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Peter Schiff Slams PikettyMania

Tyler Durden's picture




 

It's all the rage... Pikettymania is sweeping the nation and liberal economists are throwing their academic panties on his theoretical stage...

 

 

So here is Peter Schiff to debunk the euphoria...

 

Submitted by Peter Schiff of Euro Pacific Capital,

There can be little doubt that Thomas Piketty's new book Capital in the 21st Century has struck a nerve globally. In fact, the Piketty phenomenon (the economic equivalent to Beatlemania) has in some ways become a bigger story than the ideas themselves. However, the book's popularity is not at all surprising when you consider that its central premise: how radical wealth redistribution will create a better society, has always had its enthusiastic champions (many of whom instigated revolts and revolutions). What is surprising, however, is that the absurd ideas contained in the book could captivate so many supposedly intelligent people

Prior to the 20th Century, the urge to redistribute was held in check only by the unassailable power of the ruling classes, and to a lesser extent by moral and practical reservations against theft. Karl Marx did an end-run around the moral objections by asserting that the rich became so only through theft, and that the elimination of private property held the key to economic growth. But the dismal results of the 20th Century's communist revolutions took the wind out of the sails of the redistributionists. After such a drubbing, bold new ideas were needed to rescue the cause. Piketty's 700 pages have apparently filled that void.

Any modern political pollster will tell you that the battle of ideas is won or lost in the first 15 seconds. Piketty's primary achievement lies not in the heft of his book, or in his analysis of centuries of income data (which has shown signs of fraying), but in conjuring a seductively simple and emotionally satisfying idea: that the rich got that way because the return on invested capital (r) is generally two to three percentage points higher annually than economic growth (g). Therefore, people with money to invest (the wealthy) will always get richer, at a faster pace, than everyone else. Free markets, therefore, are a one-way road towards ever-greater inequality.

Since Piketty sees wealth in terms of zero sum gains (someone gets rich by making another poor) he believes that the suffering of the masses will increase until this cycle is broken by either: 1) wealth destruction that occurs during war or depression (which makes the wealthy poorer) or 2) wealth re-distribution achieved through income, wealth, or property taxes. And although Piketty seems to admire the results achieved by war and depression, he does not advocate them as matters of policy. This leaves taxes, which he believes should be raised high enough to prevent both high incomes and the potential for inherited wealth.

Before proceeding to dismantle the core of his thesis, one must marvel at the absurdity of his premise. In the book, he states "For those who work for a living, the level of inequality in the United States is probably higher than in any other society at any time in the past, anywhere in the world." Given that equality is his yardstick for economic success, this means that he believes that America is likely the worst place for a non-rich person to ever have been born. That's a very big statement. And it is true in a very limited and superficial sense. For instance, according to Forbes, Bill Gates is $78 billion richer than the poorest American. Finding another instance of that much monetary disparity may be difficult. But wealth is measured far more effectively in other ways, living standards in particular.

For instance, the wealthiest Roman is widely believed to have been Crassus, a first century BC landowner. At a time when a loaf of bread sold for ½ of a sestertius, Crassus had an estimated net worth of 200 million sestertii, or about 400 million loaves of bread. Today, in the U.S., where a loaf of bread costs about $3, Bill Gates could buy about 25 billion of them. So when measured in terms of bread, Gates is richer. But that's about the only category where that is true.

Crassus lived in a palace that would have been beyond comprehension for most Romans. He had as much exotic food and fine wines as he could stuff into his body, he had hot baths every day, and had his own staff of servants, bearers, cooks, performers, masseurs, entertainers, and musicians. His children had private tutors. If it got too hot, he was carried in a private coach to his beach homes and had his servants fan him 24 hours a day. In contrast, the poorest Romans, if they were not chained to an oar or fighting wild beasts in the arena, were likely toiling in the fields eating nothing but bread, if they were lucky. Unlike Crassus, they had no access to a varied diet, health care, education, entertainment, or indoor plumbing.

In contrast, look at how Bill Gates lives in comparison to the poorest Americans. The commodes used by both are remarkably similar, and both enjoy hot and cold running water. Gates certainly has access to better food and better health care, but Americans do not die of hunger or drop dead in the streets from disease, and they certainly have more to eat than just bread. For entertainment, Bill Gates likely turns on the TV and sees the same shows that even the poorest Americans watch, and when it gets hot he turns on the air conditioning, something that many poor Americans can also do. Certainly flipping burgers in a McDonald's is no walk in the park, but it is far better than being a galley slave. The same disparity can be made throughout history, from Kublai Khan, to Louis XIV. Monarchs and nobility achieved unimagined wealth while surrounded by abject poverty. The same thing happens today in places like North Korea, where Kim Jong-un lives in splendor while his citizens literally starve to death.

Unemployment, infirmity or disabilities are not death sentences in America as they were in many other places throughout history. In fact, it's very possible here to earn more by not working. Yet Piketty would have us believe that the inequality in the U.S. now is worse than in any other place, at any other time. If you can swallow that, I guess you are open to anything else he has to serve.

All economists, regardless of their political orientation, acknowledge that improving productive capital is essential for economic growth. We are only as good as the tools we have. Food, clothing and shelter are so much more plentiful now than they were 200 years ago because modern capital equipment makes the processes of farming, manufacturing, and building so much more efficient and productive (despite government regulations and taxes that undermine those efficiencies). Piketty tries to show that he has moved past Marx by acknowledging the failures of state-planned economies.

But he believes that the state should place upper limits on the amount of wealth the capitalists are allowed to retain from the fruits of their efforts. To do this, he imagines income tax rates that would approach 80% on incomes over $500,000 or so, combined with an annual 10% tax on existing wealth (in all its forms: land, housing, art, intellectual property, etc.). To be effective, he argues that these confiscatory taxes should be imposed globally so that wealthy people could not shift assets around the world to avoid taxes. He admits that these transferences may not actually increase tax revenues, which could be used, supposedly, to help the lives of the poor. Instead he claims the point is simply to prevent rich people from staying that way or getting that way in the first place.

Since it would be naive to assume that the wealthy would continue to work and invest at their usual pace once they crossed over Piketty's income and wealth thresholds, he clearly believes that the economy would not suffer from their disengagement. Given the effort it takes to earn money and the value everyone places on their limited leisure time, it is likely that many entrepreneurs will simply decide that 100% effort for a 20% return is no longer worth it. Does Piketty really believe that the economy would be helped if the Steve Jobses and Bill Gateses of the world simply decided to stop working once they earned a half a million dollars?

Because he sees inherited wealth as the original economic sin, he also advocates tax policies that will put an end to it. What will this accomplish? By barring the possibility of passing on money or property to children, successful people will be much more inclined to spend on luxury services (travel and entertainment) than to save or plan for the future. While most modern economists believe that savings detract from an economy by reducing current spending, it is actually the seed capital that funds future economic growth. In addition, businesses managed for the long haul tend to offer incremental value to society. Bringing children into the family business also creates value, not just for shareholders but for customers. But Piketty would prefer that business owners pull the plug on their own companies long before they reach their potential value and before they can bring their children into the business. How exactly does this benefit society?

