US faces Downton Abbey Economy

[doodle]

The U.S. is at risk of becoming a "Downton Abbey" economy, as the gap between the top 1 percent and the poor widens, former US treasury secretary Larry Summers has warned.

In a comment piece for the Financial Times, Summers highlighted that the share of income going to the top earners in the U.S. has increased sharply, while real wages and family incomes remain stagnant. These conditions will last beyond the normalisation of the economic cycle and budget deficits, Summers added.

"The cumulative effect of all these developments is that the U.S. may well be on the way to becoming a Downton Abbey economy. President Barack Obama is right to be concerned. Those who condemn him for 'tearing down the wealthy' and engaging in un-American populism are, to put it politely, lacking in historical perspective," Summers wrote.

http://www.cnbc.com/id/101421153

[Pointedstick]

As a crazily wealthy plutocrat himself who is in many ways one of the people more responsible for the current state of affairs (having spearheaded the repeal of the Glass-Steagall Act and worked closely with all the big banks), I wholeheartedly encourage Larry Summers to set a good example and tear himself down if he really think it will help things.

[moda0306]

To be fair to the opposition, there are a lot of safety-nets in place, currently, that aren't necessarily classified as "income" or "assets' of the lower/middle class.  Is the asset equivalent of future Social Security income counted as "wealth" when we discuss "distribution of wealth?"  Is having my kid educated for free counted as "income" when discussing "distribution of income?"  Further, having a kid is perhaps the most financial burdensome decision one can make.  It significantly hampers your ability to have an opportune career path, and is a big expenditure.  People have to bare some responsibility of their decisions, and the more bad decisions people are making, the less I can feel like it's a "macro-economic problem," and more of a personal responsibility problem.

Obviously I agree with certain aspects of this, but I think the numbers are meaningless if we don't point some of these aspects out, and be honest about what they actually mean against what we're trying to say.

That said, as Paul Krugman sometimes points out, this isn't just about deadbeats, this is about the ridiculousness of the .1% compared to people who contribute heavily to society (teachers, engineers, etc).  Not doctors and accountants and engineers, but certain CEO's and financial types on wall-street, are the ones getting uber-rich.  There is something bigger going on here. 

[Kshartle]

Is the asset equivalent of future Social Security income counted as "wealth" when we discuss "distribution of wealth?" 

One person's income is another person's tax. Social Security is a transfer from poorer young working people to older wealthier people who can now choose not to work because other humans are now forced to be their slaves. People in retirement have significantly more assets on average than the people paying the tax. Wealthier people as well as non blacks also live longer so it's even more of a theft from black people.

If you want to count future Social Security income as an asset you need to factor in the theft/tax as a liability. Since the government will keep a portion of the money for itself to process all this transferring you can see counting Social Security in makes us look even poorer, and especially workers and poorer people who are hurt the most by social security.

[Kshartle]

That said, as Paul Krugman sometimes points out, this isn't just about deadbeats, this is about the ridiculousness of the .1% compared to people who contribute heavily to society (teachers, engineers, etc).  Not doctors and accountants and engineers, but certain CEO's and financial types on wall-street, are the ones getting uber-rich.  There is something bigger going on here.

When economic interaction is based purely on voluntary terms......everyone gets fair compensation. If someone becomes wealthy, it's because they created a lot of wealth for other people.

The situation today where lots of people get wealthy even though they don't contribute nearly that much.......is due to violence dominating our economic interactions. It is theft when someone aquires wealth they didn't earn. The instrument of violence used by the theives is the government. Calling for more government power to help income inequality and prevent theft will only and always result in more of it. It is strengthening the tool that the theives will use to steal. You cannot write laws to keep the tool out of their hands. They right the laws. They buy the politicians. You can't have that power. You will never get that power. Calling for more power to the government is calling for more whips and chains and overseers for massa to use on you.

Krugman cannot be as dumb as he sounds. He must be a liar. I cannot believe he is so clueless about anything to do with economics on accident. It has to be on purpose. If he had the economic understanding of a little kid he would be better off. It's like he literally believes and repeats the exact opposite of reality. This has to be on purpose.

[Libertarian666]

That said, as Paul Krugman sometimes points out, this isn't just about deadbeats, this is about the ridiculousness of the .1% compared to people who contribute heavily to society (teachers, engineers, etc).  Not doctors and accountants and engineers, but certain CEO's and financial types on wall-street, are the ones getting uber-rich.  There is something bigger going on here.

Krugman cannot be as dumb as he sounds. He must be a liar. I cannot believe he is so clueless about anything to do with economics on accident. It has to be on purpose. If he had the economic understanding of a little kid he would be better off. It's like he literally believes and repeats the exact opposite of reality. This has to be on purpose.

It is.

[Kshartle]

Krugman advocates money printing as a solution to help the economy and bridge the wealth gap. This is hillarious.

