All the arguments advanced in favor of income equalization
within a country can with the same justification or lack of justification also
be advanced in favor of world equalization. An American worker has no
better title to claim the savings of the American capitalist than has any
foreigner. That a man has earned profits by serving the consumers and has
not entirely consumed his funds but ploughed back the greater part of them into
industrial equipment does not give anybody a valid title to expropriate this
capital for his own benefit. But if one maintains the opinion to the
contrary, there is certainly no reason to ascribe to anybody a better right to
expropriate than to anybody else. There is no reason to assert that only
Americans have the right to expropriate other Americans.
Ludwig von Mises -“Profit and Loss
Keep in mind that by Credit Suisse estimates that if your
net worth is just $3700 (this is all assets minus debt including home equity
and resale value of all personal items) you are wealthier than 50% of the world
population. If you have net assets that
total just $71,000 you immediately go into the top 10% of the world’s
wealthiest. How’s about some of that
wealth distribution from your inordinately high standard of living?... and
while you are at it, if you want uncontrolled immigration, why don’t you volunteer
to give up a bedroom or two...
An interesting comment and most, including me, immediately pull our wealth closer to our persons and put out the guard dog. This is a quite normal reaction from so many of the so called wealthy. Those of us who were not sired by a golden dick have been responsible throughout our working lives, for the support of our families ((the most important responsibility every man takes on when he marries). We were born poor and we have made our generation richer by our own enterprise. Of course we have supported those less well off but our overriding endeavor has been to accumulate a measure of wealth for our families.
ReplyDeleteNow, the heading in the piece by TS is reminiscent of a quote by a well known leftist from last century. An idealistic approach then doomed to failure and even more dangerous today. What this and other designs on redistribution of wealth ignore is the personal aims and aspirations of the populace. No one who has not been hungry can understand hunger. No one who has not been dirt poor can understand poverty and no one who has struggled out of poverty and hunger will willingly return. Yes, we do become charitable as we prosper, but we do so at our pace and in areas where we see a need. What we need least of all is advice as to how we shall distribute the capital we donate! What is needed most is an understanding that enterprise by the citizen is enterprise for the nation.
Cheers from Aussie
This comment has been removed by the author.
ReplyDelete
ReplyDeleteThe Impact of Inequality on Growth
By Jared Bernstein | December 4, 2013
Among the most important economic challenges facing the United States and some other advanced economies today is the increase in the inequality of economic outcomes. In the case of the United States, the distributions of income, wages, and wealth are more dispersed than ever. Though measurement issues abound, it is widely agreed that U.S. economic inequality is at historically high levels.
This fact, however, has different implications for different observers. Many critics of higher inequality suggest that it violates basic fairness, particularly when considering, for example, the divergence of median compensation and productivity growth. Such trends, these critics hold, are evidence of working people no longer getting their “fair share” of the growth that they are helping to generate.
Others note that inequality serves as a wedge between growth and living standards, funneling income largely to those at the top of the scale and thus making it harder at any given level of economic growth for living standards to grow as they have in more equitable times or for poverty to fall during business cycle expansions. Economic growth, as this report argues, has become a spectator sport for too many poor and middle-class households that watch as the gross domestic product, or GDP, productivity, the stock market, and corporate profits rise while their incomes either stagnate or grow much more slowly.
To add a few concrete numbers to this observation, note that so far in this expansion, which officially began in the second half of 2009, the stock market is up 60 percent, GDP is up 8 percent, corporate profits as a share of national income are at historic highs, yet median household income is down 5 percent, with all figures adjusted for inflation.
Economic Inequality: What are the negative effects of increasing wealth disparity in the United States
DeleteThere are a number of negative effects, above and beyond the inherent "unfairness" of unequal distribution of wealth, which is a moral issue and up for debate anyway.
In brief, high economic inequality can stifle growth by:
1.Reducing the human capital of a large sector of a population, among other effects. A poor population is nearly always an unproductive one.
2.Encouraging rent-seeking behaviors by elites, which drain capital and skill from productive activities.
3.Reducing trust in and effectiveness of government. In situations with a small elite and large underclass, government is often captured by elites (rent-seeking, see #2), and treated as irrelevant or predatory by the majority of the population, undermining its capacity to take effective action and uphold the rule of law, which is critical to stable economic growth.
