Morality of Wealth Redistribution

[bendog]

What do you mean by corporatism here? (everyone seems to define it differently).

For the sake of our discussion, I've tried to use a notion that corporatism occurs when a govt tries to benefit one group more/or less than another, or confers a benefit to only one group while using resources of others.

Good. I just wanted to make sure we were on the same page.

So, are you saying this isn't an example of corporatism? Or that it is corporatism but you don't think that's a valid objection?

I don't see it as corporatism to use tax dollars from capital to create or maintain a healthy educated workforce. 1) the workforce benefits capital as well as labor, by both working to achieve profit for capital and buying capital's goods. 2) And, MORE Importantly to just the corporatism view, the healthcare and education are equally available to those whose income is solely from capital and not labor.

I don't see any issue of corporatism in the tax being levied from those professions who get more customers from more people getting healthcare, or any progressive taxes, and certainly not from taxing retained corp profits, passive income and cap gains at the same rate as income.

 

[Dad2three]

Here's the thing. I don't care what you believe. It's no skin off my nose. I know the difference between income and wealth. You don't. You think that the varying, naturally occurring increases in wealth among the respective owners of the factors of production is . . . what? . . . evil? That's nuts. You think the market is a zero-sum-gain proposition, that wealth is a finite commodity. That's nuts. Hence, you're little pictures are not telling you what you think they are, and that's okay with me.

Carry on. . . .

Yes, keep believing in your myths and fairy tales lol

There is only so much corporate income in a given year. The more of that income that is used to pay workers, the less profit the corporation makes. The less profit, the less the stock goes up. The less the stock goes up, the less the CEO and the investors make. It’s as simple as that.


Wealth is a Zero-Sum Game

The Zero-sum Nature of economics

Yes, of course, zero-sum game. Brain fart. I am aware the phrase's origin. That's what happens sometimes when you get past 50.

Moving on. . . .

Now for the sake of some, like Dante, who fancies himself to be a master logician and gave your post, that rash of argumentum ad nauseam, a thumbs up.

Of course the total income of any given year is finite, which is all you're really saying. Do tell. Who said it wasn't?

Answer: no one, Mr. Straw Man. Stay away from open flames.

The sum of any given fixed term is finite, for crying out loud!

I'm talking about the growth of wealth, especially, the increase in wealth and economic mobility of those emerging from the lower rungs of the economic ladder, which you keep implying to be the finite commodity of annual income. Apples and Oranges. For example, you're using the terms annual income and wealth interchangeably, jumping from one to the other. Your link has nothing to do with the creation and accumulation of new wealth. Pay attention. Wealth is not a finite commodity; hence, the market is not a zero-sum-game proposition.

Rates of taxation above a certain threshold, along with increased regulation and wealth-redistribution schemes like ObamaCare, stunt economic growth due to their negative impact on the factors of production. They impede the investment and productivity of wealth creation from the bottom up.

You're going on about some generic model of marginal rates of taxation relative to historical growth in GDP. I'm well-aware of the recent rash of duplicity proffered by the shills of crony capitalism that would keep the working poor and the middleclass dependent on a corporatist economic structure sponsored by Big Daddy government. And a good many of the nominally conservative politicians in Washington are feeding the same animal.



Hello! Yours is not the whole story. Got the informal logical fallacy of incomplete comparison, anyone?

Your propaganda, all your blather and that at the end of your Internet link, is nothing more than the rank stupidity of surplus value defined as the unpaid surplus labor of the working class: classic Marxist doggerel which confounds the finite sum of material resources/the finite sum of any given period of income with wealth. The latter is not a finite commodity, but the limitless accumulation of production capital ultimately bottomed on the emergence of new enterprises.

For instance, the Congressional Research Service (CRS) has found support for the theory that taxes have no effect on economic growth by looking at the U.S. experience since World War II and the dramatic variation in the statutory top marginal rate on individual income.[1] They find the fastest economic growth occurred in the 1950s when the top rate was more than ninety percent.[2] However, their study ignores the most basic problems with this sort of statistical analysis, including: the variation in the tax base to which the individual income tax applies; the variation in other taxes, particularly the corporate tax; the short-term versus long-term effects of tax policy; and reverse causality, whereby economic growth affects tax rates. These problems are all well known in the academic literature and have been dealt with in various ways, making the CRS study unpublishable in any peer-reviewed academic journal.[3]

So what does the academic literature say about the empirical relationship between taxes and economic growth? While there are a variety of methods and data sources, the results consistently point to significant negative effects of taxes on economic growth even after controlling for various other factors such as government spending, business cycle conditions, and monetary policy. In this review of the literature, I find twenty-six such studies going back to 1983, and all but three of those studies, and every study in the last fifteen years, find a negative effect of taxes on growth. Of those studies that distinguish between types of taxes, corporate income taxes are found to be most harmful, followed by personal income taxes, consumption taxes and property taxes.

