Under what circumstances do you think the GOP would allow a tax increase on the wealthy?

I like this position

Another point: I heard John Kerry describing how the Super Committee was recently deadlocked because the GOP wouldn’t allow any tax increases. Kerry implied the Dems were willing to allow cuts to SSN, Medicare, and other “sacred cows” to the liberal base, but the GOP wouldn’t budge.

The might once they have the Oval Office. it is all about not allowing Obama to have any victories.

Getting voted out of office might do it.

@johnpowell I wouldn’t consider that spam. Did you even listen to it? His position makes sense to me: figure out a way to distinguish the wealthy abusers of the system from the job creators and respond appropriately. What’s terrible about that idea?

@syz That’s never going to happen.

The deadlock is actually on raising RATES. I think we could find agreement on closing loopholes and reducing/eliminating subsidies. The Democrats won’t allow any change to the tax code without raising rates and the Republicans won’t allow the rates to increase. If we could focus on where we agree, we might find a solution.

The other stumbling block is spending. Democrats want to increase taxes to fuel more spending while Republicans want spending to decrease. Another impasse.

@Jaxk You know, I’ve been hearing both sides suggesting tax code reform for some time now, yet it never happens. Liberals and conservatives both seem to have solid common ground in this regard. What the hell is the holdup?

I just can’t wrap my head around the spending problem. As mentioned, Kerry implied that the Dems would allow cuts to Medicare, Medicaid, and SSN but there wasn’t compromise on the issue of taxes. That sounds like decreasing spending and increasing revenue to me. What’s the problem there? I know the GOP asserts that raising taxes in a weak economy further weakens the economy, but why won’t they allow any tax increases while they hold the debt and deficit as such large current issues? Waiting for the economy to pick up and increase revenue is a much slower fix, yet the GOP held the debt ceiling hostage over “fiscal responsibility.”

I’m rambling a little, but what I’m saying is one can’t argue we need to fix the debt and deficit NOW, yet then disallow tax increases because they will be better for longer term economic growth.

@cockswain I think a lot of folks miss what is going on with the libertarian and anti-big government conservatives.

They do not like government, at all. If they manage to bankrupt government, they force it to become smaller, without ever voting on reducing things people like. If you cannot win on Medicare, you pass large tax reductions on the wealthy and just wait for the debt to increase to unsustainable levels.

I think moderates are missing that piece of the puzzle.

Republicans only want to decrease spending that benefits poor citizens.

They want to increase military spending, have repeatedly attacked Obama for cutting military spending, and have claimed that military spending creates jobs.

@Qingu So can you imagine a circumstance in which the GOP would allow a tax increase on the wealthy?

Eliminating unemployment, welfare, food stamps, and other subsides to the poor.
Banning abortion.
Banning same-sex relationships.

Until all that happens, I don’t see them budging on taxes.

Sure can’t. They’ve made their non-negotiable stance on the issue abundantly clear for the past 11 years.

It would be easy and true to say that they’re simply bought and corrupt, but of course “Starve the beast” is also a major motivator. But I mean, the Kool-Aid they are drinking is so strong that the typical Republican now believes that tax cuts pay for themselves by stimulating economic growth… unless they are payroll tax cuts that affect poor people, of course. Those tax cuts rob our grandchildren! Our own lovely @Jaxk has argued this point many times.

You see, @Qingu , I’m somewhat of the same opinion, yet tell myself ”I must be missing something, it can’t be that bad” So I asked the question. You see, they think the same thing of liberals, that we’re misguided idiots without an understanding of simple economic theory or facts.

@cockswain You, unfortunately, are pretty close to the truth here. And I think @Judi has it right too.

That’s a problem if you actually believe that. In general, liberals are more educated than conservatives. Conservatives hate that study, but at a minimum we could say they are equally educated as an unsubstantiated compromise (which I think is pretty generous of me). Therefore, just as many liberals as conservatives have studied and understood economics.

My original point was to the fact that it’s sort of hypocritical and small-minded to believe that the other side is far more ignorant than the other, despite the fact that either of us could find plenty of hippies and trailer park idiots to support our respective points.

Except when the other side actually is more ignorant and small-minded.

I can’t stand that reflexive “both sides are equally bad” crap. That is simply not true for the vast majority of disagreements, political or otherwise.

While it’s your right to feel that way, I think it’s easier to get an intelligent discussion going to learn more about the way someone else thinks if I don’t insult them.

I don’t believe the “both sides are equally bad” argument. I’m not reasoning that if there is ever any disagreement regarding facts, then both sides must be equally at fault and must adjust the facts to accommodate the situation.

You said it’s hypocritical and small-minded to believe that one side is more ignorant than the other.

But one side is almost always more ignorant than the other, in any discussion or debate. That’s my point. Maybe it’s not polite to point this out to the more ignorant party in a discussion, but sometimes it’s inescapable, like when for example our resident GOPers try to talk about macroeconomics without knowing the first thing about the nature of a liquidity trap, or to give a slightly less wonkish example, when Captain Harley’s discourse consists entirely of copying and pasting a chain-e-mail full of lies that were debunked two years ago. I mean, the most enlightened conservative voice I’ve read is probably David Brooks, and there’s no two ways about it, the man is a stone-cold moron.

@Qingu I should have phrased that to say it’s hypocritical to believe all of the other side is more ignorant.

It’s like this: if I yell the facts at my wife, I’m not going to win that argument no matter what.

But yes, I feel your frustration. You’ll probably have your comment removed though, for violating Fluther policy of negatively mentioning another user.

By the way, did you see this David Frum article recently? I thought this conservative did an amazing job summarizing the shift in the political landscape over the last several years.

Ah, but Frum is no longer a conservative. They’ve revoked his membership.

(reading it now—great article!)

I think that people are waiting for the next election. This is all people taking positions to see what will sell in the next election.

Personally, I’m not in favor of a payroll tax cut, because I am concerned about the future viability of social security. If we need a tax cut, let’s have one targeted at low income people. Let’s increase the EITC. Let’s pay for it with increased taxes on the wealthy.

It’s a non-starter, of course, but it’s the right thing to do. The weird thing is the Republican insistence that the wealthy are job creators. Just this morning, NPR had a piece interviewing three small business folks and all of whom said the tax rate had nothing to do with whether they hired more people of not. They hired people based on whether they could make more money with them on payroll or not.

NPR asked the Republicans who argue this point to come up with some business people who didn’t like the tax. The Republicans, after three days, couldn’t come up with anyone.

Keynsians believe the economy is demand driven. Jobs get produced by demand, not by employers having more money. You don’t spend money on hiring people unless you believe the demand will be there. I don’t understand the opposite economic point of view, so I can’t speak for it here.

Taxing the rich will bring in revenue and allow us to reduce taxes on the poor. The poor spend more of their income than the rich…. driving the economy.

But Republicans won’t give on this. It is a matter of faith and probably a matter of fundraising. They need to stand for the rich because that’s how they get their PACs funded. The Republicans can only break on this issue if they start losing votes. They don’t think they will. They think they will sweep Obama out of office and get a supermajority in Congress, then they can cut the hell out of Social Security and Medicare and Medicaid, pump up defense spending, and cut taxes for the rich, under the theory that this will somehow stimulate the economy and that the people who are hurt are old people and poor people and no one really cares about them. Oh yeah. And kill health care reform, too. All in all, a delightfully sensitive and caring bunch, those Republicans.

@Qingu Yes, he was booted for saying things that were perfectly sane 15 years ago. How odd.

@wundayatta I heard that piece on NPR today too, and that is exactly what inspired this question. Yet a staunch conservative may hear that and say, “Harumph, it was NPR, a bunch of biased liberals. Let me set about finding ways to prove how that report is incorrect.” While I whole-heartedly agree one should fact check the media, when one refuses to accept the information no matter how much evidence there is, it’s just confirmation bias.

I’ve been looking into the Von Mises philosophy a bit lately, to understand the thinking of some ultra-conservatives and Ron Paul. While some of it makes sense, I think it’s a big problem if we have two radically different economic philosophies vying for control of the nation.