Furthermore, and perhaps more importantly, high income inequality reduces political stability, giving rise to populism and increased class tension.
Empirically, there's a somewhat confused connection between development and inequality. It's often the case that development can cause a (usually temporary) increase in inequality. Many middle-income countries are more unequal than low-income countries, for example (compare Brazil, with Gini 55, to Ghana, at 41). Nevertheless, it is clear that the countries with the least inequality tend to be rich, and those with the most tend to be poor The US is a bit of an outlier, but it makes good economic and political sense to limit the growth of wealth disparity going forward.
This is a pretty good primer, from the World Bank, on the possible downsides, and upsides, of income inequality (www.worldbank.org/depweb/beyond/beyondco/beg_05.pdf). I suppose that this is not the exact same thing as "wealth disparity," but I think it's close enough.
There are two kinds of income inequity. One defines that actual participation in creating wealth which is good and the other is what Gene Epstein of Barron’s calls ‘Crapitalism’. One is driven by economic entrepreneurs and the other political entrepreneurs. One creates value for society and if they violate that value either in product or in production, it can easily be competed against and that violation corrected or put out of business. Some people will get wealthy in direct proportion to the value they create around them and the stewardship they show over the capital they use to run their enterprise but in doing so they must always look over their shoulder at a competitor who will take their customers or their employees if they give too little consideration to either. They have no recourse but good business practice. The other of course is those who have learned how to transfer resources from others into their own coffers, usually by lobbying for subsidies, special favors or anticompetitive laws.
DeleteIt is widely known that most people, excepting those with a compulsive derangement, will only spend their money on things they want and find beneficial. Most people do not put their hard earned cash, in business, where it does not return a better investment or personally where it does not solve a need or otherwise enhance their standard of living.
This is no less true with respect to lobbying the government. People want to blame business for asking for favour... but I would say – Nothing ventured, nothing gained. They offer compensation and deals for this favour... we call it bribery. While the offer may be ‘offensive’.. the act of accepting it is the truly contemptible one. We have also moved from a world of bribery where offers are made and accepted to something much worse... extortion. Members of the government, particularly those with life long careers no longer allow business to ask, they tell business to pony up or prepare for an unfavourable outcome to their existing business. You want business money out of politics and government and crony capitalism to disappear over night.. get government out of business so that it no longer is in a bargaining position.
Lobbying the government will always exist as a function of regress and representation but the minute that lobbying no longer monetarily pays for itself... money flow will stop and real competition will be allowed to flourish.
As I have said before, if you see a business where the owners are taking an inordinate profit either at the expense of fraudulent manipulation of its customers or skimming excess profits at the expense of its employees all that it takes is someone to start a business in direct competition and charge or pay in such a way that the original company either changes its ways or goes out of business EXCEPT when government has given the original business special consideration. When this type of favor occurs nothing will fix the inequity as government is directly complicit in the crime and the fortunes of these political entrepreneurs.
Your World Bank article points out some inconvenient truths. Truths about both good and bad inequality. What it said directly was the harmful effects of government intervention to flatten income across the entire population. The harmful effects on production, quality and initiative. What it didn’t say was that just as government interferes to make wages ‘fair’, it also interferes to play favorites and in doing so creates the same harmful but opposite effects in favoritism as it does in forced conformity. It said... pretty much what I said but to the purveyor of big over controlling government, in the end, no amount of control, manipulation and tinkering is too little.
DeleteIn this article:
http://thebrazilbusiness.com/article/everyday-corruption-in-brazil
The last line of this section; ‘Corruption for Everybody’, pretty will sums up the problem, both in Brazil and right here in the US of A and until we understand that it is in fact the government that does so much harm to the prosperity of its people we will not get back to a vibrant, wealth creating economy again.
DeleteWhy Inequality is the Real Cause of Our Ongoing Terrible Economy
Sunday, September 4, 2011
THE 5 percent of Americans with the highest incomes now account for 37 percent of all consumer purchases, according to the latest research from Moody’s Analytics. That should come as no surprise. Our society has become more and more unequal.
When so much income goes to the top, the middle class doesn’t have enough purchasing power to keep the economy going without sinking ever more deeply into debt — which, as we’ve seen, ends badly. An economy so dependent on the spending of a few is also prone to great booms and busts. The rich splurge and speculate when their savings are doing well. But when the values of their assets tumble, they pull back. That can lead to wild gyrations. Sound familiar?