If income and wealth are capped, people with capital and incomes above the threshold will have no incentive to invest or make loans. After all, why take the risks when almost all the rewards would go to taxes? This means that there will be less capital available to lend to businesses and individuals. This will cause interest rates to rise, thereby dampening economic growth. Wealth taxes would exert similar upward pressure on interest rates by cutting down on the pool of capital that is available to be lent. Wealthy people will know that any unspent wealth will be taxed at 10% annually, so only investments that are likely to earn more than 10%, by a margin wide enough to compensate for the risk, would be considered. That's a high threshold.

The primary flaw in his arguments are not moral, or even computational, but logical. He notes that the return of capital is greater than economic growth, but he fails to consider how capital itself "returns" benefits for all. For instance, it's easy to see that Steve Jobs made billions by developing and selling Apple products. All you need to do is look at his bank account. But it's much harder, if not impossible, to measure the much greater benefit that everyone else received from his ideas. It only comes out if you ask the right questions. For instance, how much would someone need to pay you to voluntarily give up the Internet for a year? It's likely that most Americans would pick a number north of $10,000. This for a service that most people pay less than $80 per month (sometimes it's free with a cup of coffee). This differential is the "dark matter" that Piketty fails to see, because he doesn't even bother to look.

Somehow in his decades of research, Piketty overlooks the fact that the industrial revolution reduced the consequences of inequality. Peasants, who had been locked into subsistence farming for centuries, found themselves with stunningly improved economic prospects in just a few generations. So, whereas feudal society was divided into a few people who were stunningly rich and the masses who were miserably poor, capitalism created the middle class for the first time in history and allowed for the possibility of real economic mobility. As a by-product, some of the more successful entrepreneurs generated the largest fortunes ever measured. But for Piketty it's only the extremes that matter. That's because he, and his adherents, are more driven by envy than by a desire for success. But in the real world, where envy is inedible, living standards are the only things that matter. 

 

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Thu, 05/29/2014 - 11:45 | 4805804 Flakmeister
Flakmeister's picture

Schiff must be getting tired of losing vast amounts of money for his clients, assuming he has any left...

Thu, 05/29/2014 - 11:50 | 4805819 Spitzer
Spitzer's picture

Unmm.. Why ? He made a killing leading out of 2009. And he was never bearish on equities.

Moron.

Thu, 05/29/2014 - 12:02 | 4805861 bobnoxy
bobnoxy's picture

I remember back when the market was getting crushed back in 2008 and on his radio show, one of his clients called and complained about how much he was losing in Schiff's best ideas, mainly emerging markets and gold stocks.

Schiff loudly told him to calm down. Getting very defensive at being called out like that so publicly, he said;  "You haven't lost anything until you sell!''. So holding something that's down 75% isn't really a loss if he held on to it?

Lost a lot of respect for him on that one.

Oh, and technically, every citizen of Norway is a millionaire from the nationalized oil sales and the profits being pumped into their national wealth fund. Can you imagine if that had been done here? I'm sure his retort to that woould be that it shouldn't have worked. Doesn't conform to his theory.

Thu, 05/29/2014 - 12:12 | 4805894 Pladizow
Pladizow's picture

“While certain public policies would in the long run benefit everybody, other policies would benefit one group only at the expense of all other groups. The group that would benefit from such policies, having such a direct interest in them, will argue fir them plausibly and persistently. It will hire the best buyable minds to devote their whole time to presenting the case. And it will finally either convince the general public that the case is sound, or so befuddle it that clear thinking on the subject becomes next to impossible.” – Henry Hazlitt, Economics In One Lesson - Page one, 1946.

Thu, 05/29/2014 - 12:19 | 4805925 gh0atrider
gh0atrider's picture

Pytor Schiff was wrong (about Bitcoin).

Thu, 05/29/2014 - 12:27 | 4805956 Pladizow
Pladizow's picture

“It is often sadly remarked that the bad economist present their errors to the public better than the good economists present their truths.” - Henry Hazlitt, Economics In One Lesson, 1946.

Thu, 05/29/2014 - 12:42 | 4806038 max2205
max2205's picture

If they don't keep giving to the ever increasing FSA they know they will lose all their power.

 

Happy Pomo Day....when's it start damn it!

Thu, 05/29/2014 - 13:53 | 4806424 Vampyroteuthis ...
Vampyroteuthis infernalis's picture

So this French moron want to tax wealthy incomes up to 80%? Who is going to stop these high income tax donkeys from changing passports? Nothing. Go back to your commie infested generator of educated idiots!!!

Thu, 05/29/2014 - 14:18 | 4806569 Froman
Froman's picture

Preach it brother! Preach it!

Thu, 05/29/2014 - 14:51 | 4806766 taketheredpill
taketheredpill's picture

 

 

If the Top 50 Bankers in the U.S. stopped working, would the average person in the U.S. be worse off or better off.

Thu, 05/29/2014 - 16:03 | 4807089 Mercuryquicksilver
Mercuryquicksilver's picture

If the Top 5 Banks in the U.S. stopped, would the average person in the U.S. be worse off or better off?

Thu, 05/29/2014 - 13:55 | 4806437 MillionDollarBogus_
MillionDollarBogus_'s picture

"Certainly flipping burgers in a McDonald's is no walk in the park, but it is far better than being a galley slave."

Interesting comment, considering that Shiff's dad chose to go to prison (certainly living like a galley slave) in his fight against the IRS.

I can understand the source of Peter's bitterness..

Thu, 05/29/2014 - 13:03 | 4806172 Spitzer
Spitzer's picture

Europac Metals accepts btc

Thu, 05/29/2014 - 13:31 | 4806311 gh0atrider
gh0atrider's picture

Begrudgingly by the sounds of it har har har.

Thu, 05/29/2014 - 13:32 | 4806318 bobnoxy
bobnoxy's picture

Numerous investors and entrepreneurs agree that runaway inequality hurts the economy, including:

 

http://www.ritholtz.com/blog/2014/03/whos-who-of-prominent-economists-ag...

I wonder what Schiff knows that those people do not.

Thu, 05/29/2014 - 14:13 | 4806545 Notsobadwlad
Notsobadwlad's picture

Of course because financial inequality decreases money velocity.

Similarly the fewer banks, the less equality in lending.

Thu, 05/29/2014 - 14:43 | 4806719 stev3e
stev3e's picture

The likes of Bill Gates, Warren Buffet, et al. were very silent on income inequality while they were getting theirs.  Now that is it safely stored within complex legal trust structures where it cannot be redistributed and from where their managment decisions will have some power even after they have died, they would like to see income distribution for everyone else.

They should remove their wealth their protected structures and offer it up to the same processes they now hypocritically support.

The list you presented is the worst of the worst of humanity, and many people are fooled by their silver tongues.

Thu, 05/29/2014 - 14:55 | 4806797 bobnoxy
bobnoxy's picture

Wealth inequality wasn't much of an issue back in the day when they made theirs. Today it's worse than any time since the years leading into the Depression, which kind of supports their point. And they have agreed to give it away.

Thu, 05/29/2014 - 16:34 | 4807234 Steaming_Wookie_Doo
Steaming_Wookie_Doo's picture

"agreed to give it away"

If you believe that, then there's a Nigerian email claiming to give you rights to the Brooklyn Bridge (for a small processing fee). Rockefeller may have spent his elder days giving away dimes, creating "charitable foundations", etc, but I didn't notice any of his descendants in poverty. Same for any of the Robber Barons of the 1800s.

