It “just happened” as a result of, for starters, BushCo. eviscerating the staff and budget for IRS auditing of Estate and Gift Tax returns, which are hardly the province of many in the first four quintiles.

    Bush administration policy with regard to capital gains taxes and dividends also contributed to the “shifting” with whose voice you seem inordinately concerned.

    And then there are the well-documented benefits of the outgoing administration’s income tax policies, which favored the wealthiest among us to a much greater degree than they did those in the middle classes.

    If the increase in inequality is due solely to technological changes favoring raw intellectual talent, and that talent, thanks to nature, is itself distributed very unevenly, then there is simply no avoiding this outcome.

    Why is it, when I find myself in these kinds of conversations, Social Darwinisim inevitably raises its ugly head? Let me tell you something, Skipper, if raw intellectual talent had anything like a direct correlation to wealth, I and a whole lot of other people you probably wouldn’t be too fond of would be fabulously wealthy.

    Are you suggesting between 1979 and 2005 the top 1% of income earners in America became populated by people who understand unix and C++? Perhaps you wish to contend it was the raw intellectual talent of the CEOs of Citibank, Merrill Lynch, and Morgan Stanley (who undoubtedly reside in that 99th percentile) that caused those companies to disappear more than $80 billion from their balance sheets last year. You are sadly mistaken if you think we live in anything resembling a meritocracy, my friend.

    The Bush administration has seen to it we’ve already sacrificed considerable freedom, each and every one of us, from the biggest Grinch, down to the smallest Who in Whoville.

    And I would submit that it’s no penalty to success, if one is fortunate enough to enjoy the benefits of wealth — whether through hard work, good genetics, luck, timing, or any of the other ephemeral and capricious variables that might enable a fat bank account — to require a fair and generous contribution back to the society of which one is a member.

16. Hey Skipper - January 8, 2008 @ 2:53 pm

    It “just happened” as a result of, for starters, BushCo. eviscerating the staff and budget for IRS auditing of Estate and Gift Tax returns,

    …

    And then there are the well-documented benefits of the outgoing administration’s income tax policies, which favored the wealthiest among us to a much greater degree than they did those in the middle classes.

    Please pay more attention to your own post. Quoting from it:

    Between 2003 – 2005, $400 billion in pre-tax dollars was shifted from the bottom 95% of households to those in the top 5%

    Making the administration’s tax policy completely irrelevant.

    Never mind that, though. Had the administration increased taxes for the bottom 95% while decreasing taxes for the top 5%, then the term “shifted” would have some meaning.

    However, that is not the case. Taxes were lowered across the board, meaning “shifted” is completely meaningless in both the EPI article, and your responses.

    Now, one might make the argument that the wealthiest should pay even more. However, it is problematic for two reasons.

    First, as a matter of equity. And I quote By that measure, the top quintile, which earned 55% of all income in 2005, is only paying [at 60%] slightly more than its “fair share”.

    Second, as a matter of mathematics. In a rank ordered list of taxpayers, any reduction favoring those at the low end shifts the tax burden towards the high end. Do that sufficiently often, and only one person will be paying taxes. As it stands, those earning less than $30,000 / year either pay no income tax at all, or actually get paid through EITC. Presuming you favor taxes to fix income disparity, then people in the lower half wouldn’t have to work at all — they would make a comfortable living off EITC.

    Besides. The EPI article chose, curiously, the period 2003 – 2005. And it did so without mentioning perhaps the most salient consideration over that period: the increase of the DJIA from roughly 7500 to nearly 11,000.

    Why is that? Ignorance, or very selective neglect?

    Why is it, when I find myself in these kinds of conversations, Social Darwinisim inevitably raises its ugly head?

    You are the one misusing the term here, not I. It is a fact that the US population is evenly distributed around an IQ of 100. It is also a fact that the most lucrative professions (law, medicine, engineering, accounting, etc) are absolutely unobtainable for those whose IQs are less than the mean, and difficult so for those somewhat less than one standard deviation right of the mean. The mean IQ for a college graduate is 120, which equates to roughly the 80th percentile.

    What that means is that based solely upon the nature of the economy, roughly 20% of the people (odd how that fits into the upper quintile of income distribution).

    That is the nature of the beast, whether you like it, or not.

    You are sadly mistaken if you think we live in anything resembling a meritocracy, my friend.

    You are sadly mistaken if cherry picking a couple examples contradicts the fact that our economy is predominantly, if not exclusively, meritocratic.

    And I would submit that it’s no penalty to success, if one is fortunate enough to enjoy the benefits of wealth — whether through hard work, good genetics, luck, timing, or any of the other ephemeral and capricious variables that might enable a fat bank account — to require a fair and generous contribution back to the society of which one is a member.

    Having completely failed to posit what constitutes “fair” and “generous”, and how you intend to attain that goal, your submission is a hard vacuum.

    Particularly the part about not penalizing success.

    (Also, considering that there are only two things one can do with money, you completely fail to make the case that giving the money to the government produces a superior outcome to individuals saving or investing their own income.)

17. lonbud - January 9, 2008 @ 5:30 am

    I see. The rise in the Dow between 2003 – 2005 both explains the $400 billion shift in pre-tax income to the 95th percentile of income earners, and proves government policy had nothing to do with it.

    Additionally, the top quintile is composed of college graduates with a mean IQ of 120 employed in law, medicine, engineering, accounting, etc., which proves the meritocratic structure of our economy and obviates the possibility that government could possibly make any adjustment to social policy that would improve conditions for the other four quintiles without “penalizing” the success of those at the top.

    As we have begun to see in trading at the outset of the new year, the value of equities traded on the stock market enjoyed wild overinflation during the Bush admininstration due to a combination of inadvisable central bank metastasis of its fiat currency and the greed of speculators. I hope you’ve locked in your profits, Skipper, and begun to move your assets into something tangible like gold and real estate with a dependable natural water source.

    As for your blather about IQ, it’s well recognized that IQ scores alone are a notoriously poor predictor of “success.” Things like GPA, passion, and perseverance are far more relevant to the consideration.

    Not to suggest your membership in any club or organization, but here is some of the fine company you keep with your particularly misguided beliefs about who resides at the top of the money pyramid in this country, and how they get there.

    Four of the people in the top 10 of the wealthiest Americans are heirs of the late Sam Walton, founder of WallMart Stores. The top quintile is rife with people from the worlds of sport and entertainment, including such giants of thought and innovation as Howard Stern, Rush Limbaugh, 50 Cent, and Jessica Simpson.

    Now, tell us again what you were saying about rising inequality being due solely to technological innovations favoring raw intellectual talent?

    Here is but one, tiny, though particularly egregious example of the Bush administration’s intent, plan, and policy — and its agents — for making sure the top quintile is both well-cared for and populated by people it likes. Meritocracy in action.

18. Hey Skipper - January 9, 2008 @ 9:02 pm

    The rise in the Dow between 2003 – 2005 both explains the $400 billion shift in pre-tax income to the 95th percentile of income earners, and proves government policy had nothing to do with it.

    You need to stop using the word “shift”. The increase in income for the upper 5% did not come at the expense of everyone else.

    And, yes, I am willing to bet that the rise in the DJIA would explain nearly all of that change, which is precisely why the EPI paper chose 2003 – 2005, and not 2000 – 2003. That is at the very least disingenuous, and verge on outright dishonest.

    In other words, it qualifies as propaganda. And you fell for it.

    Did government policy have something to do with it? Of course. The administration could have pursued policies which would have tanked the stock market, and greatly eased income inequality.

    It did not. Instead, it pursued a set of policies that have given the US the most dynamic economy in the world, with what amounts to virtually full employment.

    … proves the meritocratic structure of our economy and obviates the possibility that government could possibly make any adjustment to social policy that would improve conditions for the other four quintiles without “penalizing” the success of those at the top.

    Our society is, by and large, meritocratic. On the whole, people who have the greatest combination of motivation and cognitive ability are by far the most likely to get ahead.

    IQ scores are, in fact, and excellent predictor of success. GPA is in large part dependent upon one’s cognitive ability. Where passion and perseverance are equal, someone with an IQ of 120 is far more likely to do better than someone with an IQ of 95. That is a brute fact, whether you like it, or not.

    In my profession, aptitude tests have shown that below a certain, and reasonably high, result, the failure rate increases dramatically. That is a brute fact, whether you like it, or not.

    As we have begun to see in trading at the outset of the new year, the value of equities traded on the stock market enjoyed wild overinflation during the Bush admininstration due to a combination of inadvisable central bank metastasis of its fiat currency and the greed of speculators.

    No, we haven’t. There is no way the stock market qualifies as anything like as “overinflated” as it was during the 90s. We may be in for a few bumps over the next year or so. I’ll continue doing what I have done for 30 years, and keep my money in the market.

    Four of the people in the top 10 … and Jessica Simpson.

    So what? That only proves my point: our economy rewards merit. And it doesn’t matter a tinker’s darn what you think of that merit. I am certain you scorn Rush, but that view is not at all shared by enough people to make him rich.

    Whether you like it, or not.

    Now there is a way you can put an end to that kind of merit, but it must involve eliminating freedom and remaking society based upon your whims.

