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September 19, 2011

Comments

"economics isn’t something that Obama cares that much about"

The single thing that's going to make or break his presidency, the reason he got elected, and the main if not the only reason he will or will not be re-elected, and he _doesn't care about it_???

And you still contend this man is smart?

"On other economic issues, he’s happy to delegate to his advisers, and it seems to be the only area of his administration in which the advisers are disproportionately heterosexual white men."

Wasn't this true on health care too (we can count Pelosi as a white dude right?) It was a big issue for him but he was hands off and offered essentially no input on the details beside chiding insurance companies. In fact I'd say the defining characteristic of Obama's career is not getting into the details, even the really important details on things he cares about. Granted, that is true of a lot of presidents, but he definitely sold himself as the genius that would get the details right. Instead corporatist largely wrote the details of his big legislative initiatives that were suppose to stop corporatist.

Simply put if its complicated Obama likes other people to do the work, and he doesn't check it.

what ever happened to the idea that freed up labor could move out of dying inefficient industries and into new industries?

Paying people to play WoW is a stupid idea. There is useful work almost anyone can do, even if there isn't a private sector market for it. If the government is going to pay people anyway, it might as well get some useful work out of them.

- Hospital, nursing home, and rehabilitation orderlies. Americans are heavier than ever these days, which means more need for strong orderlies to move them around and help care for them.

- Scraping the disgusting gum stains of city streets.

- Policing garbage in cities in between garbage removal days. There's no reason why a city like New York should smell like ass all summer. Get some special sealed plastic dumpsters for everyone to put their garbage bags in, and pay people to make sure the bags are in and sealed every day.

- Tutoring/teaching. The FT mentioned in a recent article an chemical engineer who's been out of work for two years. Why not pay him to tutor honors chem students, helping them with advanced products & such?

The essence of Obamanomics is government activism/expansionism. If he had carte blanche Obamacare would have had created a massive new bureaucracy.

He's just a black John Kerry in that respect.

Reducing the number of hours in a workweek has been extensively tried in Europe. In the Netherlands there are many companies with a 36 hour workweek. In France they even made it into a law. Didn't do much for the economy or unemployment levels.

How about let people on unemployment benefit to work for the govement to get their benefit?

"It was a big issue for him but he was hands off and offered essentially no input on the details beside chiding insurance companies. In fact I'd say the defining characteristic of Obama's career is not getting into the details, even the really important details on things he cares about."

As long as the bottom line is more scope and power for the federal government, Obama is happy. That's why he's not so obsessive about details.

The US economy is largely a consumer driven economy. From 1950 to 1973 worker productivity and middle class wages (corrected for inflation) both grew at about the same rate, 2-3% per year. From 1973-2000 worked productivity continued to grow at 2-3%, but inflation corrected middle class wages only grew at 1% per year. From 2000 to present, work productivity has continued to improve at 2-3% a year, but middle class wage growth has been essentially 0%.

There is no agreement as to why this has happened, but the income of the very wealthy has been growing far more rapidly than the middle class. It looks like starting in 1973 the improvements in worker productivity have been gradually redirected away from wages to high level management and business owners (shareholders). Much of that improved profitability has been sucked into the financial sector through LBOs and similar schemes.

For a while in the 1990s and 2000s we kept the US economy growing by the middle class increasing their debt load, both home mortgages and credit card debt. That came crashing down with the collapse of the housing bubble in 2008.

We now are facing a decade or more of stagnant economic growth, because the growing middle class and growing middle class incomes that were the engine of economic growth since the 1950s has run of gas. The middle class is shrinking and middle class incomes are stagnant.

The incomes of the very wealthy have done really well over the last 20 to 30 years. Their tax rates have gone steadily down since the 1960s. The top marginal tax rate in 1950 was above 90%. By 1965 it had been lowered to 70%. In 1982 is was lowered to 50%. By 1988 is was 28%. In 1991 it was raised to 31% and in 1993 to 39.6%. In 2003 it was lowered to 35%.

When Clinton raised the top rate in 1993, Republicans predicted it would slow economic growth. Instead the economy boomed between 1993-2000. When Bush lowered the top rate to 35%, Republicans predicted this would boost economic growth in the coming decade. Instead we had a period of weak economic growth followed a large financial collapse.

From these results, I see very little correlation between top tax rates and economic growth. We had strong economic growth in the 1950s when the top tax rate was 90%+. All the prediction that raising or lowering the top tax rates would boost or slow economic growth have completely failed.