What Is the Evidence on Taxes and Growth? | Tax Foundation

And once again:

In Theories of Surplus Value Marx conceded that the middleclass was actually growing under capitalism, not disappearing as he had previously held in The Communist Manifesto and Das Kapital, and more honest Marxist theorists have since conceded that the working class is not a culturally homogeneous, but a culturally heterogeneous component of production comprised of competing interests, and one that has become increasingly economically mobile under capitalism from generation to generation. Strike (1) those fallacious critiques of capitalism, the guts of dialectic materialism, insofar as they pertain to the allegedly historical antagonism between the oppressed proletariat and the exploitative bourgeoisie, (2) the abject stupidity of "from each according to his ability to each according to his need" and (3) the conceptualization of surplus value as an injustice or a problem to be solved, if not by bargaining than by compulsory wealth redistribution: what more must the world endure at the hands of this debacle before we toss it into the ash heap of history and move on?

Marxists disregard the rise in wages over time under capitalism as industries reinvest surplus value and grow. They gloss over the destructive results of over-bargaining industries into stagnation and bankruptcy.

Take a close look at Detroit.

Marx moralistically imagined surplus value to be the unpaid surplus labor of the working class. But surplus value is in fact the stuff of reinvestment and growth, the startup costs of producing new products and services, future wage increases, more jobs of varying expertise and levels of compensation despite increased automation, improved living standards, strategic surpluses, which are essentially production costs, as they must be maintained and replaced. The latter are not distributable profit. And don't forget about the public infrastructure and the all those public services, for good or bad. Don't forget about all that governmentally funded research, the scientific, medical and technological advances thereof. Don't forget about the exploration of space and the oceans, and the scientific, medical and technological advances thereof. All these things in addition to the strictly business concerns of the private sector were paid for by capitalist systems . . . way beyond what any communist system could ever dream of. . . .

That's the complex reality and the magic of capitalism, but in the stagnant, make believe world of Marxism, that zero-sum-game fantasy, surplus value is merely the accumulation and centralization of transferable capital and power. Hence, the supposed fatal flaw or irresolvable contradiction of capitalism, namely, the falling profits-unemployment crisis of over-accumulation.

. . . In recent history, this supposed Achilles' heel of capitalism is in fact the wrecking ball of economic collectivism: the punitive taxation, regulation or nationalization of the means of production. Businesses that don't continuously innovate and grow, stagnant, shrink and die. Businesses besieged by overbearing governments go elsewhere and take their jobs with them . . . or die.

Privately owned surplus value is the economic lifeblood of the developed world. It's not a horded and withheld commodity. It's not a limited commodity either. . . .

"Wait a minute! Stop right there, Mister! Material resources are finite," the unimaginative rube of the zero-sum-game mentality hysterically exclaims.

. . . Human ingenuity—the essence of technological innovation, ever-increasing efficiency—is not finite! Privately owned surplus value is readily attainable for all the world, but for the meddling of corrupt and oppressive regimes. It is this factor that alludes the Marxist . . . or does he simply turn a blind eye on the obvious resolution of the supposed contradiction of capitalism? Pretend not to see it?

I'm not kidding. In every rendition of the supposed problem of over-accumulated capital I've ever read, the Marxist author invariably claims that this critique has never been satisfactorily answered by free-market theorists. The factor of human ingenuity and its effects on production capital have been understood for at least two centuries. Marxism is sheer political ideology posing as an economic science propagated by rank sociopaths. If this supposed flaw of capitalism were real, capitalism would have universally collapsed long before now. In the meantime, the only economic paradigm that has collapsed every time it's been tried is communism precisely because it stifles the very factor its theorists obtusely disregard: human incentive and ingenuity. --M.D. Rawlilngs

"FDR tried for 8 years to buy our way out of the great depression by hiring people for the CCW and the WPA for minimum wages and giving to the poor. None of it worked. It took a war time mobilization, huge sums of money spent to buy war machinery, which got us out of the depression."

NONSENSE, It worked UNTIL FDR listened to the deficit scolds in 1937 and cut spending 10%, took US back to thje conservatives dfepression

YES, CONSERVATIVE POLICIES, WHEN FOLLOWED, LEAD TO DEEP AND WIDE DEPRESSIONS/RECESSIONS!!!

 

[Dad2three]

Nope. They provide jobs and inexpensive consumer goods. Walmart enables millions of people to live better than they could otherwise. On the other hand, our socialist education system makes our population stupid, and does it at great cost.

And pay wages low enough to suck BILLIONS of fthe Gov't in WELFARE to survive, that's Walmart entire Biz model

right!! we could end all poverty on earth by just requiring corporations to hire enough and pay enough. When a Walmart opens 1000's line up for the jobs because they offer 1000's something better than what they have. Walmart is a savior.

Well Germany seems to be doing ok, and Australia?

 

[dnsmith35]

Define the morality you are referring to, please.

The question seems to circle around whether the mere act of earning "too much" money is immoral - are people who do this somehow harming society and, if so, should government pursue remedial measures (aka "wealth redistribution").

With all respect, I think this illustrates our differences. I would agree with you, and the corporatism 'thing,' if the discussion was about "rich" having too much, and "poor' not enough ... an issue of morality or even civics based on the rights of individual citizens or even groups.