I can't quite get with the level inequality, though I do understand the sheer numbers. Of course, really adjusting for inflation would probably make more of a difference than was glossed over in the article. The poor in this country still have running hot/cold water, electricity, indoor toilets, phones, color TV (probably with cable), and the lowest relative costs for clothing anywhere in the world. Not saying living in a public housing unit would be great, but compared to a ghetto in India or the Philippines, these guys have nothing to bitch about.

Fri, 05/30/2014 - 07:40 | 4808903 Sean7k
Sean7k's picture

Yet, none of them do anything about it. None of them work at creating a better system, knowing that the simple acts of eliminating fractional reserve banking and State regulation would work wonders. Not everyone is tgnorant enough to accept one words at face value, but actually look to works.

Thu, 05/29/2014 - 15:35 | 4807006 Agstacker
Agstacker's picture

Can you imagine if that had been done here?

 

Alaska does.

 

http://pfd.alaska.gov/

Sat, 05/31/2014 - 23:34 | 4813747 TheReplacement
TheReplacement's picture

If you are so smart why don't you write a rebuttal and disclose your wealth?

Thu, 05/29/2014 - 11:54 | 4805828 CaptainSpaulding
CaptainSpaulding's picture

I guess his vitamin company isn't doing too well

http://pics.drugstore.com/prodimg/28922/220.jpg

Thu, 05/29/2014 - 12:04 | 4805875 Spitzer
Spitzer's picture

I like his bank. The first thing he does is throw the seppos under the bus when you log into the site. Europac bank

Thu, 05/29/2014 - 12:05 | 4805877 Greenskeeper_Carl
Greenskeeper_Carl's picture

What an astute observation. And very relevant to this article....

But one thing I haven't heard many say, and I'm surprised schiff didn't, is that the fed is responsible for almost all of this. There are always going to be rich and poor people, but it's no coincidence that the gap between them coincided with the massive growth of the Feds balance sheet, or record low interest rates.

Thu, 05/29/2014 - 12:36 | 4805945 Bananamerican
Bananamerican's picture

Yes.
So can we at least redistribute Dimon, Geithner and Blankfiend's money? Huh? Can we??

"First they came for Vikram Pandit's money and I said nothing...
Then they came for Moynihan's money and I said noth....Oh fuck this"

What I don't get is this .gov troika that 1st fattens the wealthy class in true fascist form then shears that same class after the wealth transfer...from the....formerly...Middle class!!? Muthafuckerz!!!!

Fri, 05/30/2014 - 01:50 | 4808716 Fiat Envy
Fiat Envy's picture

Stop giving them trillons and they will be broke in the blink of an eye.

Thu, 05/29/2014 - 12:33 | 4805990 NidStyles
NidStyles's picture

Schiff has been beating that particular drum for over 20 years, he doesn't need to actually come out and say it, it's implied.

Thu, 05/29/2014 - 13:25 | 4806043 Flakmeister
Flakmeister's picture

That would explain why the US GINI ratio decreased from 1930 to ~1980 or so and started rapidly rising then...

Are you always so blind to what the data says?

Thu, 05/29/2014 - 13:43 | 4806372 Greenskeeper_Carl
Greenskeeper_Carl's picture

Wow really? Inequality starting rising once the US ended the gold standard and the fed started to blow bubbles, and central banks were able to freely print fiat money and inflate their debts away at the expense of the middle class saver? Color me shocked....isn't that exactly what I said?

Thu, 05/29/2014 - 13:49 | 4806407 eclectic syncretist
eclectic syncretist's picture

Schiff's just another used car salesman who writes without research.  Wealth redistributions from the rich to the poor are, historically speaking, almost always extremely violent, and involve widespread death of the rich.

Thu, 05/29/2014 - 14:25 | 4806610 Flakmeister
Flakmeister's picture

Nope...

The beginning of the end was US oil production peaking in 1970...

Supply side, aka voodoo economics, sealed the deal in the '80s...

The inflection point is obvious

GINI Data US

The first bubble didn't occur until 15 years later....

Thu, 05/29/2014 - 16:23 | 4807184 mraptor
mraptor's picture

Remember that the hockey stick of inequality started at 1971 ...

Thu, 05/29/2014 - 14:10 | 4806523 Notsobadwlad
Notsobadwlad's picture

Never heard of him ... I sure he will thank ZH for the plug.

Thu, 05/29/2014 - 16:12 | 4807129 Pig Circus
Pig Circus's picture

Turns out Thomas NosePikery Stats are flawed. In other words he like all Marxists is a lying worthless piece of shit:

 

[W]hen writing an article on the distribution of wealth in the UK, I noticed a serious discrepancy between the contemporary concentration of wealth described in Capital in the 21st Century and that reported in the official UK statistics. Professor Piketty cited a figure showing the top 10 per cent of British people held 71 per cent of total national wealth. The Office for National Statistics latest Wealth and Assets Survey put the figure at only 44 per cent.

 

http://www.powerlineblog.com/archives/2014/05/is-thomas-piketty-a-fraud.php

Thu, 05/29/2014 - 17:25 | 4807467 BrosephStiglitz
BrosephStiglitz's picture

When we see stability in the developed regions of the world to parallel the end of the millenium era (Clinton era) I'll call Schiff out on BS.

He isn't always right, he's often wrong, but I don't think you can rule his entire scenario out until 2016 at the earliest.

People think he is a dumb guy, but his '06 interview was 100% spot on when it came to the sub-prime.

Thu, 05/29/2014 - 18:00 | 4807577 Flakmeister
Flakmeister's picture

Even a blind nut finds a squirrel every now and then...

Thu, 05/29/2014 - 20:03 | 4807961 BrosephStiglitz
BrosephStiglitz's picture

For anyone informed on what actually happened during the Sub-Prime Crisis, and subsequent financial shock, people would be foolish to disregard Schiff.

He didn't just make general predictions.  He made accurate and detailed predictions which have been confirmed by a great deal of post-crisis study.

Yes, his timing is terrible (something he has personally admitted) as he misses intermediate steps.  But he has proven himself to be intelligent enough to pick apart some crises, some of the time.  Will he be right again?  Maybe not.  I doubt macroeconomic shocks are his forte (his education is in accounting and finance.)  The next crises will step out of the microeconomic sphere, which was where he was concentrating his focus in '06.

If Armstrong has not been compromised, he will probably provide far superior information.  Anyone with a focus on currencies will probably have the right tea-leaves to call this next one.  Though the next crisis will probably originate in Asia and propate West.  Japan and China are looking like two mighty big dominoes that are waiting to topple these days.

Thu, 05/29/2014 - 22:44 | 4808444 Flakmeister
Flakmeister's picture

Everybody knew it was coming, except those that paid to lie in public....

I was modelling CDO^2 at the time for a mono-line....

Thu, 05/29/2014 - 11:46 | 4805806 Hongcha
Hongcha's picture

What?  What the hell is this.

Thu, 05/29/2014 - 11:50 | 4805818 maneco
maneco's picture

I prefer Frederic Bastiat's "The Law" as far as French economists go.

Thu, 05/29/2014 - 11:54 | 4805823 ParkAveFlasher
ParkAveFlasher's picture

Persnicketty can only be an apologist who aims to freshen up this easily-comprehensible, basically-malodorous concept: that interest rates imply controlled redistribution by their very existence.  Try to apply an interest rate to the lending of sound money. 

 

 

 

EXACTLY.

