Niall Ferguson On Whether The Financial Crisis Will Lead To America's Decline And A Glimpse Of The "Post-Pax Americana" Dark Ages

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bugs_'s picture

One of Prechter's subscribers?

Thomas's picture

Ferguson's one screw up: When asked should it come from taxes or government reduction he should have been clearer that it really ought to come from essentially all government reduction since it is the source. I fall into the camp, however, that we ought to tax the crap out of everybody and pay COD if necessary as a reminder that we are squandering the money. It is only by paying the real cost that we can understand the real cost. I also do grow weary of the children-grandchildren argument: We are gonna get reamed before they can even inherit this mess. Niall gets that part spot on.

midtowng's picture

Ferguson's solutions seem to be run-of-the-mill neoliberalism.

I don't know why people forget the basic lessons of classical economics: tax the Hell out of unearned income, and give incentives for earned income.

Adam Smith, Ricardo, Keynes, and all the great economists before WWII all said the same thing: unearned income (i.e. rentier state) is a burden on the economy. We need to give incentives to workers and direct investment.

Instead, all discussion, including the discussion above, is all about blaming the working class and punishing them for not working hard enough.

packman's picture

Just wondering - what's your estimate of what % of income is rentier state income?  And what is that estimate based on (e.g. what's the basis for what you consider to be rentier state income)?

AnAnonymous's picture

In the US?

100 pc. The US is living off their USD hegemony. Rent.

Looks at all the US afford to do (and cannot afford not to do by the way) thanks to the USD position.

The USD is the ultimate rent for the US.

66Sexy's picture

I agree that technology and entrepreneurship are what is going to get us out of this.

Government policy seeks to suppress technology and entrepreneurship, because government is non productive and is supported by huge multinational corporations, who have the resources to afford immense bribes to influence government policy. These huge corporations insure suppression with capital, all to maintain their positions at the top.

It is the culture of self preservationism and corporate protectionism; which is in and of itself, maladaptive.

This is also reflected in the actions of governmental self policy, as its actions are a self exaltation and public servitude, without regard to the long term, bigger picture. Government seeks to bloat the ranks of itself, and thereby expanding its own influence, and it also uses this tactic for self preservation.

The solution is to reduce dramatically, or eliminate the influences of large international corporations on the political process, by limiting and tracking political contributions, and adapting policies that foster technological innovation and small business growth.. not maintaining unsustainable entitlement programs.

Jerry Maguire's picture

Unfortunately, it is only the law that will get us out of this.  Constitutional law.  As in an amendment:

http://strikelawyer.wordpress.com

About five posts there for review.

 

Malcolm Tucker's picture

Here is a Chilean telling David Rockefeller that he's not welcome in Chile:

http://fedupmontrealer.blogspot.com/2011/01/david-rockefeller-gets-welcomed-in.html

Maybe it has something to do with the alleged Pinochet collaborator who gets in the car with him!

OddFieldIsStrong's picture

I have junked you - why are you spamming with the same ot comment on every post?

creviceCaress's picture

send lawyers guns and money

 

unfortunately, the constitution said 'i'm going to disneyworld!"  and wont be available for an amendment.........dewd you gotta get off this law crap.im sure you actually think/believe this is the way to go.....but you're deluded.  quit being a lawdog, it's better for your health

New_Meat's picture

66-and if you say :O

If by "technology and entrepreneurship are what is going to get us out of this."

you mean some kind of growth, then right on!  Only way out of the burning theater watching the "everything is unsustainable, the world will end" movie.  The 1946++ example, that included slurping down the excess (might one say 'unsustainable') spending all through the '30s and even through WWII.

Mal-adaptive? Check!

Complete disclosure (that is, even eliminating the money bundling monks with 'no controlling legal authority')? Check!

Contribution limits? Nyet!, but see above full disclosure.  (Both on libertarian grounds and on the fact that the Supremes ruled and on the fact that the fraud is already embedded, so it can only hurt outsiders).

The only way (as you posit) to reduce the influence of the international corporations is to remove barriers to entry for newbies; then they (newbies) march or die. e.g.

http://www.youtube.com/watch?v=L7z691yC9pc

- Ned

OT, sorta' I'm in Houston tonight listening to the doo-gooder city trying to "license" soup kitchens to meet "standards" because someone might become "sick".  Just a "no charge" registration with some city "training".

D'Ya think the churches have no clue as to how to feed folks?

 

 

 

 

 

 

dizzyfingers's picture

Well said. True and right.

midtowng's picture

I haven't done the numbers, so I can't answer that.

But that's not the point. The fact that capital gains are taxed at a lower rate than even poor, working class income is the exact wrong set of values, and bad economics.

