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Author Topic: Are you paying your fair share?
LetterRip
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edgmatt,

quote:
With food stamps, however, I DO know that the ones receiving it are receiving it because they haven't earned it.
We only know that they meet the guidelines to receive food stamps - they may well have earned it, and been swindled out of it. A lot of pensions have disappeared due to a combination of corporate action and law changes that moved pensions from first creditors (which makes sense, sense pensions are compensation that should just be equivalent to a savings account managed by the corporation) to where pensions are the last creditors. We are talking at a minimum hundreds of billions of dollars and likely trillions. These law changes directly transferred wealth from the poor and middle class to the wealthy.

We also have bankruptcy protection in general - which usually ends up transferring wealth from middle class to the upper class.

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PSRT
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Going even further, even they are working, and the company they are working for is making significant profit, or the executives are making more than x times what they are making, then they have earned enough so that they shouldn't need to be on food stamps. If they were working, and fired by a company with executives making more than an upper middle class salary, then they earned enough that they shouldn't need to be on food stamps. If they are in school to improve their careers, then they have earned enough not to be on food stamps. and more...

The food stamp program is essentially a wealth transfer system from the poor and middle class to the wealthy. Employers can pay their employees less than the value of their labor, and those employees will be able to pick up additional income paid for by the public, putting more dollars into the pockets of the owners.

The whole assumption, that somehow the people who are on food stamps haven't earned that tiny amount of money, only works at all because of our systems of laws and financial exchanges. The whole assumption that people with a crap ton of money have earned it only works because of the systems of laws and financial structures that are in place.

[ December 15, 2013, 04:43 PM: Message edited by: PSRT ]

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KidTokyo
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quote:
I don't even disagree with you completely, but it's irrelevant because:

1- We don't know that.
2- There's no way to know that.
3- There's no way to calculate how much either side owes the other.

With food stamps, however, I DO know that the ones receiving it are receiving it because they haven't earned it.* I DO know exactly how much food stamps (for example) are costing the rest of the country.

Actually, economists make monetary determinations of this sort all the time -- very specific determinations of the kind you say are impossible to make.

Your contention that someone "hasn't earned" a food stamp presupposes that the income they earn, if any, represents what they "deserve." Why are you certain they haven't earned it? Perhaps they have. Perhaps whatever money they had was defrauded from them by overprivileged men with lear jets.

Without government support of these huge corporate associations, they would shrink or cease to exist completely, and their managers would earn much smaller incomes doing whatever there is left for them to do.

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RedVW on a Laptop
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Koolade.

Or at least theories that equivocate to it.

As to the commentary from 2010, we followed through on it. We didn't expect our healthcare costs to skyrocket like they did.

So now we are strategizing how to lower our incomes and tax liabilities to a point where we are subsidized.

Our latest strategy, we may get divorced for tax reasons. Since marriage is a penalty, we will ditch the government marriage. Well go get powers of attorney for each other etc and fully replicate everything but the taxation penalty.

So I'm wondering how the economy is doing because over the past three years I'm not the only one who did what we did?

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LetterRip
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RedVW,

if your income differences are significant enough that it changes your ACA subsidy, then chances are the income difference is also providing you a 'marriage bonus' in terms of income taxes that is probably about the same as the ACA subsidy.

Ie marriage is probably a 'wash' in terms of Federal income taxes and ACA subsidy.

If you then factor in other favorable tax treatment to marriages (property transfer etc.), you probably are coming out well ahead from marriage 'bonuses'.

So you might want to talk to a tax expert before doing a divorce.

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RedVW on a Laptop
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LR

Already did.

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JoshuaD
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Red: Did the tax consultant look at death taxes? I work in an estate planning law firm, and I don't believe there is any planning that can be done to replicate the 100% marital deduction.

What state are you from? If you did this in NJ, anything passing from you to her would be taxed at about 15%. If you were over the NJ estate tax threshold ($675k), the percentage could be higher. Each state is different, but the pattern is usually the same.

What have you calculated the savings to be, out of curiosity?

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RedVW on a Laptop
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It's looking iffy as to whether it would work or not. Real round numbers we can make it so my child is fully covered by the state and as for myself if be fully covered as well.

Asset wise the fictive divorce would have to place our assets fully under my wife. There are tax penalties for this in the first year.

More to it than what I have posted. Ethically it's a gray area. But seeing as marriage is now an easy legal framework as far as government is concerned and is still taxed as a penalty on the federal level we feel it washes out. Other ideas we have looked at include moving to a state without state income tax and membership in health care state markets.

We have also looked at moving abroad.

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edgmatt
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quote:
Your contention that someone "hasn't earned" a food stamp presupposes that the income they earn, if any, represents what they "deserve." Why are you certain they haven't earned it? Perhaps they have. Perhaps whatever money they had was defrauded from them by overprivileged men with lear jets.

You were so sure about the specifics of the jet owner, and now your telling me we can't know the specifics of the food stamp guy.

Besides, you are helping me make my point with this. You are right with all those "perhaps". But we can't gauge it. So we have to take things at face value; one can't afford food, we give them food stamps. We assume they legititmatly can't *earn* it by paying for it. We can't start asking these deep questions about if they *actually* earned it, if they *truly* deserve it, etc.

And the same has to apply for the jet owner. Because we can't know if he legitimately *earned* every dollar to buy the jet, we have to take things at face value when it comes to making decisions about taxes. If there is a specific law you think very directly accumulates wealth towards him, then go after that law. But don't assume that every wealthy person has gotten their wealth illegitimately. That's just as horrible as assuming everyone on food stamps is scamming the system.

quote:
Your contention that someone "hasn't earned" a food stamp presupposes that the income they earn, if any, represents what they "deserve."
No, that's not my contention %100. "Deserved" isn't a good word their either; that's more of a philosophical term. Maybe that's the problem with all those comments about the rich deserving, or the poor deserving. Your trying to determine correct policy based on intangible philosophic grounds, which can't be done.

"Earned" is a much more concrete term in this context. And money, in general, tends to be a strong indicator of exactly what someone has earned. There's other factors, and that's why we have all those programs, and that's why we have all those taxes, to fill in the cracks of imbalances. And that's ok, to a point. But when *we* start making presumptions like NONE of the wealthy earned their money, and ALL of the poor earned more then they got, then things are going to spiral out of control in a bad bad way.

