114
   

Where is the US economy headed?

 
 
okie
 
  1  
Reply Mon 16 Mar, 2009 11:09 am
@spendius,
spendius wrote:

Quote:
It proves to me that I don't want to live in Russia.


It proves to me that I don't want to live in Russia too. But this is not about "me". Once we are all about "me" we can forget civilised existence.

I don't have a car though and I never travel further than half a mile from home on foot. I know many people who are just the same. They don't make the news though. Mediated people think we don't exist.

But--B.F.Skinner wrote this-

Quote:
Our culture has produced the science and technology it needs to save itself. It has the wealth needed for effective action. It has, to a considerable extent, (note that unscientific, possibly ironic, qualifying phrase okie), a concern for its own future. But if it continues to take freedom or dignity, rather than its own survival, as its principle value, then it is possible that some other culture will make a greater contribution to the future.


BFS has an MA and a Ph.D from Harvard where he was Edgar Pierce Professor of Psychology. He holds the National Science Award and his famous book Beyond Freedom and Dignity was described by Science News as "one of the most important happenings in the 20th-century psychology".

Which means he cannot be dismissed with some trite assertions. Trite assertions signal trite minds.

China and Russia both downplay the freedom and dignity of their citzens "to a considerable extent".


You are getting into philosophical meanderings there, and if you want to debate whether technology can be reversed, or perhaps more realistically as you suggest, used to preserve the future. Maybe, but I do not profess to know what the future holds, and I am not particularly impressed with the idea that you can legislate wealth into poverty, for the sake of preserving the future. I do not view the automobile as the same level of threat as Al Gore does, sorry, but I just do not.

On the flip side, I believe in conservative living, and if you voluntarily can live comfortably without a car, fine, thats great, but to try to tell everyone else that they cannot, that is not logical. My only requirement is that the playing field should be such that people who live lavishly should be required to do it honestly, and pay for it, thats all. And if a society spends itself into bankruptcy, that is the price that has to be paid.

I go back to the original issue, that being that Obama should be realistic, not deceitful or totally stupid, in regard to what can be achieved in the energy world. I like the energy issue to illustrate the argument here about Obama's common sense, because the facts of the issue are pretty difficult to change, which is different than alot of other political footballs.
0 Replies
 
Cycloptichorn
 
  1  
Reply Mon 16 Mar, 2009 11:14 am
@Foxfyre,
Quote:
False money? Really? How is a dollar you can put in the bank or spend false money?


Why don't you ask our banks which are currently hundreds of billions of dollars over-extended about that, Fox? The revenues which led to these higher taxes were not based on actual growth at all but instead on the manipulation of money to make more money.

I don't really care what JFK had to say on the subject; economists disagree with both him and you as to what caused the US to recover from recessions, and also as to the effect of lowering taxes on the national treasury. You are merely Appealing to Authority instead of presenting an actual logical argument, step-by-step, showing how lowering taxes raises revenues.

Cycloptichorn
Foxfyre
 
  1  
Reply Mon 16 Mar, 2009 11:36 am
@Cycloptichorn,
Cycloptichorn wrote:

Quote:
False money? Really? How is a dollar you can put in the bank or spend false money?


Why don't you ask our banks which are currently hundreds of billions of dollars over-extended about that, Fox?


Well I would, but I can't see how that is relevant to the increase in the Federal treasury.

Quote:
The revenues which led to these higher taxes were not based on actual growth at all but instead on the manipulation of money to make more money.


Nevertheless, the money that went into the national treasury was not a figment of anybody's imagination. It was real money.

Quote:
I don't really care what JFK had to say on the subject; economists disagree with both him and you as to what caused the US to recover from recessions, and also as to the effect of lowering taxes on the national treasury. You are merely Appealing to Authority instead of presenting an actual logical argument, step-by-step, showing how lowering taxes raises revenues.


So who do you care about when it comes to authority? Or you just go with your own notions and appeal to no authority to test those notions?

