Ah yes, another (blatant) attempt at the “Just World Theory” strawman. Well, guess who believes what you said? Nobody. Which is why it’s a strawman.
Sam Stone (and I, and others) only believe that hard work etc. put someone in a position to be successful, but of course it’s not guaranteed. It’s just more likely.
But you go ahead and keep believing that we believe in the “Just World Theory” if that makes you feel better. Don’t hurt me none.
It depends on the nation, the infrastructure, and the role the infrastructure plays in the cost of doing business and the productivity of the workforce. Investing so everyone at McDonalds has a masters degree is probably a waste. Investing so that electricity can run 24/7 without interruption, people aren’t getting diptheria and high speed internet is available is not. However I can point you to a study showing infrastructure investments create more jobs than tax cuts.
If you can find a study which finds a direct connection between supply side economics and GDP growth and job growth, and that finds supply side economics is consistently the best method of GDP growth and job growth, I’d love to see it.
You have a strong underlying assumption in all your arguments too.
My argument is not invalid. The private market is motivated by profit. Fine and good. But when it comes to investments that do not turn a profit, that require years before they turn a profit, or are too decentralized to turn a profit, the private market is not interested.
I think government sometimes leads to better organization. Sometimes not.
The interstate highway system was too large, too decentralized, and too long term for private markets to invest in it. Same with rural electrification. Same with environmental regulation (which saves money to other people because they don’t have lowered productivity and the cost of cleanup).
Even Jeffrey Sachs, who is a liberal who supports heavy investments in the developing world, says that method is true and that sweatshops are a good thing and a first step on moving up. Not denying that.
But China’s educational system was going before they opened up to international markets. So the concept that international trade leads to higher education investment isn’t something I really believe. That seems more domestically driven, and it’ll improve international competitiveness.
As far as national stability (which is important to business) that requires police and military, which require tax funds to pay for and has to be done publicly.
I really don’t understand economics, so I don’t know what I’m debating.
Really? Based on what? Would Bill Gates be rich had he been born in Uganda in 1910? No.
You missed off shore jobs and built your plants in China so you can pollute at will . International corporations don’t build or hire in America. That is why the banks should be forced to loan to small companies. That is where future jobs are.
I agree, all those things make it more likely you will succeed. So what are the variables that account for disparate outcomes between individuals who work equally hard, repress impulsive behavior, and preserve their precious bodily fluids?
There is also a good thread going on at somethingawful forums related to the income disparity of wealth in this country, semi related to this thread.
Unlike Sam Stone, there were some that admitted making it to the top was not through their education, resume etc alone but through connections as well.
So, if you have the grades, education, experience etc but not the connections or luck of knowing the right people, or being at the right place at the right time, your chances are pretty slim.
A good point also brought up there is, and I’ll quote it:
Similar situation here. My friend’s dad is an influential professor at the University where I work. Even though I was qualified for the job and it’s a skilled position (programmer), I know since I was hired we’ve turned away people with MS degrees when hiring our most recent employee. I only have a bachelor’s.
Oddly enough, it seems like it’s usually the most wealthy people who benefit the most from nepotism that tend to be the least willing to acknowledge their own good fortune.
Clearly, there is plenty of capital at the top so that is not the issue. Demand is but there are less and less jobs as we become more “efficient” so perhaps, like one of the posters said, paying a perma unemployed class welfare to live.
Thoughts?
How about,
“Anyone can get cancer, but that’s not an excuse to smoke.”
“Opportunities are everywhere. Sometimes they fall in your lap, and sometimes you have to make them.”
“If you get lucky enough to come across sunken treasure, it really helps if you know how to swim.”
“Most people will get chances in life. The key is to be prepared to grab them when they come by.”
“Good connections helps. If you don’t already have them, you’re going to have to make them by impressing the people around you.”
“Serendipity is real. But you won’t find it by sitting at home eating cheezies.”
“When in doubt, work hard. Good things tend to come to people who work hard.”