But, I think morality and even "class warfare" may not be an issue. The issue could also be that consumers are having less real dsposable income to spend, and thereby create less econ demand, because as a result of de-unionization and globalization, the market of capital to labor has been affected in way to make it different than it was in say ..... 1980. So, taxing profit in the form of dividends or retained corp earnings, or capital gains when stock is sold, and using the proceeds for things like healthcare and public higher education, to which all citizens have an equal chance to access.

Much of what you say makes a lot of sense. The most important issue at odds is your comment about unions. New businesses, auto makers and other industrial producers have proved conclusively that Unions serve little to no value in todays market. When unions were at the forefront of wage and benefit as well as safe and comfortable working conditions they did a lot of great work. But in recent years, the government has usurped union activity in the form of OSHA, labor relations et al such that unions have little to do to improve the lot of the worker. There are obvious exceptions....but they are not the rule. Your comment, "So, taxing profit in the form of dividends or retained corp earnings, or capital gains when stock is sold, and using the proceeds for things like healthcare and public higher education, to which all citizens have an equal chance to access" is probably the most useful I have recent times. It shows liberal thinking with out the extremism so common in this thread. Kudos!

 

[Dad2three]

under Obama's horrible policies, 10+ million PRIVATE sector jobs have been created since hitting Bush's bottom March 2010

and yet under Obama unemployment is still 50% higher than it was for decades before the recession? Obama's record is worst since Great Depression.

Nope, you mean the hole Dubya/GOP left US in is worse, AND even though the TPGOP has fought him EVERY step of the way, MORE THAN 10+ MILLION PRIVATE SECTOR JOBS HAVE BEEN CREATED SINCE HITTING DUBYA'S BOTTOM, MARCH 2010

Bureau of Labor Statistics Data


You'd think, after 8 years of Dubya/GOP 'job creator policies, the US economy would've been booming? ANYONE?

 

[dnsmith35]

Yes, of course, zero-sum game. Brain fart. I am aware the phrase's origin. That's what happens sometimes when you get past 50.

Moving on. . . .

Now for the sake of some, like Dante, who fancies himself to be a master logician and gave your post, that rash of argumentum ad nauseam, a thumbs up.

Of course the total income of any given year is finite, which is all you're really saying. Do tell. Who said it wasn't?

Answer: no one, Mr. Straw Man. Stay away from open flames.

The sum of any given fixed term is finite, for crying out loud!

I'm talking about the growth of wealth, especially, the increase in wealth and economic mobility of those emerging from the lower rungs of the economic ladder, which you keep implying to be the finite commodity of annual income. Apples and Oranges. For example, you're using the terms annual income and wealth interchangeably, jumping from one to the other. Your link has nothing to do with the creation and accumulation of new wealth. Pay attention. Wealth is not a finite commodity; hence, the market is not a zero-sum-game proposition.

Rates of taxation above a certain threshold, along with increased regulation and wealth-redistribution schemes like ObamaCare, stunt economic growth due to their negative impact on the factors of production. They impede the investment and productivity of wealth creation from the bottom up.

You're going on about some generic model of marginal rates of taxation relative to historical growth in GDP. I'm well-aware of the recent rash of duplicity proffered by the shills of crony capitalism that would keep the working poor and the middleclass dependent on a corporatist economic structure sponsored by Big Daddy government. And a good many of the nominally conservative politicians in Washington are feeding the same animal.



Hello! Yours is not the whole story. Got the informal logical fallacy of incomplete comparison, anyone?

Your propaganda, all your blather and that at the end of your Internet link, is nothing more than the rank stupidity of surplus value defined as the unpaid surplus labor of the working class: classic Marxist doggerel which confounds the finite sum of material resources/the finite sum of any given period of income with wealth. The latter is not a finite commodity, but the limitless accumulation of production capital ultimately bottomed on the emergence of new enterprises.



And once again:

What the left wing extremists refuse to admit is, wealth is not a zero sum game. Yes, as you stated at any specific point in time there is a specific amount of wealth. But in the very next moment wealth can go up, or down. The point is, over time wealth can be increased by increased production or decreased by reductions of productions. It is asinine to contend that the rich are taking from the less wealthy. Their investments pay off more, and it does not detract from lessor earning people. It is one of the most basic economic principles. Production causes wealth. It is as simple as that.

One other thing that our current left wing extremist will not admit, it is easy to prove that under the proper conditions supply side economics does improve the economy. It is very difficult to prove that demand side economics improves the economy.

If the government choses to engage in Keynesian economics, they would do better concerning themselves only about government spending which directly increased demand across the board. Effectively like following Eisenhower's example and put the $500 billion Obama threw at the poor and spend it on true shovel ready infrastructure projects.

FDR tried for 8 years to buy our way out of the great depression by hiring people for the CCW and the WPA for minimum wages and giving to the poor. None of it worked. It took a war time mobilization, huge sums of money spent to buy war machinery, which got us out of the depression.

The only thing that ended mass unemployment was sending all the unemployed off to fight that Germans.