Yes, some liberal economists disagree with JFK and Adam Smith, John Locke, David Hume, David Ricardo, Voltaire, Montesquieu, Milton Friedman, Thomas Sowell, Walter Wiliams, et al and me. But they can't get around all that data showing what real dollars--that's dollars that can be spent--went into the national treasury. Those who attempt to dispute that can do so only on blind ideology and/or class envy because they have absolutely no other basis to go on.


Cycloptichorn
 
  1  
Reply Mon 16 Mar, 2009 11:39 am
@Foxfyre,
Quote:


Nevertheless, the money that went into the national treasury was not a figment of anybody's imagination. It was real money.


Yes, but it had nothing to do with the levels of taxation of Corporations at all. Instead, it was based on the manipulation of paper. Raising or lowering the Corporate tax rate had no effect on these large revenues garnered from companies during their period of making money appear from nowhere.

Cycloptichorn
Foxfyre
 
  1  
Reply Mon 16 Mar, 2009 11:58 am
@Cycloptichorn,
It was dollars the government had to spend Cyclop. It doesn't matter where it came from or how it got there. It was money in the national treasury. Money your Congress and my Congress had to spend at their discretion. I accept that you think your argument has merit based on your logical conclusions and all, but you simply can't get around the simple fact that tax policy affects the revenues received into the national treasury. You can argue til the cows come home that any tax rate increase will increase revenues for the national treasury and you can argue all you want that no decrease in tax rates will increase revenues for the national treasury, but you simply can't support your case if you look at the historical record with any kind of open mind.

Some taxes that do not significantly affect productivity or the behavior of the people can raise revenues. Some tax cuts that do not significantly affect productivity or the behavior of the people can lower revenues. But you simply cannot take that incentive for productivity and behavior out of the equation and income taxes, capital gains, and corporate taxes do affect incentives for productivity and human behavior and a solid understanding of that is essential in both raising government revenues and stimulating a weak economy.
Cycloptichorn
 
  1  
Reply Mon 16 Mar, 2009 12:00 pm
@Foxfyre,
Quote:
It was dollars the government had to spend Cyclop. It doesn't matter where it came from or how it got there.


Yes, it does matter, Fox. Tax policy had nothing to do with these revenues at all.

Cycloptichorn
Foxfyre
 
  1  
Reply Mon 16 Mar, 2009 12:01 pm
@Cycloptichorn,
I know you believe that Cyclop. But the historical record simply does not support your opinion.
Cycloptichorn
 
  1  
Reply Mon 16 Mar, 2009 12:02 pm
@Foxfyre,
Foxfyre wrote:

I know you believe that Cyclop. But the historical record simply does not support your opinion.


Yes, it does, in fact, support my opinion. The 'extraordinary profits' that led to the increased tax revenues came from the paper money manipulation game. You cannot point to them as evidence of any opinion about taxation policy affecting revenues, for they had nothing to do with tax policy at all.

Cycloptichorn
0 Replies
 
georgeob1
 
  1  
Reply Mon 16 Mar, 2009 12:02 pm
@Cycloptichorn,
Cycloptichorn wrote:

And yet, these companies still managed to pay out exorbitant salaries to their leadership. For a long time. Seems the taxes aren't as ruinous as you and other proponents of Big Business make them out to be.

Cycloptichorn


What's your definition of "exorbitant"? Much of their compensation was in the form of stock or options, and in the cases of the firms cited, these have lost nearly all of their value. While I agree that executive compensation has grown too high in many areas, I also recognize that most of them have very heavy responsibilities and most face severe consequences (dismissal) if they don't meet their goals. Tom Daschle earned several millions/year as a government lobbyist immediately after he left the Senate. Was that exorbitant?
Cycloptichorn
 
  1  
Reply Mon 16 Mar, 2009 12:06 pm
@georgeob1,
georgeob1 wrote:

Cycloptichorn wrote:

And yet, these companies still managed to pay out exorbitant salaries to their leadership. For a long time. Seems the taxes aren't as ruinous as you and other proponents of Big Business make them out to be.

