“If you have enough capital relative to other players in a system, then the rules for the other players are backed by the full-force of the government, but the rules for you are more or less on the honor system.”
This is the essential problem in American economics, politics, and society at large. We got so worried about the government getting too much power that we never considered what happens when private individuals and corporations concentrate enough power to keep rigged systems that favor them broken. If we do not end the 2-tier system we have in this country that favors the individuals with the most wealth over everyone else, then there’s no point in saying “work hard and you’ll succeed” anymore. It’s more like “have rich parents and you’ll succeed.”
The wealthy rigged the system by breaking the meritocracy (merit > wealth became wealth > merit). The longer we allow wealth to accrue dynastically without limit in individual families, the longer the meritocracy and justice system stay broken. We either take concentrations of power seriously or we let our kids live like bootlickers forever (or society eventually descend into something much more violent and worse when it breaks). We play with fire every generation by letting wealth inequality go unchecked. Horizontal inequality leads to cultures of resentment online, and cultures of resentment online lead to stochastic terrorism on a long enough timeline.
When I first heard Pete B interviewed - this was before he ran for president in 2020 - he was talking about "widely shared prosperity" and what was needed to achieve it. But he didn't talk about it when he ran. I thought it was the perfect message for support from the Dems, the Independents and the moderate Rs
Yup. That's when the Chicago School's model of "Supply-Side Economics" took off as a national model for the GOP to run with. Lower taxes on the consumer class 100% makes sense for an economic growth engine, but low taxes on the collection points at the top? That was just begging for the new Gilded Age we have now. A rising tide doesn't lift all boats when only the yachts don't have leaks. Now we're a bootlicker economy.
"We got so worried about the government getting too much power that we never considered what happens when private individuals and corporations concentrate enough power to keep rigged systems that favor them broken."
I worry about this, and always have. But as Craig Butcher said in another comment, "those who started out thinking they want capitalism but wind up as rent-seekers" are a menace. It's not obvious that making government more powerful makes this rent-seeking less.
Our so-called "free-market" in private health care is, in fact, heavily regulated, indeed an artifact of something I'm hearing increasing calls for: price controls. Health perks were a popular fringe benefit to get around WWII wage caps, got enshrined in our tax code, and now we live in a bonkers nation where being sick enough to lose a job means being sick enough to lose health benefits, even if you can still make policy payments. Why should I have confidence that other caps on perceived excess would work out much differently, with the really advantaged enjoying loopholes not available to suffering chumps?
Our weird health-payment plan, where people healthy and successful enough enjoy employer-based perks in their working years and government perks in their retirement, is also ridiculously popular, for some reason. Even if it's more hated than loved, it's still loved enough to make regulation favoring it hard to ditch.
Several nations involve government somewhere in all their citizens' health-payment process with better results than ours, with no great loss to their citizens' freedom. Clearly, it's possible! Still, those systems have inequities. EuroDis seems to be reorganizing its website making its reports harder to find, but it runs surveys on patients' experience managing rare disease in European systems. and sometimes just being a woman still puts you a decade behind men in attaining correct diagnosis and treatment. Of course, rare diseases are.... rare. The vast majority of citizens won't have them and may get more equitable treatment. It's tough to arrange a system where *nobody* takes a hit to secure average well-being, so perhaps that really is the best humanity can do.
Obviously, a system with remaining inequities could still be much more equitable than ours. But, honestly, do I trust our government to regulate in an equity-increasing, rather than equity-decreasing, way? No. No I don't.
I realize this libertarian-leaning skepticism can be exploited by reactionaries who don't just suspect a more-powerful government will also favor more-powerful private interests, but who are positively interested in preserving the way the government we already have already does. I realize this, but I still can't shake the skepticism. Already been burned, thanks. And not by the perks offered to the very wealthy and powerful, either, just midcentury middle-class ones.
As Terry said below, we've had a 90% tax rate on the rich before, and they were still rich enough to live rich lifestyles. I don't trust deregulation and smaller government to fix the inequality problem. We've seen that approach for the last 50 years and it has made things *much* worse than if the government had been instituting economic fairness measures. The government basically exists to do as little as possible economically, as that has been the GOP model of "starving the beast" since Reagan. If the government is stifled by a party who wants it to have as little power as humanly possible in instituting economic fairness, then of course it will fail at making the economy more equitable!
My simple proposition is this: in an economy closer to laissez-faire capitalism that lets private wealth collect unchecked, a government that does more to make the economy equitable by punishing the greediest winners while boosting the consumer class broadly is going to produce a more equitable society and a consumer class that spends more and has less household debt. Elon Musk isn't buying more toilet paper than you or I, and all those billions sitting in his stock portfolio could easily be moving through the economy and creating aggregate demands instead of generating returns on investment for a investor class that sits on their money like a dragon with gold instead of moving it through the economy. There's a lot in common with the Southwest drying up because too many are taking too much out of the Colorado River and the economy drying up because too many are taking too much money out of the annual national GDP growth (the economic river). Elon Musk is the economic equivalent to the Imperial Valley farmers sucking the water out of the Colorado River inefficiently for their personal gains while fucking everybody else's supply up in the Southern Compact. If we're not willing to address those rate-of-change issues, lots of people are going to go economically thirsty, and economic thirst often pairs well with desperation, scapegoating, and violence.
