Matt Yglesias: Creating Jobs by Cutting Wages

[sugarkang]

@Slate.

The depressing truth is that the easiest way to bring good, high-paying manufacturing jobs back to America is to make them less good and less well-paying.

Well that's gotta sting.

How do we shoehorn this into the progressive narrative? Matt's freedom of expression at ThinkProgress was compromised by the corporate shackles of Slate?

[miceelf]

Originally Posted by sugarkang

@Slate.



Well that's gotta sting.

How do we shoehorn this into the progressive narrative? Matt's freedom of expression at ThinkProgress was compromised by the corporate shackles of Slate?

I didn;t take him to be endorsing this as a solution, merely expanding the definition of the problem.

Wages are kind of a collective action/free rider problem. Most companies depend on some kind of middle class consumer base for their profitability. But each individual company also profits most by paying its workers lower than middle class wages. So a company will be most profitable when it pays its workers low wages and most other companies don't. It's a classic example of free riderism. Simply increasing the number of jobs that don't support the middle class isn't at all a solution to this problem.

[jimM47]

Originally Posted by miceelf

Wages are kind of a collective action/free rider problem. Most companies depend on some kind of middle class consumer base for their profitability. But each individual company also profits most by paying its workers lower than middle class wages. So a company will be most profitable when it pays its workers low wages and most other companies don't. It's a classic example of free riderism. Simply increasing the number of jobs that don't support the middle class isn't at all a solution to this problem.

I think that rests on at least two fallacies. First, firms in a particular economic environment may depend on a middle-class consumer base, but firms do not inherently depend on the middle-class. Second, firms are most profitable when they maximize the difference between the cost of their (labor) inputs and the product of those inputs; that can mean that the greatest profits come from very highly paid workers. The incentive of firms are not to pay wages that are lower than middle class earnings, but to pay wages that are the minimum amount higher than the next-most-productive use of their employees' labor.

The story you are telling appears to be one in which middle-class laborers across all sectors are taking home large amounts of rents (payments not needed to induce them to provide their labor for its current use) extracted from employers, without which the middle class would be unable to afford anything like its current basket of consumption goods; and if employers were able to stop those rents from being extracted, then producers of that current basket of goods would cease to be viable.

But I see no evidence whatsoever for that theory, which, at best, holds true only for limited number of sectors mostly corresponding to those with high unionization. I think the reality is that middle class laborers do the lion's share of consumption and investing in this country because they also hold the lion's share of valued productive resources (their labor and their human capital therein) that exists in the economy. Their wages and spending power are not the result of what they have been given, but the result of what they have the power to demand.

It is perfectly easy to imagine an economy (or several thousand years of economies) in which ordinary laborers do not hold the lion's share of valued productive resources — because the resources that command the greatest returns are agricultural lands, or slaves, or monopoly rents or other things held by a small aristocratic minority. Such an economy can hum along quite nicely, producing good returns for firms that produce consumable goods. But the basket of goods that they produce will be the goods that the aristocratic minority wants to purchase, not the goods that laborers want.

Now, it has become reflexive for some to say that you can't have stable consumption based on rich people, because rich people don't spend all of their money the way middle class people do, and so that money doesn't go back into the cycle of production and consumption the way it should. But that overlooks two things. First, consumption is not the sole form of economic transaction — the money that rich people don't consume is either spent on capital goods or is lent out to others who either consume it themselves or invest it in capital goods, all of which cause the money earned by the rich people to continue to cause the full employment of productive resources.

Second, it is by no means inevitable that the rich won't consume all their income — rich people now invest large amounts of money because there are good investments to be had, but history shows us lots of examples of times when there weren't great investment opportunities and rich people just lived extravagant lives, and what they didn't consume themselves was lent to other (over-mortgaged) aristocrats who consumed beyond their means.

I know I must get a bit tedious always railing against the Henry Ford fallacy on these boards, but I think it is really important to stress that capitalism is mostly indifferent to the distribution of wealth, and the distribution of capacity to take future returns, that exists in the society at large. Capitalism won't collapse, eat itself or correct itself, before it produces what we might, for other reasons, regard as highly undesirable distributive outcomes. Which is to say, there are interventions we can make that will produce these outcomes and the system won't cry foul.