The economy won’t really bounce back until America’s surge toward inequality is reversed. Even if by some miracle President Obama gets support for a second big stimulus while Ben S. Bernanke’s Fed keeps interest rates near zero, neither will do the trick without a middle class capable of spending. Pump-priming works only when a well contains enough water.
Look back over the last hundred years and you’ll see the pattern. During periods when the very rich took home a much smaller proportion of total income — as in the Great Prosperity between 1947 and 1977 — the nation as a whole grew faster and median wages surged. We created a virtuous cycle in which an ever growing middle class had the ability to consume more goods and services, which created more and better jobs, thereby stoking demand. The rising tide did in fact lift all boats.
During periods when the very rich took home a larger proportion — as between 1918 and 1933, and in the Great Regression from 1981 to the present day — growth slowed, median wages stagnated and we suffered giant downturns. It’s no mere coincidence that over the last century the top earners’ share of the nation’s total income peaked in 1928 and 2007 — the two years just preceding the biggest downturns.
Starting in the late 1970s, the middle class began to weaken. Although productivity continued to grow and the economy continued to expand, wages began flattening in the 1970s because new technologies — container ships, satellite communications, eventually computers and the Internet — started to undermine any American job that could be automated or done more cheaply abroad. The same technologies bestowed ever larger rewards on people who could use them to innovate and solve problems. Some were product entrepreneurs; a growing number were financial entrepreneurs. The pay of graduates of prestigious colleges and M.B.A. programs — the “talent” who reached the pinnacles of power in executive suites and on Wall Street — soared.
DeleteThe middle class nonetheless continued to spend, at first enabled by the flow of women into the work force. (In the 1960s only 12 percent of married women with young children were working for pay; by the late 1990s, 55 percent were.) When that way of life stopped generating enough income, Americans went deeper into debt. From the late 1990s to 2007, the typical household debt grew by a third. As long as housing values continued to rise it seemed a painless way to get additional money.
Eventually, of course, the bubble burst. That ended the middle class’s remarkable ability to keep spending in the face of near stagnant wages. The puzzle is why so little has been done in the last 40 years to help deal with the subversion of the economic power of the middle class. With the continued gains from economic growth, the nation could have enabled more people to become problem solvers and innovators — through early childhood education, better public schools, expanded access to higher education and more efficient public transportation.
We might have enlarged safety nets — by having unemployment insurance cover part-time work, by giving transition assistance to move to new jobs in new locations, by creating insurance for communities that lost a major employer. And we could have made Medicare available to anyone.
Big companies could have been required to pay severance to American workers they let go and train them for new jobs. The minimum wage could have been pegged at half the median wage, and we could have insisted that the foreign nations we trade with do the same, so that all citizens could share in gains from trade.
We could have raised taxes on the rich and cut them for poorer Americans.
DeleteBut starting in the late 1970s, and with increasing fervor over the next three decades, government did just the opposite. It deregulated and privatized. It cut spending on infrastructure as a percentage of the national economy and shifted more of the costs of public higher education to families. It shredded safety nets. (Only 27 percent of the unemployed are covered by unemployment insurance.) And it allowed companies to bust unions and threaten employees who tried to organize. Fewer than 8 percent of private-sector workers are unionized.
More generally, it stood by as big American companies became global companies with no more loyalty to the United States than a GPS satellite. Meanwhile, the top income tax rate was halved to 35 percent and many of the nation’s richest were allowed to treat their income as capital gains subject to no more than 15 percent tax. Inheritance taxes that affected only the topmost 1.5 percent of earners were sliced. Yet at the same time sales and payroll taxes — both taking a bigger chunk out of modest paychecks — were increased.
Most telling of all, Washington deregulated Wall Street while insuring it against major losses. In so doing, it allowed finance — which until then had been the servant of American industry — to become its master, demanding short-term profits over long-term growth and raking in an ever larger portion of the nation’s profits. By 2007, financial companies accounted for over 40 percent of American corporate profits and almost as great a percentage of pay, up from 10 percent during the Great Prosperity.
