It depends on how you do it, in my opinion. At a certain level, it becomes almost an abuse of the system. Yes, they’re intended to raise money for civil projects, which is all well and good, but the idea behind it is to attract many small investors, not invite two or three large ones to shovel in a substantial part of their income to avoid paying taxes.
By stashing large sums in the bonds, they’re not doing anything illegal but they are “cheating” the government by paying no taxes, and possibly earning interest on the money as well. The government actually loses money on the deal. That wasn’t the intent of the bonds.
**
That’s exactly what Ford said about the Pinto. The car had a tendancy to catch fire if struck from behind, because bolts punctured the gas tank.
[quote]
The financial analysis that Ford conducted on the Pinto concluded that it was not cost-efficient to add an $11 per car cost in order to correct a flaw. Benefits derived from spending this amount of money were estimated to be $49.5 million. This estimate assumed that each death, which could be avoided, would be worth $200,000, that each major burn injury that could be avoided would be worth $67,000 and that an average repair cost of $700 per car involved in a rear end accident would be avoided. It further assumed that there would be 2,100 burned vehicles, 180 serious burn injuries, and 180 burn deaths in making this calculation. When the unit cost was spread out over the number of cars and light trucks which would be affected by the design change, at a cost of $11 per vehicle, the cost was calculated to be $137 million, much greater then the $49.5 million benefit.
So, do you believe Ford was correct in its actions when it decided, based on the incorrect information of the costs, that they should just pay off the lawsuits of burn victims’ families?
Yes, but his luck and talent couldn’t do it alone. He needs the society. To put it to you this way: If I could help you win a big lottery and it would be due to genius and hard work on your part but there was also a part that you needed me for, I would be in a pretty good bargaining position vis-a-vis what fraction goes to me. You might try to argue that almost all of the hard work and genius will be on your part so you should get the overwhelming fraction. But, then I will point out that, you won’t be able to do it without me. (You may counter that I won’t be able to get anything without you. But, actually, I have a hard time buying this. I mean, I think if Bill Gates never existed, our society would be just fine, thank you, and the computer revolution would have gone along just fine without him. We might even be in a situation where people had higher satisfaction with their computer operating systems and software than they do now.)
Yes, that is what I mean. We have also made a sort of social contract. We’ve agreed to have a capitalist economy and such. To be honest, if someone offered me a society with a capitalist economy with corporate law and property rights law and intellectual property law the way they are, I think I would not really be too keen on being part of such a society unless the contract including stipulations to the effect that measures would be taken to counteract the immense concentrations of wealth and power that result from this system and to try to have at least some measure of insuring that we all get a reasonable share of the wealth that is produced.
There have been conscious decisions made to structure society in a way that results in immense concentrations of wealth. So, I don’t see why any deviation from this often gets labelled as “redistribution” as if the distribution that resulted from this structure was what was natural or desirable.
Well, what would you cut specifically?
Yeah…but there are two problems with this. One is that people do seem to judge this stuff relatively…i.e., almost the only way we know to measure what we have is against others. I think there have been studies to this effect. Thus, I think having a very skewed distribution is going to lead to unhappiness at the bottom even if those at the bottom are not poor in comparison to some standard like a few hundred years ago or in 3rd world countries. And, this unhappiness will inevitably spill over into society at large.
The second problem is that I think that it truly is more difficult to live at a certain income in our society than in poorer societies because costs are driven up by the affluent. For example, if you don’t have the money to afford the inflated housing prices in a region, you will end up in a neighborhood with bad crime, bad schools, etc. I don’t think these places are just bad in relative terms…I think they can be quite bad in absolute terms. And, almost everything tends to be more expensive, as those who travel in 3rd world countries will testify…I.e., a dollar goes much further there.
Well, that is only if you think noone has a right to complain as long as their situation didn’t actually get worse. The society got a lot richer and yet it hardly made any difference to the lives of the large majority of people. I think that raises the question of whether there was another path whereby the society gets a lot richer and these benefits are shared a little more equally. This is particularly true given that policies are geared to expanding the wealth of society. You have to ask if these policies are the best policies to pursue if they benefit primarily a select few and just throw some small scraps to everyone else.