Regarding your last couple paragraphs, I agree that demand is what does the most for the economy. I’ve read stuff supporting supply-side economics, and there is some evidence it works, but my personal conclusion is the bulk of economic growth is on the demand side. I don’t understand why the GOP is so unyielding in accepting this and clings so tenaciously to trickle-down theory. I don’t have a problem with aspects of trickle-down, but to adhere to it to the near complete exclusion of the demand side seems like lunacy to me.

@wundayatta, the payroll tax cut is targeted at low income people. Many low income people do not pay federal income taxes; the only fed taxes they pay are payroll.

But otherwise I completely agree with you.

I trust those who have made accurate predictions. Just type in predicts housing bubble into YouTube search and see for yourself who had their game on.

Instead we listened to guys like this.

@cockswain

While your all patting yourselves on the back about how smart you are, let me inject a few facts to ponder. When the recession hit federal revenues dropped by about 20%. That wasn’t because the low income people lost jobs but rather because the high income decreased dramatically. Before I get the cat-calls about sympathy for the rich, it isn’t about sympathy, it’s about recognising the facts. The top .1% of income earners saw the income drop on average about 25%. That results in a 20% drop in the taxes they paid. They saw a drop in capital gains (not surprising with the market decline) and many at the high income levels lost jobs as well. Raising the tax rate won’t solve this problem.

The video posted by @RealEyesRealizeRealLies above talks about closing loopholes to solve the problem of those that are gaming the system with tax breaks without penalizing those that are working to grow thier business. That is what I was referring to when I said close the loopholes to gain revenue. The main problem (and why this hasn’t been addressed) is that Obama has staked his campaign on raising rates for the rich. He can’t afford to let a tax change go into affect without raising rates on the rich. It’s not an economic issue, it’s a political issue.

I know the Democrats have advanced this argument that the rich don’t spend while the poor do. That is, frankly, bullshit. The top 20% contribute 40–50% of all the consumer spending. And frankly it has picked up since the market began to recover. That means as they saw thier income start to recover, they spent more. That flies in the face of those arguments that higher taxes for the rich, won’t affect thier spending. And the minimal payroll tax cut did nothing to spur consumer spending by the middle and lower class.

So here we are with much lower tax revenues and federal spending has increased by almost a $Trillion/yr. You’d think that if spending were the solution we have seen some results. I don’t think you’d need to be a member of Mensa to figure that out. Yet we still want to increase tax on those that are spending, and scream that they get too many tax write-off so we need to increase the rate. Increasing the rate for some one using those loopholes won’t change their tax burden by much. Closing the loopholes will. Raising the rates will however, dramatically affect those that aren’t getting the tax breaks. Your penalizing the wrong people.

Anyway, that’s my take. Go ahead and take your best shot.

Go ahead and take your best shot. lol

I’m not sure why you’ve directed your comments at me with a dickish tone. Maybe you’ve been watching Newt’s debating style too much lately. No need for that, I’m not attacking you at all.

I appreciate you taking the time to support your assertions with valid sources. Further, please note that I actually mention above that @RealEyesRealizeRealLies‘s Ron Paul video makes sense to me. You may also notice I advocated taking a civil tone when @Qingu took a shot at your line of thinking. Finally, please see I actually responded directly to your first post by agreeing the rewriting the tax code is something we all agree on.

But I realize you’re a cantankerous guy, and since you’re begging for someone to scrutinize your argument, I will gladly offer my opinions. First, it seems you’ve pretty much proven that economic recovery is driven by demand. Upper income people are spending more, spurring the recovery. You also say ”That means as they saw thier income start to recover, they spent more. That flies in the face of those arguments that higher taxes for the rich, won’t affect thier spending.” Note you spelled “their” wrong twice. If they pay higher tax rates, then they will have less money to spend, and the recovery will be slower, correct? You go on to say closing the loopholes will increase gov’t revenue. Wouldn’t closing the loopholes reduce the spending money of the wealthy in the same way a tax rate increase would, decreasing the rate of the recovery? I’m not saying this is a bad idea, but I’m wondering what you think about that distinction.

Also, you mention that federal spending is at a trillion more/yr, and we should see some results. Do you think that the chart in your first link, showing gov’t income increasing steadily increasing since 2008, be evidence of the stimulus spending? I don’t think it’s reasonable to remove it from the equation entirely. A lot of that stimulus spending went to banks. Who do you think was able to get easier access to credit the last few years, upper or middle income earners? Something worthy of discussion in my opinion.

It isn’t clear to me if you are saying that the 20% reduction in gov’t revenues and the 20% less taxes paid by upper income earners are the same thing. Maybe you aren’t, but they way you highlighted the link implies an emphasis I’m not certain is intentional. If so, we have some stuff to sort out there.

I know the Democrats have advanced this argument that the rich don’t spend while the poor do. I haven’t said that. But I don’t think you can argue that they are far more cautious with their spending right now.

Obama has staked his campaign on raising rates for the rich. Not sure why you think that.

What I’m left to ponder is how would the recovery look if the former and current middle class had more spending money, if it was more distributed. Sure, the upper incomes are doing half the spending now, but do you know what the spectrum of consumer spending by income looks during more prosperous times? What percent does the middle class account for then? I’m hoping you have an easy reference for this since you seem to spend a lot of time researching this and I don’t want to go looking right now.

Great, I spent the last half hour typing this instead of playing Jeopardy with my wife and now she’s irritated with me. Thanks a lot.

Hey, and maybe take a moment to point out the areas of agreement for a change as you build your inevitable counter arguments.

Oh, and one last thing: read the Frum article I linked above. It’s excellent and may provide food for thought by an intelligent conservative.

@cockswain “Wouldn’t closing the loopholes reduce the spending money of the wealthy in the same way a tax rate increase would, decreasing the rate of the recovery?”

If implemented in the manner suggested in the first link, no. The idea is to close loopholes for those who benefit at the expense of others, and to keep incentives in place for those who reward the consumer with good products that promote the creation of good employment.

@Jaxk “Your penalizing the wrong people.”

I get your drift. But it’s “you’re”... not “your”.

Sure, but regardless of if they are gaming the system, they are still the upper income assholes people that are driving the recovery in this argument. Not that I’m saying we thank them for their charitable purchases of Tiffany bags and golden dildos, but in this case if we reduce incomes of those gaming the system they will reduce demand.

But I get that there would be a certain amount of offsetting by those who are creating jobs being rewarded. I just don’t want my entire point negated for that reason.

A refusal to raise taxes on their sponsors is, by and large, a position staked out due to ideology. It’s harder to change the mind of an ideologue than it is to change the mind of a pragmatist.

Nice article, @laureth. Perhaps you recognize that Frum article? ;-)

First a couple of points in general. I come from a generation where typing was not a skill everyone possessed. I’m a hunt and peck typist and as such I tend to focus on the keyboard rather than the screen. Unless I do a thorough proofread, I tend to end up with typos. Spell check will only catch some of them. If you choose to critique my spelling, I have no problem with that but be aware, you will have a full time job.

Nah, it was just funny.

@cockswain

The dickish tone was in response to the ‘Ignorant’ debate. It’s difficult to have a reasonable debate that starts with the premise that I’m ignorant. Even if you qualify it with not all republicans, just most of them. I realize this is a tactic popularized by Obama but it is one of the reasons we talk at each other rather than to each other.

Just a brief comment on the NPR stunt. All radio and talk show hosts play that game. Glenn Beck had a telephone on the set for the entire time his show was on for the expressed purpose of letting the Whitehouse correct anything he said that wasn’t true. It never rang. Does that mean the Whitehouse couldn’t debate anything he said? Or maybe they just didn’t want to respond to a hostile audience. The whole thing is a gimmick, nothing more.

Now for the good stuff. I reject you premise that the economic recovery is driven by demand. The growth rate is way too slow to assume it’s a recovery. Take a look at the rate of growth after the 2003 tax cuts. The rate of growth was much faster and the key is the time to surpass the previous high. And remember we’re looking at tax revenue not economic growth.