“You will be presented with good offers and bad offers in life. Your job is to be educated enough to tell the difference between them.”
“You don’t have to be the smartest guy in the world to get ahead. You just have to be smarter than the guy in the cube next to you.”
“Instead of getting mad at being given extra work, why not see it as an opportunity to stand out from the crowd? Do an excellent job, because you have people’s attention. Show them what you can do.”
“The best way to get ahead is to make your boss look good to his bosses.”
“Every failure brings knowledge and new opportunities.”
Those are the attitudes of successful people. Unsuccessful people have attitudes like this:
“Life is not fair.”
“Why should I have to do the extra work? Screw that. I’m not paid for this.”
“The only way to get ahead in today’s society is to know someone.”
“It’s impossible for me, a <insert sex/racial minority here> to get ahead in a white man’s world.”
“All my bosses are idiots. Anyone could do the job of a CEO. There’s nothing special about it.”
“Employers are generally evil, and they’ll get nothing out of me other than what I’m paid to do.”
“Why should I go to work? I’m worth more than what anyone’s willing to pay me.”
“I’m too old to go back to school. Besides, a foreigner would just take my new job, too.”
“How can I possibly save money? I’m not paid enough for that.”
“If he expects me to come in on the weekend, he’s got another thing coming. I don’t get paid by the hour.”
“If I put in extra work, it’ll just be expected of me from now on, and I’ll have to work harder.”
Exactly the kind of thinking I just mentioned in my last post. Also nonsense. My wife and I both came from poor backgrounds. We both moved from our home towns to a big city where we met. We knew no one. We had no inheritances. We worked our way through school. We’re both reasonably successful. She’s now working on her Masters in the evenings as well as holding down a full time job and being a mother, because she wants to move up. That’s what successful people do. I’m a little lazier than that, myself. But if I don’t climb as high as I hoped, I’ll have only myself to blame, or at least I’ll know that I made a conscious choice to prioritize work a little lower so that I can spend more time hanging out with the folks here, for instance. I’m personally okay with that.
Because I grew up in a poor background, none of my friends had connections or money either. Almost all of them made it into middle class, and some have done very well.
My cousin came from a tiny town, worked his way through college, and eventually become a sales rep for a sporting goods company. He did such a good job for them that various professional sports teams started asking for him personally when new equipment was sent to them, so he quit his job and started his own company, and became quite wealthy.
My mother had almost no education. She raised two kids on her own. She started as a clerk in grocery store making minimum wage. She did an excellent job and was promoted to assistant manager, then manager. She put a down payment on a house, then ten years later used the house as collateral to buy her own store, which she ran for ten years. Then she sold that to finance her retirement. No connections, no luck. Just hard work and a willingness to step up to the plate when opportunity presented itself.
I lived with my grandparents when I was a small child. At the time, both of them were in their 50’s. My grandfather was working as a pump jockey in a gas station. My grandmother was unemployed. They found the cheapest, crappiest apartment they could, lived like paupers, and saved every nickel they had until they had enough money for a down payment on a very small farm with an old house that didn’t even have indoor plumbing or heat. In Saskatchewan. Winters there were not a lot of fun, let me tell you. They put up with it to follow their dream.
I remember living there, and I remember how hard they worked and how little they spent. Every nickel went into that farm. My grandfather built a new house with his bare hands when he was almost sixty - he couldn’t afford to hire people. They built that farm up, made it a real going concern, and eventually retired in their mid-70’s with almost half a million dollars in the bank from the sale of the farm.
I could go on all night. I personally know dozens of people with stories like this. My neighbor when we lived in a housing project got a scholarship to college, worked his ass off and got into law school, and he’s a lawyer in Toronto now. With nary a connection. Another friend who was lower middle class and lived down the street from me wound up as a computer programmer, then a college teacher.
If you can’t make it without luck and connections, please explain this.
