"Our greatest responsibility is to be good ancestors."

-Jonas Salk

Monday, February 28, 2011

Overheard on the Intertubes

A Rich Capitalist, Tea Party Member, and Union Member sit around the table. At the center of the table sits a plate with a dozen cookies.

The Rich Capitalist takes eleven cookies, then whispers to the Tea Party Member, "Watch out for that union guy. He's got his eye on your cookie."


Anonymous said...

Divide the working class up as much as possible. The 'public union employee' is the new 'welfare queen'. Funny how politics here always come back to these silly tags, and have the same effect.

Paul Kelly said...

It is time to start working toward 2012. As a voting bloc, we must identify candidates, regardless of party, whose election most benefits energy transformation.

Hank Roberts said...

> As a voting bloc ...
> regardless of party

Wait, I think you've contradicted yourself.

Paul Kelly said...


At least in the beginning, a voting bloc reduces it's influence by committing to a particular party. The idea is to move the party in a way that absorbs the bloc. Historical examples are the Socialist Party moving the Democratic Party to the left and religious conservatives moving the Republican to the right.

King of the Road said...

Well, how about "the problem with socialism is that pretty soon you run out of other people's money."

Or:Bar Stool Economics

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100 and If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that's what they decided to do.

The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. "Since you are all such good customers," he said, "I'm going to reduce the cost of your daily beer by $20." so drinks for the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes so the first four men were unaffected...They would still drink for free...But what about the other six men - the paying customers? How could they divide the $20 windfall so that everyone would get his 'fair share?'...They realized that $20 divided by six is $3.33...But if they subtracted that from everybody's share, then the fifth man and the sixth man would each end up being paid to drink his beer..So, the bar owner
Suggested that it would be fair to reduce each man's bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so:
The fifth man, like the first four, now paid nothing (100% savings).
The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead of $59 (16% savings).

Each of the six was better off than before...And the first four continued to drink for free...But once outside the restaurant, the men began to compare their savings.

"I only got a dollar out of the $20,"declared the sixth man. He pointed to the tenth man," but he got $10!" "Yeah, that's right," exclaimed the fifth man. "I only saved a dollar, too. It's unfair that he got ten times more than I!" "That's true!!" shouted the seventh man. "Why should he get $10 back when I got only two? The wealthy get all the breaks!" "Wait a minute," yelled the first four men in unison. "We didn't get anything at all. The system exploits the poor!"

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn't show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn't have enough money between all of them for even half of the bill!

And that, ladies and gentlemen, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

Hank Roberts said...


Paul Kelly said...

Hank, I've seen the name of the kickitover poster in comments around, but don't remember where. The part praising the UN guy for his great leap forward in Cancun was pretty funny.

Michael Tobis said...

Rob, the fact that my sympathies are with the unions is almost coincidental. As a climate scientist, I am a fellow victim of the most malign forces of the hard right.

Everyone I know in Wisconsin is absolutely horrified by the behavior of the governor. The union sympathies are mostly because only the unions had the capacity to slow the disaster, a disaster that is not just about destroying the unions.

As I already admitted to you in a phone call some months ago, it was the early success of American unions that prevented a sane health care system from emerging in America. So it's strange for me to be rallying for them. But what we are up against is a fundamentally malign vision of government. I am happy to make common cause with them as long as the opposition stinks as much as it does.

Where to fall on the bigger question of private property vs social property is a bigger question than I'd like to take on right at this minute. It's too big. Somebody has to set ground rules for a conversation like that or it gets sophomoric very quickly.

I find, however, a strange faith among those who play the game and do fairly well at it, that "dollars" have some existence independent of the government that issues them. The arguments that start there, from a concept of "capital" that has very little to do with actual capital, lead to confusing conclusions.

It's necessary, in evaluating how and why brazen lying became part of ordinary governance, to consider how the distribution of wealth has dramatically changed in America. Only with this as context does the cookie story make any sense.

