The Economics Thread

[The Ozzman]

Bake sales!

OM NOM NOM

 

[Cythraul]

I'm having a hard time imagining what kind of legitimate arguments would go to support it, aside from something along the lines of increasing actual tax revenue by decreasing tax fraud. From a utilitarian perspective, it should be clear that because of how much disposable income rich people have, paying a higher percentage of taxes is of negligible harm to them compared to the benefit of giving many more poorer people financial breathing room.

Even if it's of only negligible harm to them, it doesn't follow that it's of only negligible harm to economic growth in the long run (something everyone should care about, rich or poor). The more you punish somebody for making over a certain amount of money, the more you disincentivize risk and new investment. After all, it's not as if all the rich people are just hoarding their money or blowing it all on caviar and Rolls Royces. And anyway, seizing somebody's property so bureaucrats can pass it around in the name of "helping" others is of questionable morality at best, but that's a whole other can of worms.

 

[The Ozzman]

The more you punish somebody for making over a certain amount of money, the more you disincentivize risk and new investment. After all, it's not as if all the rich people are just hoarding their money or blowing it all on caviar and Rolls Royces. And anyway, seizing somebody's property so bureaucrats can pass it around in the name of "helping" others is of questionable morality at best, but that's a whole other can of worms.

We need to have a beer sometime

 

[Cythraul]

How do you propose the government to have revenue to pay for things like public works systems and public safety personnel?

There's all kinds of literature on how such a society could work out. You can probably find a lot of it at the Mises Institute.

 

[The Ozzman]

There's all kinds of literature on how such a society could work out. You can probably find a lot of it at the Mises Institute.

I'm working on A Case Against the Fed right now though

 

[Cythraul]

We need to have a beer sometime

I agree.

I'm working on A Case Against the Fed right now though

Awesome. Rothbard is a really clear writer and that book taught me a lot about the nature of central banking. Rothbard is actually one of the central figures in the rise of the modern libertarian movement. He wrote a lot of influential stuff.

 

[zabu of nΩd]

Even if it's of only negligible harm to them, it doesn't follow that it's of only negligible harm to economic growth in the long run (something everyone should care about, rich or poor). The more you punish somebody for making over a certain amount of money, the more you disincentivize risk and new investment. After all, it's not as if all the rich people are just hoarding their money or blowing it all on caviar and Rolls Royces. And anyway, seizing somebody's property so bureaucrats can pass it around in the name of "helping" others is of questionable morality at best, but that's a whole other can of worms.

It also doesn't follow that giving a small handful of people an astronomical sum of money will stimulate economic growth as much as (or more than) than giving financial leeway to a huge number of people so they can open small businesses and start garage projects, but I gotta head out right now, so I'll have to leave you with that for now.

 

[The Ozzman]

I agree.



Awesome. Rothbard is a really clear writer and that book taught me a lot about the nature of central banking. Rothbard is actually one of the central figures in the rise of the modern libertarian movement. He wrote a lot of influential stuff.

I am actually impressed how clear and concise the writing is in that particular book (essay??). It's a very easy read. When I read some Friedman, it was a chore to get through because of how he worded things.

 

[Cythraul]

It also doesn't follow that giving a small handful of people an astronomical sum of money will stimulate economic growth as much as (or more than) than giving financial leeway to a huge number of people so they can open small businesses and start garage projects, but I gotta head out right now, so I'll have to leave you with that for now.

I'm not sure I understand your objection. First of all, what does "financial leeway" mean? Second of all, how is this not more inefficient than simply letting people put their money where they want to put it? After all, we gotta pay the bureaucrats who are supposed to seize the money and, in all their altruistic glory, give it to others.

And I have a bone to pick with your use of language here. You speak of "giving a small handful of people an astronomical sum of money." What an egregious affront to our sense of cosmic justice! Who exactly is "giving" some small handful of people an astronomical sum of money? Consumers, perhaps? Your language is suggestive but perhaps misleading. People are making voluntary exchanges of money and goods. Typically, the people who are "given" astronomical sums of money are the ones who offer more bang for your buck (a good thing for everybody). There is of course a different sort of giving; it involves forcibly seizing money and giving it to others. That's a lot different than the way people are "given" money in a system of free and voluntary exchange.