Money printing is the ultra wealthy using the government to steal from everyone. Slips of paper have no value. They represent purchasing power. When the government prints them it redistributes purchasing power from the people to itself. Since the government is the tool of the weathly they are literally printing away the property of the people and stealing it. This is why QE is making almost everyone poorer except for a tiny few.

Obama is the hitman assiged to the job of assasinating the Americans. He works for the people who put him in power, the people who control the financial system. If you want things to get worse you only need to support more government power.

[moda0306]

That said, as Paul Krugman sometimes points out, this isn't just about deadbeats, this is about the ridiculousness of the .1% compared to people who contribute heavily to society (teachers, engineers, etc).  Not doctors and accountants and engineers, but certain CEO's and financial types on wall-street, are the ones getting uber-rich.  There is something bigger going on here.

When economic interaction is based purely on voluntary terms......everyone gets fair compensation. If someone becomes wealthy, it's because they created a lot of wealth for other people.

Or it's because they arbitrarily claimed vast amounts of common resources as their own... minor detail...

When economic interaction is based purely on voluntary terms......everyone gets fair compensation.

So when we all float through space and interact with each other purely voluntarily, rather than being trapped on this rock together with limited resources and no one objectively legitimate claim on those resources, I'll come ask you for a moral... errr... economics lesson.

Krugman cannot be as dumb as he sounds. He must be a liar. I cannot believe he is so clueless about anything to do with economics on accident. It has to be on purpose. If he had the economic understanding of a little kid he would be better off. It's like he literally believes and repeats the exact opposite of reality. This has to be on purpose.

K,

Now you just sound ridiculous.  There's some things I really don't like about the guy, but he has more knowledge about economics in his finger than you have in entirety, and it's probably not that much different for me.  All you have is a moral theory, and you use that to predict everything (incorrectly) about economics.  That's it.  Every attempt at analyzing history or economic models essentially comes back to some giant moralizing lecture from you.  This is fine, but inflation and GDP numbers might not care very much that you just hate everything the US government does.  It might help to "know the customers" a bit more, rather than applying your ethical code to 7 billion people and drawing economic conclusions from there.

PK analyzes models, analyzes actual numbers and history, analyzes what we might expect to see as EVIDENCE that we are supply-constrained vs demand constrained, or what natural interest rates should be.  This is huge.  He actually looks at history and evidence rather than just making claims, predicting disaster, and waiting for it.  How someone who is essentially an Austrian can say this crap about PK is beyond me.  It's quite laughable really.  How long do you have to be wrong before you start re-analyzing your position?

He has correctly predicted how the macroeconomics of the last 5 years would play out compared to Austrian economists freaking out over inflation and/or higher interest rates, and he did so based on a lot of studying of Japanese going through a similar event, with similar balance-sheet and aggregate demand fundamentals.  He explains why, mathematically, "QE" isn't inflationary, or deficits at current levels for that matter.

I think there are better economics writers/theorists out there, but your claim is absolute poppycock.  Are you sure you're not talking about Peter Schiff? 

[Kshartle]

Moda the policies Krugamn advocates are what the government is doing. Money printing, pushing down interest rates, redistributing the wealth etc.

It is destroying the economy.

Are you actually on this same rock as the rest of us?

[Kshartle]

Krugman's job is to hoodwink people into supporting their own destruction. He is a spokesperson for the theives who control the government and use it to rob everyone.

Based on your belief that he is an economic expert it appears he's succeded at hoodwinking you.

Obama got the Nobel Peace prize too man. You don't have to be an advocate or champion of peace to get it. You can be a muderer.

You can also be a complete dunce in the field of economics and get the Nobel prize for econ, as Krugman proves.

[moda0306]

Moda the policies Krugamn advocates are what the government is doing. Money printing, pushing down interest rates, redistributing the wealth etc.

It is destroying the economy.

Are you actually on this same rock as the rest of us?

The rest of us?  Who is us?  You and Libertarian666?

I live on a rock (pretty much forced to share it with others by nature) where nobody has, as of yet, proven that one moral theory is logically perfect.  I live on a rock with probably about ZERO free societies.  I live on a rock where a history of plunder and conquest, as well as the fact that we're just stuck on this rock together in the first place, makes property disputes anything but obvious.

Krugman's job is to hoodwink people into supporting their own destruction. He is a spokesperson for the theives who control the government and use it to rob everyone.

Based on your belief that he is an economic expert it appears he's succeded at hoodwinking you.

Someone hoodwinked you years ago, it would seem, that you're a victim of theft and a slave, yet you've stayed, at will, to serve your masters.  It would appear somebody got hoodwinked, to be sure.

Is Krugman an employee of government?  How is it his job to "hoodwink" someone?  Who hired him for that?  Please explain your ridiculous hyperbole.

[moda0306]

Krugman advocates money printing as a solution to help the economy and bridge the wealth gap. This is hillarious.

