Capitalism Guarantees Rising Inequality

[dnsmith35]

From 1941 to the 1960's we had high taxes on the rich and high wages. The taxes were invested in education and infrastructure and the high wages created consumer demand. Now we have low taxes for the rich and low wages. What is the result? 23% of total income goes to the top 1%. 70% of our economy is consumer demand. Too much money in too few hands starves the economy of demand. Stagnation is the result.

Raise the minimum wage and tax capital gains as income.

Yes, raise the minimum wage. But you make a common mistake that it was the high taxes on the rich and capital rather than prosperity happened in spite of those high taxes. JFK was right in lowering the top rate from 91% to 70%. And prosperity has continued, only we have a much larger % of our population enjoying a reasonably good life whereas most our "poverty stricken" people are only relatively poor. IE, they have less wealth than the next higher quintiles.

 

[Zombie_Pundit]

I'm just baffled, because you never seem to make such idiotic claims to this point, so I'm shocked you praised such logic.

Don't sulk, kiddo, you sorta got the point in the end. (pun?)

He has had the point all along.

Okay, now that's funny on a number of levels.

When do you expect to arrive? When discussing new construction the "appraisers" must look at the plans, the size of the house, where it is located, determine what similar new construction sold for then ESTIMATE its value so as to set a fair price. Having been in the real estate business while pursuing my graduate work it became that "appraisers" can be off either way as to the actual value of the house and the price at which it should be sold. Until about 1995 the "appraisers" mostly took the price to construct from the builder giving the builder huge profits in many cases. In the mid 90's our state's laws took the appraiser out of the brokerage business such that they could hold them responsible for more accurate estimates and insisted they complete a course in appraisal before getting their license. Things changed for the better toward the end of Clinton's term and we started to get appraisals which adhered to value.

I wouldn't expect a price index to include a market value on the home until it had sold a few times. Is the resale not the real test of value? Wasn't that the original point of contention?
But I digress...
I don't disagree that some form of appraisal is needed for setting a price on a new thing. Of course, the market will provide the real answer.
Hypothetical:
If you started to build a development of some 30 homes, had the model homes appraised, was happy with that price because it was around your target and then started getting sales based on that projected price range... things would be great, right?
Now, let's throw in market forces... the housing market heats up... prices of existing homes all around your development are spiking. Do you
A) increase your prices because the market will bear more
B) keep your prices the same, ride through on easy sales
C) lower your prices because you're a real nice guy
Do market forces have no effect on the final sale price, is what I'm asking.

 

[Zombie_Pundit]

Context, quote from earlier post: "A successful economic system revolves around the truism, "man has an unlimited desire for wealth." If it doesn't, it fails, MISERABLY."

If we look at the coal industry in the late 19th and early twentieth century, paying their employees in company scrip, forcing employees to do business with the infamous company stores, abolishing all competition for commodities needed by the employees,
does such a scenario to your mind follow the model of Capitalism or Feudalism...or some other model?

I choose to discuss the here and now. It doesn't matter what happened 100 years ago. Our government has taken over the role of the unions as to OSHA in spite of some failures, including coal mine disasters.

Then onto the subject of "truisms"

"Those who cannot remember the past are condemned to repeat it"

 

[gnarlylove]

There's a book called Without Consent or Contract: The Rise and Fall of American Slavery. It's been a long time since I read it, but it does not define "Slavery" as a specific economic system, more an offense against Capitalism with specific comparisons between the slave laborers and laborers in the north.

I think that's correct if you consider slaves as unpaid labor only.
According to a MOOC I just finished, slaves also served as capital in bond markets on both sides of the Atlantic.

I am, sadly, able to believe that. As painful as it is to review this chapter in our history, and recognize that much of the wealth we enjoy today was built on those early unspeakable bonds and investments, does this reflect an inherent flaw in Capitalism? Or do we need some other qualifier such as "integrated" "regulated" "fair" to disambiguate a system that treats humans as capital from the system that we have today?

