Why Weddings Matter

[Oregone]

Firstly, I would like to note the following, and have no wish to further discuss them:

1. It is their money, and their "right" to spend it (taxes theoretically take that which they have no right to spend)
2. Relative to their egregious net worth, it is inconsequential, and therefore, not considered significantly wasteful to them
3. The capital injected into the economy from this superfluous event is stimulatory and will benefit many.

But with that said, the reality is that weddings are a barometer for inequality. While you can look at the positive effects of capital injection, it must also be noted that this injection is only possible due to mass disparity making that amount seem "reasonable" to the spender. Simply put, a wedding like this cannot happen unless there is a system that allows a few to accumulate the majority of the wealth at the cost of everyone else; this is a public illustration of the manifestation of capitalism.

And that is something to be outraged about. The system is broke, and only benefiting the elite. If we are to sit around and whitewash each and every trivial--but wasteful--event that the rich put on, we are ignoring the signs about how out of whack the society is (and thereby, preventing mobilization against it). There is nothing wrong with being outraged about "wasted" wealth, and more so, about the system that creates the conditions that allow that wealth to be wasted.

So while this event may be centered around a lightning rod, both loved and hated, I hope we can removed the Clintons for a moment and talk openly and honestly about the system that perpetuates disparity and makes these kind of events possible. If we are bound by taboo, or even the common sense points I initially noted, to criticize the system in light of these events, I fear people will never become educated about the system or motivated to change it. The anger is justify in many respect, and it can be a cornerstone of a movement against disparity.

[MineralMan]

1. OK. I won't post anything. I mean since you don't want to discuss it.

That is all.

[Oregone]

2. I want to discuss disparity

I think those other points are valid, but a distraction from the most important argument. Does that make sense?

Why spend time on tangents everyone essentially agrees with and ignore the elephant in the room?

[JanMichael]

7. I am almost positive that about 70% of DUers do not understand your point.

Trickle down economics /and inequitable distribution of wealth have become so insidiously ingrained in the National psyche that most people here are unable to understand what you wrote so eloquently...and I tried to say (badly, and angrily) last night.

[Oregone]

10. Well, we have to start somewhere

:)

Its never a bad time for a calm, open and honest discussion that people can learn from

[HughMoran]

48. lol

It might be that we're tired of the arrogant nanny types telling us shit we already know.

:eyes:

[Oregone]

52. "telling us shit we already know"

Excuse me, but all I see is OPs defending the Clintons or attacking them on the arbitrary grounds I tried to shuffle out of the way immediately (to eliminate red herrings).

Most people miss the entire ball on the problem of disparity when viewing this during their 5 minutes of hate or adoration.

Hey, maybe you understand it all, but at least Ive made an attempt to appeal to other's minds (rather than just snarked).

[northernlights]

57. I think everybody here pretty much gets that disparity and waste are the root issue

But there is one set of people who are more concerned with "my team winning," and another set of people more concerned with "my ideas winning."

The side concerned more with "their team" doesn't care about wealth, disparity or waste...as long as "their team" is the one with the wealth to waste.

The other side doesn't care who's team is the benefit of the disparity of wealth and waste...they care only about the disparity.

I tend to be in the latter group. Therefore, I can feel free to be disappointed in Chelsea's maturing into a woman focussed on ammassing still more wealth and conspicuous consumption. And I can feel free to be pleasantly surprised at (young) Barbara Bush's concern that health care is available only to those who can afford it, and Jenna's time spent in the Peace Corp working among the poor.

Sometimes the apple doesn't fall far from the tree. Other times, the apple rolls down a hill, out of the sand and into the bottomland and grows into a somewhat different tree than its parents.

[HughMoran]

47. lol

rightly stated :rofl:

[KurtNYC]

3. They have money, their daughter is getting married -- GET OVER IT

[uppityperson]

5. "I hope we can removed the Clintons for a moment and talk openly and honestly about the system that

"I hope we can removed the Clintons for a moment and talk openly and honestly about the system that perpetuates disparity and makes these kind of events possible"

[depakid]

63. The OP was even more explicit than that

.... no wish to further discuss:

1. It is their money, and their "right" to spend it (taxes theoretically take that which they have no right to spend)

[Oregone]

6. See, this is precisely the problem

People are using these "common sense" arguments about weddings in general to ignore the more important argument about wealth disparity and its overall consequences. We can keep doing this as the gap goes wider, but you are only enabling a system by ignoring or whitewashing these flagrant displays.

[uppityperson]

4. The rich get richer, the rest get poorer

If someone has money, they can spend it as they wish, but I think you are getting at the point of why do they have so much in the first place.

Most of those rich did not "earn the money by the sweat of their brows (or non-sweat" but inherited it. There is nothing wrong with inheriting, but at least be honest where it came from.

Next, is it morally right for there to be such a disparity? I have been accused of being everything from a communist to a socailist to a whateverist but do not see any of those as having the right way to be.