Thu, 05/29/2014 - 11:53 | 4805827 insanelysane
insanelysane's picture

I think the max salary thing is a great idea.  What could go wrong?

Say you are a musician and end up being a "one-hit wonder."  The government takes 80 to 90% of your earnings, your one big year and then you can play in subway tunnels the rest of your life.  Same for pro athletes that play for a couple years or actors that have one movie.

Thu, 05/29/2014 - 11:55 | 4805835 ParkAveFlasher
ParkAveFlasher's picture

How about a baker that makes one really awesome pie, just once.

Thu, 05/29/2014 - 12:08 | 4805884 Flakmeister
Flakmeister's picture

Clearly the concept of how a progressive marginal tax rate works is beyond your grasp...

But hey, if I had my druthers, it would be a consumption tax (the fair flat tax) combined with progressive wealth taxes above $5 million or so that would really kick in above $200 million with income tax relegated to the trash bin...

Thu, 05/29/2014 - 12:31 | 4805984 Confused
Confused's picture

Flak, maybe you could clear up something for me.

 

With a consumption tax, it would appear that the low income individual would still bear the burden of most of the taxes being paid. Presumably, it is these individuals who would spend the entirety of their pay. And I would imagine the 'wealthy' (however the fuck this is actually defined now) would not. 

 

Not trying to be a dick. Just looking for an alternative thought on it, as I have not read much on the topic. 

Thu, 05/29/2014 - 12:49 | 4806074 Buckaroo Banzai
Buckaroo Banzai's picture

Yes, exactly. "Progressive" taxation is evil. Do you not understand the definition of "poor"?? It means that EVERYTHING costs more, in relative terms. Trying to "even things out" with "progressive" taxes is not just evil, it's pointless as poor people are ALWAYS disproportionately affected.

Consumption taxes are avoidable taxes. Grow your own food and make your own clothes. Shit, virtually the entire human race did that up until quite recently.

Thu, 05/29/2014 - 13:03 | 4806169 Confused
Confused's picture

.. Do you not understand the definition of "poor"?? ...

 

Cool bro. You could have just responded with:

..Consumption taxes are avoidable taxes. Grow your own food and make your own clothes. Shit, virtually the entire human race did that up until quite recently.

 

I'm not advocating for 'progressive tax.'  But your response is much appreciated. 

Thu, 05/29/2014 - 12:52 | 4806092 Flakmeister
Flakmeister's picture

Given the current level of sales tax, FICA etc.. it would be wash at the low end to have a 15% VAT or so....

Clearly, there has to be a lot of fine tuning, and it could well be that an Income tax (10%??) for incomes above $250,000 is required...

Thu, 05/29/2014 - 13:07 | 4806192 Confused
Confused's picture

As I said, its not something I can claim to have read alot about. Buckaroo seems to have hit on a key point. Consumption tax is avoidable, which could potentiall provide some relief from the affect of taxes. 

 

Thanks for the response. Its an interesting thought. 

Thu, 05/29/2014 - 13:29 | 4806302 Flakmeister
Flakmeister's picture

BB is full of shit as usual...

As a rule, food is not taxed under a VAT unless it is prepared for you, i.e. a restuarant...

Thu, 05/29/2014 - 13:56 | 4806444 Confused
Confused's picture

Yes, this is true, but if a 'consumption tax' were to be implemented, it is possible that i might deviate slightly from a VAT tax as we see them now. So potentially groceries could be taxed. But I guess you are right, using VAT as an example, you would not be avoiding a tax by growing your own food. But rather avoiding paying for it as well as dependence on a system outside of your control. 

Again, all interesting. 

Thu, 05/29/2014 - 13:57 | 4806446 Charles Nelson ...
Charles Nelson Reilly's picture

so my wife and I who earn about $250k combined, live frugally within our means and save some (not a lot) & get our clocks cleaned because we live near an east coast city, where the cost of living is enormous. We would then have to pay more.  Do you collectivists ever give any thought to what you say?

That's a great plan, Flak. That's fuckin' ingenious, if I understand it correctly. It's a Swiss fuckin' watch.

Thu, 05/29/2014 - 15:27 | 4806973 mayhem_korner
mayhem_korner's picture

 

 

Collectivist liberals by nature are wired to want to infringe on others' individual sovereignty in the name of "fairness."  Taxes are a favorite implement of theirs, as tax policy at this stage of the cancer is strictly about wealth re-distribution.  Lost in the misdirection of VAT v. consumption v. income taxes is that ongoing government spending beyond the means (and will) of the people is so far past the point of recovery that no viable tax (or other) solution exists.

But people who earn less than I pay in taxes will get on their high horse and tell us all about what is fair.

Thu, 05/29/2014 - 17:07 | 4807391 Flakmeister
Flakmeister's picture

    Pretty full of your self, eh?

But people who earn less than I pay in taxes will get on their high horse and tell us all about what is fair.

So you pulling down mid 7 figures?

Thu, 05/29/2014 - 15:47 | 4807030 de3de8
de3de8's picture

Dp

Thu, 05/29/2014 - 16:05 | 4807031 de3de8
de3de8's picture

Tp

Thu, 05/29/2014 - 15:46 | 4807040 de3de8
de3de8's picture

The answer here is a sliding scale where food and staples little to no tax Clothing a bit more, so on and so forth with luxury items taxed highest.

Thu, 05/29/2014 - 12:38 | 4806015 Herd Redirectio...
Herd Redirection Committee's picture

We keep calling it a tax, when really, what is needed is a one-time wealth repatriation.  Everyone who has been affected by ZIRP, fiat currency and central bank bubble creation is entitled to wealth repatriation.  Tax money goes to the gov't.  Repatriated wealth should go to every LIVING, BREATHING non-criminal on the planet. 

So really, I think there should be a MASSIVE Truth & Reconciliation trial, banksters going to jail, and then wealth repatriation to end it.  We need enforcement of the law, not MORE laws!

Thu, 05/29/2014 - 12:51 | 4806087 Buckaroo Banzai
Buckaroo Banzai's picture

Fallacious reasoning. "If only we could eliminate waste, fraud, and corruption...our socialist state would truly be nirvana!"

Hopeless. Only solution is to eliminate government-- it's the source of all waste fraud and corruption.

Thu, 05/29/2014 - 13:33 | 4806324 dirtbagger
dirtbagger's picture

I guess BB was born after Enron.  Must be a gifted child

Thu, 05/29/2014 - 15:36 | 4807013 Buckaroo Banzai
Buckaroo Banzai's picture

Who do you think enabled Enron in the first place? Enron was just gaming retarded california utility rate regulations. Government stupidity breeds private sector fraud.

Thu, 05/29/2014 - 12:51 | 4806090 insanelysane
insanelysane's picture

I'm all for a flat tax.  20% is one day of my work week and 40% is two days of my work week.  As long as the takers start working their 1 or 2 days of week for a better country, I'm in.  You want to see riots?  Ask the takers for 1 day of labor per week for their handouts and see what happens.

Thu, 05/29/2014 - 12:54 | 4806111 Lord Koos
Lord Koos's picture

Ever heard of income averaging?

Thu, 05/29/2014 - 12:56 | 4806126 free_lunch
free_lunch's picture

This article contains faulty facts and wrong assumptions..

Wrong fact:  "Rich people not lending..blablabla..." It's not people's savings that are used for lending.. New money gets created out of thin air..