Today compared to two centuries ago is improvement. However, I don't think we've reached the qualifier "fair." Countless millions are systematically denied basic rights, including the right to exist domestically (homeless, propertyless) and all over the globe (often at the behest of US and the West in general for the sake of open markets for western corporations). Would you agree?

 

[Zombie_Pundit]

I think that's correct if you consider slaves as unpaid labor only.
According to a MOOC I just finished, slaves also served as capital in bond markets on both sides of the Atlantic.

I am, sadly, able to believe that. As painful as it is to review this chapter in our history, and recognize that much of the wealth we enjoy today was built on those early unspeakable bonds and investments, does this reflect an inherent flaw in Capitalism? Or do we need some other qualifier such as "integrated" "regulated" "fair" to disambiguate a system that treats humans as capital from the system that we have today?

Today compared to two centuries ago is improvement. However, I don't think we've reached the qualifier "fair." Countless millions are systematically denied basic rights, including the right to exist domestically (homeless, propertyless) and all over the globe (often at the behest of US and the West in general for the sake of open markets for western corporations). Would you agree?

Okay, there is a dangerous double-edge sword at play here. Global trade has, in point of fact, increased the real wage in developing countries. Global trade has also, in point of fact, set up sweatshops so terrible that the workers leap from windows.
So my answer is I don't know. I want that real wage increased. Global trade is a good path to world peace. Little girls making Nike shoes is why I don't buy Nikes.

We need not trade with nations that enslave people. C'mon, be fair, Nike didn't open up a plant in Sudan. That being said, I don't know how to implement global trade without recognizing the sovereignty of foreign nations over their own people. Maybe, just maybe, as these other nations go through many of the pains we went through, these other countries will go through those pains more quickly and with less pain overall than we experienced. Maybe we can try to set a good example?

 

[AntiParty]

No one has benefitted more from capitalism more than poor people. Their quality of life is a million times better than it used to be.

I don't know how many likes this statement had, maybe 30/40.

I'm curious why Capitalism is now the "helper" of the poor when every post up until now has said, "Socialism and it's welfare programs costing us yadda yadda"...

The truth is neither Capitalism or Socialism have anything to do with the "Welfare State".

So I'm extremely confused about the amount of likes when someone stated "Capitalism helped the poor".....I would be just as confused if a Socialist stated they were the reason the poor lived in such good conditions today...

AGAIN, Welfare has nothing to do with Socialism or Capitalism........

 

[georgephillip]

The collapse was caused by Bush's SEC letting Wall Street run a derivatives Ponzi scheme.

It wasn't the housing market.

But are there any valid and sound arguments the Democrats will serve Wall Street any less obediently than Bush did?

"Financial reform didn’t work. Banks today are bigger and more opaque than ever, and they continue to trade in derivatives in many of the same ways they did before the crash, but on a larger scale and with precisely the same unknown risks.

"Ignoring warning signs has inevitable consequences. We ignored them before and we saw what happened.

"We can say this with virtual certainty: if we continue as now and ignore them again, the great white shark of a global financial meltdown will gobble up the meager economic recovery and make 2008 look like a hiccup."

Big Banks and Derivatives: Why Another Financial Crisis Is Inevitable - Forbes

Neither party is going to bite the hand that feeds them, and the politicians can't stand success, they wouldn't have a point to run on.

Lest We Forget: Why We Had A Financial Crisis - Forbes

"Many actors obviously played a role in this story.

"Some of the actors were in the public sector and some of them were in the private sector.

"But the public sector agencies were acting at behest of the private sector.

"It’s not as though Congress woke up one morning and thought to itself, 'Let’s abolish the Glass-Steagall Act!' Or the SEC spontaneously happened to have the bright idea of relaxing capital requirements on the investment banks. Or the Office of the Comptroller of the Currency of its own accord abruptly had the idea of preempting state laws protecting borrowers.

