Class Struggle in US

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Madame
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Class Struggle in US

Post by Madame » Mon Nov 20, 2006 6:29 pm

Class Struggle
American workers have a chance to be heard.

BY JIM WEBB
Wednesday, November 15, 2006 12:01 a.m.

The most important--and unfortunately the least debated--issue in politics
today is our society's steady drift toward a class-based system, the likes
of which we have not seen since the 19th century. America's top tier has
grown infinitely richer and more removed over the past 25 years. It is not
unfair to say that they are literally living in a different country. Few
among them send their children to public schools; fewer still send their
loved ones to fight our wars. They own most of our stocks, making the stock
market an unreliable indicator of the economic health of working people. The
top 1% now takes in an astounding 16% of national income, up from 8% in
1980. The tax codes protect them, just as they protect corporate America,
through a vast system of loopholes.

Incestuous corporate boards regularly approve compensation packages for
chief executives and others that are out of logic's range. As this newspaper
has reported, the average CEO of a sizeable corporation makes more than $10
million a year, while the minimum wage for workers amounts to about $10,000
a year, and has not been raised in nearly a decade. When I graduated from
college in the 1960s, the average CEO made 20 times what the average worker
made. Today, that CEO makes 400 times as much.

In the age of globalization and outsourcing, and with a vast underground
labor pool from illegal immigration, the average American worker is seeing a
different life and a troubling future. Trickle-down economics didn't happen.
Despite the vaunted all-time highs of the stock market, wages and salaries
are at all-time lows as a percentage of the national wealth. At the same
time, medical costs have risen 73% in the last six years alone. Half of that
increase comes from wage-earners' pockets rather than from insurance, and 47
million Americans have no medical insurance at all.

Manufacturing jobs are disappearing. Many earned pension programs have
collapsed in the wake of corporate "reorganization." And workers' ability to
negotiate their futures has been eviscerated by the twin threats of modern
corporate America: If they complain too loudly, their jobs might either be
outsourced overseas or given to illegal immigrants.

This ever-widening divide is too often ignored or downplayed by its
beneficiaries. A sense of entitlement has set in among elites, bordering on
hubris. When I raised this issue with corporate leaders during the recent
political campaign, I was met repeatedly with denials, and, from some, an
overt lack of concern for those who are falling behind. A troubling
arrogance is in the air among the nation's most fortunate. Some shrug off
large-scale economic and social dislocations as the inevitable byproducts of
the "rough road of capitalism." Others claim that it's the fault of the
worker or the public education system, that the average American is simply
not up to the international challenge, that our education system fails us,
or that our workers have become spoiled by old notions of corporate
paternalism.

Still others have gone so far as to argue that these divisions are the
natural results of a competitive society. Furthermore, an unspoken
insinuation seems to be inundating our national debate: Certain immigrant
groups have the "right genetics" and thus are natural entrants to the
"overclass," while others, as well as those who come from stock that has
been here for 200 years and have not made it to the top, simply don't
possess the necessary attributes.

Most Americans reject such notions. But the true challenge is for everyone
to understand that the current economic divisions in society are harmful to
our future. It should be the first order of business for the new Congress to
begin addressing these divisions, and to work to bring true fairness back to
economic life. Workers already understand this, as they see stagnant wages
and disappearing jobs.

America's elites need to understand this reality in terms of their own
self-interest. A recent survey in the Economist warned that globalization
was affecting the U.S. differently than other "First World" nations, and
that white-collar jobs were in as much danger as the blue-collar positions
which have thus far been ravaged by outsourcing and illegal immigration.
That survey then warned that "unless a solution is found to sluggish real
wages and rising inequality, there is a serious risk of a protectionist
backlash" in America that would take us away from what they view to be the
"biggest economic stimulus in world history."

More troubling is this: If it remains unchecked, this bifurcation of
opportunities and advantages along class lines has the potential to bring a
period of political unrest. Up to now, most American workers have simply
been worried about their job prospects. Once they understand that there are
(and were) clear alternatives to the policies that have dislocated careers
and altered futures, they will demand more accountability from the leaders
who have failed to protect their interests. The "Wal-Marting" of cheap
consumer products brought in from places like China, and the easy money from
low-interest home mortgage refinancing, have softened the blows in recent
years. But the balance point is tipping in both cases, away from the
consumer and away from our national interest.

The politics of the Karl Rove era were designed to distract and divide the
very people who would ordinarily be rebelling against the deterioration of
their way of life. Working Americans have been repeatedly seduced at the
polls by emotional issues such as the predictable mantra of "God, guns,
gays, abortion and the flag" while their way of life shifted ineluctably
beneath their feet. But this election cycle showed an electorate that
intends to hold government leaders accountable for allowing every American a
fair opportunity to succeed.

