Imagine an isolated village with effectively a market economy. Let's say this village has a shaman with a small cult following.

This shaman says, "the next time a meteor passes by, the economy is going to crash". That night a meteor passes. His cult followers, wanting to beat the market crash, all try to sell their belongings. Everybody else, unfamiliar with the shaman's prophecy, see the panicked selling and try to sell before the market crashes, too. Pretty soon the runs destroy the economy.

Eventually things stabilize. However, now the shaman is heralded. The next time a meteor passes, everybody begins selling belongings immediately to beat the coming market crash. The selloff then sparks a market crash.

From then on, meteors cause market crashes. The meteors never had anything to do with the market, but people's beliefs have suddenly created results.

How do we differentiate this from tax cut growth?

Again, I apologize. I was referring to the one you made way back on December 4th of 2017. You might remember it as the post from about a week ago that started this conversation.

It's considered good praxis to speak a little bit more of substance in a debate, rather than these hollow nitpicks about details nobody cares happened.

Wookie06, allow me to refresh your memory:

(This doesn't include the 'scam for government funding' part; I'm pretty sure that bit was brought up in a previous discussion. But he did ignore me, so I've got that part right.)

Anyway,

Not manipulate; effect socialism, for the rich only.

And sure it was.

I meant what I said. Neoliberalism wasn't simply a reaction to perceived excesses or inefficacies of Keynesian fiscal stimulus, it was invented by some of the economists hired to oversee said stimulus (via evolution from monetarism). This invention didn't happen in the 1970s when Keynesian stimulus stumbled, it happened in the 1930s and 1940s, when Keynesian stimulus appeared to be working fine.

The philosophical disagreement between these early sides was never about whether policies and regulations should be employed to dampen the business cycle; both sides acknowledged that government action is necessary. The disagreement was instead really about who the beneficiaries of those policies should be. Fiscal stimulus broadly benefits workers ahead of capital, while rules-based monetary policy intentionally benefits the rich: the rentier and the usurer.

[Academic] neoliberalism is simply an expansion of this goal to encompass other kinds of policy, but it is every bit as deliberately corporatist and monopolist as its earlier incarnations. And neoliberals define their success with metrics and standards that are optimized precisely when unchecked corporate power runs rampant worldwide, which is, again, an intentional choice. I doubt many of them would admit that this outcome is their goal, but they don't need to explicitly say it in order for it to be clear.

It's quite generous how you're willing to separate neoliberal academics from neoliberal policy advice, but I suspect you'd have a hard time finding a Chicago economics blueblood who wasn't an active agent in government encouraging exactly those policies you hate.

Nixon, Thatcher, Reagan, Bushes Jr. and Sr. didn't know **** about economics. They did what the Chicago school told them to do. Nixon at least had the good sense to eventually ignore them. The rest didn't.

perhaps some sort of "tariff"

Free markets are inherently better! I don't advocate for market-based socialism for nuthin'. Free markets democratize production and distribution choices - it's literally day-to-day cumulative voting - and democracy is the fairest way of making most choices.

The problem is that capitalism destroys free markets. They might start out as free, but they don't stay that way. Capital markets become more and more exclusive as they evolve, as capitalists pare themselves down, reducing the pool of people making those economic choices. And because capital is required for producing other goods, the same disenfranchisement spreads to all of the other goods markets.

Neoliberals know this, and they like it. They worship the market, free or not. If the market decides in the long run that all economic activity should be controlled by a single billionaire, it's because he is the most competent person at deploying capital in the whole world. Neoliberals basically believe in dictatorship, as long as the empire was sold for a fair price.

Those guys are ****ed in the head. But don't let that dissuade you from believing in market based economics. It's entirely possible to have socialism and still have competitive markets.



The (original?) Laffer curve argument is much worse than that. The original proposal was about marginal utility of free time. Basically, if the tax rate is too high, people will voluntarily choose to work less and therefore make less money.

