The System Is Rigged

[stone]

IMO much of the work that gets done in our economy is essentially working to enforce inequality of power in various forms. We work hard to make sure that people don't get their fair share of the earth.

[doodle]

Stone,

So using Harry Brownes advice from "How I Found Freedom in an Unfree World" the solution would be to first extricate yourself from this issue and then (if you enjoy it) try to help others see the light. There are many options to remove yourself if you simply are willing to live by your convictions. I spend less than the poverty level of the United States and still find my life extravagant. Hell, I'm surfing the internet from a Macbook as we speak with the entire knowledge of the world at my fingertips! A few hundred years ago kings would plunder and kill for the power and knowledge I casually possess today.

Jacob at ERE and Mr. Money Mustache are two examples of people who have seen the light and are letting others know that you can jump off the yellow brick road...

[moda0306]

IMO much of the work that gets done in our economy is essentially working to enforce inequality of power in various forms. We work hard to make sure that people don't get their fair share of the earth.

stone,

I agree 100%.  I also think this has little to do with deficit spending, and everything to do with other combinations of forces.

[Gumby]

Agreed. But, that's also the way it has to be. Not everyone can be rich. The middle class can't have too much disposable income. Otherwise, that would be inflationary. The best we can do is give everyone a job so they can pay their bills, and maximize productive capacity, so that everyone can improve their standard of living together. The top 1% are obviously going to be collecting those bills and hopefully providing those jobs. That's how capitalist economies work. Governments can help by providing jobs when the private sector can't or won't. Maximizing productive capacity improves everyone's standard of living.

If the top 0.1% has rigged the system to direct government spending directly into their pockets — thereby bypassing the middle class altogether — then something needs to be done to stop that. Full employment needs to be the top priority.

[Gumby]

It's worth mentioning that Sweden and Norway were able to reach full employment and eliminate the power of the top 1%.

See: How Swedes and Norwegians Broke the Power of the ‘1 Percent’

However, most Americans would not want to embrace the "Nordic Model":

http://en.wikipedia.org/wiki/Scandinavian_welfare_model

[Reub]

The 1%? Man, some of you guys are easily brainwashed by left-wing propaganda!

I say thank God for the 1%!

[Gumby]

The 1%? Man, some of you guys are easily brainwashed by left-wing propoganda!

I say thank God for the 1%!

Unless you're a member of the 1%, what exactly are you thanking them for?

[moda0306]

Reub,

Not to end this thread in a ball of flames, but we're the ones discussing complicated issues in a respectful way, and like clockwork you come in ad hominim, as usual.  I'll take your glib responses as evidence that it's you, not us, who is truly brainwashed.

And by "1%," we're probably talking more about the top .1%-.5%... as they're the ones who have seen the vast majority of the gains in real income since 1980.  "The 1%" is just a general term to describe the wealthy few who seem to do extremely well compared to their contributions to the economy/society.

Most of these people are in high finance, legal or real estate... not too many engineers and heart surgeons in there.  We'd be just fine without a good chunk of them.

[TripleB]

TripleB,

Would you rather be on a gold standard system that didn't allow individual gold ownership (Bretton Woods), or a floating currency system that allowed gold ownership?

Moda,

Does private gold ownership need to be mutually exclusive from a gold standard? From your post, it sounds as if that's what you're implying. It may very well be true, I never thought about it until you just mentioned it.

I always imagined the ideal scenario to be a fixed currency system, where there is zero inflation, private gold ownership is allowed, and I can trade in my paper money for gold as desired.

Does allowing both at the same time cause a monetary/economic issue of some kind? Couldn't the government just have lots of dollar bills and lots of gold. Anytime someone came in with a dollar and asked for gold, they made the trade. Anytime someone had gold and asked for paper, they would do that too.

Money becomes more valuable over time because there is less of it, relative to economic production, since the value of gold is fixed.

What are the flaws that I'm missing?

[l82start]

The 1%? Man, some of you guys are easily brainwashed by left-wing propoganda!

I say thank God for the 1%!

Unless you're a member of the 1%, what exactly are you thanking them for?

which part of the one per cent we are talking about, the providers of things people value and are willing to pay for, or the crony capitalists that manipulate the system to get to and stay where they are?