Part of the problem why people won't rally against the rich, why they won't press for the ultra rich to be taxed more is the Lottery Mentality that someday, maybe, "I" might strike it rich and then, by god and gum, NO ONE should be allowed to take MY money from me.

I think this hope is what allows many to not rise up.

[FiveGoodMen]

11. I think that the Lottery Mentality you mention is the main reason we have lotteries.

Yeah, they raise a bit of money directly (usually from the people who can least afford to spend it) but mainly they keep the downtrodden in their place.

[uppityperson]

12. Don't rise up because maybe...you may be rich....someday

indeed

[Oregone]

22. We have lotteries because its better than the alternative

Black market lotteries (numbers) ran by crooks

:)

As for why we need either form, thats a huge discussion about the human psyche, paired with our current conditions.

[dflprincess]

24. The Clintons won the lottery when Bill was elected president

No way they would have had the money for this if he hadn't gone along with selling out the working & middle classes.

[JanMichael]

8. it's going to be interesting

to see the results from this thread, and mine from last night.

Sad...I see no recovery from Reagan's bullshit at this point-

[MineralMan]

9. Besides, a change in wedding plans has been announced:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x8801897

[uppityperson]

14. What about the system that perpetuates disparity and makes these kind of events possible?

The growing disparity between the rich and the rest of us? Have you thoughts on that?

[MineralMan]

21. I do have some thoughts on that, yes.

In my ideal society, there would be no such discrepancies. It's also an impractical ideal...one that cannot be attained. In the real society, I have no interest whatever in how much some former President spends on his daughter's wedding. The result will be money in the pockets of a lot of people who will have work that day. The money will go, primarily, to working people and the businesses that hire them. Good for them.

[Oregone]

26. "In the real society..."

And you have no interests in trying to change "the real society" into the "ideal society"

As soon as he reflected seriously he was convinced of the existence of God and immortality, and at once he instinctively said to himself: "I want to live for immortality, and I will accept no compromise." In the same way, if he had decided that God and immortality did not exist, he would at once have become an atheist and a socialist. For socialism is not merely the labour question, it is before all things the atheistic question, the question of the form taken by atheism to-day, the question of the tower of Babel built without God, not to mount to heaven from earth but to set up heaven on earth. Alyosha would have found it strange and impossible to go on living as before. It is written: "Give all that thou hast to the poor and follow Me, if thou wouldst be perfect." Fyodor Dostoevsky, The Brothers Karamazov

[MineralMan]

29. My emigrant friend:

I've been trying that for 45 years. There's been some progress, but I doubt that ideal society will ever be realized fully.

I see that you are working on it by leaving it. How sad.

[uppityperson]

31. a bash, "i've been trying", another bash.

how sad

[Oregone]

34. Ideals do not have to be fully realized (and scary for some if they often ever are)

But the pursuit of equality is surely more beneficial than ignoring it and whitewashing the manifestations of disparity.


"I see that you are working on it by leaving it. How sad."

I've made a lot of progress toward an ideal for myself and my family in a very short time. Sad or not, immoral or not, it doesn't matter to me. The manifestation of those efforts will directly benefit my loved ones in the immediate future, and I won't have to enroll my children to be soldiers in a fight not of their choosing (and thereby, they won't have to feel the effects of the status quo until that fights been won). Seeking out a better existence for one's family is a fundamental American idea.

And now we are on a tangent.

[MineralMan]

42. Exactly my point. Movement toward ideals is about the best

we can do in a large, complex society that votes for its legislators. That's why I've been an activist since I was 20. I've seen a lot of movement in some areas over those 45 years. I'll see some more in what remains of my life, I'm sure, and I'll keep working on moving people in that direction.

I stay here because that's the society I live in. It's the society I'm trying to change.

Am I an idealist? Only in my dreams. When I'm awake, I deal with whatever reality presents itself and look for ways to move it along a path that increased individual equality. That's all I'm capable of doing. It's not much, but I'm just one guy.

[sui generis]

13. see, I kind of like that answer

You seem to be saying "assess what is, then do something about it" which is different from "eat the rich" and other idiotic cathartic verbal explosions.

The thing is most of the people who are saying "eat the rich" wouldn't hesitate for a second to defend their newfound wealth if they were suddenly the beneficiary of some capitalistic largesse.

The piece that's missing from almost all the discussion on the topic of disparity is that it's not just economic systems that lead to disparity but poor value systems, and extending that just leads to a chicken vs. egg argument.

I think we have to pick the egg and start with that - liberal education and liberal values mean that we inculcate a higher sense of fairness into people who earn and into people who have fewer opportunities so that fair legislation, governance and the rules governing the acquisition of extreme wealth are more readily adopted by all.

Reagan did the most incredible disservice to America by reverting public education back to survival basics, the the R's: readin', 'ritin', and 'rithmetic.

