Obama’s stimulus produces temp-jobs ‘recovery’
So says economist John Lott, writing at FoxNews.com:
Our current “recovery” might be in its seventeenth month, but the few new private sector jobs have come from companies temporarily hiring staff on a contract basis. What were once jobs reserved for people hired to cover seasonal demand or permanent employees on sick leave have become the standard employment for many workers. Companies simply don’t want the risk of hiring workers that they might soon have to get rid of.
Since the recovery started in June 2009, the total number of private sector jobs has increased by 203,000 [link fixed at 1:11 p.m.]. But these weren’t “regular,” permanent jobs. Indeed, permanent private sector jobs fell by 257,000.
“Temporary help service” jobs is what made up the difference, as they increased by 460,000. For all sectors of the economy, including government jobs, the drop in the number of permanent jobs during the recovery was even worse — a drop of 561,000.
The trend has recently been getting worse. During five of the last six months, the total number of permanent jobs fell. The new unemployment numbers released on Friday weren’t as bad as other recent numbers. There were 39,000 more jobs during November. However, with 39,500 coming from temporary jobs, there would have been essentially no new permanent jobs. (links original)
Hmmm … could Washington’s emphasis on temporary, demand-side “stimulus” spending have anything to do with this temporary “recovery”? As Lott notes, we can also see the temporary jobs “recovery” in government jobs — and that doesn’t even include the public-sector jobs that were “saved” by stimulus infusions in state budgets and which may disappear now that states are having to balance budgets without stimulus cash. See here for a description of what Georgia is facing.
The problem is more acute this time around than after previous recessions:
When the Bureau of Labor Statistics started collecting data on these temporary jobs in 1990, such jobs were much less common than today. Only about half as many people held temporary jobs two decades ago. Since then, the current recovery is record-setting in terms of adding temporary jobs. We can compare the three recessions since 1990. While the current recovery has seen the share of jobs held by temporary workers increase by 26 percent, the recession that ended in March 1991 saw a 10 percent increase in share held by temporary workers and the recession that ended in November 2001 had no increase …
You can see these numbers in graphic form on Lott’s personal blog here.
The culprit is not just the temporary nature of the stimulus. Lott argues, as I’ve argued before, that uncertainty is also at play:
Companies don’t want to make longer-term commitments if they don’t know what the next couple of years will look like. New regulations are being imposed on companies, be it health care, finance, the environment, and the other areas. And the exact form and extent of these regulations still have to be determined by regulators. Many small companies don’t even know what tax rates they will face after the beginning of the year. Neither the president nor the Democratically controlled congress attempted to prevent income tax rates from rising for even the middle class until just a few weeks before they were expected to rise.
Indeed.
– By Kyle Wingfield
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120 comments Add your comment
Jefferson
December 14th, 2010
2:34 pm
I’ve yet to find a failed banker in GA that wasn’t a republican.
Port O'John
December 14th, 2010
2:35 pm
Umm, its not the BLS numbers that matter so much as the political views of the commentator. Any opinion writer, whether they are from the NYT, CNN, Fox News, those fuzzy-heads at MSNMC, and, clearly, the AJC, are only going to be selective in what statistics they use and in what context to support what ever pre-conceived conclusion they want to reach.
I know your a very partisan writer Kyle, that’s why the AJC hired you and you probably cannot help yourself. If you want to believe everything Fox News says, that’s your right.
But boy, Fox News has told some whoppers, that story on the banning of red/green was just the latest knee-slapper.
BTW — is it true that the AJC banned the use of the word “sprawl” because it offends suburbanites? I read that in that left-wing rag Creative Loafing and I thought “can’t possibly be true…” — but I’m starting to wonder.
ronald
December 14th, 2010
2:41 pm
True American said (at 2:20) “Rep are a much of hyprocrites, its ok to add on to the Debt long as their rich friends benefits.”
