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ORIGINAL: willbeurdaddy

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ORIGINAL: DarkSteven

All right.  Here's the story.

Back when Reagan was President, he created the idea of "trickle-down".  The theory was that, since the wealthy have the means to create companies and therefore jobs, the key to job creation is to give the rich more money.

So they got more money and they spent some and held on to some of it.

The simple truths are:

1. Companies do not hire because they have extra money and can't figure out what to do with it except to hire.  They hire because they need more people to produce product or service.  In other words, the jobs are created by market demand, not excess capital.
2. The wealthy will save a greater percentage of income than the poor, many of whom have already spent more than they have (e.g., payday loan places).  So giving extra cash to the wealthy will not stimulate the economy as much as giving it to the less well off.
3. Bush 43 gave tax cuts to everyone.  Result: deficit ballooned, unemployment rose, the gap between rich and poor widened.

2. Incorrect. Savings and investment stimulate the economy more than spending. Thats why spending has a 1.5 multiple and tax cuts a multiple of 3. The impact of the fraction of the tax cuts not spent overwhelm the value of the spending.
3. The Bush tax cuts led to a remarkably strong economy despite the challenges of the Clinton recession, the burst of the Internet bubble and 9/11. Not their fault that they couldnt overcome the housing bubble bursting.

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ORIGINAL: willbeurdaddy

It is against the law to not act in the best interests of the shareholders. If their best interests are served by maximizing current profits, that it would be illegal to not do so.

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ORIGINAL: DarkSteven

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ORIGINAL: willbeurdaddy

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ORIGINAL: DarkSteven

All right.  Here's the story.

Back when Reagan was President, he created the idea of "trickle-down".  The theory was that, since the wealthy have the means to create companies and therefore jobs, the key to job creation is to give the rich more money.

So they got more money and they spent some and held on to some of it.

The simple truths are:

1. Companies do not hire because they have extra money and can't figure out what to do with it except to hire.  They hire because they need more people to produce product or service.  In other words, the jobs are created by market demand, not excess capital.
2. The wealthy will save a greater percentage of income than the poor, many of whom have already spent more than they have (e.g., payday loan places).  So giving extra cash to the wealthy will not stimulate the economy as much as giving it to the less well off.
3. Bush 43 gave tax cuts to everyone.  Result: deficit ballooned, unemployment rose, the gap between rich and poor widened.

2. Incorrect. Savings and investment stimulate the economy more than spending. Thats why spending has a 1.5 multiple and tax cuts a multiple of 3. The impact of the fraction of the tax cuts not spent overwhelm the value of the spending.
3. The Bush tax cuts led to a remarkably strong economy despite the challenges of the Clinton recession, the burst of the Internet bubble and 9/11. Not their fault that they couldnt overcome the housing bubble bursting.

2. By "saving and investment", I assume that you mean stock ownership, correct?  I don't know what you mean by "the economy" - I mean an environment where companies are hiring and people are able to get jobs.  People are feeling able to leave their jobs to get better ones, and companies are concerned with employee retention and satisfaction.

When you use those multipliers, they look like they're out of some model.  There have been models such as the Laffer curve that purport to show that the Bush/Reagan policies will work.  It's pretty easy to come up with theoretical models to support viewpoints - I frankly wouldn't put much stock in some model telling me what's best unless it's been tested.

I consider your post here:

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ORIGINAL: willbeurdaddy

It is against the law to not act in the best interests of the shareholders. If their best interests are served by maximizing current profits, that it would be illegal to not do so.

(which I agree with) to be equivalent to a statement that investment does not necessarily result in higher employment, if the money could be used for another means that does not cause hiring.  Or hiring overseas people....

3. Evidently you are making the case that under W, the economy was strong.  No way.  In his first term, he very nearly became the first President since Hoover to preside over a drop in actual jobs worked.  There WAS no Clinton recession, although I will give you that some of the prosperity was the Internet bubble. And the Bush disaster would have been worse if the RE bubble had deflated earlier than in his last few months on the job.

I reiterate that the deficit ballooned under him, unemployment increased, and the gap between rich and poor widened.  I fail to see any of that as the mark of a strong economy as you indicate.

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ORIGINAL: willbeurdaddy

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ORIGINAL: Hippiekinkster


It's not a question of turning a profit. They can do that. Offshoring is all about maximizing profit. The notion that the sole function of a corporation is to maximize the return on investment for shareholders has become so ingrained that many people believe that it is against the law for a corporation NOT to do so.