"These agencies of government were being strenuously lobbied to do the very things that would benefit the financial sector and their managers and traders.

"And behind it all, was the drive for short-term profits."

Maybe we can all agree to blame the lobbyists?

 

[georgephillip]

From 1941 to the 1960's we had high taxes on the rich and high wages. The taxes were invested in education and infrastructure and the high wages created consumer demand. Now we have low taxes for the rich and low wages. What is the result? 23% of total income goes to the top 1%. 70% of our economy is consumer demand. Too much money in too few hands starves the economy of demand. Stagnation is the result.

Raise the minimum wage and tax capital gains as income.

Apply a property tax to intangible property like stocks and bonds, and eliminate the FICA cap.

 

[georgephillip]

What point do you imagine you (and grandma) are making here?
Are you implying private banks weren't behind more than 84% of sub prime mortgages in 2006?

Imply hell! let me say it straight out. The banks did what the government told them to do. The fault is the government's. No matter how you try to pass it off on the banks whose only blame is trying not to lose too much money with low interest toxic loans. If there is another crisis in the making, look to our politicians in Washington, D.C., not to the banks.

Of course, those banks hired the lobbyists to tell government which laws to pass, right?

"Even this morning, November 22, 2011, a seemingly smart guy like Joe Kernan was saying on CNBC’s Squawkbox, 'When the losses at Fannie and Freddie reach $200 billion… how can the ‘deniers’ say that Fannie and Freddie were enablers for a lot of the housing crisis. When it gets up to that levels, how can they say that they were only into sub-prime late, and they were only in it a little bit?'

"The reason that people can say that is because it is true.

"The $200 billion was a mere drop in the ocean of derivatives which in 2007 amounted to three times the size of the entire global economy."

Lest We Forget: Why We Had A Financial Crisis - Forbes

 

[Andylusion]

What point do you imagine you (and grandma) are making here?
Are you implying private banks weren't behind more than 84% of sub prime mortgages in 2006?

Imply hell! let me say it straight out. The banks did what the government told them to do. The fault is the government's. No matter how you try to pass it off on the banks whose only blame is trying not to lose too much money with low interest toxic loans. If there is another crisis in the making, look to our politicians in Washington, D.C., not to the banks.

Wow. You must be privy to secret meetings between lots politicians and loan officers.
You must have 20/20 hearing.
Any proof or is this more bloviating on your part?

We have provided proof dozens of times in this thread alone. Possibly hundreds of times throughout the forum.

The Clinton Administration, and the Democrats, both pushed banks to make bad loans. They were very very open about it. They even had public announcements of their success in forcing banks to make bad loans, and even openly admitted the default rate would be higher on these bad loans.

[ame=http://youtu.be/PEoqKYCMDmc]1998: Andrew Cuomo admits Forcing Banks to Make Affirmative Action Loans - YouTube[/ame]

Andrew Cuomo, praising the actions of the Federal Government forcing banks to make bad loans, that he admits will have a higher risk, and a higher default rate. 1998.

I have on my computer right now, a court document, of a lawsuit by Acorn, against a bank to make more sub-prime loans. The document includes the name Barack Obama.

This claim that we have been saying over and over, is a well established documented fact.

 

[kaz]

Standards were lowered to increase private profits stemming from an epidemic of mortgage fraud on behalf of Wall Street and the 1%. Sounds like business as usual.

LOL. So the Clinton administration coerced banks into lowering their lending standards so more people could buy homes and flooded the banks with endless virtually zero interest loans to fund it. Then the banks lowered them, but it wasn't because of that, it was because of some Marxist talking point.

Actually, comrade, banks are owned by everyone who owns mutual funds. Teacher pension accounts hold them. The evil 1% actually largely have their wealth tied up in the businesses that made them wealthy. Your grandmother probably owns part of the banks.