What does it mean to a child and teenager to build into their value system that we operate as a community, rather than as opportunists? Well, for one thing, taxation is a collective event that benefits the collective. Like insurance you don't pay enough in premiums to cover just your expenses - that would just be direct billing. But there is a corollary too, which is that the opposite of responsible community participation is not abject evil. There are just as many "poor" people who are every bit as anti-tax and anti-community for almost the exact same reasons, as there are people of means, and by means I just mean comfortable upper middle class and above.

It starts with having a value system that involves more than just the individuals without punishing people for being individual.

[Oregone]

16. "liberal education and liberal values mean that we inculcate a higher sense of fairness"

Hey, I couldn't agree more. Its a huge piece of the puzzle IMO.

Thanks for taking the time to make a measured response.

[uppityperson]

17. I like your last 2 paragraphs

"What does it mean to a child and teenager to build into their value system that we operate as a community, rather than as opportunists?"

very good. As a whole, our society has moved away from any sort of community, valuing opportunisty instead while many then feel the lack of community and try to figure out how to regain that.

"It starts with having a value system that involves more than just the individuals without punishing people for being individual."

Well put

[tularetom]

15. If you leave Clinton out of the discussion, what's the point of arguing?

I don't think you'll get a lot of disagreement here that it is somehow gauche or tacky for any rich people to throw a pricey wedding for their kid. Perhaps it is unconscionable for them to do so when so many people are suffering.

How far do you want to carry this argument? Should all yachts be confiscated? Nobody allowed to drive a luxury car? Or own multiple homes while some people are homeless?

I'm as big a believer in class warfare as anybody. I wish there was more of it. But we have to choose our battles and to me this one is far from the most egregious example we can find.

[Oregone]

18. Is there ever a point of arguing against disparity after observing an event made possible by it?

Im not arguing about what is "gauche or tacky". Im trying to have people set their sights on the system that allows "gauche or tacky" events to be easily undertaken by extremely wealthy people (who benefit disproportionally from the labor of all mankind).

[TZ]

19. So its okay to tell people how to live their lives and spend their money

And to look down your nose at anyone who's beliefs wants and desires are different than yours. Got it!
Its really none of your business if they want to spend 10 dollars or 100,000 dollars on their child.
Silly me was raised to think that liberals were live and let live. Its live the way I BELIEVE is moral I see.....:eyes:

[Oregone]

23. Please read the topic before responding

"Its really none of your business if they want to spend 10 dollars or 100,000 dollars on their child."

It may not be, but it is all our business that they have amassed so much wealth from the labor of all of mankind that spending vast sums seems negligible.

Capitalism disprorportionally rewards the owners of capital the wealth created in production--mind you, from the labor of others--and contributes to massive disparity. It may not be our business what they spend in that sense, per se, but it should be all our business that the economic structure allows them to so easily spend it.


"Silly me was raised to think that liberals were live and let live"

I did not think liberals "live and let live" in the face of systems that perpetuate mass disparity.

[uppityperson]

32. I applaud you for your patience in trying to explain your point

not that of any particular person but the income disparity issue.

[Lance_Boyle]

20. Anger over the disparity? Nah - we LOVE to watch the rich flaunt it.

"My Super Sweet Sixteen" would never have had an audience otherwise. Nor would the Charles and Diana televised wedding extravaganza. We not only don't get angry over the wealth disparity, we are ENTERTAINED by it. We don't even get invitations to the bread and circuses anymore. We still don't care.

[Robb]

25. Interesting point, actually.

Although I don't think it's that we no longer care about how far below them we are in wealth. The most popular shows are the "rich people acting stupid" variety.

It's as if people find their own sense of superiority buried in the inequality -- "Look at these idiot rich folks."

[Oregone]

28. Maybe part defense mechanism and part ol fashion entertainment

You know, we like watching beautiful cars get destroyed in action movies...what is so romantic about that notion? Well, here is another form of watching destruction (destruction of wealth)

I don't even think I can express why this is entertaining to me, so maybe thats my best guess. Its unfathomable and completely irrational that bratty girls blowing half a million on birthday parties is entertaining...but nonetheless, like watching a train wreck, it can be.

[Lance_Boyle]

33. I just love your sig line image in relation to this thread topic.

That "story" seems to be one instance in which the majority of viewership (story followers) are intent on seeing one of "them" brought down.

[Oregone]

36. Oh yeah, quite true

Really, its just a joke for me, because I care so little about it.

I often wonder if its not only just the lower classes that delight in seeing such downfall, but perhaps "old money" as well (rarely do we see their implosions, but rarely are they such celebrities)

[Lance_Boyle]

38. Now THAT would be reality TV.

Cameras throughout the homes of the Rockefellers and Vanderbilts recording their reactions to the Clinton wedding, Lohan trials and tribulations, etc. I have a feeling it would be incomprehensible to most of us, though.

[Lance_Boyle]

30. I don't know.

Certainly the "sweet sixteen" type shows were about watching the rich behave badly. But I question whether we were laughing at them or still wishing we could afford to behave like that ourselves. Certainly the televised royal wedding viewership was not about laughing at the upper crust. Nor the show filmed at the Playboy mansion. Remember "Lifestyles of the Rich and Famous?" Hell, remember "Richie Rich?" "Silver Spoons?" We revel in the inequality. I'm not sure why - whether we want to be like them, or we want to see them brought down to our level. It's just another angle on the obscenity, I guess.

