Political Roundtable Part XIX

[gtn130]

Let's see what grandpa is tweeting about today.

*checks twitter*

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hahahahhaohwow people voted for this moron

[gtn130]

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Wonder why someone would do something like this...

Spoiler:

[FAH1223]

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[dckingsfan]

So as an economist I look at the political outcome of globalization and I wonder if it was worth being right. Our gini coefficients are the worst among developed countries.

It's quite shocking where the USA ranks in comparison to other western nations.

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2172rank.html

I think that gross income inequality in the US is pretty standard for developed nations (we are among the highest but not that far off. Some Asian nations (Korea, Japan, Taiwan) have significantly lower rates, but the majority of European nations have roughly the same level of income inequality (might be a percent or two off but close.

The US becomes a leader in inequality (among developed countries) when looking at the net (after tax and transfers) income inequality. That means that the overall income tax burden (on high income individuals) when comparing to other developed countries is the problem.

And this is where it gets tricky. What you want is a) no carveouts; b) very low corporate income taxes.

But we LOVE our carveouts. Who doesn't like their home mortgage deduction? Does someone with little income have that? The rich LOVE their charity deductions but we don't want to get rid of those.

And we love to crucify corporations. But we know that high corporate taxes lead to less tax receipts.

And the why for our income inequality would best be reflected from Price’s Law - across all domains of creative production, the square root of the number of people working in the field produce about half of the product. And that number goes up when you are talking automation (think AI).

But in the end, Zonk is right - the fall of private unions wasn't at all helpful. And the change happened quickly, so we weren't able to adapt fast enough.

[queridiculo]

So as an economist I look at the political outcome of globalization and I wonder if it was worth being right. Our gini coefficients are the worst among developed countries.

It's quite shocking where the USA ranks in comparison to other western nations.

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2172rank.html

I think that gross income inequality in the US is pretty standard for developed nations (we are among the highest but not that far off. Some Asian nations (Korea, Japan, Taiwan) have significantly lower rates, but the majority of European nations have roughly the same level of income inequality (might be a percent or two off but close.

You and I must be looking at different numbers because the statistics don't back up what you're saying in the slightest.

No point in responding to the rest if you're just going to make things up.

[DCZards]

But in the end, Zonk is right - the fall of private unions wasn't at all helpful. And the change happened quickly, so we weren't able to adapt fast enough.

Well here's something we can totally agree on regarding unions. The decline of private unions has indeed been harmful, especially to the middle class.

Ironically, the growth of the same public employee unions that you rail against is the main reason that the labor movement--and those private unions--have been able to stay afloat.

[cammac]

So as an economist I look at the political outcome of globalization and I wonder if it was worth being right. Our gini coefficients are the worst among developed countries.

It's quite shocking where the USA ranks in comparison to other western nations.

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2172rank.html

I think that gross income inequality in the US is pretty standard for developed nations (we are among the highest but not that far off. Some Asian nations (Korea, Japan, Taiwan) have significantly lower rates, but the majority of European nations have roughly the same level of income inequality (might be a percent or two off but close.

The US becomes a leader in inequality (among developed countries) when looking at the net (after tax and transfers) income inequality. That means that the overall income tax burden (on high income individuals) when comparing to other developed countries is the problem.

And this is where it gets tricky. What you want is a) no carveouts; b) very low corporate income taxes.

But we LOVE our carveouts. Who doesn't like their home mortgage deduction? Does someone with little income have that? The rich LOVE their charity deductions but we don't want to get rid of those.

And we love to crucify corporations. But we know that high corporate taxes lead to less tax receipts.

And the why for our income inequality would best be reflected from Price’s Law - across all domains of creative production, the square root of the number of people working in the field produce about half of the product. And that number goes up when you are talking automation (think AI).

But in the end, Zonk is right - the fall of private unions wasn't at all helpful. And the change happened quickly, so we weren't able to adapt fast enough.

Where I disagree with you is on corporate tax rates the USA tax rate is a oxymoron most Fortune 500 Companies pay much less than the published rate because of loopholes. In fact that many of these companies such as Boeing get astronomical government subsidies at all levels. The corporate level that is being over taxed is the small and medium companies that don't have access to these loopholes.

https://www.politico.com/interactives/2017/35-percent-corporate-tax-rate-100-companies/

[dckingsfan]

It's quite shocking where the USA ranks in comparison to other western nations.