Don't get me wrong. I no more begrudge you your position in the top couple of percent than I begrudge our mutual friend D M his interest in an oil field. I am happy when my old friends become wealthy, because when the super-wealthy finally succeed in libeling climate science out of existence I will need to know somebody with a fair stretch of property that I can park my trailer in the back of and raise rabbits.

In the end I agree with neither you nor the unions on how the world is or should be put together. And while I'm sorry that my recent leftist outbursts may be irritating you, I'm immensely grateful to the Democratic Party of Wisconsin, the public sector unions, and various of my non-union cheesehead friends who have put in time at Capitol Square, in pursuit of a vision of government that is genuinely accountable, decent and honest.

Decent, honest and accountable government is something that, perhaps exceptionally, the people of Wisconsin have come to expect. The contrast between what they expected and what they got could not have been starker. That is the message of these events. Wisconsin was working. Walker broke its budget as an excuse to break its social contracts. Some things are not actually criminal but are ethically worse than criminal. In the climate sphere we have been seeing this for decades. The rest of society still expects better. Perhaps, in some states, some petty larceny and influence peddling is tolerated, (even this is not historically common in WIsconsin) but in general nobody expects the interests of the public to be explicitly grossly subverted in favor of narrow private interests.

This is serious business, and it's not about socialism vs market libertarianism. It's about plunder.

Oale said...

With respect, is it fair to compare Florida to North Korea, as in both countries the photography of farmland is prohibited and punishable by law?

Anonymous said...


This is not an attack on the wealthy. It's an attack on those who wish to dominate the means of production, reap the benefits of other's work, and then divide the working class systematically to keep it that way. It's a very powerful political tool that was formalized under Regan's 'welfare queen' but had started long before. This is why Saul Alinski is a pariah in "conservative" circles.

If the rich capitalist cannot handle the progressive tax system (which, if you work out economic models, is the only feasible method in an unbalances economy), and they want to go somewhere else, so be it. Just tell them to return the capital to the working class and watch out for the door on the way out. Just because there are weaker governments who allow for plundering, this does not mean that we should allow it here. Thanks to government support, it's what happens now either way, high taxes or not. It is about the price of labor and the ease at which capital is mobile versus the laborer.

"Well, how about "the problem with socialism is that pretty soon you run out of other people's money."

Real Socialism (TM) is about the relationship of the person the means of production, not supporting those who don't work.

Michael Tobis said...

This really could be bottomless. Though my fascination with the events in Wisconsin is not going away, and I insist that economics is not off topic, I don't think a clash of high-level economic models (I don't buy Grypo's either) is going to get us anywhere.

I can't resist pointing out that, as with people calling themselves "Christians" or such, you will find that people calling themselves "socialists" or "libertarians", once you scratch the surface, really hold a very wide variety of beliefs.

As a descendant of people who escaped Stalinism as well as Nazism, I don't much care for the label "socialist". I'm certainly not inclined, however, to take private property as a matter of principle. I think the only defensible ethical arguments for capitalism are utilitarian, they are always limited, and they become somewhat weaker as the world gets full, but remain cogent except in the most extreme emergencies.

But I don't think a top-down argument, with everyone stating their economic model of the world, is fruitful. I think this requires some sort of agreement on terms of engagement to make progress. But, the bottle is uncorked, so I won;t stop anyone who cares to join in.

The point here, the point of the little joke, the point of the current episode in Wisconsin, much of the story of Texas since Ann Richards, and alarmingly, increasingly the story of Canada, is that libertarianism (and sneering at socialism) is only window dressing for the most alarming and potent elements of the right wing. Indeed, socialism is crucial to their real object, which is the transfer of wealth and power back from the middle class to the wealthy. Without public expenditures, there remains little to plunder. But there's something of a shell game involved.

One of David Benson's little fly-bys here was so helpful to me in thinking about this all that it absolves him of a dozen cryptic comments. He recommended this book: The Wrecking Crew by Thomas Frank.