With this new Congress, and heading into an important presidential election
in 2008, American workers have a chance to be heard in ways that have eluded
them for more than a decade. Nothing is more important for the health of our
society than to grant them the validity of their concerns. And our
government leaders have no greater duty than to confront the growing
unfairness in this age of globalization.

Mr. Webb is the Democratic senator-elect from Virginia.


Copyright © 2006 Dow Jones & Company, Inc. All Rights Reserved

Lilith
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Post by Lilith » Mon Nov 20, 2006 7:11 pm

Thank you for posting this well written and troubling article.

I will be interested to hear a response from Kevin R, who supports 'unfree trade' without hesitation (see his Lou Dobbs Democrats thread) and finds it amusing that some people who protest this corporate & wealthy domination are 'weirdos'.
When your health plan requires you to fly to Jakarta to get your open heart surgery or when your daughter gets no offers in the USA but has to start her first Engineering job in Saudi Arabia or when Aunt Freda loses her job (and medical benefits) because it can be done in India for $3 hour, you will begin to understand what we have allowed to happen.
Hopefully, the election of several new anti unfree trade senators will prompt a thorough review of this. Kevin R's worst nightmare!

Brendan

Post by Brendan » Mon Nov 20, 2006 7:26 pm

Lilith wrote:Thank you for posting this well written and troubling article.

I will be interested to hear a response from Kevin R, who supports 'unfree trade' without hesitation (see his Lou Dobbs Democrats thread) and finds it amusing that some people who protest this corporate & wealthy domination are 'weirdos'.
When your health plan requires you to fly to Jakarta to get your open heart surgery or when your daughter gets no offers in the USA but has to start her first Engineering job in Saudi Arabia or when Aunt Freda loses her job (and medical benefits) because it can be done in India for $3 hour, you will begin to understand what we have allowed to happen.
Hopefully, the election of several new anti unfree trade senators will prompt a thorough review of this. Kevin R's worst nightmare!
So the money and jobs are going to the poorer countries, raising their standard of living. Global free trade in action, gradually eliminating poverty. That such distribution of wealth has consequences for the first world as well as the third should be obvious, and complacency and protectionism may not be the best option for anyone.

Werner
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Post by Werner » Mon Nov 20, 2006 7:36 pm

This article states what I see as the most troubling domestic problem we face, of which the current administration has been oblivious or worse.

Yes, we have all the problems of international competition in economics, but when the average CEO here earns 400 times the pay of the factory hand, and all we see is libertarian excuses, there is trouble ahead.

Let'sake no mistake, the free enterprise system is still the greatest way to build a nation, but nothing exists without limits. Those limits are the perennial subject of political debate.

The great development of the twentieth century brought about a strong and vigorous middle class - the foundation of the widespread prosperity of the post-WWII decades, when the opportunities and rewards were more fairly distributed among the populace than we see at present.

We ignore the lessons of that at our peril. The solution is not easy - nothing is - but these facts must be faced and dealt with before anyone falls for such cheap slogans as "nanny state" or the like.

I suspect it's a matter of the legendary political pendulum, which is surely due to reverse direction one of these days soon.
Werner Isler

Lilith
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Post by Lilith » Mon Nov 20, 2006 8:02 pm

"So the money and jobs are going to the poorer countries, raising their standard of living" Brendan

Precisely. When it is at the expense of my fellow American citizens, I am against it. I am an unapologetic nationalist - My views are shaped, primarily, by what I feel is best for my fellow citizens. We have spent many years building up a solid middle class in this country and I do not want to see it undercut on the altar of 'unfair trade'.

Werner
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Post by Werner » Mon Nov 20, 2006 8:08 pm

Easy to say, Lilith, but we do live in an increasingly small world, and more and more we have to factor that international life into our domestic plans.

An example: our farm supports that insulate our farmers from foreign competition, and keep farmers in the developing world from access here.

Fair trade? Protectionsm? How to balance this? And what happens when those poorer countries fall under the Islamicist domination and volunteer as terrorists against us? How do we minimize that risk?