And that's just one obvious example.

blindfaith's picture

By God, add to that the number of CEO's, bankers, et al who deliberately (and liberally)delay pay, options, etc in order to claim capital gains tax instead of ordinary income tax and you have a crimethat the government has know about for years and, once again, turns it's blind eye to it...to many pals are doing it, you know...mustn't mess with our friends.

rawsienna's picture

fyi .  delay pay, optiosn, restricted stock, etc are all taxed as INCOME in the year it vests.  THere are a lot of messed uped shit in the tax code but that is not one of em.  

dizzyfingers's picture

Thank you. True and right.

Are these people lying deliberately or is it just the ignorance of the left?

A Nanny Moose's picture

Those with capital gains can always take their ball and leave, should they find business conditions hostile here. We see this in the number of businesses that have left California for other states such as Nevada, and Arizona.

Additionally, and simplistically, if we tax the homeowner/lessor, who pays the taxes? The homeowner? No, the Lessee does.

Jealousy, and social engineering are not the solution.

midtowng's picture

This has nothing to do with jealousy (I'm guessing you meant "envy"). This is all about good economics. Do you really think that Adam Smith, David Ricardo, et al were talking about envy when they created their theories? Please.

It's about rewarding behavior like hard work and smart investing and things that help the economy in general, and removing the incentives for things like land speculation. If you really want to call that "social engineering" then I suggest that punishing armed robbery is also "social engineering".

As for those with capital gains, they won't do that if their rewards for building factories and starting businesses in a thriving economy are far greater.

the rookie cynic's picture

Agreed. I was chatting with an upwardly mobile bank exec recently who told me how he can't wait to live of his capitals gains and not have any earned income to pay ahigher rate on. If you're wondering....yeah, I punched him.

dizzyfingers's picture

"Jealousy, and social engineering are not the solution"

I agree; both have got us where we are today re unpayable promises.

packman's picture

The fact that capital gains are taxed at a lower rate than even poor, working class income is the exact wrong set of values, and bad economics.

Well I wouldn't say that capital gains are taxed at a lower rate than poor, working glass income; since the latter is generally near zero due to our tax brackets (at least at a federal level).  However I definitely agree in principle that capital gains and/or rentier income (whether the two can be lumped together is pretty subjective and situation-dependent) should be taxed at the highest rate.  For short-term (less than a year) it is; but it should be for long-term as well; probably even moreso for short term (especially in the case of HFT; in which case it should probalby be close to 100%!)

packman's picture

The fact that capital gains are taxed at a lower rate than even poor, working class income is the exact wrong set of values, and bad economics.

Well I wouldn't say that capital gains are taxed at a lower rate than poor, working glass income; since the latter is generally near zero due to our tax brackets (at least at a federal level).  However I definitely agree in principle that capital gains and/or rentier income (whether the two can be lumped together is pretty subjective and situation-dependent) should be taxed at the highest rate.  For short-term (less than a year) it is; but it should be for long-term as well; probably even moreso for short term (especially in the case of HFT; in which case it should probalby be close to 100%!)

But I'm not sure why Hudson says that about the commissions proposal.  The proposal does away with special rates for capital gains and dividends.  I assume that means that they'll be raised to be equal to income tax.  I'm not sure why Hudson (and you) disagree with that.

 

midtowng's picture

There is a tendency to only look at income taxes when looking at what the poor pay in taxes, and forgetting to look at regressive payroll taxes. The wealthy pay almost nothing percentagewise in payroll taxes, while the taxes the poor pay are almost exclusively payroll taxes.

As for the commission, I believe Hudson criticized it for what it didn't address, rather than what it did.

New_Meat's picture

You should consult with John Edwards on this subject, he seems to have come up with some kind of mastery on the subject.

- Ned

A Nanny Moose's picture

Interesting proposition, but how does taxing unearned income affect entrepeurship? What defines unearned? Governemt income is largely unearned except if you wholly believe that might makes right.

midtowng's picture

This is from a ZeroHedge article:

http://www.zerohedge.com/article/adam-smith-critiques-deficit-reduction-...

And the century of free market economists who followed Smith would have said, “Tax away unearned rentier income. And do not pay creditors by selling off the public domain to rent-seeking privatizers erecting tollbooths on the economy.” That was precisely the legacy of feudalism that free-market theory was designed to reject, after all.

PulauHantu29's picture

"The Horse that works the Hardest, gets whipped the most to work even Harder."

 

Old Confucius proverb

Hollow_Point's picture

Yep, WTWB......Whip The Willing Boy.

Infinite QE's picture

My concern about Fergie is how in bed with the Rothschild cabal he is.