    Here is but one, tiny, though particularly egregious example …

    Congratulations, you have uncovered evidence that indicates people are human, and that some humans behave corruptly. No matter what system they inhabit, no matter who is president. Ever heard of Mark Rich?

    The EPI article you cited is claptrap that, ultimately, says absolutely nothing — other than a simple observation — defendable. What is worse, its unacknowledged reason for choosing the years it did, while fooling a lot of people, including you, is excellent reason for viewing their intellectual credibility very skeptically. What this report really meant to say was that a rising stock market benefits those who own stock over those who do not. What it cannot possibly say, no with any credibility, anyway, is that somehow income was “shifted” from the lower 95% to the rest.

    Your defense of their core assertion has been correspondingly empty. Beyond that, you make all sort of moral claims about re-distributing income without having to defend any means of doing so. Which, in turn, means you don’t have to burden yourself with wondering whether the cure is worse than the disease.

    By the way, the best reason to avoid ending a sentence with a preposition is to avoid redundancy. Their is only one way for a rising to go: up.

19. lonbud - January 9, 2008 @ 10:00 pm

    Well, I just have to say I’ve enjoyed watching the bee in your bonnet, Skipper, but at this juncture, we ought to just agree to disagree.

    The American capitalism has always been rigged to make sure the haves keep having without any particular regard to the merits on which they got. And I’ll agree that aspect of the status quo is largely agnostic with respect to political party, though the Republicans in general, and George W. Bush in particular, are especially egregious and transparent about larding their own kind from the treasury.

    That said, it’s also the land of opportunity and a place where any damn thing can happen. Look at Bill Gates! Having saddled the entire planet with mediocre software products, at least now he’s leaving the computer business to focus on philanthropy, as he should.

    Good luck with your investments, and if you happen to be in that fortunate upper quintile, consider setting up some sort of endowment for the high-IQ — or at least the passionate and persevering — members of the lower quintiles to get the education and support they need to ride the waves of technological innovation onto the beaches of the promised land.

    Fair winds and clear sailing to ye, matey.

    By the way, it would be There is only one way… though a rising could also go over, and above, in addition to merely up.

20. Hey Skipper - January 11, 2008 @ 8:56 am

    On some points, I don’t see how disagreement is possible.

    — There was no “shifting” of income from the bottom 95% to the top 5%.

    — The pie got bigger, resulting in income increases across the board.

    — The report purposefully, and surreptitiously, picked a time series coinciding with a rapid rise in the stock market. No doubt the authors’ intent was to fool people; it certainly fooled you.

    — The report completely excluded the effects of immigration.

    — The author’s conclusion such concentration of income is unsustainable in a democratic society, and your agreement, is completely unsubstantiated.

    — Upper quintile earners are overtaxed in comparison to their income.

    — Having decreed that there must be more income equity, you then venture into the land of null: no notion what would represent acceptable equity, or how to obtain that goal.

    — Insisting the Bush administration’s policy is to ensure the concentration of as much wealth as possible in the upper reaches of society qualifies as a rant unless you provide specifics; such as you did are demonstrably wrong; e.g, income tax reductions “favoring” the rich, who still pay more than their share.

    — “… here is some of the fine company you keep …” is an ad hominem attack. NB: those who resort to an ad hominem attacks often do so to compensate for an empty argument.

    — Their is only one way for a rising to go … Ouch.

    I pursued this as a consequence of trying to fathom how those on the far left think. Oddly considering you fancy yourself part of the reality based community, your example here is nearly a dead ringer for ID/Creationist thinking. In other words, the faith in your precepts overwhelms any evidence to the contrary. Neglecting to acknowledge (except implicitly by failing to provide any counter to my objections) the very real flaws — putting it kindly — in the cited EPI analysis is precisely what an ID/Creationist would do.

    Ultimately, Left thinking relies upon several things:

    — blank slate thinking

    — which leads to equality of outcome trumping equality of opportunity. BTW, this is not the same as saying the US has anything like complete equality of opportunity — although I bet you can’t come up with a society that does better in this regard.

    — intentions without regard to consequences.

    Unfortunately, none of those fares at all well in the real world. But, just as with ID/Creationists, for the Left, it is all faith an no analysis.

21. Tam O’Tellico - January 11, 2008 @ 10:00 pm

    Where do I begin? I suppose I could get into a statistical pissing contest, but that never seems to be too effective since numbers are so easily made to lie. It will likely do little good for me to try and convince a Michael or a Skipper or any other Free-Marketeer that unmitigated greed is not a good idea for any society that intends to remain democratic.

    But perhaps we ought to listen to some of the kings of capitalism, who I assume know more about the subject than any of us. First there’s billionaire Warren Buffet.

    “Speaking at a $4,600-a-seat fundraiser in New York for Senator Hillary Clinton, Mr Buffett, who is worth an estimated $52 billion said: “The 400 of us [here] pay a lower part of our income in taxes than our receptionists do, or our cleaning ladies, for that matter. If you’re in the luckiest 1 per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent.”

    Mr Buffett said that he was taxed at 17.7 per cent on the $46 million he made last year, without trying to avoid paying higher taxes, while his secretary, who earned $60,000, was taxed at 30 per cent. Mr Buffett [said} that US government policy had accentuated a disparity of wealth that hurt the economy by stifling opportunity and motivation.

    The comments are among the most signficant yet in a debate raging on both sides of the Atlantic about growing income inequality and how the super-wealthy are taxed.

    They echo those made this month by Nicholas Ferguson, one of the leading figures in Britain’s private equity industry, when he criticised tax rates that left its multimillionaire venture capitalists “paying less tax than a cleaning lady”.

    Last week senior members of the US Senate proposed to increase the rate of tax that private equity and hedge fund staff pay on their share of the profits, known as carried interest, from the 15 per cent capital gains rate to about 35 per cent.

    Lloyd Blankfein, the chief executive of Goldman Sachs, acknowledged in an interview yesterday that there were justified concerns about the huge profits generated by private equity firms and that he worried that income inequality was “poisoning democracy”. He also said that he would be voting for the Democrat candidate at the next election. Mr Blankfein is the highest-paid executive on Wall Street, earning $54 million last year.

    Mr Buffett, who runs the investment group Berkshire Hathaway and is widely regarded as the world’s most successful investor, said that he was a Democrat because Republicans are more likely to think: “I’m making $80 million a year – God must have intended me to have a lower tax rate. ”http://business.timesonline.co.uk/tol/business/money/tax/article1996735.ece

    I’m going to take a wild guess that no one who posts on this forum including Skipper is a billionaire, but one does not have to be a billionaire to predict the consequences of the politics of greed, as I fear we are all about to sadly discover. Free-Marketeers ought to be asking themselves why billionaires are bailing on the Republican Party. The answer seems clear to me — they are fearful of the kind of societal catastrophe we witnessed in the The Thirties. Anybody wanna buy an apple?

22. lonbud - January 11, 2008 @ 11:15 pm

    I pursued this as a consequence of trying to fathom how those on the far left think.

    Certainly admirable enough of you Skipper, and while I can’t speak as any sort of authority of “the far left,” I’m happy to try and explain further how I think.

    I am a middle aged man from a single-earner-income-family in the top quintile, whose parents have both been dead more than 20 years. I nor my siblings bitched when our inheritance was reduced by the Estate Tax because, even though we had to split our pie four ways, we knew we were far more fortunate than the vast majority of people, and we’d have given it all away if we could have had more time in this life with the people who loved us more than anyone.

    I have a post-graduate professional degree and have traveled extensively in Europe and Asia. In the mid-eighties I lived and worked in Taiwan and Mainland China for fifteen months.

    I have owned two of my own small businesses, provided employment to more than thirty people over the years, bailed employees out of jail, paid for their emergency room medical care, helped two start their own businesses, and helped one with the down payment on his family’s first home in California.

    I have come by my political understandings and opinions through my study of history and sociology, through my observations of and interactions with people, and by participating in government and economies on scales from the personal and local to those abstract and international.

    In my experience, opportunity is plentiful and is offered without prejudice to each and every person in the first two quintiles here in America. Which doesn’t mean in order to remain successful one mustn’t excel in one’s efforts once opportunity has been extended, though my experience has also revealed a far greater tolerance for mediocrity and laziness in the well-to-do than is generally extended to those from the working classes.

    I agree that America probably offers more opportunity for success to those in quintiles 3 – 5 than other nations, but, in my experience the offer comes with great prejudice and is by no means something gladly, or often enough, even willingly given by the great majority of people in the highest quintiles.

    In the most general respects, my observations in this life are that, by and large, owners of property and capital are focused primarily on securing and expanding the benefits of such ownership and any law or policy that might require the sharing or diminishment of those benefits to enhance the commonweal is met with a great hue and cry and gnashing of teeth.

    I’ll give you one specific, personal example of a tiny way in which wealth was indeed shifted to the upper 5% of income earners between 2003 – 2005, at the expense of the bottom 95% and in a manner having nothing to do with the rising up of the equity markets.