Not possible? What do you think would have happened if the Iraquis of various stripes at least had a chance to make a living without the economic problems the've experienced in the past three or four years?
Werner Isler

Lilith
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Post by Lilith » Mon Nov 20, 2006 8:37 pm

"Easy to say, Lilith, but we do live in an increasingly small world"

True, so some compromises may have to be made. But in the past years we have seen corporate business interests completely dominate.
I think there are other issues that are of utmost importance - such as >What industries are absolutely essential to National Defense, ie cannot be outsourced
>What jobs are essential to maintaining a vibrant middle class in the USA, ie cannot be outsourced

There are other key questions such as how to compete with other countries that offer no medical benefits, have no environmental standards, use underage workers etc etc

RebLem
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Post by RebLem » Mon Nov 20, 2006 11:43 pm

I am not one of those who thinks we shouldn't trade with another country until they pay our minimum wage. Wages should not be the issue, at least to me. But respect for international standards in the environmental policies and labor rights should. However, we need to guard against the return of excessive protectionism. The Big Three automakers want to be protected against foreign competition. Honda, however, working in the same economy, and under contract with the same union, the UAW, is doing just fine. If the Big Three cannot compete with Honda America, that is their problem, not ours, and we need to tell them that.

There seems to be some perception around here that I am a protectionist. Not so. I think we can get a clue as to what will happen to us if we adopted protectionist policies from the fact that the three industries that are most resistant to foreign competition are also the three industries with the highest inflation rates--medical care, higher education, and, until recently, housing. Housing is a special case. The growing disparity between the rich and the poor, and the squeeze being put on the middle class is perhaps best illustrated by the fact that, before the collapse of the housing bubble, 25% of the housing being sold was 2nd homes. And only the market for 1st homes has collapsed. The market for 2nd homes is a vigorous as ever.

I have a policy proposal that I think will help rectify the above situation. One of the reasons the market for 2nd homes is so high is because luxury homes are a tax shelter; the mortgage interest is tax deductible. And loans being made for 2nd homes place additional pressure on the money supply available for loans for 1st homes, further exacerbating the growth of the gulf between the rich and the middle class. So, I propose that the mortgage tax deduction be continued for one home only. Under my proposal, mortgages on more than one home would no longer be tax deductible.

That being said, I think there is too much blaming of free trade for all our problems, even though unfettered free trade is responsible for a few of them. Our corporate compensation packages are out of whack with the rest of the world, and the rest of the world often gets better results for less. Our refusal to accept the rest of the world's goals for a clean environment has slowed development of clean technologies, and we will be the worse off if we continue to abdicate leadership in this area. Even the British Conservative Party leaders are angry, and publicly so, that the Labour Party has not been more aggressive in insisting that the USA wake up and smell the coffee.

Let me get back to this stuff about executive compensation packages; also the tremendous emphasis on finance and banking has introduced great economic dislocations. America graduates about 50-60,000 engineers a year; India graduates about a half million a year, ten times as many. Why? Because Americans can make more money as executives and bankers than they can as engineers, and engineering is a much more intellectually demanding field. So who would want to go into engineering? Well, mostly people who have a hard time getting people to follow them, an essential quality in an executive or banker. Translation: geeks and immigrants. The former is in limited supply, the latter less so, but we cannot continue to show contempt for the opinions of the rest of Mankind and still be increasingly dependent on their technological expertise without risking serious economic and technological dislocation and stagnation.
Don't drink and drive. You might spill it.--J. Eugene Baker, aka my late father
"We're not generating enough angry white guys to stay in business for the long term."--Sen. Lindsey Graham, R-S. Carolina.
"Racism is America's Original Sin."--Francis Cardinal George, former Roman Catholic Archbishop of Chicago.

paulb
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Post by paulb » Tue Nov 21, 2006 12:28 am

The poor are getting poorer.
But thank god we have the democrats who crank up the ol money machine at full speed ahead.
Bounty for everyone is their moto.
Makes the $ worthless.
Psalm 118:22 The Stone that the builders rejected has become the chief cornerstone.
23 This is the Lord's doing , it is marvelous in our sight.

RebLem
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Post by RebLem » Tue Nov 21, 2006 3:43 am

paulb wrote:The poor are getting poorer.
But thank god we have the democrats who crank up the ol money machine at full speed ahead.
Bounty for everyone is their moto.
Makes the $ worthless.
And, besides, its no fun being rich unless you can lord it over the little people.

Muhammad Yunus says we should plan in every city, in every country, to build a Poverty Museum as soon as poverty is conquered. We should set goals for eliminating poverty, hire an architect to design the building, and have the ribbon cut by the last family which pulls itself out of poverty in that area. And, he says it is possible.
Don't drink and drive. You might spill it.--J. Eugene Baker, aka my late father
"We're not generating enough angry white guys to stay in business for the long term."--Sen. Lindsey Graham, R-S. Carolina.
"Racism is America's Original Sin."--Francis Cardinal George, former Roman Catholic Archbishop of Chicago.

Kevin R
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Post by Kevin R » Tue Nov 21, 2006 3:47 am

Webb is an interesting man, and I can think of worse Dems. Unfortunately for the US and the poor around the world, his ideas in that article are poppycock. How sad that the Dem party is headed down this road.

