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Old 04-20-2011, 01:24 PM   #21
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I have lobbyists in the familiy so I gotta defend them
So that makes you are a lobbyist, for lobbyists.
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Old 04-20-2011, 01:33 PM   #22
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The rich have an insatiable appetite for wealth that can never be satisfied.
Farrell is an idiot. He makes Chicken Little look like a calm rational person. How do YOU define "rich"
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Old 04-20-2011, 01:57 PM   #23
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Paul Farrell offers some compelling arguments supporting his theory that America is being destroyed by the misuse of capitalism by the Super Rich in his article, "10 Doomsday Trends America can't Survive."
Correlation without showing causation

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Old 04-20-2011, 02:02 PM   #24
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Farrell is an idiot.
Well said ...
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Old 04-20-2011, 02:31 PM   #25
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I don't know about America, but Paul Farrell seems to be at the point of no return.
+1

I have an instinctive response to rants like this - I look for the holes. Unfortunately, there's at least a nugget of truth in most of what he says.

IMO, the rise of communists and socialists in Europe in the first half of the 20th century scared the American wealthy into enlightened self interest. They accepted unions, limits on immigration, and a social safety net as ways to keep the US from sliding too far to the left. That approach seems to have faded away. The new approach is to sell the masses on the notion that the rich create all the wealth and the masses are the parasites (where's Atlas Shrugged on the Amazon list these days?).

I think we've reached a "point of no return" in that we are not going to get back to a world with income distributions that we saw in the 1950's and 1960's. I think we're looking at an extended period of stagnant incomes for most working people. But, I don't think that automatically leads to complete social meltdown like Farrell claims.
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Old 04-20-2011, 02:38 PM   #26
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The solution, that Farrel et al propose would be worse than what we have now.

If you want the elites to have an equal share in mass poverty then the socialist agenda will acheive that. Then everyone will be equal.
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Old 04-20-2011, 03:03 PM   #27
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I think the 800 pound gorilla in the room is technological gains due to efficiency and automation. "Creative destruction" has existed for centuries with technological advancement. This holds that when one industry is obsoleted by technology, these jobs are replaced by even better jobs in an emerging industry.

For example, 100 years ago buggy whip makers losing their buggy whip jobs could find jobs working for Henry Ford -- and probably doing at least as well, if not better, financially. When heavy manufacturing started its serious domestic decline in the 1970s and into the 1980s, these lost jobs were replaced by the emerging high tech sector -- chip designers, programmers, systems analysts, all that sort of thing.

Where are the "new" jobs coming from increased automation and efficiency? To the extent they are being created at all, they are mostly going to China or India or some such. In *this* sense, yes, the American economy is in uncharted waters. The "creative destruction" no longer creates a sufficient number of good new domestic jobs in the emerging industries. And that is a problem if almost all of the economic growth that comes from this sort of job-killing automation and technology are allowed to concentrate in the hands of the economic elites while all those displaced by it get little more than a pink slip. Early retirement? Forget about it. Those lucky enough to still have jobs will probably need to hold them for life, or as long as their employers will have them.

Another problem is that so much of today's economic output comes from goods that do not require a lot more labor to sell a lot more stuff. If you sell a piece of software, for example, it's not like a car -- to manufacture 10X cars instead of X cars or to build 10X homes instead of X homes, you probably need close to 10 times as many workers. To sell 10X pieces of software instead of X pieces, you may need a few more folks in sales and support, but you won't need anywhere NEAR 10 times as many people. These fields don't require job growth to fuel sales and revenue growth. And they are an increasing part of the economy.

