Latest Round of Stimulus Debated in Congress
Speaker Nancy Pelosi has unveiled the plan for another $3 trillion in spending to offset the effects of the Coronavirus economic shutdown.
CNN:
House Democrats announced a sweeping new Covid-19 stimulus bill on Tuesday with a price tag expected to be more than $3 trillion — an amount that would stand as the largest relief package in history.
The legislation, which provides funding for state and local governments, coronavirus testing, and a new round of direct payments to Americans, sets up an immediate clash with the Senate, where Republican leaders have said another round of emergency funding is not yet needed.
Sen. John Barrasso, a member of Republican leadership in the chamber, warned that the new bill is dead on arrival. “That will not pass. It’s not going to be supported,” he said of the new legislation.
The package is expected to cost more than $3 trillion, dwarfing the stimulus measure enacted in March, which was more than $2 trillion and at the time amounted to the largest emergency aid package in American history.
The bill, which Democrats are calling the Heroes Act, would provide nearly $1 trillion for state and local governments, a $200 billion fund for essential worker hazard pay, an additional $75 billion for Covid-19 testing, tracing and isolation efforts, and a new round of direct payments to Americans of up to $6,000 per household, according to a fact sheet released by the House Appropriations Committee.
House Majority Leader Steny Hoyer, a Maryland Democrat, notified members on Tuesday afternoon that the House is expected to meet Friday morning to vote on the legislation.
Well I’d say we can definitely bury the argument that Pelosi doesn’t go big now.
I’m struck by the contrast with 2009. The GOP went pretty much uniform opposition to economic assistance because a Democrat was in the White House and they wanted to try and tank the economy to maximize their odds of reelection in 2012. Now the Dems are going big even though, if they got their way, it’d increase the odds of Trump getting reelected.Report
It’s the same basic ideological reasoning that led Obama to appoint disaster experts to head up FEMA, and Bush to appoint a horse-breeder with no relevant expertise.
Obama expected FEMA to be able to help in the aftermath of disasters, and appointed people who could achieve that. Bush felt government “just gets in the way” and that FEMA was useless, but since he had to fill a useless governmental position, he might as well reward a random donor.
You can see the same thing in both parties when it comes to ambassadorships to fairly inconsequential countries — wherein you expect no actual diplomatic problems, no need for top talent or even decent leadership at the top, because it’s a friendly country wherein the embassy pretty much runs itself, with no actual high-level diplomatic issues needing resolution. And if there are, they fly in an actual, experienced, diplomat to handle it.
Democrats pretty clearly think that there’s a massive problem that requires federal intervention, and wish to solve the problem. Sure, they think it’s an electoral winner as well — but they’re not going to let the country burn on the off chance it helps Trump. They want to fix the problem. That is not to say their fix necessarily will work , just that they believe it will. The same belief in “fixing the problem” was behind the CRA and the ACA — both of which led to rather significant immediate electoral losses, which was known even as those bills were debated.Report
The timing on 2009 was a bit different. The crisis actually precipitated in Sept 2008, before the election when Bush was still prez. By the time Obama took over, the crisis was in a different phase. Dems had the house on lockdown, and the Senate, while not filibuster proof (cause Coleman/Franken was still being litigated) was still more or less a Dem show. Though it was limited by the rightward most leaning dudes in the caucus like Nelson & in hindsight Lieberman.
For that matter, the GOP only started to get any traction at allReport
“Debated in Congress” seems an odd term for a situation where one chamber’s majority party is going to pass it with minimal time on the floor, and the other chamber’s majority party is already saying “dead on arrival.” Something will pass if Pelosi and Mnuchin can agree on it. There will be little to no public debate at all. McConnell won’t care because he’s got his bunch back in Washington and can ratify another dozen or two judges.Report
I’ve also read complaints from members of the *Dem* caucus that the bill was written in secret by Pelosi’s team and leaves out what they view as important components.Report
I guess we’re gonna have to pass the bill to find out what’s in it!Report
What I find astounding by the Republican response is that they have no answer, whatsoever.
They aren’t saying “We have a better plan to address the problem”. They are really just saying “We don’t want to address it at all.”Report
Of course there are faults with this D plan especially Pelosi’s guff about people not double dipping. But on the whole this is good stuff that is attempting to deal with the scale of the problem. So good on them. Now we get to the negotiations with the R’s going to the mat for ..umm…inoculating businesses from lawsuits and cap gains tax cuts.Report
It seems well intentioned, and I don’t see any poison pills (although if a pension bailout is in there without reform that would qualify), but an extra $3T increases the total public debt by 20% and puts us roughly at the previous WW2 high.
https://en.wikipedia.org/wiki/National_debt_of_the_United_States#/media/File:US_Debt_Held_by_Public.pngReport
Spend it now, or spend it over the next 10 to 20 years in reduced GDP. Pick your poison. We are at a truly ridiculous level of unemployment, and despite the rosy assessments coming from some quarters, even a best case sees maybe half those jobs coming back before either a vaccine or 60%+ of us get it.