Harvard's Greg Mankiw on Webb's silliness:

"Today's op-ed by the Senator-elect Webb got me thinking. The piece is filled with standard Democratic hand-wringing about rising inequality, but as Arnold Kling points out, it is essentially devoid of policy proposals.

Free-market economists like me are typically less concerned about rising inequality; some, like Gary Becker, go so far as to call it a "favorable development." But let's suppose for a moment that a free-market economist were hired by the Dems to offer policy advice. If the boss's goal is to reduce income inequality, what is the best way to do that?

The standard Democratic fare would be quickly rejected. Erecting barriers to trade, raising the minimum wage, encouraging the cartelization of labor via unions, and bashing Wal-Mart are inefficient and poorly targeted ways to redistribute income.

The tax system is probably the best vehicle to accomplish the Dems' goal. One possibility would be to reduce the payroll tax rate and to make up the lost revenue by increasing, or perhaps even eliminating, the cap on taxable payroll. That would benefit, approximately, the bottom 90 percent of the income distribution.

This policy change would, of course, have an efficiency cost. By raising taxes on taxpayers who already face the highest tax rates, the deadweight losses of the tax system would surely rise. But almost any attempt to achieve a more equal distribution of income would entail efficiency costs. The Dems' goal should be to minimize the efficiency cost for any given amount of redistribution. And that is most likely accomplished through the tax system rather than by more heavy-handed market interventions."

Let us hope Bill Clinton and free market Dems can talk some sense into these folks.
"Free trade, one of the greatest blessings which a government can confer on a people, is in almost every country unpopular."

-Thomas Macaulay

Madame
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Post by Madame » Tue Nov 21, 2006 1:43 pm

Kevin R wrote:
The tax system is probably the best vehicle to accomplish the Dems' goal. One possibility would be to reduce the payroll tax rate and to make up the lost revenue by increasing, or perhaps even eliminating, the cap on taxable payroll. That would benefit, approximately, the bottom 90 percent of the income distribution.

This policy change would, of course, have an efficiency cost. By raising taxes on taxpayers who already face the highest tax rates, the deadweight losses of the tax system would surely rise. But almost any attempt to achieve a more equal distribution of income would entail efficiency costs. The Dems' goal should be to minimize the efficiency cost for any given amount of redistribution. And that is most likely accomplished through the tax system rather than by more heavy-handed market interventions."
What do you mean by "payroll tax" -- taxes levied on workers, such as Social Security? I'd have to see some numbers to see how that would benefit the poor in any substantive way.

Let us hope Bill Clinton and free market Dems can talk some sense into these folks.
The dirty little secret is that we don't have a free market system, just a lot of Orwellian-type buzz words.

Ted

Post by Ted » Tue Nov 21, 2006 3:19 pm

Reb Wrote:
Muhammad Yunus says we should plan in every city, in every country, to build a Poverty Museum as soon as poverty is conquered. We should set goals for eliminating poverty, hire an architect to design the building, and have the ribbon cut by the last family which pulls itself out of poverty in that area. And, he says it is possible.
I wonder what he’ll say after he pulls the needle out of his arm

Madame
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Post by Madame » Tue Nov 21, 2006 6:24 pm

RebLem wrote:
paulb wrote:The poor are getting poorer.
But thank god we have the democrats who crank up the ol money machine at full speed ahead.
Bounty for everyone is their moto.
Makes the $ worthless.
And, besides, its no fun being rich unless you can lord it over the little people.
Yeah, how can you have a club if you let everybody join? :) :) :)

Sapphire
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Post by Sapphire » Wed Nov 22, 2006 4:57 pm

As I understand the argument advanced by some here, there is a growing income distribution problem in the USA which is thought to be attributable partly to a loss of manufacturing jobs allegedly caused by "unfair trade" with certain overseas competitors. This unfairness is said to lie in non-comparable labour laws, eg on minimum wages, working conditions etc.

Usually, this sort of allegation doesn't stand up to much analysis. For example, it is often found that a minimum wage in the home country is set so low that its overall impact is not that large, especially in the tradeables sector. This is not to say that in parts of the service sector (non-tradeable) it may have a positive effect on wages, albeit possible negative effect in terms of the number of jobs. As for relative working conditions, it mustn't be forgotten that in many of these developing countries long working hours are normal and not socially repressive. It would make little sense to disengage from trade merely because they work longer hours in some parts of the world.

In any event, it seems odd tackling an income distribution problem (if there is one) through trade barriers, rather than though the tax system or through supply-side policies aimed at reducing differential skill levels among the working population.