[Guy Whitey Corngood]

41. That is so unfair.

Anybody who watched 80s TV knows that the rich use their spare time to fight crime.

[NeedleCast]

27. Oregone, I don't often agree with you

But this is one of the times that I do, pretty much completely.

The issue here is one that has been buried by the 'celebrity' nature of the event. You've hit on it, but few people seem to be able to focus on it.

[earth mom]

35. I have nothing against weddings but everything against Robber Barons.

Fuck the rich who flaunt their wealth and do little to help the people or the planet. :puke:

[Oregone]

37. While I find it tone deaf...

I think arguing from the corner of flaunting wealth will inevitably lead you right into the relative tangents that people use to whitewash these events (and in doing so, ignore them). It isn't that we should say spending that much wealth in that manner is "wrong", but rather, the system that allows someone to have so much they can negligibly piss away 2 million is "wrong". Change the system.

[leftstreet]

40. +1000000

Absolutely!

[OmmmSweetOmmm]

46. Ironically, the area where the wedding is taking place was a hotbed for Robber Barons.

[treestar]

39. That is true with everything

cars, houses, clothes.

[Rabrrrrrr]

43. I agree with much of what you say. The system is indeed broken and needs a fixin'.

A more significant tax rate for high income earners would help, and bringing back the estate tax is a great way to help avoid aristocracies (which is we had it to begin with).

And we need to get away from treating corporations like gods as well.

[ZombieHorde]

44. Bravo. I think many DUers are creating fantasy OPs and replacing your OP with the fantasy.

Truly awesome. I personally believe humans create fantasies extremely often, and then populate their fantasies with their own versions of the people and events around them. Maybe that is just my little fantasy.

Anyway, an extremely high estate tax would help to end the wealth gap. Tax where the money is and then place large amounts of that money into the schools.

[blindpig]

45. k&r

Problem is that for many the questions you pose are beyond discussion, it's 'human nature' doncha know? That this 'human nature' is an artifact of our current social environment and is projected upon the past to justify the present passes them by. A result of propaganda and perceived self interest, only remedied by a close reading of history. The scale of accumulation, the technical ability to augment that accumulation, is like nothing the earth has seen before. As are the means of coercion and 'soft' crowd control. Ain't 'human nature', I suspect that even those nasty Romans would find capitalism barbarous.

[brooklynite]

49. so, no more birthday parties? or backyard BBQs?

After all, the inequities of society mean that not everyone can afford to throw one, or be as elaborate in what they provide. Or do you have a per-capita price you're comfortable with?

[Oregone]

51. Did I even say "no more weddings"?

I am rather saying, "these weddings are an indication of disparity."

What I want no more of is mass disparity, and the poverty associated with it. And if you want to put a number value on that, its easily enough done with thoughtful discussion. It isn't as if no one has researched the concept of inequality, and have the current system measured with finite values. Food for thought:

[txlibdem]

50. Tax the rich, feed the poor, till there are no rich no more

"Tax the rich, feed the poor, till there are no rich no more."

I'd Love To Change The World
by Ten Years After
From the Album A Space In Time

http://www.amazon.com/Id-Love-Change-World/dp/B000S55PC0/ref=sr_1_1?ie=UTF8&s=dmusic&qid=1279992837&sr=8-1

[BzaDem]

53. The truth is that there is a tradeoff between wealth disparity and increasing standard of living.

Most here (including me) would agree that the wealth disparity here is ridiculous, and should be reduced. Many would argue (like me) that we should do so by making the tax structure, safety net, and regulations more reasonable. (Right now, things are so out of whack and there is so much waste that doing so wouldn't even reduce innovation that much if at all, and would likely increase it by redirecting resources away from the casino financial sector towards productive uses.)

You would rather change the incentives so that profit and risk are dramatically disincentivized compared to how they are now.

But this argument is somewhat irrelevant, because I don't even think you consider it a trade-off. You clearly want reduced wealth disparity (as we all do), but from your previous posts (and correct me if I'm wrong here), I don't think increasing the standard of living is one of your priorities. I remember a debate about how fast we should move to green energy (i.e. how low should a carbon cap be, the trade-off between short-term reductions in standard of living and environmental protection, etc.) Your argument was that because green energy is still energy, it is not a great idea, and that we need to "slow the fuck down" (or something to that effect) and reduce our standard of living as a goal in and of itself.

My point is that it is difficult to have a conversation about the trade-off when you either don't acknowledge the trade-off or don't see it as a trade-off (i.e. see reductions in our standard of living as a good thing independent of wealth disparity). This means that policies that dramatically reduce incentives to take risks and innovate are always and everywhere a good thing for you (since you favor both reducing wealth disparity AND reducing such innovation), while most people (here and elsewhere) would have the opposite of your goal regarding standard of living (and do not see technological innovation as a bad thing in general).