A compelling piece of evidence he brings to bear: the
DC metropolitan area was solidly middle class when Reagan came in. It now contains four of the ten richest counties in America, including the very wealthiest. It's worth considering how this occurred during a supposedly right-wing era with no president to the left of Bill Clinton, and mostly considerably to his right.

I would include Obama as to the right of Clinton, but others may disagree. Those others tend to forget the near-disastrous condition that W left the country and indeed the world in. But either way, that doesn't affect Frank's argument. The concentration of wealth around the capital did not suddenly emerge over the past two years.

Michael Tobis said...

I like my version better than Joe Romm's. But the rest of Joe's article is clever and true.

Paul Daniel Ash said...

I jettisoned my high-level models for a high-concept model some time ago. To wit:

* Every institution should be as close as possible to the people it serves (subsidiarity); and
* There should be rigorous and consistent oversight... and meta-oversight (quis custodiet ipsos custodes) at every level

Templatize and instantiate as needed.

DirkD said...


With all respect, that tax analogy is both trite and irrelevant. I cannot take it seriously after reading this and, especially, this.

In any case, I have little faith that events in WI will change the political and plutocratic status quo, either locally or nationally. The bottom line is that life for the majority in WI, or in any other state, is still too comfortable to precipitate the change that folks like McKibben et al desire. People may question the influence of the Kochs on politics and denying climate change, but the same people will still bulk buy their cheap Brawny paper towels, or inexpensive clothes laced with Lycra and Tactel.

Furthermore, even IF the Kochs go away and take their cash elsewhere...what's there in the system to stop the next Koch from showing up? That's a more worrying thought now, isn't it?

Anonymous said...

I believe 100% in private property, but there must be limits to it. And these limits should be based on needs instead of limitless wants.

Ah, if only Atlas would shrug. But he won't, he only threatens he will.

Hank Roberts said...

Wisconsin’s .... Senate majority leader, Scott Fitzgerald — who happens to be the brother of the Assembly speaker, Jeff Fitzgerald — .... he’s been sending state troopers out to look for the missing Democrats.

The troopers are under the direction of the new chief of the state patrol, Stephen Fitzgerald. He is the 68-year-old father of Jeff and Scott and was appointed to the $105,678 post this month by Governor Walker.

Perhaps the speaker’s/majority leader’s father was a super choice, and the fact that he was suddenly at liberty after having recently lost an election for county sheriff was simply a coincidence that allowed the governor to recruit the best possible person for the job....

Michael Tobis said...

read this

Paul Kelly said...

D. Green appears to be a progressive alienated by President Obama. What are the chances of a protest candidate in the Democratic primary or even in the general election? The Green Party could get a lot of votes by nominating someone appealing like McKibben.

King of the Road said...

@ Dirk: thus. Barstool story is, IMHO, more relevant and more real than the joke leading off this post. A little imagination is required to expand it to taxes but the fundamental proportions are not so far off.

RealClearMarkets - Articles - The Rich and Their Taxes

David B. Benson said...

My comments are never cryptic, but some actual thought is required.


guthrie said...

Michaels comments have finally spurred me to mention something that is relevant to the political maunderings.
I have read an interesting book called "The western paradox" by Bernard de Voto. It consists on his unfinished last work, and some of his Harpers magazine columns.

In these columns, he spends a great deal of time writing about how the public lands in the west (Defined as where the yearly rainfall is under 20 inches) are under threat from those who seek to plunder them by means of felling all the forestry and grazing all the land until it dries up and blows away.
A lot of this happened in the 1880's, was repeated in the 1930's, and led to various laws and government agencies, usually federal, being set up to deal with the degraded land and return it to usefulness.
So central government picked up the tab after the west ate itself. Fast fowards to the 1940's. You find highly organised associations of a tiny minority of western society, who happen to be rich, greedy and powerful, running a propaganda campaign no different from that being done against climatologists, the IPCC and AGW. Their aim being to return the public lands to their use as cheaply as possible, so that they can be abused for a few years of good profits and left to the public after they have lost the ability to produce such profits.