[miceelf]

Originally Posted by jimM47

IThe story you are telling appears to be one in which middle-class laborers across all sectors are taking home large amounts of rents (payments not needed to induce them to provide their labor for its current use) extracted from employers, without which the middle class would be unable to afford anything like its current basket of consumption goods; and if employers were able to stop those rents from being extracted, then producers of that current basket of goods would cease to be viable.

But I see no evidence whatsoever for that theory, which, at best, holds true only for limited number of sectors mostly corresponding to those with high unionization. I think the reality is that middle class laborers do the lion's share of consumption and investing in this country because they also hold the lion's share of valued productive resources (their labor and their human capital therein) that exists in the economy. Their wages and spending power are not the result of what they have been given, but the result of what they have the power to demand.

I am failing to see the distinction you are making. My point is not that most workers have historically been gettings rents which are now being exposed as corrupt. It is that the balance of power has shifted so that workers have now less power to demand recompense for their labor than they did before. I agree with you that capitalism is indifferent to this, and I hope you didn't take my brief post as a critique of capitalism. I certainly agree that avoiding some horrific outcomes isn't inherently anti-capitalist.

Rather, I am critical of a legal framework that has given corporations all of the rights of personhood and none of the responsibilities, along with an entire political party that believes, contra you, that the way to create jobs is to simply shower corporations and the few wealthy individuals who head them with more wealth; that wealthy people create jobs naturally out of their excess wealth and the virtue that this wealth reflects, rather than that jobs are created from demand for goods and services and a populace living hand to mouth is in a less likely position to demand goods and services (or for that matter, to bargain for fair value for labor).

[jimM47]

Originally Posted by miceelf

My point is . . . that the balance of power has shifted so that workers have now less power to demand recompense for their labor than they did before. I agree with you that capitalism is indifferent to this . . .

It appeared to me that you were saying something different than this when you analogized the wages paid to middle class workers by the producers of middle class consumer goods to a free-rider problem. My point is that there is no free rider problem: if power shifts so that workers have the power to demand less recompense, and members of a higher social class can demand more, then producers of goods aren't stuck hoping middle class consumption was higher but stopped from using wage increases to make it so by a free-rider problem, they will just make products demanded by the higher class.

Rather, I am critical of a . . . [belief] that the way to create jobs is to simply shower corporations and the few wealthy individuals who head them with more wealth; that wealthy people create jobs naturally out of their excess wealth and the virtue that this wealth reflects, rather than that jobs are created from demand for goods and services and a populace living hand to mouth is in a less likely position to demand goods and services (or for that matter, to bargain for fair value for labor).

It seems like there are two distinct criticisms you may be making there. One is that economic growth isn't the result of giving the most productive economic actors better end-results in terms of wealth and money, it is the result of giving them better incentives and opportunities for finding profits. So doling out tax benefits in order to reduce the tax burden of a major company and increase its total revenue, will not predictably create jobs or growth. I, of course, agree with such a criticism.

But I do disagree with the other criticism you seem to be making, which is that the capacity of a particular segment of the population to consume is a necessary condition for the economy to run well. As long as your monetary/banking structure is working correctly, supply creates it's own demand. Even if it isn't laborers, someone is getting the return from production; and no one ever produces anything for nothing, they will demand things in return for that production (even if it is "excess wealth"). A populace living hand to mouth is bad for other reasons, but not because a society in which this occurs is incapable of sustaining full demand for goods and services; it is capable.

* * *

Now, I am also somewhat skeptical of the idea that the relative economic power of middle class has been, or is being, much eroded. (It has recently fallen in absolute terms, but so has the power of all classes, the rich moreso.) But if it is, a significant part of the solution is for members of the middle class to engage in less consumption and more investment, such that they capture some of the purportedly disproportionate gains that have accrued to capital over labor, but also such that they increase the relative scarcity (and therefore power) of labor.