Another thing: It has been stated that the government, with it's laws, has set up a way for money to be continually in the hands of the wealthy, and kept away from the poor. But the solution has been to give that government more authority over the money by way of higher taxes. How is this going to solve the problem? Your going to rely on the same people who have the power to make themselves and their friends rich, (and have done so, according to you) to make things better by giving them more access to and more power over money? [Exploding]

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KidTokyo
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quote:
You were so sure about the specifics of the jet owner, and now your telling me we can't know the specifics of the food stamp guy.

Besides, you are helping me make my point with this. You are right with all those "perhaps". But we can't gauge it.

I'm not telling you that at all. I'm suggesting a possibility that you seem to have excluded. In fact, I believe we can and do know a great deal about who uses foodstamps, and why, and I see little support for your notion that most people who use them are making use of "unearned" privileges. As with the lear jet guy, these things have been studied in great detail.

quote:
Because we can't know if he legitimately *earned* every dollar to buy the jet, we have to take things at face value when it comes to making decisions about taxes.
What does that even mean? You've written a blank slate.

quote:
If there is a specific law you think very directly accumulates wealth towards him, then go after that law.
It's more than a law, it's a system.

quote:
But don't assume that every wealthy person has gotten their wealth illegitimately.
I don't have to *assume* anything. Corporations and their managers have unique legal privileges, and these privileges are responsible for their ability to accumulate so much wealth. That's not even debated by the managers themselves. Whether or not these privileges are "legitimate" is a matter of one's politics, but that they exist is beyond debate.

quote:
Your trying to determine correct policy based on intangible philosophic grounds, which can't be done.
Not at all! What intangible about fairness? About not getting shafted or defrauded? About having control over your own life rather than being viewed as a resource to be mined and exploited by creditors?

quote:
But when *we* start making presumptions like NONE of the wealthy earned their money, and ALL of the poor earned more then they got, then things are going to spiral out of control in a bad bad way.
The gap between the wealthy and the poor in the US is an order of magnitude beyond what it was 30 years ago, and far exceeds the difference in most modern democracies. That's a product of economic policy, not the astonishing genius of our capitalists.

quote:
But the solution has been to give that government more authority over the money by way of higher taxes.
That's not my solution. My solution is to take away the legal privileges as much as possible, and hence remove the need for policies based on redistribution.

quote:
Your going to rely on the same people who have the power to make themselves and their friends rich, (and have done so, according to you) to make things better by giving them more access to and more
That is absolutely not what I'm proposing. You likely think that because you haven't really been following the implications of what I've been saying. What I propose is the literal opposite -- to reduce narrow privilege and increase access. For instance, higher regulation of financial institutions and less regulation of small business, and perhaps tax benefits to encourage worker-ownership of businesses. The solution must be structural, not centralized and based on redistribution.

[ December 16, 2013, 10:10 AM: Message edited by: KidTokyo ]

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Seriati
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So is there more to your argument, Kid, than having wealth means you are necessarily the result of priviledge and taking it from others who are more deserving? That not having wealth always indicates that you have had your rightfull earnings displaced?

I think this debate gets confused when you measure the weathly against philosophy (they have more than anyone is worth) and the poor on statistics (direct evidence of fraud is low). Statistically, fraud is low in both groups. Philosophically many rich and poor have more than they deserve based on their own efforts, and many do not.

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KidTokyo
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quote:
So is there more to your argument, Kid, than having wealth means you are necessarily the result of priviledge and taking it from others who are more deserving? That not having wealth always indicates that you have had your rightfull earnings displaced?
Yes, absolutely. As an attorney who deals with corporate law, and who has studied how it works in several countries, I have a fairly intimate understand of how it actually works, as opposed to how most people think it works.

Thing is, I've already explained this in some detail, but it's not sinking in...that's alright, it can take a while to get your head around a new idea.

The fundamental thing to realize is that for the last 30 years our policy makers have been "deregulating" big business, and yet, paradoxically, there are more regulations and government has grown.

How to explain this paradox?

Answer: our politicians, and the corporate managers who write our laws and policies, are employing something akin to doublespeak. What they call "deregulation" does not result in few laws or less government -- it results in laws that favor corporate power over the individual citizen. They call it de-regulatory because it expands legal entitlement, so on the surface there appears to be less regulation because there is less natural limitation. A classic example is that when Glass-Steagal was repealed, it was replaced by more government involvement and regulation to manage more corporate contracts of greater complexity. So, what is called "deregulation" subtracts, rather than adds to economic and legal equality. Bright-line laws get replaced by micromanagerial support systems.

This process is itself a redistributive system flowing in the opposite direction as the tax system. In fact, our income taxes have faced only modest changes over the last 30 years, but the distribution of special government support for corporate interests has drastically increased, and the wealth distribution has followed accordingly.

In systems where there is more genuine democratic control over business structure, economic egalitarianism is greatly increased, and there is little need for social safety nets because people actually are getting their fair share.

[ December 16, 2013, 11:09 AM: Message edited by: KidTokyo ]

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TomDavidson
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quote:
Philosophically many rich and poor have more than they deserve based on their own efforts...
From an economics standpoint, I think it's more useful to examine which populations have more than they will circulate, and which would circulate more if they had more to spend.
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Seriati
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quote:
Originally posted by TomDavidson:
quote:
Philosophically many rich and poor have more than they deserve based on their own efforts...
From an economics standpoint, I think it's more useful to examine which populations have more than they will circulate, and which would circulate more if they had more to spend.
I think that's a false test. No one's really sits still these days. The wealthy put it in banks, where it's loaned out, or put it in investments where it goes to work directly. Now I do agree that we've gotten into a speculation based economics model, and that detracts from the best purpose of investment.

But I don't see any value in a tax policy that causes the wealthy to engage in tax avoidance mechanisms - which they do to great extent - rather than in making investment. And I certainly don't see a benefit to the economy in a tax policy that causes that, adds in a layer of government waste, adds in another layer of government allocations to policitically favored projects, and then sends a remainder of the fraction to a large number of impoverished because it will increase circulation.

I mean get the simple principal, but I don't see anything that makes me believe you are correct that the result is more economic benefit from redistribution policies, and when you couple that with the disincentive to be productive it looks even worse.
quote:
Originally posted by KidTokyo:
Yes, absolutely. As an attorney who deals with corporate law, and who has studied how it works in several countries, I have a fairly intimate understand of how it actually works, as opposed to how most people think it works.

In fairness, it's not a unique perspective here.
quote:
The fundamental thing to realize is that for the last 30 years our policy makers have been "deregulating" big business, and yet, paradoxically, there are more regulations and government has grown.

How to explain this paradox?