Thanks for the concession.

So Brian, any plans on how you’re gonna raise money so Verizon and Comcast don’t block Massassi?

He posts so infrequently now because he's developing a monetization strategy for Massassi. You'll see: we're going to be the biggest altcoin exchange on the block...

...chain.

So apparently you guys were wrong, and all the data is against you. It turns out that capitalism isn't the real culprit here, and that the way to bring the country together isn't to address income inequality. What we have to do is sit down with racists and homophobes and tell them that trans people have feelings too.

https://www.vox.com/identities/2017/12/15/16781222/trump-racism-economic-anxiety-study

Apparently, unlike the "economic anxiety" argument, the "racial resentment" argument doesn't have with a very strong correlative policy solution. Which is especially amusing given that Vox is supposed to be all about policy analysis.

In fairness, "actually it was just racism" has pretty consistently been the story from the data journalism people since the election.

Hmm. Is a such a blatant racket (pay up or we shut you out) like that likely? I guess it's indirectly achieved if they throttle you to the point of uselessness, but damn.

These people don't get Trump support. Trump support isn't about immediate economic concerns, it looks a bit further than that. The sentiment among Trump supporters is: the future is going to ****ing suck, we're way too comfortable and our lives are going to be taken away, and we can't stop people in power. We're going to have to compete for resources. We have to make a decision then: either back down and let people take, or become savage and brutal and take what you can get from everyone around you.

Has a real consensus emerged on this? I thought the jury was still out.

Most of the smarter takes I've seen (admittedly, they aren't very quant heavy) have argued that the racial resentment/economic anxiety debate set up a false dichotomy, and what's really important is anxiety about diminishing status, which straddles the racial resentment/economic anxiety binary.

From that point of view, pointing out that Trump voters were, in many cases, well off financially misses that their relatively high income (even during the Republican primaries, when compared to people who supported/voter for other Republican candidates) was less important the fact that their actual wealth and their future prospects aren't on par with their expectations (as well as the wealth and prospects of their children, who, in many cases, for the first time in generations, aren't better off than they are). And it makes sense of racially tinged concerns that Trump voters have as well, such as, for example, the fear that non-whites are unfairly getting ahead by abusing social services.

To my mind, this way of thinking leaves open the door that trying to make the economy work for more people (i.e., more equitable distribution economic growth) would be an effectively address many of the grievances of people on the right (even though their anger frequently manifests itself in ways that has little to do with economics).

Who asked for these tax cuts? Just Trump and his personal circle of friends?

[quote=Micahael Bloomberg]

Last month a Wall Street Journal editor asked a room full of CEOs to raise their hands if the corporate tax cut being considered in Congress would lead them to invest more. Very few hands went up. Attending was Gary Cohn, President Donald Trump's economic adviser and a friend of mine. He asked: "Why aren't the other hands up?"

Allow me to answer that: We don't need the money.

Corporations are sitting on a record amount of cash reserves: nearly $2.3 trillion. That figure has been climbing steadily since the recession ended in 2009, and it's now double what it was in 2001. The reason CEOs aren't investing more of their liquid assets has little to do with the tax rate.

CEOs aren't waiting on a tax cut to "jump-start the economy" -- a favorite phrase of politicians who have never run a company -- or to hand out raises. It's pure fantasy to think that the tax bill will lead to significantly higher wages and growth, as Republicans have promised. Had Congress actually listened to executives, or economists who study these issues carefully, it might have realized that.

Instead, Congress did what it always does: It put politics first. After spending the first nine months of the year trying to jam through a repeal of Obamacare without holding hearings, heeding independent analysis or seeking Democratic input, Republicans took the same approach to tax "reform" -- and it shows.

The Treasury Department claimed to have more than 100 professional staffers "working around the clock" to analyze the tax cut. If true, their hard work must have been suppressed. The flimsy one-page analysis Treasury released -- which accepts the White House's reality-defying economic projections in order to claim that the tax cuts will pay for themselves and then some -- is a politically driven document that amounts to economic malpractice. So does the bill itself.