Part of making that happen is to pull back on government interventions that are either aimed at, or had the effect of, increasing current consumption by the middle class at the expense of savings/investment. Such interventions chiefly include our failed housing policies and our misregulation of the financial sector, but they also include stimulus measures and proposed inflationary policy.

[miceelf]

Originally Posted by jimM47

But I do disagree with the other criticism you seem to be making, which is that the capacity of a particular segment of the population to consume is a necessary condition for the economy to run well.

I guess this is probably the heart of it. I think of the middle class as the majority of people, not a niche group.

Originally Posted by jimM47

But if it is, a significant part of the solution is for members of the middle class to engage in less consumption and more investment, such that they capture some of the purportedly disproportionate gains that have accrued to capital over labor, but also such that they increase the relative scarcity (and therefore power) of labor.

How, exactly does someone downsized into a minimum wage job, or into a part-time "consultant" job so that their employer doesn't have to pay benefits rustle up the capital to invest? I would certainly grant that such a person is going to consume less, but not clear on where the money is going to come from. Perhaps I am being too literal, but I dont see how this works in practical terms.

[jimM47]

Originally Posted by miceelf

I guess this is probably the heart of it. I think of the middle class as the majority of people, not a niche group.

I'm skeptical that the heart of it. Nothing in my post was meant to imply that the middle class is a niche group and not the majority of people. The point is that whatever is your economy's current pattern of consumption, there is nothing inviolable about it. Even a shift that affects the consumption patterns of the vast majority of current consumers, while it will have transitional costs, can support an altered and viable pattern of consumption. To repeat, I think it is undesirable for (mostly) non-economic reasons to see a drop in the economic power of the middle class diminish, my point is that the economy as a whole doesn't enforce that normative preference: it isn't going to resist such a shift or collapse as a result of it.

How, exactly does someone downsized into a minimum wage job, or into a part-time "consultant" job so that their employer doesn't have to pay benefits rustle up the capital to invest? I would certainly grant that such a person is going to consume less, but not clear on where the money is going to come from. Perhaps I am being too literal, but I dont see how this works in practical terms.

The circumstances that present any given individual are certainly going to determine whether it is wise or foolish for them to have any configuration of consumption, savings and investment. Your hypothetical individual might rationally do best to have a negative savings rate, and consume more than 100% of his income. Of course it might be good if the incentives facing him were such that his savings rate would be less negative than it might otherwise be.

(Indeed, much of what we are talking about in terms of shifting the consumption-investment balance among the middle class is having savings rates that are less negative, particularly in the form of restoring equity to houses that were revealed to be underwater when the housing bubble burst.)

It is also the case that if, as stipulated, the issue we are facing is that owners of capital can demand higher than socially desirable rates of return because the supply is too scarce relative to the supply of labor, then inducing the middle class, in the aggregate, to engage in higher rates of investment will have both direct effects for individuals who will reap returns on those investments, but also indirect effects for all laborers, whether they make investments themselves, whose labor will be able to demand a greater share of returns as greater amounts of capital chase the same amount of labor.

[sugarkang]

Originally Posted by jimM47

I think the reality is that middle class laborers do the lion's share of consumption and investing in this country because they also hold the lion's share of valued productive resources (their labor and their human capital therein) that exists in the economy. Their wages and spending power are not the result of what they have been given, but the result of what they have the power to demand.

Originally Posted by miceelf

My point is not that most workers have historically been gettings rents which are now being exposed as corrupt. It is that the balance of power has shifted so that workers have now less power to demand recompense for their labor than they did before.

I believe I've found the source of contention. Mice, your beef seems to be with globalization. Companies ship jobs overseas because it's cheaper to produce, and that pushes down wages domestically. You seem to believe that if Labor had more bargaining power, they'd get a bigger "fairer" wage. Possibly; that's the purpose of unions. But this only works for the short term. For example, you might get the current corporation in your hometown to dole out higher wages because the cost of them to move out of state would be more expensive than staying in-state. But any potential new corporations, aka new jobs, will not come to your state because of the new union presence. High unionization in Michigan meant all the car factories moved out. This is not a matter of opinion. This is plain fact. I'm sure I've mentioned labor arbitrage many times before on this board, but the left seems ever resistant to acknowledge this reality.