I know democrats are fixated on consumer demand but remember that their is more to this economy than consumer demand. That demand can be enhanced or restricted by other factors. Investment is a major component as well. When the economy fell in 2008, GDP declined by 5.1% but investment spending declined by 34%. While housing is the biggest part of this investment in plant equipment and software account for about a third. And the growth of this spending hasn’t recovered. This is the perfect time for business to do this type of investment since money is cheap and labor plentiful. But it’s not happening. More on this later.

The other piece of this puzzle is how much benefit we’re getting from the spending. Consumer spending has actually surpassed where we were at the peak in 2008 yet we haven’t recovered. If you look at the gasoline and energy line, it will provide a clue. We’re spending as much but getting less for it. And the money spent on gasoline doesn’t help us much, it gets sent overseas to pay for the oil. Regulation has that same effect. It raises the cost of goods and lowers the margins. Remember that the cost of regulation is about $1.5 trillion/yr and it is coming at a record pace. There are 17 major regulations in the pipeline (major regulation is defined as costing $100 million or more). And it should be noted that more than 90% of the cost of regulation falls on Small Business. This is sapping the economy of any chance to grow out of the recession. As business sees higher taxes and record regulation in the pipeline, they don’t invest and they don’t hire And as a side note, banks don’t lend).

Sorry for being so windy on this first part. @RealEyesRealizeRealLies fairly explained why closing the loopholes is not the same as raising rates. I will add that as you raise the rate, you provide more incentive to hire a tax attorney to find the loopholes. The higher the rate, the more likely that the tax attorney will find more savings than they cost. Closing the loopholes has the opposite affect.

As for the lending, I know that it is very difficult to get a loan for a new business right now. I suspect that a low income earner would have an easier time getting a loan for a house than a business would. I don’t feel like looking for those stats right now but that’s my opinion.

As for the reduction in income and the reduction in taxes, I think it is directly linked. Since the top 1% pay 40% of the taxes and the top 5% pay 60% of the taxes, it seems pretty clear that when their income drops so does the tax. I’m not sure what you want to sort out, just let me know.

As for Obama’s campaign, it’s all about the tax rates. His whole mantra of tax cuts for the rich is the basis for his campaign. He has said he will not extend the current rates and continues to talk about them as a tax cut. I’m not sure how continuing the same rates we’ve had for a decade translates into a tax cut but that’s his whole shtick.

I don’t have an easy reference for the spending numbers but would be surprised if they are much different in normal times. Just higher overall.

I think we can agree, that both our wives become irritated when we spend excessive time beating up the keyboard rather than paying attention to them.

Excellent answer! But I’m far too tired now to do more than say that. Some Friday night.

When the democrats decide to quit spending so much, and printing money like its toilet paper.
Now the Fed is in the drivers seat, the lead role in stabilizing or bailing out the European banks, enough is enough.

As always you’ve said some amazingly deceitful things, Jaxk, but the main thing I want to address right now is the idea that the top 1% are somehow champions of the tax system and if we take away their income, we’ll lose revenue.

It is meaningless to talk about what percentage the top 1% pay of fed income taxes without also pointing out the percentage of the country’s wealth they control—that would be 42%. So on a per-dollar basis they pay a little less than they would under a flat tax.

If the top 1%‘s incomes drop, that means other people’s incomes are going up… which means more taxes. It also means more consumer spending, since people in lower income brackets tend to spend more of their money than very wealthy people. If that income shifts to the middle class, it also means more revenue altogether since the top 1%‘s income is generally capital gains, which have an absurdly low tax rate.

As for your solution of pumping the economy full of oil, @Jaxk, I really do wish you would show at least a little bit of integrity and point out that you are a gas station owner.

Take away the job creators and the government will be your only equal opportunity employer-by design.

Oh, as it turns out, you’re completely wrong about how much the top 1% pay in taxes to begin with.

They pay 40% of federal income taxes. As you have been made aware, numerous times @Jaxk, federal income taxes are not the same thing as taxes. Top 1% only pays 4.1% of federal payroll taxes. In total they pay 28.1 percent of federal taxes.

And they control 42% of the country’s wealth.

And you don’t see anything wrong with this picture.

I see a 35% corporate tax as a big problem.

@Garebo, that’s the kind of thoughtful and well-informed answer that I expect from the GOP. I imagine you actually have some kind of argument or evidence to back up your statements.

And nobody mentioned corporate tax.

I am not GOP I am for Ron Paul-he’s my man, enough with the bought and paid for.
I think the 35% tax has created a massive black hole of money the politicians are looking at to extort. I am not a statistician but there is a lot of money overseas the pols are looking at for votes and share holder enrichment.

Also @Jaxk, consumer spending has not made up the slack in demand since 2008. It has surpassed the level it was in 2008, but I have no idea why you would assume that would imply “back to normal” since “normal” means a steady rate of growth and the economy contracted or was flat for those three years. Remember how I always talk about “rate of change”?

Beyond that, we are still in a liquidity trap—by the way, did you ever actually learn what a liquidity trap is?—and consumers are drowning in household debt, which saps demand. So it’s not a puzzle at all. THere are obvious explanations for why the economy remains weak, without invoking gas prices.

@Garebo, I frankly don’t care one whit what you think when you demonstrably know nothing about economics. The corporate tax rate in America is high, but thanks to loopholes the effective rate is extremely low (for example, Google pays around 2%, GE paid nothing). And I remain unsure as to why you brought up corporate taxes to begin with, or what you think it has to do with anything that is under discussion, or what “money overseas” you are referring to… in short, I don’t think you understand what you are saying.

You are obviously Keynesian
“Why do you think Treasury Secretary Geithner was in Europe last week to explain to leaders how the Fed will run the show and all they will have to do is implement budget cuts and increase taxes, and to concentrate as well on relieving 17 countries of their sovereignty If anyone ever needed an execute to audit the Fed fully this is it. This is 2008 all over again; only this time it is foreign governments that are the focus of attention. The Fed will proceed to create trillions of dollars, which in turn will create higher inflation to go along with that, which is already in the pipeline. Any semblance of sound money is history. One thing is for sure today’s central banking and Keynesian corporate fascism policies are failures.”

@cockswain “Under what circumstances do you think the GOP would allow a tax increase on the wealthy?” Either Grover Norquist dies or his welfare for the rich program becomes so widely understood by the American public that it is utterly rejected by all voters and he is no longer able to play king maker in Republican Primaries. That, or the Republican Party fades into insignificance or oblivion and is replaced by a rational opposition to Democrats.

That’s right—I’m a Keynesian which, according to your Ron Paul cult, is a bad word and means you can assume I am wrong. It’s that easy, you don’t even have to understand anything about Keynesianism!

I honestly don’t know where to start with Paul cultists like you. I mean, I guess we could talk about how deflation is actually worse than inflation in most circumstances and “printing money” is less arbitrary than “digging up more shiny metal” and is in fact can be extremely helpful during a liquidity trap when credit is tight… but what’s the point? I don’t think you actually understand the terms you are using. I think you are repeating things you’ve heard like a parrot.

No more than yourself, you are equally brain-washed!

That’s a surprisingly self-aware response. I’m glad you are honest enough to admit you are brainwashed.

However, I do not believe I am brainwashed and I would be more than happy to discuss and defend any points I make on here on the merits.

I am quite aware of what is transpiring from a layman’s perspective. I saw the collapse and moved my money at the cusp into Gold-that unbelievable shiney object that through time memorial retains its storage of value. You can keep buying your 30 year treasuries, stocks with two sets of books, or better yet why don’t you invest all your Google money on 3 month treasuries-there’s a great bargain for you While inflation’s eats away at your toilet paper money, I’ll be eating my gold, lol!!

@Qingu

According to Roosevelt “We put those payroll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and unemployment benefits. With those taxes in there, no damn politician can ever scrap my social security program.” It is a direct connection between what you pay and what you get in retirement. It is a retirement account. Your absurd attempts to make it just another tax are…. well….absurd.