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2172rank.html

I think that gross income inequality in the US is pretty standard for developed nations (we are among the highest but not that far off. Some Asian nations (Korea, Japan, Taiwan) have significantly lower rates, but the majority of European nations have roughly the same level of income inequality (might be a percent or two off but close.

You and I must be looking at different numbers because the statistics don't back up what you're saying in the slightest.

No point in responding to the rest if you're just going to make things up.

No worries - it is a little confusing. You want to find a figure with GINI before taxes and transfers and after taxes and transfers. If you break it up that way, you can better understand the root cause.

[dckingsfan]

But in the end, Zonk is right - the fall of private unions wasn't at all helpful. And the change happened quickly, so we weren't able to adapt fast enough.

Well here's something we can totally agree on regarding unions. The decline of private unions has indeed been harmful, especially to the middle class.

Ironically, the growth of the same public employee unions that you rail against is the main reason that the labor movement--and those private unions--have been able to stay afloat.

Two different things. We agree that the downfall of private unions has been harmful. I don't say that the public unions are harmful in and among themselves. I have said:

The conspiracy between politicians and union officials where it relates to unfunded pensions is near to criminal and has become a bigger issue than Trump himself (and that is big - I am a never Trumper).

That issue is borderline evil (or maybe it crossed that line in the sand).

[dckingsfan]

It's quite shocking where the USA ranks in comparison to other western nations.

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2172rank.html

I think that gross income inequality in the US is pretty standard for developed nations (we are among the highest but not that far off. Some Asian nations (Korea, Japan, Taiwan) have significantly lower rates, but the majority of European nations have roughly the same level of income inequality (might be a percent or two off but close.

The US becomes a leader in inequality (among developed countries) when looking at the net (after tax and transfers) income inequality. That means that the overall income tax burden (on high income individuals) when comparing to other developed countries is the problem.

And this is where it gets tricky. What you want is a) no carveouts; b) very low corporate income taxes.

But we LOVE our carveouts. Who doesn't like their home mortgage deduction? Does someone with little income have that? The rich LOVE their charity deductions but we don't want to get rid of those.

And we love to crucify corporations. But we know that high corporate taxes lead to less tax receipts.

And the why for our income inequality would best be reflected from Price’s Law - across all domains of creative production, the square root of the number of people working in the field produce about half of the product. And that number goes up when you are talking automation (think AI).

But in the end, Zonk is right - the fall of private unions wasn't at all helpful. And the change happened quickly, so we weren't able to adapt fast enough.

Where I disagree with you is on corporate tax rates the USA tax rate is a oxymoron most Fortune 500 Companies pay much less than the published rate because of loopholes. In fact that many of these companies such as Boeing get astronomical government subsidies at all levels. The corporate level that is being over taxed is the small and medium companies that don't have access to these loopholes.

https://www.politico.com/interactives/2017/35-percent-corporate-tax-rate-100-companies/

We aren't disagreeing at all. If you cut the carveouts and had a flat rate for ALL corporations we would be fine.

[I_Like_Dirt]

We aren't disagreeing at all. If you cut the carveouts and had a flat rate for ALL corporations we would be fine.

I think the point is more about your statement that high corporate taxes lead to less tax receipts. That isn't actually true. High corporate taxes in combination with a rather horribly manipulated carveout system and/or the ability for profits to flee and "pay" taxes elsewhere while still benefiting from access to the American market results in less tax receipts. High corporate taxes don't actually result in lower tax receipts, though there are certain costs/benefits to any number of levels for them. I don't think it's a bad idea to look at lowering corporate taxes in conjunction with other steps having been first taken, but the real issue is with the carveouts, which you've identified pretty consistently. There are also quite a few de facto monopolies out there at this point, which is a big problem that never really seems to be addressed.

[Wizardspride]

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[gtn130]

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People voted for this guy

[dckingsfan]

We aren't disagreeing at all. If you cut the carveouts and had a flat rate for ALL corporations we would be fine.

I think the point is more about your statement that high corporate taxes lead to less tax receipts. That isn't actually true. High corporate taxes in combination with a rather horribly manipulated carveout system and/or the ability for profits to flee and "pay" taxes elsewhere while still benefiting from access to the American market results in less tax receipts. High corporate taxes don't actually result in lower tax receipts, though there are certain costs/benefits to any number of levels for them. I don't think it's a bad idea to look at lowering corporate taxes in conjunction with other steps having been first taken, but the real issue is with the carveouts, which you've identified pretty consistently. There are also quite a few de facto monopolies out there at this point, which is a big problem that never really seems to be addressed.