Half of today’s unemployment numbers is still catastrophically bad.
At least interest rates are low, yeah?
Be a good time to really look over the military, though. 700 billion a year is it now? 800? Can’t recall. Pretty sure we could be better spending that on other forms of defense. Like, I dunno, pandemic preparation and mitigation.Report
The problem is we’re in unknown territory here.
CAN the gov distribute this kind of money so it reduces the damage to the GDP, or will it just go to pork/special-interests/whatever?
Worst case in spending it is it goes to the politically influential, doesn’t reduce the damage by much, and we start getting risk adjustments in the interest rates (i.e. they go up) which makes paying off the debt a problem.
I can also make the worst case for not spending which is roughly as bad.
RE: Military spending
721 Billion (google).
So it’s behind social spending and transfers by a lot. 16% on the pie chart vs 28% in health and 25% for Social Security.
RE: pandemic preparation and mitigation.
Sounds like a “health” thing to me.
What I’d like to see is serious market reforms in HC, we’re spending a lot and not getting much.Report
That’s gonna require congressional intervention as the markets aren’t correcting them selves. Given that Obama signed a market based insurance “reform” chock full of Republican ideas that Republicans had voted against and are still trying to tank I’m not hopeful.
Sounds like most of the initial tranches of stimulus. Of the $2.2 Trillion now in play, roughly $250 billion goes to actual taxpaying citizens. There is the claim that more does because of the Paycheck Protection Program, but even that has ended up supporting large and politically influential businesses because it generated more fees for banks.
This is a direct result of 4 decades of tax cuts, which have flattened the tax curve, couple with 4 decades of increased spending, and 15 or so years of war not paid for with additional taxation (which underpinned our response to WW2). Much though I know many here don’t want to hear it trickle down didn’t, and its a major driver for where we are.Report
We didn’t even attempt HC reform last time, it was purely insurance reform. The big problem is we don’t have markets in HC. We don’t have published prices or even just “prices”. Walmart doesn’t change the prices they charge depending on how much you can pay and it’s deals with other parties involving you.
Make the HC industry publish their prices and honor those prices to all comers and we’re basically done, and agreed that it would require congress.
Exactly. We’re expecting the same process to produce different results… why?
There are too many unspoken assumptions there. Where do you think we are?Report
I think we are in a massively unequal economy where the people producing the most actual economic value are woefully undercompensated for their labor, where the top 1% have grown rich by hoovering up tax breaks and other government revenue give aways while insisting that those below them not only receive starvation wages, but no longer need any sort of societal safety net – which the 1% won’t pay for any way since they pay so little taxes to begin with.
I think we live in a country where, in the name of keeping political and economic power, rich white men stoke racist and misogynistic fears in those below them economically so as to distract us from their pillaging of the economy. And they have elected in Donald Trump and Mitch McConnell two men who are perfectly happy to burn it all down and end the “great experiment” in democracy at precisely the moment we might have emerged onto the world stage as a truly pluralistic society.Report
the people producing the most actual economic value are woefully undercompensated for their labor
Who are these people, and why do you believe this? Ideally your answer should contain some indication that you have any familiarity at all with the relevant economic concepts.
where the top 1% have grown rich by hoovering up tax breaks and other government revenue give aways
What do you mean by “tax break?” Reductions in marginal rates? The top 1% pay the highest marginal rates. Deductions and credits? Most of these phase out at high incomes, or are capped in a way that makes them much more relevant to the lower and middle classes. It’s also unclear whether you understand the distinction between the government giving a person money, and the government taking less of that person’s money away.
while insisting that those below them not only receive starvation wages, but no longer need any sort of societal safety net
Virtually nobody starves to death in the US, the rare exceptions being due to severe mental health or substance abuse problems, or to child or elder abuse; the common factor being that starvation victims are isolated in ways that prevent them from getting access to the help that’s available. No working people starve to death because their wages are too low; in fact, the primary nutritional problem with poor Americans is obesity, not starvation.
Furthermore, inflation-adjusted median household income was at an all-time high last year, despite a secular fall in the number of workers per household due to younger generations getting married later.
