Wall Street Protests

[Shryke]

Depressions don't go on forever. It's just if you don't do anything they go on for a long long time and ravage your economy for years/decades.

At this point, the US is headed full-steam for a lost decade.

[Shryke]

Also, Herman Cain weights in:

Cain said. “Don’t blame Wall Street, don’t blame the big banks — if you don’t have a job and you are not rich, blame yourself!”

Interviewer Alan Murray asked: “You don’t think the banks have anything to do with the crisis that we went into in 2008?”

“They did have something to do with the crisis that we went into in 2008. But we’re not in 2008 — we’re in 2011!” Cain replied.

http://2012.talkingpointsmemo.com/2011/10/cain-if-you-dont-have-a-job-and-you-are-not-rich-blame-yourself-video.php?ref=fpa

[Spaceman Hobbes]

Because a massive reset button is hit on new years and all the worlds problems are solved. Cain scares me.

Depressions don't go on forever. It's just if you don't do anything they go on for a long long time and ravage your economy for years/decades.

At this point, the US is headed full-steam for a lost decade.

And this is what the protesters(and really every American) should be trying to avoid. The protest needs to advocate fiscally responsible spending, simplification of the tax code, and an end to the Bush tax cuts(which would put us back at 39% I believe). We need a platform of fiscal responsibility to get behind and an end to this he said she said partisan bullshit.

And now I'll stop being an idealist and go back to lurking....

[Tormund Ukrainesbane]

an end to the Bush tax cuts(which would put us back at 39% I believe).

Not arguing against this, but I gotta ask, what is it that people think this is going to do to help the economy? Right now we're borrowing instead of taxing to cover the deficit. As Shyke likes to point out, we're borrowing at such low interest rates they're practically giving us the money. Raising taxes will mean we'll borrow a little less, but it won't change what we're spending on anything at all. It won't create any jobs. Despite this, it seems to be a tentpole of the economic plan of 2/3 of the country. It seems more punitive than restorative. What do you think we're going to get out of it?

[Shryke]

Yeah, "fiscally responsible spending" (while not a bad thing or anything) is not gonna do jack-shit right now for the US economy. That's a long term issue. The US needs solutions to fix the short-term problems.

What the US needs is a way to create demand and jobs. Since you are currently stuck in a liquidity trap, monetary policy is ineffective so you need to have the government actually spend money. Which isn't a problem (financially anyway) since the US can borrow money at essentially 0% right now.

A repeal of the Bush tax cuts, especially on the higher income earners, is a huge necessary step for long term fiscal balance for the US though. And repealing them on the wealthy wouldn't be a huge deal right now anyway, but would lower the amount the government would need to borrow or the like.

[felice]

Professionals don't have unions. We are professionals, not labor.

You do work for money. And plenty of jobs that do have unions require skill/training/experience that you couldn't do any more than a labourer could take over your job. It's an entirely arbitrary distinction.

[Aemon Stark]

Verboten,

Doctors have a Union? If you are thinking of the AMA it is no more a Union than the ABA is for lawyers.

Well, that may be true in the US, but in Canada every provincial medical association negotiates a master agreement for the fee schedule every few years. It's collective bargaining by any other name, though (as yet) does not extend to pension plans or other benefits. Physicians have even gone on strike before (not typically with much success). Residents have explicit unions termed "professional associations" which negotiate salaries, call frequency and hours, benefits, and vacation/academic time.

So, yes, "professionals" do have unions and I don't think they can be said to fall under anything but "labour" (as opposed to "capital"). Not "labourers" certainly but "skilled workers" is a valid synonym.

[felice]

Not being a corporate income tax person, I agree out of ignorance that corporations should be a pass-through entity. Perhaps the dividends derived from certain industries could be taxed more or less if said industry is considered helpful vs. harmful to society in a way of steering society's goals. Say dividends from cigarette companies are taxed at ordinary income rates whereas dividends from companies that provide alternative energy resources are not taxed at all.

There's no need to do this via taxing profits or dividends, though. For things like cigarettes that are harmful for individuals, sales tax is appropriate (and pretty much only for this sort of thing; in general, sales tax is regressive and should be abolished). And helpful industries can be directly subsidised, either at the customer level for things like insulation installation, or research grants for development of new tech, or simply setting up government-run research facilities that aren't driven by commercial pressures at all.