True American- What the GOP fought for, and what your boy Barack also agreed to, is an extension of the tax cuts for ALL AMERICANS. It is the congressional democrats (and class envy) that attempt to divide the country along income lines when they continously try to demonize the wealthy. So stop your BS whining about how “the rich benefit” from the tax cuts. EVERYONE benefits.
Kyle Wingfield
December 14th, 2010
2:43 pm
Double Standard: Maybe your research should have involved reading the AJC, because our news reporters have been writing about the bank failures — including investigations into fraud and other potential criminal charges — for months and months.
Dave
December 14th, 2010
2:59 pm
Jefferson – I’ve yet to find a lazy societal leech who wasn’t a Democrat. Chances are, most successful bankers are probably Republicans too.
ronald
December 14th, 2010
3:04 pm
To Double Standard:
“Here is my question for the Feds and our media: How can the state of Georgia have the most bank failures when it ranks 9th in population and wasn’t one of the states hardest hit by the real estate crash”
The # of banks is irrelevant, you should be focusing on the size of the banks that are failing. IndyMac in California probably had more assets than all failed Georgia banks put together. Georgia has more small, community banks than most other areas of the country, due to the population explosion in the 80’s and 90’s when many denovo banks in Georgia were founded. When the real estate market crashed, it was precisely those smaller, newer banks that were the first to fail. You should not read into the “# of banks” theory as an indication that fraud is at work in Georgia.
Left wing management
December 14th, 2010
3:07 pm
Dave: “I’ve yet to find a lazy societal leech who wasn’t a Democrat. Chances are, most successful bankers are probably Republicans too.”
Societal leach?
Laziness? Laziness is good. After all Aristotle thought that leisure was the highest form of human existence, the privilege of aristocrats.
As far as leaching, that’s what the financier class does with their unusual derivative products. They leach the ground right under your feet .. not that you’re aware of it ..
Jefferson
December 14th, 2010
3:09 pm
Dave, you agree then change the subject.
CJ
December 14th, 2010
3:11 pm
Dave, “I’ve yet to find a lazy societal leech who wasn’t a Democrat.”
While Dave scours the country for lazy societal leeches who are not Democrats (get help brother), Ronald @2:41 absorbs the right-wing propaganda that having about a quarter of the country’s wealth going to about 1 percent of the households (more wealth than the bottom 50 percent combined) somehow benefits EVERYONE.
Clearly, Ronald is the one who suffers from class envy. The rest of us are victims of legalized theft.
Left wing management
December 14th, 2010
3:15 pm
ronald : “It is the congressional democrats (and class envy) that attempt to divide the country along income lines ”
Why do you engage in class warfare, ronald?
Why do you carry water for people who pillage?
Fletch
December 14th, 2010
3:17 pm
Dave – “Do you actually KNOW anyone who owns or runs a business? Likely not, since most on the left like to sit on government payrolls and not actually compete for anything. Talk to someone who actually owns a business which comes into contact with federal regulations and ask them what they think.”
Dave, you can talk to me. My partners and I have diversified holdings in Georgia, California and Montana. With our Air Charter Company here in Georgia (Air Atlanta), we deal with Federal Regulators all the time.
At no time over the course of the last decade (including the last 2 years) have I or my partners EVER based our expansion or hiring on the policies of the sitting POTUS. Expansion and hiring has ALWAYS been based on NEED and DEMAND. We certainly never “sat on our hands” wondering in confusion what next step we should take based upon the absolute garbage thrown out by the Left or the Right.
A better question would be do YOU know anyone who has ever owned a business?
Kyle Wingfield
December 14th, 2010
3:18 pm
CJ: What is “the country’s wealth”?
Linda
December 14th, 2010
3:23 pm
The left has called the right, especially Tea Party members, every ugly name in the book. When that only inspired us, they escalated their class warfare.
Let me repeat a comment.