Some say the regressive lurch occurred because Americans lost confidence in government. But this argument has cause and effect backward. The tax revolts that thundered across America starting in the late 1970s were not so much ideological revolts against government — Americans still wanted all the government services they had before, and then some — as against paying more taxes on incomes that had stagnated. Inevitably, government services deteriorated and government deficits exploded, confirming the public’s growing cynicism about government’s doing anything right.
"I pay my workers well, not because I am rich. I am rich because I pay my workers well." Robert Bosch
ReplyDeleteSome say we couldn’t have reversed the consequences of globalization and technological change. Yet the experiences of other nations, like Germany, suggest otherwise. Germany has grown faster than the United States for the last 15 years, and the gains have been more widely spread. While Americans’ average hourly pay has risen only 6 percent since 1985, adjusted for inflation, German workers’ pay has risen almost 30 percent. At the same time, the top 1 percent of German households now take home about 11 percent of all income — about the same as in 1970. And although in the last months Germany has been hit by the debt crisis of its neighbors, its unemployment is still below where it was when the financial crisis started in 2007.
ReplyDeleteHow has Germany done it? Mainly by focusing like a laser on education (German math scores continue to extend their lead over American), and by maintaining strong labor unions.
THE real reason for America’s Great Regression was political. As income and wealth became more concentrated in fewer hands, American politics reverted to what Marriner S. Eccles, a former chairman of the Federal Reserve, described in the 1920s, when people “with great economic power had an undue influence in making the rules of the economic game.” With hefty campaign contributions and platoons of lobbyists and public relations spinners, America’s executive class has gained lower tax rates while resisting reforms that would spread the gains from growth.
Yet the rich are now being bitten by their own success. Those at the top would be better off with a smaller share of a rapidly growing economy than a large share of one that’s almost dead in the water.
The economy cannot possibly get out of its current doldrums without a strategy to revive the purchasing power of America’s vast middle class. The spending of the richest 5 percent alone will not lead to a virtuous cycle of more jobs and higher living standards. Nor can we rely on exports to fill the gap. It is impossible for every large economy, including the United States, to become a net exporter.
Reviving the middle class requires that we reverse the nation’s decades-long trend toward widening inequality. This is possible notwithstanding the political power of the executive class. So many people are now being hit by job losses, sagging incomes and declining home values that Americans could be mobilized.
Moreover, an economy is not a zero-sum game. Even the executive class has an enlightened self-interest in reversing the trend; just as a rising tide lifts all boats, the ebbing tide is now threatening to beach many of the yachts. The question is whether, and when, we will summon the political will. We have summoned it before in even bleaker times.
As the historian James Truslow Adams defined the American Dream when he coined the term at the depths of the Great Depression, what we seek is “a land in which life should be better and richer and fuller for everyone.”
That dream is still within our grasp.
Robert Reich 2011
That further perpetuates the cycle of income inequality, as an increasing number of middle-class jobs favor the more educated.
ReplyDeleteWhile researchers stress that it's difficult to concretely link any of these measures with rising income inequality, the correlation is compelling.
"When income inequality goes up, you see more inequality in these other things," said Lane Kenworthy, a professor of sociology and political science at the University of Arizona.
Economic growth: Some economists have long argued that a widening income gap suppresses economic growth and job creation, and may be one reason this economic recovery doesn't feel like a recovery at all.
The theory is based on research showing middle-class people tend to spend more of their income than rich people. As their incomes and feelings of relative wealth decline, so does overall economic growth.
Since the recession ended, growth has averaged just 2.2%. That compares to the 3.3% historical average since the Great Depression.
"Our middle class is too weak to support the consumer spending that has historically driven our economic growth," Nobel Prize-winning Economist and Columbia Professor Joseph Stiglitz wrote in an editorial earlier this year.
"With inequality at its highest level since before the Depression, a robust recovery will be difficult in the short term, and the American dream — a good life in exchange for hard work — is slowly dying."
What to do about it: Research shows Americans want the country to be more equal -- two thirds say inequality is a problem according to Leslie McCall, a sociology and political science professor at Northwestern University.
The trouble is, Americans don't really know what to do about it. Strengthening unions, taxing the rich, raising the minimum wage and better job training are a few ideas.
But many view inequality as an unavoidable symptom of the free market -- a market that has, on a global scale, lifted hundreds of millions of people out of poverty and provided the wherewithal to boost living standards around the world.