I should also note that the numbers from 1979-1997 that show some modest 10% gain in family median income also show that this gain was due essentially entirely to people working more hours. If you look at real median wages, I don’t think they went up at all. And, I believe families in the bottom quintile actually saw their real incomes not go up at all or even decline. I’d have to look back at the details. [In the 1997-2000 time, when the labor market got really tight, there was some gains in median wages. But, I don’t know how these gains have faired during the recession.]
Well, I may be exaggerating a bit to make a point and to fight against the opposing idea (expressed by the most ardent libertarian-types) that every penny someone earns is rightfully theirs and taking it away is theft. I mean I know that our market system is set up in a way in which what people get out of the system is supposed to reflect the amount that their contributions are worth to other members of society. However, I think people forget the many, many assumptions that go into this and the many, many ways in which markets don’t work ideally. I would grant that the amount someone earns still bears some relationship to what they have contributed. (If it didn’t, it would be hard to justify not massively redistributing money pretty evenly all around.) But, I think at the moment people seem to generally be erring on the side of believing too strongly in the connection between what money you get in the system and what your contribution is. This is particularly true amongst those (like Bush, Cheney, …) who have done very well. This is why it is so refreshing for me to hear someone like Warren Buffet argue otherwise.
Pervert, why do you have to frame the issue in such stark ideological terms when we’re just bickering over a couple of percentage points? Why can’t you accept that the current tax rates represent a compromise among all the practical and philosophical considerations? The top tax rates have been cut greatly under Reagan and again under Bush II, meaning that the ideal that wealth belongs to the individual has been given greater weight than in the past–and in most other countries. Sympathy for the less well-off and the greater impact their tax burden has on their standard of living is lessened of late, but the result is a tax code that is still modestly progressive. Can’t we just accept the current compromise and stop all the bitching and commie-baiting?
I’m not sure I have framed the issue in stark ideological terms. Have I? If I have left anyone with the impression that I think liberals are communists I appologize and cringe at my horendous inability to communicate. I have been trying all along to suggest that the idea that libera = communism is mistaken. It may have some reasonableness in certain regards. But on the whole it requires forgetting several critical features of liberalism and communism.
What I am trying to get at with my back and forth with jshore is a way to define welfare without resorting to emotional, communistic, wealth redistribution motives. In another thread erislover suggested an insurance analogy. I don’t wholly agree with that either. But it should be added to the increased benifits and lessened pain arguments we are discussing.
I actually wrote 3 other responses to this post. I deleted them as too snarky. I appologize in advance for any snarkyness left and ask that you point it out so I can ridicule it with you.
Sure. I agree with that. However, given that his success places him in a very small minority, we have to be willing to examine why his success is so rare. If you say that most of his success is due to societal activity, then we have to ask why more people are nto as successful. Or, of course, you have to be willing to see things that society did for him which it did not do for most others. That is, if society is more responsible for his success, then why did it favor him over others. If, however, his success was mostly due to his own activity, then we have to conclude that most of his wealth is in fact his.
I deleted 3 responses to this. They were entirely too snarky. AFter more reflection I doubt that you meant this the way I read it at first. You did not mean to suggest that the American decision to have a free market as opposed to a planned economy was equivilant to a fashionable decision did you? That is, I’m not sure you meant to trivialize the differences, correct?
Well, I would argue that if we had a system which more througoughly respected property and civil rights, we would not be as worried about the amassing of wealth. Unless you bring political influence into the equation, what possible difference could it make to a man making a comfortable living that someone somewhere else is makeing 10 times as much. Personally I find it quite inspiring.
This troubles me a little as well. The system of government in the United States was not at all set up to promote concentrations of wealth. It was set up to promote freedom. Unless you mean that allowing individuals to interact freely promotes wealth concentration. But I would argue that it does not really. It may promote wealth creation. The welath created under such a system may be created at the top more than at the bottom, but only as a function of individual income. Remember the numbers which indicated that most of the new wealth went to groups below the top 1%?
Me, Personally? Well, I’d probably get so fed up withe the political wrangling, that I woudl cut everything. I’d simply say to every single part of government that they had to cut a couple percetn a year for a while. At least until we could get our debt under control and establish a few real savings funds.
I disagree. I think judging ourselves this way is common, but it is not the only way we know. It is most definately not the best way to judge ourselves.
But this can only e true if the affluence is wide spread. For instance we have been talking about the top 1% income group. I don’t think that even should the gap double or tripple it would make any difference in the average home price. Perhaps, but I seriously doubt it.