And your statement “If the top 1%‘s incomes drop, that means other people’s incomes are going up”. do you really think that? It is a fact, in 2009 that the top 1% earning dropped. Do you really mean to say everyone else earned more in 2009. Are you even in the same world with the rest of us.

As for the rest of your trash talk, it follows the same reasoning. Not worth commenting on.

Gold doesn’t hold its value all the time.

Plus, it’s in a bubble.

Under no conditions will the so-called GOP allow a tax increase on the wealthy. They are bought and paid-for by billionaires. Everything else comes secondary.

@Mamradpivo

The problem with your assertion is that most of the big donations go to Democrats. The other problem is that the rich are an ever changing group. Looking at the top 400 earners since 1994 (when the list was created), only 4 people made the list every year. 73% only made the list once. The problem with looking at these top earners as a fixed group and engineering tax rates to address them, is that most are a one time wonder. They sold a business or some other such event.

There are some very specific areas where earnings get a break that shouldn’t. Hedge Fund managers are able to take thier earnings as capital gains. That’s just wrong and is what I consider a loophole. Their management fees for the fund should be normal earnings. Or maybe the commodities traders that get long term capital gains for what is a short term investment. That’s another loophole. But the average guy that worked his whole life to build up his business or make a go of his farm, should not be penalized. They’re not the problem. Or the guy that cashes in his 401 or other retirement savings, should not be penalized because we hate the rich guys. They’re not the problem either.

We currently seem to be rushing with a ‘herd’ mentality to penalize everyone that has high earnings for a single year. They’re not a static group and you spreading the penalties much further than you realize.

Payroll taxes aren’t taxes, war is peace, freedom is slavery.

And about the drop in the top 1%‘s income—yes, everyone’s income dropped during the recession, including the top 1%‘s. That’s what happens during recessions. I didn’t think you were making such a banal point. I thought you were trying to claim that the wealth of the top 1% needs to remain concentrated (as opposed to being spread out more equitably) because those rich folks pay so much in taxes to support the system. Which is BS.

And no, the rich are not an ever-changing group. Of course it’s in the Murdoch-owned WSJ’s interest to portray the oligarchs that control it as not actually oligarchs but rather as paragons of income mobility. Look at the details of that study, or look at the CBO report. There are people who often move in and out of the “millionaire” group… but the movements are typically small. For example, if I make 1.1 million dollars in 2009, 900k in 2010, and then 1.2 mil in 2011, that’s held up as the rich “ever-changing.” Complete BS. See here.

And this isn’t about “penalizing” rich people, @Jaxk. Rich people pay less taxes per dollar of income than the middle class. It speaks a lot about your worldview that you see “making people participate fairly in the United States economy” a form of punishment.

@Qingu

Averages, by design, eliminate the spikes. How the hell do you use averages to prove ther are no spikes. You and Krugman make a good pair.

Okay @Jaxk. Enlighten me with your data. What percentage of rich people are actually “spikes”? What percentage of this allegedly great income mobility into the upper 1% is the result of large increases in income, rather than trivial fluctuations at the boundary?

Your article talks about the top 400 richest people, period, saying (correctly as far as I know) that only 100 have made the list more than once a year. Who cares? The top 1% is not 400 individuals, it consists of more than a million households (any household that makes over 300k). And furthermore, are any of these 400 ultra-rich people actually becoming, like, middle class? (Of course not). Are they being displaced by lower-class success stories? (I’d love to see evidence that they are.) Your source does not begin to paint a picture of significant income mobility for the upper class… because it doesn’t exist.

@cockswain

The GOP wouldn’t allow taxes on the rich simply because they have a different economic school of thought then that of the liberals. Liberals subscribe to Keynesian economics, while GOP subscribe to Austrian economics. The two schools of thought are the antithesis to one another.

If you want to understand GOP’s school of thought, then here are some general overviews.

Link1
Link2
Link3
Link4

You can take a quiz to see how much you actually understand about economics here. Link5

Despite the economic school of thought, there is an issue with equality. How can liberals single out rich people from the law (progressive taxation) when America is supposedly the champion for equality under the law. This would & is blatant discrimination against rich people.

@saracore – Are you aware of any more economic schools than just Keynesian and Austrian? There are plenty out there. It’s not as clear cut as “all liberals believe X, all conservatives believe Y.”

Also, there are many definitions of “fair” and “equal,” especially when it comes to taxation. If you believe it’s “fair” to take from all taxpayers the same dollar amount, that makes the percentage burden fall far less “equally” on the poor folks who have to decide what meal to skip because they had to pay income taxes instead – so, for example, you might ask why in America, land of equality, they lean harder on those who might not eat today, than they do on the people who own several yachts.

@saracore I am aware of the Von Mises thinking, and mentioned it above in this thread here. But I disagree that you can say, as @laureth points out, that you can say conservatives all believe Von Mises. Keynesian theory dominates both sides of politics, with some occasional Von Mises believers, usually on the GOP side.

But yes, the two theories are opposed to one another in many key places, like inflation. If the Fed operates with Keynesian philosophy and Ron Paul wanted to run it like a Von Mises believer, there would be big conflict. We can’t have one part of our gov’t trying to run the economy differently than the other. They need to agree on the philosophy first, preferably using historic data and statistics, which is also something Von Mises rejects for reasons I don’t agree with.

@saracore, I agree with you that the GOP has a different economic ideology than liberals.

The problem is that the Austrian school of economics has about as much validity in the profession as the phlogisten theory of combustion does in the chemistry profession. Like most of the GOP’s other positions (evolution, global warming), their economic position is also based on crackpot pseudo-science.

Also, as others have pointed out, GOPers are pure Keynesians when it comes to military spending. You try to cut military spending and suddenly Republicans are yelling about how you’re killing jobs, and during a recession no less!

@laureth,

I am aware of other economic schools of thoughts, but currently, Keynesian economics is mainstream around the world. The general mainstream opposition is Austrian economics, or a lighter version, Chicago school. GOP, being in opposition to Keynesian, generally subscribe to a much more individually freer economic school of thought, which is the mainstream opposition (Austrian/Chicago).

They shouldn’t lean on anyone. Equality is everyone equal under the law. Everyone should receive the same protection. They shouldn’t single out rich people and they shouldn’t single out poor people.I’ll let you figure out how to make the system work so neither side is singled out.

@Qingu,

Well the GOP says the same thing about Keynesian economics, hence why they won’t agree with each other. You just proved my point. You, a Keynesian subscriber, knocking down on another school of thought, as they do to you, hence reaching an agreement on progressive taxation is highly unlikely.

@saracore – Someone is always leaned on, depending on perspective. If you take the same dollar amount, the poor get screwed. If you take the same percentage, the poor get screwed again. If you have a progressive tax code (“sliding scale”), the rich get screwed. For me, it’s about seeing that the people who are the most vulnerable, most likely to suffer, are the ones not quite as screwed. But then, the more-screwed are the ones with more power and money, most able to fight back and shift the screwing to the most vulnerable.

In other words, you seem to be leaving that decision to me, perhaps because you know it’s impossible?

@saracore, similarly, Republicans say evolution is not a proven scientific fact; Democrats say it is.

You could play the agnostic card and say “well both sides have their positions and experts.”

Or you could be more honest and say that virtually every expert who knows about biology agrees with the Democrats, while only a handful of cranks and fringe cultists agree with the Republicans.

Ideally, you would also look at the evidence supporting both positions… arriving at the conclusion that there is no evidence for the GOP’s position and mountains of evidence for the Democratic position.

Maybe you could tell us what real-world evidence supports the “Austrian school,” particularly today. I look at the past four years and I see the economy behaving exactly as predicted in Keynesian economics, with depressed demand in a liquidity trap hampering growth. I don’t see perfectly rational economic actors spontaneously self-regulating their industries for the greater good while government spending crowds out private sector growth. There is absolutely nothing to support this position; government spending has not crowded out private growth at all (because of demand slack) and of course the financial industry did not self-regulate and did not act like rational economic actors at all—as Alan Greenspan himself lamented, causing him to question his whole worldview.