 

[zabu of nΩd]

I'm not sure I understand your objection. First of all, what does "financial leeway" mean?

By that I mean enough disposable income to take business risks and make investments of the kind you referred to earlier. You seem to think it's perfectly fine that nearly all of the disposable money in a society pool up at the top of the economic food chain, which makes very little sense in my opinion. People with great ideas only account for a fraction of those who are filthy rich, and god only knows how many people of comparable talent among the middle and lower classes could do just as much good for our society if they had at least a modest budget for personal projects and business endeavors.

Second of all, how is this not more inefficient than simply letting people put their money where they want to put it? After all, we gotta pay the bureaucrats who are supposed to seize the money and, in all their altruistic glory, give it to others.

I freely admit that there is inefficiency in maintaining a group of tax collectors and enforcers. That's a small price to pay for ensuring that more than a tiny fraction of society is able to live comfortably and have the opportunity to rise above the harsh necessity of making ends meet.

And I have a bone to pick with your use of language here. You speak of "giving a small handful of people an astronomical sum of money." What an egregious affront to our sense of cosmic justice! Who exactly is "giving" some small handful of people an astronomical sum of money? Consumers, perhaps? Your language is suggestive but perhaps misleading. People are making voluntary exchanges of money and goods. Typically, the people who are "given" astronomical sums of money are the ones who offer more bang for your buck (a good thing for everybody). There is of course a different sort of giving; it involves forcibly seizing money and giving it to others. That's a lot different than the way people are "given" money in a system of free and voluntary exchange.

Sorry, bad word choice. Try "allowing" instead.

Anyway, I think you're way off the mark when you say that people who are filthy rich typically offer more bang for your buck. What about people who get rich merely by having claims to oil fields and mineral deposits, or - even worse - through inheritance? I'm pretty sure that geniuses and innovators do not make up the majority of the super-rich.

 

[The Ozzman]

I'm curious to see if this argument ends up going towards talking about the supposed 'robber barons (read: productive geniuses) and their impact on our lives.

 

[zabu of nΩd]

I'm curious to see if your mouth ends up going towards my dick, and the impact my spooge will have on your face.

Oh wait, that was last night.

 

[The Ozzman]

I'm curious to see if your mouth ends up going towards my dick, and the impact my spooge will have on your face.

Oh wait, that was last night.

Dude, it's only when I drink. Stop sharing it with people.

 

[Dak]

I think the people participating itt all need to sit down over beers. Except Ozzman. NOBEERFORJOO

 

[cookiecutter]

I'm not sure I understand your objection. First of all, what does "financial leeway" mean? Second of all, how is this not more inefficient than simply letting people put their money where they want to put it? After all, we gotta pay the bureaucrats who are supposed to seize the money and, in all their altruistic glory, give it to others.

And I have a bone to pick with your use of language here. You speak of "giving a small handful of people an astronomical sum of money." What an egregious affront to our sense of cosmic justice! Who exactly is "giving" some small handful of people an astronomical sum of money? Consumers, perhaps? Your language is suggestive but perhaps misleading. People are making voluntary exchanges of money and goods. Typically, the people who are "given" astronomical sums of money are the ones who offer more bang for your buck (a good thing for everybody). There is of course a different sort of giving; it involves forcibly seizing money and giving it to others. That's a lot different than the way people are "given" money in a system of free and voluntary exchange.

I think a good argument against this is that you need money to make money. This means without any type of equalization, rich people will keep getting richer while those without money will continue to get poorer. There would be no social mobility. I'm sure plenty of rich people got there through talent and ability, but I'm also sure that there are plenty of poorer people with that same talent and ability who can't afford to invest or can't afford to go to college and therefore can never achieve what they possibly could.

