@rbar sorry I didn't see your last post. I think this UDHR is pretty noble but unknowingly evil, because it states that people have all sorts of rights, but what happens to the costs and demands those rights impose? To enforce them would imply a huge amount of force that would deny people of even more basic rights the declaration supposedly claims to protect. Take for example, "Everyone, without any discrimination, has the right to equal pay for equal work". Does that mean the price of labor should be controlled?? By whom? To see that policy enforced, would be an egregious assault on economic freedom.

My ideal is a society where most if not all of these problems that socialists and liberals are also concerned about, like people's material needs being met, living happy productive lives, etc. are handled in an environment where the right incentives and freedoms allows creative solutions and resources to be best allocated voluntarily, rather than by mandates that are noble and well intended, and seem to handle the problem in the short run, but cause a lot more trouble than they are worth because they destroy this very environment in which society thrives.

Your video of Noam Chomsky commenting on Ron Paul's answer in a republican debate, "what if some guy is on a coma and he's going to die" to which he supposedly replied, "it's a tribute to our liberty", is a gross misrepresentation, that was never the answer Ron Paul gave. I'll bet Noam Chomsky wouldn't like to be paraphrased into saying the opposite of what he meant, he just understood what he wanted based on his own preconceptions.

Watch the actual footage here: http://www.youtube.com/watch?v=gMHY21VA8WE
(And please don't confuse a few members of the audience yelling "Yes!" with the position of the Tea Party (not that I care what they think) or Ron Paul's)

Before you talk about capitalism and democracy balancing each other out, you must first question what really happens when people are given economic freedom. A contrived scenario is playing out in your mind.

It's like if someone told you that if people had freedom of expression, people would just start spewing lies on top of lies and society would bury every shred of truth and dignity until it became unrecognizable. All I'm saying is that freedom of expression is beautiful, it's far from perfect, a lot of people will say terrible things, but it's a much better environment than censorship, and that it's not naive to expect freedom of expression to improve society with time, making truth more and more available and affordable to everyone, not only making our society more civilized but effectively raising our standards of living.

Only I'm not arguing about freedom of expression, but economic freedom.

>> ^kevingrr:

I don't know. The Obamacare debate isn't that interesting or compelling. It seems to make sense that our system will be better under Obamacare than it is now - but only time will tell.
The more interesting question is how we are going to handle the coming advances in medicine with the "right to healthcare". What I mean by that is are we going to expend huge dollars to keep people alive at ridiculous costs?
I've seen so many cool videos on the sift - like a pig lung receiving gene therapy in a box before transplant - but all those really cool things are going to cost a lot of money. How do we most effectively allocate our resources and where do we draw the line?
Also, this video kind of makes its argument on an ad populum argument...

Most people don't need pig lung transplants. "Basic" healthcare (check-ups, shots, testing, dental, other stuff not involving pig parts) would serve most people well, I think, and it's a far better option than no health care at all.

what would be the point of working so much when we have robots doing all the stuff we need? They would reduce our costs of living, so we wouldn't need to work as much.


Oh - certainly it's a good problem. Once we've adjusted to it, people will be free do great things and a ton of other problems will disappear. However, some of adjustments are going to be big - and while they won't be instant, they'll still be very fast. The balance could tip over the course of just a decade or so, and many people won't want to change.

But the old way won't work. Of the remaining jobs, many won't be sharable - and other people won't want to share, assuming we're still allocating resources how we do now. It would make sense for many people to be involved in doing creative works (even if those works are only appreciated by a small group), but the market won't support them in doing so (just as it doesn't now). You'd get huge positive feedback cycles for owners of remaining scarce resources.

Anyways, there will still be scarcity (of something) - and I don't think we'll able to distribute stuff based solely on how the market values our contribution. If we do, we'll end up with a cruel, unsustainable level of inequality (if we aren't there already).

But that's exactly what some people will want. Many people believe in the current setup of capitalism as not just a "more practical economic system than its competitors", but as a kind of divine perfection of fairness and just rewards. People have bought into capitalism as quasi-religion, and many - especially the people who are currently "winning" - aren't going to want to switch.