Of course, I’m not a “Keynesian,” Keynes afaik didn’t write much about monetary policy and I also of course accept that monetary policy is a valid tool—that would put me well in line with the textbook GOP position circa, oh, 1950–2008. In fact, for most of history and around the world, Milton Friedman’s monetary policy style economics has been the main opposition to Keynesianism… not the Austrian school, which is a fringe group. (But in a liquidity trap with zero-bound interest rates monetary policy is more or less a moot point.)

@laureth,

That’s right.

@Qingu,

I am being honest when I write both sides have their positions and experts. They do. It’s not some quack writing it. Each school of thought contains Nobel laureates, Ivy league doctorates, senior lecturers, chairman of departments, etc…

You don’t need me to give you evidence. The Austrian/Chicago school of thought gives you evidence.I gave you the website. If you’re unsatisfied with their evidence, then that’s it.

I’m also not sure what your point is because whether someone is more right then the other doesn’t change the fact that there are still opposing schools of thought, and therefore it is highly unlikely to convince someone to change positions. Hence why you won’t see progressive taxation as long as the GOP are in position to oppose democratic policies. You need the democratic party in all positions of government to achieve that.

The Austrian school contains one—or is it two?—Nobel laureates who received their prizes in fields unrelated to the core tenents of the school.

Every other nobel laureate in economics has nothing to do with the Austrian. The Austrian school is not taught at any major university’s econ department.

There are also a handful of PhDs who believe that Yahweh made humans out of clay 6,000 years ago.

And I fail to see what your point is when you say that people have different positions, and people tend not to want to change their positions. Duh? This strikes me as as a copout that a person says when he cannot defend his position. “It’s just my opinion!”

It’s also possible that one school of economic thought is not applicable to all economic situations, just like one medicine is not good for all diseases.

@laureth, that is true for the major schools of thought, Keynesianism and monetary policy. Keynesianism deals with the fiscal side (taxes and spending); monetary policy deals with interest rates. Both have their uses; Keynesianism was somewhat useless during the inflation scare of the 80’s, while monetary policy is useless in our current situation.

The Austrian school, on the other hand, has no use whatsoever, because it is based on nonsensical assumptions and makes no predictions about the real world that can be tested or have been supported. If you’rewilling to call econ a science in the first place, the Austrian school is pseudo-science.

@Qingu,

Austrian school of thought contains two laureates. I’m simply making a point that these are not quacks. These are educated people.

Austrian is taught in more then a few major Universities. Harvard & New York University for example.

My point is everyone does defend their own positions, and believe theirs is correct. I believe that is pretty obvious. To such a question, I give an obvious answer. You just don’t like the evidence, I get that, but others do like the evidence.

@laureth,

Perhaps.

LOL, show me the Harvard econ class that doesn’t rely on statistics or some semblance of empiricism.

Also, Hayek won the nobel for his work on pricing… hardly central to Austrian econ. Who’s the other laureate?

And please tell me honestly: do you actually understand anything about the economics ideas in question? Or are you just supporting a school of thought that Lord Ron Paul says you should?

See his classes. He is an Austrian Economist. Jeffrey Miron

His classes:

Ec 1010a: Microeconomic Theory

Ec 910r: Supervised Reading and Research (Fall 2009, repeated Spring 2010)

Ec 970: Sophmore Tutorial (Fall 2009, repeated Spring 2010)

Ec 975 (formerly 980) Tutorial: Theory Review

Ec 985a: Research in Microeconomics

Ec 985c: Research in Labor Economics

Ec 985d: Research in Economic Development

Ec 985e: Research in Macroeconomics

Ec 985f: Research in International Trade and Finance

Ec 985g: Research in Behavioral and Experimental Economics

Ec 985h: Research in Financial Markets

Ec 985k: Research in Public Economics

Ec 990: Tutorial—Senior Year

Ec 1010a: Microeconomic Theory (Fall 2009)

Ec 1017: A Libertarian Perspective on Economic and Social Policy

You are referring to the last one?

It sure seems like every single other one of his classes relies on statistics, mathematical models, and empirical evidence… which would put them at odds with the Austrian school. A quick skim of the course descrpitions reveals things like “externalities” and “information assymetry” which do not really seem to exist in the Austrian school as I understand it.

I’m not sure, perhaps you’re right. I never took his classes. I just read and listen to some of his daily articles/audio lectures at the Cato institute and the arguments resemble Austrian, in my opinion.

I don’t think Cato institute would publish his articles if he was a Keynesian.

@Qingu,

Here is an example of one of his articles published in Harvard Journal (PDF file)
The Case Against the Fiscal Stimulus

Well okay. I guess that can be construed as “Austrian” because it cites no statistics or evidence and makes no valid argument except to criticize Keynesianism on the familiar ground of moral hazard… which all Keynesians would agree with, of course, instead arguing that moral hazard induced by stimulative gov spending is the lesser of two evils in a recession.

There’s a reason they don’t teach classes about this kind of thing. Because there is simply nothing quantitative to this “school.” It’s a vague philosophy, an elaboration of faith in the invisible hand. It’s not an actual discipline in economics, and nobody thinks it’s anything beyond a fringe “school” except cranks like Ron Paul and his acolytes.

Well your response goes back to point 1. You knock on their beliefs, they knock on yours = deadlock.

I’m not agnostic to the two parties. I vote for the GOP because their economic policies benefit me more then that of the liberals. I’ve been investing for 5 years now, and the 0% capital gains tax (thanks to GOP) on those who have no income salary allowed me to keep all of my invested earnings. My state has no sales tax, so I only paid a property tax and that’s it.

Democrats want to increase that tax which is why they automatically lose my vote since I’m not going to vote for higher taxes upon myself.

So, @saracore, you prefer to sit back and enjoy those nearly tax-free ‘earnings’ and let everyone else pay the taxes that allow you to live in a civilized society with roads, defense, public schools and hospitals, fire trucks, police, etc.?

Tell me, do you ever get mad at welfare users and people you perceive as mooching off the system?

Again: pointing out that your beliefs are different from mine is pointless and a copout.

Though I appreciate your frank elaboration. You prefer the Austrian school and the GOP because you will have more money personally from their policies. “Selfishness is good,” right?

Unless of course financial crises become even more common thanks to the policies you’re voting for, like they were before the days of financial regulation, and your extra money vanishes because of further stock market gyrations and bank runs.

@laureth, according to Ayn Rand, whose cult I’m assuming saracore follows, selfishness is the height of moral development. So it’s actually admirable that saracore seeks to extract as much as he can from society without giving anything back.

Ayn Rand: providing ideological cover for sociopaths since 1943.

@laureth,

Well we just conversed about the impossibility of making everyone equal under the law. There would always be a group singled out depending on perspectives.

Private roads are horrible, Public schools are terrible. Public hospitals are horrible. Defense turned into war. We’re in a 15 trillion dollar debt and the services are awful, so why would I ever want to pay taxes for these services? Not only are they horrible.

Private has always been more efficient. It use to be cheaper too before the government started offering these services. Schools, hospitals, private security, personal protection (firearms). Roads could also be private if the government/state loses the monopoly. Roads would be built no different then how the private railroads were built in the 18th century.

Also, if I’m paying for private then I obviously don’t want/need to pay for public. I went to a private school, and I went to a private hospital when I had a medical issue.

I have no problem with welfare users because I’m no the one paying for their welfare.

@Qingu,

How is it pointless? It answers the question that the OP asked. And how is it a cop-out when that is reality?

I don’t think it is selfish when I take care of myself and my own family first before I take care of some stranger.

A financial crises is a non-issue for investors. I simply sell-short on all my market investments, so I end of profiting off of the crash. That’s actually why I was intrigued by it. I’m able to make money in bad economic times.

I don’t think you know what a sociopath is. You’re not using your labels correctly.

Sociopath someone who behaves in a dangerous or violent way towards other people and does not feel guilty about such behavior

Nice straw man fallacy.

Private insurance is far less efficient than Medicare. Private for-profit colleges are often of lower quality and shadier reputation than public institutions.