Fortunately at that time their efforts were defeated. They were attempting to use governmental forces for private profit on a large scale. So we get back to Michaels comment about transferring money and power to the wealthy.

guthrie said...

Now, the other issue that has been raised is the tax one.
Back in the good old days in Britain, you could only vote if you had property over a certain amount in value. You also paid some tax because you could afford to do so. Vast swathes of the populace paid no tax because they did not have the money to pay it.

Its as simple as that. Trying not to be judgemental in any way here, but if you have a society in which the wealth is concentrated in the top 1 and 20%, they are the ones who end up paying most taxes, because they have the money to do so. Otherwise you might as well re-institute slavery for paying taxes and sell people off when they can't pay.

The interesting question comes when you ask why there are such disparities, and whether they are ok. To which I reply it all depends on your ethical system, beliefs, and personal desires. Speaking as someone who is probably close to communist in how they'd like things to be, I would never want to live in the USA, so I'm not going to. I do have issues with the UK's ruling classes trying to make us more like the USA, but anyway, thats for another day. Meanwhile I'll leave you lot to argue about the USA and restrict myself to making comments on blogs.
If you want a country with feudally concentrated wealth distribution, you obviously need to set it up so certain people can get their hands on choke points of resources and power, and levy toll for them.
If you want a country where the entrepreneur is free to spread their wings and do what they want to do, there might be somewhere for you but I can't think where, not now in this crowded planet.

So, what sort of country do you want to live in?

Paul Daniel Ash said...

King, the total tax paid by the richest is larger because the total wealth of the richest is larger. There were no more than 10 billionaires in the US in 1980: there are now 403. We went from 500,000 millionaires to over five and a half million in the same time period. And their taxes were cut from a top marginal rate of 50% in 1980 to 35% today.

Are the very rich garnering so much less value from the public infrastructure (schools to train their workers, roads to transport their goods, etc.) than they were in 1980? Were they being soaked in the Reagan years?

If a "rising tide lifted all boats," in the common vulgar praise, then I could see an argument for lessening the tax burden on the rich as their numbers grew. Instead, what we've seen is a plundering of the public fisc in sync with reduction in tax rates. Debt more than tripled in the Reagan-Bush years, then doubled again under Bush the Younger.

And yes, the poor keep getting poorer.

So in sum, I'm not sure that you've effectively made the case that the plutocrats going John Galt would of necessity be a bad thing. But you know and I know that they won't. They've got too good a deal here to run off to some place like Bosnia and Herzegovina.

manuel moe g said...

quoting MT: "I think the only defensible ethical arguments for capitalism are utilitarian, they are always limited, and they become somewhat weaker as the world gets full, but remain cogent except in the most extreme emergencies."

Hear, hear. Capitalism and liberal markets are wonderful tools for the hardest problems of resource allocation, but they are not, in themselves, human values proper.

I am always envious of the quality of lines that MT considers merely to be throw-away lines.

David B. Benson said...

The bartender actons off ten pints of beer, already tapped, to the highest bidder. For the first pint
the first four men (the poorest) bid nothing;
the fifth bid $1;
the sixth bid $3;
the seventh bid $7;
the eighth bid $12;
the ninth bid $18;
the tenth man (the richest) bid $59.
This establishes the utility of the first pint of beer. For the second pint, the tenth man doesn't bid as he already has his beer; the bids for the first nine are the same as before. Repeat until all ten tapped pints are being enjoyed.

[Hope that message isn't cryptic; its about utility value of marginal dollars.]

Michael Tobis said...

David, sorry, it is cryptic.

It relates, I think, to some stuff I've thought about and not written about.

But it seems to me that five or six pints get sold and four or five guys go thirsty, depending on whether the bartender is willing to let a pint go for a dollar. Or do some guys bid something for the second beer?