 

"We have a few things to say about the recent debunking of established monetary theories.

In case you missed it, the Bank of England issued a report in March explaining that standard textbooks get money and banking all wrong.

The authors point out that banks don’t wait for deposits before making loans, as often claimed by academics. It’s the other way around. Banks create new deposits when loans are made, for this is how loan proceeds are delivered to the ultimate recipients. The fact that deposits then slosh around from bank to bank has no bearing on future loan issuance, which is always matched with newly-created, not old, deposits."

From: http://www.zerohedge.com/news/2014-05-20/banking-buffoonery-modeling-mys...

 

Misconception: if you have 1000$ and you know of a good investment that can turn it into 2000$ in 3 months, but you have to pay 300$ taxes on it.
I think anybody that can do math would still make the investment. Who would let go of a 700$ profit?

Thu, 05/29/2014 - 12:59 | 4806143 Lord Koos
Lord Koos's picture

Ever heard of income averaging?

Thu, 05/29/2014 - 13:22 | 4806273 bobnoxy
bobnoxy's picture

So you toss out the concept due to a tiny number of outliers? And most of those athletes will piss their money away anyway. And what if the max salary is $5 million?

Not that I agree with the max salary idea, but even less so your defense against it.

Thu, 05/29/2014 - 19:11 | 4807803 Bro of the Sorr...
Bro of the Sorrowful Figure's picture

hazlitt pointed out our problem perfectly. we will never be able to win this argument because people have been condition to have extremely short attention spans. understanding economics and the long term results of policies has been rendered impossible for your average, and even your intelligent american. the brain washing has been thorough and there's very little we can do. im really dreading the moment where the crash comes and people begin shouting: "look what capitalism and free markets have done". im either going to kill myself or everyone around me.

Thu, 05/29/2014 - 11:55 | 4805833 dontgoforit
dontgoforit's picture

I remember my bro-in-law telling me one very hot day in February in Venezuela back in the early '80's - "The poor in America live better than most of the balance of the people in the world."  It was true then - it is still true, though maybe not as much.

Thu, 05/29/2014 - 12:14 | 4805900 Spitzer
Spitzer's picture

Has a seppo like you ventured out of seppo land in the last 10 years ?

Thu, 05/29/2014 - 12:35 | 4805996 NidStyles
NidStyles's picture

As a person whom grew up poor in the US, you'd be wrong.

Thu, 05/29/2014 - 14:20 | 4806582 Pickleton
Pickleton's picture

And strangely enough, as a person that grew up poor in the US and has seen poor the world over, he'd be right.  You dont know WTF you're talking about.

 

Thu, 05/29/2014 - 12:46 | 4806058 alien-IQ
alien-IQ's picture

I'm guessing your b-in-law watched a lot of american sitcoms and thought they were reality.

Thu, 05/29/2014 - 14:58 | 4806818 The Wedge
The Wedge's picture

Most below the poverty line in the US, scratch that, nearly all have indoor plumbing and electricity, air conditioning which is more than a large portion of the world. YES, the poor in America are rich compared to the rest of the worlds poor. Not to mention most have computers, flat screens etc. Although I would not necessarily describe those items as "rich".

Thu, 05/29/2014 - 11:55 | 4805834 dontgoforit
dontgoforit's picture

double post, my bad - fat finger

Thu, 05/29/2014 - 11:56 | 4805840 hairball48
hairball48's picture

No surprise here and I'm just a dumbass redneck. What should we  expect from a society that dotes on what the Kardashians are doing.

Thu, 05/29/2014 - 12:55 | 4805843 Mercury
Mercury's picture

Pickety appears to re-hash a lot of stale Leftist ideas (a Frenchman that wants to raise my taxes!)  but the elephant in the room is not how cool are you with capitalism...but how cool are you with meritocracy?

Meritocracy is supposed to be one of those "fair" systems that everybody is in favor of right?

Let’s assume for the sake of argument that tomorrow we develop some near-perfect model government that maximizes opportunity for all. No more complaining that any individual/group has an unfair advantage over any other individual/group because it’s no longer possible for that to be the case.

Wouldn’t the best and the brightest 1% soon end up with the lion’s share of everything to an even greater extent than today’s somewhat “unfairly” selected 1% have? I don’t see how that wouldn’t be the case since ever more advanced technology and efficiency enables this to an extent never before possible.

I'm not saying that whatever flavor of capitalism we currently have is synonymous with pure meritocracy but, despite all the cronyism and central planning there is (still) probably greater overlap now than at any other (large scale) government/system in human history. If you apply to Harvard you're basically competing with every other 18yr old in the world. If you're the next Michael Jordan, the NBA will probably find you even if you live on a rock in the South Pacific.
Thu, 05/29/2014 - 13:03 | 4806168 Lord Koos
Lord Koos's picture

Anyone who thinks the uber-wealthy are composed largely of "the best and the brightest" is crazy.  There are some who earned their money honestly thru brains and hard work, but many more who have not. The whole "best and brightest" meme should be changed to something like "the greediest and most ruthless".  Inheriting money for a living is nice work if you can get it.

 

Thu, 05/29/2014 - 13:24 | 4806265 Mercury
Mercury's picture

Check out the Forbes 400 today vs. 30 or 40 years ago (let alone 400 years ago). I bet there was much more inherited wealth on the charts in 1974/84 than there is now (although it may be a different story two or three levels down from the top .01%).

Also, do-gooder, social justice minded government central planning has helped to make inequality worse over the same period, not bettter (in the USA anyway).

Thu, 05/29/2014 - 11:57 | 4805845 Took Red Pill
Took Red Pill's picture

Wealth redistribution is just a way for the government to get it's hands on more tax money

Thu, 05/29/2014 - 12:02 | 4805865 alien-IQ
alien-IQ's picture

So if the poor take from the rich it's "wealth redistribution"...and that's a bad thing. But when the rich steal from the poor, that's "capitalism" and that's good.

I see how it works now.

Thu, 05/29/2014 - 12:09 | 4805886 Zerozen
Zerozen's picture

You're good at setting up those fake dichotomies, aren't you?

Thu, 05/29/2014 - 12:19 | 4805927 alien-IQ
alien-IQ's picture

it's the only way to communicate with children.

Thu, 05/29/2014 - 12:36 | 4806007 NidStyles
NidStyles's picture

Children? The only child I see here is the one supporting an idea and declaring the results before the debate has begun. That would be you.

Thu, 05/29/2014 - 12:43 | 4806048 alien-IQ
alien-IQ's picture

what results of what debate are you talking about?

if you think the jury is still out on this experiment then you clearly have not been paying attention.

Thu, 05/29/2014 - 12:52 | 4806100 Buckaroo Banzai
Buckaroo Banzai's picture

You are kind of being a cunty socialist.

Thu, 05/29/2014 - 12:58 | 4806137 alien-IQ
alien-IQ's picture

I find no benefit in being a sycophant.

Thu, 05/29/2014 - 13:04 | 4806175 Seahorse
Seahorse's picture

Is there a non-cunty variety?

Thu, 05/29/2014 - 15:38 | 4807017 Buckaroo Banzai
Buckaroo Banzai's picture

Well I was using redundancy for emphasis.

Thu, 05/29/2014 - 12:20 | 4805929 NOTaREALmerican
NOTaREALmerican's picture

Re:  You're good at setting up those fake dichotomies, aren't you?