I don't know. The Obamacare debate isn't that interesting or compelling. It seems to make sense that our system will be better under Obamacare than it is now - but only time will tell.

The more interesting question is how we are going to handle the coming advances in medicine with the "right to healthcare". What I mean by that is are we going to expend huge dollars to keep people alive at ridiculous costs?

I've seen so many cool videos on the sift - like a pig lung receiving gene therapy in a box before transplant - but all those really cool things are going to cost a lot of money. How do we most effectively allocate our resources and where do we draw the line?

Also, this video kind of makes its argument on an ad populum argument...

@bcglorf, yes, taxation does restrict economic freedom, which is why less taxes are preferable in a free market. We need taxes for government, and that's one good reason why libertarians keep talking about limited government, to maximize economic freedom. How much out of the time of your life that you waste working are you willing to give up to government? I'd personally like it to be as little as necessary.

Those who don't want government or force-based services (military, police, courts, etc.) being done by government are anarchists, period. Bark at them on your own time, because I'm not one.

@Drachen_Jager, those are mostly not examples of force, I guess your problem is that you don't quite understand what force is. If Foxconn practices slavery, yeah that's force, and that's not allowed in a free market. Besides, I never said China has a free market, they are just enjoying more economic freedom and prosperity than we do.

I can't address every misconception you have about economic freedom, but I like how you started your rant with the question, "You want companies to have more freedom, to what end?". It's not just companies, YOU are being economically oppressed right now! The money you use is being inflated, so any money you bothered to save is losing its value as we speak, fast. You can thank the Fed and your government for that. You pay a lot more for things than they actually cost because your state and federal governments are charging taxes upon taxes on those companies you hate so dearly (you know, the ones you want to tax to death?), and they pass on many of these taxes to you. All the while, that money of yours that mostly went to taxes is being poorly allocated by a big government that tries to do many things it shouldn't, losing most of that money along the way while doing a crappy job. So a big percent of the precious time of your life that you spend working, goes to feeding a fat government that is mostly weighing on the economy, and also on your shoulders.



@Ryjkyj, you crossed the line there with stinky-poopoo-face, pal. I'll be waiting for an apology. Btw, I meant in terms of economic freedom, I personally know a few people who have already gone to China for work, one in my family even, and they have no plans of coming back anytime soon. I guess @Drachen_Jager would say they're being held hostage by all the money they're making!

All True.. except you won't qualify for food stamps because of the way the department allocates your stipend.

Congress does not have a century of a generally poor track record. The US has been the most prosperous country in the history of the planet the last century, and it's not even close. And much of what has made the US so economically prosperous had a lot to do with gov't decisions on where to spend money such as creation of the Fed, FDIC, etc., funding the industrial/military complex which led to things like NASA, computers, the internet; federal grants, scholarships, and funding for public universities; nuclear technologies that led to things from nuclear reactors to home microwaves, electrification with programs like the TVA and the Hoover Dam which developed entire regions economically, medical funding, I could go on and on and on.



Private citizens are responsible for quite a number of things you've mentioned, and their success.

but it's lunacy to say federal gov't spending didn't play a major role



Agreed. Why did you say that? No one is arguing that point. Government revenue should be spent on these things. My argument is about who is making those decisions and if they can be better made by those who experience these things firsthand.

Have you looked at the kind of financial decisions we Americans are making?



Yep. Personal savings has been bad only for the past decade or so. Economic growth in the US is primarily driven by consumer demand.

So let's talk about those million voters. Have you looked at the kind of financial decisions we Americans are making. With all the talk about how banks screwed consumers in mortgages, who were the idiots who agreed to said mortgages? Way too many Americans, even during the boom, were a paycheck or two away from being broke, had virtually no savings, overpaid for houses, weren't investing/saving for retirement, etc. I'm sorry, but the general public, including voters, are god awful at handling money. Even some people who are generally financially responsible are this way because of hardline rules they refuse to break like never using credit to buy anything other than a house or MAYBE a car. Can you imagine how many businesses would exist if loans weren't taken out to start them? Such people have no idea how to be entrepreneurial and borrow money to increase productivity.