It doesn't have to end badly -- but if almost all the economic benefits of efficiency and automation end in the hands of a very few, it will. And I fear what that could do to the social order.
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Old 04-20-2011, 03:05 PM   #28
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Tax the rich seems to be the big mantra these days. While I agree that the "rich" don't create tons of jobs like is often said, their CONSUMPTION does create a lot of jobs, so taxing them into oblivion will do little to help the economy......
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Old 04-20-2011, 03:16 PM   #29
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Tax the rich seems to be the big mantra these days. While I agree that the "rich" don't create tons of jobs like is often said, their CONSUMPTION does create a lot of jobs, so taxing them into oblivion will do little to help the economy......
The consumption of the rich does create jobs, true, but the consumption of the non-rich creates even more, because the non-rich spend a larger portion of their income. So, contrary to what you say, taxation that redistributes income does help the economy. The rich don't spend enough.
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Old 04-20-2011, 03:19 PM   #30
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Tax the rich seems to be the big mantra these days. While I agree that the "rich" don't create tons of jobs like is often said, their CONSUMPTION does create a lot of jobs, so taxing them into oblivion will do little to help the economy......
Sure they do. But if you double the income of someone who already has everything they need and most of what they want, their spending won't go anywhere near double. Double the income of someone in the middle/working class, sure, they too may save a little more but they'll surely spend a much greater percentage of their extra income than those who already can buy pretty much all they want.
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Old 04-20-2011, 03:53 PM   #31
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Sure they do. But if you double the income of someone who already has everything they need and most of what they want, their spending won't go anywhere near double. Double the income of someone in the middle/working class, sure, they too may save a little more but they'll surely spend a much greater percentage of their extra income than those who already can buy pretty much all they want.
We tried that. Some folks got those wonderful stimulus checks from the US govt. Then the pundits lamented that a lot of those nice folks paid down CC debt and didn't buy "stuff" so it didn't really work.

The middle class can't carry our economy back from the brink. The US has lived off of consumption from the middle class for 2-3 generations. Throw in tight credit for everyone and they can't even overmax their credit cards anymore............
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Old 04-20-2011, 04:36 PM   #32
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Tax the rich seems to be the big mantra these days. While I agree that the "rich" don't create tons of jobs like is often said, their CONSUMPTION does create a lot of jobs, so taxing them into oblivion will do little to help the economy......
[RANT ON]How does restoring the roaring 90s tax levels for the rich and relatively wealthy (I include myself in that category) translate into "oblivion?" A little further back in the thread someone else commented on their dad thriving in those wonderful post war 50s when the US was booming. Take a look at the marginal rates back then. Far from getting trashed, it seems to me that the rich have been elevated to a protected minority over the last three decades. Cut their taxes to the bone. Deregulate them so they can stick it to us with a sneer. Bail them out when they screw up.

The disgraced CEO from BP gets to crawl away with a $1M/year pension. Goldman Sacks partners are swimming in bonuses. That's oblivion?[/RANT OFF] Have a nice day now
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Old 04-20-2011, 04:50 PM   #33
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We tried that. Some folks got those wonderful stimulus checks from the US govt. Then the pundits lamented that a lot of those nice folks paid down CC debt and didn't buy "stuff" so it didn't really work.

The middle class can't carry our economy back from the brink. The US has lived off of consumption from the middle class for 2-3 generations. Throw in tight credit for everyone and they can't even overmax their credit cards anymore............
I don't know which pundits you listen to. I'd guess that those who thought the stimulus checks (and the tax cuts) were a good idea before they were sent out didn't change their minds. Those who thought they were a bad idea before the fact didn't change their minds either.

In any country that I'd want to live in, most of the consumption would come from middle class workers/consumers. The problem with the slow economy today is the vicious circle of not enough jobs for the middle class => not enough spending by the middle class => not enough employers wanting to hire workers => not enough jobs for the middle class => not enough spending by the middle class => ....
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Old 04-20-2011, 06:47 PM   #34
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Not that there isn't plenty of stuff "wrong" with the USA, but most of these doom-gloomers, from whatever political stripe, are trying to sell you something, usually a candidate and/or an ideology, likely closer to the tails than the middle of the bell curve...
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Old 04-20-2011, 07:16 PM   #35
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I'm a little confused on the concept of "misuse of capitalism". Seems to me that the Super Rich are using the heck out of it. Imagine how they'd do if they turned out to be just misusing it now! Why, with a little motivation and some hard work...