Yes. but things have changed since the time of the 90% income tax for the wealthy. First of all, there are more tax loopholes. Musk does not draw a salary. His home is low cost and probably paid by one of his corporations. Additionally, globalism did not exist at the time of the 90$% tax. We did not have the trade agreements with China, nor the other trade agreements we have now. Musk recently moved his HQ and a manufacturing facility from CA to TX. He has also executed some major layoffs in his US facilities while expanding and hiring in his facilities in China. I can see him easily moving all his manufacturing offshore. Sure, it will be a balancing act for him to continue to receive US tax monies (subsidies) as he does this however I think he will retain the minimal amount employment stateside while gaslighting and treating them as serfs (as he has done already). He may just move the Tesla entirely overseas but retaining the SpaceX stateside to retain his siphon on our Taxpayer Subsidies. Especially since his Tesla has lost quite a bit of value and he is exposed via his Twitter exploits to SEC sanctions and fines.
We can make laws forbidding the shipping of jobs overseas just like we can make a 90% tax on the rich just like we can close loopholes. We can also pass laws forbidding the use of offshore accounts for the purposes of shielding taxes. We just refuse to pass them and enforce them. This isn't difficult, we just have to stop being bootlickers about it. Instead, we'd rather let the rich build as many Epstein Islands as possible with their Scrooge McDuck levels of tech stock-filled swimming pools because Adam Smith and the Chicago School said so or some fucked up logic like that.
If populism can chart us on a path toward the end of democracy, why can't populism also chart us a path toward the end of bootlicker economics?
The other day I had a patient telling me how dangerous and inept socialized medicine would be for our nation and as I nodded pleasantly and asked him about his allergies, I could not help but notice he was 82 and on Medicare and retired from GE. Tell me about it. Dude, you already outlived my parents.
“If you have enough capital relative to other players in a system, then the rules for the other players are backed by the full-force of the government, but the rules for you are more or less on the honor system.”
This is the essential problem in American economics, politics, and society at large. We got so worried about the government getting too much power that we never considered what happens when private individuals and corporations concentrate enough power to keep rigged systems that favor them broken. If we do not end the 2-tier system we have in this country that favors the individuals with the most wealth over everyone else, then there’s no point in saying “work hard and you’ll succeed” anymore. It’s more like “have rich parents and you’ll succeed.”
The wealthy rigged the system by breaking the meritocracy (merit > wealth became wealth > merit). The longer we allow wealth to accrue dynastically without limit in individual families, the longer the meritocracy and justice system stay broken. We either take concentrations of power seriously or we let our kids live like bootlickers forever (or society eventually descend into something much more violent and worse when it breaks). We play with fire every generation by letting wealth inequality go unchecked. Horizontal inequality leads to cultures of resentment online, and cultures of resentment online lead to stochastic terrorism on a long enough timeline.
We should examine more carefully how the previous mid-century highest marginal tax rate of 90% correlated with the widest distribution of prosperity ever. https://www.cbpp.org/research/poverty-and-inequality/a-guide-to-statistics-on-historical-trends-in-income-inequality As the chart in the article show, income disparity began accelerating with the reduction of the marginal tax rate to 50% in 1980.
When I first heard Pete B interviewed - this was before he ran for president in 2020 - he was talking about "widely shared prosperity" and what was needed to achieve it. But he didn't talk about it when he ran. I thought it was the perfect message for support from the Dems, the Independents and the moderate Rs
Yup. That's when the Chicago School's model of "Supply-Side Economics" took off as a national model for the GOP to run with. Lower taxes on the consumer class 100% makes sense for an economic growth engine, but low taxes on the collection points at the top? That was just begging for the new Gilded Age we have now. A rising tide doesn't lift all boats when only the yachts don't have leaks. Now we're a bootlicker economy.
"We got so worried about the government getting too much power that we never considered what happens when private individuals and corporations concentrate enough power to keep rigged systems that favor them broken."
I worry about this, and always have. But as Craig Butcher said in another comment, "those who started out thinking they want capitalism but wind up as rent-seekers" are a menace. It's not obvious that making government more powerful makes this rent-seeking less.
Our so-called "free-market" in private health care is, in fact, heavily regulated, indeed an artifact of something I'm hearing increasing calls for: price controls. Health perks were a popular fringe benefit to get around WWII wage caps, got enshrined in our tax code, and now we live in a bonkers nation where being sick enough to lose a job means being sick enough to lose health benefits, even if you can still make policy payments. Why should I have confidence that other caps on perceived excess would work out much differently, with the really advantaged enjoying loopholes not available to suffering chumps?