Private K-12 schools are often better but they’re also significantly more expensive, and there is no country I’m aware of that has tried an all-private education system—if you want that, you have to explain how you will educate poor kids, or if you will even try or instead be content with a largely illiterate blue collar work force. I’d also love to see how you’d return to 19th century-style private roads and railroads, or why you think such a system is more beneficial to begin with… but I’m assuming you haven’t given much thought to practical matters like this and instead just have religious-style faith that the market would figure it out.

More examples of the “Austrian school’s” complete disconnect with reality. It’s a vague philosophy, not a valid school of economics.

And not all sociopaths are violent. In psychology, the term generally means someone who lacks the capacity for empathy.

@Qingu

That’s not what I hear from those on private insurance. Also, Medicare is only available at 65. What if I die before then? And if you have such a massive debt, how is that efficiency? Please don’t even bother linking me to some study that shows medicare is better. I’m not interested because I’ll just send you a study that shows private insurance is better.

You think private Ivy League colleges are of lower quality then some public college up in the boondocks? Haha!! That’s some amazing evidence right there. Again, please don’t send me some article from huffingsomepot that says public college is superior in quality.

They’re more expensive because its a quality service. If you wouldn’t have public schooling and government financial aids, then private schools would have to lower prices to accommodate everyone to maximize profit. You would have competition. Instead the government hampers it.

“How would I return to roads and how would it be more efficient?” I gave you the Austrian website, go read the articles on roads. Anything is more efficient then government. The roads are terrible and we have a debt on top of it.

I have empathy, hence taking care of the family.

“That’s not what I hear from those on private insurance.”

What does that even mean? This is not something where anecdotal evidence matters at all (I could also cite horror stories by many people on private insurance who are denied coverage, rescission, etc). Efficiency as measured by spending on overhead vs actual coverage—Medicare comes out slightly ahead of large employer-based insurance and way ahead of individual coverage (where overhead costs amount to almost 30%).

But at this point I wonder what the point is of arguing with you, since you show no interest in actually basing your points in empirical reality or statistics. Again: this is why nobody really cares about the Austrian school, because Austrians use the same approach (or non-approach, really). If you’re not going to use models, stats, or evidence there’s simply nothing to debate. It’s just you asserting that the world works a certain way, or would work a certain way if only government didn’t exist, with no evidence to support your view.

Much like how creationists assert that God created the Earth 6,000 years ago, contrary to all evidence, because “the Bible says so and I believe the Bible is right.”

About Ivy League—I said “often,” not all; Ivy Leagues are rare and extremely expensive, and my statement was meant to include institutions like online colleges. You also didn’t really engage the point I was making and once again simply assumed that the market would fill a social need (educating poor people) because the market is magic. What if there is no profit in educating poor people? There’s no profit in medically insuring poor people. In countries without public education, like Somalia and other third-world nations, no market forces spontaneously emerge to educate poor people. But I’m guessing you’re not concerned about how your philosophy interacts with the real world.

Sorry, but I don’t agree with your assertions. My school of thought states otherwise.

I’m not sure why you wanted to argue with me in the first place. You’re literally trying to convince me to vote on taxing myself more. That is about as useless as convincing a poor person to accept his or her’s poverty.

I’m glad you finally understand that not everyone agrees with your school of thought, and that other schools of thought exist too despite your disagreement with it.

If you want to argue, then go argue with the people who influenced me (the Chicago/Austrians). They convinced me that I benefit more when siding with them. I’m not the scholar, I’m an ordinary person.

Perhaps if you were more influential, I would be voting for your causes.

I’m an ordinary person too. I just try to have reasons for taking positions. I think it’s important to be able to defend the things you believe, rather than, you know, just stating that you believe things.

But thank you for illustrating precisely what kind of voter the modern GOP is serving.

I am defending what I believe in. The answer is unsatisfactory for your standards. Nothing I can do about that. I’m unsatisfied with your answers too.

And what is the point of ordinary people parroting a defensive argument to support their subscribed school of thought? Isn’t it just easier and a less time consuming to go directly to the source that champions the perspective? Why repeat what was already written?

Because there’s a big difference between “parroting” an argument and understanding and internalizing an argument, and defending said argument would demonstrate that you have done the latter rather than the former?

Because oftentimes a person does not swallow a “champion”‘s entire suite of positions and actually discussing the details of the arguments would highlight where you disagree and why you disagree with said champion?

Because, in the process of defending a belief, you may be exposed to criticisms of the belief that you hadn’t encountered or thought about, and you may even realize that you are wrong to hold that belief in the first place?

I mean, you sound like a cultist. “Why should I defend my belief that a UFO will come and teleport me and my friends up into the sky and give us free ponies? Our dear leader has already put forth all the arguments for my belief in his reading materials. Why don’t you try having this discussion with those reading materials instead of with me?”

I disagree that private is always cheaper. Link.

However, if one has a “school of thought that disagrees,” that makes it easier to overlook data that disagrees with a school of thought. I would wonder, though, why one subscribes to a particular school of thought, if it is not backed up by data.

You have to know enough about your belief to defend it properly. As an ordinary person, I cannot possibly know enough about my belief to properly defend it, but that doesn’t mean I shouldn’t believe in something I cannot defend. It appeals to me. It supports what I feel and want. Therefore, I refer any opposition to someone who is an expert of what I believe in.

When an expert talks to an expert, for example, Keynes vs Hayek, then I can make a decision based upon their debate. Whichever appeals/benefits me best.

Instead of having me defend my position, you should be trying to appeal to me. Influence me more then I already am from another belief.

As a citizen, I have a list of things I’d like fixed to make life easier for me. I support the person who will get that done for me. One of the complaints was capital gains taxes, and the GOP said they will take care of it, and they did.

I currently have no complaints about our system because my only complaint was capital gains taxes, and I pay none now, so I’m satisfied.

@saracore – Serious question. When someone is trying to appeal to you, what is the best hook? Is it just any promise to do something that benefits you or makes your life easier, no matter how fantastic? Or are you more convinced by facts, and/or premises that are factually credible?

@laureth,

Because the school of thought states that data is nonsense, and explains why.

So what I’m hearing from you is that you believe things not because you think they’re true, or because you know anything about them… but rather because their conclusions support what you want out of life.

Whelp. I guess I’m done here.

As an ordinary person, I cannot possibly know enough about my belief to properly defend it, but that doesn’t mean I shouldn’t believe in something I cannot defend.

Don’t you think it’s wiser to believe nothing rather than that? Why not just take an entirely neutral stance?

“Data is nonsense?”

Whoa.

@laureth, that is seriously a central tenant of the Austrian school. They don’t use data, because economies are just too complex to be modeled with data… and so instead they use sweeping and unevidenced presumptions about human and organizational behavior.

Reminds me of a fundamentalist Christian I once debated with. He said I couldn’t use logic to attack Christianity… because logic makes no sense outside of the Christian worldview. As an example, it makes no sense to point out a contradiction in the Bible, because the concept of contradiction is based on logic, and logic is based on God’s Word (the Bible). More on this, if you want to go down a fun rabbit hole.

@laureth,

Not just a promise. I want it actually done in practice. If they say they’re going to lower it, then they appealed to me. I will give them the chance to get it done. It is a current fact that the GOP lowered the capital gains tax bracket to 0% for those who have no income salary and solely invest.

If you believe that something is too hard to model, you don’t model it. You’ll just never try, because you don’t believe it can be done.

And then you miss every opportunity to learn something from modeling.

This is when an economic school goes from being a science you can study and use for predicting future outcomes, into something more akin to faith, or maybe the humanities. And something that is faith, belongs in a church or other place of worship or meditation, rather than trying to guide an economy that they suppose cannot be guided.

@cockswain,

If I don’t want to pay taxes, and someone is offering such a belief, then why should I take nothing rather then this?

@saracore, if an expert argued that people like you shouldn’t pay capital gains taxes, because capital gains taxes offend the Great Space Emperor Zargon, who watches over Earth from afar and will punish societies with capital gains taxes… would you believe said expert?

Why or why not?

So basically you like any economic system where you don’t have to pay capital gains taxes?

I’ll ask the expert how does he know there is a Great Space Emperor and that he wants us to not pay any capital gains taxes.