This is also the source of Elizabeth Warren's idea that the middle class has been squeezed and pushed and whatever else she says has been done to them. But this brutality of capitalism is what allows more goods and services to be produced by lowering its cost. This high productivity is what allows everyone to have a cell phone in 2011 while only drug dealers had them in the 1980s. But the very ubiquity of increased standard of living gives the impression that one is not special. If anything modern day Progressives are upset with capitalism because it's achieved the promise of socialism -- it provides everyone with the basic necessities of life.

See:
Louis C.K. on everything's amazing and nobody's happy.
America's bottom 20% richer than the rest of the world's 80%.

[miceelf]

Originally Posted by sugarkang

IBut this brutality of capitalism is what allows more goods and services to be produced by lowering its cost. This high productivity is what allows everyone to have a cell phone in 2011 while only drug dealers had them in the 1980s. But the very ubiquity of increased standard of living gives the impression that one is not special.

??? Do you really think the ubiquity of cell phones is at all a compensation for the fact that families used to be able to survive on the income of one wage earner, and now cannot?

[badhatharry]

Originally Posted by miceelf

??? Do you really think the ubiquity of cell phones is at all a compensation for the fact that families used to be able to survive on the income of one wage earner, and now cannot?

Families haven't been able to survive on the income of one wage earner (or haven't thought they could) for at least thirty years and that was largely due to women entering the workforce in large numbers.

[handle]

Originally Posted by badhatharry

Families haven't been able to survive on the income of one wage earner (or haven't thought they could) for at least thirty years and that was largely due to women entering the workforce in large numbers.

Badhat wins the Fox award by throwing her own gender under the bus.
You could at least have tempered it by pointing the remaining fingers on that hand at the gays, blacks, immigrants, and minimum wage teenagers.
I liked the post better before you edited it.

[uncle ebeneezer]

Damn all those shrill feminists and their 83-cents-on-the-(male)-dollar wages!!1!

[handle]

Originally Posted by uncle ebeneezer

Damn all those shrill feminists and their 83-cents-on-the-(male)-dollar wages!!1!

Careful Unc, we are treading dangerously close to getting slapped with a jpeg of Beavis and Butthead.. nobody wants that!

[badhatharry]

Originally Posted by handle

I liked the post better before you edited it.

Thanks, except I realized that it didn't address miceelf's post well enough. However that wouldn't really matter to you since your style is entirely non-sequiter.

Badhat wins the Fox award by throwing her own gender under the bus.
You could at least have tempered it by pointing the remaining fingers on that hand at the gays, blacks, immigrants, and minimum wage teenagers.

How is pointing out a well known sociological phenomenon throwing my gender under the bus?

[handle]

Originally Posted by badhatharry

Thanks, except I realized that it didn't address miceelf's post well enough. However that wouldn't really matter to you since your style is entirely non-sequiter.

Got to hand it to you. You have successfully rephrased and reposted your "I don't get it so it's meaningless" retort. Well played once again.

Originally Posted by badhatharry

How is pointing out a well known sociological phenomenon throwing my gender under the bus?

Perhaps I was expressing my skepticism that it is one in a clever way.
But since you did not read it that way, then I wasn't.
That about right?

[badhatharry]

Originally Posted by handle

Perhaps I was expressing my skepticism that it is one in a clever way.

I would never call you clever.

PS. Why don't you just say what you mean? if you are aware of what that is, of course.

[handle]

Originally Posted by badhatharry

I would never call you clever.

PS. Why don't you just say what you mean? if you are aware of what that is, of course.

Originally Posted by handle

But since you did not read it that way, then I wasn't.
That about right?

C'mon Badhat, you can do this.

Or are you deflecting from the fact you can't defend your assertion that the women's liberation movement played a large role in creating the need for dual incomes?

I'll translate:
You, badhat, pretend not understand, to avoid defending statements.
Like:
1.Meaningless sentences make up progressive narrative.
2.Women working made need for women to work.