Now you're just making gross generalizations. You've given good examples of how government funded programs in the last century helped lead to economic prosperity, but cited one poor example within the last 5 years of how a minority (yes. minority) of the population made bad financial decisions. By that logic, *my* money management is bad because of someone in Nevada bought a house and couldn't afford it.

I know you're upset at my tiny, detailless post, but I think it's you who needs to get perspective before so obviously jumping the gun.

Everyone, including the president, says that "we have to work together blah blah" but time and time again it does not happen. Then comes the proof that lobbyists pay congressmen to speak on their industry's behalf, completely undermining the voters who placed them in office in the first place.

As a result of narrow mindedness and rigidity, the US is performing average in reading and science, and below average in math. College tuition is rising much faster than home prices. Gas is higher. Food is less quantity but more expensive. Healthcare costs are exhorbitant. Social security is dying a slow death thanks to Reagan. Medicare is always on the chopping block because it's costs are absurd. Unions are losing their rights. Meanwhile, the military industrial complex is doing very well, and corporate entities have cleaned up their books and are in the best financial position in decades *but refuse to hire people*.

You can have your opinions on why things are the way they are; republicans do this, democrats do that. The president did this, Bush did that. None of that matters because NOW..NOW you're unemployed,and/or your house is in foreclosure, and/or your kids won't be able to goto college because it's too expensive. And those jobs that were lost during the crisis? They're gone. They are not coming back. It's a mathematical reality.

Let's do some numbers now.

US tax revenue: 2.3 trillion
Currently 535 people in position to control budgetting = 4.3 billion worth of financial leverage each.
130 million people = popular vote in 2008 election
So hypothetically, if voters controlled federal budgets, each voter would have ~17500$ worth of financial leverage.

Every year, each person elects where they think all US revenue should be allocated. This, in essence, gives each voting citizen of the united states direct control of the united states federal budget. Also, each state could give their population voting control of their state budgets. For those people who elect to not make their allocations, either congress and state congress will allocate for them as usual, or the leverage they had is transferred into the remaining pool.

Why do this?

1. Because the people, the majority, know best. Congress by nature of their numbers is incapable of providing the best decisions because this country is a huge melting pot of cultures. Each state has different problems and different benefits, and the local citizens deal with them firsthand everyday. The representative system of governance worked a century ago because the population was a fraction of what it is today.

2. The entire us lobbying institution would literally collapse overnight. Lobbyists exist to manipulate congress into moving money into their direction. Since the budgeting decision has been given to millions instead of a couple, money spent lobbying is rendered ineffective to produce their desired outcome.

3. No more blame game since you now have a piece of how the pie gets sliced. Do you support the military? Allocate money to military spending. Support stem cell research? Allocate money to science and R&D. Want to get off foreign oil? Allocate the money to alternative energy sources. Worried about social security? Allocate more to the fund. Worried about our country's ability to compete? Allocate the distribution to education. Worried about debt? Pay it down. People always hate the government because of the financial decisions they make. Not anymore.

4. The internet can be the primary vehicle of how people cast their tax allocation and educate themselves on this important decision. For those who do not have access, they can cast their allocation at designated locations such as their local library or post office.

5. There are times when emergency funds are needed for disasters; Economic, weather, unforeseen events. Congress shall have control over that as time is of the essence. But if the money exceeds a set amount, the voting power shall be delegated to the people (for example, bank bailouts).

Look, it's just an idea and it doesn't deserve to be insulted. But if you feel better, then GO FOR IT! I'd like constructive feedback though.

Congress does not have a century of a generally poor track record. The US has been the most prosperous country in the history of the planet the last century, and it's not even close. And much of what has made the US so economically prosperous had a lot to do with gov't decisions on where to spend money such as creation of the Fed, FDIC, etc., funding the industrial/military complex which led to things like NASA, computers, the internet; federal grants, scholarships, and funding for public universities; nuclear technologies that led to things from nuclear reactors to home microwaves, electrification with programs like the TVA and the Hoover Dam which developed entire regions economically, medical funding, I could go on and on and on.