 

[The Ozzman]

I think the people participating itt all need to sit down over beers. Except Ozzman. NOBEERFORJOO

Pfft, I was drinking last night. I haven't given it up entirely LDO

 

[Dak]

I think a good argument against this is that you need money to make money. This means without any type of equalization, rich people will keep getting richer while those without money will continue to get poorer. There would be no social mobility. I'm sure plenty of rich people got there through talent and ability, but I'm also sure that there are plenty of poorer people with that same talent and ability who can't afford to invest or can't afford to go to college and therefore can never achieve what they possibly could.

A big problem really is education, and generational "broke thinking". When all you have ever known is being poor, rising out of that is a lot of times difficult just because your former peers either despise you, or try to suck you for handouts.

 

[The Ozzman]

or they are just complacent overall

 

[Dak]

or they are just complacent overall

This too. Plenty of people are just lazy, and are happy as long as they have cable tv and extra beer money.

 

[Meh]

Are you by any chance referring to Japan's practice of dumping consumer electronics? Exactly how is the U.S. consumer "raped" by such practices? The alternative is forcing the U.S. consumer to pay higher prices while stifling innovation and shielding special interests from actual competition.

One of the clearest illustrations of how the Japanese system was set up to take advantage of American openness and its own closed nature is the television war.

For American companies to gain access to Japan, RCA and General Electric were required to license the technology for television to Japanese companies in the early 1950's. The decision was encouraged by the U.S. government as an example of the American commitment to help rebuild its former enemy.

The transfer of the technology provided the U.S. companies with some short-term profits from the licensing agreements. But the leap the transaction gave to the Japanese was priceless.

The Japanese fraud was incredible and involved 80 U.S. distributors including Sears. The kick-back scheme to hide the true cost of the Japanese TV sets from the customs office reads like a James Bond movie - only its true.

http://www.unsustainable.org/index.asp?type=article&contentID=15

They basically did the same thing with the auto industry.

And we can't forget the defense blankets.

We dumped the burden of the most expensive military on the planet on the back of our industry to protect nations like Japan (and Australia from the USSR) who thanked us by back stabbing our industry through dumping, subsidizing, tariffs, quotas, licensing agreements, inspection fees, and bribing our government officials to look the other way. Everything but free trade.

Good for the U.S. consumer, bad for U.S. special interests.

We are paying the tax burden that they avoid.

The problem was not with free trade as such, but rather with England's destructive interventionist policies and its control of Ireland. For years the British government's stranglehold on Ireland's economy and its violation of Irish property rights distorted the economic structure and even led to excessive exploitation of land without regard for consequences. And the British government only exacerbated the potato blight after its onset, ultimately helping to turn a blight into a full-fledged famine. Among other things, heavy taxation for the procurement of wasteful public works projects and welfare programs was not only a drain on the Irish economy but also crowded out private charity. But the British government didn't just crowd out private charity indirectly. In some cases, they actually turned away ships full of food from America. Examples can be multiplied.

The government can muck up tariff's just as easily as they have free trade.

Trade will be controlled by gigabuck corps as long as we have any society.

With laissez-faire, the British didn't intefere with the English controlled export business of Irish grown grains. Large quantities of native-grown wheat, barley, oats and oatmeal sailed out of places such as Limerick and Waterford for England, even though local Irish were dying of starvation.

You're going to have to explain how repeal of protectionist policies is tied to the fact that "by the first World War she could barely feed 1/4 of her population." I'm not familiar with that particular historical episode, but I suspect you're referring to some kind of food shortage around that time. Even if what you say is true as far as that goes, it's hardly an argument that supports protectionism over free trade. I could just as well make similar arguments against protectionism. Look up a little something called 'food riots'.

U-Boats were sinking ships with great regularity Food supply wasn't much of an issue until 1916, the Germans began a submarine campaign and were sinking the merchant ships from the U.S. and Canada with regularity. Come the Battle of Somme (wherein Hitler was also wounded, but that's irreleavnt really) and the food supply was strained.

Since the men were at war, the Women's Land Army came into effect.

How exactly do you mean to tie Japan's protectionism to its relative competitiveness? They make products that people want to buy, simple as that.

Which we're more than capable of manufacturing ourselves.

This is nonsense. The dollar is tanking because of bad monetary policy.

One cause, only. Thanks to the Fed.