Well, I'd explain it by saying that it's not true. Our government has always worked at crossed purposes, and no matter what the legislature does the career bureaucrats in the administrative agencies have NOT BEEN engaged in deregulation. Honestly its a stretch to even claim the legislature has, when they pass ten laws (at least) for everyone they rescind.
quote:
Answer: our politicians, and the corporate managers who write our laws and policies, are employing something akin to doublespeak. What they call "deregulation" does not result in few laws or less government -- it results in laws that favor corporate power over the individual citizen.
And this is where I think you've crossed a bridge too far. As many laws are against corporate interests as in favor (at least as many). What more than anything the laws do is waste money and divert resources into things like compliance (which oddly enough is more focused on technicality than the intent behind the rules - and I don't even think its bad faith, the US government's enforcement of rules is so "gotcha" there's really no other rational way to proceed).
quote:
This process is itself a redistributive system flowing in the opposite direction as the tax system. In fact, our income taxes have faced only modest changes over the last 30 years, but the distribution of special government support for corporate interests has drastically increased, and the wealth distribution has followed accordingly.
No. The only benefit the excess regulation culture has to corporations is that it raises the bariers to entry for new businesses. In almost all other ways its a parasitic waste product. It's not the opposite direction of tax flow, its in fact the same direction the federal government has taken, it maximizes middle management and entrenched bureaucracy.
quote:
In systems where there is more genuine democratic control over business structure, economic egalitarianism is greatly increased, and there is little need for social safety nets because people actually are getting their fair share.
I assume this is a complex way of saying operator owned? I do agree regulation makes this a hard model.

But as a general matter a person's "fair share" of someone else's labor is zero. If you want that labor you should pay for it, not seize it.

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KidTokyo
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quote:
Our government has always worked at crossed purposes, and no matter what the legislature does the career bureaucrats in the administrative agencies have NOT BEEN engaged in deregulation. Honestly its a stretch to even claim the legislature has, when they pass ten laws (at least) for everyone they rescind.
That's what I just said, dude.

quote:
As many laws are against corporate interests as in favor (at least as many). What more than anything the laws do is waste money and divert resources into things like compliance (which oddly enough is more focused on technicality than the intent behind the rules - and I don't even think its bad faith, the US government's enforcement of rules is so "gotcha" there's really no other rational way to proceed).
In essence I agree with this except the "against" part. Corporations of this magnitude cannot even exist without a strong state. Whatever "regulations" they find obnoxious are dwarfed in importance by the laws which support them. Corporations, however much they may complain, essentially get what they want out of government.

quote:
The only benefit the excess regulation culture has to corporations is that it raises the bariers to entry for new businesses.
I said something similar (though I disagree with the "only" as well as your implicit implication that a "barrier" is not in fact monumentally empowering), but you seem not to be seeing it because you are stuck in the lens of what you think my politics are.

quote:
In almost all other ways its a parasitic waste product.
In many ways, true, but that is not the whole picture.

quote:
It's not the opposite direction of tax flow, its in fact the same direction the federal government has taken, it maximizes middle management and entrenched bureaucracy.
Disagree with "middle" and "same," agree with the rest. Wealth is extracted from blue collar and middle class by the credit industry and by the dual-caste legal system.

I actually think you and I largely agree on many of the facts, just not the full extent of the damages, nor the implications.

quote:
But as a general matter a person's "fair share" of someone else's labor is zero. If you want that labor you should pay for it, not seize it.
Yes, exactly. But I don't think this means what you think it means. State capitalism has, historically, used violent and coercive means to suppress the rights of those who labor, thus keeping wages down.

[ December 16, 2013, 02:18 PM: Message edited by: KidTokyo ]

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Seriati
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I actually think we disagree on who is the motivating force. I don't see your argument on - the corporations - being the ones in control.
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KidTokyo
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Having studied how American law related to corporations has evolved from the 1850s to the present day, my conclusion -- and I believe it is unavoidable -- is that the corporation and the state have grown hand-in-glove, and that the purpose of each is to support the other and that they fundamentally protect their mutual interests. Supposed outrage and conflict between government and big business is, more often than not, a bit of a sock puppet show. Not always, to be sure, but often. Even among bosom buddies, blowups happen. Also, sometimes each has to cave a little to populist pressure, just enough to let the steam out.

To be clear, this is *not* some kind of wacky conspiracy theory, and I see no evidence of a centrally managed, directed conspiracy. I only assume profit motive and rational self-interest.

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Adam Masterman
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quote:
Originally posted by Seriati:

But as a general matter a person's "fair share" of someone else's labor is zero. If you want that labor you should pay for it, not seize it.

What if you seize it, and then pay for it? But far less than its actual value? Assuming that you don't see this as much different than simply seizing it, ethically speaking, think about the power imbalance created by a government policy that explicitly maintains a positive unemployment rate. In economic terms, what happens when the employer is free to shop around, but the employee is bound by need to take whatever is available? Do you think that leads to an equitable distribution of wealth?

One of the things people seem to miss about [Adam] Smith is that, when he said "free", as in "free markets" he wasn't saying about the presence or absence of government. In the Smithian sense, a free exchange was simply one where either party could choose to accept or reject an economic exchange. Both were "free" to pursue their economic self-interest, and this quality allowed for prices to naturally find a level that reflected their actual value to the market at large. The contemporary dumbing-down of this already simple concept is that "free" simply means "less government". But that's absurd. Government "creates the market by eliminating the most obvious obstacles to free exchange, such as me marching into the market with a machine gun and taking everything I want for free. Beyond that, government's role in a Smithian free market is ensuring that parties maintain as much freedom to walk away if the exchange doesn't reflect their perception of value. When people *always* have the freedom to "take their business elsewhere", that's when the economic optimization that Smith describes actually takes place.

Unemployment is a pressure that reduces the freedom of employees to "walk away", and thus increases the bargaining leverage of employers. With a constant, maintained positive unemployment rate, which we've had for a very long time, there is a steady, constant suppression of wages; the lack of freedom in the situation means that the market isn't able to reflect the true value of labor.

While there are many ways to address the issue, all with legitimate pros and cons, its a real issue, and ignorance of this dynamic leads to some very flawed assumptions. "Fair share", in my experience, typically refers to the fact that wages have become almost entirely divorced from their real value, in a way that's obvious to most everyone. Comparing CEO pay, or hedge fund manager compensation, to that of teachers, police officers, manufacturing jobs, and even doctors; its easy to see that our system doesn't distribute based on either merit or social benefit. Redistribution, in this context, is a misnomer; the initial distribution itself is deeply flawed, reflecting neither true market dynamics nor any measure of justice or fairness. So long as this problem remains, doing nothing is an active form of confiscation.