The largest economic challenges we face include a skills crisis that our public schools are not addressing, crumbling infrastructure that imperils our global competitiveness, wage stagnation coupled with growing wealth inequality, and rising deficits that will worsen as more baby boomers retire.

The tax bill does nothing to address these challenges. In fact, it makes each of them worse.

EDUCATION: The bill, by limiting the deduction for state and local taxes, will make it harder for the localities to raise money for education. The burden will fall heaviest on cities with poor students, making it harder for millions of children to escape from poverty -- and leaving more and more businesses with fewer qualified job applicants.

INFRASTRUCTURE: Restricting state and local tax deductions will also mean less local investment for infrastructure, and by raising deficits, the bill will constrain federal infrastructure spending. Our airports, railways and roads are in desperate need of modernization, and our energy grids are vulnerable and inefficient. Yet spending on those and other needs, which acts as a catalyst for private investment, will become more difficult.

INEQUALITY: If Congress wanted to raise real wages and reward work, there is a simple and proven way to do it: expand the earned income tax credit. Instead, it seems to believe that lower corporate tax rates will magically lead to higher wages, which fundamentally misunderstands how labor markets work.

In addition, by eliminating the requirement that individuals buy health insurance, many young and healthy people will drop out of the marketplace, causing health insurance premiums to rise for everyone else. This is nothing more than a backdoor tax increase on health care for millions of middle-class families that will leave them with less disposable income for savings, investment and spending.

DEFICITS: The bill's cost -- $1 trillion to $1.5 trillion -- makes it more difficult for taxpayers to afford Medicare and Social Security for the baby boom generation, which is now hitting retirement. Republicans didn't grapple with those costs. Instead, they kicked the can down the road. Ignoring the bill's price tag, or pretending we needn't worry about deficits, is like ignoring climate change or pretending we needn't worry about its effects. I'll say one thing for Republicans in Congress: They're consistent.

In effect, the tax bill achieves four main things:

It takes money away from schools and students.
It restricts our ability to invest in infrastructure.
It does nothing to boost real wages while making health insurance more expensive.
It makes it harder to control the costs of Medicare and Social Security without cutting defense and other spending -- or further exploding the deficit.

To what end? To hand corporations big tax cuts they don't need, while lowering the tax rate paid by those of us in the top bracket, and allowing the wealthy to shelter more of their estates.

To be clear: I'm in favor of reducing the 35 percent corporate tax rate as part of a revenue-neutral tax reform effort. Right now, the corporate code is so convoluted, and rates so high relative to other nations (thereby creating an incentive to keep profits offshore), that the real rates companies pay can be wildly divergent. This is neither fair nor efficient. Eliminating loopholes and reining in the offshoring of profits can and should be done in a revenue-neutral overhaul of the tax code.

Republicans in Congress will have to take responsibility for the bill's harmful effects, but blame also falls on its cheerleader-in-chief, President Trump. A president's job is to get the two parties in Congress to work together. Yet Trump is making the same mistake that Barack Obama made in his first two years in office -- believing that his party's congressional majority gives him license to govern without the other side.

The tax bill is an economically indefensible blunder that will harm our future. The Republicans in Congress who must surely know it -- and who have bucked party leaders before -- should vote no.

[/Quote]

https://www.bloomberg.com/view/articles/2017-12-15/this-tax-bill-is-a-trillion-dollar-blunder

But hey, I'm sure that (((Bloomberg))) is just some feckless moral degenerate who hangs out with Anthony Weiner. Surely there is nothing in the actual content in his editorial that would rebuff me from causally writing off anything there with some mindless memeing.

Heh, sounds like if Republicans really want to jump-start the economy and incentivize spending they should start taxing those sitting cash reserves?