So what? Exactly how would taxing imports represent a boon for our economy?

There is no universal agreement about the effect of the tariff. According to the U.S. Statistical Abstract, the effective tariff rate was 13.5% in 1929 and 19.8% in 1933 with 63% of all imports being duty-free. From 1821 through 1900 the United States averaged 29.7% effective tariff rates and peaked in 1830 at 57.3% with only 8% of all imports being duty-free, dwarfing the Smoot-Hawley rate.

I'm not certain on the best implementation of taxation to imports, but surely allowing imports to flood our nation isn't a wise idea either. Especially when they get here free.

First of all, there's nothing sacred about manufacturing jobs. Real growth over time would naturally lead to a decline in manufacturing jobs given that less input is required to produce a given amount of output. This is bad how? But even if I grant that manufacturing is important, the loss of manufacturing jobs has not been accompanied by a comparable loss in manufacturing output. As a matter of fact, it's been accompanied by booms in manufacturing output, which is evidence of growth. Furthermore, much of the loss in manufacturing jobs can be attributed to a slump in U.S. exports and the recession at the turn of the century (something we'd expect to have an effect on employment).

The only people that say the words in italics are people that haven't lived around manufacturing.

Without manufacturing, a country is worthless and is at the mercy of the importers. It's foolish to be a nation of consumers, which is what the globalist free trade elite wish to do. Their active goal is to remove the production dominance from America and "spread the wealth" to give other nations the ability to rise to 1st world status, whilst America becomes a cesspool of socialism.

Oh I see. So if something has the words 'free' and 'trade' in it, then it must be a prime example of free trade, right? NAFTA is hardly a free trade agreement (in fact, it just so happens to contain something like 900 pages of tariff rates if I'm not mistaken). At any rate, the fact that some jobs are destroyed is not inherently detrimental to our economy by any stretch of the imagination. Technology has eliminated millions of jobs in the U.S., but the American worker is no less employable now because of that fact. What a pity that the light bulb was invented, right? After all, think about all the jobs that were lost in the kerosene lamp industry. Give me a break. And anyway, if you look at the bigger picture the average annual rate of unemployment in the U.S. fell steadily from the time of NAFTA's approval until 2001.

No such animal as an even playing field ever has nor ever will exist between nations, pure fiction.

If we look further I am sure we will find all sorts of restrictions on trade in all sorts of places. The ban on American beef in Europe is comparable to the ban on European diesels in the US. Europe doesn't make diesels that are legal for use in the US (despite being cleaner than US Diesels due to better fuel) and the US doesn't grow beef that is fit for consumption in Europe, due mostly to over-use of growth hormones.

You use an example of improvement as a way to legitimize free trade? No one is against improvement. I'm against allowed 3rd world nations dump their products into 1st world nations. Products from China have been recalled over and over again, it's only the isolated incident that the globalists couldn't keep under wraps that actually makes the news. The most recent I believe, drywall.

And yet, NAFTA still fails to benefit anyone except those with self-serving economic and political agendas.

Apparently I was expected to comment here, though I'm really not that well-informed on economics aside from a personal finance class and moderate keepings-up with the recent economic news, so my comments will probably be brief.

The problem with a lot of this stuff is that what's good in theory and what's practical in reality can differ so vastly. Like most people here I'm in favor of free trade, since protectionist bullshit like tariffs and subsidies destroys good industries in disadvantaged countries so that shittier ones can thrive, and has virtually none of the benefits of socialism in that it doesn't really prevent monopolies and trusts from forming.

Keynes came along with his notion that the free marketers of the Adam Smith school were wrong. Von Mises and Von Hayek ran a counter argument that money supply was the cause of an economy's problems.

Decisions...

However, the world has such a long history of protectionist politics that it's become like an addiction that countries have to wean themselves off of. Moreover, as long as there are uncooperative countries out there (i.e. Russia and China), efforts at international free trade agreements are going to be perpetually hobbled until those giant oligarchies loosen their grip on their people and allow a culture of freedom to develop. The problem of free trade is just a mess these days.

lol, freedom... America is free? What?