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PSRT
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quote:
But as a general matter a person's "fair share" of someone else's labor is zero. If you want that labor you should pay for it, not seize it.
Yes. So can we agree, then, that any law or system that allows people to pay less than the value of labor to their employees, or removes leverage from those employees so that they can't negotiate in order to receive the actual value of their labor, is a system that is at least as problematic as a system that removes wealth from those employers that puts their earnings below the value of their labor?
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KidTokyo
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Very well put, Adam.
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PSRT
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Its really disheartening to post that close to Adam. He's so much more eloquent than I am.
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Adam Masterman
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quote:
Originally posted by PSRT:
Its really disheartening to post that close to Adam. He's so much more eloquent than I am.

That's very kind, Paul, but the union point you alluded to is cogent as well. Just the need for a union is an indication that market forces are being blocked in the employment market. It means that the market is *already* structured to grant more freedom to employers than employees. A union is an attempt to re-balance the equation through cooperation. Not only should labor organization be considered sacrosanct, but the very existence of unions should be our first clue that we don't really have a free employment market.
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Pete at Home
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I wish that PSRT would elaborate on what he said about the rules by which we allow acquisition of monies. Because I basically agree with him, but would like to see the thesis made clear.

Perhaps this example would help:

quote:
Richard Fuld, head of Lehman Brothers, faced questioning from the U.S. House of Representatives' Committee on Oversight and Government Reform. Rep. Henry Waxman (D-CA) asked: "Your company is now bankrupt, our economy is in crisis, but you get to keep $480* million. I have a very basic question for you, is this fair?"
Funny how some Righties say that the fairness question is all important except when lefties ask it, when it becomes "class warfare." [Confused]

*Fuld had in fact taken about $300 million in pay and bonuses over the past eight years. IMO even though Waxman overshot the number by 50%, the question is valid.

The Rightspeak answer is that Lehman brothers execs had contracts and contracts must be honored. But what of the obligations towards employees and shareholders? If that's the contracts we're giving these people, maybe we need to rewrite the damned contract. Because taxpayers paid through the nose to mitigate the mess created to make the Fulds of this world their golden parachutes. Maybe we need a different deal.

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Seriati
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quote:
Originally posted by Adam Masterman:
[QB]
quote:
Originally posted by Seriati:
But as a general matter a person's "fair share" of someone else's labor is zero. If you want that labor you should pay for it, not seize it.

What if you seize it, and then pay for it? But far less than its actual value? Assuming that you don't see this as much different than simply seizing it, ethically speaking, think about the power imbalance created by a government policy that explicitly maintains a positive unemployment rate. In economic terms, what happens when the employer is free to shop around, but the employee is bound by need to take whatever is available? Do you think that leads to an equitable distribution of wealth?
So you equate "seizures," the forcible taking of something, with coercion, with voluntary transactions to try and make this point. With a hand wave, voluntary transactions become practically seizures.

So specifically, if you seize and then pay for it, you're a thief. While there may be times when this excusable for individuals like in an emergency when the owner can't be found, that doesn't change the general rule that this is a theft. Paying anything less than the asking price (not fair value) in a private transaction is still a theft. We do recognize a power for the state to force these transactions on fair value.

I don't however accept your unstated implication that this is what has occurred in the jobs market, there is no seizure, there is no force, there is no version of reality where the imbalance in the US is such to make this argument carry water without proof. Even if it were true that zero unemployment were somehow a good result (and that ignores completely the necessary inhibition of development and inefficient allocation of efforts such would require) it is not true that policies that enable or encourage such a result equate to seizures.
quote:
Assuming that you don't see this as much different than simply seizing it, ethically speaking, think about the power imbalance created by a government policy that explicitly maintains a positive unemployment rate.
Ethically speaking, think about the harm to the overall economy, the institutionalized waste and the inhibition on growth maintaining a policy of zero or negative unemployment causes. Those economies that have attempted it have all been autocratic and generally not successful unless they have an exploitable natural resource. So if you want to discuss specific policies feel free, but I'm not accepting a general case argument on a complex issue.
quote:
In economic terms, what happens when the employer is free to shop around, but the employee is bound by need to take whatever is available?
First, I simply reject that this is the general case in the US. Most employers are local and their ability to shop around is limited, even where it's not, the same ability to hire from a wide area means that potential employees can obtain employment from a wider market of employers. It's a reciprocal fact that you can't have one without the other.

What I see as the real situation is that you have potential employees who DON'T have to take the jobs, and the result is exactly what you'd expect, the employers attempt to tempt them out but only so far before they leave the market by either closing or where possible exporting the jobs to workers who will do them.

There are two components to the value of work, what someone is willing to accept to do it, and what someone is willing to pay. All the theories I've seen you guys express ignore the second component, apparently in the view that there is always more to be paid.
quote:
Do you think that leads to an equitable distribution of wealth?
I don't think you've accurately stated what occurs, so the question doesn't particularly have merit. If the situation you imply still existed (can you point me to the serf based economy you're describing?) then it wouldn't be particularly fair.
quote:
One of the things people seem to miss about [Adam] Smith is that, when he said "free", as in "free markets" he wasn't saying about the presence or absence of government. In the Smithian sense, a free exchange was simply one where either party could choose to accept or reject an economic exchange. Both were "free" to pursue their economic self-interest, and this quality allowed for prices to naturally find a level that reflected their actual value to the market at large. The contemporary dumbing-down of this already simple concept is that "free" simply means "less government". But that's absurd. Government "creates the market by eliminating the most obvious obstacles to free exchange, such as me marching into the market with a machine gun and taking everything I want for free. Beyond that, government's role in a Smithian free market is ensuring that parties maintain as much freedom to walk away if the exchange doesn't reflect their perception of value. When people *always* have the freedom to "take their business elsewhere", that's when the economic optimization that Smith describes actually takes place.
Two things. First I'm not an anarchist so I don't have a problem with the existence of government.