Even if not religious, most people are moral & minimally abide by at least a few of the Ten Commandments, especially the ones against murder, theft, lying & cheating on your spouse. Right there among those is envy. It’s sinful & immoral & frankly, it’s childish & unbecoming. Jealousy is a character flaw.
Class warfare has been alive & well in this country for the last 2 yrs. It’s a further attempt to divide our nation. Anyone who can’t see thru this & worse, participates in it, is a dupe.
Your neighbor might think you make too much money, but your mama would disagree. Always listen to your mama & do your best.
If people didn’t make gobs of money, we wouldn’t have the Falcons, movies or computers.
CJ
December 14th, 2010
3:24 pm
Kyle, “What is “the country’s wealth”?”
Household annual income –
http://www.federalreserve.gov/Pubs/feds/2009/200913/200913pap.pdf
http://www.irs.gov/pub/irs-soi/10winbulinincome.pdf
Kyle Wingfield
December 14th, 2010
3:26 pm
Now: How is it produced?
Left wing management
December 14th, 2010
3:37 pm
Linda:
Bless you for your sincerity, you do mean well. But here’s a quote for you to ponder;
“The history of all hitherto existing society is the history of class struggles“.
ronald
December 14th, 2010
3:37 pm
Left wing management
December 14th, 2010
3:15 pm
“Why do you engage in class warfare, ronald? Why do you carry water for people who pillage?”
Left-wing: I was correcting True American, who claimed that the GOP were just helping the rich. I was pointing out that the GOP-led extension of the tax cuts benefited ALL AMERICANS. The congressional democrats wanted to help everyone EXCEPT for the top wage earners. When Congressional democrats sought to exclude the top wage earners from a benefit that they wanted to give to everyone else, they were practicing Class Envy and trying to demonize the wealthy. It is the Congressional democrats who practice Class Warfare on a daily basis and it is the GOP who seek equal benefits for all. The recent tax debate is all the proof you need.
Unpainted Huffhines
December 14th, 2010
3:37 pm
Thanks for bringing up the topic of “Temps.” The Temp industry has been growing like crazy since 1989. Temp jobs have had a profound impact on the labor market, but this Lott guy doesn’t tell us what a “Temporary” job is, or remember his timelines well.
For example: “the recession that ended in March 1991 saw a 10 percent increase in share held by temporary workers and the recession that ended in November 2001 had no increase …” November 2001, recession ended? The news must have been too busy reporting the 2000-point post-9/11 drop in the Dow in Nov ‘01 to let everybody know a recession had ended.
“Companies don’t want to make longer-term commitments if they don’t know what the next couple of years will look like.”
Well golly gee Mr. Lott! I want to invest $1 million in the stock market, but I don’t know what the next couple of years are going to look like. Isn’t one of the overriding characteristics of the free market the fact that the future is uncertain?
“New regulations are being imposed on companies, be it health care, finance, the environment, and the other areas.”
These poor, poor companies! Were it not for those pesky regulation, “they” could create a monopoly and know exactly how much “they” will make, not only in the “next couple of years,” but forever. This, of course, will stop the rapid growth of the temp agency dead in its tracks! And why must our small businesses be prohibited from things like dumping battery acid in the river, or only taking loans where they have a record of being able to pay them back?
Companies have said they “feared” hiring permanent employees for years, therefore they must hire temps. Not sure what the market is like now, but in 1998 the temp agency would be paid about 2.5 to 3 times more per hour than what their contractor would be paid. In my case, worker made $11.25/hour, temp agency got about $53/hour, sometimes more or less, depending on work involved. Overall, the man-hour/costs to hire a perm or temp were equal from year to year. Other than time and convenience, there is no additional cost for a company to fire a temp or regular employee.
If this article is to imply that it is harder for a company to fire an employee as opposed to a Temp, it doesn’t actually work that way. Most companies have a 90-day probationary period, union or otherwise. Benefits can be processed with a few minutes worth of paperwork. The only advantage for a company in going with a temp agency is the Company can have the agency inform the Temp about termination. In my experience, self-described conservatives have been the ones most afraid to fire and lay-off, or perform the discipline necessary to establish cause, so they would hire temps, stating that the future was uncertain. Invariably, they would have the agency inform of a job ending, even though in many cases that was a bald-faced lie. Most of these folks would also agree with this article.