A number of years ago, Oprah Winfrey had the idea that all most people needed was a chance. She selected a group of welfare mothers and gave them cell phones, paid up credit cards, new, tastefull clothes and some other bennys that should have made them able to pull themselves up and become productive. When she cut them loose, even after some mentoring, they went downhill in a straight line.

I don't really know how one would effectively keep capitol distributed evenly.

I really don't see how it's a big deal for countries to rely on each other for imports. How often is it that a large, independent country that supplies others just cuts another country off, saying "WELL FUCK YOU, YOU CAN JUST STARVE"?

China would do it in a heartbeat.

Corporations did it to coal miners. Globalists and freetrade economists want the people to stay in debt to the company store. Government likes debt as well, because it can keep the people in a strnglehold.

Ever heard of the West Virginia Mine Wars?

A nation that consumes more than it produces is weak.

Free Trade erodes our borders and our national identity.

Familiar with the North American Union, and the Amero?

Obviously the lifting of trade regulations/tariffs/whatever can be used as a weapon on other countries. But that doesn't mean free trade is a bad idea itself, just that it shouldn't be implemented for the wrong reasons. Once it's in place, I think it's safe to say that the world as a whole benefits in the long run.

Free Trade, like Communism are good ideas - on paper. They do not work in practice. They eventually commit suicide.

Until the government stepped in and interfered with the free market, the exploitation of our society's' weakest and most vulnerable was business as usual while factory owners lived like kings.

Ever hear of patent medicines?

Tubercular beef?

Before the government interfered with regulating food and medicine untold numbers of citizens died from companies who intentionally laced medicines with alcohol, cocaine, opium and others sold rancid meat treated to disguise its true condition to maximize profit at the risk of killing its customers. It is said that more U.S. soldiers died from food poisoning than from battle in the Spanish American war due to contaminated meat sold to the government from crooked meat packers - all in the name of free markets and profit at any cost.

'Freetrade' demands a global government to enforce global laws the second that differences come to the rise and somebody "cheats" on somebody else. And then you need to define "cheat".

Some people think that bribes and kick-backs are legitimate business practices.

Some people think that unsafe working conditions are private business matters and government shouldn't interfere in private operation of business.

Some nations inflate their currencies and hoard other currencies - all fair in trade with no barriers.

Some nations link market access to political concessions.

Some nations divert gambling revenues to pay for state controlled R&D to give their advanced technologies an edge over other nations that don't. Is that cheating?

Some nations recognize the right of labor to organize, others don't.

Friedman was a huge proponent of the flat tax.

That's all I got.

http://www.thefreemanonline.org/featured/the-great-depression-according-to-milton-friedman/

This too. Plenty of people are just lazy, and are happy as long as they have cable tv and extra beer money.

'Tis the root of most problems, laziness.

A good plan:

The military of the United States is deployed in more than 150 countries around the world, with more than 369,000 of its 1,379,551 active-duty troops serving outside the United States and its territories.

Bring those troops back home and deploy them on our Mexican border and stop the invasion from that nation.

Next, the Federal government has no Constitutional authority to be in the education business, so eliminate the Department of Education and let the states take care of their own.

Foreign Aid should stop until we pay off the national debt. Eliminate it.

The Department of Homeland Security is a grave threat to our civil liberties and we managed to survive two world wars without it. Eliminate it.

Eliminate Federal funding for the arts, National Public Radio, funds for moving U.S. business overseas.

Eliminate welfare queens. If a woman has a child and wants welfare to pay for the baby, the woman's tubes get tied if she wants welfare. No tubes tied, no benefits.

No medical/social benefits for illegal aliens other than a free ride back south of the border.

Second time they get caught, 1 year on a chain gang fixing roads and picking up litter - then the free ride back south.

And lots more.

But the Federal government does need to get back into the tax business with imports.

And any U.S. official when he/she leaves office cannot go work for a foreign entity for at least 10 years. Slam the door on that bribe racket.

Ronald Reagan should have died in prison for taking a $2 million "speaking tour" to Japan in exchange for thwarting investigations into Japanese trade violations.