But importantly, the argument about freely entering into transactions DOES NOT mean that we must be free from all considerations. It is not an argument that we must all start from a baseline of not having to work, only that we are free to choose who to work for. Your argument about the employment rate is disingenuous in an economy where the unemployed don't stay unemployed long term other than by choice (which is largely what we had pre-recession). And I have nothing against providing help during recessions when there aren't jobs to be found.
quote:
Unemployment is a pressure that reduces the freedom of employees to "walk away", and thus increases the bargaining leverage of employers. With a constant, maintained positive unemployment rate, which we've had for a very long time, there is a steady, constant suppression of wages; the lack of freedom in the situation means that the market isn't able to reflect the true value of labor.
That's simplistic way to look at unemployment. Unemployment can mean many things, it can mean that there's been growth faster than worker's can be integrated, it can mean that people are optimistic about their prospects and are willing to wait for better opportunities, or it can mean that the situation is hopeless and there are no jobs available. It doesn't in isolation mean that wages will be suppressed, though that could certainly be a result.
quote:
While there are many ways to address the issue, all with legitimate pros and cons, it’s a real issue, and ignorance of this dynamic leads to some very flawed assumptions. "Fair share", in my experience, typically refers to the fact that wages have become almost entirely divorced from their real value, in a way that's obvious to most everyone.
Again that's because you only consider one side of the picture.
quote:
Comparing CEO pay, or hedge fund manager compensation, to that of teachers, police officers, manufacturing jobs, and even doctors; it’s easy to see that our system doesn't distribute based on either merit or social benefit.
If it's so easy to see, why don't you demonstrate it. Is it you assertion that being a teacher is tougher than being a CEO? That it takes more effort, involves more stress, takes more skill? Honestly, that's one of those things people tell themselves that isn't really true. Can just anyone be a good President? A good Senator? Invest a portfolio of billions intelligently? Our system of rewards is based on rewarding people who can do things that others can't do - that's expressly a meritocracy. And generally speaking it’s also a social benefit.
quote:
Redistribution, in this context, is a misnomer; the initial distribution itself is deeply flawed, reflecting neither true market dynamics nor any measure of justice or fairness. So long as this problem remains, doing nothing is an active form of confiscation.
Black is white. We must confiscate, else by our inaction a confiscation will continue.

That was a well written piece, but it's a still a big brother argument. It's accurate to call what you want redistribution, there's nothing fair about what you're proposing. There's no special merit of the have nots that justifies taking from the haves, there's barely any historical truth to the idea that the have's have manipulated the rules in their favor given the turnover in the haves and have nots over time. If you think the rules have been corrupted, I'm willing to work on them, but the system uncorrupted is far far better than a system that attempts to equalize outcomes without regard to merit.

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scifibum
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Equalizing outcomes would require a complete revolution. Enormous increases in progressive tax rates could be absorbed without coming close to "equalizing outcomes".

Also just want to say: the idea that someone can "merit" or deserve hundreds of millions, or billions of dollars, is absurd. It may be an acceptable side effect of an economic system that is beneficial for other reasons, but it's impossible for that to be what is deserved or merited.

[ December 17, 2013, 12:34 PM: Message edited by: scifibum ]

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KidTokyo
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Seriati,

I'm sure Adam is capable of defending his post and will do so, but I'd like to make a few quick points myself.

quote:
So you equate "seizures," the forcible taking of something, with coercion, with voluntary transactions to try and make this point. With a hand wave, voluntary transactions become practically seizures.
I would argue that the term "voluntary transaction" is the ultimate handwave. Voluntary transactions are, in no way, an indicator that one is at liberty, free of coercion, or that the outcome is just. Even in a maximum security prison, one may engage in a voluntary transaction. One may also do so in a totalitarian regime. Choices do not indicate the presence of freedom.

quote:
I don't however accept your unstated implication that this is what has occurred in the jobs market, there is no seizure, there is no force, there is no version of reality where the imbalance in the US is such to make this argument carry water without proof.
This is simply not true. Labor, land, and resources are seized on a routine basis. We kill for our oil, we prop up dictatorial regimes for economic reasons, and we bully weaker nations into lowering import tariffs so that we can dump subsidized products on their markets (putting their farmers out of work) and buy cheap labor where union rights are forcibly quashed (putting our factory workers out of a job). Nothing "voluntary" has occurred here. That is theft.

quote:
Is it you assertion that being a teacher is tougher than being a CEO? That it takes more effort, involves more stress, takes more skill? Honestly, that's one of those things people tell themselves that isn't really true. Can just anyone be a good President? A good Senator? Invest a portfolio of billions intelligently? Our system of rewards is based on rewarding people who can do things that others can't do - that's expressly a meritocracy.
I don't think all people are equally able, but it is very popular nowadays to vastly overestimate the "genius" of CEOs, managers, and bankers. These roles do not involved abstract ideas or esoteric skill sets. The main barriers to entry to these roles is lack of interest, lack of stamina, and social privilege (meaning not just wealth but the ability to read personality nuances carefully -- an ability that great businessmen share with successful criminals and actors).

quote:
there's barely any historical truth to the idea that the have's have manipulated the rules in their favor given the turnover in the haves and have nots over time.
That is an astonishing statement. There is an abundance of evidence. There is so much evidence, in fact, that I am wondering where you would look to not find it.

[ December 17, 2013, 01:09 PM: Message edited by: KidTokyo ]

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LetterRip
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Seriati,

quote:
If it's so easy to see, why don't you demonstrate it. Is it you assertion that being a teacher is tougher than being a CEO? That it takes more effort, involves more stress, takes more skill?
For many CEOs, teachers definitely have it tougher. Most of their results are independent of the CEO. I think a large percentage of the population (10-20%) might be able to outperform many CEOs.

quote:
Honestly, that's one of those things people tell themselves that isn't really true. Can just anyone be a good President?
I think many individuals (10% of the population) in the US would make better Presidents than most of the individuals who have been VP or candidates for VP (Ie Biden and Palin), and for many of our historical Presidents.

quote:
A good Senator?
Senators in general seem to be awful. A significant subset of the population (20%?) can likely perform the job of Senator or Congressman better than currently sitting senators/congressman.

quote:
Invest a portfolio of billions intelligently?
Many portfollio managers are outperformed by chance. Much of the 'success' we hear about is based on having a huge number of portfolios - and then only reporting on the lucky portfolios. (Ie if you want to be a brilliant portfolio manager - create 100 random portfolios with high volatility, and any that go down for the year, drop those and keep the remainder. After 5 years you'll have 3 portfolios with positive returns averaging way above the market for 5 years in a row.)

Others of course profit via insider trading or via lawful equivalents.

This isn't to say that there is no skill. There seem to be some managers with definite skill, but they are a small subset of the total.