David B. Benson said...

Michael Tobis --- I had to make it tapped beer so that the bartender is willing to give away the last (somewhat flat & warm) four pints.

I just used the previously given figures as I certainly have no firm idea of how to translate dollars possessed into utils possessed.

Anonymous said...

Capitalism is not only utilitarian, it is essential at bringing about what Moe and MT are saying. It is an important step in economic development. Unfortunately, over time, capital tends to gather small areas without a regulatory body to prevent it. If Marxian analysis is correct, this leads to those who do not have equal access to the means of production to revolt, rebel, etc.

All this talk makes me look like a dedicated Marxist, I see. I'm not, although I am a collectivist and believe the concepts of class war and relationships to capital are apt. But time, the stock market, the growth of the professional class, etc. has made those relationships very messy.

Michael Tobis said...

This seems about right.

David B. Benson said...

Up there with all those tax breaks is that cancer on the body politic, the Department of Defense [as it is named].

Michael Tobis said...

"Medieval theologians debated how many angels could fit on the head of a pin. Modern economists debate whether American median income has risen or fallen since the early 1970s. What’s really telling is the fact that we’re even having this debate. America is a far more productive and hence far richer country than it was a generation ago. The value of the output an average worker produces in an hour, even after you adjust for inflation, has risen almost 50 percent since 1973. Yet the growing concentration of income in the hands of a small minority has proceeded so rapidly that we’re not sure whether the typical American has gained anything from rising productivity."

-- Paul Krugman, The Conscience of a Liberal, p 124.

King of the Road said...

As it happens, my second marriage is into a family with very strong "lower class" connections and ethics. I mean this literally - tangential connections to the Long Beach Crip factions, etc. Some work, many don't, living by various government inputs, their wits, and input from those relatives and friends who do work (though years ago I contributed to this support, I no longer do as it doesn't ever end). I will categorically state that most have children, all eat well, all have good clothes, all have flat screen TV's, all have broadband internet connections at home, all have smart phones, all have cars (though not necessarily the latest and none with insurance and many without driver licenses), places to live, etc. Their situations are less stable than mine in that they may have a different vehicle every couple of months, they may move more frequently, etc. and their cars and living quarters may be less "nice" but they don't walk, sleep on the street, etc. None, as far as I know, are Union members.

Thus, the argument over the extent to which working class incomes have increased seems a bit misplaced. One might argue that the above represents something other an the working class. Fair enough. We have something on the order of 275 employees, some of whom make a bit above what the City of Santa Monica determines to be a "living wage." A very few take the bus (these are almost universally those who have many children) but, again, they have the niceties listed above - and this is in Southern California, where the cost of living is not low and unemployment is quite high. Approximately 130 of these are represented by Local 12 of the International Union of Operating Engineers. These have hourly wage and benefit packages of about $56/hour with wages representing about $38/hour. The efficiency of the Union's benefit packages is strongly argued but we pay it by the hour.

All this is not meant to claim that there aren't people living in poverty but rather to point out that the evidence I see on the ground indicates that the oft cited statistics are misleading.

King of the Road said...

By the way, the original joke in this column and a lot of the sentiment thereafter and elsewhere is quite condescending toward many of those who identify with the Tea Party (which, by the way, I most assuredly do not). Regardless of whether the Kochs or others have funded and stoked the Tea Party, many "working class" people understand fully what the Tea Party stands for and support it. I know this as some work for our firm and I discuss these things (and argue them) with these people. I can assure you that they understand the issues at stake and that they are not morons who will be led down the primrose path by a "rich capitalist" whispering in their ear. "If only they understood the issues as well as I do" is not a constructive attitude. To take toward these people.

Michael Tobis said...

Well, I don't make $38 an hour. I only wish.

Unfortunately a union wouldn't do me very much good (see "philosophers' strike" in Hitchhikers' Guide to the Galaxy).

And I can see that in your case these guys really are in competition with each other (and with you).