This was at cammac because he knows what happened in Canada when they lowered corporate tax rates - tax receipts went up.

But violent agreement that the carveouts should be addressed first and foremost. And violent agreement on the monopolies.

Where I am pessimistic is that both the Ds and the Rs have added to both the carveouts and monopolies. I see neither of our major parties giving a f&^k about it.

And we vote for them - I can't figure that out.

[DCZards]

But in the end, Zonk is right - the fall of private unions wasn't at all helpful. And the change happened quickly, so we weren't able to adapt fast enough.

Well here's something we can totally agree on regarding unions. The decline of private unions has indeed been harmful, especially to the middle class.

Ironically, the growth of the same public employee unions that you rail against is the main reason that the labor movement--and those private unions--have been able to stay afloat.

Two different things. We agree that the downfall of private unions has been harmful. I don't say that the public unions are harmful in and among themselves. I have said:

The conspiracy between politicians and union officials where it relates to unfunded pensions is near to criminal and has become a bigger issue than Trump himself (and that is big - I am a never Trumper).

That issue is borderline evil (or maybe it crossed that line in the sand).

What I don't get dckings is your use of the word "conspiracy." That implies that unions and politicians somehow plotted in the dark to intentionally create the problems we're seeing regarding unfunded pensions. I think that view is patently wrong. In fact, public employee unions have been among the first to expose how state and local governments were not funding or underfunding pensions. Many of these unions have also tried to work with state legislatures to address the problem.

Negotiations between unions and public officials and their results are covered by "sunshine" laws in most states. So the public, if they choose to, can very easily find out what's contained in collectively bargained agreements. To suggest that public employee unions are "evil" because they strive to improve the lives of their members and their families insults the hardworking men and women who belong to those unions...and who in most cases are the ones directly involved in negotiations with their state and local governments.

As for "evil" public employee unions and politicians negotiating costly pension plans, well the fact is that few pension plans are part of negotiations. This is from an article that you posted yesterday about Connecticut.

[b]In addition, a special 14-member fiscal commission, co-chaired by former business executives Robert Patricelli and James Smith, called recently for ending the long-running practice of negotiating pensions through collective bargaining. The commission reported that the members were “surprised to learn that only four states do it this way’’ through union bargaining.

I assume that you are also aware that most states and localities have moved (or are moving) away from the traditional "defined benefit" pensions that are causing the funding problems. Most new state and local government employees go into 401K pension plans, or "defined contribution" pension plans, rather than the costly "defined benefit" plans that have been or are being phased out. (BTW, the federal government moved away from "defined benefit" pension plans more than 20 years ago. Most current fed employees are now in 401K pension plans.)

The article you posted about Connecticut points to this where it talks about the funding problem being caused by those retirees in the state's older "Tier 1" pension plan.

Yes, the public sector may have gotten it wrong when it initially set up its pension plans, which is something that many states and localities are now trying to fix. But they got it right when they decided that police officers, firefighters, teachers and other public employees should be able to look forward to and enjoy a financially secure retirement.

[Pointgod]

So... my Grandfather was a union organizer and a member of the American Communist Party.

Unions in Europe are political and represent classes. That's why you have a Labour Party in the UK.

Unions in the United States are purely economic. During the industrial revolution there were a lot of industries whose optimal technology enjoyed increasing returns to scale, meaning the optimal size of the factory is pretty large, so you employ a lot of workers, and because you're so large you get monopoly rents. So unions were a way of forcing the owners of the factory to share some of their monopoly rents with the workers. Despite not being political in purpose, the thing about monopoly rents is they very quickly convert into payments to lobbyists to preserve the rent, so you end up becoming political. So unions evolved into political representation for blue collar laborers.

Now we have globalization, which in theory is a very good thing - let China build all the cheap things and we'll build all the high tech things, we'll have a more tech-intensive economy and the country will make more money. And this happened. The problem is, globalization eroded all the monopoly profits that were being shared with the unions. The unions collapsed and all of a sudden blue collar workers didn't have representation any more, or jobs, or prospects for the future. The billionaires fill the vacuum and pass tax laws that seize money from the poor and hand it over to the rich. So all the benefits of globalization go to the billionaires. Not me - I'm pretty fricking wealthy (compared to my parents anyway) but my taxes are going up next year.