Fake?   That's where we're at right now.  The smart-n-savvy people, over the last 60+ years, have aquired everything - including the politicians to ensure they keep it.   So, now what?  Those with inferior genetics (the bottom 70% trash class) aren't going to just die peacefully.   

Thu, 05/29/2014 - 12:33 | 4805991 Zerozen
Zerozen's picture

It's a fake dichotomy because his characterization that capitalism is the process of stealing from the poor is false. He knows it, I know it, you know it - but he needs to exaggerate his point and make memorable statements.

The smart-n-savvy people is not some monolithic group that never changes. New millionaires are minted all the time. Old money sometimes loses everything.

The majority of economic wealth has been owned by the top few percent since forever. Sometimes it's more, sometimes it's less, but it's always the lion's share. It's the way of the world.

Why do you assume that the bottom 70% have to die? Where did that ridiculous extrapolation even come from?

Something like a third of the world's people lived in a leftist experiment for the better part of a century; we've got a lot of empirical, real world data on these ideas like Picketty's. They don't work. Move onto something else.

Thu, 05/29/2014 - 12:40 | 4806033 Herd Redirectio...
Herd Redirection Committee's picture

"Old money sometimes loses everything."

Harharhar.

Really?  Is that what happened in 2008 with the institution of TBTF, ZIRP, bailouts...

No, sadly the OLDEST money does not sometimes lose everything.  But if there was a jubilee every 70 years or so...

Thu, 05/29/2014 - 12:42 | 4806039 NOTaREALmerican
NOTaREALmerican's picture

Re:  No, sadly the OLDEST money does not sometimes lose everything.

The Old Money is usually smart-n-savvy enough to own the politicians required to ensure they keep their wealth.  

Thu, 05/29/2014 - 12:54 | 4806112 Buckaroo Banzai
Buckaroo Banzai's picture

"Old money" goes bankrupt ALL THE TIME. If you don't know that, then you don't know any rich people.

Thu, 05/29/2014 - 13:03 | 4806173 alien-IQ
alien-IQ's picture

If they "go bankrupt all the time", how the fuck does it get to be "old money"?

Thu, 05/29/2014 - 15:41 | 4807025 Buckaroo Banzai
Buckaroo Banzai's picture

Dope. Most old things eventually die. There are about 300 families who have managed to continuously expand their wealth over the last 300 years.

The rest ebb and flow with the tides of time..

Thu, 05/29/2014 - 19:17 | 4807821 Bro of the Sorr...
Bro of the Sorrowful Figure's picture

and they have done so in spite of the increasing freedom and capitalistic nature of society, not because of it. they have used the tools of the state to safeguard their money, and endless lies and deception. you are absolutely right that in a free market economy the only way to stay wealthy is to constantly meet the ever changing demands of the consumer.

Thu, 05/29/2014 - 12:41 | 4806034 NOTaREALmerican
NOTaREALmerican's picture

Re:  They don't work. Move onto something else

There's nothing else.   There's ONLY the smart-n-savvy predators and the trash-class getting eaten.    I don't care about the trash-class either. 

But, it's very easy to manipulate the trash-class with bullshit; and nothing sells like wealth-redistribution (Blue Team) and slow-motion flags (Red Team).    So, if you don't want the sociopaths manipulating the dumbasses with bullshit YOU better come-up with something else.   I could care less. 

Thu, 05/29/2014 - 12:56 | 4806131 Zerozen
Zerozen's picture

You're just a little ray of sunshine aren't you? ;-)

Thu, 05/29/2014 - 12:41 | 4806035 alien-IQ
alien-IQ's picture

who the fuck sold you that bag of goods? the capitalism fairy god mother?

Thu, 05/29/2014 - 12:56 | 4806129 Buckaroo Banzai
Buckaroo Banzai's picture

Yawn. You took a wrong turn at Albuquerque. FailyKos and HuffPuff are thataway. Don't let the door hit ya where God split ya!

Thu, 05/29/2014 - 14:25 | 4806612 Pickleton
Pickleton's picture

Said the dumbshit that defined capitalism as the rich stealing from the poor.

Thu, 05/29/2014 - 14:45 | 4806729 The Wedge
The Wedge's picture

Financial illiteracy. Thinking for one party to succeed another must suffer. All credit to M. Friedman.

Thu, 05/29/2014 - 12:38 | 4806016 Confused
Confused's picture

I think the base of this problem is the 'smart-n-savvy' and the idea of wealth distribution. 

 

The 'smart-n-savvy' needs to be defined. Are we talking about an individual who creates something new? A business that hires people? Or are we talking about a room full of math PHDs writing code to scalp pennies? There is a difference. And that is where this whole debate should be focused. That and the corruption of the state*, through which wealth redistribution is possible, as well as the ability for those to reap massive wealth without being the smart-n-savvy. It would appear the top of the societal pyriamid and the bottom are not that much different. 

 

*even without being corrupt, the state is shit, but at least it is possible it might be LESS shit.

Thu, 05/29/2014 - 12:51 | 4806086 NOTaREALmerican
NOTaREALmerican's picture

Re:  The 'smart-n-savvy' needs to be defined.

Smart-n-savvy:  manipulative, duplicitous, sence of entitlement to take as much as they can without guilt or shame, predatory,  ability to create bullshit,  an asshole.  

The smart-n-savvy eat the dumbasses. 

Thu, 05/29/2014 - 12:59 | 4806147 Confused
Confused's picture

I suspect no one would take issue with redistributing wealth from this particular group. So why all the hub-bub? ;-P

Thu, 05/29/2014 - 13:10 | 4806214 NOTaREALmerican
NOTaREALmerican's picture

Re:  So why all the hub-bub?

Because humans worship sociopaths who create bullshit about why the sociopaths should keep their wealth and power; it's (basically) what politics and religion exist for:  to create the bullshit for the dumbasses.

Thu, 05/29/2014 - 14:41 | 4806704 The Wedge
The Wedge's picture

That covers all walks of life. This is really sad. You actually think you are describing the rich and powerful alone. You could easily be talking about the welfare class to the powerful elites.

Thu, 05/29/2014 - 13:08 | 4806203 Lord Koos
Lord Koos's picture

"The trash class" -- nice way to talk about the people who do all the unimportant stuff like deliver your mail, grow, harvest & cook your food, teach your kids, pave the streets, etc etc while the rentier class suck the blood out of them.

I suppose you support the Nazi genetic plan too.

Thu, 05/29/2014 - 13:11 | 4806219 NOTaREALmerican
NOTaREALmerican's picture

Hey,  I just live in this society.

Thu, 05/29/2014 - 13:02 | 4806164 Frank N. Beans
Frank N. Beans's picture

"Wealth redistribution is just a way for the government to get it's hands on more tax money."

I upped you, but then got to thinking, if the rich and powerful control government, they won't allow government to take away more of their money through taxes.  And if they don't control government, they will find loopholes to preserve their wealth. 

Besides, wealth redistribution may not result in government getting more tax money.  The wealthy, who presumably got that way through selling products that people want, provide jobs.  Those jobs provide more tax revenue for the government than if the tax burden were to shift to the rich. 

 

Thu, 05/29/2014 - 13:10 | 4806209 Lord Koos
Lord Koos's picture

"if the rich and powerful control government, they won't allow government to take away more of their money through taxes."