A quote for you,

quote:
The surprising fact is that, on the whole, these active managers, who have spent years accumulating expertise, are paid handsome salaries, and have access to boat-loads of information, still under-perform simple indices year after year. In other words, they are unsuccessful in picking stocks that perform better than the market as a whole.
http://momanddadmoney.com/the-experts-cant-pick-stocks-can-you/

Have a look at 'report 1'

http://www.spindices.com/documents/spiva/spiva-us-mid-year-2013.pdf

quote:
Our system of rewards is based on rewarding people who can do things that others can't do - that's expressly a meritocracy.
No it really isn't even close to a meritocracy. Jobs are rewarded primarily based on connections not merit, and many attributed successess and failures are primarily based on chance, not merit - or based on merit of individuals whom the individual credited with the success or failure had nothing to do with.
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KidTokyo
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I seem to recall reading about a guy who let his five-year old pick stock investments, with the outcome that the subsequent "portfolio" performed on par with another assembled by an experienced adviser.

I'm starting to think that investment banking is similar to astrology.

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Seriati
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quote:
Originally posted by KidTokyo:
I would argue that the term "voluntary transaction" is the ultimate handwave.

You think there is actual coercion in employment? Where are the chain gangs? Is it your view that when Adam Smith was discussing how self interest leads to society's gain, that he meant we should take from the rich and redistribute to the poor to ensure that no one has to actually work to acheive their betterment? I honestly, don't see it.

Understanding that not everyone has equal resources does not mean that there is coercion in any specific employment relationship.
quote:
Voluntary transactions are, in no way, an indicator that one is at liberty, free of coercion, or that the outcome is just.
They don't have to indicate any of that, only that you are capable of making a choice in pursuing them. We don't expect that private transactions be "just" to any greater extent than they be a choice you are free to make. Adam's argument is that notwithstanding that there is no coercion we much impute such coercion to the available employment.
quote:
Even in a maximum security prison, one may engage in a voluntary transaction. One may also do so in a totalitarian regime. Choices do not indicate the presence of freedom.
And why do you think that's relevant?
quote:
quote:
I don't however accept your unstated implication that this is what has occurred in the jobs market, there is no seizure, there is no force, there is no version of reality where the imbalance in the US is such to make this argument carry water without proof.
This is simply not true. Labor, land, and resources are seized on a routine basis. We kill for our oil, we prop up dictatorial regimes for economic reasons, and we bully weaker nations into lowering import tariffs so that we can dump subsidized products on their markets (putting their farmers out of work) and buy cheap labor where union rights are forcibly quashed (putting our factory workers out of a job). Nothing "voluntary" has occurred here. That is theft.
We're talking about the US jobs market. You see people being killed for oil? and dictorial regimes here? A global discussion is going to look very different. Honestly, if we're talking global then by Adam's theory, the rest of the world is entitled to end the way of life of all American's because we've "coercively stolen" their efforts for years. There's lots of discussion possibilities here, but I think it'll help to restrict it a bit at least short term.
quote:
I don't think all people are equally able, but it is very popular nowadays to vastly overestimate the "genius" of CEOs, managers, and bankers. These roles do not involved abstract ideas or esoteric skill sets. The main barriers to entry to these roles is lack of interest, lack of stamina, and social privilege (meaning not just wealth but the ability to read personality nuances carefully -- an ability that great businessmen share with successful criminals and actors).
Well again "CEO's" is a silly term to use, every small company has one, but you tend to only mean the creme de la creme that lead major corporations. I can't believe that anyone can be involved with a major corporation and believe that the role of a CEO is something that there are lots of people that can do well. Most CEO's are over their heads, and they are generally people that do in fact have idenifiable specific skill sets that are not fully common in the population. Just like not everyone makes a good sales man, or a good doctor, not everyone makes a good head of a business.
quote:
quote:
there's barely any historical truth to the idea that the have's have manipulated the rules in their favor given the turnover in the haves and have nots over time.
That is an astonishing statement. There is an abundance of evidence. There is so much evidence, in fact, that I am wondering where you would look to not find it.
If you look around in your personal life, how many of your friends are in exactly the same financial situation as their parents. At your high school reunion has no one gone up or down in the world?

The fact that rich people exist is not evidence that the system is set up to favor them. Dynasties, caste systems, zero social mobility are evidence of that. So what's your evidence?

LetterRip, your post largely boils down to an anti-exceptionalism assertion. I guess you have to believe that it's chance not talent that lets people get ahead. I don't see it. I've known a lot of people that got ahead, and other than one who won the lottery (literally) they all were driven and talented. Now not all suceeded, but there's a definite correlation.

And I love the assertions about stock picking by children. You're correct if you get enough random pickers together one of them will beat all the professionals in the short term, but that's not a decent argument when their average is well below. Not to mention there are entire categories of investment that have nothing to do with the speculation game that is the current stock market, and no random picker even has a chance in those fields.

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TomDavidson
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quote:
You think there is actual coercion in employment?
I think there's loads of coercion in employment, yes. There's no way that your typical worker would put up with his boss' bull**** if he didn't feel that he needed the job.

quote:
Dynasties, caste systems, zero social mobility are evidence of that.
America has pretty terrible social mobility, actually.

quote:
I've known a lot of people that got ahead, and other than one who won the lottery (literally) they all were driven and talented.
In my anecdotal experience, about half the people who "got ahead" were driven and talented, and about a third were singularly untalented. All of the ones who wound up better off than they were at birth, notably, benefited enormously from some lucky event or another over which they had little to no control, or literally the accident of their birth (like, for example, being given a job by their parents.)
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Seriati
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quote:
Originally posted by TomDavidson:
I think there's loads of coercion in employment, yes. There's no way that your typical worker would put up with his boss' bull**** if he didn't feel that he needed the job.

Needing a job and not being willing to put in the effort to switch jobs, is not coercion. Aren't you usually the one insisting on some undo linguistic precision, yet here anything at all - even a lack of actual force - is now coercion?
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TomDavidson
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quote:
Needing a job and not being willing to put in the effort to switch jobs, is not coercion.
Do you believe that everyone currently unemployed is simply lacking in effort? Until very recently, for example, someone switching jobs could well have risked losing insurance for themselves and any ill family members -- and there's no guarantee that the new job would necessarily be any better. Consider the plight of someone who's gone into game design but believes strongly that time spent with his family is important; he will have to choke back his dedication to that principle as long as he stays in the industry, not because ridiculous hours are required or necessary for game development but because all the employers have produced an environment where workers have no better options without leaving the industry altogether.

And that's just a frivolous example. God help you if you start looking into industries like construction or mining or restaurant work, where employers have pretty much all the power unless their employees somehow manage to unionize.

quote:
Aren't you usually the one insisting on some undo linguistic precision, yet here anything at all - even a lack of actual force - is now coercion?
I've actually had precisely this conversation on this very site -- and, yes, social coercion is also coercion. Consider the threat of excommunication or shunning: it's clearly coercive, even though no force is applied.