Everyone has a right to complain about absolutely anything. Freedom of speech and all that. I only object to basing economic policies on envy.
But this is the point I question. If we took all of the money that went to the top 1% (which I understand you are not advocating) and distributed it to the next 49% (I’m not going lower because the tax foundation site does not have numbers for them) we go from 5,000,000 to 6,000,000. Not much more of an improvement than the 10% you said “hardly made any difference”. And if we take less than all of it, of course, we get even less of a boost. My only point is that the wealth increase is not nearly so inequitable if you can look beyond percentage increases. Expecially when you notice that the number of returns in the top 1% and the top 50% grew by about 38%. That is everyone’s income went up and the number of people in each catagory went up. I’m not sure how spinning this as a few got rich while the rest got poor is anything but a lie? The total wealth went up. The number of people participating in the wealth at all levels went up. The only way it looks bad is that the wealth per capita is different amongst different groups.
I don’t find it snarky. I do worry though that both of us are starting to repeat the same arguments…So we may be sort of at an impasse.
One useful thing I did discover this morning is that the CBO recently extended the data on incomes and taxation up through year 2000 and here is a detailed analysis of it by CBPP (Center on Budget and Policy Priorities). A few of the most notable facts:
(1) In the 1979-2000 period, real after-tax income of the top 1% increased by 201%…i.e., a factor fo 3. For the middle quintile, there was a 15% increase and the bottom quintile saw a gain of 9%. Note that the average real income increased by 40%…So, this difference between 40% increase for the average and 15% for the median gives you an indication of how much better folks at the median would have done if all the gains had been shared equally (in percentage terms), rather than being concentrated at the top. In other words, if the same gains had been made in the economy but inequality had stayed constant (in ratio terms) during this period, the median folks would have experienced almost 3 times the gain that they had. Of course, if [heaven forbid!] inequality had actually decreased, the gains for the median income folks could have been even greater.
(2) In absolute dollar terms, the after-tax income gains enjoyed by a family in the top 1% were 100 times greater than those enjoyed by a family in the middle quintile and 500 times greater than those enjoyed by those in the bottom quintile.
(3) There is indirect evidence, although admittedly not proof, that policies matter in who gets what gains since the period of the 1980s and the period of the 1990s saw much different results in terms of who got what. In the 1980s, the lowest two quintiles actually lost ground in terms of real after-tax income, whereas in the 1990s the gains were much more evenly distributed. As CBPP summarizes it:
(4) What data is available suggests that the share of the national income of the top 1%, both pre-tax and after-tax, is at the highest level its been at any point going back to 1929.
One piece that is not presented here is median wages. I seem to recall that the gains made at the median income, at least for the 1979-1997 period, were attributable entirely to increase in working hours, as hourly wages stayed the same. But I am not sure where I saw that statistic.
OK, we are going back and forth over the same ground. I’d like to make one more point, and then you can have the last word about who earned what.
But these percentage analysis are very misleading. For instance, look at the table labeled “Appendix Table 2” in your cite. It implies that the share of income increased for the top 1% and the top 5% only. It is a blatent attempt to suggest that these very wealthy groups got richer on the backs of the rest of us. But this is clearly not true. Reading the rest of the report carefully, all income groups increased their per capita wealth. And from the Tax Foundation link we were discussing earlier, we know that these groups grew in size as well. Which means that the per capita percentage increase in income is very misleading as to the total wealth that acrued to any given group.
This new cite does not give enough figures to tell for sure, but I suspect that even your last assumption is flawed. That is, if the wealth were distributed evenly throughout the population, I doubt very much that anything like a tripling for the median would have occured. The average income increase was calculated, unless I am mistaken, by averaging the increases by the variouas groups. Unfortunately this also ignores the number of people in those different groups. As I said last time, if we were to take all of the money earned by the wealthiest 1% and give it to the rest of us it would not make a juge dent in this gap. The problem is that the “rest of us” are so numerous in comparison to the top 1% that distributing their wealth would not make much difference.
The only way an income gap appears is when we look at income as percentages like in the links you have provided. It is NOT a good way to measure wealth creation rates.
OK, that’s my last word on the subject of who made the most money. Please feel free to take me to task on any point.
As an aside, have you ever read Innumeracy by John Allen Paulos? I used to read news reports and studies most uncritically. Since I read that book, I never let a statistic pass unexamined.