You completely, utterly lack any historical perspective. No civilization on the planet prospered as well as the US did in the last century. I'm not crediting Congress for it all, but it's lunacy to say federal gov't spending didn't play a major role. Just because debts were run doesn't mean they made poor decisions.

So let's talk about those million voters. Have you looked at the kind of financial decisions we Americans are making. With all the talk about how banks screwed consumers in mortgages, who were the idiots who agreed to said mortgages? Way too many Americans, even during the boom, were a paycheck or two away from being broke, had virtually no savings, overpaid for houses, weren't investing/saving for retirement, etc. I'm sorry, but the general public, including voters, are god awful at handling money. Even some people who are generally financially responsible are this way because of hardline rules they refuse to break like never using credit to buy anything other than a house or MAYBE a car. Can you imagine how many businesses would exist if loans weren't taken out to start them? Such people have no idea how to be entrepreneurial and borrow money to increase productivity.

I'm sorry, but no. I'd take even the foolish budgetary decisions of the last 10 years than allow the general public to allocate the federal budget. They're clueless.

>> ^heropsycho:

I'm sure I'll get flamed for this, but that would be a disaster. Voters don't have the foggiest idea how to allocate a federal budget.
>> ^Edgeman2112:
Real change = let voters control federal budget.



Congress has had a century of generally poor track record, so let's give it a try.

And that's actually beside the point. The entire lobbying industry would collapse overnight since the concentration of money in Washington is vanished. 300 people controlling money vs. ~200 million voters? Lobbyist buying power will be completely decimated.

>> ^heropsycho:

I'm sure I'll get flamed for this, but that would be a disaster. Voters don't have the foggiest idea how to allocate a federal budget.
>> ^Edgeman2112:
Real change = let voters control federal budget.



No flames here.
That's what I thought when I read that.
"Voters" includes some pretty stupid people (Faux Noise Zombies).

I'm sure I'll get flamed for this, but that would be a disaster. Voters don't have the foggiest idea how to allocate a federal budget.

>> ^Edgeman2112:

Real change = let voters control federal budget.

Hey, thanks for taking the time to explain. Much appreciated. Rock on, srd. :-)


In reply to this comment by srd:
Well, this explanation is what happens on the hardware level, i.e. in the wiring inside the CPU. On the software side you can emulate the carry-over by allocating several pieces of memory and checking bounds and doing carry-over manually. So you're manually programming around the hardware constraints.

Trouble here is, the programmer has to anticipate that the given constraint isn't sufficient for the use case and needs to be worked around. For scores this was obviously the case. For the levels, I'm pretty sure that noone ever really anticipated that someone would go through 255 levels of pacman.

It's basically the same expectation management on a human level that brought us the fear of the Y2K problem.

Well, this explanation is what happens on the hardware level, i.e. in the wiring inside the CPU. On the software side you can emulate the carry-over by allocating several pieces of memory and checking bounds and doing carry-over manually. So you're manually programming around the hardware constraints.

Trouble here is, the programmer has to anticipate that the given constraint isn't sufficient for the use case and needs to be worked around. For scores this was obviously the case. For the levels, I'm pretty sure that noone ever really anticipated that someone would go through 255 levels of pacman.

It's basically the same expectation management on a human level that brought us the fear of the Y2K problem.

@NetRunner Honestly, I'm unimpressed. Peter Schiff may not be John Nash, but you sound like Chris Matthews. Do you get your economic wisdom from Mother Jones or HuffPo?


So the response to "I doubt he's really paying 50% in taxes" is not to recount even a hypothetical example of how someone could wind up paying a sum total of 50% in taxes, but instead to just argue that the dubious statement might feel true because there are many various taxes someone might be paying?

Hypothetical example (which I thought I outlined for you): Peter Schiff owns/runs a business as his primary mode of income. That business pays a 35% corporate tax rate on their profits. The remaining profits translate into capital gains, which are then taxed at 15%. While obviously the tax rates aren't perfectly additive (15% of 65% is smaller than 15% of 100%), you can still see how one could quickly approach 50% in taxes. I haven't even included any local taxes or consumption taxes. These aren't dubious statements. These are facts about the tax code which progressives should learn to wise up to. There is a valid point there about streamlining the tax code. Like you said... Meh.