[Oregone]

54. Are you suggesting increased standard of living necessitates increased disparity?

That in order to gain an inch, .01% must gain a mile? Is this your premise? How much must the rich gain as a necessity for the poor/middle to gain anything at all? When calculating the aggregate gain, is it mitigated by inflationary forces since the poor/middle get so little of the total wealth created? Is any empirical increase (by today's standards) only supported among the poor/middle by the easy availability of credit? Is it impossible to innovate and increase the standard of living without a capital driven economy (Prior to capitalism, did the standard of living always stay constant)?


"My point is that it is difficult to have a conversation about the trade-off when you either don't acknowledge the trade-off or don't see it as a trade-off"

Probably, but I'm not in a reality-based context at this point. Lets pretend I still think we can grow away, and innovate away, and survive on this planet. Id still suggest you can better mankind without a system that contributes to so much disparity by emphasizing labor and capital equally, and offsetting capital investment incentives with increased worker incentives (done through capitalistic-to-co-op private enterprise economies). And even if that did slow the growth of "standard of living", if more people could actually realize it without increased burden and debt, a better world that would be.

[BzaDem]

55. I'm just saying there is a trade-off.

I'm not saying the trade-off curve is linear, and I'm not even saying it isn't flat at the moment.

Right now, if someone wants to invest in a high-risk venture, where the probability of success is low (by definition of high-risk), that person is not going to do it unless their reward (if they succeed) justifies the risk. (Their expected return must be positive.)

If you limit the return they can make (time-based, amount-based, or whatever), that is going to necessarily change their calculation of whether or not they are going to invest. Some risks taken under the current system will not be taken under your system.

For a really simplistic example, let's say the chance of success is 10% for starting a company building a product. That means that a hypothetical person would not invest in this company unless the expected reward if successful is going to be about 10 times his investment. When I say expected reward, I mean a weighted average over the realistic possibilities. For example, assuming success, there might be a 10% shot that the initial investment might be multiplied by 50, and a 90% chance their investment will be multiplied by 6.

Let's say in your hypothetical world, we erase the chance that their investment will be multiplied by 50. (This might be caused by time-limiting the investment, or some other such action.) Instead, we say that even in the best case scenario, their investment will only be multiplied by 10.

Well then our distribution just got fucked. We now have a 10% chance that the initial investment will be multiplied by 10, and a 90% chance the investment will be multiplied by 6. This produces an expected return of 6.4 (times the initial investment). Therefore, the investment will not be made, since we are assuming only a 10% chance of success of any kind (which requires a return of 10 times the initial investment if successful for the total expected return to be positive).

This is obviously a simplified example. In reality the distributions are much more complicated, and people also are not entirely rational entities when making decisions like this (though venture capitalists who fund these investments as they get larger are more rational).

There is a trade-off between limiting the return one can make on an investment, and the resulting investments made/risks taken. As a very general matter, the more you limit the return, the less risks will be taken and the less innovation occurs. Again, the curve is NOT linear or even necessarily continuous. It may very well be that we are at a point on the curve such that limiting return in certain ways will NOT impact investment. And this is also not to say that we don't need strong regulation to prevent the financial sector from taking risk that does not benefit anyone (expecting to get bailed out later).

It is even possible to take this argument too far. This is what supply siders do, when they say that any change in the marginal tax rates of the rich will affect this calculation. I do not buy that, since changes in marginal tax returns of the rich do not alter this calculus much. As Keynes said, investment is not elastic (and small changes often have no affect). This is one reason we have a Fed managing interest rates instead of an open market; they need to be changed significantly in either direction to have any affect on investment. Like small changes in the interest rate, small changes (or even medium size changes) in the marginal tax rates do not have a huge affect on someone's desire to invest. And even if a steeply-progressive tax system might affect investment somewhat, it is still the right thing to do to reduce wealth disparity and maintain a good safety net. It is a trade-off.

But if you significantly limit returns (such as by saying "after this date you will get no more return"), you will start to get the effects of reduced investment. This might help reduce unnecessary risk by the financial sector, but it will also reduce necessary risk required to innovate to increase our standard of living over time.

[Oregone]

58. You are saying it, but not proving it

Firstly, rewarding risk is not the same as increasing disparity by rule. Perpetuated disparity implies that the growth in the upper class is not proportional to the growth in the lower classes. There is no necessary rule that this must happen for innovation & increased standard of living. If an individual possess 100X the wealth of the lower classes, why can't their risk be rewarded by having them gain only up to 100X the wealth laborers will by their investment? Why must they grow at a faster pace that that to make "risk" worth it? I think this is a foolish, unproven premise. You are essentially saying the minimal ROI to any investment is dynamic and directly dependent upon one's own relative wealth; if that were the case, there are a handful of people so disproportionally wealth that they could probably never find an investment at this point attractive enough to meet this rule.