I’m sorry, but this is insane. The purpose of bonds was not to allow people to make money? The purpose was not to invite investment? Investing in the city is a tax dodge??? You do realize the bonds are not open ended, right? Its not like people can put any amount of money into bonds whether the city needs the funds or not. The city (usually) has to ask for a certain amount of money and only when people invest that amount do they get it. Once that amount is invested, no one else can buy bonds from that city. That is, the government has complete and total control of this “dodge”. Citi bonds are tax exempt or tax defered to encourage people to invest in cities. It allows cities to raise funds which would be much harder otherwise.
Well, adaher has not responded, so I will. If he chooses to contradict me please consider his post to take precidence.
It seems to me that your example is exactly the opposite of the hypothetical that adaher posed. He suggested that a significant cost to save 10 lives would be undesireable. You found an example where a trivial expense would have saved hundreds of lives.
The economic analysis done by Ford concerning the Pinto was flawed in several respects. They compared the cost to the cost of lawsuits without good reason. The lawsuits could easily have been much higher than the numbers you quoted in the article. Are you sure that article is not merely quoting the lowest estimates? Also, the analysis failed to note that $11 dollars could easily have been passed on to the consumer, while the $5000 dollars in adaher’s hypothetical could not.
I feel I should point out, that the article you linked to was similarly flawed. It quotes many numbers of deaths by automobile fire but never once differenciates how many were due to Pintos verusus the rest of the automobiles on the road. It certainly never differenciates the nubmer due to rear end collisions. It does this, IMHO, in a disengenuous attempt to inflate the deaths attributable to Ford’s bad decision.
Having said all that, I think that Ford did the right thing in trying to analyse the costs of fixing the Pinto problems. They simply made several bad assumptions which invalidated the analysis.
Let me turn the question around on you. Do you think that any expense is acceptable if it will save even 1 life? If so, why do you not call for the immediate and indefinate banning of automobiles until we can find a way to save the 50,000 people who die each year in them?
I don’t see how that follows. It is not necessarily an issue of favoritism but a system of “winner-take-all” where the amount that people walk away with is out-of-proportion with their contribution as compared to others. (Although, clearly, one of the ways in which our society works is that when people gain economic power, they gain political power by which they are able to gain more economic power, so I won’t totally discount favoritism in many cases.) That is why I like my example of imagining Bill Gates in negotiation with society at large. Both might feel that the other one needs them but I think society’s claim is more believable. After all, even if only 1 in a million people have the talents to cause the sort of revolution in computers that Bill did (and my guess is that this is a low estimate), if Bill walks away from the bargaining table he loses pretty much everything whereas society has a couple hundred more people it can go and tap. This suggests to me that Bill needs society more than we need him.
And, of course, luck comes in here too. After all, I don’t think the most recent winner of the lotto got where he is compared to everyone else because of his superior talents or hard work.
Well, you are talking in extremes. I am more talking at the margin. I.e., I am not saying the choice is between a free market and planned economy but what about between our current system and one in which corporate law is very different. Perhaps corporations as we know them are not even given the special legal privileges that we have granted them…or maybe they are but in return they must really show that they are being good corporate citizens in order to have their charters renewed.
And, even if we were to conclude that our current corporate law is the best thing because we worry that these other paths, while leading to less concentration of wealth, would also stifle wealth creation too much, we might still decide that part of the bargain we want to make is to explicitly decide to tax very progressively in order to mitigate the “winner-take-all” effects of extreme wealth concentration.
Well, we have a very different view of the conditions faced by those people at the bottom. I would suggest reading some on the sort of day-to-day struggles faced by these people in terms of violence and hopelessness in their lives.
Of course, maybe you are talking about those at the median, and I can see this argument applying more there. But, I would still argue that “comfortable living” may not be a good description in all ways.
I think this is a very simplistic view of economic policy in this country to claim that it is simply set up to promote freedom. There are all sorts of decisions that are made everyday…related to monetary policy, taxation policy, subsidies, the ability of people to pass on wealth and all the advantages that go with it to their heirs. All of these policies are decided in an environment where the “haves” have much more access to politicians than the “have-nots”.