Concerning firing “for cause,” temps have the same rights as Employment-at-will, more in some contracts. Temps often sign away liability against the company, but seldom does that result in any expense or savings.
“Only about half as many people held temporary jobs two decades ago.”
Another change from 20 years ago is in 1990, 4 years after Reagan’s executive order 12564, only 10% of private companies drug-tested, in 2010 99% of private companies drug test. When temps are hired, unless their agency requires, they do not have to take a pre-employment drug screen. When I needed an employee right away, I couldn’t wait 3 days for drug screen results! Indeed, temps would decline becoming perm because they did not want to drug test. Or, if they were good workers, they would stay clean leading up to their drug test. The growth in temp agencies correlates better with the increase in drug testing than it does with the rise in temp job numbers during Democratic presidencies, as Lott attempted to demonstrate in his quotes.
CJ
December 14th, 2010
3:43 pm
“Now: How is it produced?”
Before I address how wealth is produced, let’s make sure that we’re on the same page with the statistics?
The top 1 percent “has gone through enormous fluctuations along the course of the twentieth century, from about 18 percent (of income) before WWI, to a peak to almost 24 percent in the late 1920s, to only about 9 percent during the 1960s-1970s, and back to almost 23.5 percent by 2007.”
http://elsa.berkeley.edu/~saez/saez-UStopincomes-2007.pdf
How is the wealth produced? It varies. Some is inherited. Some is profit of the sale of investments. Some is received as dividends from investments. Some is received as a gift. Some is earned from setting the alarm and going to work every day. Some is paid, but not earned, such as that that goes to members of boards that collect money without providing oversight, or management that collects a disproportionate amount of compensation at the expense of employees, customers, and stockholders.
What do I mean by “legalized theft?” The fact that tax rates on income from working for a living results in workers subsidizing lower tax rates, and even tax write-offs, on income from investments and inheritances. And the fact that compensation for board members and upper management in big business is frequently significantly disproportionate to their contributions, leaving less compensation available to other company workers and lower long-term profits for stockholders.
Of course, this is all possible because of our pay-to-play political system in which corporations are now considered “persons” under our Constitution and wealth is equated to speech such that the few with the most money dominate the political conversation in our country.
Left wing management
December 14th, 2010
3:43 pm
And Linda, you mention morality, so here’s another quote for you:
“Law, morality, religion, are to him [the proletarian] so many bourgeois prejudices, behind which lurk in ambush just as many bourgeois interests.“
j
December 14th, 2010
3:45 pm
Companies don’t want to make longer-term commitments if they don’t know what the next couple of years will look like.
——
Where did you find this crackhead? he writes garbage that’s why he is not involved in running a business.
Lott is a friggin moron. Please try again. Go out and find a CEO in ATL and talk to him/her then report back.
I Report (-: You Whine )-: mmm, mmmm, mmmmm! Just sayin...
December 14th, 2010
3:49 pm
I know one thing for sure, the space heater industry is being stimulated as we speak, and it didn’t get any help from obozo.
I thought the planet was warming?
Left wing management
December 14th, 2010
3:50 pm
ronald: “It is the Congressional democrats who practice Class Warfare on a daily basis and it is the GOP who seek equal benefits for all.”
With any luck they’ll not just practice it on a daily basis, but at night during their sleep too.
We need class warriors in droves. Lots and lots and lost of them.
And the reason, you ask: because the war is being carried out at every moment.
“the GOP-led extension of the tax cuts benefited ALL AMERICANS. The congressional democrats wanted to help everyone EXCEPT for the top wage earners”
Logic is flawless, I must say. But alas, the point is useless.