What point do you imagine you (and grandma) are making here?
Are you implying private banks weren't behind more than 84% of sub prime mortgages in 2006?
Bill left in 2001, remember, Comrade?
The richest 1% of the evil 1% own Wall Street banks, and they're instigating the next crisis as we speak. Maybe you can outsource Goldman Sachs?

LOL, every time government controls free markets it makes things worse. Then you find that a reason for MORE control over markets. See Einstein's definition of insanity.

 

[kaz]

Standards were lowered to increase private profits stemming from an epidemic of mortgage fraud on behalf of Wall Street and the 1%. Sounds like business as usual.

Power hungry politicians trying to buy votes caused a crisis then pointed fingers at businesses rather than accept the blame for their own actions. Then they appeal to the greed and wealth envy of their minions to pound the message home.

Yep, business as usual.

Politicians from both major parties who depend on the richest 1% of voters to fund their election campaigns and retirements did their parts in creating the crisis, but it was private bankers resorting to an epidemic of control accounting fraud (80% by lenders) that were the biggest culprits in The Mess.

The current Administration then did its part by not prosecuting a single major financial figure in the greatest looting of the US economy since the Great Depression.

"The Mess
The economy was at risk of a deep recession after the dotcom bubble burst in early 2000; this situation was compounded by the September 11 terrorist attacks that followed in 2001. In response, central banks around the world tried to stimulate the economy. They created capital liquidity through a reduction in interest rates.

"In turn, investors sought higher returns through riskier investments. Lenders took on greater risks too, and approved subprime mortgage loans to borrowers with poor credit.

Consumer demand drove the housing bubble to all-time highs in the summer of 2005, which ultimately collapsed in August of 2006. (For an in-depth discussion of these events, see The Fuel That Fed The Subprime Meltdown.)

"The end result of these key events was increased foreclosure activity, large lenders and hedge funds declaring bankruptcy, and fears regarding further decreases in economic growth and consumer spending.

"So who's to blame? Let's take a look at the key players

Biggest Culprit: The Lenders
Most of the blame should be pointed at the mortgage originators (lenders) for creating these problems. It was the lenders who ultimately lent funds to people with poor credit and a high risk of default. (To learn more about subprime lending, see Subprime Is Often Subpar.)

Who Is To Blame For The Subprime Crisis?

You missed the biggest one. The housing bubble which was caused by government. When you flood the market with free money and force banks to lend to more people, then the price of housing raises ever artificially higher. Then when the economy goes into a recession and people can't pay, housing not only drops but the bubble bursts as well. Then people who were OK are suddenly under water. Which is exactly what happened.

Clinton turned what should have been a normal recession into a great recession. W didn't help, he continued the policy. But Clinton started the policy. Only blinders on Democrats don't see that. Government? That's the solution, it can't be the problem!

 

[kaz]

Standards were lowered to increase private profits stemming from an epidemic of mortgage fraud on behalf of Wall Street and the 1%. Sounds like business as usual.

LOL. So the Clinton administration coerced banks into lowering their lending standards so more people could buy homes and flooded the banks with endless virtually zero interest loans to fund it. Then the banks lowered them, but it wasn't because of that, it was because of some Marxist talking point.

Actually, comrade, banks are owned by everyone who owns mutual funds. Teacher pension accounts hold them. The evil 1% actually largely have their wealth tied up in the businesses that made them wealthy. Your grandmother probably owns part of the banks.

The collapse was caused by Bush's SEC letting Wall Street run a derivatives Ponzi scheme.

It wasn't the housing market.

LOL, now there wasn't even a housing bubble. You can't baaa -ck that up. You people explain how Jamestown happened.

Do even know what derivatives are Chris?

 

[Andylusion]

LOL. So the Clinton administration coerced banks into lowering their lending standards so more people could buy homes and flooded the banks with endless virtually zero interest loans to fund it. Then the banks lowered them, but it wasn't because of that, it was because of some Marxist talking point.

Actually, comrade, banks are owned by everyone who owns mutual funds. Teacher pension accounts hold them. The evil 1% actually largely have their wealth tied up in the businesses that made them wealthy. Your grandmother probably owns part of the banks.