So as an economist I look at the political outcome of globalization and I wonder if it was worth being right. Our gini coefficients are the worst among developed countries.

As an economist you'll know more about the details, but from my opinion income equality in the US has less to do with globalization and more to do with the fact the fact that for some reason you insist on giving more money to millionaires and billionaires. If the US had a model similar to other developed countries you'd probably have a higher standard of living than some of these countries. Who would have thought that allowing corporations and billionaires to continue to horde their wealth instead of reinvesting it into the people would be a bad thing?

[Ruzious]

Let's see what grandpa is tweeting about today.

*checks twitter*

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hahahahhaohwow people voted for this moron

Jesus, each tweat by the twit is more disingenuous and moronic than the next - no matter what order you put them in.

[Pointgod]

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Who would have thought that Republicans who only live to line their pockets and the pockets of their donors would pass a bill that did just that.

This was entirely predictable and was pointed out on numerous supposedly Fake News outlets like CNN and MSNBC. This is why you can't lump them into the same bucket as Fox News. Fox News only touted the Republican talking points and didn't give a full picture of the tax bill. CNN and MSNBC showed the Republican view points but also used Facts to explain what would most likely happen. And they were 100% right. Some posters need to learn the difference between news outlets they don't like and actual misinformation.

[gtn130]

remember when Republicans were stalwart deficit hawks lol

[dckingsfan]

Well here's something we can totally agree on regarding unions. The decline of private unions has indeed been harmful, especially to the middle class.

Ironically, the growth of the same public employee unions that you rail against is the main reason that the labor movement--and those private unions--have been able to stay afloat.

Two different things. We agree that the downfall of private unions has been harmful. I don't say that the public unions are harmful in and among themselves. I have said:

The conspiracy between politicians and union officials where it relates to unfunded pensions is near to criminal and has become a bigger issue than Trump himself (and that is big - I am a never Trumper).

That issue is borderline evil (or maybe it crossed that line in the sand).

What I don't get dckings is your use of the word "conspiracy." That implies that unions and politicians somehow plotted in the dark to intentionally create the problems we're seeing regarding unfunded pensions. I think that view is patently wrong. In fact, public employee unions have been among the first to expose how state and local governments were not funding or underfunding pensions. Many of these unions have also tried to work with state legislatures to address the problem.

Negotiations between unions and public officials and their results are covered by "sunshine" laws in most states. So the public, if they choose to, can very easily find out what's contained in collectively bargained agreements. To suggest that public employee unions are "evil" because they strive to improve the lives of their members and their families insults the hardworking men and women who belong to those unions...and who in most cases are the ones directly involved in negotiations with their state and local governments.

As for "evil" public employee unions and politicians negotiating costly pension plans, well the fact is that few pension plans are part of negotiations. This is from an article that you posted yesterday about Connecticut.

[b]In addition, a special 14-member fiscal commission, co-chaired by former business executives Robert Patricelli and James Smith, called recently for ending the long-running practice of negotiating pensions through collective bargaining. The commission reported that the members were “surprised to learn that only four states do it this way’’ through union bargaining.

I assume that you are also aware that most states and localities have moved (or are moving) away from the traditional "defined benefit" pensions that are causing the funding problems. Most new state and local government employees go into 401K pension plans, or "defined contribution" pension plans, rather than the costly "defined benefit" plans that have been or are being phased out. (BTW, the federal government moved away from "defined benefit" pension plans more than 20 years ago. Most current fed employees are now in 401K pension plans.)

The article you posted about Connecticut points to this where it talks about the funding problem being caused by those retirees in the state's older "Tier 1" pension plan.

Yes, the public sector may have gotten it wrong when it initially set up its pension plans, which is something that many states and localities are now trying to fix. But they got it right when they decided that police officers, firefighters, teachers and other public employees should be able to look forward to and enjoy a financially secure retirement.

First, initially there were (IMO) conspiracies and trades. A conspiracy to pay more than those states and localities could afford and the trade off was that the public unions would work for those politicians. After the fact, then unions cried that the pensions were underfunded. Go figure.

It is terrific that we are moving away from pensions. It is how it should be - but the damage has been done. It was nice that they wanted a financially secure retirement for their employees - it was a terrific idea - but with the tragic consequence of bankrupting those same states and municipalities.

Those programs should have been shut down long ago. But like so many of our failing programs, we wait until it is too late. And now many services for those that need it most will be cut. And that blame will be misdirected.