    My wife is a 20+ year employee of a major airline, who along with tens of thousands of her fellow employees, took a 20% pay cut in late 2003 as part of a corporate-wide effort to help the airline survive its reorganization in bankruptcy. The pay cut put her at the same pay-rate she had been earning in 1984 (with no adjustment for inflation). We can talk about the fundamental injustice of working at a job for 20 years and receiving average raises worth just over 1% per year in another conversation, I suppose.

    After the wage concessions were finalized, the airline’s CEO and several vice presidents received bonuses amounting, in aggregate, to more than $10 million, nominated of course, as “performance bonuses,” and ostensibly in return for productivity and efficiency gains, but as sure as you are sitting there reading these words, directly resulting from the hundreds of millions of dollars in cost savings produced by the wage cuts taken by rank and file employees across the country.

    When the airline emerged from bankruptcy in 2005, three outgoing directors received multi million dollar “golden parachute” packages and lifetime annuities worth well in excess of $100K per year. The line employees received modest stock grants in the new corporation and cash payments valued at a few thousand dollars, but continue to work for 1984 wages.

    Tam makes excellent reference to a handful of 1 percenters who understand the inequities at play in our system. I can only hope they somehow manage to hold sway over the inestimable greed and sense of entitlement found in their fellow members of the rare air society because, should they not manage to do so and put in place mechanisms for shifting some of their obscene excess back down the food chain, our society may soon resemble not so much 1930s America as 1790s France.

23. Tam O’Tellico - January 12, 2008 @ 12:17 pm

    Lon, I would add that my wife is a critical care RN, and I assure Skipper that if he were to need critical care, his life would depend as much on the services of a $20 an hour RN as on the services of a $400 an hour MD.

    What no one needs is the “services” of a $4,000 an hour HMO CEO, whose services are more like those of any other prostitute. I’m still waiting for some Free-Marketeer to explain to me how the “invisible hand” has worked to make health-care better or more affordable by adding another layer of mismanagement. In the case of HMOs, the invisible hand has pick-pocketed our wallets and then been shoved up our ass just for spite.

    Q: What’s the difference between the CEO of an HMO and a terrorist?
    A: You can bargain with a terrorist.

24. Hey Skipper - January 14, 2008 @ 10:30 pm

    Tam:

    Buffet’s speech is not evidence, nor does it provide context. It certainly does raise some questions regarding precisely how Mr. Buffett paid only 17% on $46 million without avoiding taxes, or the AMT. And it certainly says not a word about how Mr. Buffett’s charitable contributions might have changed his tax liability, which I will bet they did. If so, that directly contradicts his contention that he didn’t try to avoid paying higher taxes: he did, by declaring charitable contributions.

    It is an incontrovertible fact the the upper quintile, regardless of Mr. Buffett’s tax experience, pays roughly 67% of all federal taxes, in comparison to that same group’s 54% of all income.

    OK — US income is skewed. I’m not arguing that point. The question is, before one can insist upon some particular income distribution as “moral”, what measures do you envision that would reduce that inequality, and what would be the consequences?

    Punitive tax rates have been tried, both here and in Europe. They failed here, and are failing in Europe. They penalize both success and virtue, greatly reduced the incentive for risk taking, and, perversely, significantly reduce the government’s income.

    So, what, precisely, do you or lonbud think a “moral” distribution of income is, and how do you intend to get there? To quote from lonbud: And I would submit that it’s no penalty to success, to require a fair and generous contribution back to the society of which one is a member. Unsaid is what constitutes “fair and generous”, precisely what lurks behind “require”, or in what way “require” can not come without penalizing success and virtue.

    My contention is that in a meritocratic system, given the disparity of abilities, desires, and personal decisions, and, yes, luck, significant income inequality goes hand-in-hand with a free economy. The only alternatives involve penalizing both success and virtue, which, as history has clearly shown, by making a smaller pie, produces worse results for everyone.

    Beyond that, there are only two things one can do with money: spend it or invest it. What is better for the economy — that is, what is most likely to increase the size of the pie — individuals making the majority of spending and investing decisions, or the government?

    Mr. Buffett, presumably, believes that the government would be a more successful investor than he. So why doesn’t he work for the government?

    lonbud:

    I nor my siblings bitched when our inheritance was reduced by the Estate Tax because, even though we had to split our pie four ways, we knew we were far more fortunate than the vast majority of people, and we’d have given it all away if we could have had more time in this life with the people who loved us more than anyone.

    That is very admirable. However, as, presumably, an argument against repealing the Estate Tax it is an appeal to emotion made possible only by a false dichotomy (since it is impossible to have traded money for more time).

    In my experience, opportunity is plentiful and is offered without prejudice to each and every person in the first two quintiles here in America … in my experience the offer comes with great prejudice and is by no means something gladly, or often enough, even willingly given by the great majority of people in the highest quintiles.

    That is purely a glittering generality.

    Clearly, those who have more have fewer barriers to success. No doubt my kids, who live in a disciplined household and benefit from expert, on call, tutoring, will have an easier time exploiting their native abilities than children in households where the TV is on 24/7.

    But there is no way you can that the great majority of people anywhere, including the highest quintiles approaches with great prejudice (as opposed to great admiration) someone who manages to overcome a childhood in the DC school system.

    In the most general respects, my observations in this life are that, by and large, owners of property and capital are focused primarily on securing and expanding the benefits of such ownership and any law or policy that might require the sharing or diminishment of those benefits to enhance the commonweal is met with a great hue and cry and gnashing of teeth.

    Your observation, with regard to opposing government appropriation are no doubt correct. But your conclusion is, as I mentioned above, dead wrong. Owners of capital, as I mentioned above, can do only two things with that capital: spend it or save it. Each of those benefits the economy, and the “commonweal.” Owners of property pay property taxes.

    I’ll give you one specific, personal example of a tiny way in which wealth was indeed shifted to the upper 5% of income earners between 2003 – 2005, at the expense of the bottom 95% and in a manner having nothing to do with the rising up of the equity markets.

    An example, considering I am an airline employee laid off twice during that period, with which I am completely familiar. Passenger airlines, due to reasons too complex go discuss here, faced a permanent revenue reduction of something over 20% per passenger mile. There is no way a company can take that kind of hit, and avoid liquidation, without reducing costs by a similar amount. That is not injustice, just a brute fact, like it or not.

    I am not about to justify executive compensation, and it is OT to discuss it here. However, the airline at which I worked failed to get cost reductions from its unions (who were, by and large, in complete denial of reality), and had to go into bankruptcy; the consequence being substantial job losses, including mine.

    Be that as it may, wiping out all such executive compensation isn’t even a drop in the income bucket. The EPI chose the time series it did on purpose, without disclosing that purpose. No amount of finessing will change that.

    I can only hope they somehow manage to hold sway over the inestimable greed and sense of entitlement found in their fellow members of the rare air society because … our society may soon resemble not so much 1930s America as 1790s France.

    Well, except that our society has absolutely nothing in common with 1930s America or 1790s France.

    When considering income inequality, and, along the way, insisting that there is no such thing as trickle down, you, and, I am sure, the EPI, completely ignore hedonic inflation.

    Hedonic inflation is that part of a commodity’s price increase due to a change in quality. For example, in the early 1970s, the average price of a new car was about $4500. Today, it is around $18,000.

    Four hundred percent inflation over that time, right?

    Wrong. In fact, it is extremely difficult to say what the inflation rate is, because no amount of money in 1973 would have been sufficient to purchase as good a car as today’s average.

    Other examples abound. Want a healthier house? Buy a HEPA filter. How much did those cost in 1970? Scarcely any facet of American life is unaffected by

    The point should be obvious: precisely because of greed, which only those wedded to blank slate thinking could hope to eliminate, people even at the bottom of the income rankings are markedly better off than they were even thirty years ago.

    That could absolutely not have been said of 1790s France, and scarcely about 1930s America.

    While we are talking about income inequality, from this article, I noted the following:

    — The median household income is over $48000.
    — Household income inequality has been rising since the 1970s.
    — Married couples are disproportionately represented in the upper two quintiles, compared to the general population of households.
    — Household income as well as per capita income in the United States rise significantly as the educational attainment increases.

    So, yes, in the US income distribution is very unequal.

    And, yes, CEOs can be greedy. Along with everyone else.

    It is all well and good to go into high dudgeon. Unfortunately,

    Personally, given the relative comfort in which the various quintiles live today, over the next twenty five years, I think the top 1% would do quite well with a 6% increase in their annual income. And if we could manage a way to increase the income of the bottom quintile by 228%, well, that would be something to be proud of.

    is in the realm of magical thinking. Just like with ID/Creationists who refuse to acknowledge that the universe doesn’t work the way they insist it must.

    What is worse, though, is that your approach is essentially anti-human, in that you insist there is some way to make people other than what they are, and if they fail to conform, they must be required to conform. By, oddly enough, a government made of people.

    We can either have a highly dynamic economy that emphasizes freedom, creates an ever expanding pie, and allows people to routinely obtain today what even the super-rich couldn’t purchase 20 years ago; or, we can assuage your moral sensitivities, penalize success and virtue, and have the Sweden’s moribund economy.