Most economists would not favour trade restrictions to deal with an income distribution problem. It's inefficient and potentially retaliatory. Nationalist arguments are only superficially attractive options. The idea of "looking after your own country" sounds fine but it's actually full of holes when it is considered that helping other countries develop through allowing them to exploit their own comparative advantage actually helps both countries. This is obviously the case for the exporting country, but also the importing country gains through releasing resources for more gainful employment in other uses which can be exported or used for import substitution. This was all set out nearly 200 years ago by David Ricardo, one of the great early figures in Economics. It has formed the mainstay of the Free Trade argument ever since then.

Income (payroll) tax changes are better but they have their cost too. They can seriously reduce wealth creation through adverse incentive effects. Removing tax distortions (eg mortage relief) would be sensible, not just on second homes but all homes.


Saphire

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Post by Dennis Spath » Wed Nov 22, 2006 8:03 pm

It would make imminently good sense to me if President Bush proposed a 10% "war surtax" upon those high salary corporate jobs and multi-million dollar estates which are being protected by way of expenditures for our magnificent Defense Establishment. This would make a lot more sense than borrowing the funds from foreign governments by way of Treasury Bonds which are debt obligations, with interest, upon our children and grandchildren.
It's good to be back among friends from the past.

RebLem
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Post by RebLem » Thu Nov 23, 2006 2:57 am

Dennis Spath wrote:It would make imminently good sense to me if President Bush proposed a 10% "war surtax" upon those high salary corporate jobs and multi-million dollar estates which are being protected by way of expenditures for our magnificent Defense Establishment. This would make a lot more sense than borrowing the funds from foreign governments by way of Treasury Bonds which are debt obligations, with interest, upon our children and grandchildren.
Investment income is, thanks to the Republicans, now taxed at a lower rate than income from work, whether its ditchdigging, or work as a CEO of a Fortune 500 company. This was known as the Paris Hilton Coddling Act. Now, Paris Hilton pays a lower tax rate on her trust fund income than the maid who changes her sheets after she does one of her little movies.

Ah, but they're all doing God's work.
Don't drink and drive. You might spill it.--J. Eugene Baker, aka my late father
"We're not generating enough angry white guys to stay in business for the long term."--Sen. Lindsey Graham, R-S. Carolina.
"Racism is America's Original Sin."--Francis Cardinal George, former Roman Catholic Archbishop of Chicago.

Kevin R
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Post by Kevin R » Thu Nov 23, 2006 4:45 am

Dennis Spath wrote:It would make imminently good sense to me if President Bush proposed a 10% "war surtax" upon those high salary corporate jobs and multi-million dollar estates which are being protected by way of expenditures for our magnificent Defense Establishment. This would make a lot more sense than borrowing the funds from foreign governments by way of Treasury Bonds which are debt obligations, with interest, upon our children and grandchildren.

Dennis,

The entire "class" concept is alien to America. I'm not sure (except as a vote getting measure) why the Dems push such an absurd argument (Edwards is especially grating on this issue). All we seem to get from them is the same old nonsense.......increase the minimum wage, build trade barriers, stop outsourcing, whine about inequality, whine about CEO pay and spend, spend and spend some more. Some things never change. Growth is the key.

Have a great Thanksgiving!
"Free trade, one of the greatest blessings which a government can confer on a people, is in almost every country unpopular."

-Thomas Macaulay

Donald Isler
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Post by Donald Isler » Thu Nov 23, 2006 7:55 am

RebLem wrote:

"Investment income is, thanks to the Republicans, now taxed at a lower rate than income from work, whether its ditchdigging, or work as a CEO of a Fortune 500 company. This was known as the Paris Hilton Coddling Act. Now, Paris Hilton pays a lower tax rate on her trust fund income than the maid who changes her sheets after she does one of her little movies."


Warren Buffett, the second richest man in the country, would probably agree. He said he learned that his secretary was paying a higher per cent of his (or her) taxes than he himself was, which he considered unfair.
Donald Isler

Dennis Spath
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Post by Dennis Spath » Sat Nov 25, 2006 1:01 pm

I must congratulate you, Kevin, on being consistent over the period of years I've know and exchanged opinions with you in several discussion sites. A more dogmatically pure Libertarian Capitalist I've never known. What I've always respected is your honesty with regard to Darwinian principles of "survival of the fittest" and dismissal of Humanitarian idealism as manifest in such abstractions as "Government of the people, by the people, and for the people".
It's good to be back among friends from the past.