As I pointed out in another thread a week or so ago, means-tested spending is way up over the past 40 years, outpacing not only population and inflation growth, but also GDP growth. I’m not sure that support for cutting or slowing the growth of means-tested spending is coming disproportionately from the top 1% of income earners; certainly support for this is widespread enough that they can’t possibly account for more than a small percentage.
which the 1% won’t pay for any way since they pay so little taxes to begin with.
I’m not sure that this is the most ignorant thing you said in the paragraph above, but it’s the easiest to disprove: Here’s a report from the center-left Brookings Institute showing that a) the top 1% of income earners pay the highest effective federal tax rates by far, and b) since 1979, tax rates have declined much more dramatically for the lower income quintiles than for the top quintile or for the top 1%. Note also that in absolute dollar terms, the top 1% are paying orders of magnitude more in taxes per capita than the lower quintiles.
This is the kind of thing I was talking about when I said that you clearly have no understanding of even the basics of these issues. You confidently stated as fact a claim that anyone with any understanding of the US tax system would immediately recognize as obviously false. This isn’t even a question of understanding economic theory; it’s a basic fact that can be looked up in under a minute.
Please don’t do this. Don’t assert that something something is true when you haven’t actually verified it with a reliable source. It’s information pollution, and it’s disrespectful to other people who have to clean up your mess.Report
I know you very badly want to dive into the weeds of battling Wikipedia statistics, but lets just consider your basic logic here.
Your basic argument is roughly that the rich pay a lot in taxes, that they aren’t making out like bandits nowadays at all.
But then this raises a question: So all these rounds of tax cuts which have been made through the years- the Reagan tax cuts, the Bush tax cuts, the Trump tax cuts- they were all for naught?
Like, if we were to revoke all of them, and return tax policy to where it was in 1979, no one would object and claim that this was a draconian tax hike?
Because after all, they wouldn’t be paying more than they are now, right?
Or maybe this isn’t what you meant?
Maybe what you meant was that the rich pay a lot now, but still a lot less than they would in previous eras.
Which seems more believable.Report
He’s pointing out that the tax code has gotten increasingly more progressive over the decades if you’re measuring taxes actually paid. Return the code to 1979 and you’re going to be increasing the amount of money raised from the poor a LOT, while the rich hide their money in tax shelters.
What you’re pointing to are the theoretical rates which no one actually paid, not the tax codes actual ability to raise money.Report
So, once again:
Your argument is that if we were to revoke the Trump tax cuts, Bush tax cuts, and Reagan tax cuts, and restore the tax code to 1979 levels, rich people would be fine with that?Report
the tax code has NOT gotten increasingly more progressive if you are measuring taxes actually paid, even taking into account state and local taxes.
https://www.nytimes.com/interactive/2019/10/06/opinion/income-tax-rate-wealthy.htmlReport
You are comparing a theoretical max tax rate in yesteryear to the actual overall rate paid now.
This is invalid on the face of it.
…between 1950 and 1959, the top 1 percent of taxpayers paid an average of 42.0 percent of their income in federal, state, and local taxes.
Notice that if they’re actually paying 42% to all three combined then the amount paid to the Feds needs to be a lot less than that.
https://taxfoundation.org/taxes-on-the-rich-1950s-not-high/
Oh, and the “progressive” part is (since you’re focusing on fed taxes) that the bottom X% effectively pays no taxes to the Feds, and that X% has gone up a lot.Report
The thing to keep in mind when we evaluate tax rates and their effects is people change their actions. The rich aren’t mushrooms, you tell them the rules and then they’ll tell you their actions.
https://www.cato.org/publications/congressional-testimony/increasing-progressivity-us-taxes-shrinking-tax-base
The reduction of average tax rates among the top 1 percent (to 19% in 1997 from 21.8% in 1979) does not imply that top taxpayers in 2007 paid less income tax than they would have if they had still been taxed at the 1979 rates of 70% on interest and dividends and 28% on capital gains. On the contrary, the evidence is unambiguous (Reynolds 1999 and Table 2) that raising the tax rate on capital gains reduces asset sales and therefore shrinks the amount of capital gains to be taxed…
Raising the tax rate on interest and dividends likewise reduces that amount of taxable interest and dividend income. Raising the tax on high salaries reduces the incentive to be paid in cash, rather than in deferred compensation and perks. Raising the tax on individual income far above the tax on corporate income encourages professionals and small firms to shelter retained earnings in C‐Corporations. For such reasons the punitive tax rates of 1979 resulted in fewer high incomes to tax, so that individual income tax revenues were, in fact, no higher in 1979 than they were after top tax rates had been cut in half, even though average tax rates have also fallen sharply on the bottom 80 percent.
