While We Wait: Writer's Block & Other Lame Excuses

[Masada]

We can't even trust the rich to be rational self-interested actors now

 

[Gem Hound]

Yes, those billionaires don't have to do anything at all, just throw their money into savings accounts and have countless amounts from just sitting there due to interest.

 

[Symphony D.]

Those rich are too few, and it's not so true anymore. Those rich don't need anyone to buy anything anymore to make money. They just make money out of having money... Take previous presidency candidate Mitt Romney, he became rich without selling a single product.

Nope.

We rich people have been falsely persuaded by our schooling and the affirmation of society, and have convinced ourselves, that we are the main job creators. It’s simply not true. There can never be enough super-rich Americans to power a great economy. I earn about 1,000 times the median American annually, but I don’t buy thousands of times more stuff. My family purchased three cars over the past few years, not 3,000. I buy a few pairs of pants and a few shirts a year, just like most American men. I bought two pairs of the fancy wool pants I am wearing as I write, what my partner Mike calls my “manager pants.” I guess I could have bought 1,000 pairs. But why would I? Instead, I sock my extra money away in savings, where it doesn’t do the country much good.

So forget all that rhetoric about how America is great because of people like you and me and Steve Jobs. You know the truth even if you won’t admit it: If any of us had been born in Somalia or the Congo, all we’d be is some guy standing barefoot next to a dirt road selling fruit. It’s not that Somalia and Congo don’t have good entrepreneurs. It’s just that the best ones are selling their wares off crates by the side of the road because that’s all their customers can afford.

The more money there is in the economy, the greater the opportunities for creating money off ultimately non-to-poorly productive (net) economic activities (speculation, fee/rent extraction from basically moving things around, vulture-capitalism, etc.), but like any ecosystem "parasites" only thrive where there's life to begin with. The rich might control an outsize proportion of the assets but they can't generate enough activity to be self-sustaining. As a group this is true, even if individually it isn't.

Someone like Mitt Romney is reliant on a system that in turn relies on the vast churn of economic activity produced by goods and services, even if he himself doesn't really contribute. His perspective of how that system works and his place in it is wholly delusional, sure, but he is in fact ultimately utterly dependent on the economic performance of others to maintain his own economic well-being. This is true of everyone, no matter how rich.

 

[Shadowbound]

Marx had some good ideas, yo.

 

[Azale]

Someone tell Piketty that amirite?

 

[erez87]

Nope.


The more money there is in the economy, the greater the opportunities for creating money off ultimately non-to-poorly productive (net) economic activities (speculation, fee/rent extraction from basically moving things around, vulture-capitalism, etc.), but like any ecosystem "parasites" only thrive where there's life to begin with. The rich might control an outsize proportion of the assets but they can't generate enough activity to be self-sustaining. As a group this is true, even if individually it isn't.

Someone like Mitt Romney is reliant on a system that in turn relies on the vast churn of economic activity produced by goods and services, even if he himself doesn't really contribute. His perspective of how that system works and his place in it is wholly delusional, sure, but he is in fact ultimately utterly dependent on the economic performance of others to maintain his own economic well-being. This is true of everyone, no matter how rich.

Sure, but they don't need us thriving, they just need us surviving. In fact the worse the host situation is, the easier it is for the parasite. Also - biologically speaking a parasite would finish off its host if it could, and go extinct as well. I wouldn't be surprised if that's how it will end.

 

[Daftpanzer]

Aside from relatively low wages, it seems we remain addicted to long working hours.

Makes sense when you want to keep people in a position of having to pay for convenience food/services/entertainment, not having too much time to dwell on their situation, and discourage time-consuming activities and hobbies that cannot be easily monetised?

In my current workplace, I'm pretty sure the same or more amount of productivity could be gained from shaving a few hours off the working day - people arriving at work more alert, more creative, better rested and more motivated.

How many of us have mastered the art of 'looking busy' without actually doing much?

Just like paying people more is actually good for the economy, I wouldn't be surprised to discover that making people work less hours (for the same pay) would actually be a net benefit as well.

 

[erez87]

Aside from relatively low wages, it seems we remain addicted to long working hours.

Makes sense when you want to keep people in a position of having to pay for convenience food/services/entertainment, not having too much time to dwell on their situation, and discourage time-consuming activities and hobbies that cannot be easily monetised?