Cycloptichorn


What's your definition of "exorbitant"? Much of their compensation was in the form of stock or options, and in the cases of the firms cited, these have lost nearly all of their value. While I agree that executive compensation has grown too high in many areas, I also recognize that most of them have very heavy responsibilities and most face severe consequences (dismissal) if they don't meet their goals. Tom Daschle earned several millions/year as a government lobbyist immediately after he left the Senate. Was that exorbitant?


'Dismissal' is not a severe consequence. Everyone can get fired for poor performance, they are not special in any way and deserve no special consideration b/c of this. The executive who pretends he works harder than I did during my College years when I hung air ducts in the Houston heat during the summer, is an executive who is lying to themselves. They faced the same pressures and consequences as I did for my work; they just got paid millions of dollars to do it.

Those stock options you mention aren't 'worthless' if they've been redeemed and sold long ago, a little point you neglect to mention.

As for Daschle, what do you want me to say? I would not have paid him those monies for the lobbying work he did and I doubt he should have rec'd that much no matter what influence he claimed to have. What, George, did you think you would throw out the name of some highly-paid Dem and get a concession out of me?

Cycloptichorn
georgeob1
 
  1  
Reply Mon 16 Mar, 2009 12:18 pm
@Advocate,
Advocate wrote:

You are again off base. Corps not making money (which is a large percentage), pay no tax. Due to deferrals and other tax maneuvering, almost no profitable corps pay the 35 %. But the point that escaped you is that, in a lot of cases connected to the bailout, the govt. is covering the losses. But the profits over the years went to shareholders.


Well individuals who make no money don't pay income tax either. Indeed under our tax code most individuals who make less than about $40,000/year pay virtually no income tax. Corporations pay a flat 38 - 41% tax on all net income (depending on the state).

Cycloptichorn wrote:
Are any of you right-wingers going to admit that the Corporate tax rate you constantly harp on is before any deductions or trickery accounting? What's the effective corporate tax rate? Far below what you post.
Cycloptichorn
The deductions and "trickery" accounting to which you refer have mostly to do with the depreciation of real property involved in the business, something that applies equally to self-employed individuals and a well-established real cost of doing business by accounting principles and standards. It is a real cost, not trickery.

You also ignore the incentive of publically traded companies to keep their taxable earnings high - these are the key factor in the evaluation of their market (i.e. stock) price. The standard rule of thumb for a companie's valuation is Value = cash or liquid assets + growth factor x taxable earnings, where the "growth factor" = generally a number between 4 and 8, depending on the expectations for future growth of earnings.

To be sure most companies work very hard to minimize their tax liabilities, however they are generally far more subject to outside audit and IRS enforcement action than are individuals.
Cycloptichorn
 
  1  
Reply Mon 16 Mar, 2009 12:24 pm
@georgeob1,
Quote:
The deductions and "trickery" accounting to which you refer have mostly to do with the depreciation of real property involved in the business, something that applies equally to self-employed individuals and a well-established real cost of doing business by accounting principles and standards. It is a real cost, not trickery.


Yes, that is a valid deduction. That's why I said 'Deductions AND trickery.' You are sort of ignoring the trickery that goes on, the wonderful world of 'loopholes.'

Cycloptichorn
0 Replies
 
cicerone imposter
 
  1  
Reply Mon 16 Mar, 2009 12:27 pm
@georgeob1,
I agree with georgeob that it's not "trickery" in reducing the tax liability, because the tax codes allows quicker writedowns of depreciable assets and other expenses. However, there are companies with branches in foreign countries that can reduce US tax liabilities that domestic companies do not have, but that really isn't "trickery," but good accounting practice.
0 Replies
 
georgeob1
 
  1  
Reply Mon 16 Mar, 2009 12:34 pm
@Cycloptichorn,
Cycloptichorn wrote:

'Dismissal' is not a severe consequence. Everyone can get fired for poor performance, they are not special in any way and deserve no special consideration b/c of this. The executive who pretends he works harder than I did during my College years when I hung air ducts in the Houston heat during the summer, is an executive who is lying to themselves. They faced the same pressures and consequences as I did for my work; they just got paid millions of dollars to do it.
I think most people would count getting summarily fired, whether from a job as CEO or hanging air ducts as a severe consequence.

