Socialism for the rich and capitalism for the poor

[Murky]

I thought this might be interesting topic to discuss so I looked up some articles and found a nice wiki page to describe the political-economic argument.

From wiki

Socialism for the rich and capitalism for the poor is a classical political-economic argument, stating that in the advanced capitalist societies state policies assure that more resources flow to the rich than to the poor, for example in form of transfer payments. The term corporate welfare is widely used to describe the bestowal of favorable treatment to particular corporations by the government. One of the most commonly raised forms of criticism are statements that the capitalist political economy toward large corporations allows them to "privatize profits and socialize losses."[1] The argument has been raised and cited on many occasions.

The notion that banks privatize profits and socialize losses dates at least to the 19th century, as in this 1834 quote of Andrew Jackson:

I too have been a close observer of the doings of the Bank of the United States. I have had men watching you for a long time and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the Bank. ... You are a den of vipers and thieves.
—Andrew Jackson in 1834 on closing the Second Bank of the United States.[2]

From a related article

Emmanuel Saez, an economist from UC Berkeley, tried to quantify that oppression. He found that during the first year of the recovery from the 2008 crisis 93 per cent of incomes gains went to the 1 per cent. "Top 1 per cent incomes grew by 11.6 per cent, while bottom 99 per cent incomes grew only by 0.2 per cent," he said in an update of a previous study. "... Such an uneven recovery can help explain the recent public demonstrations against inequality."

Moreover, income for the 99 per cent grew by 20 per cent from 1993-2000, but during the Bush years, it grew by only 6.8 per cent. It's worth saying again that this is not a natural occurrence of the free and open marketplace. The upward redistribution of wealth is the concrete result of politics and policy - one might even say socialism for the rich, capitalism for everyone else.

So why would the average citizen, being of sound mind, and knowing this information vote for a Republican like George W. Bush?

 

[Integral]

@Saez: the quote is incomplete. So 93% of the income gains from recovery went to the top 1%. The obvious related question is, how much of the income loss from the recession went to the top 1%?

 

[caketastydelish]

Bill Gates is either the richest man in the world, or at the very least "up there" and if you've heard him speak lately, it seems he's quite possibly a socialist. It's not just his words that make me think this, but his actions as well.

And I heard somewhere that the guy that wrote "the jungle" was rich (even before writing the book).

On the other hand I hear a lot of middle class or even lower class people that are die-hard republicans. Go figure.

 

[~Corsair#01~]

I think it's inevitable that any market economy will polarise wealth. The rich have competitive advantages that they use to get richer, so over time wealth moves inexorably upwards.

This is why any economic system requires constant downwards wealth distribution otherwise it will end up denying progressively larger amounts of the wealth of the economy to the overwhelming majority of the people who work in it.

 

[BasketCase]

So why would the average citizen, being of sound mind, and knowing this information vote for a Republican like George W. Bush?

Because "this information" is malarkey.

Government policies don't direct money to the rich. RICH PEOPLE direct money to the rich. Rich people adapt. They avoid government policies that take money away from them. Most often, what rich people do is move their businesses to whatever country has the least onerous government policies. (Also, rich people use boldface )

 

[Murky]

@Saez: the quote is incomplete. So 93% of the income gains from recovery went to the top 1%. The obvious related question is, how much of the income loss from the recession went to the top 1%?

The Rich lost about 49% according to Saez

The sharp fall in top incomes is explained primarily by the collapse of
realized capital gains due to the stock-market crash. Aggregate realized
capital gains fell from $895 billion in 2007 to $236 billion in 2009. Indeed,
including realized capital gains, the top decile income share dropped from
49.7% in 2007 to 46.5% in 2009 while excluding realized capital gains, the top
decile income share remained virtually constant from 45.7% in 2007 to 45.5%
in 2009 (Figure 1).
http://elsa.berkeley.edu/~saez/saez-UStopincomes-2010.pdf

The latest version explains that during the Great Recession average family income fell 17.4 percent. That's the worst two-year drop since the Great Depression. The one percent got socked worse than the 99 percent. Indeed, it absorbed 49 percent of the income loss. But that's to be expected. Rich people lose income during recessions. The Great Recession wasn't as hard on the one percent, relative to everybody else, as the 2000-2002 recession. In that earlier downturn, which was a lot less harsh on the 99 percent, the one percent absorbed 57 percent of the income loss.
http://www.tnr.com/blog/timothy-noah/101369/the-one-percent-bounce-back

Because "this information" is malarkey.