In my current workplace, I'm pretty sure the same or more amount of productivity could be gained from shaving a few hours off the working day - people arriving at work more alert, more creative, better rested and more motivated.

How many of us have mastered the art of 'looking busy' without actually doing much?

Just like paying people more is actually good for the economy, I wouldn't be surprised to discover that making people work less hours (for the same pay) would actually be a net benefit as well.

There is some evidence to that. But how will you make private employers who know these evidence but don't care (or don't believe) to give shorter hours to their workers without the government telling them so?

 

[Daftpanzer]

Maybe by waiting for all the older generation to die and disappear, or for faulty systems to collapse under their own weight, so we can take over with our new ideas

 

[Symphony D.]

Sure, but they don't need us thriving, they just need us surviving. In fact the worse the host situation is, the easier it is for the parasite.

No, because then there's less volume and so they all make less money regardless of how they make it, which is literally the entire premise of the argument and so I assume you didn't read a single word of it.

 

[erez87]

No, because then there's less volume and so they all make less money regardless of how they make it, which is literally the entire premise of the argument and so I assume you didn't read a single word of it.

I did, I just didn't see that was the main point.

Do they make less money when the market is lower? Did they make less money in 2008? cause I know they did make money... And does it matter? Greed doesn't see far ahead. A parasite doesn't see its own betterment, only the multiplying to the next host.

Anyway, I admit I'm a bit... negative on the subject. I don't trust the greedy to understand they will do better if we all do better.

Just to be clear - I wish more of them were like that guy - but they aren't. Their just blindly greedy.

I'll go read more deeply first.

I finished reading and all I can say is that I wish more rich people were like him. Sadly, I don't believe so.

 

[Symphony D.]

Their just blindly greedy.

Which is why what he's advocating will probably actually eventually work. It doesn't appeal to nobility or justice or fairness; it appeals precisely to greed. The rich get richer when everyone else has more money to spend. Rich people are, in fact, increasingly advocating for wage hikes. Even Mitt "47%" Romney endorsed the idea. It's the (conservative and libertarian) politicians who are standing in the way.

 

[erez87]

Which is why what he's advocating will probably actually eventually work. It doesn't appeal to nobility or justice or fairness; it appeals precisely to greed. The rich get richer when everyone else has more money to spend. Rich people are, in fact, increasingly advocating for wage hikes. Even Mitt "47%" Romney endorsed the idea. It's the (conservative and libertarian) politicians who are standing in the way.

I hope it works. Anything that happen in the big brother USA usually flows to Israel. I just can't say I believe it will happen. If only for the reason that a lot of rich people are spending insane amounts of money on making sure it isn't...

 

[Lord_Iggy]

Just to clear up a biological point, as it was expressed a little unclearly earlier, a parasite that kills its host is generally an unsuccessful parasite. Natural selection will tend to make parasites less virulent, as a parasite which kills its meal ticket is going to have less resources available to it than a parasite which is able to leave its host alive.

 

[Thlayli]

I think that's a fairly simplistic interpretation of what a company like Bain Capital *does,* but I wouldn't disagree that rich people don't by themselves create the most jobs. But rich people are an important and necessary segment of the economy, just like middle class people are. The root of the 48% comment was Mitt Romney pointing out that yes, in fact, 48% of the country pays no effective personal income tax. Which is, you know, the truth, but also an awkward point to those who want to increase the tax burden of the rich alone, since the richer half of the country is already the only segment bearing the (federal) tax burden.

It was a politically suicidal thing for him to be seen saying, but the truth is like that in politics. So 52% of Americans pay federal taxes. We could shift the burden even further to the right, but then we get into Laffer curve territory, though idk enough about that to comment educatedly.

There are examples of industries which couldn't exist without rich people. The luxury hotel, car, luxury anything industries for one, which in turn employ lots of mechanics and service workers. The tourism industry as well is driven by the wealthy. NGO's and other charitable organizations which are primarily run off of rich or upper middle class donations are another example. Finally of course, there's educational endowments, which are sourced through a combination of public and private funding and provide plenty of intangible benefits to the economy through basic and applied research.

