Economic Inequality

[pbrower2a]

(05-29-2016, 12:43 AM)Galen Wrote:

(05-26-2016, 11:52 AM)pbrower2a Wrote:

(05-22-2016, 02:26 PM)John J. Xenakis Wrote:

(05-06-2016, 12:32 PM)Odin Wrote: >   If there is a crash with a 10,000 point Dow drop I think it will
>   be a tech crash. There seems to be a huge bubble involving
>   everyone and their mom trying to get into marketing on social
>   media sites and the number companies centered around managing
>   other companies social media presence seem to be growing at an
>   exponential rate and reminds me a lot of the delusion that took
>   hold in the late 90s.  

(05-21-2016, 09:09 AM)Mikebert Wrote: >   Likely.  The last stock crash in 2000 involved the same.  Although
>   the 2007-2009 bear was bigger than the 2000-2 one, this crash is
>   better characterized as a real estate crash like 1837, 1857, 1873,
>   and 1893.  Both 2000 and the new crash would like be stock centric
>   like 1907, 1929 and 1987.  

A stock market crash like 1929?  As I recall, when we discussed this
ten years ago, you ridiculed the idea.  Good to see you're coming
around.  But 1987 really wasn't much of a crash.

Do Keynesian economics well, and you prove the Austrian school wrong.

It is not possible to do Keynesian economics well because of its internal contradictions.  After nearly a century of failure you think this would be obvious.  Its a bit like socialism in that respect because not matter how hard you try it is not possible to do that well either.

Given a chance, people can work around the internal contradictions. Given enough freedom, people could even make a Soviet-style economy work. Paradoxically, Austria succeeded to some extent with a heavily state-owned economy after buying out Soviet-owned interests (taken as reparations, typically from German war criminals) from the Soviet Union and unwilling to sell out to the only viable buyers, the same Nazi war criminals. People can evade the official sector. If people can make more money as street vendors than as employees of sweat-shop employers or a 'socialist' government, then they will unless the State apparatus puts such people out of business.

In practice, "state serfdom" on a Soviet collective farm has its parallel in the plantation system of the Jim Crow South. People were not allowed to work around the System.

[pbrower2a]

(05-29-2016, 07:21 AM)radind Wrote:

(05-28-2016, 10:23 PM)pbrower2a Wrote: 2000 marks, much as did 1920 roughly eighty years ago, the start of the last phase of a Third Turning: what I call the Degeneracy, a time of depraved mass culture, weak government unable or unwilling to address the moral issues of the time, and business practices that sink to the worst for about eighty years. A Degeneracy eventually pushes society as a whole onto a destructive course to be rectified only in a Crisis.

It is sad and tragic that we cannot act to correct things before a Crisis occurs. But the cycle does seem to repeat.

Yes, it is. The cycle has a biological reality behind it -- that people generally lose all competence to participate in public life in their middle-to-late 80s.

It is easy to read into Generations whatever fits one's ideology. The previous 4T had so many horrors that have been etched into the minds of people born after the Crisis. I may have been born in 1955, but the images that I have of the Nazi concentration camps are as strong in my mind as those that people living at the time in which those atrocities were first exposed must be as powerful. Likewise the images of mass destruction from war, whether of Warsaw, London, Manila, Hamburg, or Hiroshima. I hoped that the Crisis would be relatively benign, largely a transformation of America in its culture to adapt to economic realities of productivity so great and technology so sophisticated that we can live without need. We all share in the dirty work and have meaningful, rich leisure.
 
So maybe we would avoid a similar Crisis by avoiding the depravities that lead to such Crises. So don't single out innocent people as pariahs. That's easy to say. Remember well that the German gentiles who put gaudy yellow stars on Jews were the gentiles most similar by culture to the Yiddish-speaking, let alone German-speaking Jews. So we don't use a military build-up as a substitute for social justice. So we don't have a back-to-the-land movement that depends upon stealing land from people already living there. We watch anything resembling Big Brother (the police system, and not the TV show) as closely as Big brother watches us. We turn against hate speech when we see or hear it.

But we can't avoid the Degeneracy, can we? Maybe this time we needed a full-scale meltdown of the 1929-1932 to wipe out the pervasive narcissism among American elites and to make people turn to a New Deal instead of the Tea Party. Maybe we needed the same meltdown to bring an end to decrepit bureaucracies and become more self-reliant upon our own enterprise.

I look at the 2008 financial crisis (which really began in 2007) as an analogue to the truly-destructive start of the real meltdown of 1930. 78 years apart? It might not be 80 years, precisely, but close enough. But politically, 2006 was the equivalent to 1930 when Democrats got control of both Houses of Congress -- but because of the President's bungling of the war and not due to an economic collapse.