That was part of it. At one time we had 16 million men in active military service. They could not spend all their money while in combat, and rationing in the states caused many $$$$ to be saved. The mobilization took us out of the great depression, and the pent of needs of consumers unleashed spending not seen for years.

 

[EdwardBaiamonte]

The only thing that ended mass unemployment was sending all the unemployed off to fight that Germans.

yes but those were only temporary jobs so really had no affect on long term unemployment

 

[dnsmith35]

On those where rates don;'t matter? Or those with the lowest sustained EFFECTIVE and marginal rates in 80+ years?


DEMAND creates jobs, demand is driven by those at the bottom, so yes, the payroll tax holiday, that not ONE GOPer opposed it's demise, would've saved jobs!

Weird how the ONLY tax increase the GOP was for, was one hitting the bottom 90% the hardest!

On those where rates don;'t matter?

Which are those?

Or those with the lowest sustained EFFECTIVE and marginal rates in 80+ years?

Some rates are lower than recently. Like capital gains.
Some are higher, like the top income tax brackets.
Do higher taxes ever cause jobs to be lost? Be honest.

DEMAND creates jobs, demand is driven by those at the bottom

Does raising taxes on business cause job loss? Cause business creation to shrink? Cause demand by the newly unemployed to shrink?

the payroll tax holiday, that not ONE GOPer opposed it's demise, would've saved jobs!

Bush's tax cuts saved the middle class more than the payroll tax holiday.

All a bunch of right wing garbage, I'm shocked.

Yes, capital gains were cut to 15% under Dubya, besides benefiting the MOST wealthy among US 9top 1/10th of 1% get over 50% of ALL dividends) , how does 20% it is today hurt job creation?


EFFECTIVE rates SUSTAINED haven't been this low since before the GOP great depression!!!

Marginal rates, heck even that socialist Reagan had the top rate at 50% for 6 years


NO RECENT TAX INCREASE HAS STUNTED GROWTH, PROOF? Look at Clinton's 1993 tax increases where he created 3 new brackets and took the top rate from 31% to 39.6%, the economy lost jobs right?

lol

Dubya's tax cuts benefited the RICHEST ($1+ MILLION ) the most, BUT that doesn't refute the FACT that NO ONE in the GOP fought to stop the payroll tax holiday from increasing, first time in decades the GOP supported increasing taxes, of course it hit those on the bottom 90% NOT those 'job creators'


CARTER HAD 9+ MILLION PRIVATE SECTOR JOBS GROWTH IN 4 YEARS VERSUS 14 MILLION FOR REAGAN'S 8

Jan 1979 65,636,000
Jan 1981 74,677,000

INCREASE OF 9,041,000 Total private IN 4 YEARS

Jan 1981 74,677,000
Jan 1989 89,394,000

14,717,00 Total private IN 8 YEARS

Bureau of Labor Statistics Data

YEAH, CUTTING TAXES CREATES JOBS *Shaking head*

It looks like you are defending my comment that cutting taxes on the rich and corporations IS SUPPLY SIDE ECONOMICS, JUST LIKE WHAT JFK AND LBJ DID IN 1964. Thanks for the vote of confidence.

 

[EdwardBaiamonte]

The mobilization took us out of the great depression,

of course thats silly since the mobilization was temporary and so had no affect on the long term economy.

 

[dblack]

For the sake of our discussion, I've tried to use a notion that corporatism occurs when a govt tries to benefit one group more/or less than another, or confers a benefit to only one group while using resources of others.

Good. I just wanted to make sure we were on the same page.

So, are you saying this isn't an example of corporatism? Or that it is corporatism but you don't think that's a valid objection?

I don't see it as corporatism to use tax dollars from capital to create or maintain a healthy educated workforce. 1) the workforce benefits capital as well as labor, by both working to achieve profit for capital and buying capital's goods. 2) And, MORE Importantly to just the corporatism view, the healthcare and education are equally available to those whose income is solely from capital and not labor.

In this case, the corporatism lies less on the side of who will benefit, and more on the side of who will be scapegoated to provide the benefit. The question, the moral question, is whether it's justified to go after a particular segment of society with the explicit intent of taking their wealth because some people think they have too much.

As I've said, going after income that wasn't earned via honest trade and investment should be priority, that's basic property protection.

I don't see any issue of corporatism in the tax being levied from those professions who get more customers from more people getting healthcare, or any progressive taxes, and certainly not from taxing retained corp profits, passive income and cap gains at the same rate as income.

I do. When we find ourselves tempted to tax some people more because they benefit more, we need to re-examine the policies creating that inequity. Clearly, at that point we've failed to provide for the general welfare and are, instead, serving special interests. If a government service can't be justified as benefiting everyone more or less equally (and thus something that should be paid for more or less equally), then it probably shouldn't be a government service.

 

[dnsmith35]

True, Walmaret and McD's is sucking a lot off of US

Nope. They provide jobs and inexpensive consumer goods. Walmart enables millions of people to live better than they could otherwise. On the other hand, our socialist education system makes our population stupid, and does it at great cost.