That’s because in commercial programming, no one cares about your Masters. It will only come into play if the two candidates are otherwise undifferentiated. IF the subject of your thesis or project matches a specific skill they were looking for, then yes your masters makes a difference. Don’t sell yourself short - maybe you gave a better interview, or had aspects of your resume that were better than the other guy’s.
But maybe you were the beneficiary of favoritism. It happens. It’s just not a dominating factor. Hell, our company encourages employees to bring in candidates, and rewards them if their referral is hired. So certainly in that case the candidate got the interview through ‘connections’. I’ve probably been the victim of it at one point or another. So what? You just find another one. I’ve gotten plenty of interviews and jobs, and I can think of only one that I got because I was recommended by a friend. Usually it’s a complete stranger interviewing me, who got my name from a staffing service. I’m not sure where ‘connections’ even enter into it.
You may be thinking of a place like Goldman Sachs or an old, established law firm. There are certainly some areas of the economy dominated by networks of wealthy people, fed from the Ivy League schools and consisting of people who know people and their children. Yes, if you’re a law grad from Podunk U with a 4.0 GPA, and your dream is to become an executive at Goldman Sachs, you might just get beat out by a loser who scraped through Harvard by the skin of his teeth and a few phone calls from Dad to the Dean.
So don’t go there. Let the old rich guys have their sandbox. You’re just tilting at windmills if you let those people keep you from finding your own opportunities.
Yeah, I agree. I said that in my last paragraph. But, so what? I mean this sincerely, because it’s the one thing I’ve never understood about the people on the left: Why does the existence of rich people bother you so much? Why is it such an evil that you don’t even care if your own standard living is going up, so long as theirs goes up faster?
It’s a free world. People transact voluntarily. Go out into that world, find out how you can carve your own niche out of it, and do it. Your job would be no easier and your pay no higher if Jeff Immelt made 50,000 dollars instead of 5 million. Would it really make you feel better just knowing old Jeff wasn’t going to have a Learjet with ‘ecomagination’ on the side?
I rather like having rich people in the world. It’s aspirational. They show you what’s possible. And they’re interesting people. They do idiotic things like buy race cars and never drive them or buy pet monkeys and children, but then they also build space ships and freaking cool museums and make billion dollar movies about disturbingly sexy space lizards. And, like I said, most rich people got where they are by providing a lot of value to a lot of human beings. So I even look up to them on moral grounds. They didn’t waste opportunity.
And I’m hoping to one day buy a ride in a spaceship. Go capitalism.
I don’t want to live in a drab world where no one decides to build a space ship for yucks and Graham Hawkes isn’t buildingdeep ocean sport submarines for rich guys, just so we can drive down the all-important GINI index.
This was the bogeyman people yakked about in dorm rooms when I was in college in the 1980’s. It didn’t happen, and it won’t happen. The whole history of economic growth is a history of productivity gains due to efficiency and automation replacing human labor. When this happens it grows the economy, which causes new demand which creates new jobs.
There is pain in the transition, and the creative destruction that keeps our economy relevant and modern certainly leaves a wake of human displeasure behind it. I can understand government programs to help those people get re-established in the job market and help them out financially while they do so. But I don’t need to bring down a rich guy to do that. And I sure don’t have to protect him from the consequences of his own actions, even if it means banishing the phrase, “too big to fail”.
It’s the same old, tired victimization culture. A defense mechanism built on top of fundamental human insecurity. The same defense mechanism that causes people to willingly sign their rights away to choose what drugs to ingest, or what types of cars they can buy, or what mortgage contracts to sign. They are afraid to look inward and take accountability for their own standing, so they practice cognitive dissonance by looking outwards in an effort to find another reason for their plight.
I don’t like where I’m at. I feel insecure relative to that guy over there. But it can’t be my fault. I’m a good person. It must be their fault…or the fault of the system.
Then a savior comes along in politician’s clothes and says “Yes, of course it’s not your fault. Don’t feel bad. I’ll fix it for you. I’ll stick it to that guy over there, and fix the system. Vote for me.”