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Post by RebLem » Sat Nov 25, 2006 2:30 pm

Kevin R wrote:
Dennis Spath wrote:It would make imminently good sense to me if President Bush proposed a 10% "war surtax" upon those high salary corporate jobs and multi-million dollar estates which are being protected by way of expenditures for our magnificent Defense Establishment. This would make a lot more sense than borrowing the funds from foreign governments by way of Treasury Bonds which are debt obligations, with interest, upon our children and grandchildren.

Dennis,

The entire "class" concept is alien to America. I'm not sure (except as a vote getting measure) why the Dems push such an absurd argument (Edwards is especially grating on this issue). All we seem to get from them is the same old nonsense.......increase the minimum wage, build trade barriers, stop outsourcing, whine about inequality, whine about CEO pay and spend, spend and spend some more. Some things never change. Growth is the key.
!
I knew there was something about John Edwards I liked. I voted for him in the presidential primary in 2004, and his selection as the VP candidate by Kerry was one of the few things Kerry did right. But, now, I can put a finger more closely on why I like him. He irritates Kevin. No one who irritates Kevin can be all bad.

I notice, Kevin, that you did not mount an argument against anything I said. All we got was a series of "Pure Assertions," "pure" because they are completely divorced from any association, however tangential, with anything so mundane, plebian, and otherwise beneath your notice as a fact, evidence, or a train of logical thought. Now, I know what you are going to want to do. You're going to tell me to read some book by some libertarian academic economist who will explain it all to me. I am going to ask you, however, to, instead, take a look now and then at the real world of honest working people.

I argued in my post that the evidence that CEOs are overpaid is in the fact that it discourages people from taking up professions like engineering which are lower paid and more academically demanding, but essential for industry. I do note, Kevin, that we didn't see one point of argument against that idea.

Kevin, it is obvious to anyone who looks around that there is a war being waged on the middle class. Warren Buffett is aware of it. so is Bill Gates. And I assure, you, so does everyone else at the top of the heap.

But somehow, it is considered un-American for the poor and the middle class to fight back. We are just supposed to lay down and take it, like a dog that is used to being beaten, and continue the fiction that the concept of class is alien to America. Another Pure Assertion, for which no evidence need be presented, against which there is much evidence, but in which Kevin has a fanatical, fundamentalist faith which is impervious to evidence. Evidence is just dirty. Its beneath Kevin. It gets dirt under the fingernails, and of course, that is just not acceptable, is it, Kevin. But to some of us evidence is important, and John Edwards is an important action-oriented thoughtful man.

Its just a plus that he irritates Kevin.
Don't drink and drive. You might spill it.--J. Eugene Baker, aka my late father
"We're not generating enough angry white guys to stay in business for the long term."--Sen. Lindsey Graham, R-S. Carolina.
"Racism is America's Original Sin."--Francis Cardinal George, former Roman Catholic Archbishop of Chicago.

Kevin R
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Post by Kevin R » Sun Nov 26, 2006 4:46 am

RebLem wrote:
Kevin R wrote:
Dennis Spath wrote:It would make imminently good sense to me if President Bush proposed a 10% "war surtax" upon those high salary corporate jobs and multi-million dollar estates which are being protected by way of expenditures for our magnificent Defense Establishment. This would make a lot more sense than borrowing the funds from foreign governments by way of Treasury Bonds which are debt obligations, with interest, upon our children and grandchildren.

Dennis,

The entire "class" concept is alien to America. I'm not sure (except as a vote getting measure) why the Dems push such an absurd argument (Edwards is especially grating on this issue). All we seem to get from them is the same old nonsense.......increase the minimum wage, build trade barriers, stop outsourcing, whine about inequality, whine about CEO pay and spend, spend and spend some more. Some things never change. Growth is the key.
!
I knew there was something about John Edwards I liked. I voted for him in the presidential primary in 2004, and his selection as the VP candidate by Kerry was one of the few things Kerry did right. But, now, I can put a finger more closely on why I like him. He irritates Kevin. No one who irritates Kevin can be all bad.

I notice, Kevin, that you did not mount an argument against anything I said. All we got was a series of "Pure Assertions," "pure" because they are completely divorced from any association, however tangential, with anything so mundane, plebian, and otherwise beneath your notice as a fact, evidence, or a train of logical thought. Now, I know what you are going to want to do. You're going to tell me to read some book by some libertarian academic economist who will explain it all to me. I am going to ask you, however, to, instead, take a look now and then at the real world of honest working people.

I argued in my post that the evidence that CEOs are overpaid is in the fact that it discourages people from taking up professions like engineering which are lower paid and more academically demanding, but essential for industry. I do note, Kevin, that we didn't see one point of argument against that idea.

Kevin, it is obvious to anyone who looks around that there is a war being waged on the middle class. Warren Buffett is aware of it. so is Bill Gates. And I assure, you, so does everyone else at the top of the heap.