And pay wages low enough to suck BILLIONS of fthe Gov't in WELFARE to survive, that's Walmart entire Biz model

OK, so the government should shut Walmart and McDonalds and all the other businesses like them down. Then what have you got? $10 hamburgers? $$60 shirts? Good for you. You have just thrown 3 to 5 million people out of work.

 

[dnsmith35]

Weird, so there was a housing bubble? AND?

BANKSTERS CREATED A WORLD WIDE CREDIT BUBBLE AND BUST. Dozens of nations. CRA? LOL

How about the subprime auto Biz and commercial real estate bubbles at the same time as Dubya's subprime bubble? lol

FACTS on Dubya's great recession
Q When did the Bush Mortgage Bubble start?

A The general timeframe is it started late 2004.

From Bush’s President’s Working Group on Financial Markets October 2008

“The Presidents Working Group’s March policy statement acknowledged that turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007.”



Q Did the Community Reinvestment Act under Carter/Clinton caused it?


A "Since 1995 there has been essentially no change in the basic CRA rules or enforcement process that can be reasonably linked to the subprime lending activity. This fact weakens the link between the CRA and the current crisis since the crisis is rooted in poor performance of mortgage loans made between 2004 and 2007. "


http://www.usmessageboard.com/economy/362889-facts-on-dubya-s-great-recession.html

Right-wingers Want To Erase How George Bush's "Homeowner Society" Helped Cause The Economic Collapse

Are you really that stupid? The primary cause of the housing bubble was low interest used to push housing to more people who could not previously qualify. That started during Clinton's term and the inflation cycle started in 1997.

It is obvious you can't read a graph or you wouldn't make such stupid comments.

I did not say CRA CAUSED the bubble. I said it contributed to it because the concept of providing home ownership to more of the less wealthy. CRA was not enforced during Carter's administration even though that is when it was passed. Clinton was the one who STARTED to push more home ownership BECAUSE OF CRA, but it was the government policies of low interest, low or no down payments continued into Bush's administration which fueled the inflation because of the heated housing market which led to the balloon and subsequent crash. Lenders were not necessarily covered by CRA, but when Fannie and Freddie allowed lower lending standards (sub prime) they had to follow suit to stay in business, and that was part of the deregulation.

New Study Blames Community Reinvestment Act For Mortgage Defaults - Investors.com

Democrats and the media insist the Community Reinvestment Act, the anti-redlining law beefed up by President Clinton, had nothing to do with the subprime mortgage crisis and recession.

But a new study by the respected National Bureau of Economic Research finds, "Yes, it did. We find that adherence to that act led to riskier lending by banks."

Added NBER: "There is a clear pattern of increased defaults for loans made by these banks in quarters around the (CRA) exam. Moreover, the effects are larger for loans made within CRA tracts," or predominantly low-income and minority areas.​

Wait! Government did cause the housing bubble. - CSMonitor.com

In the 2000s, of course, malinvestment appeared largely in real estate, the result of government programs designed to relax underwriting standards and otherwise increase investment in particularly risky real-estate assets. In other words, ABCT tells us to look for malinvestment during the boom, but not where that malinvestment will show up.

Paul Krugman asserts, for example, that the “Community Reinvestment Act of 1977 was irrelevant to the subprime boom.” Actually, no. A new NBER paper (gated) on the CRA is causing quite a stir. Authored by four economists from NYU, MIT, Northwestern, and Chicago, the paper is the first to use instrumental-variables regression to distinguish changes in bank lending caused by the CRA from changes that would likely have happened anyway. (The authors use the timing of loan decisions relative to the dates of CRA audits to identify the effect of the CRA on lending.) The results suggest that CRA enforcement did, contra Krugman, lead banks to make substantially riskier loans than otherwise.

Rahan said, "“
The key then to understanding the recent crisis is to see why markets offered inordinate rewards for poor and risky decisions. Irrational exuberance played a part, but perhaps more important were the political forces distorting the markets. The tsunami of money directed by a US Congress, worried about growing income inequality, towards expanding low income housing, joined with the flood of foreign capital inflows to remove any discipline on home loans. And the willingness of the Fed to stay on hold until jobs came back, and indeed to infuse plentiful liquidity if ever the system got into trouble, eliminated any perceived cost to having an illiquid balance sheet."

I’d reverse the order of emphasis — credit expansion first, housing policy second — but Rajan is right that government intervention gets the blame all around.​

In other words Dad2three, you are looking at old guesses and opinions instead of the more recent ECONOMIC STUDIES which prove the typical left wing assertions were WRONG.

GAAAWWWWWDDD NOT THE ZOMBIE LIE

LOL


YEAH, A LAW AROUND FOR 30 YEARS AND WEAKENED ENFORCEMENT UNDER DUBYA, CAUSED A WORLD WIDE CREDIT BUBBLE, LOL

Yep! That law contributed to the problem as the more recent study proves. If you are not smart enough to recognize a legitimate study after the defensive sounds from the Fed, they you are too stupid to exist in this world. I don't have to try more, I have proved my point in spades, and you continue to parrot your left wing extremist propaganda.

