This is why I'm suicidal, lol. Even though I'm better off than many, and have a ton of education, the system isn't broken, it's fixed, and there is no hope.
With respect to this article, is he wrong about that loophole that banks are using to own non-financial businesses, and that banks are merging with businesses like mad? I regard this as a tremendous argument. If he's wrong, I'd like to know.
Yes. One, it's not a "loophole," it's intentional. The United States was somewhat unique in regards to that separation between banks and "non-financial businesses," and the removal of that wall helps with international competition in a world economy.
We should be welcoming such expansive variety. It bolsters the business and makes failure harder to accomplish due to the number of moving parts. This is a good thing. Of course, Taibbi's argument is "banks bad, regulation good," so it's something we need to be scared of. He's been trying to make people fear the banks and the private sector for years (and you'll never see him complain about state control of oil in the ground, a key piece in the somewaht-unpredictable, always-overpriced cost of fuel, as a contrast), and some eat it up.
I sometimes hesitate to even call him a journalist, as his pieces invariably end up being less of an illumination and more of an ideological screed about things he has limited knowledge about.
The writer of that piece is James Piereson; and he is a Manhattan Institute senior fellow and director of the Institute's Center for the American University. The "institute" is not an academic one in any traditional sense of the word. It is instead is a conservative American think tank established in New York City in 1978 by Antony Fisher and William J. Casey.
The Manhattan Institute received over $31 million in grants from 1985 to 2012, from foundations such as the Koch Family Foundations, the John M. Olin Foundation, the Bradley Foundation, the Scaife Foundations, and the Smith Richardson Foundation.The Manhattan Institute does not disclose its corporate funding, but the Capital Research Center listed its contributors as Bristol-Myers Squibb, ExxonMobil, Chase Manhattan, Cigna, Sprint Nextel, Reliant Energy, Lincoln Financial Group Foundation, and Merrill Lynch. Throughout the 1990s the Tobacco industry was a major funding source for the institute.
Well, pretty much any of Paul Krugman's blog entries do that pretty effectively. This piece in the WSJ is just another installement of a series of defending the one percent. A lot James Piereson's piece is the most recent in a series of such pieces by conservatives that are basically trying to reframe the discussion. (http://krugman.blogs.nytimes.com/2014/02/16/iron-men-of-wall-street/?module=BlogPost-Title&version=Blog%20Main&contentCollection=Opinion&action=Click&pgtype=Blogs®ion=Body) And since James Piereson framed his case in a rather self serving manner, and whines that discussions regarding income inequality are really nothing but a distraction from the "failure of Obama care!" was laughably predictable.
As Krugman notes in the linked entry (some of the same points raised by James Piereson have been raised before by Greg Mankiw).
One more thing: Mankiw argues that our tax system is fair because the top 0.1 percent pays a higher share of income in federal taxes than the middle class. This neglects the partial offset of this progressivity by regressive state and local taxes. But surely the main point is that to the extent that taxes on the 0.1 percent are high (they aren’t really, in historical context) that’s largely because Mitt Romney lost the 2012 election, so that Obama’s partial rollback of the Bush tax cuts and the high-income surcharges that partially finance health reform remained in place and the Ryan budget didn’t happen. It’s kind of funny to claim that our system is fair thanks to policies that you and your friends tried desperately to kill.
Anyway, the wolves of Wall Street are more Gordon Gekko than Iron Man; if they’re the best argument you have for the justice of extreme inequality, you’re not doing too well.
The critique falls along three lines. First, as Dean Baker notes, even if you believe that the glittering prizes at the top of the economic scale were fairly won, the size of those prizes is very much defined by policy choices. We live in a society that allocates rights to intellectual property in a way that yields huge rewards to a select few, that taxes top incomes at a historically low rate, and so on. Even if the game is fair, nothing says that the game has to look the way it does.