The fact is the economic significance of being (say) CEO of General Motors is greater than that of being an HVAC installer, and therefore commands greater economic rewards. Do you object to that? If so what alternative system would you impose? How would it work?

Cycloptichorn wrote:

Those stock options you mention aren't 'worthless' if they've been redeemed and sold long ago, a little point you neglect to mention.
True enough. However, in virtually all companies, option grants are issued at or close to the current value of the company stock (and therefore of no immediate value) and expire within a few years - they are expressly designed to reward executives only if the company prospers during that period. If the stock price doesn't rise during the option period, they are worthless. (And to get the stock price to rise they have to maximize the company's taxable income.)

Cycloptichorn wrote:

As for Daschle, what do you want me to say? I would not have paid him those monies for the lobbying work he did and I doubt he should have rec'd that much no matter what influence he claimed to have. What, George, did you think you would throw out the name of some highly-paid Dem and get a concession out of me?

Cycloptichorn
No, I was merely trying to point out to you that some (not all) corporate executives are not the only folks who manage to squeeze a bit "too much" money out of their economic situations. I would also include many tort lawyers (like John Edwards) who get rich on class action and tort claims usually in carefully selected jurisdictions; most politicians; and many heads of foundations & so-called NGOs; and many labor Union bosses - among many others.
Cycloptichorn
 
  1  
Reply Mon 16 Mar, 2009 12:40 pm
@georgeob1,
georgeob1 wrote:

Cycloptichorn wrote:

'Dismissal' is not a severe consequence. Everyone can get fired for poor performance, they are not special in any way and deserve no special consideration b/c of this. The executive who pretends he works harder than I did during my College years when I hung air ducts in the Houston heat during the summer, is an executive who is lying to themselves. They faced the same pressures and consequences as I did for my work; they just got paid millions of dollars to do it.
I think most people would count getting summarily fired, whether from a job as CEO or hanging air ducts as a severe consequence.


Severe but not unique in any way, therefore deserving of no special recognition or different set of rules or expectations of performance.

Quote:
The fact is the economic significance of being (say) CEO of General Motors is greater than that of being an HVAC installer, and therefore commands greater economic rewards. Do you object to that? If so what alternative system would you impose? How would it work?


No, I do not object to that. But do not pretend that they somehow work harder. That's pure bullshit.

Quote:
Cycloptichorn wrote:

Those stock options you mention aren't 'worthless' if they've been redeemed and sold long ago, a little point you neglect to mention.
True enough. However, in virtually all companies, option grants are issued at or close to the current value of the company stock (and therefore of no immediate value) and expire within a few years - they are expressly designed to reward executives only if the company prospers during that period. If the stock price doesn't rise during the option period, they are worthless. (And to get the stock price to rise they have to maximize the company's taxable income.)


A recipe for disaster, as we have seen lately, the concept that short-term rises in stock price are somehow preferable to long-term growth. This is a great example of companies short-sighted behavior blowing up in their faces, when they attempt to dodge regulations limiting executive compensation.[/quote]

Quote:
Cycloptichorn wrote:

As for Daschle, what do you want me to say? I would not have paid him those monies for the lobbying work he did and I doubt he should have rec'd that much no matter what influence he claimed to have. What, George, did you think you would throw out the name of some highly-paid Dem and get a concession out of me?

Cycloptichorn
No, I was merely trying to point out to you that some (not all) corporate executives are not the only folks who manage to squeeze a bit "too much" money out of their economic situations. I would also include many tort lawyers (like John Edwards) who get rich on class action and tort claims usually in carefully selected jurisdictions; most politicians; and many heads of foundations & so-called NGOs; and many labor Union bosses - among many others.


