Why income inequality is America’s biggest (and most difficult) problem

[Mr. Ambien]

You lived there?

Did you? You're the one praising Venezuela?

Its being done now. Define "lucrative".

Most profitable?

and replaced with what?

Replaced with a question that makes no sense?

Giving a poor person a check every month would do more to stimulate the economy than low taxes do for the rich, they actually spend it. Youre against giving the poor money?

You're for giving the poor money for doing nothing but being poor?

If the USA is having a major inflation problem, why is gasoline going down to its lowest price in 4 years?

Why is the housing market bubble still inflating? Why are the cost of goods going up?

Responses in blue?

Yeah, time to reregulate so people dont get easy credit anymore.

Wouldn't that raise interest rates and create an economic disaster all over again?

How would reregulation happen with Obama's friend Janet Yellin, who likes cheap money policy, being in charge of the Fed now? Likewise, with the federal government who prefers stimulus to the housing market that relies on cheap money policies?

[freebuddy]

You said they were repressive, correct? Seems to me if theyre trying to erase economic inequality, theyre trying to take care of their people.

For now, but if consumption goes down it may not be.

Simple question: What would YOU replace central banks with if you see them as a problem?

Isnt that happening already on certain levels? There are some economists and politicians who have endorsed a guaranteed income for EVERYONE.

I said MAJOR inflation problem, like across the board inflation. If that were the case, gas would be going up instead of DOWN.

Wouldn't that raise interest rates and create an economic disaster all over again?

How would reregulation happen with Obama's friend Janet Yellin, who likes cheap money policy, being in charge of the Fed now? Likewise, with the federal government who prefers stimulus to the housing market that relies on cheap money policies?

Considering something like 50% of bankruptcies are because of medical costs, I think he's going in the right direction with Obamacare to get people insured. Beyond that, there was less personal debt in the past because people earned a living wage, and there were restrictions on easy credit.

[freebuddy]

Common man - you can't neglect the geopolitical from the economic. It's the same with Cuba. Do you believe Cuba started the green revolution because each consumer cared deeply for the environment? Or was it because they had embargoes up the a$& and were forced to find new means.

The world doesn't dance to an economic theory. When will you learn?

Why do right wingers hate Keynes so much?

Its not because they dont believe Keynsian stimulus works - although they pretend otherwise. Listen to Republicans talk about Federal spending on the military or state spending on roads - they know that government spending can create jobs and wealth even if they usually say the opposite. What Republicans and Hayekians and the other right wingers hate about Keynes is that he explained how poverty and scarcity and struggling to make a living and competing just for basics are all unnecessary.

A modern industrial economy, based on markets, without a command economy or bureaucratic management of everything can provide both opportunity for wealth and success and a basic good standard of living for everyone. In the 1960s and 1970s, even market fundamentalists like Milton Friedman advocated that the government could pay everyone a basic living wage. Just offer every person the option of a basic living for when they were sick or studying or taking care of little kids or thinking up a great invention or writing poetry or catching some rays or whatever. People who wanted more or want to be useful would work. Friedman said this program would be cheaper and less demeaning and more effective than 100 different welfare programs all of which have bureaucratic overhead and have to spend a lot of money in a not very effective effort to prevent cheating. In those days people then spoke about post-scarcity economics.

As Keynes had shown, and as J.K. Galbraith helped prove, government actions can create market conditions for economic growth and general prosperity high enough to be able to afford such a program. For example, the government funded basic research and then the initial development of the Internet, generating a huge increase in prosperity. None of this was all that new: Adam Smith pointed out that if the government kept interest rates low the markets would favor well thought out investment, but if rates went up too high investors would speculate and harm national prosperity (ahem, Lehman Brothers). But it was Keynes who first explained that poverty and insecurity could be cured within market systems with some limited assistance from the government.