25. lonbud - January 15, 2008 @ 1:05 am

    Well, Skipper, I thought fairly early on in our conversation I recognized a certain cast of mind on your part reminiscent of several extended debates engaged herein prior to the last election cycle with Michael Herdegen.

    After reading your last comment, I took the opportunity to investigate the Daily Duck and, well, lo and behold…

    I was pleased to find a post therein, contributed by you even, to which we might distill our entire “argument” in this thread, and upon which we may find common ground (presuming your original post was sincere and not facetious):

    Words to Live By

    “… the general spread of the light of science has already laid open to every view the palpable truth that the mass of mankind has not been born with saddles on their backs, nor a favored few booted and spurred, ready to ride them legitimately by the grace of God.”

    — Thomas Jefferson

    My point, and I do not believe my view is essentially anti-human one bit, is that the outgoing administration has effectively distributed boots and spurs to a favored few and saddles to the rest through its economic and environmental policies.

    Yes, the lot of humans on planet earth has generally become less nasty, brutish, and short in the past century, and the least among us have today things within their grasp the most privileged did not possibly dream of 50 years ago.

    But that does not excuse the rapacity of our oligarchs, nor the collusion by which our government abets it.

26. Hey Skipper - January 15, 2008 @ 11:31 am

    My point, and I do not believe my view is essentially anti-human one bit, is that the outgoing administration has effectively distributed boots and spurs to a favored few and saddles to the rest through its economic and environmental policies.

    Your point is wholly wrong.

    The Bush administration’s economic policies scarcely vary from what has prevailed since the Reagan administration. And what variation there has been amounts to an across the board tax reduction that went someway to reducing the disproportionate (with respect to share of income) taxation on the wealthy.

    The trend towards income inequality has been going on for nearly thirty years. It is a secular phenomena that is a concomitant of a free economy and the huge disparity in human attributes.

    Which is where your view, as it must be with the Left, is anti-human. You engage in magical thinking when you insist upon an outcome that will somehow not destroy freedom, while somehow not penalizing success and virtue. It is anti-human because it relies upon ignoring, or rejecting, human nature.

    The sole reason the lot of humans, particularly those living in the freest economies, has improved so dramatically is the open competition for success that our economy allows. You, in essence, wish to strangle the goose that has been laying the golden eggs.

    My post was not the least bit in jest. Your accusations are completely unsubstantiated, except by anecdote, which is always sufficient to prove any position one might desire. Billionaires, or even millionaires, do not saddle the rest of us — to say that, then in the space of a carriage return acknowledge the lot of humans has vastly improved verges on incoherent.

    But that does not excuse the rapacity of our oligarchs, nor the collusion by which our government abets it.

    What rapacity? There simply is no such thing, in the general sense.

    Your use of language is typical of the left. Terms such as “shifted”, “required”, and “rapacity” appear as if they have some concrete meaning. Unfortunately, they are appeals to emotion that fall almost immediately to even cursory scrutiny.

27. lonbud - January 15, 2008 @ 6:16 pm

    I’m sorry. What is this free market of which you speak? Ours is as centrally planned and executed an economy as the world has ever known. Better planned and executed than other historical examples perhaps, but it nonetheless does not qualify as anything remotely resembling free or open to any and all comers.

    BushCo’s penchant for awarding lucrative no-bid contracts to its financiers and fellow-travelers is but one piece of incontrovertible evidence of the centrally-planned, closed system presently in play.

    Interesting, too, that you should recognize the provenance of this state of affairs lying with Ronald Reagan, he of blessed memory.

    Indeed, while running for and getting elected to office on false promises of small government and reduced spending, Mr. Reagan oversaw the greatest peacetime expansion of the federal government in the nation’s history and spent his way to budget deficits that have only been eclipsed by the current occupant on Pennsylvania Avenue.

    I thought The Road To Serfdom was supposed to be one of your favorite books. You may want to give it a re-read, for the trajectory of the past 30 years has us clearly on a path to the very place you and Hayek purport to abhor.

    Shall we scan a checklist?

    Increasing appeals to nationalist sentiment? See Republican-led invectives against U.S. participation in the United Nations; John Bolton. Check.

    Rising suspicions of the foreign-born and demands for immigration restrictions? See The Minutemen and Republican-led condemnation of Mike Huckabee’s candidacy for President. Check.

    Concentration of authority in a central organization? See The Unitary Executive. Check.

    Excessive politicization of law enforcement? See the US Justice Department. Check.

    Diminution of Individual Liberty and Concentration of Enforcement Authority in the Central Scrutinizer? See the Patriot Act; Department of Homeland Security; NSA wiretapping and Data Mining Programs; The Real ID Act; CLEAR. Check.

    Central Planning of Economic Policy? See the Federal Reserve Bank System. Check.

    Consolidation of Media Ownership and Diminution of Competition for Transmission and Distribution of Communication Facilities? See News Corp; Time Warner; Disney; AT&T; Sprint; Verizon. Check.

    Dismantling of Constitutional Checks and Balances? See US Department of Justice, EPA, Dept. of Health and Human Services, US Labor Department. Check.

    I’ll never convince you to change your mind about anything, Jeff, because you have already decided that things are just peachy the way they are and you can not conceive of a different way to channel our collective creative energies that would produce a more egalitarian distribution of our common resources that would not in some way “penalize” success. I disagree. Tomato – To-mah-toe.

    BushCo made conscious, centrally planned decisions to commit the full faith and credit of the U.S. government to an ill-advised, unilaterally undertaken, illegal, poorly executed war of choice against a thoroughly reprehensible yet sovereign nation half a world away.

    In the process, vast stores of our collective wealth and treasure have been squandered and/or redistributed to the personal accounts of a very few individuals who are loyal to a singular political mindset that has nothing to do with respect or concern for the security or quality of life of the vast majority of American citizens.

    In the process, we have all come under greater scrutiny and control of the central government based in Washington, DC and individual liberty has been sacrificed on the altar of chimeric defense against the non-existent threat of Islamic jihad.

    Party on, Garth.

    PS: Here is a fine example of exactly what I’m talking about, from the only Presidential candidate who could even remotely be mistaken for a Libertarian. How do you reconcile his analysis with your belief in the validity of Hayek’s work?

28. Hey Skipper - January 23, 2008 @ 2:51 pm

    [Our economy] is as centrally planned and executed an economy as the world has ever known.

    That is delusional.

    As for the remainder of your comment, you have descended right through baseless allegations to outright ranting that isn’t even in the same time zone as the topic under discussion: the EPI report, and the conclusions you draw from it.

    The report itself is shameless propaganda. Because it is congruent with your emotional — which is to say, not at all analytical — take on both human nature and our economy, you swallowed it hook, line, and sinker. However, in so doing, you created a hard vacuum where the consequences of taking your conclusions as stipulated should be.

    I’ll never convince you to change your mind about anything, Jeff, because you have already decided that things are just peachy the way they are and you can not conceive of a different way to channel our collective creative energies that would produce a more egalitarian distribution of our common resources that would not in some way “penalize” success. I disagree.

    You will never convince me of anything so long as your manner of persuasion is such as I have seen here. I have rarely seen an argument so badly put as what you have displayed here. It ranges from factual errors to ad hominem attacks, throws in arguments from anecdote and emotional appeal, and finishes up by leaving a gaping void under the central concepts you must address.

    I am certainly open to persuasion that there might be a different way to produce a more egalitarian outcome without penalizing success and virtue, but you never devoted so much as a syllable to describing just how that might be done. And you show none of the caution that should derive from the consequences of every attempt to attain the end you desire.

    I have been must struck by the parallels between ID / Creationists and the Left.

    The former will not accept that variation, time, and differential success, absent any design or goal, could produce a an astonishingly dynamic planet, and beings with moral sense. To avoid encountering the bankruptcy of their position, they engage in all manner of magical thinking and rhetorical charades.

    Just so with the Left. You will not accept that a goalless system inhabited by human beings will produce better results than anything burdened by some — you — imposing their notions of “moral” and “equitable” upon everyone else. So you resort to magical thinking — how else to describe forceful reallocation that somehow doesn’t sacrifice freedom — and an impressive ability to completely ignore contradictory evidence and unpleasant conclusions.

29. lonbud - January 23, 2008 @ 8:14 pm

    The EPI report is propaganda, eh?

    Perhaps, though it takes its underlying data from the widely regarded Congressional Budget Office and merely states incontrovertible facts. To whit: total US household income grew by $1.1 trillion between 2003 – 2005. The top 5% income earners saw $681 billion of that growth flow into their accounts, while the other 95% of income earners divvied up $396 billion.

    It was the largest two year gain in income share for any group in the period from 1979 – 2005.

    You are free to interpret the data as suggestive of a social and economic meritocracy. I tend to believe it’s suggestive of a stacked deck. We disagree. C’est la vie.

    As to delusional and/or magical thinking, if you believe we have here in the US a “goalless system” wherein human beings with political, economic, and regulatory power do not impose their own notions of morality and equity on everyone else, well, we’ve really got nothing left to say to one another.