The collapse was caused by Bush's SEC letting Wall Street run a derivatives Ponzi scheme.

It wasn't the housing market.

But are there any valid and sound arguments the Democrats will serve Wall Street any less obediently than Bush did?

"Financial reform didn’t work. Banks today are bigger and more opaque than ever, and they continue to trade in derivatives in many of the same ways they did before the crash, but on a larger scale and with precisely the same unknown risks.

"Ignoring warning signs has inevitable consequences. We ignored them before and we saw what happened.

"We can say this with virtual certainty: if we continue as now and ignore them again, the great white shark of a global financial meltdown will gobble up the meager economic recovery and make 2008 look like a hiccup."

Big Banks and Derivatives: Why Another Financial Crisis Is Inevitable - Forbes

Whenever something goes wrong, the left instantly blames big business, and makes this claim that government is somehow in the pocket of big business.

But this very topic disproves that entire concept.

The big banks were completely against sub-prime loans to begin with. Default rates of CRA loans were easily double that of conventional mortgages.

None of the banks wanted the CRA, or sub-prime to begin with. The only reason CRA and sub-prime loans existed is because government forced them to.

And of course the government isn't going to back track on this. They all believe that home ownership is inherently good. Barnie Frank even said there was no bubble at all.

[ame=http://youtu.be/iW5qKYfqALE]Barney Frank in 2005: What Housing Bubble? - YouTube[/ame]

2005, no bubble, no problem, not a dot.com. There will be no collapse, and those of us on our committee will continue to push for more home ownership.

Again, has nothing to do with 'government is in the pocket of business' bull crap.... it's government pushing this agenda. They were warned there was a price bubble, and they ignored it.

 

[bripat9643]

No one has benefitted more from capitalism more than poor people. Their quality of life is a million times better than it used to be.

I don't know how many likes this statement had, maybe 30/40.

I'm curious why Capitalism is now the "helper" of the poor when every post up until now has said, "Socialism and it's welfare programs costing us yadda yadda"...

The truth is neither Capitalism or Socialism have anything to do with the "Welfare State".

So I'm extremely confused about the amount of likes when someone stated "Capitalism helped the poor".....I would be just as confused if a Socialist stated they were the reason the poor lived in such good conditions today...

AGAIN, Welfare has nothing to do with Socialism or Capitalism........

Before capitalism, the poor starved on a regular basis. They had no healthcare, no clothing, no food, no television, no cell phones, no central heating, no air conditioning, no nothing. The poor live like kings compared to how they lived before capitalism.

Your claim that welfare has nothing to do with socialism or capitalism is one of the most hilarious statements ever posted to this forum.

Welfare doesn't really help the poor, but it sure costs a lot of money.

 

[Toddsterpatriot]

But are there any valid and sound arguments the Democrats will serve Wall Street any less obediently than Bush did?

"Financial reform didn’t work. Banks today are bigger and more opaque than ever, and they continue to trade in derivatives in many of the same ways they did before the crash, but on a larger scale and with precisely the same unknown risks.

"Ignoring warning signs has inevitable consequences. We ignored them before and we saw what happened.

"We can say this with virtual certainty: if we continue as now and ignore them again, the great white shark of a global financial meltdown will gobble up the meager economic recovery and make 2008 look like a hiccup."

Big Banks and Derivatives: Why Another Financial Crisis Is Inevitable - Forbes

Neither party is going to bite the hand that feeds them, and the politicians can't stand success, they wouldn't have a point to run on.

Lest We Forget: Why We Had A Financial Crisis - Forbes

"Many actors obviously played a role in this story.

"Some of the actors were in the public sector and some of them were in the private sector.

"But the public sector agencies were acting at behest of the private sector.