Money printing is the ultra wealthy using the government to steal from everyone. Slips of paper have no value. They represent purchasing power. When the government prints them it redistributes purchasing power from the people to itself.

Except no transfer of purchasing power has taken place.  A slip of paper was transferred for a slip of paper of equal nominal value.  We've shown this to you dozens of times, and it's obviously not having the affect on the economy you and Peter Schiff would like it to, for some reason. 

If government is the tool of the rich, why so many "safety hammocks" for the poor?  Why not leave them fighting for every last dollar by having to maintain their position in the workforce?

[Kshartle]

Krugman advocates money printing as a solution to help the economy and bridge the wealth gap. This is hillarious.

Money printing is the ultra wealthy using the government to steal from everyone. Slips of paper have no value. They represent purchasing power. When the government prints them it redistributes purchasing power from the people to itself.

Except no transfer of purchasing power has taken place.  A slip of paper was transferred for a slip of paper of equal nominal value.  We've shown this to you dozens of times, and it's obviously not having the affect on the economy you and Peter Schiff would like it to, for some reason. 

If government is the tool of the rich, why so many "safety hammocks" for the poor?  Why not leave them fighting for every last dollar by having to maintain their position in the workforce?

Reams and reams of discussions about how QE and inflation increase the price of financial assets and make the wealthy wealthier and you still don't get it. You can't get past the cullenrocheian nonsense about asset swaps.

Why do you think the disparity or wealth is growing? Why do you think some people get a lot of wealth they didn't create? Surely you have a theory?

[Kshartle]

Saftey hammocks for the poor trap them in poverty. Then they beg their masters for the scraps from the table. In return they give the masters power over the producers by voting for their share of the stolen loot. If someone stands up to the masters they are outvoted and out moralized by the hordes of poor the government has created with it's saftey hammocks.

This is basic and obvious stuff man.

If the government didn't create the millions of poor and we were all wealthy producers we'd see how obvious it was that we don't need the masters to redistribute the wealth and level the economic playing field.

The government needs the poor so it can grow. It's grown so big now and created so many poor the system is going to collapse. They cannot steal enough through taxes so they are turning to stealing through inflation. They have to give up at some point and let the economy crash or they will destroy it.

[moda0306]

K,

So the rich control the government to pay the poor to do nothing, because they need the poor to grow government so.... what again?  How do the rich benefit from a growing government?

Sure sounds like a confusing conspiracy... the rich "trapping" the poor with money so they can grow government which will... tax the rich more?

[ns3]

In regards to K's argument about the poor, there is a famous libertarian axiom that War is the health of the state (Randolph Bourne - any relation to Jason?). You could probably make a similar argument in a welfare state like the one we are currently nurturing that (limited) poverty is also the health of the state.

[Kshartle]

K,

So the rich control the government to pay the poor to do nothing, because they need the poor to grow government so.... what again?  How do the rich benefit from a growing government?

Sure sounds like a confusing conspiracy... the rich "trapping" the poor with money so they can grow government which will... tax the rich more?

You're confusing the ultra rich with the relatively rich. Yes well to do people like surgeons and business owners get scalped by taxes and a portion of that money goes to trap the poor and grow the government. The ultra rich get their wealth because of the state. They use the state to force people to buy their products and limit their competition. They use the state to inflate the currency and make money cheap for their speculations and business. They use the state to bail out their bankrupted businesses and let them cash out with 20 billion dollar bonuses despite driving their companies to bankruptcy. The state sheilds them from liability for their theft.

The idea that state can protect you from predations of super wealthy theives is a joke. The state is what they use to acomplish this. The idea that the state helps the poor is also a laugh. They create the poverty by stealing, instituting min wage, piling on regulations and fees and liscenses that prevent people from getting work, granting special privliges to unions to prevent competition etc. etc.

Let's not forget the extremely expensive "education" that we are forced to pay for. Tremendous amounts of resources go to pay for a government education where the children barely learn how to read and learn zero history or economics. What passes for history is they learn about how evil the US was because of slavery and how socialism and democracy are wonderful. Ask a high school kid what they know about communisim? Ask them who the revolutionary war was fought against? If you think the government education is worth the 20k or whatever per year is spent per kid then please talk to a recent high school graduate. Remeber they've been spending 30+ hours per week in school for 13 years. Go to a poor area and talk to the kids then come back and tell me how the government's "free" education is helping the poor. They are barely fit to work at McDonalds.

War and poverty have always been tools of the ultra wealthy to control society. That has never changed. That is still where we are. The difference now is the propaganda is so successful that not enough people can comprehend it. The interwebs are changing that game though.

[Ad Orientem]

That said, as Paul Krugman sometimes points out, this isn't just about deadbeats, this is about the ridiculousness of the .1% compared to people who contribute heavily to society (teachers, engineers, etc).

Memo from the Dowager Countess to Mr. Krugman...