@cockswain,

Yes, since investing is my career choice and I would like to keep everything I earn.

When you go to a casino, you get to keep all of your winnings, not some of it.

And you haven’t thought to ask Ron Paul or whoever you’re getting this stuff from why they know the market is optimally efficient, that government spending always crowds out private investment, that market self-corrects for things like collusion, pollution, and financial crises, or any other of the tenants of the Austrian school that have no evidence to support them and heaps of real-world counterexamples that contradict them?

Jesus. Do you think the economic system and all the infrastructure from which you benefit would exist without a government?

@Qingu,

Yes, I was pointed to mises

I started reading the articles and the articles explained how the market handles everything and how governments cause all the problems.

@cockswain,

Yes, the market would handle it.

And you prefer to believe that because you don’t have to pay capital gains taxes in such a system?

Okay. And why do you believe those articles, which have no data or evidence to support them on the one hand… but on the other hand say you would be skeptical of someone claiming you should pay no capital gains taxes because of Space Emperor Zargon?

If the person claiming Space Emperor Zargon wants no capital gains taxes wrote a series of articles and posted them on the Internet, would you read them and believe what they say?

From what I’ve seen, if saracore would like to believe it, then he would. Evidence and facts don’t really factor in.

@Qingu,

Well you have evidence. Here is a daily article for example. War Collectivism In World War I

See, you can assert anything you want. The assertion itself, however, isn’t proof. Seeing how well the assertion holds up in the real world is proof.

If, on the other hand, I were asserting something that I didn’t want to have to prove, perhaps because it doesn’t work in the way I’m suggesting it works, I would certainly add the argument that “data doesn’t matter.” (This is one reason I’m skeptical of religious claims that “all will be rewarded in the afterlife,” because it’s a claim that cannot be proven. The assertion that all will be rewarded in the afterlife is not actual proof that all will be rewarded in the afterlife.)

Could you direct me to the portion of that article that supports what you’re saying?

@cockswain,

No, I believe that based on the evidence of the experts.

@cockswain,

That article is just an example that the articles use evidence to support what they say.

You must be a troll.

@laureth,

Well I have my proof. The GOP said they will make the tax 0% and they did. I got what I wanted. I was rewarded.

@cockswain,

Problem?

@saracore, I started reading the WW1 collectivism article, then I started skimming it, then I realized I really need to ask you this before I do anything else:

What do you think that article’s argument is? Why is it important? And what evidence does the article bring to bear, in general, to support that argument?

@Qingu Perhaps you noticed I asked nearly the same question. This must be a troll.

A slight difference: you asked how the article supports what saracore is saying. But I don’t think saracore is citing the article to support a point he is making.

He’s saying the article is an example of an Austrian argument that uses evidence to support some point, which may or may not have any relation to our current discussion.

I think. I dunno. I try to give people some credit, what can I say.

Edit: tho I guess his last statement can be interpreted as an admission that he is a troll.

I think he is amusing himself by intentionally frustrating us.

I know a lot of so-called “Austrians” lurk around comments sections of newspapers and blogs and basically inundate them with this stuff. Maybe they think trolling is a good thing?

It’s weird. There are definitely some good ideas in there, but they do a crappy job accentuating them by clinging to weird, utopic, unproven positions. No real give in my experience.

But I recently made the observation that it seemed Paul Volcker tackled inflation using Austrian principles, by targeting only the money supply and letting rates fluctuate independently. It worked.

So I don’t see it as pure crackpot fringe stuff, but they sure don’t have a lot of well-educated voices out there. At least not that I run into. If they want to get people to listen, the advocates damn well better know Keynesian theory first, or else that’s the only counterpoint they’ll be stuck on.

On the other hand, here is what I’m talking about when I say it’s important to use data to test economic hypotheses. If a prediction comes out close to right, it means you’re on the right track. If real-world events turn out exactly the opposite of what you predicted, it means you don’t know as much about economics as you thought you did.

@laureth “If a prediction comes out close to right, it means you’re on the right track.”

I couldn’t agree more.

@RealEyesRealizeRealLies – First, I wish I had a little more context for some of that than a YouTube clip. But no matter. Ron Paul says some things that make sense. He also is like the blind squirrel that sometimes finds a nut anyway. And he’s also so full of crazy in other ways, that it outweighs the part that makes sense.

Anyone can be right part of the time – like Nouriel Rabini, who seems to have predicted 74 of the last 4 recessions. ;)

(Speaking of whom, he predicted “the big event” back in April. How’s that coming?)

@Qingu,

The author of the article uses historic evidence to support his argument that big governments were and continue to be used as a tool by Corporations for their own benefit (regulatory capture) while screwing everyone else. The importance of this should be obvious.

@cockswain,

If you want me to start listening, then you’re going to have to do a better job then calling me a troll.

Eh, I suppose if you want us to listen, a good way to start would be to explain Austrian economics and why you think it’s a great system, rather than just telling us to look it up.

I don’t care if you listen to it though. I’m not trying to convince you that my subscribed system is better then yours. I gave you the link to answer the threads question, and to introduce an alternative thought. You decide what is better. If you don’t want to read it, or don’t like what you read, then stick to what you do like.

@laureth “I wish I had a little more context for some of that…Anyone can be right part of the time”

You obviously didn’t bother watching the video. The context is RP speaking to Congress in his own words. I can’t find any “part of the time” he’s wrong. His “predictions” are like a time traveler coming back to warn us of the future events which lie ahead.

If you’re going to make the statement @laureth…
“If a prediction comes out close to right, it means you’re on the right track.”

… then don’t back peddle to “Anyone can be right part of the time”… just because the prediction doesn’t come from anyone you acknowledge.

THAT… is the partisan doublespeak that crummy politicians destroy our country with.

If you’re going to claim someone “full of crazy”… then back up your claim before drawing a comparison to “Noruriel Rabini” only for the sake of pseudo supporting your claim against the one you disregard.

THAT… is the partisan disingenuous half truths which attempt to make false accusations appear as full truth.

@cockswain, Volkner used monetary policy, which is orthodox econ stemming from the work of Milton Friedman. While there is some overlap, it’s not the same as Austrian stuff. For starters, monetary policy uses data.

@saracore, okay. First of all that’s not the point that I drew from my initial reading of the article (it seemed to be broader than regulatory capture, rather positing that the entire apparatus of the modern corporatist big government so hated by Austrians has its roots in WW1 collectivism). But I didn’t actually finish reading it, so whatever.

Why do you think regulatory capture is of unique provenance to the Austrian school, and what do you think it has to do with any of our current discussion? Regulatory capture is of huge concern to Keynesian liberals too.

@Qingu No, not the same but similar. From what I understand, Friedman became strongly opposed to Keynesian thought later in life, and helped create to so-called Chicago School of Economics. Certainly there appears to be substantial overlap between Chicago and Austrian, but again, Friedman used data to support his hypotheses.

@saracore It isn’t clear you actually want to learn. Posting an article, then when asked what it is about the article supports your philosophy you reply, “l just wanted to show that the article has links to it’s sources at the end” makes me think you’re either an idiot or a troll.

Idiotroll?

@RealEyesRealizeRealLies – I did watch your video. The context I was looking for was the situation in which he was talking to Congress (Discussing a bill? Addressing real or imaginary concerns? Going off on a tangent?). Simply taking a clip of someone speaking and editing it and putting it on YouTube doesn’t mean that it is true as represented. The Shirley Sharrod flap a while back (in which a conservative blogger edited a speech she gave so as to make her appear racist, inverting the whole point in the uncut speech) is proof that it can happen.

I also think there’s a big difference between making a motley grab bag of predictions that sometimes seem prescient and sometimes are full of crap (showing only a video of ones that appear to be right, as in the Ron Paul example), and the large body of predictions made by a school of economics that has largely been a good way to predict what has gone on with this downturn. Did you watch the video I posted, where Ron Paul predicted back in April some things that have clearly not come to pass? Do you think he learned from that mistake, went back to see what he did wrong, and incorporate that knowledge into his future predictions, or is still banging the same old drum? That, to me, speaks volumes.