(Obviously, they wouldn't want to do that, because one of the reasons why they want to lower taxes is that they want to shrink the government. They argue that if they lower the government revenues, they'll force the government to lower expenses, even though it rarely happens that way in practice. It often just leads to more debt, because it's difficult to muster the political will for so-called entitlement reform.)

Huh.

I don't think the tupil thing happened the way people think it did.

Bitfinex printed a bunch more USDT and now the price is at 19k

hmmmmmmmm

i doubt the crypto bubble will pop soon, the average persons capacity for delusion and avoiding due dilligence is incredible

American corporations aren't literally sitting on cash; their savings are in long-term securities, like government bonds (usually US treasury bonds). The money hasn't left circulation, it's been lent out and spent already. It'd be difficult to encourage corporations to liquidate and spend these savings without affecting retirement savers, financial services, and without limiting the ability of governments to borrow money when needed. Even if you did find some way, though, it wouldn't help because corporations already invest in capital at (as far as they know) an efficient rate. No tax incentive or deterrent will ever make a company grow the economy (build factories and train workers) unless they can make make money off of doing it; the profit-maximizing rate of production is the same whether income/savings taxes are 0% or 90%.

Honestly, you would be better off destroying or redistributing that wealth than trying to get corporations to invest it. Corporate mortality would be good, or at least corporations should be broken up before they pose a moral hazard. But really any policy that forces corporations to discharge non-invested wealth to their employees or shareholders would suffice.



The income tax / government debt / procurement loop is a massive transfer of wealth from the working class to the capitalist class. Conservatives have absolutely no intention of shrinking government, lowering expenses, or even reducing taxes on the working class in the long term. None whatsoever.

Their voters want it. But they don't.

The conservative goal is to generate rents for their friends. Print bonds and make the working class pay the interest. It's been that way for centuries. It's where the gentry and nobility came from. The US had a lil revolution thing about this.

I think it happened this way.

https://youtu.be/5c7FL9QV1bs?t=1m3s

Is that show any good?

At least in the case of Milton Friedman, I don't know of him specifically advocating for regressive tax cuts or bailouts or anything like that. The neoliberal premise seems to be something like, "inequality increasing is fine if wealth for all is increasing", and therefore globalization is fine because Chinese virtual slave labor produces really cheap goods.

There are definitely cases where such a thing makes sense. At least in principal. But I draw a line between neoliberal economic principles and the reality, and the reality is far worse than the ideal.

And yeah, Reagan also implemented a bunch of protectionism to pick American winners. So the implementation of neoliberalism was never actual, it was just a policy excuse to **** certaib people over.



It is apparent that all of these neoliberal guys were basically all pro-business profit maximizing **** the poor style people. And I think that did secretly inform the work.

I think what I mean is, neoliberalism in policy is far more radical, hypocritical and ****ty than neoliberalism in academics. It wouldn't have survived if it's academic arguments weren't more coherent.



Milton Friedman was absolutely writing from the perspective of a Keynesian pro-intervention background. If you trust what Krugman says, Friedman was much more willing to acknowledge the role of government and ambiguity of the efficacy of "free markets" in his academic work, but put on another face when presenting his ideas to the public.

Maybe you think Krugman is wrong and Friedman is more radical than that. It's possible, and I can't really comment since I don't know enough to say much more. But it's possible Krugman also has bought into the same neoliberal myths.

I will say this: for all the **** neoliberals say about more socialist ideas not being good policy "based on evidence", my foray into neoliberalism made me see just how deeply ideological it actually is.

Free markets are better. Pretty much all of us agree on that. However it's murky what policies lead to the freest markets.



I think the end results of the decades of neoliberal policy have led us there, yeah.



This is probably the most damning thing you could say about academic neoliberalism: that a group of self-assured, ideological pro-business people got together and wrote a bunch of plausible economic research that deceived dozens of talented economists away. I'm not saying that's not possible, but I am saying it's a pretty pessimistic view of the study of the whole study.