[badhatharry]

Originally Posted by handle

Or are you deflecting from the fact you can't defend your assertion that the women's liberation movement played a large role in creating the need for dual incomes?

I can absolutely defend it but you never asked me to. Instead you used some sort of strange thing you describe as cleverness to indict me for saying it. And what's more you insinuated that saying such a thing is horrible beyond belief and essentially throws women under the bus. Liberal kneejerk nonsense, again. I should probably say just kneejerk nonsense and leave the liberal out of it.

Here's what I said:

Families haven't been able to survive on the income of one wage earner (or haven't thought they could) for at least thirty years and that was largely due to women entering the workforce in large numbers.

So apparently, according to you, the increased income that families enjoyed due to women entering the workforce did absolutely nothing to the economy. Families weren't able to buy more things and increase their standard of living which resulted in greater costs to familes in the form of more expensive housing, more cars, more stuff, more education costs because they now had to educate their daughters, more debt obligations, child care, etc. And according to you it is very controversial, almost heretical, to say that over time the standard of living for the average family rose to such an extent that two incomes were needed to sustain it.

But I will admit that my time frame was off. It would probabaly be more accurate to date the dramatic increase of women in the workplace to be around 1960 which would make it fifty years.

[handle]

Originally Posted by badhatharry

I can absolutely defend it but you never asked me to. Instead you used some sort of strange thing you describe as cleverness to indict me for saying it. And what's more you insinuated that saying such a thing is horrible beyond belief and essentially throws women under the bus. Liberal kneejerk nonsense, again. I should probably say just kneejerk nonsense and leave the liberal out of it.

Talk about kneejerk. Not to mention dishonestly paraphrased, but you didn't understand what I was saying, right? BTW the "clever" comment was sarcasm. You are right about my cleverness, I could never think up anything as clever as a JPEG of beavis and butthead. Or Harkin drooling and spitting his vile "nanny state" nonsense. I came across that PM you sent me by mistake recently, cheerleading how fantastic his post was... cleverness in action, to be sure! By whoever made up his stale talking points in the first place, that is.

Originally Posted by badhatharry

So apparently, according to you, the increased income that families enjoyed due to women entering the workforce did absolutely nothing to the economy. Families weren't able to buy more things and increase their standard of living which resulted in greater costs to familes in the form of more expensive housing, more cars, more stuff, more education costs because they now had to educate their daughters, more debt obligations, child care, etc. And according to you it is very controversial, almost heretical, to say that over time the standard of living for the average family rose to such an extent that two incomes were needed to sustain it.

But I will admit that my time frame was off. It would probabaly be more accurate to date the dramatic increase of women in the workplace to be around 1960 which would make it fifty years.

What you said was about survival, not standard of living, but I think women's liberation, as you put it pre-edit, had little to do with SURVIVAL depending on two wage earners. I think most of our economic ills are due to the scrapping and exporting of our manufacturing base, and your finger pointing at social issues are just smoke and mirrors put in your field of vision intended to divert attention long enough to finish the job.

This is all pretty hard to quantify with hard facts IMO. But since you got to make a causal connection between a far right conservative social beef and an economic consequence, then it was pretty clear from the start what the angle was. Defending would, as evidenced by your response, only amount to reiteration.

The real problem I had with your comment is that you seem to be arguing for reversing the trend, and think we ought to turn back the clock on this, hence the bus reference. You would do much better to clarify that aspect of it, but once again your reading comprehension level gets you off the hook as you had no idea what my crazy ramblings were driving at, right?

Before you get all rabidly partisan on me (again), I've said it before and I'll say it again, this was a group effort, all ideological, political, demographic, race, and gender divisions are responsible. But if you want to continue to believe it was the evil, (I paraphrase for effect sometimes) "progressive narrative" at play, I really don't care, 'cause those jobs ain't coming back unless everyone gets thier head out of their ass ASAP, and I'm not holding my breath.

Don't worry, This forum is about to go down the tubes and I probably won't be calling you on your "aw shucks" "Fox and Friends" inspired passive aggression anymore. But keep the links to those JPEGs on your desktop just in case!