Heres Keynes writing just after WWI to explain that market systems in which all the gains are grabbed by a very small number of people are unstable and unnecessary:

I seek only to point out that the principle of accumulation based on inequality was a vital part of the pre-war order of Society and of progress as we then understood it, and to emphasize that this principle depended on unstable psychological conditions, which it may be impossible to recreate. It was not natural for a population, of whom so few enjoyed the comforts of life, to accumulate so hugely. The war has disclosed the possibility of consumption to all and the vanity of abstinence to many. Thus the bluff is discovered; the laboring classes may be no longer willing to forego so largely, and the capitalist classes, no longer confident of the future, may seek to enjoy more fully their liberties of consumption so long as they last, and thus precipitate the hour of their confiscation.

But this is heresy to conservatives. The conservatives tell the public that the only alternative to a system in which few enjoy the comforts of life is some despotic Stalinist state. Put up with David Koch dumping poison in the sea and buying Senators, they say, because the only alternative is misery for all and the despotism of a command economy. Keynes showed that was nonsense.

A dynamic market economy without fear and scarcity is the last thing conservatives want - because it would limit the power of the elite. For conservatives, when a job creator threatens to shut down low wage jobs unless he gets more government subsidies, less regulation of harmful environmental effects, less job safety, and no taxes the response should be be craven fear and obedience.The idea that the response could be: someone else can organize that work better, safer, more profitably, and more cleanly, terrifies the entrenched incumbents at the top of the heap, their paid propagandists and flacks, and people who enjoy servility. And face it, the popular support for the right is from people who take pleasure in the misery of others, fear change, and love having powerful bosses. You know, the kind of people who as kids followed the bully and cheered him on. Impertinent rabble rousers, entrepreneurs, inventors, tinkerers, innovators, union organizers, do-gooders and other trouble makers who want to change the world , are poorly suited to conservatism. So are people who just want to do their part and carry their share of the work

Why do conservatives hate Keynes? Because Keynes showed that market economies can be post-scarcity economies and that the deprivation,uncertainty, fear and insecurity that are so much a feature of our present economy can all be cured. Conservatives need deprivation and insecurity to keep the serfs in line. They dont hate Keynes because his suggested policies dont work They hate Keynes because his suggested policies do work. A party that wins office by scaring people with lies about how immigrants are going to take their jobs or black people are going to take all the welfare or other nonsense would be lost if nobody was scared.

http://krebscycle.tumblr.com/post/50178968253/why-do-right-wingers-hate-keynes-so-much

[CanadianLoonie]

Common man - you can't neglect the geopolitical from the economic. It's the same with Cuba. Do you believe Cuba started the green revolution because each consumer cared deeply for the environment? Or was it because they had embargoes up the a$& and were forced to find new means.

The world doesn't dance to an economic theory. When will you learn?

Err...the US is the only major country embargoing Cuba...everybody else is free to do business with them so why is that country so impoverished under the Castro regime?

Why did so many Cubans flee that socialist paradise?

And who is embargoing Venezuela?

Why are there food shortages in that socialist paradise?

Why are so many Venezuelans so desperate to get their hands on foreign currencies that the current black-market VEF/USD exchange rate is a dozen times higher than the official government exchange rate?

How many more countries ruined, how many more people put into poverty before you'll admit your centrally-planned Keynesian economies don't work?

[freebuddy]

Err...the US is the only major country embargoing Cuba...everybody else is free to do business with them so why is that country so impoverished under the Castro regime?

Why did so many Cubans flee that socialist paradise?

And who is embargoing Venezuela?

Why are there food shortages in that socialist paradise?

Why are so many Venezuelans so desperate to get their hands on foreign currencies that the current black-market VEF/USD exchange rate is a dozen times higher than the official government exchange rate?

How many more countries ruined, how many more people put into poverty before you'll admit your centrally-planned Keynesian economies don't work?

Why do a select group of Cubans in Florida hold so much power that the decades old embargo against Cuba still stands? The American business community wants trade with Cuba.

[ronthecivil]

It's.......

I want more stuff! Someone else should pay for it!

VS......

The gold licking tinfoil hat wearing wannabe government topling conspiracy theorists!

That my friends is what goes for an economic discussion these days!