Is protectionism ideal? What kind of protections do you think would be a good idea?



I agree with this. Because I personally at least define free markets with a few key ideas: low restrictions to trade, and more importantly open and free access to capital. And I don't think a system based on the private ownership and accumulation of capital can also have open and free access to capital.



Do they, though? I think they really believe that the current trends of American economics are good for everybody. As in, actually good.



Well personally I'd confiscate all wealth over $50 million, and put a 100% tax on wealth past that and a 100% inheritance tax past $1 million per child.

At least even neoliberals won't try to justify no estate tax. They can give (****ty) justifications that billionaires earned it, but their ****ty brat kids sure didn't, and anyone who actually values the merit of self-made wealth should set that inheritance tax to basically 100% past $100k or some ****.



Yup. And I should emphasize that, AFAIK we really don't know what the shape of the Laffer curve is. It could be mostly pretty flat with a slight max at God knows where.

However it is certainly clear that tax cuts do not increase revenue. We are far to the right of the curve and that's based on near universal economic consensus.

American businesses aren't reinvesting any cash, and the only real conclusion one can reasonably draw is that the increased profits are coming as a result of new rents.

Most of these rents can basically be traced back to government bailouts.

Eat the rich.

"First world country"

except nobody got seriously injured with the tulip thing

whereas at least based on the commercials, his career is not doin so hot with that show

I bet at least someone killed themselves.

Tonight I'm eating pasta.

It was a metaphor. Also, nobody got hurt because the Dutch government decreed the tulip futures contracts void. No money ever changed hands.

The Orville is good and I’m happy you aren’t watching it b/c you don’t deserve to

thats why the bitcoin bubble will be fine because the government will get me my money back when it pops

if you like it im def not watching

Re: The Orville

This is the first time in a long time I find myself disagreeing with Jon. I don't think it's bad but I don't think it's very good either. Of course I never really enjoyed any of the Star Treks.

guess im justified in not watching

https://www.youtube.com/watch?v=74A4VUC4t_A

If you didn’t like Star Trek The Next Generation you definitely won’t like The Orville.

Yeah, I knew that going in but I still watched the whole thing. I got some chuckles out of it. Like I said, it's not bad, it's just not for me.

https://www.theguardian.com/world/2017/dec/18/us-outnumbered-14-to-1-as-it-vetoes-un-vote-on-status-of-jerusalem

Against world consensus.

So the Egyptians put forward a resolution that they knew the US would veto, and then a bunch of Arab leaders complained about it. Sounds like a pretty typical day at the UN. "Evergreen tweet"?

You say that like Egypt is some sort of a huge ******* for putting forward a proposition literally everybody, minus one person in the room with a gun, agrees with.

Uh, what? lol

Anyway, back on planet Earth: I think Egypt put forward this resolution at the behest of Abu Mazen, who is flexing the very little amount of diplomatic muscle he has, because he's trying to make the US look isolated, because, in fact, he is isolated, and, eventually he'll have nowhere else to go than to negotiate with Israel in US-led talks.

After Trump recognized Jerusalem, Abu Mazen had to respond by vigorously objecting in international fora. He couldn't simply accept it. He had to make a stink about it, or else he'd be letting the US walk all over him.

Apparently the US was "against world consensus" in 2011, too.

https://www.google.co.il/amp/s/amp.theguardian.com/world/2011/feb/19/us-veto-israel-settlement



Trump isn't nearly as radical on this issue as he lets on, or as the media lets on. People here want to depict him as someone who's radically departing from US foreign policy (and he describes himself in that way too). But his innovations are only incremental.

And the US has for a long time been isolated for its stance on Israel. It didn't suddenly happen overnight when Trump became president.

Uh, yeah? The U.S. and Israel have long been isolated in their stance on this issue. You're thinking I'm making it an issue about Trump in particular?