A “benefit” to those who are not top wage earners is not the same as one to those who are and do not need a benefit.
Jefferson
December 14th, 2010
3:50 pm
The only thing that give money any value is the fact that someone will work for it.
CJ
December 14th, 2010
3:51 pm
Following up Kyle,
I just read a statistic that about half of the wealthiest people in this country inherited it. I’ll do some more research, but if true, then the answer to the question about how wealth is produced is that, for about half of these folks, it comes from Mommy and Daddy.
I Report (-: You Whine )-: mmm, mmmm, mmmmm! Just sayin...
December 14th, 2010
3:52 pm
As Mr. Holbrooke was sedated for surgery, family members said, his final words were to his Pakistani surgeon: ‘You’ve got to stop this war in Afghanistan’…
And then the Pakistani offed him.
Maybe they’ll build a mosque in Holbrook’s neighborhood, named after………..the surgeon.
Fletch
December 14th, 2010
3:54 pm
“Companies don’t want to make longer-term commitments if they don’t know what the next couple of years will look like.”
This statement makes absolutely no sense at all. If I run a forecast model, I can manipulate the numbers any way I want + or -. If there is “uncertainty” regarding cost, you simply compensate for it in your projections. i.e. My cost might go up by 8%, I will therefore compensate for an increase of 10%. If the costs do not surpass 10% then I simply adjust the model. If they do rise beyond 10% same thing. You can do this for 1 year, 5 years, 10 years etc… No one is simply sitting around until January 1st to make decisions. As a point of fact, most businesses operate on “fiscal” year, and should already have had their cost projections completed well before now.
Linda
December 14th, 2010
4:18 pm
Tax cuts for the millionaires & billionaires:
1. People who make a million or a billion dollars are not necessarily millionaires nor billionaires (because they have to pay for taxes, among other things like food).
2. People who are millionaires & billionaires do not necessarily have any annual income. (Do they need to work?)(Does their trust fund pay the bills?)
3. Individuals who make $200K & couples who make $250K are probably not millionaires, let alone billionaires. The couple might be a firefighter married to a teacher living in NYC in a one-BR apt.
4. The upper tax bracket scheduled to increase from 35 to 39.6% does not kick in until the taxable income has exceeded $372,950, a heck of a lot more than $200K for singles & $250K for couples.
There are 3.8 M people who make between $200K for singles/$250 for couples & $500K. There are only 608,000 people who make between $500K & $1M. There are only 315,000 people who make over $1M.
If the Dems. let the tax cuts expire, there are 156 million people (hostages) who make less than $200K who will be paying another $157 B in 2011.
http://www.bloomberg.com/news/2010-08-11/earners-of-less-than-500-000-wouldn-t-face-higher-taxes-in-democrat-plan.html
Jefferson
December 14th, 2010
4:28 pm
Cuts gov’t spending will increase unemployment, cuts to medicare will increase insurance premiums and possibly close hospitals, forcing doctors to hike prices to maintain their standard of living. Spending cuts, yep that’s the ticket.
Linda
December 14th, 2010
4:32 pm
Paying taxes has always been voluntary. That is, any taxes over & above what you are required to pay are entirely voluntary. This is one way that we are all entitled. We are entitled to pay more than the minimum. Volunteers are always greatly appreciated. We talk about social justice but do we practice it fully?
JF McNamara
December 14th, 2010
4:40 pm
Dave,
I never said I was for high regulations. I’m not. In fact, my whole post was pretty much the Republican playbook. People in a free market economy are doing what is in their best interest. For the government to do anything would likely not change the situation at all. That was my whole point. I’m not really sure how that makes me a lefty, since free markets and the invisible hand are what conservatives believe in. If anything, you’re the lefty since you believe that the government actually has that much control over the market instead of what Adam Smith thought.