To summarize, average individual income tax rates fell most dramatically for the bottom 80 percent of taxpayers from 1979 to 2007, with the bottom 40 percent now receiving more in refundable tax credits than is paid in taxes.Report
Yes, and “household income” is something that should be adjusted for social changes, so it understates how good things are.
Many more women have the resources to flee dysfunctional marriages, so we have more divorces. Thus there are more households per person than in the old days.Report
So these articles we read bout the “economic anxiety of the white working class”, these are just bunk?
No truth to them at all?
The white working class who voted for Trump are leading happier more prosperous lives than ever before?Report
If we measure things in terms of math, things have gotten better. Having said that…
1) Personal experience may vary. If your wife has the ability to divorce you and has, maybe you long for the days when she wouldn’t have the resources to leave.
2) If you expected that working on the assembly line would make you one of the movers and shakers in the economic world, while your life may be better in absolute terms, other people have done even better so you’re worse in relative terms.
3) The media only presents bad news in order to sell clicks. If we had one newspaper every 10 years then it’d be filled with GREAT positive news in terms of what is happening because the long term trends are great. That’s not the world we have.
For example police shooting people is way down but Ahmaud Arbery is what we’re hearing about.Report
This is why I don’t like to just use statistics alone to reach conclusions, because your statistics seem wildly at odds with observed phenomenon.
According to your numbers and logic, America is much more progressive place than it was 40 years ago, and much more prosperous as well.
So we should be seeing much higher levels of satisfaction, and lower levels of inequality.
We should be seeing evidence of prosperity, such as fewer working hours and more vacations, and earlier retirements as people enjoy their wealth. People would be buying homes at younger ages than their parents.
Yet, we aren’t seeing that at all. People work more hours now, not fewer, take shorter and fewer vacations, and retire much later than before and buy homes later in life.
And most interestingly, we see the language of rage against “elites” in both parties now.
How to explain the variance between your metrics and this observed phenomena?
Again, these phenomena aren’t media concoctions- they aren’t the result of feelings and beliefs, they are real measurable things.
How can you explain any of this?Report
America is much more progressive place than it was 40 years ago, and much more prosperous as well.
So we should be seeing much higher levels of satisfaction, and lower levels of inequality.
I’m not sure at the causal chain of how becoming more progressive results in higher satisfaction.
Nor how additional prosperity would result in lower levels of inequality.
I could easily see the argument that becoming more progressive will result in lower levels of satisfaction and greater prosperity will result in higher inequality.
And I could use evidence of “this is what happened the last X times it was done” to bolster my case.Report
Great, but you aren’t arguing with anything Dark or I said.
Dark and Brandon are saying that the lower income households are paying less in taxes and earning more money than ever before.
So my causal chain is that if we are earning more and paying less in tax, we should be happier. And that happiness should manifest itself in observable ways.Report
If the police are shooting fewer people then BLM should be observably happier.Report
Well, when you said “If (P + Q) then (R + S)” where:
P is “America is much more progressive place than it was 40 years ago”
Q is “(America is) much more prosperous (than it was 40 years ago”
R is “we should be seeing much higher levels of satisfaction”
S is “(we should be seeing) lower levels of inequality”
I am disagreeing that (R + S) follows from (P + Q).
Indeed, you say “If (P + Q) then (R + S)” and I am saying “It is not the case that ‘If (P + Q) then (R + S)'”.
So, yes. I am disagreeing with you.
“So my causal chain is that if we are earning more and paying less in tax, we should be happier.”
And I disagree with the truth of your statement here as well.
As for whether happiness should manifest itself in observable ways… I guess maybe?
Here are stats on suicide rates since 1950.
Using this measure, we were happiest in the year 2000.
If you have better measures that you’d like to use to measure happiness (as it could easily be argued that the emotional states measured by suicide rates are negative and shouldn’t be used as a measure of happiness), I’d love to see what observable measuring stick you’d suggest for happiness measurement.Report
So you are saying we earn more and pay less in tax than before?
And you are also saying we are happier than before?
I’m just trying to get a baseline of your assertions here.Report
I am saying that the proposition that:
“if we are earning more and paying less in tax, we should be happier”
Is False.Report
Why?Report
Because the correlation of happiness to earning/taxation is small. I will grant that earning X and then, later on, earning X+Y is likely to increase happiness somewhat, but X+Y very quickly becomes a new normal and, eventually, a new X.
And if X+Y doesn’t outpace inflation, X+Y may not translate to increased purchasing power despite X+Y being a numerically larger number than X.Report
That. Most people are pretty bad at saving and managing money, “if I have it I spend it” is pretty common. “Spending tomorrow’s dollar today” is also pretty common.
