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LuckyOne

I Wonder How The Split In Opinion Will Be ....

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As per title.

In my view, he is missing the key component that the way out for countries like the UK and the USA is to make enough things that people around the world want at a high enough price that labour and capital can both earn satisfactory returns.

A precondition is that labour, capital and governments also have to learn the art of trying to reach acceptable outcomes for everyone while no-one gets exactly what they want.

http://www.huffingtonpost.com/2011/06/21/robert-reich-solves-economy_n_881479.html

Oops : It would help if I pasted the link ....

Edited by LuckyOne

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As per title.

In my view, he is missing the key component that the way out for countries like the UK and the USA is to make enough things that people around the world want at a high enough price that labour and capital can both earn satisfactory returns.

A precondition is that labour, capital and governments also have to learn the art of trying to reach acceptable outcomes for everyone while no-one gets exactly what they want.

Sorry, what are you talking about? Seeing what?

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We already did this when he made the vid.

He is an idiot that believes that consumerism will save the economy.

He identifies the problem as being that the middle class can no longer borrow like they could so dont have the cash to spend and get the economy growing again. Credit and growth is his answer rather than allowing prices to fall and the market to find its own clearing price.

Listen to it from 2 mins.

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We already did this when he made the vid.

He is an idiot that believes that consumerism will save the economy.

He identifies the problem as being that the middle class can no longer borrow like they could so dont have the cash to spend and get the economy growing again. Credit and growth is his answer rather than allowing prices to fall and the market to find its own clearing price.

Listen to it from 2 mins.

I missed it the first time around. Sorry.

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We already did this when he made the vid.

He is an idiot that believes that consumerism will save the economy.

He identifies the problem as being that the middle class can no longer borrow like they could so dont have the cash to spend and get the economy growing again. Credit and growth is his answer rather than allowing prices to fall and the market to find its own clearing price.

Listen to it from 2 mins.

Why are you so intent on misrepresenting what they guy says?

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Are you trying to say that that isnt what he says?

Absolutely!

The guy says: due to rising income inequalities middle class incomes have failed to rise - people have borrowed to compensate - now they can't borrow we are getting the mess we're in now - implied: we must reduce income inequalities so people can spend without having to borrow.

You translate as (from 2 mins :-):

people can't borrow so they must be enabled to borrow more.

This is complete BS. Because the guy is political (I assume this is what drives you) does not mean this message should be invalidated. You just pick the bit you want to hear, change it to suit your objective, take it out of context and then spread the resulting misinformation.

The video doesn't start at +2mins.

Edited by _w_

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Absolutely!

The guy says: due to rising income inequalities middle class incomes have failed to rise - people have borrowed to compensate - now they can't borrow we are getting the mess we're in now - implied: we must reduce income inequalities so people can spend without having to borrow.

You translate as (from 2 mins :-):

people can't borrow so they must be enabled to borrow more.

This is complete BS. Because the guy is political (I assume this is what drives you) does not mean this message should be invalidated. You just pick the bit you want to hear, change it to suit your objective, take it out of context and then spread the resulting misinformation.

The video doesn't start at +2mins.

Thats not how it came across to me. It came across as though the ills of the economy would be solved by more debt and consumption.

Mind you I might be biased as I think he is a moron.

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Absolutely!

The guy says: due to rising income inequalities middle class incomes have failed to rise - people have borrowed to compensate - now they can't borrow we are getting the mess we're in now - implied: we must reduce income inequalities so people can spend without having to borrow.

So wage inflation is the answer as it will allow more spending, what could possibly go wrong :rolleyes:

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Thats not how it came across to me. It came across as though the ills of the economy would be solved by more debt and consumption.

Mind you I might be biased as I think he is a moron.

I understood him to mean that the problem is a lack of consumption.

He used the income distribution in the States as the justification to use higher taxes to replace the incapacity to take on more debt.

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I understood him to mean exactly what he said, which is absolutely true. The problem is inequality. Enormous inequality. Inequality of wealth. Inequality of income. Inequality of opportunity. Inequality of taxation.

What he didn't say was how to solve the problem. In my view, it is simple. Land value tax. And I would go the whole hog and scrap all other taxation and have taxation on the value of the land only.

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So wage inflation is the answer as it will allow more spending, what could possibly go wrong :rolleyes:

We do very well with lower income inequalities yes. Higher inequalities tend to come with sustained and high inflation as now. Which is the chicken or the egg is where I think he is wrong as I believe you do. He is still correctly identifying a symptom that should not be ignored as it also contributes to the problem (VIs enriched by high inflation gain more power and then use that enhanced power to lobby harder for more inflation).

I don't think this message should be trashed.

<Edit to add: this question was the last point you made in the other thread and it bugged me. I don't think forcing wages up is the answer, that would probably be a form of communism and we know how that one worked out. I think killing inflationary policies would reduce these inequalities automatically.

Edited by _w_

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I understood him to mean that the problem is a lack of consumption.

He used the income distribution in the States as the justification to use higher taxes to replace the incapacity to take on more debt.

I am sure he is sat at home with his millions worrying about income distribution, same as Nancy Pellosi who has amassed $35M worrying about it, or Bill and Hilary Clinton or Tony Blair and Red Ed with their multi million pound property empire.

Its a profitable business worrying about income distribution I should start a foundation or something.

They want to feed the proles with more credit so they can skim it off the top again.