It is against the law to not act in the best interests of the shareholders. If their best interests are served by maximizing current profits, that it would be illegal to not do so.

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ORIGINAL: willbeurdaddy

2. No, by saving and investment I mean exactly that. Putting money in the bank (which due to fractional reserve accounting and the loans that banks make) help drive the economy. "Stock investment" is too narrow a term as commonly used for investment, since it doesnt take into account Sub S and partnerships, which in our economy account for more growth than publicly traded companies.

The multiplier "models" are from Obama's former advisor Cristina Romer and her husband. They are not "theories" they are based on empirical data.

I agree, investment does not NECCESSARILY result in more employment. However, lack of investment NECESSARILY means no additional employment.

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As far as 3 goes, dont be ridiculous. Clinton left with a recession and drop in jobs due to the internet bubble. The start of the recession was originally pegged as March 2001 and was later recognized/revised to have started many months earlier. Unemployment until 2008 was the same or lower as under Clinton and only dropped in 2008 because of the financial crisis that GWB did his best to avoid. The deficit under Bush "ballooned" during the Democrat run House. The only large spending plan pushed by Bush besides two wars was prescription drugs, a mistake I agree, but also the only program that actually cost what it was priced at.

The Clinton economy WAS the internet bubble, the housing bubble, and ill-advised reductions in defense spending....all false prosperity that we are paying for now. Even Obama is getting some of the blame for what originated under Clintons watch.

You fail to see what you dont want to see.

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ORIGINAL: willbeurdaddy
Wow you are so fucking clueless its ridiculous.

I'll just deal with your first claim, that taxes are at "historic lows as a % of GDP and lower than in the 50s and 60s. Actually during the 50s and 60s Federal government receipts ranged from 14% to 19.7% of GDP with 5 years out of 20 exceeding 18% They are currently at around 18.5% thanks to the recession. Total government revenes were never above 25% in the 50s and 60s and now are hovering arouund 30%.

When you cant get your fact straight (or lie about them) its no surprise that your "opinions" come straight out of Das Kapital.

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ORIGINAL: LadyConstanze

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Secondly, the idea that high taxes drive away the rich is nonsense.

Really? Then why do very rich people maintain residences in low tax countries? Why do you think all sorts of tax resorts are so popular?

As to NYC, most companies need to have an office there for their image, but you see much production there?

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ORIGINAL: AnimusRex

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ORIGINAL: willbeurdaddy
Wow you are so fucking clueless its ridiculous.

I'll just deal with your first claim, that taxes are at "historic lows as a % of GDP and lower than in the 50s and 60s. Actually during the 50s and 60s Federal government receipts ranged from 14% to 19.7% of GDP with 5 years out of 20 exceeding 18% They are currently at around 18.5% thanks to the recession. Total government revenes were never above 25% in the 50s and 60s and now are hovering arouund 30%.

When you cant get your fact straight (or lie about them) its no surprise that your "opinions" come straight out of Das Kapital.

I notice you didn't cite any sources-
Here's mine:
Taxes as a percentage of GDP is currently in the middle of the graph- so although not at a historic low, it is not anywhere near the top- that is to say, our tax burden is not very high, but is perfectly normal, by historical standards.

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ORIGINAL: willbeurdaddy
In other words your claim of "historic lows" is vast hyperbole. The current revenues, IN A RECESSION are higher than some and lower than some during the 50s and 60s, HUGE BOOM TIMES. Exactly what I said. surprise surprise surprise.

And your claim that the effective tax rate is at its "lowest point since 1979" shows your inability to read your own chart or to write a coherent sentence.
There were 11 years during that period that were lower than the end year in the chart of 2006.
In 2008 the percentage of taxes paid by the top 1% was up to 38% the HIGHEST rate since 1979. That is the real measure fo the tax burden.

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ORIGINAL: AnimusRex

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ORIGINAL: willbeurdaddy
In other words your claim of "historic lows" is vast hyperbole. The current revenues, IN A RECESSION are higher than some and lower than some during the 50s and 60s, HUGE BOOM TIMES. Exactly what I said. surprise surprise surprise.