 

Huh, you noticed that too...

Thu, 05/29/2014 - 11:57 | 4805847 williambanzai7
williambanzai7's picture

I have a different thesis which can be summed up with one question: where is it written that corrupt elitist billionaire scumbags have a God given right to ass fuck ordinary working muppets 24/7/365 and get away with it without exception?

I don't really care much about taxing the fuckers.

Hanging em all will do just fine.

 

Thu, 05/29/2014 - 12:00 | 4805857 alien-IQ
alien-IQ's picture

+1,000,000,000

Thu, 05/29/2014 - 12:02 | 4805862 Flakmeister
Flakmeister's picture

Hang these fuckers and the next batch will replace them faster than you can say "tax cuts for the job creators"...

And that really is the problem, isn't it...

Thu, 05/29/2014 - 12:04 | 4805872 alien-IQ
alien-IQ's picture

You put just one of those motherfuckers in a real pound-me-in-the-ass prison and I assure you that the next in line will tread very very lightly. They will find religion might fucking fast.

Thu, 05/29/2014 - 12:10 | 4805892 Flakmeister
Flakmeister's picture

Sorry, but that is just a tad too idealist for my liking...

Besides, history has shown that it don't happen that way...

Thu, 05/29/2014 - 12:18 | 4805923 alien-IQ
alien-IQ's picture

Marie Antoinette would disagree...if she could find her head.

Thu, 05/29/2014 - 12:31 | 4805976 Flakmeister
Flakmeister's picture

And look what came out of that...

It took all of 15 years for an Emperor to emerge....

Thu, 05/29/2014 - 12:39 | 4806020 alien-IQ
alien-IQ's picture

yeah, you're right. might as well surrender. give up. after all, "they" are clearly superior.

Thu, 05/29/2014 - 12:53 | 4806109 Flakmeister
Flakmeister's picture

Hardly, just realize that complex societal problems aren't usually solved by simplistic solutions rooted in violence...

Thu, 05/29/2014 - 12:56 | 4806124 alien-IQ
alien-IQ's picture

It's not that "complex"

Thu, 05/29/2014 - 17:09 | 4807370 Flakmeister
Flakmeister's picture

Ah, but it is, otherwise, there would not be a problem of wealth accumlation at the top throughout history as it would be easy to solve...

You know, finding the balance between personal liberty and the result of unfettered greed...

Thu, 05/29/2014 - 18:31 | 4807696 RaceToTheBottom
RaceToTheBottom's picture

"You put just one of those motherfuckers in a real pound-me-in-the-ass prison and I assure you that the next in line will tread very very lightly."

Worth a try.  Can't be worse than what we have now.  What is the downside?

Thu, 05/29/2014 - 12:09 | 4805889 disabledvet
disabledvet's picture

Welcome to a media that is both totally private and a cartel.

This exists nowhere else on earth...nor even in time actually.

All media throughout time has been owned by Governments.or at a minimum located in the Capital...for obvious reasons.

This is not true in the USA....and interestingly it is amazingly diffuse (used to only be New York...now Atlanta, San Francisco, Seattle, San Antonio, Chicago, Indiana, Connecticut, Columbus, Toronto. Hollywood is an interesting case study unto itself.)

The question that needs asking and answering is "why are some redistribution schemes (Germany, Sweden) more effective than others? (USA, Japan, France, Britain.)

Obviously this book doesn't even address the issue...let alone the question.

Thu, 05/29/2014 - 12:37 | 4806011 NOTaREALmerican
NOTaREALmerican's picture

Re:  more effective than others?

Yeah, that is interesting question.   Personally, I think it's related to how threatened the smart-n-savvy owners of a particular society are by outsiders (foreigners) , and - as a result - how much they value the trash-class peasants who eventually are needed to defend them.    The USA, Japan, France, and England smart-n-savvy have never valued the trash-class peasants very much, but the dumbasses keep defending them anyway.   However,  USA, Japan, France, and England have always had really good national bullshit (who has better slow-motion flags than the USA).

Thu, 05/29/2014 - 12:16 | 4805908 MeMongo
MeMongo's picture

No one told you? Their the chosen ones Bill! They can do NO wrong:-)

Thu, 05/29/2014 - 12:20 | 4805931 MrPalladium
MrPalladium's picture

Good point WB-7!

The issue is the wealthy buying legislation to insulate themselves from competition and lock in subsidies. Look at the sectors that are producing the outsized wealth inequality - primarily finance, web tech and defense. Inequality has become a function of governmental favor and largesse.

How could it be otherwise when the economy is otherwise stuck in the mud.

Pickety wants to give goverment yet more resources to distribute to the politically connected. He is completely transparent.

Thu, 05/29/2014 - 12:39 | 4806024 williambanzai7
williambanzai7's picture

Exactly, the MSM frames this as capitalists versus commies etc., but that is one big misdirection.

We don't have to argue about statistical anomolies and ideologies to reach a conclusion on what is going on: Corrupt Billlionaire Bukake on Steroids. And it ain't ending anytime soon.

Thu, 05/29/2014 - 11:58 | 4805848 Quinvarius
Quinvarius's picture

Earned inequality is justice.

Thu, 05/29/2014 - 11:58 | 4805851 alien-IQ
alien-IQ's picture

fuck peter schiff.

Thu, 05/29/2014 - 12:12 | 4805895 Flakmeister
Flakmeister's picture

Go ahead, I wouldn't fuck him with Rush Limbaugh's dick....

Or Ed Schultz's for that matter...

Thu, 05/29/2014 - 12:16 | 4805910 Spitzer
Spitzer's picture

Class act you are...

Thu, 05/29/2014 - 11:59 | 4805852 Stoploss
Stoploss's picture

Last gasp of the Libtard Dems.

Not happening.

 

Thu, 05/29/2014 - 12:24 | 4805943 what's that smell
what's that smell's picture

peter schiff is a schmuck.

ayn rand, milton friedman, and peter schiff are schmucks.

predatory capitalism, and its free market (free market for monopoly cartels) ideology, is a schmuck religion.

anybody who spouts such schmukery is a schmuck.

Schmuck or shmuck in American English is a pejorative meaning one who is stupid or foolish; or an obnoxious, contemptible or detestable person.

schmuck (1) That portion of one's penis which is cut off during circumcision.
Thu, 05/29/2014 - 12:45 | 4806056 Zerozen
Zerozen's picture

Predatory capitalism is no good.

But I hope you're not thereby implying that these ideas like Picketty's are then, by contrast, good ideas.

They're utterly idiotic.

At least capitalism, when practiced fairly (no purchased politicians, no cartel/regulated monopoly power) is pretty good at wealth creation.

Socialism, even when it's practiced according to the textbook rules, fails from the get-go because most of the ideas don't even make sense. e.g. Tax the producers to hand out to non-producers in the name of income fairness: this is totally unjust.

Socialism is also choice-restrictive (read: takes away economic freedoms from individuals). When you have these high tax rates, and you have government paying for your health care, your education, your electricity, your water bill, and so on, you lose choices and you lose economic freedom.

Thu, 05/29/2014 - 14:31 | 4806638 Pickleton
Pickleton's picture

"ayn rand, milton friedman, and peter schiff are schmucks.  predatory capitalism, and its free market (free market for monopoly cartels) ideology, is a schmuck religion."