[ December 17, 2013, 03:46 PM: Message edited by: TomDavidson ]

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Seriati
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Lol. What's stopping your video game designer from working for himself? For getting together with other mistreated employees and making their own company? Good gods could you have a picked a field that has more potential for individual skill to shine?

What's stopping them is capital and risk, they either don't have the first or they don't want the second. So they look to other people to employ them. It's not like the skill set they have isn't usuable in any number of other ventures, why insist only on working in an industry that has such unreasonable demands? There's absolutely nothing coercive about having to pay your dues if you want to get ahead in a specific industry.

And you qualified it, "social coercion," specifically to show that it's an analagous situation, and not directly the same thing. You're not entitled to be free of all strings.

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TomDavidson
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quote:
And you qualified it, "social coercion," specifically to show that it's an analagous situation, and not directly the same thing.
No, it's the same thing. It's a subset.
You have physical coercion and social coercion. They are both examples of coercion.

quote:
What's stopping them is capital and risk, they either don't have the first or they don't want the second.
Very true. In the same way, what's stopping you from overthrowing the federal government and putting one in place that you prefer?
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PSRT
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quote:
there's barely any historical truth to the idea that the have's have manipulated the rules in their favor given the turnover in the haves and have nots over time
Ok. You don't live in reality. Fair enough.
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KidTokyo
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quote:
You think there is actual coercion in employment? Where are the chain gangs?
Ditto all the points Tom made.

More broadly, owners have used violence and coercion throughout history right up to the present to keep laborers from claiming rights. When our economy was less international, you saw plenty of violence against unions and anyone who tried to organize -- much of the violence state sanctioned. There were also very powerful private organizations hired for this purpose (Pinkertons, for example). Similar tactics are applied today, but they are cross-border.

Nowadays, domestically, a softer but equally effective approach is taken -- own the news media, control the narrative, control what kinds of social policies are discussed on both sides of the political spectrum, and humiliate "radicals" both left and right who argue for something that deviates from corporate rule. Of course, leftists still get beaten and arrested from time to time.

As a result, Orwellian constructs like "free trade" agreements can be pushed through. Using one's authority to lie to the public about what a policy is and what it will do is absolutely a form of coercion.

quote:
We're talking about the US jobs market. You see people being killed for oil? and dictorial regimes here? A global discussion is going to look very different.
It is impossible to separate domestic from international in the present day. Almost every thing in your home was manufactured overseas, with parts and resources crossing at least a dozen borders, by companies that function internationally.

quote:
Honestly, if we're talking global then by Adam's theory, the rest of the world is entitled to end the way of life of all American's because we've "coercively stolen" their efforts for years.
They certainly are entitled to see an end to our bullying.

quote:
Well again "CEO's" is a silly term to use, every small company has one, but you tend to only mean the creme de la creme that lead major corporations. I can't believe that anyone can be involved with a major corporation and believe that the role of a CEO is something that there are lots of people that can do well. Most CEO's are over their heads, and they are generally people that do in fact have idenifiable specific skill sets that are not fully common in the population.
I didn't say everyone could do it, just that the abilities are neither rare nor particularly special.

quote:
If you look around in your personal life, how many of your friends are in exactly the same financial situation as their parents.
Almost all of them. To be clear, movement from middle class to upper middle class doesn't really signify much to me, nor should it.

quote:
The fact that rich people exist is not evidence that the system is set up to favor them. Dynasties, caste systems, zero social mobility are evidence of that. So what's your evidence?
The fact that most of our politicians come from the same institutions -- educational, business, and financial -- as the wealthiest business interests. The fact that no financial law gets passed that the financial sector does not approve of or have a major hand in steering. That no presidential candidate can run for office without the backing of wall street. To name a few things.

[ December 17, 2013, 05:21 PM: Message edited by: KidTokyo ]

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Adam Masterman
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quote:
Originally posted by Seriati:
]
Paying anything less than the asking price (not fair value) in a private transaction is still a theft. We do recognize a power for the state to force these transactions on fair value.

Lets not pretend that "asking price" has any real validity if we ignore coercion: I'm pretty sure I could reduce an "asking price" by holding a gun to the seller's head.

Also, note that I was arguing for market dynamics to create fair values, not government force. The government's job in the market is to *remove* coercion, and protect against it.

quote:


I don't however accept your unstated implication that this is what has occurred in the jobs market, there is no seizure, there is no force, there is no version of reality where the imbalance in the US is such to make this argument carry water without proof. Even if it were true that zero unemployment were somehow a good result (and that ignores completely the necessary inhibition of development and inefficient allocation of efforts such would require) it is not true that policies that enable or encourage such a result equate to seizures.

First of all, full employment isn't a hastily assumed 0% unemployment rate; its an absence of a labor surplus (some economists define this as a market with an equal amount of unemployed persons and job vacancies, which works for me, and is obviously not 0% unemployment).

That said, positive unemployment rates (rates above this optimum) create a labor surplus (more jobs than vacancies), and surpluses drive down prices (wages are prices for labor). That's pretty basic economics. Now, when a government, over a long period of time, artificially maintains a labor surplus, its is distorting the market. More specifically, it is actively suppressing wages by maintaining the labor surplus. This is not a free market; its a distorted market rigged to favor employers over employees. And this distortion creates a transfer of wealth from laborers to employers, every bit as much as if I used a weapon to intimidate a seller into dropping his price for me.

quote:
First, I simply reject that this is the general case in the US. Most employers are local and their ability to shop around is limited, even where it's not, the same ability to hire from a wide area means that potential employees can obtain employment from a wider market of employers. It's a reciprocal fact that you can't have one without the other.
You don't think there is a labor surplus in the U.S.? [Confused] By "shop around", I don't mean that a business can look further afield than job seekers, I mean that more people want jobs than employers have positions to fill. This is true whether you look very locally, or nation wide. When you have two people competing for the same job, they offer more labor for less compensation in order to win the scarce commodity (the job). To the constant, ongoing benefit of the employer.

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What I see as the real situation is that you have potential employees who DON'T have to take the jobs, and the result is exactly what you'd expect, the employers attempt to tempt them out but only so far before they leave the market by either closing or where possible exporting the jobs to workers who will do them.

There are two components to the value of work, what someone is willing to accept to do it, and what someone is willing to pay. All the theories I've seen you guys express ignore the second component, apparently in the view that there is always more to be paid.