And they do.
And the government is the cause of all your problems. If only your taxes were lower, or regulators would get off your back, why, then we could really get somewhere. But that dang ol’ big government boogeyman, it’s the whole reason the country is going to hell.
Right, because the only people who advocate government interference in the economy are angry broke people. :rolleyes: Does it hurt when you snap back into reality?
1 and 2. Here are some numbers to back that up :
You can see both that the Bush tax cuts are the largest source of the deficit over the next ten years, like I said and that without the taxcuts, wars and growth returning to trend the deficit would be negligible. Those numbers are all based on CBO projections, by people who – crucially – know what they’re talking about.
And I’m sure I’m not alone in noting the hilarity of somebody with a storied history of posting disingenuous bs asking somebody else to show their work.
http://boards.straightdope.com/sdmb/showpost.php?p=12661086&postcount=45
and the people who came up with those numbers, again, people who know what they’re talking about, also know that healthcare costs are growing everywhere, and these growing costs are factored into those numbers.
Recently you posted somewhere that you now accept the current recession is demand-based. Bearing that in mind, how do you think we should go about growing demand again? And how do you think the current austerity programmes that various governments around the world are enacting will affect aggregate demand/economic growth over the next couple of years?
Now I remember why I was ignoring you. You simply can’t post without going for the nasty, sneering attacks.
Speaking of disingenuous - you claim that the numbers are based on CBO projections. But they’re not, are they? They’re based on an analysis by the “Center for Budget and Policy Priorities”, a left-wing think tank, which used CBO numbers as the starting point for their analysis. Exactly the way CATO or the Heritage Foundation does. I think if I posted a chart that was developed by CATO, and tried to pass it off as a CBO chart, you might just accuse me of some of that storied disingenuousness you say I throw around.
Let’s go straight to some facts.
This article says that completely extending the Bush tax cuts would cost 2.9 trillion dollars over the next ten years.
The Obama Administration’s budget projection says that the deficit will grow by 9.3 trillion dollars in that same period. So the Bush tax cuts only account for about a third of the deficit.
Incidentally, Obama wants to permanently extend the Bush tax cuts for the poor and middle class. According to the same article, that’s about 2.5 trillion dollars worth over 10 years. So what we’re actually talking about is 400 billion dollars in tax cuts for the rich over ten years. Which would not make a perceptible dent in the debt.
And incidentally, you may have noticed that I have not supported extending the Bush tax cuts. I’m to the left of Obama on that one.
And if I had a magic pony, I wouldn’t have to drive to work.
What’s hilarious here is that your source is Ezra Klein, who is not an economist, and not even educated in economics. He’s just a liberal pundit. He should be posting on the Straight Dope instead of passing himself off as an expert in the WP.
First of all, this is more data from your left-wing think tank. Second, something really smells about that chart, because it claims to show that if the Bush tax cuts were eliminated, the debt would actually be falling right now, and would continue to fall until 2025. Either that chart is old (as in, made during the debate over the tax cuts, well before the recession), or it’s lying with statistics. But we don’t know anything about it, since you posted an image by itself rather than in the context of the article it came from, so we don’t know anything about the assumptions behind it, when it was made, or really anything at all.
Get some real numbers next time. And post the article that describes the methodology used to create the graph. Don’t just post out-of-date graphs you found with a Google image search. And that’s the charitable explanation for why you didn’t explain what these graphs are.
You just put words in my mouth that I never said, then accused ME of disingenuousness. You’re a real piece of work. For the record for those playing along at home, what I said was that the Bush tax cuts and the 2001 recession CAUSED (note the past tense) a drop in revenue that averaged 2% of GDP over Bush’s two terms. I then posted the data to back that up. You couldn’t refute it, so now you’re taking us on a magical fantasyland tour of made up numbers, old charts, and accusations of claims I never made which you then turned into an accusation of lying. Anything to avoid admitting you were wrong, I guess.