Secondly, you really must realize that you cannot simply equate the term "standard of living" to the aggregate wealth of a country. The bottom line problem that you run into is that if only a tiny fraction of the people have the wealth to be consumers of the standard, it becomes very, very moot. Siphoning all the funds to the top to support growth in the standard of living will leave a lot of people on the bottom in poverty.


"If you limit the return they can make (time-based, amount-based, or whatever), that is going to necessarily change their calculation of whether or not they are going to invest."

I do agree with this to some extent, and as you mentioned, I'm not also the fan of perpetual growth. But, its the best gig around. I mean really...where else is the money going to go? Overseas? Tax the fuck out of it. Investing in the economy will be the only way for the rich to grow their wealth, so it will be a good enough way still.

Also, any said amount of capital can merely be continually reinvested in new enterprise, by their wise hedge fund managers, so that it is always in play. Just because, under the hood, someone's money is moving from one investment to another, it doesn't mean that their portfolio will produce drastically different results. You see, as their investment enterprise begins to buy shares back from them, they merely need to move that capital into a new investment to keep it chugging infinitely. For the rich, its very little change at all. For the economy, its a boon because it necessitates the investment in new start-up enterprises and IPOs, putting fresh capital where it is most needed.

Another aspect that you are not considering about growth, is worker incentives. While you have written a sizable sum about investors who may lose the incentive to "risk" money, you fail to realize that workers today have no incentive, other than survival, to work above the minimal amount required. Since they do not touch the profits of their labor, they have no reason to make more widgets, or better widgets. They simply put in their time, get their wage, and go home. Well, I assert, the moment they are able to profit from their labor directly, it creates an incentive for them to be more quality workers. Does this incentive mitigate the loss of potential investment capital, as it relates to the growth in standard of living? Even if it doesn't produce the same growth in aggregate wealth, will its emphasized distribution to the workers allow more people to access higher standards of living? Its an experiment really, and I'm not claiming Utopia. I'm merely suggesting this might be a better balance.

[BzaDem]

59. "Why must they grow at a faster pace that that to make "risk" worth it?"

What I'm saying is that the reward for the risk is currently inversely proportional to the probability of success. (The greater the risk, the greater the reward, in a somewhat mathematical fashion.) If you limit the reward to something less than what the probability of success should imply, the investment will not be made (because the expected return on the investment will be negative). Only investments with relatively high probabilities of success will be made, because these are the only investments where the expected return (averaging over all outcomes) will be positive.

This does imply that there will be a small group (whose investments succeed) that will have more in the end than the larger group (who either don't make investments or whose investments fail). While this isn't the same as saying the "rich" group and the "non-rich" group are always constant, there is indeeed a smaller group of people that succeeds and therefore has more money. This follows directly from allowing risky investments to be rewarded inversely proportionally to their risk.

A progressive tax system is one way to counter wealth disparity. I don't believe it dramatically harms the incentive to invest, but to the extent that it does, we as a society have agreed to the trade-off. It might mean some low-success-probability investments won't be made (because the reward necessary to make the expected return positive won't be realized), but after looking at the relative benefits and drawbacks of such a tax system, we have simply said "so be it."

"But, its the best gig around. I mean really...where else is the money going to go? Overseas?"

What I'm saying is that the expected return on some investments under your scenario will be NEGATIVE. That is true even if there is no way for the money to go overseas. When the expected return is negative (i.e. the probability of success is low enough such that the maximum reward realized won't compensate for it), the investment simply will not be made. The money will go to LESS risky investments, that are more guaranteed to work out. This limits the kind of technological innovation that can improve our standard of living.

"you really must realize that you cannot simply equate the term "standard of living" to the aggregate wealth of a country."

I am not so much equating it to the aggregate wealth of a country. I am equating it to the kind and amount of innovation that occurs under such a system. Technological innovation is often (not considering the environment) a positive-sum enterprise. It does not just help the wealthy; it often helps everyone. The standard of living for much of the poor is MUCH higher today than it was 100 years ago, and innovation (products/services at lower cost) is a big part of that. The progressive tax system is another way to help the poor realize the benefits of such innovation, without directly removing the incentive to make certain investments.

"You see, as their investment enterprise begins to buy shares back from them, they merely need to move that capital into a new investment to keep it chugging infinitely."

This often happens in our system though. While we do have things like patents for intellectual property, eventually such barriers to competition fall and competition often dramatically reduces the further reward that can be achieved by keeping all one's money in an investment. If one wants to keep growing their investment at any remotely similar rate, they would have to put it into a new enterprise.

"you fail to realize that workers today have no incentive"

I would disagree that they have no incentive beyond survival. At the very least, many workers at white-collar jobs do have incentives provided to them. Workers also have the opportunity to invest in the company to share profits. If the incentives are a problem, employers can always (and often do) provide incentives.

"I'm merely suggesting this might be a better balance."