There is actually a good policy and theoretical argument for completely getting rid of our system of two levels of tax (one on corporate income and a second on dividend income). It is particularly hard to implement, however...

...incredibly, mindnumbingly complicated, mainly to keep people from gaming the system (e.g., there was a popular dodge in the 1970s where low basis and high basis property would be "mixed" in a partnership, giving the contributor of the low basis property enhanced depreciation and amortization deductions - I simplify vastly).

You can't game the system if there isn't a system to game. Without taxation of profit, depreciation etc becomes nothing but an internal accounting practice, and that can be a black box as far as the tax department is concerned. Just tax whatever money comes out whenever it comes out, no need to worry about anything else.

It also would require that each person who owned stock would get a pass through return each year or that there be an accumulated earnings tax or SOMETHING on the corporation so it didn't just sit on cash.

What's the value to shareholders for a corporation to sit on cash? Assuming the tax rate for dividends is going to be fixed indefinitely, postponing paying them out just hurts the shareholders. Reinvesting the funds only makes sense if it will increase the total dividends (and total tax paid) in the long run, and government should be all about the long run.

Another alternative is to not tax dividends.

In other words, cutting taxes for the 1%? Not a move I'd support. And taxing dividends is simple, while taxing profits is complicated; why get rid of the simple tax?

There is a real philosophical question as to how much wealth distribution the state should engage in. That is, I think it is equally fair that someone should be rewarded in accordance with the value of their skills. Getting angry that people get paid in the 6 and 7 figures for working 60-80 hours a week, + weekends (and in my experience) + most holidays, for doing things that, frankly, not everyone can do, is missing the point.

No disagreement there; six figure incomes for people who have to work ridiculous hours like that seems entirely fair to me (though seven figures is getting ridiculous, and training more people or otherwise reducing the workload for these jobs should be a very high priority). The big problem is people whose income is "earned" from dividends etc, which is the case for the really wealthy ones. "The harder you work the more you earn" seems more or less fair; "the wealthier you are the more you earn" not so much.

[Balefont]

No disagreement there; six figure incomes for people who have to work ridiculous hours like that seems entirely fair to me (though seven figures is getting ridiculous, and training more people or otherwise reducing the workload for these jobs should be a very high priority). The big problem is people whose income is "earned" from dividends etc, which is the case for the really wealthy ones. "The harder you work the more you earn" seems more or less fair; "the wealthier you are the more you earn" not so much.

And that's where I come in - Estate Tax FTW!

[paddington]

Lots of people have to work ridiculous hours. The majority of which aren't wealthy an won't see 6 figures in a lifetime.

Also because pensions have been hit badly, alot of people are now needing to work longer. Which is only set to increase with time. When I hit 65 I suspect I am going to need to work on to my frigging 80's, because my priviate pension isn't worth the envelope they send my statement in.

I was lucky, I went to university before the tution fees. I wouldn't bother now, I'd have done taken a trade instead. (which I wish had to be honest).

There is an awful lot of people, for which life is going to be a miserable grind ending in a poverity stricken old age. Not all of them are going to be lazy left-wing whiners.

I am quite lucky, I've worked out my retirement plan. It involes a ski mask, a bag marked swag and a bank. Worst case I get to spend the last 15 years of my life in a warm cell, with free healthcare.

[felice]

Lots of people have to work ridiculous hours. The majority of which aren't wealthy an won't see 6 figures in a lifetime.

People who have to work ridiculous hours because their pay is so low is a different matter from long hours because so few people are able to do the work (and different again from workaholics). The solution to that is a massive increase in the minimum wage - which will mean more jobs since the work still needs to be done and the existing staff will be doing less of it.

Also because pensions have been hit badly, alot of people are now needing to work longer. Which is only set to increase with time. When I hit 65 I suspect I am going to need to work on to my frigging 80's

It isn't reasonable to expect the retirement age to remain constant while life expectancy goes up, though. Personally, I'd abolish automatic retirement altogether, but institute a generous disability allowance for those who are no longer able to work at whatever age that happens. Political suicide to suggest anything of the sort, though...

[Balefont]

Excuse me. It's called a Death Tax. What are you, some Godless liberal? Sheesh.