I’ll admit, however, that there is currently a debate even in liberal circles about the extent to which the current inequality is due primarily to policy decisions and the extent to which it is due to structural features of the markets. For example, on one side of this debate, you have James K. Galbraith with his book “Created Unequal” where on the other side you have Robert Frank and Philip Cook with “The Winner-Take-All Society.” However, even if it is true that the market itself is promoting these vast inequities in wealth, it does not follow that we should not as a society decide to remedy them. We might decide to do this for reasons of equity, although Frank and Cook would argue that we probably want to do it even for reasons of efficiency. I.e., they claim that we are at an extreme where the “winner-take-all” aspects are introducing a lot of inefficiency in addition to inequality.
Actually, I don’t remember any numbers that directly addressed that. Were there some? Still, I think that it would be pretty hard to sell tax cuts for the top 1% with the slogan, “The top 1% need their taxes cut since they didn’t even manage to capture 50% of the new wealth in our society over the last 20 years.”
You may recall that we pretty much had our debt under control just a few short years ago.
As for “cut everything”, that is the sort of statement that is easy to make but hard to implement. It is always easy to say in that in the abstract, which is why Republicans often campaign on a platform of cutting spending but then don’t end up doing it.
Well, okay, while the top 1% has done most fabulously, I am not claiming that it is all due to them that housing prices are up. It’s a more gradual issue as you go up the economic ladder. I.e., the top 10% are probably making it difficult in many locales for those in, say, the top 50% to be able to find nice affordable housing. And, the top 50% are making it harder for the bottom 50%. (Obviously, these cutoffs are just sort of arbitrary…But, just trying to illustrate the point.)
Well, to be honest, I’d rather base economic policies on envy of the better-off by the less-well-off than base them on the greed of people who have done extraordinarily well in our society (sometimes in large part because of their own talents or, sometimes as in the case of our current President because of their “talent” of being borne into the right family, but always within the context of the society at large) and yet want to reduce the amount they pay back to the society in which they have succeeded so fabulously.
I think it is perfectly reasonable for those at the bottom…or in the middle…to ask how we want to structure our society in terms of how the benefits that accrue to the society are shared. For example, why should we be always trying to maximize the GDP, i.e., in essence the average income, rather than the median income? And, what sort of tradeoffs might we want to make. What if we could get slightly lower GDP growth but have 75% of the people be better off…significantly in some cases…than they are today? Might we not want to make that tradeoff? [Of course, Frank and Cook would make an even stronger argument by claiming that this tradeoff likely does not even exist…i.e., that if we pursued policies to mitigate “winner-take-all” effects, we would end up with less inequality and greater efficiency too. Whether this is true or not, I don’t know but I don’t think it has to be true in order to still decide as a society that we want to reduce…or at least not continue to increase…inequality.]
I’m not sure exactly where you got this number from although I guess it doesn’t sound too out-of-line. As I pointed out using the most recent CBO numbers today, the 15% improvement in real incomes at the median would have been 40% if all boats were raised the same fractional amount.
I don’t think it takes much “spin” to ask whether we really feel that our society in 1979 had too much equality and whether we should pursue policies whereby the gains go in large part to those at the top…so that the % gain in real incomes is like 12 X higher for the top 1% than for the median…or whether we should pursue policies that, say attempt to keep this inequality from growing and thus allow the % gains at the median to be more than 2.5 times bigger than they were.
Actually, the current question we are facing is even stronger than that since essentially what Bush is telling us (in policy actions, not words of course) is that the increase in inequality seen in the last 20 years is insufficient and we want to see it increase even more. It reminds me of the slogan of the parody website setup by Citizens for a Fair Economy in 2000, www.billionairesforbushorgore.com, which had the slogan, “…Because inequality is not increasing fast enough…”
Well, I don’t read it that way (depending on what you mean “by the backs of the rest of us”). I think the CBPP has clearly said that after-tax incomes rose for those at the median too, so all boats have gone up…But some much more than others and as a result wealth is increasingly concentrated at the top. Also, it is worth pointing out that some boats did actually go down in the 1980s (for the bottom two quintiles in fact…i.e., nearly half the population) when more aggressively pro-rich policies were pursued. Then in the 1990s, boats went up fairly equally (in percentage terms…obviously not in absolute dollar terms). Want to guess what happens under the policies of the current Administration?
Well, it seems perfectly reasonable to me to look at wealth per capita rather than wealth per group. The size of groups just increases because the population goes up. The top quintile always has 20% of the population in it.