I believe the government is probably directly or indirectly responsible for somewhere between 15 and 30% of the jobs in this country, depending on how you calculate the secondary effects. I can't give you a number for how many jobs rich people create, but if we consider the fact that the private sector of the economy is larger than the public sector, more jobs are created by rich and middle class people in aggregate than created by the government.

That, I think, is the basic idea behind supply-side economics, that the impact of individuals (not just rich ones) in aggregate increasing their spending will stimulate the private economy more than the government typically can.

I mean, isn't the so-called "Third Arrow" necessary to pull Japan out of permastagnation a restatement of the need for supply-side economics, using a slightly different vocabulary? And isn't the perceived failure of the Abe government's recent massive spending/inflation spree to alter the long-term economic prospects of the country an example of how government intervention alone cannot turn an economy around without the cooperation of the private sector?

I don't know how it was articulated, but if it could be restated, I'd say "trickle-down" should be the middle class spending enough to save itself, not the rich saving everyone else through their spending. So...trickle sideways, I guess.

I have feeling I'm going to get torn a new one for this post, but I believe that the recent economic performances of Japan and France are both cautionary tales for allowing the private economy to atrophy to a certain extent through various policies unfriendly to consumerism. France in particular is suffering severe, artificially created economic contraction and also happens to be an AWFUL place to be rich at present. And it still manages to be a horrible dystopia for urban minorities even though it's socialist.

This knowledge I think is lost in the rush to lynch the rich for their sins. The rich may not be the solution, but they're not the problem, either. They already pay a lot of taxes, especially in the places where rich people like to live like New York and L.A. You could be looking at over 50% of your income going to the government if you're in the 1% and live in those areas. Is that really too *little*?

Now, you could make the argument that the rich get out of paying the top marginal tax rate through abusing deductions, but that's supposedly the system Romney was going to reform if we'd had the sense to elect him.

 

[Symphony D.]

I think that's a fairly simplistic interpretation of what a company like Bain Capital *does,* but I wouldn't disagree that rich people don't by themselves create the most jobs.

If you want to believe that, sure. Bain Capital has a history of taking historically successful businesses and then somehow those businesses mysteriously die and Bain Capital makes money, but you can call it whatever you want.

But rich people are an important and necessary segment of the economy, just like middle class people are. The root of the 48% comment was Mitt Romney pointing out that yes, in fact, 48% of the country pays no effective personal income tax.

Which is, you know, the truth, but also an awkward point to those who want to increase the tax burden of the rich alone, since the richer half of the country is already the only segment bearing the (federal) tax burden.

That was true of one year (2009), and it was a highly unusual year. New York Times. Huffington Post. You can find more examples. The actual number is significantly lower in most years. It was a rather strange "fact" to generalize over the entire population as a general truism, and doing so was suggestive of someone who would take any opportunity to sneer at the masses. Wonder why he got hammered for it?

There are examples of industries which couldn't exist without rich people. The luxury hotel, car, luxury anything industries for one, which in turn employ lots of mechanics and service workers.

Yeah, the luxury hotel and car markets, which as we all know, utterly dwarf the mass production car and hotel markets in terms of sales volume? What? Yes, there are tiny niche industries that cater to rich people, they're not actually very large because there aren't that many rich people.

The tourism industry as well is driven by the wealthy.

lol

Okay maybe you meant that in a way that actually makes sense but the way you said it is just "lol."

That, I think, is the basic idea behind supply-side economics, that the impact of individuals (not just rich ones) in aggregate increasing their spending will stimulate the private economy more than the government typically can.

Too bad that the last 30 years have been spent putting supply-side, which does in fact privilege the rich over everyone else, to the test and it has come up woefully short in terms of improving the average person's well-being. How much longer do we have to try it before we write it off? How much more do we have to watch it destroy the middle class and by proxy the entire economy before we kill it and move on? The time is now.

I mean, isn't the so-called "Third Arrow" necessary to pull Japan out of permastagnation a restatement of the need for supply-side economics, using a slightly different vocabulary? And isn't the perceived failure of the Abe government's recent massive spending/inflation spree to alter the long-term economic prospects of the country an example of how government intervention alone cannot turn an economy around without the cooperation of the private sector?