 

[dnsmith35]

Well, I'm not certain that a tax that plain and simply and openly was to take from some to give to others would be legal. I don't see the morality either. But, if a tax is levied to benefit the general welfare of all, and if it's tied to a power given to the govt that levies it, then its simply a political matter. And elections have consequences.

And that's the distinction I tried to make to dblack. If the govt's purpose in providing some benefit (or paying for a benefit that was not previously supported by revenue) is a benefit aimed at society as a whole, then I don't see an objection on the basis of corporatism.

I do agree with that. Taxes are essential to finance a government to include defense, law and order, infrastructure, education and any other service essential to the whole.

 

[EdwardBaiamonte]

Nope. They provide jobs and inexpensive consumer goods. Walmart enables millions of people to live better than they could otherwise. On the other hand, our socialist education system makes our population stupid, and does it at great cost.

And pay wages low enough to suck BILLIONS of fthe Gov't in WELFARE to survive, that's Walmart entire Biz model

OK, so the government should shut Walmart and McDonalds and all the other businesses like them down. Then what have you got? $10 hamburgers? $$60 shirts? Good for you. You have just thrown 3 to 5 million people out of work.

they would make them pay higher wages which would mean they would sell far less, and employ far less and our country would become far less competitive than it is, and its already is not very competitive and declining. ALso, it would further speed the exodus of corporations out of America just like the highest tax rate in the world does.

Lilberals lack the IQ to understand that new inventions made our economy grow fro the stone age to here! That is what needs to be encouraged, not more and more welfare for the least productive who already get far far too much!!!

 

[bripat9643]

Nope, OPINIONS distorted....

What is opinion about the statement that $16 billion is less than 0.5% of last year's spending?

Grow a brain.

What was the total budget last year, $3.8 trillion? 0.5% would be $18 billion.

His statement looks 100% correct to me.

 

[dnsmith35]

Weird, so there was a housing bubble? AND?

BANKSTERS CREATED A WORLD WIDE CREDIT BUBBLE AND BUST. Dozens of nations. CRA? LOL

How about the subprime auto Biz and commercial real estate bubbles at the same time as Dubya's subprime bubble? lol

FACTS on Dubya's great recession
Q When did the Bush Mortgage Bubble start?

A The general timeframe is it started late 2004.

From Bush’s President’s Working Group on Financial Markets October 2008

“The Presidents Working Group’s March policy statement acknowledged that turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007.”



Q Did the Community Reinvestment Act under Carter/Clinton caused it?


A "Since 1995 there has been essentially no change in the basic CRA rules or enforcement process that can be reasonably linked to the subprime lending activity. This fact weakens the link between the CRA and the current crisis since the crisis is rooted in poor performance of mortgage loans made between 2004 and 2007. "


http://www.usmessageboard.com/economy/362889-facts-on-dubya-s-great-recession.html

Right-wingers Want To Erase How George Bush's "Homeowner Society" Helped Cause The Economic Collapse

Are you really that stupid? The primary cause of the housing bubble was low interest used to push housing to more people who could not previously qualify. That started during Clinton's term and the inflation cycle started in 1997.

It is obvious you can't read a graph or you wouldn't make such stupid comments.

I did not say CRA CAUSED the bubble. I said it contributed to it because the concept of providing home ownership to more of the less wealthy. CRA was not enforced during Carter's administration even though that is when it was passed. Clinton was the one who STARTED to push more home ownership BECAUSE OF CRA, but it was the government policies of low interest, low or no down payments continued into Bush's administration which fueled the inflation because of the heated housing market which led to the balloon and subsequent crash. Lenders were not necessarily covered by CRA, but when Fannie and Freddie allowed lower lending standards (sub prime) they had to follow suit to stay in business, and that was part of the deregulation.

New Study Blames Community Reinvestment Act For Mortgage Defaults - Investors.com

Democrats and the media insist the Community Reinvestment Act, the anti-redlining law beefed up by President Clinton, had nothing to do with the subprime mortgage crisis and recession.

But a new study by the respected National Bureau of Economic Research finds, "Yes, it did. We find that adherence to that act led to riskier lending by banks."

Added NBER: "There is a clear pattern of increased defaults for loans made by these banks in quarters around the (CRA) exam. Moreover, the effects are larger for loans made within CRA tracts," or predominantly low-income and minority areas.​

Wait! Government did cause the housing bubble. - CSMonitor.com

In the 2000s, of course, malinvestment appeared largely in real estate, the result of government programs designed to relax underwriting standards and otherwise increase investment in particularly risky real-estate assets. In other words, ABCT tells us to look for malinvestment during the boom, but not where that malinvestment will show up.

Paul Krugman asserts, for example, that the “Community Reinvestment Act of 1977 was irrelevant to the subprime boom.” Actually, no. A new NBER paper (gated) on the CRA is causing quite a stir. Authored by four economists from NYU, MIT, Northwestern, and Chicago, the paper is the first to use instrumental-variables regression to distinguish changes in bank lending caused by the CRA from changes that would likely have happened anyway. (The authors use the timing of loan decisions relative to the dates of CRA audits to identify the effect of the CRA on lending.) The results suggest that CRA enforcement did, contra Krugman, lead banks to make substantially riskier loans than otherwise.