[Hugor Hill]

While many just say that the stock markets is just a scam and only the richest people benefits from it, it's completely false. They point to the dot.com crash, the Enron/accounting scandals, the collapse of Nortel/BB and other large "bluechip" companies, the Great Recession, etc..... but when you have a balanced portfolio and hold for the long-term, the annual return is still approximately 9%.

By balanced you mean one with stocks and bonds? I'm not sure if that's true over the last 30 years. You got figures to show us?

[Hugor Hill]

Capitalism has already been destroyed throughout much of the first world. Welcome to the era of central banks and government dictating winners and losers.

It's more like "Welcome to the era of the super rich and multinational corporations dictating winners and losers."

[Mr. Ambien]

http://townhall.com/columnists/johnhawkins/2014/03/04/5-ways-liberals-try-to-control-you-n1803689/page/full

Liberalism is an ideology that believes in control, not freedom. That's why liberals love the federal government so much while they detest states' rights. It allows them to bend hundreds of millions of people to their will with one imperial edict. It's also why liberal judges don't believe in the Constitution like conservative justices do. Sticking to one set of rules means people have freedom to do what they want as long as they adhere to the basic rules our society was formed around. A "living constitution" means you can put the force of law behind the whims of liberal judges. Why is Barack Obama so insistent on listening in on your phone calls via NSA? Because if the government can't watch you, it can't tell you what to do...for your own good, of course.

Granted, conservatives aren't perfect in these areas, but at least we believe in free speech, free markets, and states' rights. The all-encompassing, all-smothering liberal nanny state has no use for freedom. The only freedom liberals want to give people is the "freedom" to do as they're told.

1) Liberals want to control you with government regulations: There are 174,545 pages of federal regulations. Let me repeat that: there are 174,545 pages of federal regulations and the numbers are only increasing. As a practical matter, what that means is that we've long since passed the point where any one human being could have an understanding of all our regulations and we've moved on to the "we have to pass the bill so that you can find out what is in it" era. In fact, you probably did five illegal things before breakfast without having a clue about it, which you'll find out about the moment some liberal decides you have to be put in your place and looks for a way to do it. Liberals control what you eat, what clothes you wear, what TV you watch, what kind of car you drive, what size soda you can drink, and even what toilet or light bulb you can use in your house. Complain about it and you're accused of wanting to end restaurant inspections and safety standards that prevent cars from exploding. So, what would be wrong with permanently fixing the number of regulations at 1/10 the current number and dropping one every time a new one needs to be added? The only thing wrong with it would be that it wouldn't allow liberals to micromanage your life.

2) Liberals want to control your major life decisions: Liberals aren't just picking at the margins; they're now making some of the central choices in your life. They oppose vouchers and charter schools because they want to make sure your child is exposed to the right kind of liberal propaganda courtesy of the teachersí unions. Creepily, Melissa Harris Perry took it even further when she said, "We have to break through our kind of private idea that kids belong to their parents or kids belong to their families, and recognize that kids belong to whole communities." They don't want to own your children's education; they want to own your children. They control when you can retire by refusing to let people have even safe, limited investment opportunities in Social Security. Obamacare is an attempt to take over the health care system, which will literally give a liberal death panel the ability to decide whether you live or die. Given that Barack Obama himself once famously suggested, "Maybe you're better off not having the surgery, but taking the painkiller," that's not a comforting thought. Shouldn't you be making those decisions about your life instead of disconnected bureaucrats in D.C. who pay no price for being wrong when they make bad choices that hurt you?

3) They want to control your speech: Why do liberals push speech code designed to kill talk radio like the fairness doctrine and "localism?" Because talk radio is conservative and it gets an alternative viewpoint out. It's the same reason that they futilely try to discredit Fox News and why conservative speakers on college campuses are often attacked and shouted down. It's also why liberals embrace speech codes on college campuses and political correctness. Liberals typically don't even argue an issue in any sort of meaningful fashion so much as they shout "racism," "sexism," and "extremism" in an attempt to define all differing opinions as illegitimate by default. Since liberalism works about as well as Communism in practice, the only way it can be implemented is either by force or by preventing the arguments against it from getting a fair hearing.