30. Hey Skipper - January 24, 2008 @ 7:52 am

    lonbud:

    It is propaganda because it takes a context-free fact — that over a highly specific period, the choice of which goes completely unmentioned — and avers a process which did not exist.

    From 2003 to 2005, the DJIA nearly doubled. I need not interpret that income distributions are meritocratic to conclude that what the EPI has done is deceitfully pose as “shifting” is nothing more than an artifact of rapidly rising stock values.

    Upon this point there is no possible disagreement — the EPI picked that interval for one reason only, because it could fool people. It fooled you.

    During 2003 – 2005, there was absolutely no shifting of income from poorer to richer households. That assertion is a baseless lie. What happened is that the an expanding pie went disproportionately to the better off. There is a world of difference between the two, which should become completely obvious to you the moment you try to take the term “shifted” from the passive voice, so loved by the left, to the active voice.

    As to delusional and/or magical thinking, if you believe we have here in the US a “goalless system” wherein human beings with political, economic, and regulatory power do not impose their own notions of morality and equity on everyone else, well, we’ve really got nothing left to say to one another.

    So long as you confuse the goals of individuals with that of the system within which they exist, then no discussion is possible.

    Just as with ID / Creationists.

    A free market economy, which ours largely is (I note you do not wish to repeat your ahistorical assertion about the US being a planned economy), has neither goal nor plan. About the only thing that could possibly be considered as such is the Federal Reserve Bank’s goal to keep inflation under roughly 2% per year.

    In contrast, just as with ID / Creationists with natural history, the Left always has economic plans and goals.

    Within the stretch of this thread, you have made unsubstantiated assertions and gross factual errors, while completely eliding both your desired state of affairs and the consequences.

    What’s worse, where the US economy is planned, and has goals, it only serves to prove my point. Eliminating those facets (e.g., sugar producers, the auto workers unions) would both make our economy better off and increase income inequality.

    It may well be, and you certainly haven’t given reason to consider any alternative, that income inequality is the price we must pay for making everyone better off.

31. lonbud - January 24, 2008 @ 8:46 am

    Fully half of American households invest in the stock market today. From its low of 800 (rounded to the nearest 25 points) in 2003 to its high of 1275 in 2005, the S&P500 saw a gain of 59%, which is nearly doubled in the same way that our economy is largely free.

    Show me a single person who claims to have invested when the S&P was at 800 in March 03 and then taken his profits at 1275 in December 05, and I’ll show you a liar.

    The rise in the stock market cannot possibly explain what you admit was a disproportionate allocation of an expanding pie to the better off in our society.

    With respect to your fantasy about our goalless, unplanned, Free Market economy, I’ll commend you to a reader’s post in my thread on Chairman Bernanke’s kick-save Tuesday morning:

    I am always amazed that the very same people who incessantly tout the Free Market, and don’t seem to care in the least when ordinary folks get strangled by the “invisible hand”, suddenly and brazenly do an about face and become ardent interventionists when it looks like their ox — or in this case bull — is about to be gored.

    The real reason for the “economic stimulus” is two-fold (1) to prop up the market and preserve the holdings of investors, and (2) to hold off the recession for another year so that the next President can be blamed for it.

32. Hey Skipper - January 24, 2008 @ 3:07 pm

    The rise in the stock market cannot possibly explain what you admit was a disproportionate allocation of an expanding pie to the better off in our society.

    The total US stock market capitalization in 2006* was $20 trillion dollars. To make the numbers easy to work with, lets take the total capitalization in 2003 as $12 trillion; making the delta $8 trillion.

    $400 billion is 5 percent of $8 trillion.

    Now, which part of 5% can the rise in the stock market not explain? And, while you are pondering that, perhaps you can suss for me why the EPI completely neglected, with a silence so deafening you can’t even hear the crickets chirp, mentioning that seemingly salient fact. I’ll charitably write it off to ignorance, gob smacking though it is for an organization whose expertise is alleged to be economic policy. The alternative explanation is that they have the same regard for the truth as does the Discovery Institute.

    Yes, the pie is disproportionately allocated to the wealthiest — that is an obvious, and context-free, observation.

    It is in the applying of context where the EPI, and you, leave the reservation.

    There was no $400 billion shift from the bottom 95% to the top 5% — the top 5% took nothing from the rest. There are no Bush policies to blame for a shift that didn’t happen — consequently, your lead to the post is dead wrong.

    Clearly, you think it is wrong that the income distribution in the US is as skewed as it is; otherwise, in addition to be factually, and possibly ethically, challenged, the EPI report has no point.

    OK, now what. I do not admire the inequitable distribution of income; I merely assert that all other options have produced even worse outcomes, will always come at the expense of penalizing success and virtue, and will inevitably make everyone worse off.

    You certainly haven’t provided any solution for the problem you say is so critical.

    With respect to your fantasy about our goalless, unplanned, Free Market economy, I’ll commend you to a reader’s post in my thread on Chairman Bernanke’s kick-save Tuesday morning:

    No fantasy. Never mind that you won’t find a survey ranking economic freedom that doesn’t put the US in the top 10. Excluding agriculture (which employs about 3% of the US workforce), telecoms and utilities and the like, in order to make your charge stick you must list the following for the remaining 90-ish percent of the economy:

    — production quotas
    — employment levels
    — price targets

    by industry.

    As for the rest of that response, your reader makes a significant factual error. Bernanke lowered interest rates in order to ensure liquidity; Congress approved a stimulus package in order to prop up consumer spending.

    That is in addition to the blanket, non-specific rant of “the very same people”, who are guilty without having to suffer existence; or, following your example, providing anything like a meaningful alternative.

    Oh, BTW, as a long time Mac owner, I noted with approval your recent post on Apple’s success.

    Because of the rise in Apple’s stock over the last half dozen years, and my significant investment therein, I happen to think Mr. Jobs is worth every darn penny he makes, and after (somewhat over) paying taxes proportionate to his income, should keep every darn penny.

    Presumably you do not; equally presumably, you also believe I should not keep the gains I made on my investment.

    One other BTW — the asterisk after 2006.

    I am in China at the moment, which makes research on the internet very difficult. (In general, only the couple lines showing up on a Google search; it is very often impossible to get to the URL.)

    I was able to obtain the 2006 value, but for 2003 I had to make a guess, because the value was in euros, but I couldn’t obtain the date of the article. $12 trillion may be on the high side.

33. lonbud - January 24, 2008 @ 7:33 pm

    Market capitalization is quite a different thing than household income, as I am sure you are well aware, Skipper.

    Once upon a time, a company called Enron was responsible for a fairly hefty slice of total market capitalization, and we all know what a fiction that turned out to be.

    Some of the most well-known heralds of the goalless free market system to which your fealty is pledged, names like Citibank, JP Morgan Chase, and Merrill Lynch, accounted recently for many tens of billions in market capitalization that have been vaporized in the ether of speculative lust in the mere blink of an eye, the stroke of an accountant’s delete key.

    Household income, on the other hand, with which the EPI report concerned itself, measures actual assets, real dollar spending power exercised by real people making real transactions in the economy.

    And the disproportionate allocation of the expanding pie of 2003 – 2005 that flowed into the accounts of the wealthiest 5% of American income earners during that period is what cannot possibly be explained by or pegged to the appreciation of market capitalization.

    I appreciate that you do not admire the inequitable distribution of income in our society, but I also simply do not share your pessimism that there’s anything that can be done about it.

    I do not have an advanced degree in applied economics, nor have I real-world experience in directing public policy. Therefore, I am reticent to prescribe a course of treatment. That does not make me unqualified to recognize that there may be a problem, or to suggest that there may be a treatment that could cure the disease without killing the patient.

    As to your presumptions regarding my approval of Steve Jobs’ compensation package and your entitlement to benefit from the capital gains associated with your investment in Apple, you’d be mistaken on both counts.

    I have no idea what Mr. Jobs makes as CEO of Apple, but from all indications, he runs a company that treats its employees fairly, perhaps even generously in many respects, and certainly one where the few people I know personally who work there are happy they do so. I would imagine a CEO capable of shepherding the kind of growth Apple has enjoyed the past decade to be worth quite a lot and I can’t say I begrudge him his compensation in the least.

    So too, you and the gains you have made from your investment. Bully for you for having an appreciation for Apple products and the foresight to invest in the company’s work at an opportune time.

34. Hey Skipper - January 25, 2008 @ 1:43 am

    … the disproportionate allocation of the expanding pie of 2003 – 2005 that flowed into the accounts of the wealthiest 5% of American income earners during that period is what cannot possibly be explained by or pegged to the appreciation of market capitalization.

    Yes it can, and does. It is called “capital gains” and is taxed as “unearned” income. It flows, of course, disproportionately to those who invest, which, of course, are disproportionately those with the means to invest. So while it is different from earned income, it is part of pre-tax income nonetheless. An $8 trillion market cap gain generating more than $400 billion in capital gains, which is very much a part of household income, is not only a possible explanation, it is a sufficient explanation in and of itself.

    I have paid enough capital gains taxes to know this from first hand experience.

    Once upon a time, a company called Enron was responsible for a fairly hefty slice of total market capitalization, and we all know what a fiction that turned out to be.