Also see: Greg Mankiw and the Gatsby Curve. (http://krugman.blogs.nytimes.com/2013/06/22/greg-mankiw-and-the-gatsby-curve/)
The WSJ piece is rife with invalid inferences, red herrings, and unexplained gaps. (Including, for instance, total silence on where the top 1% derives 23% of its income.) Nearly every sentence contains some kind of error or omission. It would exhaust my time and patience to walk through it all.
It throws up an impressive counter-argument that most of us, including myself, really cannot penetrate very well, and people will only throw up their hands and say it is a debate between experts, and there must be something to both sides. To be sure if you are a liberal Democrat, you lean toward thinking that this Wall Street piece is just smoke and mirrors and trust that Krugman and the like must be right. If you are a conservative Republican, you take your faith in the opposite direction. A lot of noise is put into the atmosphere, and I imagine people feel pretty helpless about it all. Climate Change denialists can even do well in this environment, not to mention early-earth creationists.
All that's really needed is a little critical thinking. I'm reluctant to invest the time, because I really have other things I'd rather be doing, but I hope that by walking through (some of) it, I can help you to see this isn't a situation where you should - or responsibly can - just throw up your hands and assume that both sides have a point.
The first paragraph sets up a strawman, reducing all the policy arguments one might make (and that people are making) about appropriate tax policy and welfare programs to attacking some class of people described as "the undeserving rich" (who uses that term, but people setting up strawmen?) and wanting to "redistribute income" (again, invoking inflammatory, question-begging language that no one uses to describe their own preferred policy).
What's behind these policies? Well, Piereson claims there's at least three basic claims: One is that the wealthy are mostly Wall Street bankers benefitting from rising stock and real estate prices, or executives who pay themselves extravagant salaries. What does this have to do with even the strawman he'd set up? Nothing about the rich being "undeserving" requires them to be Wall Street bankers or executives. Anyway, the meme about the rich being "undeserving" isn't just about their having the benefit of accumulated, self-perpetuating wealth; it's about being handsomely rewarded for producing little of social value, or for manipulating markets and regulators, or for voting themselves and their friends uncompetitive salary, benefit, and equity compensation (and severance) packages. And again, that's accepting that the rich have to be "undeserving," when the point is more often made not that the rich fail to deserve to be rich, but that the rich are rich only because they have the benefit of a well-functioning economy that relies extensively on having a strong and employed class of domestic consumers.
Second basic point: Another claim is that such people unfairly benefit from a system that taxes capital gains at half the highest marginal rate paid by those who earn salaries and wages. It's true that the differential treatment of capital gains vs. earned income is a prominent target of progressive tax reformers. But the issue doesn't turn so much on its being "unfair" as it does on whether the difference makes any sense or has the kind of impact on behavior that we want it to. I'm actually not sure how the differential tax rates do in this respect, but certainly Piereson's red-herring response to this point - "Look how little the rich actually derive from capital gains!" without saying anything about how much less everyone else does - does not contribute meaningfully to the debate.
Third basic point: Then there is the assertion that the "super rich" have abundant funds that can be taxed to improve the living standards of everyone else. Again, just coding in a conclusion when setting up the claims to refute. Certainly, people who think that the "rich" should be taxed more likely believe that the "rich" can deal with the increased tax burden. That doesn't require holding that they have "abundant funds" that can be mined at will, or that it's just about improving the living standards of "everyone else." Again, part of the point of those arguing for a more progressive tax system is not just to "redistribute income" to improve "the living standards of everyone else." It's about improving and sustaining the conditions of economic health and wealth production for everyone. No one's going to get rich in manufacturing if they don't have rivers, roads, and rails they can use to move their products to markets; no one's going to get rich in finance if they don't have telecommunications and electricity infrastructure that they can rely on; no one's going to get rich in the service industry if they don't have people who can show up to work healthy and able to work.
Very briefly, instead of just being Robin Hood redistributionists, we have an argument for maintaining a healthfully balanced economy, whereas the WSJ-Fox-GOP may be seen as maximalists for individual freedom.