It is the very wealthy that have the most disposable income to fund the government. Increasing the top tax rate has little effect on consumption at the current rates. It is the very wealthy that benefit disproportionately from the government and the economic system in this country.

Many great world powers have fallen when the very wealthy refused to continue to fund the government at a level high enough to sustain it as a major power. If the wealthy refuse to fund the government, then the US is doomed to decades of decline.

you should check out foldit. Its a game/website, where people solve puzzles in the thermodynamics of protein folding from their mothers basement. They've already published two nature papers using solutions come up with by people at home. This is a great example of jobs people can do at home to get paid for, while still contributing. slightly more useful than leveling up your character to level 80.

http://fold.it/

Two disagreements:

"The only economy-related issue he feels strongly about is the need to increase taxes on the rich."

Sailer's ebook "Half-Blood Prince" documents well that the sole driving motivation for Obama for decades was redistribution of wealth and power from whites to blacks. Taxing the rich is just one aspect of that.

"paying people to play World of Warcraft"

Looks to me that the USA has three populations: (1) the really rich (often value transferrers), whose women don't work and have nannies and therefore have lots of kids, (2) people who actually create value, and whose women work hard, and therefore are often too busy to have any/many kids, and (3) the underemployed nonproductive, who use their copious leisure time to have too many kids (http://www.youtube.com/watch?v=NzspsovNvII).

(of course, their are also religious outliers - Mormons, Amish, Hassidim - who have lots of kids - but their numbers are small enough to be able to ignore talking about nationwide generalities)

I'd say, the Western world is getting worse because average IQs/levels-of-responsibility are dropping, and average IQs/levels-of-responsibility are dropping because modern society aids dumb/irresponsible women in having children, but not smart/responsible women.

Long way of saying: if the USA has excess capacity, then paying employed college grad women to have fully-supported eighteen month maternity leaves would help society much much more than paying unemployed losers to play WoW.

"(if 10% are unemployed, then reducing the number of hours in the workweek by 10% should create a demand for 10% more jobs, right?)"

Been tried. See France.

France has a short work week... and permanently high levels of unemployment. France squeezes a lot of productivity from those short hours, but low productivity workers simply don't get hired... and keep themselves entertained by burning cars.

Besides race, I think economics is all Obama cares about. All of his major initiatives (Obamacare, the stimulus, his new "jobs bill", tax increases for the rich, the credit card company bill, and on and on) have been economic. He definitely doesn't care about foreign policy (he didn't even know how the word "corps" was pronounced). He also doesn't talk about leftist social causes that much (gun control, abortion, capital punishment)

He lives and breathes socialism. That is his life.

"Tutoring/teaching. The FT mentioned in a recent article an chemical engineer who's been out of work for two years. Why not pay him to tutor honors chem students, helping them with advanced products & such?"

Because the reason this guy is unemployed is that we don't need as many chemical engineers as we have. So why pay him to help create more?

Its a good idea, but the problem with employment has gotten much deeper than you think.

Why not give gamers something useful to do, like this -

"Online gamers have achieved a feat beyond the realm of Second Life or Dungeons and Dragons: they have deciphered the structure of an enzyme of an AIDS-like virus that had thwarted scientists for a decade. ... To the astonishment of the scientists, the gamers produced an accurate model of the enzyme in just three weeks."

Picking up trash, cleaning gum off sidewalks, removing grafitti, staffing nursing homes -- there's an almost endless need for people to do these things.

"what ever happened to the idea that freed up labor could move out of dying inefficient industries and into new industries?"

The destruction of labor market scarcity happened.

"He lives and breathes socialism. That is his life."

What hogwash. One thing Obama is certainly not is a "socialist". I don't think Obama even knows what socialism means. A socialist is first and foremost a supporter of working class interests, Obama doesn't understand or care about working class people. His instincts are the typical elitist paternalism that American liberals have supported since the 1960s.

The effective tax rate for businesses is far lower than the actual tax rate. Any corporation that is paying the actual tax rate needs better accountants. For example, BP counted its oil spill as a loss and therefore gained more taxes than they spent in practice, and the stock holders and its top executives made record bonuses off their own failure. Obama may want to raise taxes on those making $250,000 per year, but those who own businesses need to consider LLCs, as business funds and personal funds are effectively kept separate. As a result of the astronomically low effective tax rate America's revenue from corporate taxes is far less than the "actual" tax rate of 40%.

http://www.huffingtonpost.com/2011/03/02/corporate-tax-revenues-ne_n_830361.html

http://www.cbpp.org/cms/index.cfm?fa=view&id=3411

I disagree that Republicans are also Keynesians. That was true a few years ago, but there's a new generation now who grew up believing the propaganda about how government is always the problem, spending is always bad, taxation is always bad, etc. The very idea of stimulus is extremely unpopular with Republican voters and with the new crop of politicians. Sure, they'll go for stimulative tax cuts, but only because they're tax cuts -- nothing to do with the stimulus part.