"It's not clear that raising taxes will produce what people want -- which is better jobs and more pay," said McCall.
That further perpetuates the cycle of income inequality, as an increasing number of middle-class jobs favor the more educated.
While researchers stress that it's difficult to concretely link any of these measures with rising income inequality, the correlation is compelling.
"When income inequality goes up, you see more inequality in these other things," said Lane Kenworthy, a professor of sociology and political science at the University of Arizona.
Economic growth: Some economists have long argued that a widening income gap suppresses economic growth and job creation, and may be one reason this economic recovery doesn't feel like a recovery at all.
The theory is based on research showing middle-class people tend to spend more of their income than rich people. As their incomes and feelings of relative wealth decline, so does overall economic growth.
Since the recession ended, growth has averaged just 2.2%. That compares to the 3.3% historical average since the Great Depression.
Delete"Our middle class is too weak to support the consumer spending that has historically driven our economic growth," Nobel Prize-winning Economist and Columbia Professor Joseph Stiglitz wrote in an editorial earlier this year.
"With inequality at its highest level since before the Depression, a robust recovery will be difficult in the short term, and the American dream — a good life in exchange for hard work — is slowly dying."
What to do about it: Research shows Americans want the country to be more equal -- two thirds say inequality is a problem according to Leslie McCall, a sociology and political science professor at Northwestern University.
The trouble is, Americans don't really know what to do about it. Strengthening unions, taxing the rich, raising the minimum wage and better job training are a few ideas.
But many view inequality as an unavoidable symptom of the free market -- a market that has, on a global scale, lifted hundreds of millions of people out of poverty and provided the wherewithal to boost living standards around the world.
"It's not clear that raising taxes will produce what people want -- which is better jobs and more pay," said McCall.
Wealthy individuals are more likely to break traffic laws and cheat at games, according to a controversial new study from professors at the University of California at Berkeley.
Critics accuse the Berkeley scientists of junk science and perpetuating a politically liberal agenda, but they stick by their findings.
“Let me tell you, we didn’t expect to find this,” said Paul Piff of UC Berkeley. “Our findings apply to both liberals and conservatives. It doesn’t matter who you are. If you’re wealthy, you’re more likely to show these patterns of results.”
The researchers also rigged the game of Monopoly to make one person feel richer and another poorer. The experiment was to test the effects of income inequality, which is currently the worst it has been in a century.
Despite the actual socio-economic status of the people playing the game, they assumed specific traits during play.
“We found consistently with people who were the rich players that they actually started to become, in their behavior, as if they were like rich people in real life,” said Piff.
“If I take someone who is rich and make them feel psychologically a little less well-off, they become way more generous, way more charitable, way more likely to offer help to another person.”
All of the above TS comes from top economists and social scientists. Of course social science I am sure ranks as a junk science alongside climate science with you because none of it agrees with your credo. It's easier to just dismiss it when you really can't refute it.
DeleteRobert Reich or the Scott? Geez this is a hard one. I take Robert and his highly researched professional opinions over the unqualified opinions of the Scott.
What Really Ended the Great Depression
DeleteStephen Moore
“What is history but a fable agreed upon?” as Napoleon once put it, and never has that been more true than the story of the Great Depression and its aftermath. With liberals again pitching more government spending “stimulus” in Washington, it’s critical we get this history right.
In a previous column I unmasked the historical lie that Franklin Roosevelt’s New Deal programs ended the Great Depression. After seven years of New Deal-era explosions in federal debt and spending, the U.S. economy was still flat on its back, and misery could be seen on the street corners. By 1940, unemployment still averaged a sky-high 14.6 percent. That’s some recovery.
However, I’ve been deluged with the same question from readers: Ok, what did end the Great Depression? Again, the history books get this chapter of history wrong. Most history books tell us that it was government spending on steroids to mobilize for World War II after the Japanese attacks on Pearl Harbor on Dec. 7, 1941.
Well, it is true that the economic output surged and unemployment fell, but periods of all-out war are very different than periods of peace. Is it any surprise that unemployment fell dramatically when nearly 12 million Americans joined the military?
My mother, a teenager in that period, used to tell me that during the war, when fuel was scarce and needed for the military, you wouldn’t be caught dead driving to the movie theater or a party. It was regarded as unpatriotic and selfish. People continued to produce even with high tax rates (94 percent during the war) when their tax dollars were financing the fight against the Nazis and the Japanese.