I see the Tea Party movement as a successful version of the Business Coup.  We are stuck with even more corporate power and even more inequality as solutions. Americans are to work harder and longer under harsher conditions for the enrichment and pampering of economic elites who have only one virtue -- a disdain for mass violence. America's economic elites combine the rapaciousness of Gilded entrepreneurs, the lust for economic inequality of pre-Civil-War planters of the Old South, the insensitivity of the old Soviet nomenklatura, and the amorality of intellectuals of the witch-doctor heritage. That's four different elites -- big landowners, financiers and industrialists, bureaucrats out for themselves alone, and well-educated shysters -- and all four of those elites exploit us Americans badly. They also fully cooperate politically. I failed to mention a fifth elite, organized crime, and only because I cannot readily characterize its politics. It exploits harshly, too.

President Barack Obama rescued the banks to prevent a replay of the latter half of the 1929-1932 meltdown, and the people that he rescued turned on him. He got us a rudimentary version of a welfare system in medical care, but this is shaky. He has made life more precarious for anti-American terrorists than was so under his dreadful predecessor... but I question what we have solved.

In many respects (racism, sexism, and homophobia excluded) we are no better than Americans were in the 1930s. Sure, we have more sophisticated techniques of entertainment, but much of it is amoral, mindless dreck. Do we need a meltdown as bad as the three-year economic collapse that made the Great Depression sting so badly?

[Mikebert]

With this another economic piece may fall into place. 

http://www.vox.com/2016/6/13/11920420/mo...tive-order

Add this to the push for $15 minimum wage and the new overtime rules and you start to approximate some of the things the NWLB did last 4T.  The push against free trade and open borders also is an attempt to return to "economic leveling" elements also in play during the last 4T.  Finally Bernie's proposed tax increases also mirror last 4T.  Taken together, perhaps justified by a "crusade" against ISIS, might reverse the rising trend in inequality.

[pbrower2a]

Heavily tax economic rent and machine-based production and the taxes therefrom such to fund a guaranteed income, but also promote Zero Population Growth.

Henry George lives!

[John J. Xenakis]

(06-14-2016, 09:03 AM)Mikebert Wrote: > With this another economic piece may fall into place.

> http://www.vox.com/2016/6/13/11920420/mo...tive-order

> Add this to the push for $15 minimum wage and the new overtime
> rules and you start to approximate some of the things the NWLB did
> last 4T. The push against free trade and open borders also is an
> attempt to return to "economic leveling" elements also in play
> during the last 4T. Finally Bernie's proposed tax increases also
> mirror last 4T. Taken together, perhaps justified by a "crusade"
> against ISIS, might reverse the rising trend in
> inequality.

Not with German ten year bund yields falling to -0.033%.

http://www.dw.com/en/german-bund-yield-d...a-19328400

[Mikebert]

(06-14-2016, 09:12 AM)John J. Xenakis Wrote:

(06-14-2016, 09:03 AM)Mikebert Wrote: >   With this another economic piece may fall into place.

>   http://www.vox.com/2016/6/13/11920420/mo...tive-order

>   Add this to the push for $15 minimum wage and the new overtime
>   rules and you start to approximate some of the things the NWLB did
>   last 4T. The push against free trade and open borders also is an
>   attempt to return to "economic leveling" elements also in play
>   during the last 4T. Finally Bernie's proposed tax increases also
>   mirror last 4T.  Taken together, perhaps justified by a "crusade"
>   against ISIS, might reverse the rising trend in
>   inequality.

Not with German ten year bund yields falling to -0.033%.

http://www.dw.com/en/german-bund-yield-d...a-19328400

Actually that's another piece falling into place.  It belongs to a different category.  The things to which I referred two are mostly political memes.  Policy requires two elements.  One is the content of the policy which is built out of concepts that are present in the political cultural zeitgeist (memes).  The other is the driver that makes political actors want to take any action at all.

I am expecting a recession soon which I see as involving a major drop in the financial markets.  I think we agree here.  This is the driver.  We had such an event in 2008 and it drove policy.  If one happens again it will drive more policy.  What that policy will look like with depend on the memes circulating in the political zeitgeist of the recent past.

The 2008 zeitgeist reflected the idea that financial markets needed to be stabilized, but otherwise the capitalist system was sound.

Today the zeitgeist contains new elements: 1. suspicion of free market capitalism manifesting as anti-free trade and pro-labor views 2. seeing financial elites as parasites rather than job creators supporting the idea of tax hikes on rich 3. support for direct job creation through public works rather than indirectly by encouraging investment.