"It’s not as though Congress woke up one morning and thought to itself, 'Let’s abolish the Glass-Steagall Act!' Or the SEC spontaneously happened to have the bright idea of relaxing capital requirements on the investment banks. Or the Office of the Comptroller of the Currency of its own accord abruptly had the idea of preempting state laws protecting borrowers.

"These agencies of government were being strenuously lobbied to do the very things that would benefit the financial sector and their managers and traders.

"And behind it all, was the drive for short-term profits."

Maybe we can all agree to blame the lobbyists?

It’s not as though Congress woke up one morning and thought to itself, 'Let’s abolish the Glass-Steagall Act!

Still waiting for the tiniest bit of proof that this repeal had anything to do with the real estate buubble or the crash.

 

[kaz]

The collapse was caused by Bush's SEC letting Wall Street run a derivatives Ponzi scheme.

It wasn't the housing market.

But are there any valid and sound arguments the Democrats will serve Wall Street any less obediently than Bush did?

"Financial reform didn’t work. Banks today are bigger and more opaque than ever, and they continue to trade in derivatives in many of the same ways they did before the crash, but on a larger scale and with precisely the same unknown risks.

"Ignoring warning signs has inevitable consequences. We ignored them before and we saw what happened.

"We can say this with virtual certainty: if we continue as now and ignore them again, the great white shark of a global financial meltdown will gobble up the meager economic recovery and make 2008 look like a hiccup."

Big Banks and Derivatives: Why Another Financial Crisis Is Inevitable - Forbes

Neither party is going to bite the hand that feeds them, and the politicians can't stand success, they wouldn't have a point to run on.

Yes, then when Democrats say that, they follow up with we need more government.

So government is controlled by the evil rich, so we want it to be stronger.

Is there any logical inconsistency in that? I think there is...

 

[bripat9643]

LOL. So the Clinton administration coerced banks into lowering their lending standards so more people could buy homes and flooded the banks with endless virtually zero interest loans to fund it. Then the banks lowered them, but it wasn't because of that, it was because of some Marxist talking point.

Actually, comrade, banks are owned by everyone who owns mutual funds. Teacher pension accounts hold them. The evil 1% actually largely have their wealth tied up in the businesses that made them wealthy. Your grandmother probably owns part of the banks.

The collapse was caused by Bush's SEC letting Wall Street run a derivatives Ponzi scheme.

It wasn't the housing market.

LOL, now there wasn't even a housing bubble. You can't baaa -ck that up. You people explain how Jamestown happened.

Do even know what derivatives are Chris?

"Derivatives" is just the bad Ju-Ju word that libturds have been brainwashed to parrot whenever the subject of the recession comes up.

 

[kaz]

Whenever something goes wrong, the left instantly blames big business, and makes this claim that government is somehow in the pocket of big business.

But this very topic disproves that entire concept.

The big banks were completely against sub-prime loans to begin with. Default rates of CRA loans were easily double that of conventional mortgages.

Democrats wanted sub-prime loans specifically to get less qualified people in homes because Democrats think that life is random. Sub-prime aren't less risky because of their behavior, it was just luck. Some people with good luck had good credit, some people with bad luck have not as good credit. So if you get less lucky people in homes, they aren't more likely to default than prime borrowers, there's no reason past luck will recur in future luck. They were wrong, it's behavior.

So they did a hands down their own pants policy. And rather than fix it, they use their own failures to advocate more hands down their own pants policies. Repeal Glass-Stengal! More government regulation! Liberals never learn they were wrong, they only learn they weren't right enough.

 

[kaz]

The collapse was caused by Bush's SEC letting Wall Street run a derivatives Ponzi scheme.

It wasn't the housing market.

LOL, now there wasn't even a housing bubble. You can't baaa -ck that up. You people explain how Jamestown happened.

Do even know what derivatives are Chris?

"Derivatives" is just the bad Ju-Ju word that libturds have been brainwashed to parrot whenever the subject of the recession comes up.

They do like those bad ju-ju words. That's highly corrolated with their Jamestown behavior.