Yes. Er. No. Uhm, godless, check. Socially liberal. Check. Fiscally conservative. Check. :kiss:

Psst. I've missed you, Trikles.

[CelticBrennus]

Ok. "Labor" is usually a term describing people who do "physical labor for hourly wages". Various online dictionaries confirm this common definition.

The Marxist definition is that if you earn the majority of your income through salary or wages you are working class, aka labor. Only those who own the means of production are not laborers. So, unless you are a partner in a firm, or derive your income from investments, you are part of the working class. You might be well compensated labor, but you are still labor.

I think one of the major failures of organized labor in the US is that they by and large failed to organize the private sector professionals.

[Shryke]

It isn't reasonable to expect the retirement age to remain constant while life expectancy goes up, though. Personally, I'd abolish automatic retirement altogether, but institute a generous disability allowance for those who are no longer able to work at whatever age that happens. Political suicide to suggest anything of the sort, though...

Life expectancy doesn't go up a ton. Not among some gruops anyway.

The rise in life expectancy is spread out pretty much exactly as you'd expect: the higher your social class, the larger the increase.

Which means the people who need the money the most and work the most physically demanding jobs are not the ones living alot longer.

[Lummel]

The protests on Wall Street, or for that matter the earlier Teabagger (whenever I use that term I think of the other meaning resulting in some odd combinations, but never mind) protests don't fit into the old model of left versus right party politics.

Aren't these people protesting because the established party politicians aren't perceived as addressing their needs and worries and certainly don't seem to be offering any convincing solutions?

I'm sure that there will be some attempt to co-opt the protesters into existing politics. But equally I imagine that alot of these people will be turned off voting.

[ThinkerX]

The protests on Wall Street, or for that matter the earlier Teabagger (whenever I use that term I think of the other meaning resulting in some odd combinations, but never mind) protests don't fit into the old model of left versus right party politics.

Aren't these people protesting because the established party politicians aren't perceived as addressing their needs and worries and certainly don't seem to be offering any convincing solutions?

I'm sure that there will be some attempt to co-opt the protesters into existing politics. But equally I imagine that alot of these people will be turned off voting.

That about sums it up.

One of the old time talking heads on CBS a few weeks back, in a commentary on a poll dealing with the popularity of the President and Congress, made the alarmed comment to the effect of 'the majority of the people have lost all confidence in the ability of the government to do, well, anything'.

Said poll had the *approval* rating for congress as a whole at something like 12%, with democrats scoring slightly higher than republicans. The disapproval rating was better than 80%. Also...and this was the part that prompted the talking heads comment - the people being polled did not exempt their own politicians from these low ratings 'no he's a crook, but he's my crook' type stuff - just flat out disgust.

It is probably safe to say that poll sums up fairly accurate like the sentiments of the protesters at Wall Street. It is also probably safe to say there are a *lot* more where they came from.

If the lack of confidence continues to be that high for an extended period..,

[Ser Scot A Ellison]

Shryke,

Yeah, "fiscally responsible spending" (while not a bad thing or anything) is not gonna do jack-shit right now for the US economy. That's a long term issue. The US needs solutions to fix the short-term problems.

At which point (end of the short term problems) you're going to argue the U.S. doesn't have to do anything about the debt because rising GDP will bring it down to size. So, why not be honest as say the U.S. just needs to add a few more trillion dollars to it's national debt to shrink it's national debt.

[Ser Scot A Ellison]

Triskele,

Excuse me. It's called a Death Tax. What are you, some Godless liberal? Sheesh.

No, it's called the Unified Estate and Gift Tax. Most who see the Estate Tax as some sort of panecea tend to forget the necessary second half of that particular government power to take from individuals. I think we should have an Estate Tax, not a huge one, and not one that prevents parents from passing land to their children. However, please recognize that a huge estate tax is going to affect the gift side of the equation as well.

[Mya Stone]

[Shryke]

Shryke,

At which point (end of the short term problems) you're going to argue the U.S. doesn't have to do anything about the debt because rising GDP will bring it down to size. So, why not be honest as say the U.S. just needs to add a few more trillion dollars to it's national debt to shrink it's national debt.

Uh, no Scot. I'll say that the debt-to-GDP ratio is what matters, so you can use growth to shrink the debt. Which doesn't mean you don't also need to shrink the deficit.