Nothing about Piereson's piece says anything about "individual freedom." The broader debate is about taxing and spending priorities.
The progressive position is that our economy will grow more heathfully, create more jobs, and be more sustainable, if the tax code is reformed in a way that allows us to invest more in the public resources that every American firm relies on - transportation and utility infrastructure, education, public health. Piereson et al. think that our focus needs to be on reducing the national debt and the annual deficit without asking the well-off to pay any more into that effort than they are already, in the belief that doing so will be more conducive to a healthy economy than the above alternatives. While arguments to that effect certainly are made, Piereson says nothing in favor of this view in the piece that you've linked.
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timeasmymeasure
no subject
Date: 2014-02-18 06:54 pm (UTC)no subject
Date: 2014-02-18 07:08 pm (UTC)they can find it in this Matt Taibbi article:
http://m.rollingstone.com/politics/news/the-vampire-squid-strikes-again-the-mega-banks-most-devious-scam-yet-20140212
no subject
Date: 2014-02-18 08:36 pm (UTC)But uselessness is what he sells, and people are buying
no subject
Date: 2014-02-18 08:40 pm (UTC)but you don't think his facts are reliable?
no subject
Date: 2014-02-19 12:34 am (UTC)no subject
Date: 2014-02-19 12:44 am (UTC)that banks are using to own non-financial businesses, and that
banks are merging with businesses like mad? I regard this as a
tremendous argument. If he's wrong, I'd like to know.
no subject
Date: 2014-02-19 01:00 am (UTC)We should be welcoming such expansive variety. It bolsters the business and makes failure harder to accomplish due to the number of moving parts. This is a good thing. Of course, Taibbi's argument is "banks bad, regulation good," so it's something we need to be scared of. He's been trying to make people fear the banks and the private sector for years (and you'll never see him complain about state control of oil in the ground, a key piece in the somewaht-unpredictable, always-overpriced cost of fuel, as a contrast), and some eat it up.
I sometimes hesitate to even call him a journalist, as his pieces invariably end up being less of an illumination and more of an ideological screed about things he has limited knowledge about.
no subject
Date: 2014-02-19 02:06 am (UTC)holy fuck, you've never been an engineer have you?
You think that *MORE* moving parts makes failure *HARDER* to accomplish?
You're only as strong as your weakest link, and you want to add links. Fucking insanity.
no subject
Date: 2014-02-19 02:05 am (UTC)Maybe one day you'll realize that you come off the EXACT. SAME. WAY.
no subject
Date: 2014-02-19 12:28 pm (UTC)no subject
Date: 2014-02-19 02:21 am (UTC)no subject
Date: 2014-02-19 03:33 am (UTC)no subject
Date: 2014-02-19 09:58 pm (UTC)no subject
Date: 2014-02-19 02:08 am (UTC)Am I mistaken?
no subject
Date: 2014-02-18 07:27 pm (UTC)The Manhattan Institute received over $31 million in grants from 1985 to 2012, from foundations such as the Koch Family Foundations, the John M. Olin Foundation, the Bradley Foundation, the Scaife Foundations, and the Smith Richardson Foundation.The Manhattan Institute does not disclose its corporate funding, but the Capital Research Center listed its contributors as Bristol-Myers Squibb, ExxonMobil, Chase Manhattan, Cigna, Sprint Nextel, Reliant Energy, Lincoln Financial Group Foundation, and Merrill Lynch. Throughout the 1990s the Tobacco industry was a major funding source for the institute.
no subject
Date: 2014-02-18 08:04 pm (UTC)people to tear apart if they want to. I wouldn't mind seeing that.
no subject
Date: 2014-02-18 08:49 pm (UTC)As Krugman notes in the linked entry (some of the same points raised by James Piereson have been raised before by Greg Mankiw).