And, in fact, with me. Scientist pay is surprisingly small compared to our draws from the grant, because institutions with generous employment packages and lots of ancillary staff have to be supported largely from "grant overhead". It costs the taxpayer almost three dollars to give me a dollar's worth of salary.

So I am not trying to defend the unions. What I am saying is that I am increasingly impressed by the extent to which a few very rich people are able to subvert government to their own ends. A couple of months ago I would have dismissed the argument. I would have thought, with Naomi Oreskes, that climate science is being attacked for confused but ideological reasons. I dismissed the "oil company conspiracy" stuff out of hand.

But it's stunning to find that the perfectly irresponsible governor of Wisconsin is in thrall to the very same interests that are systematically and effectively smearing the reputation of climate science. Then to read Frank's book, which explains how ideology has served as a convenient brand for a system which extracts wealth from the public and sends it to an affiliated private elite. And then to see the graphs of how wealth has become concentrated.

Put together, it all tells a story that I myself would not have believed a couple of months ago, despite the fact that my core interest is directly involved.

Could everybody be making $38 an hour? That's an interesting piece of arithmetic. Unions also are inflexible and reduce competitiveness in a fast moving world. This is why they mostly survive in government and monopoly circumstances. I am not a great fan. I am sure if I were in your position I be even less disposed in their favor.

But it is the public sector unions of Wisconsin, and the old line blue collar democrats, that finally stood up to the plunder that is going on; that's a far bigger problem in the grand scheme of things.

As to TVs and cell phones and old beater cars, yeah, that's modern life. How about health care, or a semblance of an education, or a social safety net? It turns out that these are more expensive than glowing slabs of twinkling lights.

And as to "confused", I am sure that is easily perceived as insulting, but remember I am a climate scientist.

Hell yes, many people are confused, and a few well funded interests are deliberately doing the confusing. I don't know how to put that gently. From where I sit, that's just a plain fact.

So, please consider Thomas Frank's question. Why is the DC area suddenly a center of immense wealth, when thirty years ago it was not? What economic activity supports this? What has changed?

It's an important clue.

King of the Road said...

Responding with respect to those I described above:
As to education, frankly, I don't see the parents driving it which is where, in my opinion, it must originate. Mostly I see the providing of video games and the watching of reality TV as the priorities. While there are exceptions with a small percentage of highly motivated children, no school will remediate the abandonment of interest in education on the part of parents.

The typical access to medical care is through emergency rooms. I will state that, to the best of my knowledge, all the children were born in hospitals and all injuries and illnesses have been treated. Typically nothing is paid as the patient simply doesn't pay or has moved with no forwarding address. I can tell you that I never hear "damn, why does health care cost so much?"

It's a lifestyle of which I wasn't really aware. Probably one step up the "social ladder" may be where the crux of the problem is most keenly felt. I'm not contending that there is no problem.

I'll need more time to consider your other questions.

Anonymous said...

Probably, without realizing it, King is highlighting the problem in his argument. You see, he knows some people who are "lower class" and "Some work, many don't" and they are doing fine. This is exactly the kind of division that is at the root of the issue in the joke. The union guys -- look what they make. Do you make $68 an hour? The actual issue is that there is an immense difference between those who own capital and those who do not. The supply v the demand side. Those who own and control production and those who produce. It is not up to those who own capital to determine how much is good enough for those who do not. He has not touched that part of the argument and is still rolling out the same arguments as 'welfare queen'. He is still focusing on the comparably tiny differences between the lower classes.

It doesn't surprise that, although he is not a tea partier, he is sympathetic to their arguments. They are both falling prey to same fallacy. Perhaps asking oneself questions. Is it in the best interests of all workers from the lower classes to collectively decide their fate, or allow the upper class to collectively decide their fate? Then ask who benefits from the division.

Michael Tobis said...

grypo, that strikes me as missing the point. We already know that without creative use of real capital we cannot support the present population. Also, we would not have made the progress we have.