[Reub]

"And by "1%," we're probably talking more about the top .1%-.5%... as they're the ones who have seen the vast majority of the gains in real income since 1980.  "The 1%" is just a general term to describe the wealthy few who seem to do extremely well compared to their contributions to the economy/society.

Most of these people are in high finance, legal or real estate... not too many engineers and heart surgeons in there.  We'd be just fine without a good chunk of them."


Oh! I see. "We would be just fine without a good chunk of them." And what gives you the right to determine that? What gives you the right to judge them? What gives you the right to judge their contributions to the economy/society? How would we rid ourselves of this 1%, which is now down to .1-.5%? Should they be exiled? Should their wealth be confiscated? Should they be jailed? Would our society be the better off for doing any of these things? BTW, can we start calling them the ".1-.5%ers" for the purpose of accuracy or is that not catchy enough?

[MediumTex]

The 1%? Man, some of you guys are easily brainwashed by left-wing propoganda!

I say thank God for the 1%!

Unless you're a member of the 1%, what exactly are you thanking them for?

which part of the one per cent we are talking about, the providers of things people value and are willing to pay for, or the crony capitalists that manipulate the system to get to and stay where they are?

I think that it's people like Lloyd Blankfein who really capture this sense of disgust with certain members of society.

It's not clear at all why a CEO such as Blankfein who was at the wheel when his firm should have gone under but for the grace of the American government not only still has a job but his wealth has not really been affected in any way.  If anything, he has gotten richer since 2008.

I don't have a problem with rewarding success, but it seems that many get into the 1% in the first place through a process of essentially rewarding failure.

[moda0306]

TripleB,

I wasn't implying they were mutually exclusive, but simply focusing on the period of 33-71, where we were on a fixed exchange system based on gold, and 71-present, where we had a free-floating currency and gold was free to trade.

Just wondering which you'd prefer.... I prefer what we've had since 1971.  I'd much rather invest in gold on my own than quasi-rely on a government promise.

You do realize then, that if our main form money becomes more and more valuable as time goes by then it is a huge hindrance to efficient and productive investment, because the very money you hold is growing in value.  I think even Milton Friedman realized we needed a growing money supply for an economy to properly function.

[TripleB]

Has anyone ever thought that if the system is a rigged game then maybe the solution is to just stop playing? Like when you were a kid and someone disagreed with the rules and would just pick up the ball and say "I'm going home" thus ending the game for everyone involved?

Yes, that has been my plan all along. Early retirement via ERE living.

[Reub]

I think that we need more of a contribution to society from the 99.9% not being discussed above.

[MediumTex]

"And by "1%," we're probably talking more about the top .1%-.5%... as they're the ones who have seen the vast majority of the gains in real income since 1980.  "The 1%" is just a general term to describe the wealthy few who seem to do extremely well compared to their contributions to the economy/society.

Most of these people are in high finance, legal or real estate... not too many engineers and heart surgeons in there.  We'd be just fine without a good chunk of them."


Oh! I see. "We would be just fine without a good chunk of them." And what gives you the right to determine that? What gives you the right to judge them? What gives you the right to judge their contributions to the economy/society? How would we rid ourselves of this 1%, which is now down to .1-.5%? Should they be exiled? Should their wealth be confiscated? Should they be jailed? Would our society be the better off or doing any of these things? BTW, can we start calling them the ".1-.5%ers" for the purpose of accuracy or is that not catchy enough?

We could simply let them exit the 1% through the Darwinian process that got them there--i.e., when they make bad business decisions let them fail and let their wealth through the existing bankruptcy process be turned over to other capitalists who made better decisions.

[Reub]

Isn't it curious that the left-wing politicians who castigate the 1% are the same ones that bailed them out?

[MediumTex]

Isn't it curious that the left-wing politicians who castigate the 1% are the same ones that bailed them out?

And the 1% that rails against the left-wing politicians write them big checks to finance their campaigns.

It's ugly.

[moda0306]

Oh! I see. "We would be just fine without a good chunk of them." And what gives you the right to determine that? What gives you the right to judge them? What gives you the right to judge their contributions to the economy/society? How would we rid ourselves of this 1%, which is now down to .1-.5%? Should they be exiled? Should their wealth be confiscated? Should they be jailed? Would our society be the better off for doing any of these things? BTW, can we start calling them the ".1-.5%ers" for the purpose of accuracy or is that not catchy enough?