But somehow, it is considered un-American for the poor and the middle class to fight back. We are just supposed to lay down and take it, like a dog that is used to being beaten, and continue the fiction that the concept of class is alien to America. Another Pure Assertion, for which no evidence need be presented, against which there is much evidence, but in which Kevin has a fanatical, fundamentalist faith which is impervious to evidence. Evidence is just dirty. Its beneath Kevin. It gets dirt under the fingernails, and of course, that is just not acceptable, is it, Kevin. But to some of us evidence is important, and John Edwards is an important action-oriented thoughtful man.

Its just a plus that he irritates Kevin.
So you have fun irritating me! You and my Mother-in-Law have a lot in common :wink:

I find it amusing that you, of all people, chide me for not presenting evidence. And what evidence have you produced to establish the class warfare argument? None. Of course the "real world" statement is personal opinion and worthless. What evidence did you bring to the thread on trade? None, when I put forth evidence you actually ran away from it rather quickly. Your problem is that you seem to have no understanding of basic economics (I refer you back to the thread on the deficit where you looked at total $ amounts and not % of GDP). This lack of economic understanding makes you easy prey for the likes of Mr. Webb and Mr. Edwards. And so you parrot what you hear from them. There is no thought involved.

You want some evidence? OK:

Class- historically there has been no class consciousness in this country. Pretending there is does not make it so. On this issue, there really isn't much dispute. See the contemporary accounts I've mentioned before, but also see the work of Robert Smuts, "European Impressions of the American Worker." I mention him because he is not a “libertarian academic economist.”

Much recent support has also been presented. In 1959 Robert Nibset (I quote him because he is not a “libertarian academic economist”) stated that "class is nearly valueless for the clarification of the data of wealth, power and social status in the contemporary United States." In a similar vain, Terry Clark and Seymour Lipset (in a 1991 article in International Sociology entitled "Are Social Classes Dying?") claimed that class was an "outmoded concept." (I reference both, of course, because they are not libertarian academic economists). Their article dismantles your worn-out class obsession. From a political standpoint they examine voting patterns (from the 1940s to the 1980s) in several nations showing that working class voters were (and are) becoming less attached to progressive/liberal politicians (just those workers you erroneously believe should be voting for such politicians). From an economic standpoint, the postindustrial world had eroded the hierarchical structure that was so prevalent in an industrial world. Technical skills and education were giving workers more security and an enhanced individual outlook. This outlook had little to do with class. There are many other studies as well, (and very few written by libertarian academic economists).

Inequality-This has bedazzled your likes for a long time. Your belief in a zero-sum world is misguided and historically inaccurate (damn that Marx). First of all, I'm not sure why we should be concerned with inequality. Martin Feldstein (Harvard economist) wondered the same thing, arguing that inequality in nothing to fret over. The fact that person X makes $100 million a year does not mean they are taking it from person Y. The key should be a concern over poverty. And economists know that that is best taken care of by pro-growth policies (free trade, deregulation, lower government spending, and so forth). And there is much debate about how much impact policies can have on inequality. The key for many economists is a skills gap. From the 1980s to today, inequality has increased (and not just in the US). It increased under Reagan and even more so under Clinton (I think we can agree that both men had different economic programs). What stayed the same was the importance placed on technical and educational skills. That is what is driving the inequality of today.

It is also interesting to look at Europe. Note the relevant tables from this progressive/liberal organization.

http://www.stateofworkingamerica.org/

What does this tell us? It shows us that the "poor" in America have about the same income as the "poor" in European nations. The difference is that the wealthy in America are far better off than the wealthy in Europe. So the inequality mantra of Edwards is rubbish.

And, of course, this doesn't even take into account the social mobility that has been a hallmark of the US.

CEO pay- Here is one where reasonable people can disagree. I really don't care how much a CEO is paid (again, this goes back to the zero-sum fallacy). And your evidence was nonexistent. I would ask you to give this paper a look. http://www.princeton.edu/~bcf/Seminar06/GabaixPaper.pdf

It was written by Xavier Gabaix of Princeton and Augustin Landier of NYU (to my knowledge, they are not libertarian academic economists). Here is the opening Abstract:

“This paper develops a simple equilibrium model of CEO pay. CEOs have different talents and are matched to firms in a competitive assignment model. In market equilibrium, a CEO’s pay changes one for one with aggregate firm size, while changing much less with the size of his own firm. The model determines the level of CEO pay across firms and over time, offering a benchmark for calibratable corporate finance. The sixfold increase of CEO pay between 1980 and 2003 can be fully attributed to the six-fold increase in market capitalization of large US companies during that period. We find a very small dispersion in CEO talent, which nonetheless justifies large pay differences. The data broadly support the model. The size of large firms explains many of the patterns in CEO pay, across firms, over time, and between countries. (JEL D2, D3, G34, J3)” My emphasis.