I think demand can be down for a lot of reasons, and that stimulating it is not as simple as just borrowing money and throwing it at everyone.
Demand could be down because:
If the decline in demand represents a permanent shift due to reality asserting itself (i.e. people realizing that their spending was unsustainable because they were in a bubble and not a real economy), then the thing that would be most important to do would be to allow production to scale back to match the new reality. Propping up excess demand with stimulus in that case is just a formula for a long period of low growth financed with borrowing until the whole house of cards comes down.
If people aren’t spending because they are worried about debt, then giving them money with borrowed funds is just shifting debt from one party to another. This may not have the stimulative effect you think.
But you asked how other countries who aren’t stimulating their economies are doing? Let’s see… I’ve already mentioned that Canada’s economy is doing much better than yours. Germany and the U.K both announced ‘austerity’ budgets (in opposition to pleas from the Obama administration). And what do you know:
Europe Shows Strength as U.K., German Indicators Top Forecasts
Funny how that works. The U.S., which has a government passing program after program to ‘stimulate’ the economy, keeps posting results that are constantly below economists’ estimates. Every day seems to bring a new ‘unexpected’ bad number. In the meantime, the countries that are cutting their debt and leaving the economy alone keep posting better results than economists were predicting.
Maybe the fault lies in the assumptions made by those economists…
And how much will it cost to finance the extra deficit the Bush tax cuts created, and will continue to create?
Do the math yourself. I assume the CBO’s projection included the financing aspects. But while you’re at it, you can also calculate how much it will cost to finance the trillion dollar stimulus.
I wanted to come back to this, because once again you mischaracterized what I said. I didn’t say that you’d get all the revenue back from a tax cut. I said that offsetting effects cause revenues from tax increases to be not as high as you’d expect, and losses from tax cuts to be not as severe as you’d expect. Tax increases cause GDP to change negatively, which negates some of the revenue gain, and tax cuts cause gain in GDP which offsets some of the revenue losses. Therefore, you can’t just add up the cost of a tax cut year over year and assume that’s what the real cost was, and you can’t just add up the revenue gains in the first year from a tax increase and assume they will continue into the future.
Yeah. Here’s a new paper by a couple of supply-side economists which shows a very strong correlation between tax changes and GDP growth. They show that a tax increase of 1% of GDP can actually cause a 3% decrease in GDP after ten quarters. This is consistent with what I said earlier - you don’t see initial offsetting revenue changes from a tax cut or a tax hike, but if you change GDP growth because of your tax action, the effects start to compound over time. Or as they put it, “tax cuts have very large and persistent positive output effects.”
From the paper:
They break tax changes down into different categories and examine the effects of taxes intended to lower a high deficit as opposed to taxes implemented for ‘fairness’ or to pay for new programs. They found that you can increase taxes to reduce a deficit and actually improve GDP growth. This would suggest that the economy’s response to an attempt to lower deficits is positive, offsetting the loss of the tax. That could explain why the economies of Canada, the UK, and Germany jumped almost immediately after policies were announced to cut spending and control the deficit. But that’s just speculation on my part.
The other thing they found that supports supply side theory is that tax changes have by far the biggest impact on investment rather than consumption. In fact, a 1% GDP increase in taxes can cause investment to fall by as much as 11.2%. This is consistent with supply-side theory which says that tax cuts stimulate investment and lead to greater prosperity in the long run.
Their main conclusion:
So supply-siders who think tax cuts pay for themselves are wrong, but only in magnitude. There’s no guarantee that a tax cut will eventually cause enough growth to replace all the lost taxes. But there’s no question that a tax cut will increase growth, or that a tax increase will cut into growth, and that both of these will to some degree counteract the initial effect of the tax change.
The people who are most wrong, however, are those who say that a tax cut will cause indefinite revenue losses equal in every year, and those who say that you can increase taxes without affecting economic growth.