[badhatharry]

Originally Posted by handle

The real problem I had with your comment is that you seem to be arguing for reversing the trend, and think we ought to turn back the clock on this, hence the bus reference. You would do much better to clarify that aspect of it, but once again your reading comprehension level gets you off the hook as you had no idea what my crazy ramblings were driving at, right?

Oh good, now we get to hear about your real problem. I didn't mention nor do I advocate reversing the trend. The die is cast. Time marches on. There is no going back. And everything has consequences. You might try reading what I write instead of overlaying your inaccurate assumptions about what I'm saying and reacting to those.

what bus reference????

Before you get all rabidly partisan on me (again), I've said it before and I'll say it again, this was a group effort, all ideological, political, demographic, race, and gender divisions are responsible. But if you want to continue to believe it was the evil, (I paraphrase for effect sometimes) "progressive narrative" at play, I really don't care, 'cause those jobs ain't coming back unless everyone gets thier head out of their ass ASAP, and I'm not holding my breath.

I never mentioned evil.

Don't worry, This forum is about to go down the tubes and I probably won't be calling you on your "aw shucks" "Fox and Friends" inspired passive aggression anymore. But keep the links to those JPEGs on your desktop just in case

You still haven't called me on anything but good for you if you think you have.

[handle]

Originally Posted by badhatharry

Oh good, now we get to hear about your real problem. I didn't mention nor do I advocate reversing the trend. The die is cast. Time marches on. There is no going back. And everything has consequences. You might try reading what I write instead of overlaying your inaccurate assumptions about what I'm saying and reacting to those.

what bus reference????



I never mentioned evil.



You still haven't called me on anything but good for you if you think you have.

Wow.

[handle]

Originally Posted by handle

Wow.

Wait a minute, so you are just here to bitch about stuff you know you can't change, mock things you don't understand, and expect to be taken seriously when you champion the "conservative" point of view?
Once again, wow.

[badhatharry]

Originally Posted by handle

Wow.

no shit

[sugarkang]

Originally Posted by miceelf

??? Do you really think the ubiquity of cell phones is at all a compensation for the fact that families used to be able to survive on the income of one wage earner, and now cannot?

Do you think it's unfair that the bottom 20% of Americans live better lives than the rest of the world's 80%? Yay Americans, fuck everyone else?

[miceelf]

Originally Posted by sugarkang

Do you think it's unfair that the bottom 20% of Americans live better lives than the rest of the world's 80%? Yay Americans, fuck everyone else?

I just don't think the solution is to ensure that the bottom 80% of Americans are dragged down to the level of the most destitute person in the world. Why isn't there concern about the unfairness of how the top 10% of Americans are living, if it's so tragic that the poorest Americans aren't poor enough?

[sugarkang]

Originally Posted by miceelf

I just don't think the solution is to ensure that the bottom 80% of Americans are dragged down to the level of the most destitute person in the world. Why isn't there concern about the unfairness of how the top 10% of Americans are living, if it's so tragic that the poorest Americans aren't poor enough?

I am concerned about it. I've been on record saying that the rich should pay more. I've also said that the left has a fantastical notion that undoing Bush tax cuts would fix everything. Furthermore, I find it deeply troubling that Gallup polls find socialism more popular than capitalism.

Did you get anything out of Capitalism and Freedom?

[miceelf]

Originally Posted by sugarkang

I am concerned about it. I've been on record saying that the rich should pay more. I've also said that the left has a fantastical notion that undoing Bush tax cuts would fix everything. Furthermore, I find it deeply troubling that Gallup polls find socialism more popular than capitalism.

Did you get anything out of Capitalism and Freedom?

Well, people were promised the capitalism would solve all ills and lift all boats, so it's not surprising if some people are mistakenly souring on it. Most serious people recognize that capitalism isn't a guarantee of all goodness and especially without some kind of regulation and effort toward equality of opportunity.

It's been a few years but I remember capitalism and freedom as having some good ideas, but gave short shrift to the degree to which transparency isn't a given without some regulation and in general a little magical thinking about how it would inevitably lead to the best possible outcomes without effort toward the outcomes that most serious conservatives acknowledge are orthogonal to capitalism. Of course, I was reading it through the prism of the mid Bush years which was when I read it, so I was not in an overly generous mood.