@Qingu,

Regulatory capture isn’t unique to Austrians, but it’s how Austrians handle regulatory capture that makes the difference. Austrians believe that lowering the size and power of the government is the only effective way to stop regulatory capture. Keynesian feel more and stricter regulations are required to stop regulatory capture.

@cockswain,

You got involved in a conversation I had with Qinqu. He asked me to why am I not skeptical of Austrian articles when they don’t use evidence, and I replied that they do use evidence. I gave an example with a random daily article that they posted. It happened to be about World War I.

So let me ask you, are you really that slow in the head to not keep up with the conversation? Or are you deliberately being an imbecile?

Now stop pussy-footing around and answer my question. Teach me. Tell me the Keynesian theory on why I should pay more taxes then other groups for a broken welfare system, and a regulatory system that is ineffective and counter-intuitive?

@saracore, you said, _“Austrians believe that lowering the size and power of the government is the only effective way to stop regulatory capture.”

This is like arguing that the only way to stop lung cancer is by cutting out a person’s lungs.

That’s not the same, and in many cases they do cut out one of the lungs to stop the spread of the illness, especially when therapy in ineffective. Therapy can cause more damage then fix. Millions of side effects with little result. You fix one problem and you have 20 more.

In your case, you give the patient therapy but it doesn’t work, so you give the patient stronger therapy, but it still doesn’t work, so you give even stronger medicine and it still doesn’t work, but yet you remain hopeful that it will work. Eventually you realize it’s not working and that there are now 20 different side effects due to the high doses. The tumor is growing, so you have to cut it out before it spreads to other organs.

Insanity is doing the same thing over and over again hoping for a different result.

But there are ways to limit regulatory capture. Just as there are ways to prevent lung cancer (i.e. “don’t smoke”) without cutting out someone’s lungs.

More importantly, though, you haven’t really shown how an economy can function without at least some significant regulation. Seems about as likely as a body functioning without lungs.

There are ways to limit regulatory capture, but it doesn’t mean it is effective. That is basically what the article is talking about. How throughout history regulations were ineffective at preventing capture and other negative externalities

We’re discussing how each school of thought minimizes regulatory capture, so I’m not sure why you’re now jumping into the details of how an economy can function without regulations. I will have to find you an article with evidence on how that did/does/will work out.

You know what I find funny? You ridicule Austrians for not believing in using statistical data due to market complexity, but at the same time you claim that the market is too complex to be left alone (without government intervention). You claim the market isn’t too complex to be planned out, but then you claim the market is too complex and needs planning.

What is with the flip-flopping? Is the market complex or not?

@laureth “Discussing a bill? Addressing real or imaginary concerns? Going off on a tangent?”

Seeing how accurate they are, I would imagine they were real concerns. I’ve never known RP to “go off on tangent”... but perhaps his real concerns were indeed over a bill. Does it matter really, when in your words “If a prediction comes out close to right, it means you’re on the right track.”

@laureth “Simply taking a clip of someone speaking and editing it and putting it on YouTube doesn’t mean that it is true as represented.”

There are 1,260 results for Ron Paul Predictions on Youtube. I’ll leave it to you to sort out where he is wrong.

@laureth “Did you watch the video I posted, where Ron Paul predicted back in April some things that have clearly not come to pass? Do you think he learned from that mistake, went back to see what he did wrong, and incorporate that knowledge into his future predictions, or is still banging the same old drum?”

Considering he’s known as the most consistent candidate over the last thirty years, I suggest he is definitely beating “the same old drum”. And that’s exactly why his support is growing and his predictions are accurate.

Now perhaps you provided a wrong link or I don’t know what… But yes, thank you for posting that video. Could you or someone else please point out the “back in April” things that have clearly not come to pass. I really don’t understand how your comments are supported by that video.

What “Big Event” does Ron Paul talk about in the first few minutes of the video (which is dated in April)? He also seems to be conflating “inflation” and “deflation.”

Without context to the “Big Event” that Alex Jones is asking RP about, it may seem as though this refers to a singular event to come any time now. But the “event” in question goes back three years earlier that Ron Paul warned of multiple events… not one… but multiple events. Jones is leading the interview to fit his conspiracy theorist audience who are looking for that one big event they’ve been waiting for to prove them right.

@laureth “Simply taking a clip of someone speaking and editing it and putting it on YouTube doesn’t mean that it is true as represented.”

That’s what you just did. You saw the headline with “Big Event” in quotes. You may have read the first paragraph with “Big Event” in quotes, and may have even thought the entire paragraph was an RP statement… but it wasn’t. None of that paragraph was in quotes except the words “Big Event”.

At 00:41, Jones says “Is this the big event you’ve been talking about”?

That’s singular. Jones is referring to a speech made by RP from 2008 three years earlier which speaks of “Big Events”... plural… a series of events… Not one “Big Event”.

Perspective… From his 2008 speech:
“Texas Congressman Ron Paul has warned the House that he is “convinced the time is now upon us that some Big Events are about to occur.” that will cause liberty to go “into deep hibernation”.”

“These fast-approaching events will not go unnoticed. They will affect all of us. They will not be limited to just some areas of our country. The world economy and political system will share in the chaos about to be unleashed.”
______

And so… when RP answers Jones “Big Event” question on your video link, he is referring to a series of events and not one “Big Event”. In that light, RP’s answer is much better represented.

You’ll find the specifics of the “Big EventS” in the 2008 speech.

Notice how Jones misquotes RP again… changing RP’s comments from the actual interview, and completely changes them in the print right on the same page.

The video answer at 00:45, RP says:
“Well, it’s huge, and it has started. Whether it comes about and really is identified as THE big event and if everybody recognizes it within the next 30 days or so I’m not positive. But I believe it is the beginning but it’s been going on…”

But the article quotes him differently…
”“It’s huge, and it has started,” Paul said, and it may be identified as such within 30 days. “I believe it is the beginning…”

We must watch conspiracy theory journalists very closely. Lest they make unwitting converts out of us through our own laziness.

@saracore, the article you cited talks mostly about regulatory capture in the WW1 era. There have been many examples of successful regulation since then. (It also talks about a lot of other things beyond regulatory capture… it’s kind of a screed… but that’s neither here nor there).

It also explains nothing about the effects of the Austrians’ means of reducing regulatory capture (that is, eliminating regulation). Kind of important, don’tcha think?

You said, “You ridicule Austrians for not believing in using statistical data due to market complexity, but at the same time you claim that the market is too complex to be left alone (without government intervention).”

I said no such thing. The complexity of the market has absolutely nothing to do with why I believe it needs to be regulated. I believe segments of the market need to be regulated when there are profit incentives towards things like fraud, physical harm to consumers, pollution, collusion, and the denial of human rights. It’s often quite straightforward to tell when and how such incentives exists.

Yes, this article was only referring to WW1 era. There are other articles by different authors who provide evidence for further regulatory capture after WW1, all the way up till now.

I’m sorry but i’m cutting the conversation short. This is precisely why I link to articles instead of having to type out an explanation. I cannot simply write a few magic words to explain how it would work. It takes time. This is where opportunity cost comes in.

However, if I had to choose a few magic words on how Austrians would make a market work without regulations, it would have to be: well defined property rights, court rooms with expert jurors, consumer boycotting/defamation, followed by competition.

I’ll try and find you some articles though on the subjects if I run into any.

I’m perfectly capable of doing my own browsing of the Mises Institute, thank you.

And I was already passably familiar with the Austrian school before we started discussing. My interest in this discussion was to ascertain how much you, personally, know about the economic school that you believe in, and why you believe in it.

@Qingu “Also, Hayek won the nobel for his work on pricing… hardly central to Austrian econ”

Huh?

Hayek’s work on pricing and the use of information within a society is absolutely critical to Austrian thinking. The idea that a price is a sum of information about a good or service is an extension of the criticism Mises leveled during his “Socialist Debates.” Hayek makes the important distinction that prices represent many of the preferences Keynes had said were not included in traditional market thinking, such as time preference.