The response to my argument about the impact of marginal tax increases on employment is to make some argument about Schiff's personal labor/leisure preferences? That has nothing to do with it at all. If Schiff is the entrepreneurial capitalist he claims to be (and not just the F-list media personality he seems to be), then he doesn't really do any direct labor, he just makes choices about allocations of capital -- he makes investment decisions, and business deals where all the real work is done by other people.

He's making the case that if he has to pay a few more percentage points in taxes, he's going to start walking away from making investment deals that would have made his company money and employed people. Hell, he goes so far as to say that he would dissolve his ostensibly profitable business and fire all his employees, rather than sell it to someone else who still likes making money, even if they have to pay taxes.

Making investment deals and business decisions isn't quite like arguing on the internet and playing video games. You have to meet people, negotiate, spend basically all day on the phone or in a plane. You don't have much time for your family (though I don't know if he has one). While it may not be coal mining, it's certainly work. It's at least as much work as the people typing things into excel between trips to the water cooler are doing. It's quite possible that if he were to decide to leave, or cut back his hours worked (because of government disincentive), the firm would downsize or even fail. All those workers whose paychecks depended on his profitable decision making could be out of work. Now like I said, someone else might hire back those same workers (e.g. if he sold the firm), however there is no guarantee the business will be as profitable without their greatest profit engine (Schiff himself). Like I further argued, if there were someone equally capable of running the firm as profitably, they would likely already be a competitor.


As for the "buying labor low" argument, which sector is doing that? Right now what they're doing is shedding lots of employees, not paying out raises, cutting health benefits, and hoping that if/when they need more labor, the extended period of unemployment will provide them with a pool of desperate talent willing to work for far less than they would have pre-2007.

Right, because the government won't let the labor market correct. They keep propping everybody up with prolonged unemployment (I've known somewhat skilled people that wouldn't take jobs because unemployment pays better), and direct government employment. It is happening within some sectors, particularly highly skilled labor. Perhaps you've heard of the skills gap in the current employment picture? For example, the university I'm at is shedding lecturers, and poaching high-valued researchers from struggling institutions. There have been plenty of proposals to bridge this skills gap in more industrial sectors as well, e.g. turning unemployment benefits into vocational training. But instead you took a left turn towards "the mean corporations won't do things that are against their interests."


It's true that once upon a time, back when we had a lot of unionization, a lot of companies hoarded talent in exactly the manner you describe, so they could potentially enter into the expansion with a competitive advantage. But that's the old way of thinking, back when labor was broadly considered a valuable company resource, and not simply a fungible commodity to be purchased or discarded as needed. Offshore contractors, anyone?

Now you're a protectionist? Have you heard of "cost centers" and "profit centers?" Profit centers (valued labor) don't get outsourced. Cost centers (commoditized, fungible, unskilled, expensive labor) do. With regard to unions, it has often been their own inflexibility with their contracts (not that executives aren't equally guilty with bonuses) that has resulted in layoffs as opposed to shared pain (evenly spread hour reductions).


Lastly about the "leave the money where the market put it" -- that's a good one! You seamlessly pivoted from "economics as a theory for understanding the world" to "economics as a system of moral justice". Nicely done, you're pretty good at talking like a conservative!

Thanks. I think it's important to be able to see all sides rather than just cheerlead. Also, "economics" is theory, "the market" is the most efficient system for allocating resources with respect to individual preferences known to man. We can talk about our favorite flawed microeconomic assumptions if you want, but it's a tough case that "because I said so" is going to be more efficient than voluntary exchange.


Still it doesn't address my basic economic argument at all -- that our high unemployment is fundamentally a function of a lack of demand. Lots of people don't have money to spend, even on things they desperately need. The handfuls of people who do have money don't see any way to employ that money in a profitable way, so they're just sitting on it. There's a few ways to try to solve that problem, but cutting (or maintaining existing) taxes on the top income earners won't help.