Our weird health-payment plan, where people healthy and successful enough enjoy employer-based perks in their working years and government perks in their retirement, is also ridiculously popular, for some reason. Even if it's more hated than loved, it's still loved enough to make regulation favoring it hard to ditch.
Several nations involve government somewhere in all their citizens' health-payment process with better results than ours, with no great loss to their citizens' freedom. Clearly, it's possible! Still, those systems have inequities. EuroDis seems to be reorganizing its website making its reports harder to find, but it runs surveys on patients' experience managing rare disease in European systems. and sometimes just being a woman still puts you a decade behind men in attaining correct diagnosis and treatment. Of course, rare diseases are.... rare. The vast majority of citizens won't have them and may get more equitable treatment. It's tough to arrange a system where *nobody* takes a hit to secure average well-being, so perhaps that really is the best humanity can do.
Obviously, a system with remaining inequities could still be much more equitable than ours. But, honestly, do I trust our government to regulate in an equity-increasing, rather than equity-decreasing, way? No. No I don't.
I realize this libertarian-leaning skepticism can be exploited by reactionaries who don't just suspect a more-powerful government will also favor more-powerful private interests, but who are positively interested in preserving the way the government we already have already does. I realize this, but I still can't shake the skepticism. Already been burned, thanks. And not by the perks offered to the very wealthy and powerful, either, just midcentury middle-class ones.
As Terry said below, we've had a 90% tax rate on the rich before, and they were still rich enough to live rich lifestyles. I don't trust deregulation and smaller government to fix the inequality problem. We've seen that approach for the last 50 years and it has made things *much* worse than if the government had been instituting economic fairness measures. The government basically exists to do as little as possible economically, as that has been the GOP model of "starving the beast" since Reagan. If the government is stifled by a party who wants it to have as little power as humanly possible in instituting economic fairness, then of course it will fail at making the economy more equitable!
My simple proposition is this: in an economy closer to laissez-faire capitalism that lets private wealth collect unchecked, a government that does more to make the economy equitable by punishing the greediest winners while boosting the consumer class broadly is going to produce a more equitable society and a consumer class that spends more and has less household debt. Elon Musk isn't buying more toilet paper than you or I, and all those billions sitting in his stock portfolio could easily be moving through the economy and creating aggregate demands instead of generating returns on investment for a investor class that sits on their money like a dragon with gold instead of moving it through the economy. There's a lot in common with the Southwest drying up because too many are taking too much out of the Colorado River and the economy drying up because too many are taking too much money out of the annual national GDP growth (the economic river). Elon Musk is the economic equivalent to the Imperial Valley farmers sucking the water out of the Colorado River inefficiently for their personal gains while fucking everybody else's supply up in the Southern Compact. If we're not willing to address those rate-of-change issues, lots of people are going to go economically thirsty, and economic thirst often pairs well with desperation, scapegoating, and violence.
Yes. but things have changed since the time of the 90% income tax for the wealthy. First of all, there are more tax loopholes. Musk does not draw a salary. His home is low cost and probably paid by one of his corporations. Additionally, globalism did not exist at the time of the 90$% tax. We did not have the trade agreements with China, nor the other trade agreements we have now. Musk recently moved his HQ and a manufacturing facility from CA to TX. He has also executed some major layoffs in his US facilities while expanding and hiring in his facilities in China. I can see him easily moving all his manufacturing offshore. Sure, it will be a balancing act for him to continue to receive US tax monies (subsidies) as he does this however I think he will retain the minimal amount employment stateside while gaslighting and treating them as serfs (as he has done already). He may just move the Tesla entirely overseas but retaining the SpaceX stateside to retain his siphon on our Taxpayer Subsidies. Especially since his Tesla has lost quite a bit of value and he is exposed via his Twitter exploits to SEC sanctions and fines.
We can make laws forbidding the shipping of jobs overseas just like we can make a 90% tax on the rich just like we can close loopholes. We can also pass laws forbidding the use of offshore accounts for the purposes of shielding taxes. We just refuse to pass them and enforce them. This isn't difficult, we just have to stop being bootlickers about it. Instead, we'd rather let the rich build as many Epstein Islands as possible with their Scrooge McDuck levels of tech stock-filled swimming pools because Adam Smith and the Chicago School said so or some fucked up logic like that.
If populism can chart us on a path toward the end of democracy, why can't populism also chart us a path toward the end of bootlicker economics?
Where's the Imperial Valley? (I can guarantee it isn't the San Luis Valley.)
https://en.wikipedia.org/wiki/Imperial_County,_California
thx
The other day I had a patient telling me how dangerous and inept socialized medicine would be for our nation and as I nodded pleasantly and asked him about his allergies, I could not help but notice he was 82 and on Medicare and retired from GE. Tell me about it. Dude, you already outlived my parents.
Insert Jack Nicholson "Yes" gif
Ding! Ding!! Ding!!! Ding!!! Ding!!!!