I don’t work for the government. I rent properties, invest, and have a job at a competitive company. I know plenty of business owners, and I know what they want. They want more demand. I want more demand for my rentals. I want more demand for my stocks, and my company wants more demand for their products. Until that happens, I’m spending as little as possible because that what is in my best interest.
When I believe there will be more renters, I’ll buy more properties. When I think there will be more free cash, I’ll buy more stocks. I don’t see that in the near future, and that has nothing to do with the government at all.
Fletch
December 14th, 2010
4:42 pm
JF,
Excellent!
Kyle Wingfield
December 14th, 2010
4:50 pm
CJ: In the first place, you’re confusing, or at least conflating, wealth and income.
Second, to describe one person’s income as “legalized theft” implies that it originally belonged to someone else. To whom does this money rightfully belong? How can you presume to know the contributions of “upper management” — you use the term as if it applies equally to virtually all people who qualify for the term, across virtually all companies and virtually all industries — and whether upper managers’ compensation is in proportion to said contributions? (Would you say that the power claimed by our current political “upper management” is in proportion to our political upper managers’ contributions?)
Third, to say that “workers” — again, your word and your distinction — are subsidizing lower tax rates for investment or inheritance, or any person considered “rich,” implies that a) there is a natural level of tax rates for those activities, and b) you know what it is. So, tell us: How much more would “the rich” have to pay before they’re not subsidizing anyone else?
Even more to the point: How much money does one have to make before he becomes a thief rather than a victim?
And make no mistake, this is a twisted notion of victimology that you are pushing.
Dave
December 14th, 2010
5:01 pm
Left Wing Management,
“Laziness? Laziness is good. After all Aristotle thought that leisure was the highest form of human existence, the privilege of aristocrats.”
- leisure, not laziness. Leisure is the well-earned reward of your own work. Laziness is sitting around waiting to be handed something out of someone else’s pocket.
Dave
December 14th, 2010
5:05 pm
CJ,
“I just read a statistic that about half of the wealthiest people in this country inherited it.”
You read a lie then (probably on some leftist propaganda network like MSNBC). Most wealthy people did NOT inherit their wealth, they earned it. The vast majority of millionaires in this country are first-generation wealthy, having built-up their fortunes over time. Many of them are also entrepreneurs who own or run their own business.
Paris Hilton does NOT represent most wealthy people in this country, leftist groupthink notwithstanding.
T-Town
December 14th, 2010
5:14 pm
DebbieDoRight sez: T-Town: The fact is that if businesses don’t know if or what it will cost them to increase their employment numbers, they will sit on their hands and do nothing until”
and
Oh please!! My high school cousin can do better than that!! So, basically what you’re saying, (since jobs have been “disappearing” since 2002); that companies are confused, clueless, and lost; that’s why they’re shipping jobs overseas to places like India? Oh yeah, that makes sense.”
Well Ms.DoRight; This is MY opinion. I suggest that if you or your HS cousin could do better, please forward your suggestions to the US Congress and maybe you and your HS cousin can get the country moving again. Certainly the current policies by Congress are not working, so be my guest.
Will
December 14th, 2010
5:14 pm
So…..republicans believe that cutting taxes for millionaires stimulates the economy by putting more money in millionaire’s pockets so that they will invest and expand, thereby helping the funds “trickle down” to others.
The Bush millionaire tax cuts have been in place for how long? How’s that “trickle down thingy” working for our our current economy? How’s that re-investment working for our unemployment rate?
Yes sir… we must protect the millionaire’s tax cuts in order to keep this robust economy afloat!!!
Dave
December 14th, 2010
5:17 pm
Fletch,
To answer your question, I certainly do. The ones I’ve spoken to are as concerned about the direction of this government and this country as they can ever remember, mostly because of the endless need of goverment to regulate and control everything.
There was an op-ed piece in the paper a few months back by the owner of a business up in NJ talking about the massive cost of hiring a new employee over-and-above the person’s salary, when you factor in all the additional costs tacked on by government fiat from various agencies.
Out of curiosity, do you vote Democrat? If so, why?