4) Liberals want to control minorities: If you're not a straight white male, liberals think they own you like a slave. They're not allowed to whip you like a slave any more, but if you leave the liberal plantation by thinking for yourself, they will try to destroy you as a human being. Why do liberals hate men like Clarence Thomas and Ben Carson so much? Because they're successful, intelligent, well-liked black men who don't see themselves as victims, complain incessantly about racism, or believe that they need liberals to succeed. If you're a "feminist," why wouldn't you be celebrating strong, successful, much-admired women like Sarah Palin, Michele Bachmann, Dana Loesch or Michelle Malkin? Because they don't hate men, look at themselves as victims, or believe in aborting as many children as possible. Therefore, they must be demeaned, smeared, and hurt in any way possible. What if you're gay and don't see yourself as a victim or believe the central focus of your entire life should be gay marriage? They want you destroyed. What if you're a strong Hispanic man or woman who doesn't see unlimited illegal immigration as good for the country? They hate you with the passion of a thousand suns. Liberals believe you are free to be anything you want to be, as you long as you stick to the extremely narrow, well-defined roles they've created that allow you to say, speak, and think whatever they tell you.

5) Liberals want to control your money: Liberals are happy to hand out food stamps, welfare, and school lunch programs. They love extending unemployment insurance benefits as long as possible. They're big fans of people quitting their jobs and going on disability. Why? Because once you're financially dependent on them, you're like a dog on a leash. You'll sleep in the doghouse, eat the Alpo, and roll over when your master says so in hopes that he'll give you another treat. They take tax money from the states and demand those same states jump through hoops to get it back. They take money from productive Americans, use it for programs those people don't want or need, and then take credit for spending the money while accusing the people who actually paid of being greedy for not wanting to "give" even more. You're paying the salaries of the IRS workers who audit you for being conservative, the EPA goons who declare your land is a protected wetland when it rains, and the politicians who declare you're a horrible racist for disagreeing with them. Liberals believe we should have a populace that is controlled by the government, not a government that is controlled by the populace.

[Hugor Hill]

http://townhall.com/columnists/johnhawkins/2014/03/04/5-ways-liberals-try-to-control-you-n1803689/page/full

That's propaganda you know it come on.

I'm a liberal but I love businesses and real capitalism, like you.

What we liberals truly hate is corporatism.

[ronthecivil]

By balanced you mean one with stocks and bonds? I'm not sure if that's true over the last 30 years. You got figures to show us?

I sure hope he does....

Google the returns of the S&P 500, the Dow, and the TSX. Keep in mind that doesn't include dividends.

Keep the bonds as a hedge, and rebalance when things get out of whack, and you should get average returns like that WITHOUT EVEN HAVING TO PICK A SINGLE STOCK OR KNOW ANYTHING ABOUT THE MARKET!

So ya, it is just that easy.

[Hugor Hill]

I sure hope he does....

Google the returns of the S&P 500, the Dow, and the TSX. Keep in mind that doesn't include dividends.

Keep the bonds as a hedge, and rebalance when things get out of whack, and you should get average returns like that WITHOUT EVEN HAVING TO PICK A SINGLE STOCK OR KNOW ANYTHING ABOUT THE MARKET!

So ya, it is just that easy.

If it's that easy to time the market, pull your stocks before market crashes, everyone would be doing it, Mr. 50/50 Hindsight.

[Mr. Ambien]

If it's that easy to time the market, pull your stocks before market crashes, everyone would be doing it, Mr. 50/50 Hindsight.

It's about being able to see the fundamentals. Schiff got his money out before the crash, likewise, got his clients' money out, but look at all the liquored up idiots waving their American "too big to fail" flags.

....

And it's going to happen again the way things are headed, same terrible fundamentals, on a larger scale:

https://www.youtube.com/watch?v=mKWSvJNwbck

[Hugor Hill]

It's about being able to see the fundamentals. Schiff got his money out before the crash, likewise, got his clients' money out, but look at all the liquored up idiots waving their American "too big to fail" flags.

....

And it's going to happen again the way things are headed, same terrible fundamentals, on a larger scale:

https://www.youtube.com/watch?v=mKWSvJNwbck

From having worked in the investment sector - 95% of the professional investment advisors out there didn't see it coming, and won't see the next one coming.