Given this paper, which I find quite compelling, I may have to change my position on letting the Bush tax cuts expire. My original logic is that the focus now should be on stability, and since the market has already priced in the tax increase in 2011 it should just be allowed to happen. But if it’s not used to bring down the deficit, it could have a huge negative shock on the economy. We’re talking about 3 trillion dollars in additional taxes - about 2% of GDP over that time period. If this paper is correct, then that could ensure a double-dip recession.
LOL StamStoneonomics.
Hey Sam, you still letting these people think your Canadian?
@Sam Stone
You are a true believer. You go at this stuff like a righteous fundamentalist. I am surprised at your dogmatism in this. For some reason it is important to you that your Libertarian leanings remain in the face of all the evidence.
Yes, you cite various studies that suggest you are correct. The other side does so as well.
What remains, and you have not answered, are the indisputable facts of the results of these policies.
Cite theory all you want. The trickle-down economic policies of Reagan and Bush have proven themselves to be disasters. Even teh guy who pushed Reagan’s policies eventually saw it for the mess it was and said so. These policies do not achieve a better result. Period. Look around you. The world economy is in a shambles. Unemployment in the US is shockingly high. Underemployment is shockingly high. Income inequality is shockingly high (indeed record or near record highs).
These policies have not produced desirable results. Well, maybe desirable for the top 5% or 2% perhaps. Everyone else is screwed and whole countries are in dire straits as a result.
Why can you not face the facts? They are evident all around you! How can you keep propounding a system that has screwed most of the planet? Your “hard work, keep what you earn, luck has nothing to do with it” notions have zero relation to reality.
Personally I agree it would be good if the world was a perfect meritocracy and everyone got to enjoy and keep the fruits of their labor but that is not the world we live in nor is it one ever likely to happen. At least not in out lifetimes.
This is becoming comical. You accuse me of being dogmatic ‘in the face of all evidence’, when in fact I just provided evidence that you apparently didn’t bother to look at, because you are just so damned sure of yourself that you don’t need to see any more evidence.
The study I quoted wasn’t a theoretical model - it was an analysis of past tax actions, crontrolling for various factors in order to determine the effects on growth of the tax itself. The two economists are highly respected. The conclusions aren’t even necessarily what they would personally have hoped to find.
Not only that, but I changed my own opinion after reading it. I thought Obama was wrong to want to extend Bush’s tax cuts for the poor and middle class, because I figured the taxes were already priced into the market. The paper above shows that even when people know a tax is coming, the negative effect doesn’t happen until it’s actually enacted. So we can fully expect that full elimination of the Bush tax cuts will have a significant negative effect on GDP at a time when the country is teetering on another recession. So Obama is right, and I was wrong.
You, on the other hand, haven’t changed a position on a single thing since I can remember your posts on this board. I’m the one following the actual published literature, but you’re so certain of yourself that you don’t even need to bother with evidence any more. But I’m the unyielding ideologue.
And the fact that you think free markets have screwed up the world and big government is the thing to save it, and that these facts are self-evident to anyone who opens their eyes, tells me that you do not have an even remotely balanced view. You’re completely blinded by your own partisanship and you don’t realize it.
The debt is equal to the Bush tax cuts and 2 ,count them, 2 unfunded wars. Look no farther for an explanation of what blew the Clinton balanced budget. That is not Obama’s fault, but is his problem.
Medical costs have been going up rapidly for a long time. It is not because of the health care bill. To fix it will require stepping on some very wealthy and powerful toes. So far, Obama has not shown the stones for it.
Then of course the unregulated banks looting the system for all they could was a big problem. They fended off attempts to bring them under control. Fighting those who are looting the system is very difficult and made harder by people who don’t really understand where the mess came from.
This isn’t even close to being true. Total federal debt is about 13 trillion dollars. The public debt is about 8.7 trillion dollars. The two wars cost about 1 trillion, and the Bush tax cuts about 2 trillion.