And, yes, you've said that the rich should pay more and that it's not a panacea. But "the rich should pay more" is a little different than "the rich should be satisfied as long as they're better off than the poor in bangladesh" which seemed to be where you were headed with regard to the bottom of the American economic pile. If we were to tax the rich to the level at which you were arguing Americans should be satisfied, we would indeed be pretty close to solving the deficit problem. But neither of us is actually proposing that.

[sugarkang]

Originally Posted by miceelf

Well, people were promised the capitalism would solve all ills and lift all boats, so it's not surprising if some people are mistakenly souring on it. Most serious people recognize that capitalism isn't a guarantee of all goodness and especially without some kind of regulation and effort toward equality of opportunity.

It's been a few years but I remember capitalism and freedom as having some good ideas, but gave short shrift to the degree to which transparency isn't a given without some regulation and in general a little magical thinking about how it would inevitably lead to the best possible outcomes without effort toward the outcomes that most serious conservatives acknowledge are orthogonal to capitalism. Of course, I was reading it through the prism of the mid Bush years which was when I read it, so I was not in an overly generous mood.

You can be completely hostile to the book; that's perfectly fine. I just find it hard to believe that you could say the above after having read it. While I didn't read that specific book, I did read the simplified version published afterward.

And, yes, you've said that the rich should pay more and that it's not a panacea. But "the rich should pay more" is a little different than "the rich should be satisfied as long as they're better off than the poor in bangladesh" which seemed to be where you were headed with regard to the bottom of the American economic pile. If we were to tax the rich to the level at which you were arguing Americans should be satisfied, we would indeed be pretty close to solving the deficit problem. But neither of us is actually proposing that.

I think you meant the poor should be satisfied? No, I wouldn't tell the poor how to feel about their economic situation. I made a factual assertion, not a normative one. It is a fact that our bottom 20% are better off than the rest of the world's 80%. So, if birth into the world is pure chance, there's an 80% likelihood that your life would be worse than America's poorest, e.g., perpetual war, disease, starvation, manual labor, lack of clean water, plumbing, electricity, etc.

[miceelf]

Originally Posted by sugarkang

I think you meant the poor should be satisfied? No, I wouldn't tell the poor how to feel about their economic situation. I made a factual assertion, not a normative one. It is a fact that our bottom 20% are better off than the rest of the world's 80%. So, if birth into the world is pure chance, there's an 80% likelihood that your life would be worse than America's poorest, e.g., perpetual war, disease, starvation, manual labor, lack of clean water, plumbing, electricity, etc.

Sure, although you characterized concern for American poor as kind of a national chauvinism.

But there's a 99.999999999% chance that someone born into the world will be worse than America's well-to-do. I just don't see how a statement about how good it is to be poor in America can be disentangled from how good it is to be rich in America.

[sugarkang]

Originally Posted by miceelf

Sure, although you characterized concern for American poor as kind of a national chauvinism.

But there's a 99.999999999% chance that someone born into the world will be worse than America's well-to-do. I just don't see how a statement about how good it is to be poor in America can be disentangled from how good it is to be rich in America.

You see an obligation for the rich to equalize outcomes. That's not something I believe in some moral sense. I think the rich should pay because they're threatening the future of capitalism entirely if conditions get worse. In other words, we believe in higher taxes for the rich for completely different reasons.

I'm saying the American way of life has afforded our bottom 20% better outcomes than the rest of the world's 80%.

Originally Posted by miceelf

It's either out of bounds to use the CBO or it isn't. I take it from the above you think it is out of bounds.

You can make reasonable predictions about who might win the World Series next year. You can't possibly do that for the year 2035. (Yankees)

[TwinSwords]

Originally Posted by sugarkang

I'm saying the American way of life has afforded our bottom 20% better outcomes than the rest of the world's 80%.

Yep. Thanks to the American left, which your kind have been violently opposing since, oh, about the first decade of the 20th century. We've done a lot of good, while you're determined to roll back the clock and restore the "natural capitalist order."