Having said that, way back when I was young, we had a look at a mutual fund manager's own investment account. He pulled his money a few days before the 2001 crash.

So yes, you can see it and some people do see it coming, but not everyone of them discloses the information to the public - probably because they are concerned that they can be wrong or they just didn't want to. Who knows? For people who pulled their money out on time it's very very profitable to re-invest after everyone has pull their money.

Re: Schiff - look, if I start preaching about the next market crash today and two years later the market finally crashes, am I the prophet? Or is it a winter is always coming so the Starks are never wrong kind of thing?

[Mr. Ambien]

From having worked in the investment sector - 95% of the professional investment advisors out there didn't see it coming, and won't see the next one coming.

Having said that, way back when I was young, we had a look at a mutual fund manager's own investment account. He pulled his money a few days before the 2001 crash.

So yes, you can see it and some people do see it coming, but not everyone of them discloses the information to the public - probably because they are concerned that they can be wrong or they just didn't want to. Who knows? For people who pulled their money out on time it's very very profitable to re-invest after everyone has pull their money.

Re: Schiff - look, if I start preaching about the next market crash today and two years later the market finally crashes, am I the prophet? Or is it a winter is always coming so the Starks are never wrong kind of thing?

Investing in the US economy is most certainly a good idea, and it's not that Schiff doesn't want to. However, the US government and their puppet Fed chairmen risk investments by the way they manage fiscal and monetary policy. Stimulus legislation, Fed injection, are clearly aimed at two primary parts of the economy -- re-inflating the housing bubble, and the stock market.

Schiff doesn't like answering the "when", because he flat out doesn't know. You can predict that a severe drug addict will wind up killing themselves, you just can't predict the day, month, or year they do it. Of course, he makes the mistake of placating to the TV personalities or those who are overly dependent upon the government and thus in denial about the actual problems.

[sam13371337]

some people are too stupid for their own good.

there is no way an exploitative capitalist system continues without massive support from the ordinary Joe.

This ordinary Joe is heavily propagated with the belief that if he "works hard" he too can become a gazzillionaire. And hence the system is good for him.

[ronthecivil]

If it's that easy to time the market, pull your stocks before market crashes, everyone would be doing it, Mr. 50/50 Hindsight.

You don't time the market, you invest in it. If the market goes way up, you rebalance from stocks into bonds to bring everything into your desired split (typically 60-40). If the market goes way down, you rebalance from bonds into stocks to bring everything back to the desired allocation.

There is no timing required or fortune telling required.

You can diversify by simply buying ETFs that track the major markets.

If your portfolio goes to zero, you have bigger problems than having no retirement savings.

No hindsight or foresight required. Just some intelligence and patience.

[CanadianLoonie]

Why do a select group of Cubans in Florida hold so much power that the decades old embargo against Cuba still stands? The American business community wants trade with Cuba.

Did you think things over before you typed that?

Without government, who would be lobbied by special interest groups?

Without government, who would unilaterally embargo a foreign economy from trade and commerce and make it a criminal offense to do so?

[Mr. Ambien]

some people are too stupid for their own good.

there is no way an exploitative capitalist system continues without massive support from the ordinary Joe.

This ordinary Joe is heavily propagated with the belief that if he "works hard" he too can become a gazzillionaire. And hence the system is good for him.

The system is kind to people who make smart decisions, but don't worry, it's becoming even kinder to both rich and poor moochers who come to government begging for handouts to substitute for making smart decisions.

[sam13371337]

The system is kind to people who make smart decisions, but don't worry, it's becoming even kinder to both rich and poor moochers who come to government begging for handouts to substitute for making smart decisions.

yes its kind to the very small percentage who make it. But extremely unkind to the strong majority that don't.

a lot of times the difference between success and failure lies strictly on factors such as luck/timing (not something you can control)

and by moochers and beggers I presume you mean the CEO's, bankers and executives who were all capitalist when they were gambling with other peoples money. But became massively socialist themselves the second they lost right?