Rahan said, "“
The key then to understanding the recent crisis is to see why markets offered inordinate rewards for poor and risky decisions. Irrational exuberance played a part, but perhaps more important were the political forces distorting the markets. The tsunami of money directed by a US Congress, worried about growing income inequality, towards expanding low income housing, joined with the flood of foreign capital inflows to remove any discipline on home loans. And the willingness of the Fed to stay on hold until jobs came back, and indeed to infuse plentiful liquidity if ever the system got into trouble, eliminated any perceived cost to having an illiquid balance sheet."

I’d reverse the order of emphasis — credit expansion first, housing policy second — but Rajan is right that government intervention gets the blame all around.​

In other words Dad2three, you are looking at old guesses and opinions instead of the more recent ECONOMIC STUDIES which prove the typical left wing assertions were WRONG.

An official government report was produced in April 2011 by the Senate Permanent Subcommittee on Investigations, led by Chairman Carl Levin (D-MI) and Ranking Member Tom Coburn (R-OK), titled Wall Street and the Financial Crisis: Anatomy of a Financial Collapse. The “Levin-Coburn Report,” a 639-page document, including 2,849 footnotes unanimously and unambiguously concluded that “the [2008] crisis was not a natural disaster, but the result of high risk, complex financial products; undisclosed conflicts of interest; and the failure of regulators, the credit rating agencies, and the market itself to rein in the excesses of Wall Street.”



WHY DID THE 5 INVESTMENT BANKS, NONE LEFT TODAY AS INVESTMENT BANKS, DECIDE TO GET INTO IT THEN? THEY WEREN'T COVERED UNDER CRA???



One would think that understanding that loans made by CRA banks in CRA areas reached their height in 1994 and steadily decreased right through the bubble would convince even the most stubborn ideologue to look elsewhere.

http://www.jchs.harvard.edu/publications/governmentprograms/n08-2_park.pdf


CRA helped the poor and minorities qualify (not the “poorly qualified”) for and receive credit at better than the sub-prime rates they were typically offered if they provided documentation they could make the payments.

Private lenders not governed by CRA made loans that required no documentation of ability to pay, the so called NINJA loans, but no lender governed by CRA could do that nor is there any evidence they did; e.g., mortgage-backed securities with a higher percentage of CRA loans in them had lower default rates than average.

Can you read? Did you check out the new studies proving CRA HAD A PART IN THE HOUSING BALLOON? Or are you as usual just parroting your left wing extremism propaganda.

No matter how much you deny it, the CRA DID have an effect on the housing market starting with Clinton even though it was passed into law during Carter's administration. The financial crisis was caused by the housing crash. The balloon was the inflation of housing prices/value. Government policy pushed ALL LENDERS into giving not just sub prime loans but millions of other loans all of which heated up the housing market and CAUSED THE BALLOON. Low or no down payments, and low interest rates was part of how the government monetary and fiscal policy caused the problem. ARMs to speculators or homebuyers who could not afford their payments when interest rates were adjusted up also caused part of the problem. There were multiple causes of the Balloon/Crash, but the most important was government fiscal and monetary policy OF WHICH THE CRA WAS JUST PART.

 

[EdwardBaiamonte]

There were multiple causes of the Balloon/Crash, but the most important was government fiscal and monetary policy OF WHICH THE CRA WAS JUST PART.

yes very well put!! And lets not forget Fanny/Fredie, huge huge GSE's designed to subvert the free market to get people into homes the free market said they could not afford!

 

[dnsmith35]

Weird, so there was a housing bubble? AND?

BANKSTERS CREATED A WORLD WIDE CREDIT BUBBLE AND BUST. Dozens of nations. CRA? LOL

How about the subprime auto Biz and commercial real estate bubbles at the same time as Dubya's subprime bubble? lol

FACTS on Dubya's great recession
Q When did the Bush Mortgage Bubble start?

A The general timeframe is it started late 2004.

Nope, if you could read a graph you would see the upswing started in 1997. Are you blind as well as stupid?

From Bush’s President’s Working Group on Financial Markets October 2008

How strange, a leftist president wants to put the blame solely on a rightist president.

“The Presidents Working Group’s March policy statement acknowledged that turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007.”



Q Did the Community Reinvestment Act under Carter/Clinton caused it?

It was definitely part of the problem.

A "Since 1995 there has been essentially no change in the basic CRA rules or enforcement process that can be reasonably linked to the subprime lending activity. This fact weakens the link between the CRA and the current crisis since the crisis is rooted in poor performance of mortgage loans made between 2004 and 2007. "

The bold was my emphasis. Who ever made the assertion that the enforcement process did not change between 1995 and 2004 was lying through his teeth. Not just an error, an outright bald faced lie.