I think having to give back the money is the real misuse of capitalism. I still haven't made up my mind whether it's better to be a sterling philanthropist giving people a hand up, or a filthy money-grubbing capitalist giving people a job.

I'm also surprised this thread is still open.
A good example of "misuse of capitalism" is the way in which Wall Street Bankers sold CDOs (collateralized debt obligations) to unsuspecting institutions around the world. CDOs were the primary vehicle in which Wall Street packaged their subprime loans into what we now refer to as "toxic assets." Financial trickery by the Super Rich was rampant during this ugly portion of American history.

During the housing boom, the only requirement for obtaining a loan to buy a house was for the borrowers to prove that they could fog up a mirror. A home buyer's ability to make payments on a mortgage was not even a consideration.

The housing collapse, stock market crash and subsequent Great Recession are indeed prime examples of the Super Rich misusing Capitalism.
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Old 04-20-2011, 07:33 PM   #36
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The housing collapse, stock market crash and subsequent Great Recession are indeed prime examples of the Super Rich misusing Capitalism.
We know what happened. Explain how it was a "misuse" of capitalism? If anything, folks on the left usually maintain that it was "capitalism run amok" or "too much free market." Every one of these examples you cite had willing buyers and sellers. With the housing bubble, one could make a case that the excesses resulted in large part because government significantly reduced the need for at least one party in these transactions to exercise due diligence because their risks were being underwritten by taxpayers. Regarding the financial bailout, Washington has now shown the Big Boys that their bad deals will be made good by taxpayers. We can complain about all this, but it's not correct to blame capitalism when the problem clearly lies in the excesses born of "improvements" to capitalism.
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Old 04-20-2011, 07:48 PM   #37
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Yeah, there's lots of blame to go around for the housing collapse, stock market crash and subsequent Great Recession.

You can thank Greenspan for his cheap money policies that in the long run really hurt us. You can thank Bill Clinton/Barney Frank/Chris Dodd for their extortion on banks to make mortgages to people without the wherewithal to really pay it back. Then there is the balance of trade issue(s) and what to do with all those surplus dollars finding a home in lesser and lesser qualified loans. Add in ratings agency misbehavior and virtual lack of government regulation over many decades... And Houston, we have a problem. And all from well meaning people's agendas causing unforeseen consequences.
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Old 04-20-2011, 08:00 PM   #38
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The consumption of the rich does create jobs, true, but the consumption of the non-rich creates even more, because the non-rich spend a larger portion of their income. So, contrary to what you say, taxation that redistributes income does help the economy. The rich don't spend enough.
Tax the rich and give it to the non-rich and the previously non-rich will spend a smaller portion of their income then when they were the non-rich.
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Old 04-20-2011, 08:06 PM   #39
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Add in ratings agency misbehavior and virtual lack of government regulation over many decades...
The mutual influence and dependency between the supposedly "independent" entities of government and bond rating agencies deserves some thorough airing out. Here's an ABC News story from today that brings this home. In part:
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Two weeks ago, Treasury administration officials - the ones in charge of selling US debt -- were told that the ratings agency may well downgrade its long term outlook on the United States debt. Sources tell ABC News that Obama administration officials asked S&P to hold off until President Obama was able to offer a serious proposal to reduce the debt.
I want these discussions out in the open. No one in the government should be putting behind-the-scenes pressure on S&P to delay or modify their reports. It's different if the government requests that a news outlet avoid publishing sensitive information to protect lives, sources, or intelligence methods. This is an attempt to change the behavior of a rating agency simply for political purposes. I'll bet we get no investigation.
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Old 04-20-2011, 08:37 PM   #40
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Tax the rich and give it to the non-rich and the previously non-rich will spend a smaller portion of their income then when they were the non-rich.
That doesn't follow. Even if it did, it would not show that income redistribution does not create more consumption.
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