Actually, I was making a pure Smithian argument, which takes both into equal account. In a labor scarcity, wages are inflated. But all else being equal, markets will tend to level themselves. Higher wages draws more labor, which counters the scarcity. The problem is when either surplus or scarcity is *artificially* maintained. The market can't level, and prices (wages, in this example) drift further and further from their true value. We have had an explicit policy in this country to keep unemployment several points higher than optimal; its part of the mechanism used to tightly control inflation, and it also gives corporate owners an unending supply of underpriced labor.

Interesting that you brought up "going somewhere else", as this makes my point exactly. If you go back to the turn of the previous century, labor conditions were obscene, and tremendously high unemployment basically allowed near-slavery working conditions in many industries. Upton Sincair, unfortunately, did not really exaggerate in his novel The Jungle; he only highlighted. The birth of the Progressive movement and a long century of struggle have made unbelievable progress, but the remnants of corporate/government mercantilism are very much alive, and labor surplus is a good way to understand how it works. While the artificially maintained domestic unemployment rate is one factor, much more important was the nearly unopposed victory of corporations to tap, without cost, vast reserves of foreign labor through the globalization of trade. Domestic unemployment rates became nearly a non-issue in terms of labor surplus in the 1990s, as companies simply outsourced their entire production lines to third-world countries. While you had a few vocal groups protesting this colossal corporate money grab, grungy college students and old hippies holding signs in Seattle, the whole thing was accomplished with a democrat president, a republican legislature, and a cheerleading mainstream media. When Kid mentioned corporate/government collusion, he wasn't kidding; this was the single biggest issue in our economy in modern history, and it simply had no opposition in government or the media. Not merely globalization of trade, but structuring it specifically to massively inflate the labor pool to the direct detriment of domestic workers. They did an end run around a century of slow, careful advances in labor rights, and not only have we not recovered, its getting worse.

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Two things. First I'm not an anarchist so I don't have a problem with the existence of government.

But importantly, the argument about freely entering into transactions DOES NOT mean that we must be free from all considerations. It is not an argument that we must all start from a baseline of not having to work, only that we are free to choose who to work for. Your argument about the employment rate is disingenuous in an economy where the unemployed don't stay unemployed long term other than by choice (which is largely what we had pre-recession). And I have nothing against providing help during recessions when there aren't jobs to be found.

From a market perspective, other considerations are irrelevant (or, rather, periphery). The only relevant question is: can this person decline the exchange if it fails to reflect an equal exchange of values? When the answer is no, due to looming debt, poverty, job scarcity, and/or other obligations, then the exchange will not reflect a mutual agreement of values. When those "incorrect" exchanges aggregate, the market produces false values on a wide scale. Its easy to see the imbalance when you consider that its essentially unheard of for a company to hire someone they considered unsuitable, simply because they *needed* an employee at that moment. There are long-term market forces that might push them to need to grow their labor supply, but never is an individual hiring example coerced to any degree. On the flip side, millions of people take crappy jobs because they have to. This is not a free market; indeed, its a deep mis-understanding of what "free market" means.

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If it's so easy to see, why don't you demonstrate it. Is it you assertion that being a teacher is tougher than being a CEO? That it takes more effort, involves more stress, takes more skill? Honestly, that's one of those things people tell themselves that isn't really true. Can just anyone be a good President? A good Senator? Invest a portfolio of billions intelligently? Our system of rewards is based on rewarding people who can do things that others can't do - that's expressly a meritocracy. And generally speaking it’s also a social benefit.

Its a question of values, ultimately, so people can reasonably disagree. But currently, our economy rewards money shufflers like Mitt Romney as more valuable than *hundreds* of doctors, much less teachers, firefighters, coal miners or auto workers. Even if we could grant that a hedge fund manager's labor was worth more to society than a doctor's (which I don't), can anyone reasonably claim its that many orders of magnitude more valuable? For most people, thats an absurd statement, as is the idea that our economy even remotely resembles a meritocracy. Try this experiment: grab your most conservative friend, and ask him what the most important/valuable role is in our society. Spend ten or fifteen minutes with him, and go over all the basic units of our society: government, health care, civil service, manufacturing, entertainment, etc. Find out what he considers the most indispensable, and make a ranked list. Heck, you can even factor in how difficult he thinks the job is, and how rare it would be to find a person with the requisite skills. Then, compare his list to the actual breakdown of how people are rewarded in our economy. Think they'll match? Even be close? Care to wager? [Razz]

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That was a well written piece, but it's a still a big brother argument.

With all due respect, this is exactly the dumbing-down I already mentioned. The big-government/small-government tug of war is a distraction from what I'm talking about. Indeed, government has been absolutely instrumental in blocking the healthy functioning of a free market relative to labor. Its frustrating to argue for good governance and have that mistaken for an argument for more governance, but that seems to be where the debate in this country has slithered to in this last decade. More's the pity.
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Greg Davidson
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quote:
Seriati: Is it your view that when Adam Smith was discussing how self interest leads to society's gain, that he meant we should take from the rich and redistribute to the poor to ensure that no one has to actually work to acheive their betterment? I honestly, don't see it.
Seriati, have you read Adam Smith? Because he was pretty clear about the actions of labor and management:

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"We rarely hear, it has been said, of the combinations of masters, though frequently of those of workmen. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject. Masters are always and everywhere in a sort of tacit, but constant and uniform, combination, not to raise the wages of labour above their actual rate [...] Masters, too, sometimes enter into particular combinations to sink the wages of labour even below this rate. These are always conducted with the utmost silence and secrecy till the moment of execution; and when the workmen yield, as they sometimes do without resistance, though severely felt by them, they are never heard of by other people"
Smith goes on to draw the contrast when it is business working for their own interests:

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"the masters [...] never cease to call aloud for the assistance of the civil magistrate, and the rigorous execution of those laws which have been enacted with so much severity against the combination of servants, labourers, and journeymen."
And these are not minor or isolated comments; see his comments on poverty and health

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"poverty, though it does not prevent the generation, is extremely unfavourable to the rearing of children [...] It is not uncommon [...] in the Highlands of Scotland for a mother who has borne twenty children not to have two alive [...] In some places one half the children born die before they are four years of age; in many places before they are seven; and in almost all places before they are nine or ten. This great mortality, however, will every where be found chiefly among the children of the common people, who cannot afford to tend them with the same care as those of better station."[11]


[ December 17, 2013, 08:50 PM: Message edited by: Greg Davidson ]

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Adam Masterman
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If Smith were read as often as he was invoked, the world would be a better place (the same is true of Marx, as well).
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Greg Davidson
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And in fact, Smith and Marx had some surprising areas of overlap. I remember a list one time of about ten quotes, half from Marx and half from Smith, and it really was hard to tell who had written which.
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