Dave
December 14th, 2010
5:22 pm
Will,
If you weren’t such a shallow-minded envy-riddled fool you’d realize that the economy only hit the skids when the housing crash happened. The housing crash was caused by liberal housing policies which treated “owning” a home as an absolute good, and assumed that the denial of a mortgage to anyone with dark skin was clear evidence of racism. This in spite of the fact that mortgage denial rates were the same in black-owned banks as they were in white-owned banks.
Tax rates had nothing to do with the economic crash of 2008.
Linda
December 14th, 2010
5:25 pm
Will @ 5:14, Read my post @ 2:27. It refudiates your statement. The “trickle down thingy” seems to have worked better than the “hopey changy thingy.”
Left wing management
December 14th, 2010
5:30 pm
Dave: “Leisure is the well-earned reward of your own work.”
Or the work of others, as the case may be.
“Laziness is sitting around waiting to be handed something out of someone else’s pocket.”
Even if the recipients already have their hands in that other pocket.
In other words, what’s the difference?
Dave
December 14th, 2010
5:34 pm
Left Wing Management,
Try making sense sometime. It helps people understand what the hell you’re saying.
Left wing management
December 14th, 2010
5:47 pm
Kyle: “Even more to the point: How much money does one have to make before he becomes a thief rather than a victim?”
The level of income is beside the point. The point is the ownership of capital.
Dave
December 14th, 2010
5:57 pm
LWM,
The capital is owned by those who make it and work for it, not by the government.
If you don’t like that, there’s lots of other countries for you to choose from which ascribe to your beliefs.
CJ
December 14th, 2010
6:01 pm
Kyle,
You’re right. I am conflating wealth with income. Net worth (i.e., wealth) is a function of many factors, but first and foremost, income.
With regard to legalized theft, to whom does the wealth rightfully belong? In the case of inheritances, capital gains, and dividend income, the money saved by those who benefit primarily from such sources of income as a result of our inequitable tax system rightfully belongs to the taxpayers who must pay higher rates to offset the resulting revenue losses. With regard to over-compensation, the wealth rightfully belongs to the owners of the company and/or employees who helped grow the organization, but were disproportionately under-compensated.
In addition, to say that workers are subsidizing lower rates for investment or inheritance does NOT imply that there is a natural level of rates for those activities. What it does imply is that effective rates for income from work, generally speaking, are higher than the rates from income arising out of investments and inheritance income. Again, that’s legalized theft.
Finally, when you reference a “natural level of tax rates” and ask “how much money,” you seem to be talking in absolutes. I’m talking in relative terms. And in this case the case of over-compensation, I’m talking about real free markets. Executives who sit on each other’s boards, hire compensation consultants with conflicts-of-interest, and rig the political system with their abundance of “speech,” are not earning their compensation through free-market means. This method of income is more consistent with what one might find in a banana republic.
My notion of victimology isn’t twisted if it’s true (and it is).
http://www.boston.com/news/nation/articles/2010/12/12/banks_donations_soared_as_brown_negotiated/?page=1
Left wing management
December 14th, 2010
6:01 pm
Dave: “Try making sense sometime. It helps people understand what the hell you’re saying.”
You’re right. The second quote should have been left out.
The point is: why are you defending an economic system that is doing such a poor job of providing decent work for so many hard-working people even as a speculation machine spins out of control and consists of nothing but numbers moving around?
Left wing management
December 14th, 2010
6:05 pm
Dave: “The capital is owned by those who make it and work for it, not by the government.”
Work has nothing to do with it. Those who own the capital generally are content to let others do the actual work – hence the difference between the term worker and capital-owner.
And by the way, government has everything to do with it – by acting as a framework that makes contracts enforceable, just to start with.
“If you don’t like that, there’s lots of other countries for you to choose from which ascribe to your beliefs.”
Nah, I like it just fine here thanks.