Government policies don't direct money to the rich. RICH PEOPLE direct money to the rich. Rich people adapt. They avoid government policies that take money away from them. Most often, what rich people do is move their businesses to whatever country has the least onerous government policies. (Also, rich people use boldface )

Haven't you heard of crony capitalism?

 

[Integral]

edit: misread

 

[Antilogic]

So why would the average citizen, being of sound mind, and knowing this information vote for a Republican like George W. Bush?

Because people do not vote solely along economical lines nor understand it?

 

[Leoreth]

Bill Gates is either the richest man in the world, or at the very least "up there" and if you've heard him speak lately, it seems he's quite possibly a socialist. It's not just his words that make me think this, but his actions as well.

Donating at lot of one's money, however well-intentioned that may be, does not make one a socialist.

 

[Ayatollah So]

Back when votes mattered, government policy had to please pretty much anyone and everyone, lest the officials not be re-elected. Thus, widespread income growth up and down the economic ladder. Now that money buys elections to a much greater extent, the New Golden Rule rules. ("He who has the gold, makes the rules.")

 

[Monsterzuma]

Here's a relevant free E-book on the topic by one of America's most competent economists:
http://deanbaker.net/images/stories/documents/cnswebbook.pdf

Pages 1 through 15 offer a good summary of the arguments.

 

[Pangur Bán]

So why would the average citizen, being of sound mind, and knowing this information vote for a Republican like George W. Bush?

They don't know that. It's too hard to understand. Talking heads.

 

[luiz]

Burgers ruined his life, not old rich guys.

 

[BasketCase]

Haven't you heard of crony capitalism?

Haven't you heard of deep pockets?

When you're a rich person, other rich people don't always make good business partners--sometimes they make good targets.......

 

[Murky]

Burgers ruined his life, not old rich guys.

Rich guys that own a fast-food franchise maybe?

 

[caketastydelish]

They don't know that. It's too hard to understand. Talking heads.

I showed my dad this picture and he said he wants to post it on his wall in his office at work.

I think he's making a mistake, as this will get him enemies. But whatever.

 

[Cheezy the Wiz]

Haven't you heard of crony capitalism?

Yes, it's also called capitalism. It's only crony capitalism when you want to demonize the other guy's use of the state to enrich his friends, denying other rich guys the ability to enrich their friends.

Burgers ruined his life, not old rich guys.

 

[Crezth]

Haven't you heard of deep pockets?

When you're a rich person, other rich people don't always make good business partners--sometimes they make good targets.......

What's your point? Just because Godzilla is more interested in fighting Rodan than the Japanese military doesn't mean he won't be crushing a lot of hapless passersby underfoot in the meanwhile.

 

[Pangur Bán]

I showed my dad this picture and he said he wants to post it on his wall in his office at work.

I think he's making a mistake, as this will get him enemies. But whatever.

You are wise. It's generally not a good idea to be too assertive about politics in work environments or anywhere average people can effect your prosperity, unless you are socially dominant (or even if you are).

 

[BvBPL]

Because "this information" is malarkey.

Government policies don't direct money to the rich. RICH PEOPLE direct money to the rich. Rich people adapt. They avoid government policies that take money away from them. Most often, what rich people do is move their businesses to whatever country has the least onerous government policies. (Also, rich people use boldface )

You drive a car. Every year, every mile, the car goes down in value.

Richie Rich drives a car too. Every year, every mile, his car goes down in value.

However, Richie Rich’s car is registered commercially to his company. Doesn’t really matter whether or not uses it commercially, no one actually checks that. But it is registered to his company. Consequently his company can claim a depreciation tax credit for the loss in value. His loss becomes an asset. The tax system works for him, because he’s Richie Rich and he owns a business. You just take the loss of value on your car in the pocketbook.

Now, you don’t have to be as rich as Richie to take advantage of a depreciation credit on your car. If your car is used to create income for you then you can claim it for depreciation. Of course, if that’s not your primary means of income you’ll have to give the tax man a rigmarole because when I say they don’t check that I meant they don’t check if you’re Richie Rich Conglomerated, but they will for your shabby butt.

And I’m also not saying that depreciation favors only the rich. It doesn’t. It is also great for farmers and small business owners. However, people who own, or own shares in, large businesses are able to squeeze more out of depreciation than people of lesser means.

That’s just one way the system is set up to favor people of greater wealth. And that’s not rich people using their smarts or anything to get rich, that’s just them using the tax code.