And your claim that the effective tax rate is at its "lowest point since 1979" shows your inability to read your own chart or to write a coherent sentence.
There were 11 years during that period that were lower than the end year in the chart of 2006.
In 2008 the percentage of taxes paid by the top 1% was up to 38% the HIGHEST rate since 1979. That is the real measure fo the tax burden.

You are mixing apples and oranges, and making lemonade.

True, there were several years during the Clinton Administration when the rich paid more in taxes; but overall, the trend is downward- people ARE paying less today than in 1979.

And your claim of how much of the total tax revenue rich people pay is misleading- they pay the bulk of all taxes, only because they have all the money. What they pay proportionately is much less than their relative wealth.

Example- look at the figures from 2006, for the middle quintile and the top quintile- the middle pays 3% effective tax, while the rich pay 9%;

In other words, the rich pay three times the rate of tax, but have several hundred times the wealth; effectively, the richer you are, the less of a burden taxes become.

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ORIGINAL: LadyConstanze


Have you considered that those yachts are sold in Florida and a lot of them are actually made in Florida. So by giving people tax breaks to purchase them, you are creating jobs for people working on them, then they will need maintenance, staff, all that, it creates jobs...

The company I work for is looking to open a US branch, they will go to Florida due to the tax breaks there, which means they will invest in Florida and not in another state, they'll have an office there and all that, which will be staffed by largely local people. So the tax breaks actually do create jobs. It makes so much more sense than keeping companies away with high taxes.

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ORIGINAL: tweakabelle

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ORIGINAL: LadyConstanze


Have you considered that those yachts are sold in Florida and a lot of them are actually made in Florida. So by giving people tax breaks to purchase them, you are creating jobs for people working on them, then they will need maintenance, staff, all that, it creates jobs...

The company I work for is looking to open a US branch, they will go to Florida due to the tax breaks there, which means they will invest in Florida and not in another state, they'll have an office there and all that, which will be staffed by largely local people. So the tax breaks actually do create jobs. It makes so much more sense than keeping companies away with high taxes.

The economic thinking you are advocating was put into practice in Ireland. Things went well for a while, then the GFC came along and everything went pear shaped, as they tend to when such naive economics are practised.

Now Ireland is an economic basket case with approx 15% unemployment, a return of large scale emigration, a mountain of debt that will take decades to pay off, wage welfare and pension cuts, property values a fraction of what they were etc etc.

Not an example of economic policies that anyone ought to follow, or even attach any credibility to I would have thought .....

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ORIGINAL: willbeurdaddy

Youd have a point, if you werent totally wrong.

Ireland's financial crisis has nothing to do with tax policy and their basic economy. It is strictly a banking crisis caused by two banks that made risky property loans. Sound familiar?

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ORIGINAL: tweakabelle

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ORIGINAL: willbeurdaddy

Youd have a point, if you werent totally wrong.

Ireland's financial crisis has nothing to do with tax policy and their basic economy. It is strictly a banking crisis caused by two banks that made risky property loans. Sound familiar?

What an original analysis! Does this mark the birth of Willburnomics, a new and unique economic theory that refuses to concern itself with facts and holds that reality is whatever suits your argument?

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ORIGINAL: willbeurdaddy

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ORIGINAL: willbeurdaddy

Ireland's financial crisis has nothing to do with tax policy and their basic economy. It is strictly a banking crisis caused by two banks that made risky property loans. Sound familiar?

You can start with Paul Krugman in the NY Times:

"First, there was irrational exuberance: in both countries buyers and lenders convinced themselves that real estate prices, although sky-high by historical standards, would continue to rise.

Second, there was a huge inflow of cheap money. In America’s case, much of the cheap money came from China; in Ireland’s case, it came mainly from the rest of the euro zone, where Germany became a gigantic capital exporter.

Third, key players had an incentive to take big risks, because it was heads they win, tails someone else loses. In Ireland this moral hazard was largely personal: “Rogue-bank heads retired with their large fortunes intact.” There was a lot of this in the United States, too: as Harvard’s Lucian Bebchuk and others have pointed out, top executives at failed U.S. financial companies received billions in “performance related” pay before their firms went belly-up.

But the most striking similarity between Ireland and America was “regulatory imprudence”: the people charged with keeping banks safe didn’t do their jobs. In Ireland, regulators looked the other way in part because the country was trying to attract foreign business, in part because of cronyism: bankers and property developers had close ties to the ruling party. "


If ignorance is bliss, you must be high all the time.