(I get nauseous arguing against the Keynesian point so I won't directly). What I'll say is that it isn't clear drastically raising taxes on the rich will help either. What might help is a more efficient allocation of the government revenue we already have (like the vocational training instead of unemployment I outlined above). The other thing that I, and I think many others would like to see is an increase in the standard of living of individual business proprietors. They've been doing worse than "traditional labor" over the past few decades in case you haven't noticed.


A simple, but radical solution would be for the Fed to simply buy up everyone's mortgages, and then release the leins on everyone's deeds. In other words, just have Uncle Sam pay off everyone's mortgage with freshly-printed money. I suspect consumer spending would return if we did that!

I do too! I bet everyone would go leverage themselves to the gills buying houses knowing full well that when they can't cover the debt the government will bail them out! Sure, stopgap coverage, renegotiation, all that would be great (much better than bailing out the banks directly IMO), but a full fledged free money party only exacerbates the delusion. It's a recipe for currency debasement. People need to be allowed to demonstrate and feel the consequences of their lack of creditworthiness. Also, those that were creditworthy should be appropriately rewarded. It's sort of like the OWS girl that wants rich people to pay back her 100gs in student loans, but all those people that saved for college, worked for scholarships, held a job through school, well they're probably just fine the way they are.


As for my closing quip, I'm quite serious -- Schiff doesn't deserve any respect or deference. It's not classy to be deferential to the expertise of people who don't actually have any; it's foolish.

You don't find common ground, build coalitions, or change minds with ridicule.

@bmacs27 you're pretty good at aping the right's rhetorical style -- essentially all of your responses didn't address the point I made, and pivoted to some traditional right-wing hobbyhorse.

So the response to "I doubt he's really paying 50% in taxes" is not to recount even a hypothetical example of how someone could wind up paying a sum total of 50% in taxes, but instead to just argue that the dubious statement might feel true because there are many various taxes someone might be paying?

Meh.

The response to my argument about the impact of marginal tax increases on employment is to make some argument about Schiff's personal labor/leisure preferences? That has nothing to do with it at all. If Schiff is the entrepreneurial capitalist he claims to be (and not just the F-list media personality he seems to be), then he doesn't really do any direct labor, he just makes choices about allocations of capital -- he makes investment decisions, and business deals where all the real work is done by other people.

He's making the case that if he has to pay a few more percentage points in taxes, he's going to start walking away from making investment deals that would have made his company money and employed people. Hell, he goes so far as to say that he would dissolve his ostensibly profitable business and fire all his employees, rather than sell it to someone else who still likes making money, even if they have to pay taxes.

As for the "buying labor low" argument, which sector is doing that? Right now what they're doing is shedding lots of employees, not paying out raises, cutting health benefits, and hoping that if/when they need more labor, the extended period of unemployment will provide them with a pool of desperate talent willing to work for far less than they would have pre-2007.

It's true that once upon a time, back when we had a lot of unionization, a lot of companies hoarded talent in exactly the manner you describe, so they could potentially enter into the expansion with a competitive advantage. But that's the old way of thinking, back when labor was broadly considered a valuable company resource, and not simply a fungible commodity to be purchased or discarded as needed. Offshore contractors, anyone?

Lastly about the "leave the money where the market put it" -- that's a good one! You seamlessly pivoted from "economics as a theory for understanding the world" to "economics as a system of moral justice". Nicely done, you're pretty good at talking like a conservative!

Still it doesn't address my basic economic argument at all -- that our high unemployment is fundamentally a function of a lack of demand. Lots of people don't have money to spend, even on things they desperately need. The handfuls of people who do have money don't see any way to employ that money in a profitable way, so they're just sitting on it. There's a few ways to try to solve that problem, but cutting (or maintaining existing) taxes on the top income earners won't help.

A simple, but radical solution would be for the Fed to simply buy up everyone's mortgages, and then release the leins on everyone's deeds. In other words, just have Uncle Sam pay off everyone's mortgage with freshly-printed money. I suspect consumer spending would return if we did that!

As for my closing quip, I'm quite serious -- Schiff doesn't deserve any respect or deference. It's not classy to be deferential to the expertise of people who don't actually have any; it's foolish.