[sugarkang]

Originally Posted by TwinSwords

Yep. Thanks to the American left, which your kind have been violently opposing since, oh, about the first decade of the 20th century. We've done a lot of good, while you're determined to roll back the clock and restore the "natural capitalist order."

Ahh. How quickly we regress to the ad hominem. I'm always willing to have substantive conversations with people. I don't know why people don't want to have them with me.

[TwinSwords]

Originally Posted by sugarkang

Ahh. How quickly we regress to the ad hominem. I'm always willing to have substantive conversations with people. I don't know why people don't want to have them with me.

I didn't think that was an ad hominem. I thought it was a straightforward description of your libertarian philosophy. Or are you a closet socialist, now?

[sugarkang]

Originally Posted by TwinSwords

I didn't think that was an ad hominem. I thought it was a straightforward description of your libertarian philosophy. Or are you a closet socialist, now?

20% / 80%. Let's stay on topic, hmm?

Originally Posted by AemJeff

No, no no! This is ad hominem:

Donuts?

[AemJeff]

Originally Posted by sugarkang

Ahh. How quickly we regress to the ad hominem. I'm always willing to have substantive conversations with people. I don't know why people don't want to have them with me.

No, no no! This is ad hominem:

Your argument is meaningless, because you're incapable of substantively engaging on this or any other topic.

[miceelf]

Originally Posted by sugarkang

You see an obligation for the rich to equalize outcomes.

No, I actually don't. As I said, I just don't see how we can demand that the poor in America be grateful without making a proportionate demand of the wealthy in America.

[stephanie]

Originally Posted by miceelf

No, I actually don't.

I was rather wondering where that strange claim came from.

[sugarkang]

Originally Posted by miceelf

No, I actually don't. As I said, I just don't see how we can demand that the poor in America be grateful without making a proportionate demand of the wealthy in America.

I see. My word choice was poor. I should've said that you want to move towards less inequality through redistribution and it looks like you've confirmed that. If you'll recall, we've had this conversation months ago and it was a long one. The conclusion was the same as it is now: let Bush cuts expire. Absolutely.

Then what? And what if that doesn't work? Increase taxes again? Then what? I really want to know what's the alternative plan.

[miceelf]

Originally Posted by sugarkang

I see. My word choice was poor. I should've said that you want to move towards less inequality through redistribution and it looks like you've confirmed that. If you'll recall, we've had this conversation months ago and it was a long one. The conclusion was the same as it is now: let Bush cuts expire. Absolutely.

Then what? And what if that doesn't work? Increase taxes again? Then what? I really want to know what's the alternative plan.

HOnestly, for me, let tax cuts expire. First for the top, then for everyone else in a year. Close the capital gains loophole. Then if there's still structural deficit problems, we figure out what to cut.

[TwinSwords]

Originally Posted by miceelf

HOnestly, for me, let tax cuts expire. First for the top, then for everyone else in a year. Close the capital gains loophole. Then if there's still structural deficit problems, we figure out what to cut.

Yeah, I agree. Plus some drastic cuts to the military, and we could be running surpluses.

I think we all know we do have a long term problem with Medicare; something has to be done to fix that problem. But, as sugarkang pointed out, simply letting the Bush tax cuts carries us at least through 2035. Maybe over the course of the next 4, 8, or 12 years we'll be able to advance the national conversation about the best remedy for skyrocketing health care costs, helping us to agree on a better solution. I'm not an expert on health care policy, but my impression is that the best way to control costs would be with single payer. If we could ever neutralize influence of the tea party and corporate dominance of our political system, we might be able to elect enough reality-based representatives to fix the problem in a way that doesn't, like the Ryan Plan, sacrifice millions of lives on the altar of libertarianism.

We're the richest and most technologically advanced nation on earth. We can figure out a way to take care of our people in their old age. It's just a question of willingness. The problem isn't that we can't; it's that we have a radical faction of far right extremists who don't want us to: they're the people Ron Paul whipped into a frenzy by championing the death of the uninsured. As long as people of that (lacking) moral character dominate our politics, we won't be able to solve these problems.