I am quite sure you are mistaken. The average income is the average income. You take all incomes and you average them. Note that if you divide into quintiles, take the average income of each group and then average that, you should get the same result. (You can prove that mathematically, I believe.) Clearly you can’t do this if you are looking at different sized groups (e.g., if you were computing the average income of the top quintile by averaging the average income of the top 1% and the average income of the other 19%) but then noone would “average” in this way.
Not so fast. Notice that the top 1% saw gains 100X higher in absolute dollars than the median group saw. So, you take the $576,000 gain seen by each family in the top 1% and distribute that evenly to the entire 100% of the population and each family would reap $5760 which is slightly more than the gain that was actually seen at the median…I.e., you would slightly more than double the gain seen at the median if you distributed the gain seen at the top evenly, in absolute amounts, throughout the population!!! That’s how dramatically the incomes of the top 1% have grown! I think that the more you understand how the mathematics actually works out, the more amazed you’ll be about just what is going on.
I haven’t read that book but I agree with you that it is important to study statistics critically. That is why it really irks me, for example, when the Wall Street Journal editorial page points out that the share of the federal income tax paid by the top 1% has nearly doubled in the past 20 years (which they seem to do about once a month) and implies that this shows how much more we are shafting them. In fact, what people fail to understand is that share data for the income tax paid measures not only the rate at which people are taxed but also their share of the income. The top 1%'s share of the income has increased even more rapidly than their share of the tax. So, what the WSJ is using to imply that the rich need tax relief really just shows the explosion in inequality! This makes their solution of giving the top 1% relief seem a bit less reasonable!
I promised you the last word on income disturbution, so I won’t adress the rest of your post. We have done it a couple times in this thread. But I did want to note that I agree with you here. Conservatives make the same mistake liberals do, only in reverse. Claiming that 1% of wage earners pay more than 1% of citizens should ignores the portion of the income that this 1% of the population earns. Just like (but in the other direction) my objections to concentrating on the income gap without looking at population share.
What I am trying to say in my very bad way is that if you have a group of people all trying to succeed economically, they are all in the same environment, and one of them succeeds wildly greater than the others, then you have to find what was different about that one. Either he was more capable or the environment favored him in some way, or some combination of the two. I don’t think the analogy to the lottery is apt, as that is clearly random chance. I doubt very much that economic success is so heavily reliant on luck. While it certainly makes a difference, it is not the overiding factor IMHO.
The problem wiht this example is that you have to do the negotiation after the fact. It is easy to say now that society is entitled to a share of Bill Gate’s fortune. But where was society when the risks were being taken? Why were there so few of us working in the computer industry in the late seventies? I would argue that we did negotiate with Mr. Gates back then. We said basically, “We won’t help you much if you fail. But if you succeed we want a cut.” It seems disengenuous to say now we want a much larger cut. (I understand the marginal tax rates are lower now than then, I am speaking figuratively.)
If you want to talk about corporate welfare I am all for gutting that as well. If you are only talking about some of the privileges that corporations seem to have I am willing to gut them also. As long as you are not talking about penalizing corporations for doing things that private citizens are allowed to do, I’m certainly willing to discuss it. We have to remember that a coporation is not some alien life form with no relation to private citizens. It is simply a group of citizens. I agree that grouping should not confer any special priveleges, as long as we agree that it should not inclue severe penalties.
I’m not sure that our view is different. Our opinion about various solutions seems to be. But I do not believe that people at the bottom of society are happy and dancing. I do think that poor people in America have it quite a bit better than those in some other countries. But then we begin to compare apples and cumquats.
Agreed. It is a simplistic view. The point is that removing all of the power that the government has over economic activity may be just as valid a solution as granting it more power.
I strongly disagree. Admitedly, some of the actions of the current economy do not resemble a free market. There is probably lot’s of room to ensure that less fraudulent or even ill informed choices are made. However, simply to level the income rates just to level them relies on a premise that is certainly not true. It assumes a right, or equality of ability which is clearly not true.
I was refering to the Tax Foundation cite again. It shows that while the top 1% AGI was 1,094,296 while the AGI for the top 50% was 5,379,286. Perhaps I misunderstood the numbers, but it certainly seems to me that most of the wealth went to the groups below the 1% rank.