One of my co-workers talked about his brother and his brother’s wife. They live paycheck to paycheck. Kids need braces. Serious money problems left right and center. Took a loan to pay off the credit cards and used it for something else.
My first thought was they lived in some trailer and didn’t have jobs. He’s a high level specialist doctor and she’s a high level specialist nurse.
The issue is less “increased purchasing power” and more “inflation was a way to fool people into spending less than they spend”.
Inflation is effectively zero, which means if you want to spend up to your income, you know what your income is.Report
Couldn’t I use this argument against virtually any proposed policy change?
Why cut taxes? It won’t make anyone happier.
Why bring back manufacturing? Why produce jobs? etc.Report
So because policy X doesn’t increase happiness, no policies will increase happiness?Report
Well, at least we know that cutting taxes won’t, and increasing incomes won’t.Report
Yes. Facts are stubborn things.
I don’t see how this follows. I especially don’t see why lower levels of inequality would come from more prosperity.
“inequality” is measured before gov transfers and not afterwards. Success is potentially infinite, failure goes to zero.
“Prosperity” does not mean “lazier”.
My parents got married and had kids a fair bit younger than I did. I didn’t buy a house until my wife was pregnant. I don’t see why those are bad things in general.
Now we do have issues in large cities with the locals preventing the creation of housing, but that’s a pretty narrow issue and also a local one.
ISIS is pretty much dead. The Communists are pretty much gone or a joke. We’re out of real enemies to rally against.
As for fake enemies, we’re now welcoming the gays and bad-mouthing the jews/blacks/polish is out of fashion. What minority would you suggest replace “elites”?Report
So your explanation for human behavior is to suggest that people took longer vacations, worked fewer hours in previous eras…because they were lazier?
And again, you’re suggesting the rage against elites is some sort of mass delusion?
How do these two statements even make sense on their own terms?
You’re saying that modern people work harder and longer and buy homes later in life out of a greater industriousness, yet somehow feel an unjustified rage and envy against elites?Report
I’m saying your predicted outcomes don’t make sense.
How old you are when you purchase a house is only partly going to influenced by money, and we’re getting married later.
Inequality is expected to rise with prosperity.
Rage against the elites is the modern equiv of rage against the jews/blacks/whoever and it’s never made any sense (if we exclude the whole ‘throw the rascals out’ issue).
Vacations are only slightly related to income. I like my job. Every year I earn more vacation time than I want or can use. Giving me an extra week of vacation is worthless unless I can sell it (I already sell one week every year).Report
There is no reason inequality should rise with prosperity. If a rising tide lifts all boats then we shouldn’t necessarily see more inequality. Rising prosperity can lead to multiple outcomes, only one of which is rising inequality, if the rules are written to favor that.Report
I can’t think of any situation which would benefit all industries evenly. Companies and even industries tend to be in specific states rather than evenly spread out among all 50. Trade tends to benefit trade hubs, typically coasts or boarders.
Much worse, productivity of labor tends to rise unevenly across industries and that trend doesn’t look like it’s going away.Report
Just because some industries do better then others shouldn’t lead to growing inequality. The industries that do poorly will wither and the workers will move towards industries doing well. Maybe some areas do worse ,since regions can’t move. But the regions that do well should draw workers in who will do well. None of that leads to increasing inequality.
It’s the way the pie is cut that leads to inequality.Report
Thus journalism majors should learn to code.
I know of no economic theory backing this so I assume it’s rhetoric.
If memory serves the way to increase worker pay is to increase worker productivity, which is harder in some industries than in others.Report
You are not making any argument for why inequality should rise with rising prosperity. It can but it does not have to.Report
If the argument is that increased prosperity will be more likely evenly distributed than not, I’d say that putting the burden of proof on the person arguing against that is not particularly fair.
It seems to me a lot more likely that increased prosperity will be unevenly distributed than not.
And if the increased prosperity is something like “poor people are 6% better off, rich people are 3% better off”, it will still be possible to spin this as “RICH PEOPLE MADE $80,000 MORE AND POOR PEOPLE ONLY MADE $2,000 MORE!” and use those numbers as evidence of inequality begetting more inequality even as, by another measure, poor people were better off by twice the amount of the rich.
Just the sheer number of different ways of looking at things can result in seeing increased inequality. (And, therefore, it will.)Report
The problem isn’t necessarily the ceiling it’s the floor relative to the ceiling.Report
Inequality is measured before gov transfers, not after.
The floor is thus zero. Worse, the bottom of that is dealing with addiction and/or mental health issues that lead to bad choices and we don’t know what to do about it.
We could put a cap on how successful someone can be, but that seems like a bad idea.