Uh, okay. I agree with you that many earn far more than their worth. Are you trying to bolster my argument in some way?

Cycloptichorn
Advocate
 
  1  
Reply Mon 16 Mar, 2009 12:41 pm
@georgeob1,
Corporations don't pay a FLAT rate.

Taxable income over Not over Tax rate

$ 0 $ 50,000 15%
50,000 75,000 25%
75,000 100,000 34%
100,000 335,000 39%
335,000 10,000,000 34%
10,000,000 15,000,000 35%
15,000,000 18,333,333 38%
18,333,333 .......... 35%

0 Replies
 
Foxfyre
 
  1  
Reply Mon 16 Mar, 2009 12:48 pm
@Cycloptichorn,
Georgeob1 wrote
Quote:
No, I was merely trying to point out to you that some (not all) corporate executives are not the only folks who manage to squeeze a bit "too much" money out of their economic situations. I would also include many tort lawyers (like John Edwards) who get rich on class action and tort claims usually in carefully selected jurisdictions; most politicians; and many heads of foundations & so-called NGOs; and many labor Union bosses - among many others.


Cyclop wrote
Quote:
Uh, okay. I agree with you that many earn far more than their worth. Are you trying to bolster my argument in some way?


See, I wouldn't interpret George's comment that way. I would interpret the intent to be that everybody doesn't necessarily merit their pay based on the benefit they provide from their work, but that few of us decline whatever we can legally get.

If you had been offered $1000/hour to install that ductwork instead of the rate you earned, would you have turned it down? Especially if others doing the same work were making that kind of money?
0 Replies
 
Advocate
 
  1  
Reply Mon 16 Mar, 2009 12:49 pm
@georgeob1,
Here is an interesting piece, by a respected commentator, on the coming totalitarian US society.




A warning of creeping totalitarianism in U.S

Democracy Incorporated
Managed Democracy
and the Specter of Inverted Totalitarianism
By Sheldon S. Wolin

Princeton University Press. 376 pp. $29.95



--------------------------------------------------------------------------------
Reviewed by Chris Hedges


--------------------------------------------------------------------------------
The United States, if it does not radically alter course, will become a totalitarian state. That is the argument of Sheldon S. Wolin's Democracy Incorporated.
This is no political screed. It is a brilliant, nuanced, and detailed dissection of the abject failings of the American political system by one of the nation's preeminent political theorists. It is a work that will rank as one of the most important pieces of political philosophy of the new century. By the time Wolin, who taught political philosophy at Berkeley and Princeton, is finished, it is clear that unless Barack Obama radically restructures corporate and military industrial power, our democracy is doomed.

Wolin uses the term inverted totalitarianism to describe our descent into despotism. "Inverted" totalitarianism does not revolve around a demagogue or charismatic leader, as "classical" kinds of totalitarianism do. The power centers of inverted totalitarianism are corporate and usually anonymous. It does not openly discredit democracy. It pays homage to the democratic ideal, patriotism, and the Constitution while quietly subverting democratic institutions.

The New Deal was the closest the nation came to a popular democracy, according to Wolin. But the rise of the country as a superpower after World War II led, in Wolin's eyes, to an increasingly tamed or "managed democracy." The unchecked power of a corporate elite made possible inverted totalitarianism. It has developed "imperceptibly," he writes, "unpremeditatedly, and in seeming unbroken continuity with the nation's political traditions."

In inverted totalitarianism, pliant legislators are elected by citizens - but they are beholden to armies of corporate lobbyists. Corporate media, which control nearly everything we read, watch or hear, lock out critics of corporate power (as an example, Wolin names Ralph Nader) and imposes a bland uniformity of opinion.