For nearly four years — from 1942 to 1945 — America was not a free-market economy. We were an all-out wartime economy — with the normal laws of economics suspended.
However, a war is no way to fix an economy — obviously. Countering terrorist acts of the Islamic State is not a jobs program. During World War II, when we built ships, tanks, fighter planes, dropped bombs and sent our troops into harm’s way, we weren’t creating wealth. A war is no more stimulating to the economy than a burglar stealing your money, the Japanese tsunami in 2011, Hurricane Katrina in 2005, or a tornado that levels an entire town. Without such calamity, the resources spent reconstructing (or destroying in the case of war) would be spent either purchasing useful, life-enhancing products for consumption or investing in technology and capital equipment requisite to increasing economic output.
War in self-defense might be necessary to protect our families, but any economic growth derived from it is far less beneficial than growth derived from free people making individual decisions on what to consume and in what to invest.
In the 1940s, government spending did indeed surge. The federal share of gross domestic product (GDP) rose from less than 12 percent in 1941 to more than 40 percent in 1943-45. In other words, almost half of everything that was produced in the nation was to fight the war. Domestic spending on many FDR New Deal programs in education, training and social services dropped more than 90 percent.
DeleteThe real issue is what caused the economy to surge after the war was over.
This story is also not covered in the history books. Shortly after his third re-election in 1944, and at a time when the outcome of the war was no longer in question, FDR and his domestic advisers plotted a “new” New Deal with such spending items as national health insurance. The Keynesians were sure that the massive reduction in government spending would catastrophically tank the economy.
Paul Samuelson, the dean of neo-Keynesians at that time, warned in 1943 that unless wartime spending and controls were extended, there would be “the greatest period of unemployment and industrial dislocation which any economy has ever faced.” Business Week predicted unemployment would hit 14 percent with the postwar cutbacks.
Here’s what happened. Government spending collapsed from 41 percent of GDP in 1945 to 24 percent in 1946 to less than 15 percent by 1947. And there was no “new” New Deal. This was by far the biggest cut in government spending in U.S. history. Tax rates were cut and wartime price controls were lifted. There was a very short, eight-month recession, but then the private economy surged.
Here are the numbers on the private economy. Personal consumption grew by 6.2 percent in 1945 and 12.4 percent in 1946 even as government spending crashed. At the same time, private investment spending grew by 28.6 percent and 139.6 percent.
The less the feds spent, the more people spent and invested. Keynesianism was turned on its head. Milton Friedman’s free markets were validated.
In 1946, the unemployment rate averaged below 4 percent, and it stayed that low for the better part of a decade. This all happened during the biggest reduction in government spending in American history under President Truman.
In sum, it wasn’t government spending, but the shrinkage of government that finally ended the Great Depression. That’s what should be in every history book — but isn’t.
Originally appeared in the Washington Times.
Notwithstanding the segment of a population that feel that act of being born necessarily requires submission of body, soul and possession to some overlord or those who believe that they should be the overlord, any time there is a discussion about someone forcefully reaching into the bank account of another to solve a perceived problem, it should be preceded by a complete investigation of the cause for the problem in the first place.
ReplyDeleteI think that it was you that deviated from the subject presented in this thread.... I know because I posed the subject. Be that as it may, I talked to your response and to my mind brought forth what many see as a real problem with relation to your point of income inequity. I don’t deny that some forms of wage disparity is harmful but I don’t agree with you that someone who gives value for money has no right to be wealthy beyond most people’s capabilities or ambitions.
As to your top economists and social ‘scientists’, we must first define their occupations. Economics and social science is strictly a theory based profession. There is not necessarily a right theory or a wrong theory, only one that is more accepted, for better or worse than the other. Keynesian economic theory has been the more accepted model of late but we must remember that even Keynes himself was in preparation to write another book to clarify some of his positions as the left seems to have left out the ‘austerity’ part of his philosophy and the fact that he himself stated that deficit spending itself is not without problems. The left is stuck in the book ‘General Theory’ and refuse to understand their own message.... ‘Times change’
“Economics is a science of thinking in terms of models joined to the art of choosing models which are relevant to the contemporary world. It is compelled to be this, because, unlike the typical natural science, the material to which it is applied is, in too many respects, not homogeneous through time…Good economists are scarce because the gift for using "vigilant observation" to choose good models, although it does not require a highly specialized intellectual technique, appears to be a very rare one.”