This has happened to me, multiple times. Life sucks sometimes. I don’t see a good way to change that.Report
Regional inequality pretty much has to. More broadly, yes, it’s certainly possible to have more prosperity along with less inequality. We saw that after WW2.
However we haven’t seen that recently, and we don’t expect to.Report
Wasn’t the period after WWII called the Great Compression, because inequality did NOT rise while prosperity did?Report
Unfortunately it looks like post-WW2 was the exception. One that we may not be able to repeat without murdering entire generations of young people in other countries and destroying their infrastructure.Report
Had Khrushchev made this his argument against Nixon in the Kitchen Debate, Communism would have won the Cold War.Report
Nixon: “Look at all the prosperity Western Capitalism provides!”
Krushchev: “Bah! Had not been for Great War destroying competitors America would not have such prosperity!”
Nixon: “Damn. The man’s right.”
Krushchev: “Also, look how much better Soviet people are compared to 1918! By every metric, average Communist worker earns more, lives longer and healthier than ever before!”
Nixon: “Your ideas intrigue me comrade. Do you have a newsletter?”Report
If we ignore the people who died by execution (800k), Gulaug (1.7 million), forced resettlement (400k), deportations (400k), famine (6 million in 1932-3 by itself).
Of course that hits the radar as a serious underestimate, there are serious estimates claiming the total from all this was more like 20 million between 1918 and the 50’s.
We also have to ignore them cooking the books (i.e. those numbers weren’t good until after “openness”). The communists ran around destroying any form of capital (i.e. wealth) and lying about the results. I wouldn’t at all shocked if “by every metric earns more, lives longer and healthier” was simply another lie.Report
There are a handful of reasons that inequality will, necessarily, rise with increased prosperity.
I wrote about this all the way back in 2012. (We were so young!)Report
I’ll leave it to the gentle reader to determine if this explanation corresponds to their own lived experience.Report
Dude this is crazy. The rage is coming from the fact that you’ve got small numbers of people with so much money they’re economically (and to a lesser degree legally) invincible while lots of other people don’t have enough to cover a small emergency.
It’s compounded by the fact that our support systems are increasingly outdated/dysfunctional and the indebted middle class is never going to become the former and can easily see itself becoming the latter.Report
This country is much better off for the existence of Gates, Jobs, Bezos, and so forth. They’ve created many tens of thousands of jobs and many millions of dollars. We would be much poorer if we insisted those jobs be created in other countries instead.
Having said that, I’m not sure those guys are the source of all of this. Inequality of income is mostly a reflection that the productivity of labor for the educated class has gone up a lot.
Not sure what you mean here.
If memory serves the last time I looked into the vanishing middle class I learned most of them were moving up, not down.Report
This country is much better off for the existence of Gates, Jobs, Bezos, and so forth.
Massive goal post shift. I’m glad they’re here and don’t care that they’re rich. At least they’ve legitimately contributed something. The problem is a structure allowing the bottom to be where it is relative to the peak where people like them stand.
Not sure what you mean here.
Lose your job some time despite doing everything right. During a down turn caused by the trash that populates Wall Street if at all possible. Watch the govt help them and their corporate cronies and leave you to your boot straps. See how it goes, see how it feels.
If memory serves the last time I looked into the vanishing middle class I learned most of them were moving up, not down.
Maybe by some metrics you can make an argument like that. None of it matters if you can lose it all at any time due to the vagaries of the casino- sorry, I mean ‘markets’ run by the masters of the universe and set up for their benefit by the government. Then find yourself back with those boot straps.Report
Everyone always cites Bezos, Gates, and Jobs… but the vast majority of the .1% aren’t founders of companies nor creators of important new things.
The founders of my company were forced out 16 years ago. Since then we’ve been run by Tech insiders and most recently a McKinsey consultant who left for an even bigger company only to be succeeded by a McKinsey consultant he brought on.
These people are not creators…Report
Even if we did focus on the Bezos’s, Jobs’s, and Gates’s of the world…”they” really don’t create much.
Saying that Steve Jobs “created” the IPhone ts a bit like saying that Dwight Eisenhower defeated the Nazi army.
The leadership role is no doubt critical to success, but so is the overall organization, and the overall society which creates the climate in which it can be sustained.
There are a million brilliant individuals everywhere in the world, but most of them live in societies which can’t make use of their skills, or force them to spend their brilliance merely to survive.
It was the American postwar prosperity which created the conditions in which Gates and Jobs could loaf about, quit college, and tinker in their parent’s garage, secure in the knowledge they were being supported by others.