In totalitarian regimes such as Nazi fascism or Soviet communism, economics was subordinate to politics. "Under inverted totalitarianism," writes Wolin, "the reverse is true: economics dominates politics - and with that domination come different forms of ruthlessness."

It is hard to argue with Wolin's thesis, especially as hundreds of billions in taxpayer dollars are funneled to Wall Street while the rest of us wonder if we will have a job next month.

"The new system, inverted totalitarianism, is one that professes to be the opposite of what, in fact, it is," Wolin writes. "It disclaims its real identity, trusting that its deviations will become normalized as 'change.' "

Wolin notes that the framers of the Constitution distrusted and often feared popular democracy. They established constitutional restraints - the Electoral College is one - to protect the power of the elite. The rise of democracy was a slow, arduous struggle, decade after decade, that pitted citizens against the elite. The republic existed for three-quarters of a century before the formal end of slavery. It was an additional 100 years before black Americans were assured their voting rights. It was not until the 20th century that women gained the right to vote and trade unions were able to engage in collective bargaining.

"Far from being innate," Wolin writes, "democracy in America has gone against the grain, against the very forms by which the political and economic power of the country has been and continues to be ordered."

The hijacking of government by corporations has permitted the military-industrial complex (which, in a clever sleight of hand, is no longer considered part of the government) to bleed the country. "Big government may be the problem," Wolin quips, "but military is the solution." The social programs implanted by the New Deal have been reduced or eliminated as part of the "selective abdication of governmental responsibility for the well-being of the citizenry" under cover of cost-cutting and improving "efficiency." The official U.S. defense budget for fiscal year 2008 is $623 billion. The next closest national military budget is China's, at $65 billion, according to the Central Intelligence Agency. And yet, even in the midst of our economic collapse, the two main political parties refuse to challenge the right of the military-industrial complex to gorge itself on taxpayer dollars.

Imperialism and democracy are, Wolin writes, incompatible. But imperial politics is what we have, and since our leaders refuse to limit the resources devoted to sustaining empire, democracy will perish.

"Imperial politics represents the conquest of domestic politics and the latter's conversion into a crucial element of inverted totalitarianism," Wolin writes. "It makes no sense to ask how the democratic citizen could 'participate' substantively in imperial politics; hence it is not surprising that the subject of empire is taboo in electoral debates."

Wolin has only one blind spot, a minor one. He believes that no one actively challenges the way things are because the lives of ordinary people are "materially tolerable and safer" in the United States. But this ignores what is happening to consumers and working people in the present economic downturn. As tens of thousands of workers join the ranks of the unemployed daily, as they watch helplessly as their homes are foreclosed on, and as they are unable to pay for health insurance, they could easily turn inverted totalitarianism into classical totalitarianism. And demagogues too often crawl up out of the slime to prey on those in despair during a crisis.
georgeob1
 
  1  
Reply Mon 16 Mar, 2009 08:20 pm
@Cycloptichorn,
Cycloptichorn wrote:

A recipe for disaster, as we have seen lately, the concept that short-term rises in stock price are somehow preferable to long-term growth. This is a great example of companies short-sighted behavior blowing up in their faces, when they attempt to dodge regulations limiting executive compensation.

Typical stock option grants are issued at a strike price equal to the price of the stock at the moment the option is issued. The options generally must be exercised within 3-5 years of the time at which they are issued - after that they expire. Thus they are an incentive for the executive to do what he can to maximize the company's taxable income and therefore its stock price during the option period. Their value is equal to the growth in the stock price from the moment of issue until the options are exercised - no growth means no value. Do you think that 3-5 years is "short term"? I agree that short-term goals are sometimes given too much importance, however one gets to the long-term through the short-term.

There are no "regulations limiting executive compensation"!!!!! This is still a free country and private property is still a right of all citizens.
okie
 
  1  
Reply Mon 16 Mar, 2009 09:43 pm
@Advocate,
I suggest Mr. Wolin be fired, then go on a long vacation, then go get a real job. Then perhaps he would have less time to write all of his imaginations.
 

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