"Back at the KPC mine Rothschild was unconcerned. He told me that speed was the reason for the deal’s success. “I think the fact we’ve done something quickly is heartening to the people who put money in Vallar.” He was also sure he and the Bakries would get along fine, regardless of the size of their respective shareholdings or alleged misdemeanours. His attention turned back to his BlackBerry where he was busy trading texts with Niall Ferguson, the historian and biographer of the Rothschild family, who was staying at his house in Switzerland."

http://www.ft.com/cms/s/2/3a8cd690-1ebd-11e0-a1d1-00144feab49a.html#axzz...

 

 

 

New_Meat's picture

inf--you had me with:

"My concern about Fergie is how in bed with the..."

and I had a flash back to Maggie:

http://www.zerohedge.com/article/niall-ferguson-and-dollar-margaret-bren...

[ed. start at about 1:10 to go]

- Ned

Caged Monkey's picture

My how quickly we forget. This is, after all, the same Niall Ferguson who said this:

 

"I think if anybody understands this crisis, it’s Ben Bernanke.   After all, he dedicated most of his life to studying the great depression.   And, we’re really lucky that he’s in that job.   His predecessor, Alan Greenspan, in many ways screwed up.  You could say that the bubble was in large measure a result of his negligence, when he didn’t raise interest rates early enough, and let the real estate market go crazy.  But we’re quite lucky, because Bernanke has got this right so far.   And my great fear is that congress is gonna get power over the Fed.  That’s the nightmare scenario – that we have those crazy people on the hill starting to control monetary policy.  Then I really will go back to Britain." - N.F., Real Time With Bill Maher, 7/31/09, discussing Ron Paul's resolution to audit the fed.

 

He gets some of this stuff right and yet is still a Fed apologist. It's like having one good eye; he still has no depth perception.

dizzyfingers's picture

Quote:  It is only by paying the real cost that we can understand the real cost. Unquote

 

I agree. Been carping about that since the 1960s.

dizzyfingers's picture

Quote: It is only by paying the real cost that we can understand the real cost. Unquote

I would restate this: It is only by every individual's paying the real cost of everything he or she uses or consumes and every benefit he or she receives "from government" (which really comes from every taxpayer, not from government at all, thus does not benefit the country as a whole but only the receivers of "free" benefits)... etc.

And for those who junked Thomas' comment, eff you and go shit up a rope, you are too stupid to understand what's happening.

JW n FL's picture

http://www.youtube.com/watch?v=I-lMyaSHsd8

no more dreaming as if death it self had been undone... no more dreaming!

unwashedmass's picture

 

really enjoyed listening to all of this, thank you zerohedge. once again, you guys run the best site on the web.

oddjob's picture

Funny,I turned it off as soon as I saw Mort Zuckerman.That video was tripe.

JW n FL's picture
by gwar5
on Mon, 01/17/2011 - 12:52
#882057

 

Yep, I've said for 2 years the USA will following the pattern of collapse of the USSR and American influence and empire will be broken up. The effect on geopolitics will be enormous and despots around the world will no longer be held in check.

Good night, and good luck.

**********************************************************************************

Why? cause you want it real, real, real, real, real, real bad to happen?

Are you going to call upon the alien gods to come and crush the ignorance that you swim in?

How IN THE FUCK IS IT OVER?

You sound like a fucking sheep.

here... have a song to jam too... http://www.youtube.com/watch?v=iWOyfLBYtuU&feature=related

UGrev's picture

To the contrary.. it sounds like you're too chicken shit to let it go and you want the dog and pony show to keep going real, real, real, real, real, real, bad. I want this stuff to stop as in YESTERDAY (and that would pretty much mean the collapse before the reset). But if you want to let the elitists fist your ass with a grapefruit, then you go first. I'll watch and then sell the video on the internet.

CH1's picture

Yes, collapse then reset is our only hope. The alternative is North Korea or worse.

mtomato2's picture

"Fist your ass with a grapefruit..."  Did he really say that?  Damn.  That is some gooood stuff, there.  +1000!

Oh regional Indian's picture

Smooth as silk ladies and gentlemen.

Please note the top three stories. Full court press of bad news.

Known as the numbing down of the audience. We are clearly at the edge of another shock and it will (always does) come out of left field.

A black swan?

It casts no shadows.

 

Meanwhile, all you constitutionalists, digest this:

If you don't believe read Padelford, Fay & Co. vs. The Mayor and Aldermen of the City of Savannah. 14 Georgia 438, 520 which states " But, indeed, no private person has a right to complain, by suit in court, on the ground of a breach of the Constitution, the Constitution, it is true, is a compact but he is not a party to it."

 

ORI

http://aadivaahan.wordpress.com/2010/06/16/time-faster-now/

JW n FL's picture

for someone who is media savy, you sure do post some stupid shit.

Oh regional Indian's picture

For someone whos is a stupid shit, you do a fine act of being media savvy.

ORI

JW n FL's picture

hey, settle down tonto... i told you i would have your beads and fire water next week.