I would argue that balance is best achieved through a broadly-applicable progressive tax structure, rather than what essentially amounts to a direct limit on the reward for successful investments. It is sort of like a price control. If there is a price control on a product that is lower than the cost of making the product, the product simply won't be sold. However, if there is a TAX on the profit the product produces, the product will still be sold. It is similar here, if you think of the low probability of success as a cost, and a time-limit on the investment return as a price control.

While it is possible to go overboard with even the progressive system, the tax system is still a better way to provide balance. It is broadly applicable, instead of specifically targeted. Its affects apply to everything; it doesn't primarily over-disincentivize high-risk investment over other types of wealth like a direct reward cap would.

[Oregone]

61. "What I'm saying is that the reward for the risk is currently inversely proportional to ..."

Which is not the same as the notion that disparity must be increased to encourage investment (and your original argument was an appeal to disparity as a means to raise the standard of living). Nothing about this concept states that rich must grow their wealth at a faster pace than the poor to encourage their investment in the first place. They could grow linearly and be just as enticed.


"What I'm saying is that the expected return on some investments under your scenario will be NEGATIVE."

If you think this, I don't think you understand the crux of the system. If you cannot sell 1/30th of an investment back, at the current value of the portion, each year for 30 years and have a positive return (plus dividends you receive on the unsold portions), then you made a ridiculously bad investment in a company that devalued itself over 3 decades. And people really don't make those in the current system and profit as it is.


"Technological innovation is often (not considering the environment) a positive-sum enterprise."

Imagine the technological innovations that we would see if the scientists creating them had incentives by actually profitting directly from their own work.


"This often happens in our system though. "

But the difference is, the workers never get ownership by rule and receive that profit incentive. If anything, it shows you though how unrevolutionary this concept really is. It works well with the way the current system is already structured, complementing it by adding additional worker incentives.


"I would disagree that they have no incentive beyond survival. At the very least, many workers at white-collar jobs do have incentives provided to them. Workers also have the opportunity to invest in the company to share profits. If the incentives are a problem, employers can always (and often do) provide incentives."

If workers were provided with suitable incentives, they wouldn't unionize and have to fight for them tooth and nail. Capitalism has, time and time again, shown its tendency to exploit labor to lower the cost of production


"I would argue that balance is best achieved through a broadly-applicable progressive tax structure, rather than what essentially amounts to a direct limit on the reward for successful investments."

So you want an economic system that promotes mass disparity to drive investment, then a tax structure aimed to fix it somewhat (but not so much that it wipes out a positive growth in disparity)? And somehow, by having disparity create an entrenched political class of elites, they wont tinker with this system and make it work only in their favor? Through this, you want to create balance? Good luck...

Id much rather have an entire economic system that is "balanced" in itself, complemented by a balanced tax system. And yes, Id much rather see limited ROI on successful investments, instead of infinite ROI enabled by neglecting to reward labor. The current system intentionally neglects labor, and I don't think any tax system you would deem as appropriate will rectify that negligence.

[BzaDem]

62. "your original argument was an appeal to disparity as a means to raise the standard of living"

No it wasn't. I never said that and I don't believe it. I was specifically referring to keeping the investment rewards as they are now versus limiting the investment rewards directly, as you propose. To put it another way, if we imagine a trade-off curve, it can become flat or negatively-sloped above the point where investment reward dramatically exceeds what is necessary to maintain expected return overall.

I understand your argument about selling 1/30 every year, but that is really little different than just artificially capping the return allowed for successful investments. Creating a complicated mechanism for the limit doesn't make it not a limit. Creating a limit on return for successful investments is analogous to a price control on a bottle of milk. If the price on the bottle of milk is mandated to be too low, people won't sell bottles of milk (or will reduce the cost of producing milk in non-desirable ways). Likewise, if the reward is limited (time-based or otherwise) to something below what would cause a positive expected return (i.e. not reflecting the chance of failure), people will not make such high-risk investments.

The reason why a progressive tax system is better than an investment return limit is because the tax system is more broad. It doesn't specifically discourage one activity relative to another activity. In this case, it doesn't specifically disincentivize high-risk investment over other types of earning. Your proposal specifically disincentivizes high-risk investment over other types of earning, since high-risk investments are the types of investments that require such a large return (if successful) to be worth making in the first place.

"And yes, Id much rather see limited ROI on successful investments"

This is the key point where I would disagree. Your system will not be limiting the ROI much on high-risk investments -- it is just that these high-risk investments will not be made. You WILL see limited ROI on low-risk investments, but even under the current system there is limited ROI on low-risk investments. To bring back the price control analogy (assuming a competitive market), setting a price control does not lower the price. It either is superfluous (if the price control is high) or it prevents the product from being sold (if the price control is too low) and forces people to sell a different product with a lower cost to produce (or the same product with lower cost to produce, such as by neglecting safety standards). Likewise, your system will not lower the return much on high-risk investments -- it will simply prevent high-risk investments from being made, and direct investors to low-risk investments (which ALREADY have a low return, and wouldn't expect to get much even if they didn't have to sell 1/30 every year).