Here is hard evidence. Of course you have offered none, just hackneyed versions of the stump speeches of John (I want Wal-Mart to give me a PS3) Edwards.

The minimum wage: This is easy, as economists are almost one (from both sides) in pointing out how ineffective and downright harmful it is. But it makes you and the Dems feel good to advocate it. Paternalism is apparently an important component of the liberal economic agenda.

On this issue, see the excellent work of economist David Neumark. His latest paper can be found at this link:

http://showmeinstitute.org/smi_study_2.pdf

Here is his conclusion: “Where does all of this evidence leave us regarding the wisdom of raising the minimum wage? The evidence suggests that minimum wage increases do more harm than good. Minimum wages reduce employment of young and less-skilled workers. Although in principle the gains to those who keep their jobs could offset the losses to those who bear the disemployment effects, minimum wages deliver no net benefits to poor or low-income families, and if anything make them worse off, increasing poverty. Finally, minimum wages may also have longer-run adverse effects, lowering the acquisition of skills through various channels and therefore lowering wages and earnings even beyond the age at which individuals are most directly affected by a higher minimum.

It may simply be an uncomfortable fact that trying to help low-income families through mandating a higher minimum wage has negative consequences because such wage floors amount to a tax on the employment of these workers. Those interested in using economic policy levers to redistribute income to lower-income families should instead push for policy options that encourage work, that better target poor and low-income families, and that have a proven record of reducing poverty. The Earned Income Tax Credit, which is implemented at the federal level and supplemented by many states, appears to satisfy all of these criteria (Neumark and Wascher, 2001b; Hoffman and Seidman, 2003; Wu, et al., 2006), and thus is a better redistributive policy.” My emphasis.

Also see the following:

http://ftp.iza.org/dp1428.pdf

http://www.nber.org/papers/w6996

Now maybe you don't trust academic economists. Do you trust the New York Times? Sure you do. In 1987 The NYT editorialized: "There's a virtual consensus among economists that the minimum wage is an idea whose time has passed. Raising the minimum wage by a substantial amount would price working poor people out of the job market." Imagine that!

Trade-This issue is also embraced by 95% of all economists and has been dealt with successfully (with no evidence offered against it) in the Lou Dobbs thread.

Outsourcing-This is another controversial issue, but it has been so jumbled by anti-trade Dems as to make it almost impossible to discuss rationally. There is an excellent article on this by Greg Mankiw (watch out, he is a libertarian economist). See the following link:

http://www.economics.harvard.edu/facult ... 202006.pdf

The article stands on its own. Suffice it to say, most economists (from both sides) argue that outsourcing is a good thing. Also see this excellent article:

http://www.columbia.edu/~jb38/Muddles%2 ... urcing.pdf


Just some evidence for your consideration. I eagerly await your points of refutation, as I'm sure we won't see a repeat of the trade thread.
"Free trade, one of the greatest blessings which a government can confer on a people, is in almost every country unpopular."

-Thomas Macaulay

RebLem
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Post by RebLem » Mon Nov 27, 2006 8:41 pm

Your mother in law sounds like a cool lady, Kevn. See this:
http://www.classicalmusicguide.com/view ... 943#142943
Don't drink and drive. You might spill it.--J. Eugene Baker, aka my late father
"We're not generating enough angry white guys to stay in business for the long term."--Sen. Lindsey Graham, R-S. Carolina.
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Kevin R
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Post by Kevin R » Tue Nov 28, 2006 2:50 am

RebLem wrote:Your mother in law sounds like a cool lady, Kevn. See this:
http://www.classicalmusicguide.com/view ... 943#142943
Only from a long distance........thank heaven for buffer zones.

Still eagerly awaiting rebuttal evidence.
"Free trade, one of the greatest blessings which a government can confer on a people, is in almost every country unpopular."

-Thomas Macaulay

Kevin R
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Location: MO

Post by Kevin R » Thu Nov 30, 2006 2:20 am

RebLem wrote:Your mother in law sounds like a cool lady, Kevn. See this:
http://www.classicalmusicguide.com/view ... 943#142943

Can't wait for your opposing evidence on these issues.
"Free trade, one of the greatest blessings which a government can confer on a people, is in almost every country unpopular."

-Thomas Macaulay

burnitdown
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Post by burnitdown » Sun Dec 03, 2006 2:55 pm

Plato suggests that economy-driven societies lose their values systems fastest, and that such a society is near the end of its natural lifespan.

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