Woah... I didn't say we should "rid ourselves" of them... simply that we'd be fine without them, thus no need for thanking God for them and drooling at their feet.  I'm judging them based on a lot more anlysis than how you judged us as being "brainwashed."  I used numbers over the spans of decades to judge them against their contributions to the people around them.

In my opinion, their income shouldn't be taxed at preferential rates, at the very least, and regulations should be in place preventing their bamboozlement of the rest of society.  

Much of the wealth of individuals is in the form of real resources and land that wasn't ever anyone's to begin with.  Any system that tries to distribute that land to certain people and call itself fair has to make up for that to the others that weren't included in the initial distribution of wealth.  Until we acknowledge that we're just beating around the bush.

[l82start]

which part of the one per cent we are talking about, the providers of things people value and are willing to pay for, or the crony capitalists that manipulate the system to get to and stay where they are?

I think that it's people like Lloyd Blankfein who really capture this sense of disgust with certain members of society.

It's not clear at all why a CEO such as Blankfein who was at the wheel when his firm should have gone under but for the grace of the American government not only still has a job but his wealth has not really been affected in any way.  If anything, he has gotten richer since 2008.

I don't have a problem with rewarding success, but it seems that many get into the 1% in the first place through a process of essentially rewarding failure.

i have no problem going after the blankfeins of this world.... i tend to dislike the "1%" "eat the rich" talking points because they never seem to separate the two groups, and its a important distinction, both ideologically and when it comes to drafting practical policy..   just going after the 1% or the rich because they are 1% or rich damages a group of people we shouldn't go after (a group that many of us would like to be a part of someday,,) and this could easily be as harmful as having the crooked portion of the 1% being left to run amuck...  

[Gumby]

I don't believe anyone in this thread ever suggested "going after" the 1%. Nobody is trying to punish anyone for being wealthy.

The only thing that was suggested was breaking the 1%'s influence on the political process.

[MachineGhost]

Government spending alone doesn't cause inflation. Inflation usually takes place when the middle class is able to drive up prices by spending beyond the productive capacity of a nation. And that only happens when the middle class actually have jobs and disposable income. You can't technically have an employed and richer middle class without causing inflation.

That is conflating cause and effect.  Spending is an effect of the increased velocity of money which is brought about by equilibrium theory.  Inflation = Government Spending + Change in Velocity - Productive Output.  The 70's had high unemployment and high inflation.  Consumer spending as a percentage of GDP stays relatively stable in recessions or expansions.

MG

[KevinW]

I'm still trying to figure out why humans are still working as hard as they are considering the MASSIVE increases in productivity that we have experienced over the last 200 years.

You sorta answered this question, so maybe it was rhetorical, but anyway:

Because people's material wants escalated as fast as productivity, if not faster.

Here's a thought exercise: imagine a middle-class pre-industrial lifestyle, let's say circa 1900.  How much would it cost to provide that, and nothing else? You'd have
- a drafty home <800 sq. ft. for a family of four, with no plumbing, insulation, central heat, or air conditioning
- no car; maybe a 3-speed bicycle
- three sets of clothes, laundered once per month
- local vegetables and bulk ingredients but no prepared foods
- radio, newspaper
- no refrigerator, car, television, computer, telephone, cell phone
- etc.

How much would it cost to support that kind of lifestyle? Not much.

How many hours would you have to work every month to cover that stuff? Not many.

It starts getting harder to "make a living" when one starts insisting on modern conveniences. By definition the market bids up innovative luxury products to be just-barely-affordable.

[moda0306]

The problem is the wealth and power has already been put in the hands of the super-few, through the crony capitalism of land grabs, slavery, war profiteering, corand market gamesmanship for centuries.  Entering a Ayn Randian utopia will do nothing to stop it now, because massive amounts of real wealth has been allocated to the few to allow them to bargain with other market players with.

The undeserving uber-wealthy (not that all are by any means) no longer hold all their stakes of land, MBS's, bad banks, what-have-you... they've diversified out of it.  Simply letting assets fail at this point isn't going to affect them.. they've got their muni bonds and treasury bills.

[l82start]

I don't believe anyone in this thread ever suggested "going after" the 1%.

The only thing that was suggested was breaking the 1%'s influence on the political process.

 that's pretty much what i meant by "going after".... that and as MT said "not rewarding failure".....   sorry i wasn't clear