As I wrote in the previous post, it was a major point of his campaign, and it didn’t dissuade rich people from voting for him,

The rich didn't vote for Obama. Prole/Trailer park whites did, giving him a plurality of 47% over McCain among low earning whites.

"The rich didn't vote for Obama. Prole/Trailer park whites did,"

Only in states like PA, Michigan, Indiana and Ohio.

Working-class whites down South did NOT vote for Obama.

Virginia and NC went to Obama due to the large number of relocated white northerners that have migrated there.

Mikeca, the top tax rate in the fifties was ninety percent but a smaller percentage of the population paid the top tax rate than pay the top tax rate now. You need to look at total taxes collected and government spending as a percentage of gdp and both have increased since the fifities. That's why economic growth has slowed so much since then. I agree with you that there's more income equality now but it may not be the result of the operations of the free market. For example, if Wall Street bankers make a lot of short term profits and give themselves big bonuses maybe we shouldn't bail them out later on if what they were doing wasn't so smart in the long run. Let them suffer a big drop in income or lose their jobs completely if what they do is stupid in the long term.

[HS: The corporate tax rate was a lot lower, so people would keep their income in corporations, and there were a lot of loopholes involving accelerated depreciation that people would take advantage of, so only people too cheap to hire good tax advice paid 90%.

I should make it clear that I disagree with a tax system in which people who have good tax lawyers pay less tax.]

Re: your WoW suggestion, I predict that USG will, in fact, start paying people to play video games rather soon. But I think it will be games like foldit, that have either real or pseudo scientific value. It's a lot easier to justify paying people to do "scientific research" that happens to be in the form of playing videogames than to pay them to do something purely and transparently recreational. Also, it will avoid "self-esteem" problems for the participants. "I'm not doing useless makework; I'm a scientist!"

"One thing Obama is certainly not is a "socialist". I don't think Obama even knows what socialism means. A socialist is first and foremost a supporter of working class interests, Obama doesn't understand or care about working class people."

Let's disregard the fact that Obama, like all American Leftists, *thinks* he understands and cares about working people.

Socialism, in America and everywhere else, is the transfer of wealth from the politically unconnected to the politically connected with the government as arbiter and enforcer. That is EXACTLY what Obama is all about - he, as the vanguard of the proletariat, wants to decide what is in the best interests of the proletariat and wants to decide what the proletariat will receive. In short, yes he is a socialist.

"Socialism, in America and everywhere else, is the transfer of wealth from the politically unconnected to the politically connected with the government as arbiter and enforcer."

By your definition the Republicans are socialists. The easiest mechanism to transfer of wealth in the manner you describe is inflation, and slow inflation is precisely the policy both US parties have pursued for the last 40 years. Obama isn't giving the proletariat anything at all, he's trying to perserve the wealth of Wall Street liberals and the liberal professional class. That's his real constituency, not white working class or even Black proles.

"By your definition the Republicans are socialists."

Correct.

"Obama isn't giving the proletariat anything at all, he's trying to perserve the wealth of Wall Street liberals and the liberal professional class."

Socialism isn't about helping the proleteriat. Its about helping the polically connected steal from the unconnected. In practice that means politically connected elites stealing from the bottom 99% and throwing in some welfare to buy support from the underclass.

"By your definition the Republicans are socialists. The easiest mechanism to transfer of wealth in the manner you describe is inflation,"

No, because inflation affects everybody, it does not allow the government to *choose* precisely who should be rewarded and who should be punished.

"Obama isn't giving the proletariat anything at all,"

Still you are obsessed with the canard that "socialism" has anything to do with helping the proles. Socialism, as actually practiced anywhere on Earth, has never done anything of the sort.

"he's trying to perserve the wealth of Wall Street liberals and the liberal professional class. That's his real constituency, not white working class or even Black proles."

The Soviet version of "socialism" did exactly the same thing - it preserved the wealth and privileges of the politically connected nomenklatura, who were the real constituency of the CPSU, and did little or nothing for the unconnected proles.

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