And it was the American university system that created the vast pool of talented tech employees who did the actual work of building the Mac or Windows or whatever.Report
And that very eloquent statement is the simple difference between me and the Democratic party.
The Democratic party sees the wealth and wants to negotiate with the wealthy for a portion of the wealth so it can repurpose it to better ends.
I just think that an appropriate portion of the company’s equity should be fractionally distributed to everyone who has or will work at that company.
Let the people who worked at Apple spend it as poorly as they wish. Let Apple keep its competitive edge by manufacturing the best products at the best prices and broadly distribute the gains in equity growth.
Wages are so 20th century.Report
Agree that there’s a real difference. The CEO of my company is the founder and is also a creator, along with other creators he has brought in with him. Skilled immigrant with a dream. I begrudge him and people like him nothing (not that he’s a .1 or even 1%er, but definitely quite wealthy at this point).
I get that people need to get capital from somewhere to make the good stuff happen. But it’s a means to an end not an end in itself. It’s ridiculous that we treat it otherwise and even more ridiculous how many people have become convinced there’s some virtue to it or natural law that makes it the obviously superior way to run an economy.Report
The vast majority of people who have a lot of money made it themselves, according to a new report released Wednesday from Wealth-X.
The market research firm analyzed the state of the world’s ultra-wealthy population — or those with a net worth of $30 million or more. The report, which is based on 2018 data, “showed muted growth” in the number of ultra-wealthy people that year, “rising by 0.8% to 265,490 individuals,” says Wealth-X.
Of those folks, 67.7% were self-made, while 23.7% had a combination of inherited and self-created wealth. Only 8.5% of global high-net-worth individuals were categorized as having completely inherited their wealth.
https://www.cnbc.com/2019/09/26/majority-of-the-worlds-richest-people-are-self-made-says-new-report.htmlReport
Yes? My two McKinsey CEO pals would both be considered “self-created” … they were ordinary middle class folks who followed a career path and are now wealthy off of distributed Equity they didn’t create.
At no point in their careers did they leverage their own capital at risk to create anything.
But yes, self-made men by the definition you’ve quoted… so I don’t think that the statistic you’re presenting defeats or even comes anywhere near rebutting my observations. In fact, I’d suggest it reinforces a weird fetish that “self-made” means what you think it means when it doesn’t mean that at all.Report
If you don’t like my statistics present some of your own.
At the moment you’re just saying my facts don’t change your feelings.Report
I’m not disputing the statistic, I’m pointing out that they don’t mean what you think they mean.
The fact that you don’t understand your facts doesn’t make your mistaken understanding factual.Report
The number of links you’ve provided thus far to support your claims/feelings is zero. But yes, my link is imperfect.Report
No need to disparage your link it’s lovely… I mean, here’s a quotation from it:
““I didn’t inherit my wealth. I created it,” Ford said on PBS News Hour in 2017. “But look a little deeper, and it turns out that version of my success story is a lie. ”
At stake is the difference between always citing Gates/Bezos/Jobs as a shield for what the “real world” is doing. The definition of “Self-made” is precisely in contra-distinction to how it is rhetorically deployed via Gates/Bezos/Jobs.Report
In the real world Scrooge McDuck is a fantasy. The huge piles of gold which he swims in and could be more usefully spent by the government don’t exist.
Ergo when we eat the rich, put a cap on success, or redistribute those piles of gold, we should expect serious real world problems.Report
Thank you, the next time I contemplate the problem of Scrooge McDuck (which will be the first), I’ll bear this “real world” wisdom in mind.Report
Apparently, we’re supposed to applaud capitalists and not give a shit about how business are actually operated because we can’t force those of a certain mindset to take themselves out of their high-minded theory mindset and join the rest of us in the real world.
Right. Thank the Waltons for providing millions of jobs but heaven forbid anyone talk about how business is actually operated and how capital actually calls the shots, especially in public companies.
That would require understanding things those with their heads in the clouds are incapable of understanding.
Annoying.Report
I’ll happily talk about it, especially given the numbers of people working on Walmart who – while employed – qualify for welfare. Now a good many economists like to posit this isn’t a subsidy fro Walmart per se, because those folks would likely get such assistance if they didn’t work (though said economists seem to ignore the work requirements in all states since 1996 to be receiving many benefits under the broad “welfare” umbrella). Its also true that for Walmart its biggest cost is labor – but in retail that stands to reason.
The issue, however, is that maximizing profits for shareholders demands that labor costs be kept to a minimum, and the easiest way to do that is to employ a slew of part time folks who are then ineligible for benefits like health insurance and paid time off. Which is what Walmart does.Report
I.e. keeping costs low to consumers.