    You need to pay more attention to your use of language. At its peak, Enron had a market capitalization of $60 billion. That is an impressive number, but as a fraction of a $12 trillion total market capitalization, it disappears in rounding error. It is not a “fairly hefty slice”, unless you redefine hefty to be “vanishingly small”.

    I appreciate that you do not admire the inequitable distribution of income in our society, but I also simply do not share your pessimism that there’s anything that can be done about it.

    Hence my gratitude for your self-contradicting tribute to Mr. Jobs. He no doubt has acquired no small amount of income for himself, of precisely the same magnitude that, aggregated across the economy, is what has you so exercised.

    His income is also, no doubt, a function of the increase in Apple’s stock price, also makes my point about the EPI report’s intellectual (or integrity) failure.

    So, your point about income inequality — that it is a symptom something is badly wrong and needs to be fixed — applies as much to Mr. Jobs as it does to those other as yet unidentified rapacious billionaires you excoriated above.

    Your post is based upon a simple observation converted into a fallacy. But never mind that, you object to the simple observation itself. I agree with the observation; now I’ll take your assertion that the distribution is wrong as a moral statement. In other words, a less unequal income distribution is morally preferable.

    However, unless we are entering a world of flying pigs (don’t forget your umbrella), whatever is done to produce a more equal distribution of income must not come at the expense of making everyone worse off.

    North Korea has a very equitable income distribution, but it takes someone whose loyalty to Marxism has passed the threshold for clinical insanity to assert it is more moral than our unfortunate state of affairs.

    Hence, this boils down to Mr. Jobs as the embodiment of what you insist must be fixed. He, Jessica Simpson, and Rush Limbaugh have each earned the market’s approval, no matter your personal opinion of their achievements.

    In order to reduce income inequality, you must do one, or both, of a couple of things: reduce their before tax income, or tax them more and shift that income to lower earners.

    Outside the land of flying pigs, or truly planned economies, there is absolutely no way to attain the former without completely sacrificing economic liberty, through both price and wage controls.

    We don’t have to worry about standing under incontinent pigs, though, to shift — here the term has an actual meaning, as opposed to that abuse of language perpetrated by the EPI — to take income from high earners. The government does it all the time; it is a matter of how much, and to what end.

    Returning to extortionate tax rates (70% on high incomes before Reagan), would certainly reduce post-tax income inequality. But what are you going to do with the money? Make those less well off wards of the state? After all, those making less than roughly $30,000 per year already pay no income taxes. The only alternative is for government spending to grow. However, in order for that to make any sense at all, that spending must be more productive than what private individuals manage in a free economy.

    Which is the problem right there. History has proven extortionate tax rates do not work. They penalize Mr. Jobs’ success and my virtue (that of saving, and wisely investing).

    Having advanced degrees has not helped the Left here at all: indignation abounds, but actually dealing with the problem requires magical, anti-human, ahistorical thinking with no small dollop of language abuse.

    Perhaps investment firms should pay 35% on their income instead of 15% — I don’t know enough to decide one way or the other. It sure would be nice to make executive compensation packages less egregious than they can sometimes be. But the former won’t matter a tinkers darn in pre-tax income (remember, that is the baseline for the EPI’s “report”), and the effect of eliminating the latter, completely ignoring for the moment how government can distinguish between fair CEO compensation (Mr. Jobs) and abhorrent (whathisname that drove K-Mart into bankruptcy), would be smaller than income measurement error.

    In other words, the Left has absolutely nothing constructive to say here. Acting to damage by far the best mechanism humanity has ever known to improve the lot of the least well off (see the Economics Focus article in the December 22nd issue of The Economist. Despite rising income inequality, the quality of lives across the income scale are becoming more similar, not less), is not moral, no matter what one thinks of income inequality.

    Hence my objections here. The EPI’s report is nonsense; its conclusions vapid. Your defense of it requires ignoring simple math, begs providing some alternative, makes hyperbolic assertions, and is completely contradicted by a subsequent post. You invoke terms like “problem” without stopping to consider that there is absolutely no treatment that isn’t worse than what you hope to cure.

    Which is typical of the Left: all about intentions, and nothing about consequences.

    Just as with the Discovery Institute.

35. lonbud - January 25, 2008 @ 4:32 am

    Capital gains taxes are paid on closed-out investment trades. Not the same thing as appreciation of market capitalization at all.

    Unless you are willing to posit that the wealthiest 5% were smart enough to close out in Dec 2005 at 1275 their stock investments made in 2003 when the S&P was at 800 (while the other 45% of American households with investments in the stock market were not so smart), appreciation in market cap does not explain the increase in income inequality during that period.

    Enron was the 7th largest US corporation at the time of its bankruptcy, and the largest bankruptcy in history at that time. It qualifies as a hefty enough slice in my book, notwithstanding your desire to write off its significance as worthy of a mere rounding error.

    In my belief that income inequality points to “something wrong” and that the problem is worth trying to fix, I am in company I presume you’d appreciate.

36. Hey Skipper - January 26, 2008 @ 12:10 pm

    Ever hear of mutual funds and end-of-year capital gains distributions?

    I speak from personal experience. I am an extremely passive, risk adverse, investor. I have been walloped with tax bills resulting solely from mutual fund end-of-year capital gains distributions

    Think about the position you are defending: people own stocks, yet can make no money from them, even during a sharply rising market.

    That is nonsense. Everyone who owed stocks (or funds invested in stocks) benefited over that period; those who owned more, benefited more. The $400 billion “shift” (never have scare quotes been more necessary) is a tiny portion of the capitalization increase, a portion so small that it is wholly unremarkable. Well, except for the EPI pretending it never happened.

    [Enron]It qualifies as a hefty enough slice in my book, notwithstanding your desire to write off its significance as worthy of a mere rounding error.

    It is your use of language that is the problem. You said Enron was responsible for a fairly hefty slice of total market capitalization.

    Since when did “fairly hefty” come to mean “a tiny portion”?

    And why do I need to repeat myself?

    What’s more, since Enron collapsed in 2001, it is completely irrelevant to the discussion at hand: whether there was, in fact, anything that can be, without grotesque language abuse, be described as an income “shift”, and whether there are, in fact, any administration policies that can be blamed for what, in fact, did not happen.

    Of course, attendant to that discussion is whether the existing income distribution constitutes “something wrong”.

    The answer to that resides solely with respect to a specific alternative, not a null hypothesis, which is all you have presented.

    My assertion is that there is no alternative that will not produce a worse outcome.

    Which is where Left thinking runs hard aground. Controlling income or extortionate taxation both produce horrible results. That leaves the only solution in the realm of magical thinking essential to the Left: humans are blank slates, with a very narrow range of capabilities and desires, rather than the unfortunately wide distribution the unnamed Intelligent Designer left us with.

    So, until you are willing to fill in the gaping null, your use of “something wrong” and “trying to fix” are just as meaningless as the EPI report that started this whole thing.

37. lonbud - January 26, 2008 @ 6:34 pm

    I am an extremely passive, risk adverse, investor. I have been walloped with tax bills resulting solely from mutual fund end-of-year capital gains distributions.

    I hear ya, bro. Pocketing 85 cents of every dollar that appears out of thin air in our magical economy is a frickin’ bummer.

    My assertion is that there is no alternative that will not produce a worse outcome.

    No alternative to what? To the arrangement we have today? To the one of when? Methinks you think too linearly. Here in America, it has always been better on a relative basis — even in our history so small that it is wholly unremarkable.

    Have the top 5% in America ever not been among the wealthiest and most privileged of their contemporaries? Have our thinkers, inventors, scientists, engineers, bankers, and entertainers ever not been the most successful and celebrated?

    Was the comfort and freedom lavished upon the top quintile of the late nineteenth and early twentieth centuries somehow insufficiently distinguishable from that enjoyed by the other four? Did not the vanguard of American ingenuity, genius, creativity, and invention of the post-WWII period receive the requisite obeisance?

    There are definitely alternatives, and ones far less draconian than you fear, that would lessen all relative disparities between the have-most and the have-least of us. I don’t have a Powerpoint presentation — or a Keynote one either, for that matter — to lay out the roadmap that gets us where I believe we could get to, sorry.

    But I recognize the turn of mind of the folks I believe can help us get there. Unfortunately, there’s very few of them working these days.

38. Hey Skipper - January 28, 2008 @ 3:45 am

    Pocketing 85 cents of every dollar that appears out of thin air in our magical economy is a frickin’ bummer.

    That, of course, is completely beside the point, which, to remind you is this: the EPI report was blowing smoke. Since you haven’t presented any plausible explanation contradicting that statement, and have now implicitly acknowledged mine, may we at least agree on that?

    But while you raised this OT subject. The money I had to invest was what was left over after being taxed at the highest marginal rate for my income level. So the “thin air” dollars were fewer than they would have been otherwise (and made . Taxing those “thin air” dollars further reduced future investment income.

    In other words, virtue (which I presume saving instead of spending to be) is taxed again, and again, and again and again …

    Your sarcasm seems, to put it gently, unjustified.

    No alternative to what? To the arrangement we have today? To the one of when? Methinks you think too linearly.