We may have been talking at cross purposes here. I favor tax cuts. But I’m not as married to them as Bush seems to be. I was a little disapointed that he went throgh with his even though the dot com bubble burst. It seemed like it would be much more prudent to take the money and pay down the debt. Of course my use of prudent here only applies to fiscal policy, not political reality.
Only by certain ways of calculating it. And only assuming economic growth that many knew could not continue indefinately.
Agreed. Any cutting would be very hard to implement. But I still think accross the board cuts of 1% or even .5% a year would be easier than targeted cuts to this or that program.
Well I might be able to agree that the presence of the top 50% of income earners makes it harder for the bottom 50% to afford houses. Except, of course, that it is the people in the top 50% who would be investing in the construction companies. So, we might have a problem simply transfering that wealth around.
But I might point out that some government programs have a similar effect on the availability of low income housing. Slum laws and section 8 housing, in my mind tend to raise barriers to anyone who might otherwise want to build low income housing. I remember a story around here a few years ago about an entrepenuer who wanted to rent some slums. The buildings were seriously under code. They were not good places to live. But the people who wanted to rent them knew that. There was some good evidence that they were not retarded or so uneducated that they thought they were getting standard housing. However, since he was willing to rent them for 1/10th the rate that other housing went for, he had lots of takers. The government shut him down and kicked everyone out.
I understand the policies about safe housing. As I’ve said before, I’m not in favor of gutting all regulations. But I think it is important that we examine all of the costs of our regulations. And perhaps that we alow exceptions in certain very rare cases.
From the tax foundation cite again.
Ok, this is the crux of the situation. When liberals complain that the tax cuts favor the rich (which they do) they tend to ignore that the rich pay more (of the taxes in question). If we were talking about cutting sales taxes it would be different. Unfortunately, liberals seem to be so adamantly opposed to tax cuts of any kind that they can’t offer this simple solution. How many liberals have been saying, “No we should not cut the federal income tax rate. We should cut the state sales and property tax rates.” What they have been saying is that the Bush tax cuts amount to distributin wealth from the poor to the wealthy. To my mind this is just as dishonest as the conservatives saying that they want to cut taxes to benifit the economy in general. Your both talking different words out of each sides of your mouth to different constituencies.
I think you misunderstood my point. Yes, the purpose of bonds is to allow people to make money, but the idea is to have hundreds of small investors buying bonds in order to raise the funds. The idea is not to have several huge investors shovel huge sums of money into them in order to avoid paying taxes on it. As I said, through interest and loss of tax revenue, the city, or government actually loses money. If everyone did what those people are doing, the system would collapse quickly.
For the average, small-time bond buyer (like myself, actually) the amount invested in bonds doesn’t make an appreciable difference come tax time in how much is paid out by the purchaser. It may be a small deduction, but it doesn’t necessarily put them in a lower bracket, or represent a huge savings in how much they pay to the IRS. What the huge investors are doing is “hiding” money on which they would have to pay taxes in order to avoid doing so.
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Exactly my point. If John Moneybags hears that the city is about to offer bonds to, say, build a bridge, he and several of his wealthy cronies could ostensibly buy up all of the bonds, leaving the small investor out of the picture. And, again, the idea behind bonds is to have hundreds, if not thousands, of people investing small amounts, rather than a few investors stashing massive amounts of cash in order to avoid the taxman.
Yes, I know this. But if having the bonds means that the city loses tax revenue as well as paying out interest, where does the city profit? As I said before, if everyone did this, the bond system wouldn’t work.
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Some would argue that a couple of hundred lives out of the total number of car buyers is nominal.
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Well, remember these are 1960s and 1970s dollars. Multi-million dollar lawsuits weren’t as popular as they are today.
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Remember that Lee Iacoca was firm in keeping the cost of the car under $2000. In his opinion, the $11 cost couldn’t be passed on to the consumer.
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Perhaps this is a betterarticle. It was written in 1977, and by then,
Continuing with what I said before about Iacoca:
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Thecourt in Grimshaw v. Ford Motor Co. disagrees with your opinion.
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Are the 50,000 people being killed by a faulty product, or by accidents involving other drivers?
It’s my opinion that a company has the obligation to ensure that it’s product will operate safely during its intended use. A company is ethically in the wrong if they know their product can cause injury or death to the unsuspecting consumer who is using it properly.