Translation: The gov has made full time employment expensive compared to part time employment, so businesses have done what the gov encouraged and cut people’s hours.Report
Thus encouraging us to detach Healthcare from employment altogether, and institute M4A.
If that’s what they want, that’s what they will get.Report
but we can’t do medicare-for-all because something something berniebros mean online so stop asking for pie-in-the-sky never-happen perfect-enemy-of-possible!Report
I don’t know who “they” are. Market forces are impersonal.
However I would very much like to get the gov out of the business of destroying jobs or incentivizing bad behavior.
Linking HC to employment is a bad idea for multiple reasons.
Either our brave politicians fire millions of people, the budget breaks, or we have serious market reforms.Report
It isn’t “firing” the current insurance workers.
Its rightsizing the organization to streamline and gain the synergistic efficiencies of scale. The creative disruption will allow a continuous feedback loop of dynamic information and discovery in realtime.
And beside, they can always learn to code.Report
I’m good with all that.
I just have a hard time believing that Congress has the ability to destroy millions of well paid jobs to the tune of multiple point of GDP.
I can picture the market being that ruthless because it’s done that in the past, but Congress’ history and sensitivity to political pain doesn’t suggest it can.
The people I personally know who need to have their jobs destroyed are already coding. Writing database scripts and other code to maximize billing certainly counts.Report
Given that the government is capable of delivering the same sort of healthcare we have while requiring far fewer workers to do it, seems like a massive improvement in efficiency, which will ripple through the economy and provide a tremendous burst of job creation to make use of all those newly free workers.
This is an optimized win-win positive sum engagement, really.Report
Yes… in the long term. The people I know will find other work. HC will be cheaper. More people will be covered.
In the short term, since the political class fired millions of well paid workers, ignored various special interests, and inflicted levels of destruction to the economy which have to be measured in percentage points of the GDP…
…every politician who voted this in will be voted out of office, and whichever party did this will be handing the other side a supermajority and the Presidency.
More realistically to minimize the political pain MFA would be another layer of bureaucracy on top of what we have, no one would be fired, there would be no cost savings, and spending would explode until the budget breaks.Report
Who would vote against this, the people who are enjoying their new shiny free healthcare?
Besides, I’m just digging how you keep insisting that socialized healthcare is so much more efficient than the current model.Report
What percentage of the population is happy with their HC? 85%? So we’re going to take that away and tell them care will be rationed. Their taxes will go up to pay for this. Their employers might give them some of the cost savings they’ll get from not paying for HC.
We’re destroying something like 3% of the GDP This is mind-numbingly painful, it’s roughly great recession 2. Many multi-million to billion companies cease to exist. Millions of people are fired.
And that’s the best case outcome.
The current model is hardly market, pretty much anything we could build from the ground up would be better. In theory socialized HC has intrinsic flaws/problems, but it would be better in many ways from what we have now.
However IMHO the reality would be we’d get the flaws of socialized medicine bolted onto our current situation.Report
You realize I’ve been teasing you this whole time, by spouting all this silly MBA gibberish and buzzwords about “rightsizing” argle bargle?
Many multi-million to billion companies cease to exist. Millions of people are fired.
If millions of people can be laid off, with no corresponding loss of productivity and efficiency, this means they weren’t doing any valuable work to begin with.
This is something you yourself have stated several times here, with respect to food service workers or workers replaced by automation.
But should we really think this, that all this work that those millions of people are doing at Aetna and Blue Cross, it is just Soviet tractor factory work, idle people shuffling papers pointlessly?
Millions of insurance company workers are today just engaged in zero value work that has no need to exist, and can be dismissed while providing the same level of healthcare service?
Really?
Don’t you think its more reasonable to think that if we EXPANDED Medicare to cover a hundred million more people, they might need to EXPAND their workforce, and hire a lot of people with experience in healthcare billing and tracking systems?Report
Yes.
So while we’re firing about 5 million people, we might need to hire 50k to work for Medicare? Sure.
If you’re not planning on shrinking the massive hoards of bureaucracy fighting with each other, why do you think this will be more efficient and where would we get cost savings?Report
Things are bad now but I suspect that things are going to get a lot worse. More unemployment, more businesses (large and small) filing for bankruptcy, huge amounts of commercial property being abandoned as companies go under or decide work from home is better for the bottom line. Banks could fail.Report
We have a few more restaurant-opening incidents in Colorado. By far the most interesting is the woman who has opened the dining room in her restaurant at about 30% capacity. She says that carry-out and delivery alone were not generating enough income for her to afford the $1700/month medication that keeps her out of a wheelchair. The county public health dept has said they will not close her. No word yet from the state authorities.Report