    No alternative to a free market economy, which ours, while it could be freer, most decidedly is.

    Given the disparities in human capabilities and desires, which exist despite the Left’s magical belief in the blank slate, there is absolutely no way to significantly dent income inequality without penalizing success and virtue and, thereby, gut shooting freedom.

    Hedonic inflation, and the astonishingly egalitarian consumption patterns that have arisen as a consequence, are the consequence of only one economic system: the free market economy.

    You and the EPI want to strangle that goose, without even knowing (or, in the EPI’s case, pretending not to know) what is going one.

    There are definitely alternatives, and ones far less draconian than you fear, that would lessen all relative disparities between the have-most and the have-least of us.

    So far, other than insisting this is the case, you have been completely silent on just what those alternatives might be.

    You don’t need anything like a Powerpoint Presentation to present your case. If there is one to be made, I’m sure you could make it in far less space than you have consumed avoiding doing so.

39. lonbud - January 28, 2008 @ 10:17 pm

    In other words, virtue (which I presume saving instead of spending to be) is taxed again, and again, and again and again …

    By that measure, then, either the US is not nearly so virtuous nor taxed so heavily as you seem to believe.

    The national annual savings rate fell in 2005 to its lowest point since the Great Depression: negative 0.4 percent. Since then, it has continued to fall, registering at negative 1.6 percent in May 2006 and negative 1.5 percent in June. Savings finished 2006 a full point in the negative and certainly did not improve in 2007.

    Compare those numbers with 1985 when the national savings rate hit a record 11.1 percent during the Golden Era of Supply Side Policy Initiatives.

    Has the Bush administration responded to the Great Housing-Credit-Subprime-Derivatives-Dollar Collapse with an “economic stimulus package” aimed at placing America on the virtuous road to saving?

    Well, no, our fearless Decider decided its a better bet to print more fictitious capital to distribute among American consumers so we can spend our way out of what everyone now agrees is a real problem.

    Hedonic inflation proves we’re doing as well as we could possibly hope to be doing?

    I’d like to hear you deliver your soliloquy on hedonic inflation at the corner of 5th and Mission here in San Francisco sometime. I was down there today and you know what? I saw a rheumy-eyed homeless dude talking on a cell phone! I guess things aren’t as bad as I make ’em out to be after all.

    If I got to wear the Decider suit, I probably would make some changes to the tax code that you’d deride as penalties on success, but as I’ve pointed out before, even when the highest marginal income tax rates were up in the 90s, the wealthiest Americans still enjoyed among the highest rates of hedonic satisfaction of any people on the planet.

    But the real alternatives I’d suggest would be directed far more at government spending and in the conduct of government agency operations.

    I believe we can spend less on our military and more on law enforcement, for example, and get a much better bang for the buck when it comes to our security and our credibility in international affairs.

    I believe we can be served better by a Department of Justice that isn’t operated as an enforcement arm of the political party whose President sits in the Oval Office.

    I believe we can make life today, and the lives of our children in the future better with Environmental Protection efforts at local, state, and federal levels that do not penalize success or virtue — but do, on the other hand, mete out extremely harsh penalties for extracting profit at the expense of public health and welfare.

    I have nothing against a free market system, especially one that could be, as you acknowledge, more free. I am all for virtue, and I recognize that human capabilities differ in ways that will always bring greater blessings to some and more difficult burdens to others.

    But I disagree with you that there is any great range of disparity in human desire. All humans want to be happy. All humans want to be free of suffering. The rest is just noise.

40. Hey Skipper - February 4, 2008 @ 7:54 pm

    By that measure, then, either the US is not nearly so virtuous nor taxed so heavily as you seem to believe.

    Ummm — this thread is about income inequality and alleged Bush administration policies that allegedly took income from those in lower quintiles and provided that income those in the upper quintile. Whether the US savings rate is positive or negative is entirely beside that point. Nor, for that matter, did I even come close to mentioning whether the US is taxed heavily or lightly; only that higher income earners are overtaxed with respect to their earnings.

    Keeping that in mind, perhaps you should review precisely what is not included in that headline savings rate. To summarize:

    — Capital Gains
    — 401(k)
    — Social Security taxes
    — Mortgage principle

    By the standards used to calculate the headline savings rate, my personal savings rate over the last year was zero. However, including 401(k) investments alone, and it is suddenly over 15%.

    What is worse, that savings rate you so lavishly cited doesn’t even begin to account for what is happening in the economy.

    In 2003, the net after subtracting the total US debt from assets was $38 trillion. In 2007 it was $54 trillion. Which happens to be nearly 10 times what it was in 1980.

    None of those results could possibly be true if those savings rate numbers actually meant what they are alleged to mean.

    Has the Bush administration responded to the Great Housing-Credit-Subprime-Derivatives-Dollar Collapse with an “economic stimulus package” aimed at placing America on the virtuous road to saving?

    Well, ignoring for the moment whether your assertion about saving is nothing more than a fragrant red herring, from where did that stimulus package come?

    Hedonic inflation proves we’re doing as well as we could possibly hope to be doing?

    No, and I never said it did. Rather, hedonic inflation is both nearly omnipresent in our economy, and completely ignored by people such as yourself, the EPI, and those calculating the headline rate of inflation.

    In other words, even the poorest Americans are significantly better off than 35 years ago, a conclusion which one could never reach when making simplistic income vs. inflation rate comparisons.

    Why is this important? Because to the extent redistributionist policies such as those you must advocate to obtain your goal, hedonic inflation will decrease, which will have very real, and negative, consequences for those whom you presume to help.

    If I got to wear the Decider suit, I probably would make some changes to the tax code that you’d deride as penalties on success …

    Because they would be.

    You need to move away from glittering generalities.

    What, more or less precisely, do you consider to be a tolerably inequitable income distribution?

    Since that must entail reducing incomes above the median, just how do you wish to attain that end? Legislatively restrict income, or significantly raise taxes? If the latter, do you intend to make those below the median wards of the state? Or do you wish to discard the law of supply and demand by legislatively increasing salaries below the median?

    You cannot both decry income inequality and have nothing against the free market system, that is to run headlong into your own argument.

    I also noted that your laundry list included nearly nothing at all pertinent to the topic at hand, and not one syllable about reversing a Bush policy that allegedly led to the alleged taking of money from the poor and giving it to the rich. Is that due to an oversight, or the inconvenient truth that you can’t actually name one?

    But I disagree with you that there is any great range of disparity in human desire. All humans want to be happy. All humans want to be free of suffering.

    Of all the empty glittering generalities I have ever seen, this ranks right near the top. In order for that sentence to have any meaning at all, you must insist that all people desire the same things in order to be happy.

    Nonsense. Pure, unadulterated, Left sine qua non blank slate, nonsense.

    What’s even funnier, though, is that, to the extent that sentence carries any meaning, it gut-shoots your own argument: any income at all in excess of that which is required to obviate suffering is extraneous to happiness.

    That much is very possibly true. However, that makes all income beyond that fairly minimal amount superfluous. Upon what basis, then, do you justify imposing your vision of economic morality? Happiness certainly can’t be it.

    So, to recap:

    — There was no shifting of income from poor to rich
    — There were no unique Bush policies causing a shift that didn’t happen
    — The claim that such concentration of income is unsustainable in a democratic society. is unsupported, and appeals to 1930s America and 18th century France are false analogies.
    — You have claimed that US income inequality is immoral, yet you have still yet to say what would be moral, or how we would attain that end.
    — Considering your claim our income inequality will lead to class warfare, this silence of yours is particularly odd.

    Beyond that, I note you have a proclivity for zero-sum and blank slate thinking, language abuse, and wild accusations that, when they aren’t off topic, you fail to support in any way when challenged.

    Unfortunately, I am repeating myself again, some more.

41. lonbud - February 4, 2008 @ 11:47 pm

    Methinks this horse is pretty dead by now. We have decidedly different responses to the question, “could our economic affairs be arranged in such a way as to make things better for the least among us without unduly inconveniencing the most well-off?”

    Aside from disparaging my perspective as one rooted in zero-sum and blank slate thinking, you have put words in my mouth and attempted to instigate a battle of specifics that I have no wish to join.

    With respect to the EPI report, what I said was the growth in income inequality during Bush’s presidency “may turn out to be his most enduring legacy.”

    What the EPI report itself said was, had the relative disparity in income between the wealthiest and the least wealthy remained the same between 2003 and 2005 as it had been in 2002, given the growth in American income as a whole during that period, $400 billion dollars that found its way into the pockets of the top 5% of income earners would have been shared among the other 95%.

    You have pointed out the EPI’s unfortunate use of the passive voice of the verb “to shift” — and my acceptance of it — in describing this statistical fact, and I accept your criticism of it as being infelicitous.

    Bush administration defense and energy policy surely contributed to windfall profits enjoyed by the most-wealthy, as did fiscal policy ensuring easy credit and leverage available disproportionately to those already blessed with the greatest means.

    Only time will tell whether we are on a social arc destined for conditions reminiscent of 1930s America or 18th century France, thus deriding my analogies to those eras as “false” at present is empty criticism.