 Whew!  Thankfully the predator capitalist religion belongs to the dooshes like Piketty, progressive leftists and probably dolts like you (given that you think those people are predatory capitalists)

Thu, 05/29/2014 - 12:00 | 4805855 i_call_you_my_base
i_call_you_my_base's picture

"For instance, how much would someone need to pay you to voluntarily give up the Internet for a year?"

So you go from Steve Jobs wealth to the existence of the internet? Jeez.

Everyone is analyzing the wrong problem. It's corruption, the thing not measured in models. It's cronyism, graft, etc. These "economists" analyze fantasy.

Thu, 05/29/2014 - 12:33 | 4805988 zerocash
zerocash's picture

He seems to forget that the internet was developed by the government.

Thu, 05/29/2014 - 12:40 | 4806023 NidStyles
NidStyles's picture

By scientists that would otherwise be int he private sector, you tools always forget that detail, just like you always forget that more stuff was invented without the government.

Thu, 05/29/2014 - 12:01 | 4805858 NOTaREALmerican
NOTaREALmerican's picture

History shows the wealth gets redistributed one way or the other.  

Eventually the smartest-n-savviest of society own all the wealth.  Who else would, the dumb-n-clueless?   

When you've lots and lots and lots of dumb-n-clueless people without wealth other smart-n-savvy people organize them, and (well) hilarity ensues. 

 

Thu, 05/29/2014 - 12:02 | 4805863 JR
JR's picture

Here’s wealth transfer, i.e., the ugly injustice of socialism.

Boosting the minimum wage, such as the proposed doubling of Chicago’s minimum wage to $15 an hour, is socialism. It is an underhanded way for the Obama government to monetize the debt it owes to baby boomers by devaluing its purchasing power. Thus, as government debt comes due that is owed to social security recipients and to receivers of insurance payouts, annuities and pensions et alia, the buying power of that money saved is decimated.

A $15 an hour minimum wage is $31,200 a year for flipping hamburgers. The average monthly SS benefit for a retired worker in April 2014 was $1,252 monthly, or $15,024; the average survivor benefit, $1,083 monthly as of April 2014. The median no doubt is much lower.

Thus, raising the minimum wage above market value is a form of wealth transfer at the expense of America’s working middle class – a further wipeout of middle class assets by socialism.  

One of the biggest aims of this theft is to give support to the so-called masses who are voters for socialism. These are the voters who bought Obama’s re-election. They are the low-information voters, who if they are not minimum wage employees, they still like the idea of the government intervening by forcing employers to pay what socialism demands.

Part of this minimum wage hype and propaganda now is a companion to the propaganda on the white culture’s “war on women.” Both campaigns are to help Democrats in the November elections, because a war on women, it is alleged, comes from white males and white men, it is alleged, are the Republican Party.

All these themes, including the danger of guns in society, are to direct low-information voters to select Democrats instead of proponents of the Second Amendment, i.e., the Republicans. Unfortunately, the Republican Establishment in DC foolishly is embracing these wealth transfer campaigns that further dissolve the support from their base, while at the same time attempting to camouflage what they do by their alleged support for gun ownership.

http://www.ssa.gov/policy/docs/quickfacts/stat_snapshot/

Thu, 05/29/2014 - 12:02 | 4805864 Zerozen
Zerozen's picture

I haven't read Picketty's book but if some of the things listed above are indeed in there, then it has to be a sign of the (crazy) times we live in that this book is a bestseller. So much stupidity is only achievable by a Marxist.

The irony is that in theory it's all about fairness and social justice (God, I hate that term) but in practice this type fo wealth redistribution is the most unfair, most unjust thing in the world. It would reduce everyone to an economic slave.

Thu, 05/29/2014 - 12:08 | 4805883 NOTaREALmerican
NOTaREALmerican's picture

At some point (like right now) the smart-n-savvy will own most of the nations wealth.

It's too bad the "conservatives" can't figure-out what to do with the half of the population who are below the average intelligence and are eaten alive by the smart-n-savvy people.   Because, if the "conservatives" can't address the issue of the bottom 50% for SURE the "liberals" will.

Thu, 05/29/2014 - 12:33 | 4805993 Flakmeister
Flakmeister's picture

They would like to let them starve, but in the aftermath then there would be yet another 50% that would be below average....

Thu, 05/29/2014 - 12:51 | 4806088 Zerozen
Zerozen's picture

Reminds me of the story of Lake Wobegon, where all the children are above average...

Thu, 05/29/2014 - 14:32 | 4806647 Pickleton
Pickleton's picture

Bilge.

Thu, 05/29/2014 - 12:46 | 4806060 JR
JR's picture

All the attacks on capitalism and free enterprise and freedom fit the classic definitions of socialism-communism.

Communism did not die with the U.S.S.R. Communism is a program. It is deliberately identified as a Soviet-inspired system, when it isn’t. Its goals and purposes come from a mammoth power network of people trying to take over the world, super-rich people such as George Soros whose world-wide plot is world socialism which they, the international bankers and business cartels, would control.

Americans’ standard of living should be soaring and reaching the far corners of the globe. The public’s bonus should be its share of its contribution to the productivity of the Great American Dream economy: those benefits should be open to all American citizens, yet they’ve become the sole property of the bankers and the corporations for their sole profits.

It was the growth of collectivism and coercive central planning and the reversal of the fundamental principles of American life and culture under the banner of the Federal Reserve that transferred America’s wealth to these International bankers and set her down the Road to Serfdom, i.e., to world socialism.

A relatively small group of people, such as Goldman Sachs investment bankers, will continue to take the nation's wealth and redistribute it to themselves until our free society and its worldwide cornucopia of wealth disappears from the face of the earth.  Without personal liberty, there is no economic liberty, and no need for investors.

"When the capitalist is gone," asks Ruth Wilder Lane, "who will manage production? The State.  And what is the State?  The State will be the mass of toiling workers."

Masses of toiling workers do not invest in the future for their own benefit or the community’s benefit; their only purpose is to toil, for the oligarchs.

Thu, 05/29/2014 - 14:26 | 4806616 The Wedge
The Wedge's picture

Oh good grief! My criminal gang cares for the little guy and your criminal gang doesn't. This is just grade school level drivel.

You conflate intelligence with effort. There are plenty of successful people with below average intelligence and above average who aren't.

Also, explain how someone smart eats those that are not smart? I assume you mean that as a financial metaphor but considering your other comments, I just don't know. This is a common misunderstanding amongst those that are financially illiterate that if someone else is successful, it must somehow take from someone else as though there is a fixed amount.

But the income/wealth gap is real largely due to the aforementioned criminal gangs. One preys on your weakness, the other on your strengths. One tells you that only they are looking out for the little guy the other tells you they want to "create" jobs. Both are equally disgusting lies. Of course criminal gangs aren't in Washington alone. You have corporate, banking and a whole litany of gangs. But real power is the ability to tax/regulate, war and create money. That is where the little guy loses control over his destiny. So, empowering these same individuals to somehow redistribute wealth to you, controlling your destiny, is the height of insanity. It will never happen. They will use your weakness against you and the rest of us as a political tool. And despite the gangs incessant grabs for power, the little guy still can get ahead. It happens every day.

 

Thu, 05/29/2014 - 12:04 | 4805868 q99x2
q99x2's picture

You'll know its a market top when the trannies appear on the cover of Time magazine.

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