The ethics of the situation are complicated and fraught, as anyone who has ever had even one employee (myself included) understands far better than the employees do.

I don't want to trivialize the prospect of bad employers, e.g., locking emergency exits so people can't sneak outside for a smoke break. There are real criminal actions that some bosses sometimes do, and the tedious regulations the rest of them have to grudgingly put up with have their purposes.

Still, the ethical grey zone doesn't extend to buying up the media and the congresses and parliaments.

For myself, I am absolutely not arguing against capital or capitalism. I am arguing, you might say, against backing into a twisted quasi-Stalinism (a hereditary oligarchy enforced by law dressed up in hollow populist slogans, and pretty much dregs for everybody else) all the while waving a capitalist flag and calling the result "freedom".

guthrie said...

Being a foreigner and all that, what are the goals of the tea party? How do these goals fit in with the already admitted inequalities of power, capital and wealth present in the USA today?

Anonymous said...

I'm not arguing against capitalism either. I, unlike Marxists, believe it is controllable through collective means (and there are many). My main argument, much like yours, is that capitalism, as it exists, is off balance, tilted heavily against the middle class, and the only way to fix that is to assemble. And the same group that benefits from class division, stokes it through political means.

Where you and I diverge, I think, is on the solution. I think unions, as much as I think they are pathetic and wrong headed throughout history by usurping top down power they caused there own demise, are still the best way to gain the power and organization necessary. I don't have any foresight to know if that is correct or not, just being practical, I guess. I'm unsure what your solution would be. You might not have thought that far yet. Perhaps you think it is necessary to bring down the unions and reassemble. Perhaps something else altogether. Grassroots is ideal, but weak against the opposition.

Michael Tobis said...

ah, Guthrie, you'd think that would be an easy question...

Anonymous said...

I'm still wondering why the tenth man didn't bid $19.

(@ Benson - March 1, 2011 5:41 PM)

Anonymous said...

I'm still wondering why the tenth man didn't bid $19.

(@Benson March 1, 2011 5:41 PM)

Greg said...

Rick, all the bids are sealed and only the bartender knows them, even after each round of bidding. Or, "It's just an analogy, and not a particularly good one".

Someone pointed out that when taxes are cut in a progressive income tax system, of course the richest, who were paying the most taxes, benefit most. So when taxes need to be raised, the opposite should be true. And that's what's broken down. Obviously taxes should have been raised in 2003 if not a little sooner. Eventually we have to pay the bill, and it's going to have to come from those most able to pay.

As for the justification for a progressive income tax in the first place, consider the comments above regarding (a) the benefits to the wealthy provided by society such as educating all their workers, providing roads to carry their goods... and (b) why the wealthy wouldn't want to run off to places of such minimal regulation and taxation as Bosnia or Somalia. A very simple model is close to the truth: Every person's stake in the society in which they live is pretty closely proportional to their net worth. That would argue for a wealth tax, but (a) it's easier to hide wealth than income, and (b) we don't want to discourage thrift among the majority for whom thrift is the primary means of wealth-building. So one looks at the correlation between income and wealth, and creates a progressive income tax as a reasonable proxy for a wealth tax.

If we really set income taxes in that way, the relative rates (i.e. the steepness of the progression) would automatically adjust in response to increasing or decreasing inequality.

David B. Benson said...

Rick H. --- Greg answered at length and well.

Anonymous said...

Thanks, Greg. The sealed bid eluded me.
And no argument on the tax policy here.

Michael Tobis said...

I still don't get it. What's the point?

Anyway, as has been pointed out here already, if rich people get the most benefit when taxes are cut, should they not pick up most of the burden when they are raised?

I understood it that way from the beginning.

But now that we have budget crises, we don't seem to be raising taxes, but rather cutting benefits. Which seems like an additional transfer of wealth to the wealthy.

David B. Benson said...

Which seems like an additional transfer of wealth to the wealthy.

Yup, more of the Hood Robin Principle