The American economy and the Japanese economy are in nowhere near the same places and it's almost like different economies in different situations require different solutions or something. Also, no, I'm pretty sure that Japan's deflationary spiral which has been caused by everyone at every level of society not spending (due to the Yen having been jacked up domestically to promote a trade imbalance and encourage saving and the lack of development of proper domestic consumption) will not be solved by giving rich people tax breaks that mysteriously cause everyone else to spend, and I'm pretty sure that's not what's going on over there and so it can't by any standard be called trickle-down, but I'm not following it that closely and I'm not an economist, so I'll defer to Masada.

I don't know how it was articulated, but if it could be restated, I'd say "trickle-down" should be the middle class spending enough to save itself, not the rich saving everyone else through their spending. So...trickle sideways, I guess.

You don't get to redefine terms that have been around for longer than you have.

I have feeling I'm going to get torn a new one for this post, but I believe that the recent economic performances of Japan and France are both cautionary tales for allowing the private economy to atrophy to a certain extent through various policies unfriendly to consumerism. France in particular is suffering severe, artificially created economic contraction and also happens to be an AWFUL place to be rich at present. And it still manages to be a horrible dystopia for urban minorities even though it's socialist.

You understand that if capitalism was a star system where letting the market run was determined by proximity to the star, America would be like Venus or Mercury, France would be like Mars or Jupiter, and Japan would be like Saturn, right? That not all capitalist states have the same malaises with the same symptoms, yes? That our symptoms are different than France and Japan's doesn't mean we don't have any.

The rich may not be the solution, but they're not the problem, either.

Actually they're the primary problem, because they (really, a subset of them) are the ones driving the political resistance toward changing our demonstrably broken system, or have built the mass-movement to allow it to continue, or both. I'm pretty sure if this was a Tom Clancy novel that a rogue CIA operation would've dropped Paveways on people like the Koch Brothers and Sheldon Adelson by now given they constitute clear and present dangers to America.

They already pay a lot of taxes, especially in the places where rich people like to live like New York and L.A. You could be looking at over 50% of your income going to the government if you're in the 1% and live in those areas. Is that really too *little*?

Spoiler Margin Call (2011) :

Seth Bregman: Will, did you really make two and a half million last year?
Will Emerson: Yeah, sure.
Seth Bregman: How did you spend it all?
Will Emerson: It goes quite quickly. You know, you learn to spend what's in your pocket.
Peter Sullivan: Two and a half million goes quickly?
Will Emerson: All right, let's see. So the taxman takes half up front, so you're left with one and a quarter. My mortgage takes another 300 grand. I send 150 home for my parents, you know, keep 'em going. So what's that?
Peter Sullivan: 800?
Peter Sullivan: All right, 800. Spent 150 on a car. About 75 on restaurants. Probably 50 on clothes. I put 400 away for a rainy day.
Seth Bregman: That's smart.
Will Emerson: Yeah, as it turns out, 'cause it looks like the storm's coming.
Peter Sullivan: You still got 125.
Will Emerson: Yeah, well I did spend 76,520 dollars on hookers, booze and dancers. But mainly hookers.
Peter Sullivan: 76,5?
Will Emerson: I was a little shocked initially, but then I realized I could claim most of it back as entertainment. It's true!

We're self-evidently talking about the 10% (and really 1%) of the 1%, the 99.9th and 99.99th percentiles, not just the 99th percentile. That said, given the average two-bedroom apartment in NYC costs $3,331 a month, if you're making $250,000, even if 50% of it gets taken away I have a hard time feeling sorry for you for your measly $85,000 to somehow manage with after taxes and accommodations are taken care of. The more you make, the more of a joke I think your "plight" is.

You know that the post-Reagan effective upper tax rates of 25 to 30% are historically low, right, and actually not very high? If WWIII broke out tomorrow and we weren't all dead in six months, I somehow can't see America's ultrarich paying 94% for the good of the country like their predecessors did in 1944. Wonder why. There's also the enduring mystery of how America was so successful during the Golden Age of Capitalism when the taxes on the rich were in the 75% range! A conundrum that will surely never be solved.

Oh, wait, it's not mysterious: the rich have far lower taxes now, and far higher incomes, and they'd do just fine if their taxes were jacked up to historical norms, but they manipulate the government and public opinion (ref. Tea Party, like they always have when they feel threatened) so that doesn't happen because they want to protect their bottom line and influence. The rich people of the last 30 years have already won victories that would've made the rich of other times salivate with jealousy, but it's just not enough for them and they want more. In the case of people like the Koch Brothers, they want it all, and won't be satisfied until America is a Snow Crash-esque libertarian dystopia.