Kyle Wingfield
December 14th, 2010
6:13 pm
“In the case of inheritances, capital gains, and dividend income, the money saved by those who benefit primarily from such sources of income as a result of our inequitable tax system rightfully belongs to the taxpayers who must pay higher rates to offset the resulting revenue losses.”
So, you’re saying the money really belongs to the government, which is really a way of saying the money belongs to those people who want the government to redistribute it to them. I won’t bother to ask what the rent-seekers did to merit the redistribution.
Or why this would be more “equitable,” given that those people whose money you envy already pay more a disproportionate share of the taxes relative even to their large incomes (e.g. the top 5% earn about a third of gross income reported to the IRS [which doesn't include existing government wealth transfers] but pay nearly 60% of the taxes).
I would, however, love to pinpoint the moment that arguing against other people’s envy became labeled as “greed.”
CJ
December 14th, 2010
7:00 pm
“So, you’re saying the money really belongs to the government,…given that those people whose money you envy…”
No Kyle, I’m not saying these things at all. You’re inferences are bizarre, and it appears that rather than considering what I’ve written, you’d rather regurgitate talk radio’s misrepresentation of liberalism.
I’m saying, for example, that whether the public sector amounts to 25 percent of GDP or 2 percent of GDP, if the person who inherits $5,000,000 doesn’t pay any taxes on that inheritance income (part of the Obama/McConnell deal), then others necessarily must pay more than they otherwise would.
And this liberal doesn’t envy people who engage in legalized theft, or their wealth, anymore than you envy wealth attained at the point of gun or as a result of a illegal fraudulent acts. You don’t envy those who got away with it, do you Kyle? I hope you’re not projecting here.
Question Authority
December 14th, 2010
7:20 pm
Left Wing Management – Do you even read what you write before you reply??
You said “The only thing that can clearly be judged a “complete failure” is the neoliberal economics you’re touting. Period.” And then you go on to criticise some amalgam of some crap that I never even mentioned. I mentioned Austrian economics, which is neither neoliberal nor something that is currently in effect and therefore “judgeable”.
If you actually knew something about Austrian economics, you would know that it has nothing to do with Pinochet, Reagan, or any other elected stooge that supports the giant state apparatus.
And as for Capitalism, you do specifically say that it has entered a “terminal stage”. I don’t know what your definition of terminal is, but I think of near death. Again I say that there is no capitalism to die since true free market capitalism is not currently be practiced anywhere and hasn’t been for at least 100 or more years.
And it is quite simple to say that neither the Keynesians nor the Austrians can provide clear guidance since you offer no supporting evidence for your statement.
The Austrian school is very clear about the business cycle and its causes. It begins with the manipulation of interest rates and the money supply by the central bank (the Federal Reserve). These false signals that are sent into the market cause misallocation of resources and capital into unsustainable investments and projects. Since the interest rate is not dependent on savings in a fiat monetary system run by the Fed, these artificially low interest rates incorrectly signal that there is high enough savings to sustain the long term investment that lower rates generally encourage. The lower cost of money and the expansion of the money supply both generate a false bubble in the economy that can manifest in various industries, markets, etc. generally based on government involvement (the source of the money). Ultimately these unsustainable bubbles MUST burst in order to correct the malinvestment. Misguided Keynesian economics says to keep printing money and lowering interest rates in order to reinflate the bubble (the stupid things they are trying now), but the Austrians say that it is these very behaviors that are the root cause and must be stopped in order to prevent the continuing ups and downs of the government-created business cycles.
I don’t know. I may not have explained it perfectly, but that pretty much sums up exactly where we are, how we got there, and a prescription to get back to sanity. Yes, there will and MUST be some pain. Malinvestment and debt must be liquidated. It is unsustainable and you just can’t work magic with economic realities. You cannot repeal the laws of economics by majority vote or by wishing real hard.
If anyone reading wants more information, check out www(dot)mises(dot)org or just search for The Austrian Business Cycle Theory.