[Oregone]

72. "but even under the current system there is limited ROI on low-risk investments"

Under the current system, a single, non laboring owner can collect 30 years of profits and be positioned to collect another 30 years worth (infinitely in fact). There is never really an end, and such ownership can be passed down infinitely to heirs. In my system, they lose ownership (or rather, are bought out), and have a limited time span of returns on a single investment in order to directly reward workers. My system doesn't change things dramatically for the investor class, who must just reinvest, but drastically promotes mobility for workers.

[depakid]

64. The "truth" of the matter is the OPPOSITE of that

This interview with Edward Wolff, Professor of Economics at NYU illustrates that for us:

MM: Apart from the absolute level of wealth of people at the bottom of the spectrum, why should inequality itself be a matter of concern?

Wolff: I think there are two rationales. The first is basically a moral or ethical position. A lot of people think it is morally bad for there to be wide gaps, wide disparities in well being in a society.I think there are two rationales. The first is basically a moral or ethical position. A lot of people think it is morally bad for there to be wide gaps, wide disparities in well being in a society.

If that is not convincing to a person, the second reason is that inequality is actually harmful to the well-being of a society. There is now a lot of evidence, based on cross-national comparisons of inequality and economic growth, that more unequal societies actually have lower rates of economic growth. The divisiveness that comes out of large disparities in income and wealth, is actually reflected in poorer economic performance of a country.

Typically when countries are more equal, educational achievement and benefits are more equally distributed in the country. In a country like the United States, there are still huge disparities in resources going to education, so quality of schooling and schooling performance are unequal. If you have a society with large concentrations of poor families, average school achievement is usually a lot lower than where you have a much more homogenous middle class population, as you find in most Western European countries.

So schooling suffers in this country, and, as a result, you get a labor force that is less well educated on average than in a country like the Netherlands, Germany or even France. So the high level of inequality results in less human capital being developed in this country, which ultimately affects economic performance.

More: http://www.thirdworldtraveler.com/America/Wealth_Divide.html

(This in addition to poorer health outcome and higher crime rates).

[BzaDem]

65. It is obviously a matter of degree.

I am not saying we need inequality for its own sake. Far from it. I'm simply saying we should reward investment in a way that corresponds to the risk taken to make the investment. This results in a certain amount of inequality which cannot be avoided unless we change the way investments are rewarded (which I believe should not happen). But obviously we shouldn't want inequality to be above what might be required to maintain an incentive to innovate (and if even that is too high for society, a progressive tax system can reduce inequality further).

[depakid]

67. Eisenhower era taxation levels didn't "stifle innovation" -and that's where the neoliberal arguments

fail.

Plenty of innovation- and all around much healthier societies where the Gini coefficient is far lower than it is in the US (the US is beginning to resemble third world countries in wealth disparity and income inequality).

[BzaDem]

68. There were many more loopholes and exceptions when the top tax rate was 90%

which meant no one paid anywhere close to that. As the tax rate was lowered, the exceptions and loopholes were lowered. So while revenue from the rich was higher then (and I would support it being higher than it is now), it wasn't even CLOSE to what the top line rates would suggest. During most of the Eisenhower administration, tax rates were around 17-18% of GDP, which isn't much higher than our current 15% of GDP considering the massive decline in revenues resulting from the financial crisis and recession.

[depakid]

69. The fact remains that by current standards in the US it was astonomical

as are taxation brackets and rates in other, more successful nations.

[BzaDem]

71. We brought in about 17-18% of GDP as taxation during the Eisenhower administration.

We currently bring in 15% of GDP, and that's because of the recession. In 2006 they were 18.4%. So the actual taxation brought in was not much different if at all.

I would agree that we should bring in more taxes than we currently do, but I do not compare now to the Eisenhower administration to justify it.

[depakid]

74. The issue is where does the revenue come in from- and how does it relate to "innovation"

So called "new" Democrats fell for the neoliberal line both on taxation and "free" trade- both of which have increased the Gini coefficient, decimated the middle class and exacerbated a whole host of social problems associated with wealth disparity, without any effect on innovation.

[cynatnite]

56. Weddings, honeymoons, cars, jewelry, education, clothes, vacations....

The list proving that disparity exists is endless.

[Lucky Luciano]

60. I am glad my girlfriend wants nothing to do with a fancy wedding!

We both want to spend the money on an awesome honeymoon in India - around Udaipur.

[Initech]

66. I'm all for it, Weddings help out our economy a lot.

I know most of the weddings I've been to have been on shoestring budgets, the more one wants to spend on a wedding, I dont care. Actually we need to get as much of their money in circulation as possible.

I've often said that gay marriage is a key to economic recovery. Think of all the businesses - including travel - that would benefit from this.

[Oregone]

70. You do realize this money is only spent because its negligible against the amount they retain?

Hurray. Have a party they trickle a little down, but surely know the system allocated them far more so that they are encouraged to do so.

[Initech]

73. I know trickle-down economics is bullshit.

I mean the thing is that everyone's hurting right now because of the recession. Every little bit helps.