The simple answer for why this is is that they no longer feel any responsibility toward their fellow citizens because they no longer think that the circumstances in which they find themselves (e.g., American prosperity) have anything to do with their personal success, which is why they pat themselves on the back as "job creators," claim they never had to rely on anyone else, and so on. It's a collective mass psychosis and arrogance. Since something as simple as "reason" or "civic duty" or "justice" will never get through to someone in the grip of such mania, we arrive at the need to trick the rich into doing something good for people other than themselves, by pointing out they'd actually be wealthier if they helped the masses rather than consistently screwing them. Even this isn't enough, and so it has to be rammed through in a series of local political actions until it becomes the norm and the rich at large see it actually works.

If that fails, then as Hanauer (a rich man) points out, it's time for the pitchforks. Unsurprisingly, the shrill political extremists the rich back are the ones most likely to try and implement a police state in reprisal. It's almost like there's a class struggle or something at work here!

Now, you could make the argument that the rich get out of paying the top marginal tax rate through abusing deductions, but that's supposedly the system Romney was going to reform if we'd had the sense to elect him.

Congratulations, everything you've said has been totally peripheral to the idea of increasing economic activity by raising wages for the middle class! Your reflexive defense of the rich for things they weren't even really being overtly criticized for at the time has been noted!

I don't have a problem with the rich who understand they're part of a system that enables them to be rich. I have a great problem with the rich who think they don't need anyone or anything else to be what they are, and didn't to get where they are, that they're entitled to their wealth through some vague superiority over everyone else, when the truth is that it was some mixture of them earning it and really just getting lucky. America's rich overwhelmingly belong to the second category due to years of believing their own propaganda, and they both need to be and deserve to be put back into their place.

 

[Crezth]

Yeah, the luxury hotel and car markets, which as we all know, utterly dwarf the mass production car and hotel markets in terms of sales volume? What? Yes, there are tiny niche industries that cater to rich people, they're not actually very large because there aren't that many rich people.

Going off of this, something slightly anecdotal but I think it's relevant: In aeronautics, luxury jets (and this doesn't just mean private jets, but, say, all-first-class jets) are considered extravagant projects and almost always take the backseat to mass consumption aircraft, i.e. whatever you, the reader, used to fly to your last destination. This is, for example, why the middle ground of putting first class seating on jets that also have a lot of coach seating is considered the ideal solution.

My professors sometimes have a good laugh at the expense of so-called luxury jet manufacturers. They go out of business like, um, bad hotcake places. In the desert.

The American economy and the Japanese economy are in nowhere near the same places and it's almost like different economies in different situations require different solutions or something. Also, no, I'm pretty sure that Japan's deflationary spiral which has been caused by everyone at every level of society not spending (due to the Yen having been jacked up domestically to promote a trade imbalance and encourage saving and the lack of development of proper domestic consumption) will not be solved by giving rich people tax breaks that mysteriously cause everyone else to spend, and I'm pretty sure that's not what's going on over there and so it can't by any standard be called trickle-down, but I'm not following it that closely and I'm not an economist, so I'll defer to Masada.

For sure to defer to Masada, but also note that Japan's problems and America's problems are indeed very, very different - and specifically, Japan's big problem is an extremely underdeveloped consumer goods industry, which is not exactly a charge you could put at the door of the US.

 

[Masada]

Yeah, that'd be a fair assessment of Japan's issues.

 

[Symphony D.]

Likewise, rather than endlessly editing that post, I want to point out that tourism and its major attractions, i.e., theme parks, cruise ships, etc., are obviously not driven by the rich. The truly rich have resorts and yachts, they don't need Disneyland or Norwegian Cruise Lines. They're driven by the middle and lower classes, and yes, lower rich class, aspiring to emulate the rich by seeking out unique life experiences often well beyond their means to easily afford. The upper tier of these will cater to the lower rich, in much the same way that first class seating does, but the industry is driven by volume, and that means lots of poorer people.

Vegas and Macau and Orlando aren't built to cater to only rich people, though they certainly will, can, and do.

 

[Angst]

I'll be gone for a week from today.