Right-wingers Want To Erase How George Bush's "Homeowner Society" Helped Cause The Economic Collapse

Are you really that stupid? The primary cause of the housing bubble was low down payment or interest used to push housing to more people who could not previously qualify. That started during Clinton's term and the inflation cycle started in 1997.

It is obvious you can't read a graph or you wouldn't make such stupid comments.

I did not say CRA CAUSED the bubble. I said it contributed to it because the concept of providing home ownership to more of the less wealthy. CRA was not enforced during Carter's administration even though that is when it was passed. Clinton was the one who STARTED to push more home ownership BECAUSE OF CRA, but it was the government policies of low interest, low or no down payments continued into Bush's administration which fueled the inflation because of the heated housing market which led to the balloon and subsequent crash. Lenders were not necessarily covered by CRA, but when Fannie and Freddie allowed lower lending standards (sub prime) they had to follow suit to stay in business, and that was part of the deregulation.

New Study Blames Community Reinvestment Act For Mortgage Defaults - Investors.com

Democrats and the media insist the Community Reinvestment Act, the anti-redlining law beefed up by President Clinton, had nothing to do with the subprime mortgage crisis and recession.

But a new study by the respected National Bureau of Economic Research finds, "Yes, it did. We find that adherence to that act led to riskier lending by banks."

Added NBER: "There is a clear pattern of increased defaults for loans made by these banks in quarters around the (CRA) exam. Moreover, the effects are larger for loans made within CRA tracts," or predominantly low-income and minority areas.​

Wait! Government did cause the housing bubble. - CSMonitor.com

In the 2000s, of course, malinvestment appeared largely in real estate, the result of government programs designed to relax underwriting standards and otherwise increase investment in particularly risky real-estate assets. In other words, ABCT tells us to look for malinvestment during the boom, but not where that malinvestment will show up.

Paul Krugman asserts, for example, that the “Community Reinvestment Act of 1977 was irrelevant to the subprime boom.” Actually, no. A new NBER paper (gated) on the CRA is causing quite a stir. Authored by four economists from NYU, MIT, Northwestern, and Chicago, the paper is the first to use instrumental-variables regression to distinguish changes in bank lending caused by the CRA from changes that would likely have happened anyway. (The authors use the timing of loan decisions relative to the dates of CRA audits to identify the effect of the CRA on lending.) The results suggest that CRA enforcement did, contra Krugman, lead banks to make substantially riskier loans than otherwise.

Rahan said, "“
The key then to understanding the recent crisis is to see why markets offered inordinate rewards for poor and risky decisions. Irrational exuberance played a part, but perhaps more important were the political forces distorting the markets. The tsunami of money directed by a US Congress, worried about growing income inequality, towards expanding low income housing, joined with the flood of foreign capital inflows to remove any discipline on home loans. And the willingness of the Fed to stay on hold until jobs came back, and indeed to infuse plentiful liquidity if ever the system got into trouble, eliminated any perceived cost to having an illiquid balance sheet."

I’d reverse the order of emphasis — credit expansion first, housing policy second — but Rajan is right that government intervention gets the blame all around.​

In other words Dad2three, you are looking at old guesses and opinions instead of the more recent ECONOMIC STUDIES which prove the typical left wing assertions were WRONG.[/QUOTE]

None of that long diatribe of bad information negates the newer studies that the CRA DID HAVE A NEGATIVE IMPACT ON THE HOUSING BALLOON/CRASH.

 

[dnsmith35]

There's an interesting new paper out on the role of the Community Reinvestment Act and the housing bubble. The paper, called "Did the Community Reinvestment Act (CRA) Lead to Risky Lending?" is by Sumit Agrawal, Efraim Benmelech, Nittai Bergman, and Amit Seru (ABBS). It is a serious economic analysis, which is a major departure from much of the post-2008 grumbling about the CRA. By exploiting the differences in lending behavior within census tracts between banks that are undergoing CRA exams and those that aren't, ABBS find that undergoing a CRA exam is correlated with a rise in mortgage lending and that those loans perform more poorly than those made in the same census tract by institutions not undergoing CRA exams. In other words, the CRA encouraged more lending and as a result it resulted in less prudent lending.

CRA and the Housing Bubble - Credit Slips

 

[dnsmith35]

YES, the "only" institutions which were regulated by CRA were large commercial banks, BUT that CREATED the DEMAND that small mortgage companies happily filled. CRA loans were bundled as securities and sold all around the world...but the starting point of the entire food chain was the government forcing commercial banks to make unwise loans.

What happens to prices when suddenly MILLIONS of people can now buy the same product? Thats right - bidding wars -and prices skyrocketed, didn't they? With skyhigh prices many conventional borrowers chose Alt-A and Option Arm loans for the following reasons: (1) to get into the house, and (2) cope with skyhigh payments. Other's with equity borrowed in order to buy commercial properties. The cancer spread and it all started with CRA, kinda like when you toss a pebble into a pond - the ripple effect. By some estimates all this housing activity accounted for more than 40% of ALL jobs in the U.S. since 2001. Its ALL inter-related.

CRA caused the housing crash