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I understood him to mean exactly what he said, which is absolutely true. The problem is inequality. Enormous inequality. Inequality of wealth. Inequality of income. Inequality of opportunity. Inequality of taxation.

The real problem is a flawed monetary system. But under any monetary system there will still be inequality it is a fact of life some are better lovers than moneymakers should we insist they share it around? Its the politics of envy and a diversion from the real problems..

What he didn't say was how to solve the problem. In my view, it is simple. Land value tax. And I would go the whole hog and scrap all other taxation and have taxation on the value of the land only.

Amen.

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Okay. Watched it for the second time. I've no idea who he is, but in this video alone he offers no solution, merely identifies the root problem as inequality of income and taxation, which has grown over the last 30 years. The line about borrowing is only controversial because you can infer that he means allow the middle classes to borrow more. However, his main point is to reduce the inequality gap which would naturally result in less need for borrowing anyway. I find it easy to agree it's a problem, but do think it's only one piece of a larger pie.

It reminds me of an interesting proposed law whereby companies can only pay the bosses a limited multiple (say 10x) what they pay their lowest paid worker. Thus capping inequality and if bosses want more money they must share more. Would like to hear more thoughts on that.

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The real problem is a flawed monetary system. But under any monetary system there will still be inequality it is a fact of life some are better lovers than moneymakers should we insist they share it around? Its the politics of envy and a diversion from the real problems..

When I talk of equality, I don't mean that everyone should have the same. I just mean that all people should be free to work as best they can depending on their talents, energy and enthusiasm and should be taxed for what they take from society (land and natural resources) and not the contribution they make to it with their labour.

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When I talk of equality, I don't mean that everyone should have the same. I just mean that all people should be free to work as best they can depending on their talents, energy and enthusiasm and should be taxed for what they take from society (land and natural resources) and not the contribution they make to it with their labour.

Agreed.

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Okay. Watched it for the second time. I've no idea who he is, but in this video alone he offers no solution, merely identifies the root problem as inequality of income and taxation, which has grown over the last 30 years. The line about borrowing is only controversial because you can infer that he means allow the middle classes to borrow more. However, his main point is to reduce the inequality gap which would naturally result in less need for borrowing anyway. I find it easy to agree it's a problem, but do think it's only one piece of a larger pie.

It reminds me of an interesting proposed law whereby companies can only pay the bosses a limited multiple (say 10x) what they pay their lowest paid worker. Thus capping inequality and if bosses want more money they must share more. Would like to hear more thoughts on that.

I am under the impression that the Germans have some kind of system along those lines, with labour representatives on company boards having a say about executive pay. I think it's based around a cultural social contract to keep the peace in labour relations. I am not sure whether this ever existed or does today but if yes, they seem to have done well out of it. Unsurprisingly Germany also has a low inflation policy, these things go together.

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This is all academic ********.

I disagree with his assessment that growth = prosperity and that the only way we can prosper is for the middle classes to consume (borrow) more.

These ivory tower economists fail to consider the reality which is one of scarcity and reducing resources. The entire paradigm of growth and traditional prosperity is fundamentally flawed.

To me this is like the bandmaster of the Titanic explaining why it would be more fair to move the cheap seats nearer to the stage.... well intentioned but ultimately meaningless.

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I'll just repost what I posted last time..

If this were explicitly true (that taxation is the root cause of flat middle class wage growth), I would expect it to be reproducible across all geographies.

chart.jpg

IIT-Rates.jpg

I would suggest a lack of REAL local growth could be the reason local people don't get richer.. while only the very wealthy have the ability channel their existing wealth into real growth regions.

In short, could it be that the super rich are getting richer because they are exposed to emerging markets, while the poor simply can't afford to?

Also, then is it a good thing if the rich are bringing the fruits of this growth/wealth from abroad onto our shores.. and would taxing them more drive them away?

I don't pretend to know the answer by the way...

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As per title.

Sorry Lucky, but I just can't watch Robert Reich. I hate the fecking b@stard even more than I hate Ed Balls and Gordon Brown. Reich is an extremely dangerous ideologue, with completely mistaken and misleading economics. Usually his imbecilic, pre-Ricardo's faith leads people to defend protectionist positions with racist and genocidal consequences.

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I'll just repost what I posted last time..

If this were explicitly true (that taxation is the root cause of flat middle class wage growth), I would expect it to be reproducible across all geographies.

chart.jpg

IIT-Rates.jpg

I would suggest a lack of REAL local growth could be the reason local people don't get richer.. while only the very wealthy have the ability channel their existing wealth into real growth regions.

In short, could it be that the super rich are getting richer because they are exposed to emerging markets, while the poor simply can't afford to?

Also, then is it a good thing if the rich are bringing the fruits of this growth/wealth from abroad onto our shores.. and would taxing them more drive them away?

I don't pretend to know the answer by the way...

Here's my twopence on this because I think I might have some insights from recent readings.

China looks a lot like Germany of 1920-1921: enormous investment boom with falling real consumption, a policy of excessive monetary inflation (not reflected by official CPI figures, what a surprise) and real wages plunging. On the last point, I am relying on anecdotals such as the factory worker suicides (not because real wages are rising I suspect) or graduate wages now similar to factory worker wages (a flattening of the wage scale towards subsitence levels).

As you point out, there are some differences such as the effects of globalisation: for example, western countries' attempts to inflate generate more investments in China rather than home which is to China's benefit (although it does nothing to help their overcapacity issues, quite the opposite).

But overall, the similarities are eery.

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  • 284 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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