    You call my statements regarding human desire nonsense. pure, unadulterated, Left sine qua non blank slate, nonsense and yet they form the foundation of Buddhist philosophy as articulated by the Dalai Lama, in whose thoughts on the nature of reality I am more inclined to find merit than your own, I’m afraid.

42. Hey Skipper - February 8, 2008 @ 11:18 am

    lonbud:

    One of my favorite sayings is “there is no cat so flat it can’t be run over one more time.”

    Taking that as a caution, I am going to add a few more comments.

    We have decidedly different responses to the question, “could our economic affairs be arranged in such a way as to make things better for the least among us without unduly inconveniencing the most well-off?”

    That is not true. I assert that there is no possible alternative to a free market produces better results. That is a hypothesis. You say there is, but then completely decline to say what that “is” might be. That is a null hypothesis. It is much like Senator Obama’s campaign: assauging verbiage, and not one syllable of actual substance.

    Those aren’t words that I put in your mouth, they are deductive consequences: taking your argument as stipulated, what must follow? If all that follows is a null, then your argument is empty.

    With respect to the EPI report, what I said was the growth in income inequality during Bush’s presidency “may turn out to be his most enduring legacy.”

    You also said [his] most significant achievement.

    With all the respect due to the EPI report, it is a dishonest, worthless, piece of cr*p.

    Let’s assume that I agree with you, and the EPI, completely. Which policy, unique to the Bush administration, would I want to reverse in order to shift $400 billion back to the lower 95% of households (in other words, to make the income distribution of 2005 look like that of 2002)? Specifics please, no rants.

    Neither the EPI, nor you, can do so. Which is a direct result of the EPI’s reportorial mendacity: ignoring the real cause in order to score propaganda points rarely stands up well under close examination.

    Only time will tell whether we are on a social arc destined for conditions reminiscent of 1930s America or 18th century France, thus deriding my analogies to those eras as “false” at present is empty criticism.

    Ah, the “only time will tell” copout.

    Here are overwhelming reasons my criticism is not empty.

    1. Growing incomes across the board.
    2. Which are further enhanced by hedonic inflation and vastly more homogenous consumption. (In other words, all but the most destitute enjoy essentially the same physical comforts as the most rich.)
    3. Virtue is significantly likely to be rewarded, no matter where on stands.
    4. The greatest health threat faced by the poor today is obesity.

    You call my statements regarding human desire nonsense. pure, unadulterated, Left sine qua non blank slate, nonsense and yet they form the foundation of Buddhist philosophy as articulated by the Dalai Lama, in whose thoughts on the nature of reality I am more inclined to find merit than your own, I’m afraid.

    That is because you used them that way. Stating that all humans desire to be happy goes no distance at all in promoting your argument, unless that means all humans desire happiness in precisely the same way.

    That is blank slate thinking, pure and simple. Humans as blank slates is essential to Left thinking. Unfortunately for the Left, the whole notion is intellectual rubbish.

    If blank slate thinking forms the foundation of Buddhist thinking, so much the worse for Buddhism.

    How much you want to bet there is income inequality in Buddhist societies?

43. lonbud - February 9, 2008 @ 9:11 am

    OK, let’s back up and run it over one more time, then.

    I assert that there is no possible alternative to a free market produces better results. That is a hypothesis.

    A literal, purely “free” market equates to the law of the jungle, which I don’t imagine you truly believe produces optimum results, though I’m certain you’ll correct me if I’m wrong.

    Assuming then, that some sort of regulatory framework must be imposed upon market participants who would otherwise operate under law-of-the-jungle principles, I assert the Bush administration has badly eviscerated the regulatory authority necessary to produce optimum results. One need look no further than its attitude toward environmental protection during the past seven years for evidence of this.

    With respect to your disparagement of Obama’s campaign, have a look through his website for many syllables of actual substance to go along with his assuaging verbiage.

    Leaving aside (for the duration I hope), the EPI report itself, in specific (as I mentioned before), Bush administration policy in a number of key areas contributed to an unconscionable concentration of wealth in portions of the economy that were already among the most well-to-do before the Connecticut Cowboy rode into town.

    Energy, defense contracting, and fiscal policy are just three major areas where the country’s largest corporations and their highest executives were able pocket windfall profits directly resulting from Bush administration policy, profits that would not otherwise have been created or been available to those people had more egalitarian policies been applied to their industries.

    Whether or not we’re on a trajectory to something reminiscent of ’30s America or 18th century France, I am happy to let events unfold as they will. Given the likely change in course to come with our impending collective rejection of neo-conservative politicians and their social and political agendas, I’d say we’re in for a reprieve from any realization soon of my gloomy prediction.

    My stating that “all beings want to be happy” in no way implies that every person’s conception of happiness must be the same, or that every person’s realization of happiness must be equal in order for us to live in a peaceful, prosperous, contented society.

    Income inequality and inequalities of both happiness and suffering exist in Buddhist, as in all societies. Karma, devotion to practice, individual strengths and weaknesses, all ensure a multi-textured, multi-hued amalgamation of people in various stages of grasping and letting go, of suffering rooted in desire and happiness founded on the attainment of enlightenment, regardless of a society’s underlying economic foundations or spiritual practices.

    Despite the superficial wealth, convenience, and luxury produced by western capitalism, the people living in our society express greater dissatisfaction and deeper unhappiness than those living in less nominally wealthy or comfortable Buddhist societies I have spent time in.

44. Hey Skipper - February 12, 2008 @ 10:16 am

    A literal, purely “free” market equates to the law of the jungle, which I don’t imagine you truly believe produces optimum results, though I’m certain you’ll correct me if I’m wrong.

    I was using the term “free market” as a proxy for the US economy. Is it an absolutely free market? No. Is a totally free market a good idea? No. Could the US economy be freer and work better? Probably.

    But that is all beside the point. You made some normative claims regarding income distribution. In order for those claims to be anything but empty verbiage (that is, for them to be objectively normative, rather than wishful thinking), you must have some means in mind to attain those normative claims.

    If you do, you haven’t raised them here.

    I rather suspect you don’t, though.

    Hence my assertion that all possible means of flattening income distribution must make the market considerably less free, and will inevitably produce worse results for everyone.

    I assert the Bush administration has badly eviscerated the regulatory authority necessary to produce optimum results. One need look no further than its attitude toward environmental protection during the past seven years for evidence of this.

    Eviscerated? Badly? Why does this make me suspect language abuse a la Enron?

    You really do need to provide some specifics.

    Yes, Bush made some decisions that many environmentalists didn’t like. However, I strongly suspect that in your universe, environmentalists are right as a matter of course; equally, as a matter of course, any disagreement is wrong.

    That is the disease of progressives: the automatic assumption that any idea a progressive holds is correct because a progressive holds it.. There is scarcely no quicker way to bring thinking to a dead halt

    I admit no great familiarity with the Bush administration’s environmental decisions; those few that I have heard about (arsenic in drinking water) sounded completely reasonable in the grand scheme of things, utterly failing to earn “badly eviscerated”.

    Bush administration policy in a number of key areas contributed to an unconscionable concentration of wealth in portions of the economy that were already among the most well-to-do before the Connecticut Cowboy rode into town.

    Absent some specifics, that is simply a rant.

    My stating that “all beings want to be happy” in no way implies that every person’s conception of happiness must be the same …

    Please re-read your post, taking particular account of context. Unless there is a significant degree of sameness, the statement is, at best, irrelevant to the discussion.

    Despite the superficial wealth, convenience, and luxury produced by western capitalism, the people living in our society express greater dissatisfaction and deeper unhappiness than those living in less nominally wealthy or comfortable Buddhist societies I have spent time in.

    Some kind of evidence would be nice here, also.

    BTW, in addition to “superficial wealth, convenience, and luxury”, you should add “much longer lives.”

    Last time I checked, being alive is a component of happiness.

45. lonbud - February 13, 2008 @ 1:56 am

    I strongly suspect that in your universe, environmentalists are right as a matter of course; equally, as a matter of course, any disagreement is wrong.

    Your suspicions are, as were your presumptions up-thread, off-the-mark.

    You can color me skeptical of climate change hysteria, for example. It seems to me Bjorn Lomborg has a global warming perspective more right than most environmentalists.

    If you’ve participated in a conversation with me or read through any of the more deeply commented posts on this blog and yet suspect in my universe as a matter of course, any disagreement is wrong, then I can’t help ya here, boss.

    Badly eviscerated? You tell me.

    Much longer lives, eh? 30 countries have greater life expectancy than the US, including Greece, Malta, Cuba, Costa Rica, North Korea (!), and Croatia, each of whose “superficial wealth, convenience, and luxury” are nothing to ours.

    People live longer here than in most of the Buddhist countries I was thinking of, but that may be as much a function of geography as anything else, and is anyhow immaterial to the question of happiness. It’s not too difficult to imagine circumstances in which a shorter lifespan might trump a longer one handily.

    For example, though he lived a full 14 years longer, and enjoyed infinitely greater superficial wealth, convenience, and luxury in his lifetime, Ronald Reagan’s happiness probably was not enhanced by his living “much longer” than M. Ghandi.