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Discussion in 'Too Hot for Swamp Gas' started by rivergator, Sep 10, 2013.
Not good for the country:
The current administration is assisting this statistic.
he might be. it's certainly happening. how do you think he's doing it?
By not increasing the minimum wage to $15/hr, for one.
And the top 10 percent captured a record 48.2 percent of total earnings last year.
Read more: http://www.gatorcountry.com/swampgas/showthread.php?t=270958#ixzz2eWZ2Mdvi
Your article says the top 10% earned 48.2% of the income and if you look at the link I provided the same top 10% paid 70.5% of the income taxes. Good thing you have those people paying the taxes, a disproportionate 22.3% more.
Starting next year there is a new higher marginal tax rate. Higher capital gains tax. Phase out of itemized deductions. Obama's definitely doing his share to take from the rich and give to the poor.
First of all, I think it's a terrible trend for the country. But I am not sure what to do about it. The first thing is to make sure we don't have policies that feed this.
Well that is not likely with the majority of Washington except for maybe 5% craving power. Dependency programs will remain in place from tax credits to food stamps with no requirements other than an arbitrary income.
I wish we had leaders willing to make the tough decisions but we certainly don't have enough to make a difference sadly.
what decisions do you suggest?
I think we have lower transactions costs that allow firms to go to where labor is cheaper/est and move product to where prices are higher/est. While, labor is not nearly as mobile as jobs/products. In some ways we are just scratching the surface of outsourcing. (I recently saw a presentation of a small start up that wants to outsource photo editing for wedding photographers to the Philippines). This can add to margins and put a lot of downward pressure on wages for jobs that are easy to export. Hell, China is building a lot of infrastructure in SE Asia so that they can export jobs to Laos, Vietnam, etc.
IMO, on net this is good - 1 billion have been lifted out of poverty in the last 20 years. I'm a free mkt guy. Yes, there are those that get burned. I think it would be a horrible mistake to over-react with big gov nonsense.
My gut tells me there are two sides to the same main reason for this:
1. Devaluation of dollar/Inflation - Joe Lunchbucket must pay the necessities (food, energy) out of his paycheck. Remember, food and energy prices are NOT included in the government's official Inflation figures for the purported reason of volatility. IMO, the reason is that the folks would riot when they realized how f-ed up the inflation is and how badly it's hurting them. When a greater % of your income is spent on necessities it is difficult to save and invest.
2. Quantitative Easing - pushing stocks higher and higher so that the well-to-do can afford that 3rd house in vactionland. With 95% of all Americans at age 65 dependent on continued work, charity, or government assistance the stock marktet is not where their money is (see #1); hence, those who have enjoyed the doubling of the market since March 2009 are living large.
The Fed Reserve and the printing of money steal from the poorest - as their main asset is their labor. Likewise the rich enjoy increasing returns on their investments; and, since they fund the elections the politicians know who to keep nurturing despite speeches to the contrary.
#1 is one of those lies you read from people trying to make politically based claims about economic issues. There are many measures of CPI released by the government:
Here is what the inflation rate looks like for all items, including food and energy, with the option to explore for most of the last century:
<iframe src='http://www.tradingeconomics.com/iframe/chart.aspx?url=/united-states/inflation-cpi' height='350' width='700' frameborder='0' scrolling='no'></iframe><br />Source: <a href='http://www.tradingeconomics.com/united-states/inflation-cpi' target='_blank'>tradingeconomics.com</a><br />
So with the exception of some inflation in late 2011 to the tune of about 4% and the deflation of the recession, we have been mostly sticking right around 2% annually.
By not really doing anything about unemployment.
Income inequality rises in times of high unemployment because it's there is little competition for hiring employees. This makes it easier for employer to drive wages down -- especially among lower skilled or unskilled labor. This drives wages among the 99% while it drives corporate profits up (affecting the top 1%).
This is exactly what we've been experiencing -- both unemployment and corporate profits are at historic highs.
When we're at the theoretical full employment rate (3% to 4% unemployment), then employers must compete for workers at all levels. This drives wages up and corporate profits down (affecting the top 1%).
Obama tried his Keynesian approach to improve the unemployment rate and it simply didn't work.
Unfortunately, with a $17 Trillion debt, I doubt we're really in the position to do traditional supply-side intervention either.
So, what's left?
We should be focused in on things that make use more competitive in the global economy like reduced regulations, reduced corporate tax rates, and a less adversarial relationship with employers (i.e., Obamacare rules, minimum wage rules, etc.).
What, in and of itself, makes this bad? What, inherently, is better if everyone made closer to the same?
Is everyone doing the same job? No.
Is everyone doing their job equally well to everyone else doo g the same job? No.
How much tax % of the country (not your personal beliefs if they don't pay their share or not) does that top 1% pay?
If the pie is expanding this is not necessarily a real bad thing. If the money supply is staying the same and the top people are taking more of it then it will affect us all eventually. Especially the working class.
mdgator: fair point. Just like the government provides mutliple Unemployment options there is the well-known, most commonly used, figure. To my knowledge, neither food nor energy is used in the most commonly used inflation figure.
Just as 7.3 is the "unemployment rate" (as defined by government) despite the labor participation rate being around 65%; which, inversely, means 35% of working-age Americans are NOT employed I'm sure the government's definition of the most commonly used inflation rate is whatever it needs to be to make things look better, not necessarily the most helpful, accurate or instructive definition.
Get rid of the minimum wage. That would be a good start.
Minimum wage in 1945 = 40 cents
If that was adjusted for inflation.....$5.84 in todays $s
But, but, but, it doesn't increase with inflation. Haven't we heard the lying left say that over and over...?
No, it is true, it doesn't increase with inflation, it runs beyond it.