John Maynard Keynes
As Cambridge University oral tradition claims he often used to say when retorting to criticism of his latest ideas: “When the facts change, I change my mind. What do you do, sir?”
To understand your ability to pick 10 ‘highly honored’ economists is to look at 90% of the schools of economics in the US. They are all stuck, for better or worse in Keynes words, even if they are misread and misapplied by the many buffoons that call themselves economists according to Keynes himself. They like Keynes theories not because they are necessarily correct but because they fit the Marxist model of income redistribution... or at least the part they focus on does.
Robert Riech... is not an economist.... he is a political hack parading as an economist. Just because he won a Rhodes scholarship to attend an interdisciplinary course of study that included economics did not upon graduation make him an economist. Nor did any of the political jobs or teaching positions he ever had. His greatest claim to fame is that he was sniffing up Hillary s skirt at Dartmouth and being buddies with both Hillary and Bill at Oxford. His appointment to Secretary of labor for Clinton made about as much sense as Obama’s appointment of Ron Klain as ‘Ebola Czar’.
.
A couple of notes to your comments
ReplyDelete“With hefty campaign contributions and platoons of lobbyists and public relations spinners, America’s executive class has gained lower tax rates while resisting reforms that would spread the gains from growth”
My comment to your original addressed the point specifically! Take the ability for government to pick winners and losers away and you fix all of those problems.
“It stood by as big American companies became global companies with no more loyalty to the United States than a GPS satellite”
It didn’t “Stand By”.... look at the ‘free trade’ agreements signed by various presidents... they aided in these company’s departure..... Remember that ‘sucking sound’ Perot talked about?... it was directly related to a vote that congress took and a signature applied by the president. It is also interesting how you defend uncontrolled immigration by stating the global nature of the world but rant about its existence when it comes to people doing business... what’s up with that?
“shifted more of the costs of public higher education to families”
This is an all too familiar tact of the left.... take something that never was and turn it into some natural ‘right’... kind of like healthcare. Higher education in the US was never a public expense and was always the choice and responsibility of those who wanted it. Only when government applied its deft hand did the cost of education rise above the ability to ‘work your way through college’.
While out shopping with my wife I had a thought about something you said. While it seriously deviates from the subject at hand it addresses a comment that has implications in the temper of many of the discussions that occur on here and elsewhere.
ReplyDeleteYour comment: “All of the above TS comes from top economists and social scientists. Of course social science I am sure ranks as a junk science alongside climate science with you because none of it agrees with your credo. It's easier to just dismiss it when you really can't refute it. “
As I said before, many things called science are studies of the theoretical. Economics as well as the political and social sciences to name the ones you want to focus on. The left is steeped in the principle of denouncing a god... a supernatural; someone or something that came from somewhere, exists elsewhere (or everywhere) that dictates the functions that occur in our world. It is interesting that theoretical scientists and even partial physicists are moving ever closer to the prospect of multiple, coexisting universes, even unseen dimensions within our own and with that the possibility, though mechanisms not yet understood or explainable, movement between these dimensions may in fact exist.... is it just bunk?... is it just easier to dismiss it when you really can’t refute it?... or is theoretical science just blustery words and half baked assumptions little more than personal opinion wrapped in theater and the one who sells the most tickets wins?
As a scientist Robert Reich is an economic astrologer.
ReplyDeleteThere is danger in the exuberant feeling of ever growing power which the advance of the physical sciences has engendered and which tempts man to try, ‘dizzy with success’, to use a characteristic phrase of early communism, to subject not only our natural but also our human environment to the control of a human will. The recognition of the insuperable limits to his knowledge ought indeed to teach the student of society a lesson in humility which should guard him against becoming an accomplice in men’s final striving to control society – a striving which makes him not only a tyrant over his fellow, but which may well make him the destroyer of a civilization which no brain has designed but which has grown from the free efforts of millions of individuals.
ReplyDeleteF.A. Hayek
It's embarrassing to see Robert Reich and Hayek together on the same blog page.
DeleteSort of like a tee baller and Mickey Mantle.