For example, the makers of a lawn mower have an obligation to ensure the blade will not suddenly fly off, possibly decapitating someone. (They do not have any obligation to ensure the safety of an idiot who sticks his hand into the undercarriage while the mower is in operation, because he is clearly warned not to do so.)
If the manufacturer cannot ensure that the blade will not spontaneously fly off, then they should not sell the product. If the bolt which will keep the blade in place adds $100 to the cost, then that’s the problem of the manufacturer. If they cannot figure out how to make their product safely within the cost limits, then apparently, they’re going to have to start from scratch and re-design. If they cannot do so, then they’re in a heap of trouble, but they should not endanger the consumer because of their mistakes.
To foist the product off on the unsuspecting consumer, and coldly determine that paying off the lawsuits will be cheaper than fixing the problem is just plain wrong, in my opinion. It shows “gross indifference”, and, as the court said, “concious disregard” for human life.
And it’s never a matter of just one life, or even just ten lives. If a product is inherently dangerous, it’s impossible to put an exact number on how many people will be injured or killed by it.
You said this before and repeated it again twice in this last post. Can you defend it or is it simply anassertion?
But this is entirely in the hand of the issueing government. If they offer $100,000 in tax free bonds, they know up front that they will be offering to remove $100,000 from the tax base as well as promising to return that money plus interest. They only lose money if they offer more bonds than they have tax base. Who buys the bonds makes not difference. Unless you are saying that poor people over report their income as a class.
As I indicated this is impossible since the amount available in bonds is not infinite.
Well, they make a profit by having use of the funds now instead of having to save them up. It has to do with the time value of money. $10 right now may be worth more to me than $100 2 months from now. Therefore, I may be willing to go get a loan and be willing to pay it back with interest. Municipal bonds are simply a way for a city to borrow money.
Yes. So their numbers propbaly were not made up out of whole cloth. They were probably based on the idea that only certain people would drive Pintos. When suing for wrongful death the courts sometimes calcualte a lifetime earnings. This is used to place a value on the suit (not exactly to place a value on the life). However, this analysis was shown later to be in error. All I meant was that they should have looked at the numbers more critically.
Yes.
So, rear ending pintos is their intended use?
Quite so. But that is not the end of the discussion on economic considerations. From you own cite:
So some times the court has ruled that cost analysis are appropriate. I would argue that the case law regarding this is relatively recent. The courts have not settled one way or another. Nor have they settled on a good way to judge on analysis from another. If the Pinto case occured at the begining of this debate, it would not be surprising to ultimately decide that Ford was in error, and that the court was overly punitive.
I am not saying that everything that Ford did was correct. I am simply saying that looking at the economics of teh proposed safety changes was not in and of itself wrong. I agree that it was wrong to avoid the $11 dollar change. But of course, we have hind sight on our side.
I should point out that I agree with the bulk of your position concerning liability. If a company sells a lawn mower, it should sell lawn mowers, not human quisenarts. However, they should not be responsible for people hurt using their product as fencing tools.
Re: Bill Gates. Read the book “Hackers.” The record is very clear: Gates was not a genius programmer or anything close to it, though he was quite good. When he started in computers he had come up with a condensed version of BASIC to be used for the very limited computing power of the 8088 chips then used in personal computers. He just happened to be one of the people IBM approached by IBM when they were looking for an operating system for their entry in the home computing marketplace. He turned them down at first, recommending that they go to CP/M. the folks who owned CP/M weren’t willing to deal on IBM’s terms, and in those days, that was the only way to deal with IBM. Gates’ genius consisted in realizing how beneficial it would be to be the one who created the operating system for IBM, so he created DOS, which was pretty much a direct steal of CP/M and got the IBM contract.
Later, he created Windows, which was pretty much a direct steal of the MacIntosh OS.
Gates is a brilliant example of the “Winner Take All” syndrome, because the home computer revolution was created by a lot of different people, many of whom have done well, some of whom have done badly, but it can reasonably be argued that Gates has been rewarded far, far, FAR beyond his personal “contribution” to the personal computer industry, and that a lot of greedy dogs with moderate computing know-how could have made the exact same “contribution.”
Why Gates and not another? I would say he was in the right place at the right time, but that if it hadn’t been him, it would have been someone else.
But if someone uses the product the way it was intended and it still has a high risk of causing serious injury, do you honestly believe the manufactorer is NOT responsible?