Also see: Greg Mankiw and the Gatsby Curve. (http://krugman.blogs.nytimes.com/2013/06/22/greg-mankiw-and-the-gatsby-curve/)
no subject
Date: 2014-02-19 08:56 am (UTC)no subject
Date: 2014-02-19 02:59 am (UTC)It helps to illustrate how these blowhards "win."
no subject
Date: 2014-02-19 03:07 am (UTC)no subject
Date: 2014-02-19 03:41 am (UTC)The first paragraph sets up a strawman, reducing all the policy arguments one might make (and that people are making) about appropriate tax policy and welfare programs to attacking some class of people described as "the undeserving rich" (who uses that term, but people setting up strawmen?) and wanting to "redistribute income" (again, invoking inflammatory, question-begging language that no one uses to describe their own preferred policy).
What's behind these policies? Well, Piereson claims there's at least three basic claims: One is that the wealthy are mostly Wall Street bankers benefitting from rising stock and real estate prices, or executives who pay themselves extravagant salaries. What does this have to do with even the strawman he'd set up? Nothing about the rich being "undeserving" requires them to be Wall Street bankers or executives. Anyway, the meme about the rich being "undeserving" isn't just about their having the benefit of accumulated, self-perpetuating wealth; it's about being handsomely rewarded for producing little of social value, or for manipulating markets and regulators, or for voting themselves and their friends uncompetitive salary, benefit, and equity compensation (and severance) packages. And again, that's accepting that the rich have to be "undeserving," when the point is more often made not that the rich fail to deserve to be rich, but that the rich are rich only because they have the benefit of a well-functioning economy that relies extensively on having a strong and employed class of domestic consumers.
Second basic point: Another claim is that such people unfairly benefit from a system that taxes capital gains at half the highest marginal rate paid by those who earn salaries and wages. It's true that the differential treatment of capital gains vs. earned income is a prominent target of progressive tax reformers. But the issue doesn't turn so much on its being "unfair" as it does on whether the difference makes any sense or has the kind of impact on behavior that we want it to. I'm actually not sure how the differential tax rates do in this respect, but certainly Piereson's red-herring response to this point - "Look how little the rich actually derive from capital gains!" without saying anything about how much less everyone else does - does not contribute meaningfully to the debate.
Third basic point: Then there is the assertion that the "super rich" have abundant funds that can be taxed to improve the living standards of everyone else. Again, just coding in a conclusion when setting up the claims to refute. Certainly, people who think that the "rich" should be taxed more likely believe that the "rich" can deal with the increased tax burden. That doesn't require holding that they have "abundant funds" that can be mined at will, or that it's just about improving the living standards of "everyone else." Again, part of the point of those arguing for a more progressive tax system is not just to "redistribute income" to improve "the living standards of everyone else." It's about improving and sustaining the conditions of economic health and wealth production for everyone. No one's going to get rich in manufacturing if they don't have rivers, roads, and rails they can use to move their products to markets; no one's going to get rich in finance if they don't have telecommunications and electricity infrastructure that they can rely on; no one's going to get rich in the service industry if they don't have people who can show up to work healthy and able to work.
And that's just - ugh - the first two paragraphs.
no subject
Date: 2014-02-19 03:58 am (UTC)we have an argument for maintaining a healthfully balanced economy,
whereas the WSJ-Fox-GOP may be seen as maximalists for individual freedom.
no subject
Date: 2014-02-19 04:16 am (UTC)The progressive position is that our economy will grow more heathfully, create more jobs, and be more sustainable, if the tax code is reformed in a way that allows us to invest more in the public resources that every American firm relies on - transportation and utility infrastructure, education, public health. Piereson et al. think that our focus needs to be on reducing the national debt and the annual deficit without asking the well-off to pay any more into that effort than they are already, in the belief that doing so will be more conducive to a healthy economy than the above alternatives. While arguments to that effect certainly are made, Piereson says nothing in favor of this view in the piece that you've linked.