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I'm a big fan of the Occupy Wall Street movement. And what I like most about it is the ambiguity of their demands. There's a deep honesty to that. It is okay to say the system is broken while also saying you don't know how to fix it. I'd feel uncomfortable if the protesters had specific demands. I don't want my economic policy coming from "guy in tent."

But I worry that the media needs specificity in order pit pundits against each other. It's no fun having two people agree that unemployment is too high. You need one pundit to recommend a specific solution so the other can say he's crazy. Ideally, you also need a villain for your story. That's the standard media model.

So I've been watching in horror as the media tries to transmogrify the honest ambiguity of the Occupy Wall Street movement into a sort of tortured logic with convenient villains. Everyone starts with the same facts:
  1. Some CEOs are overpaid
  2. Some banks take advantage of the system (while others fail)
  3. Some billionaires pay a lower tax rate than other people
  4. Some CEOs, some bankers, and all billionaires are part of the top 1%
  5. The top 1% are getting richer while the 99% are getting poorer
  6. Unemployment rates are obscene.
  7. Corporate profits are up.
From that set of facts, the illogical conclusion I'm starting to see is that the top 1% are stealing the nation's wealth. Villains! But how many people in the top 1% are engaged in some sort of evil? Is it 1% of the 1%? That's my best guess. I know a lot of people in the top 1%, and all they do is go to work. They hardly ever perpetrate evil. But they do create jobs for the 99%.

One problem with the top 1% simplification is that people who have college degrees aren't experiencing high unemployment. So it would be equally fair - and by that I mean equally illogical - to conclude that highly educated people are stealing the nation's wealth from less educated people. That's a bumper sticker you won't see.

I would also be willing to bet that the average math skills of the people who are doing well in this economy are better than the average math skills of the people who are suffering. In other words, the Occupy Wall Street protesters are probably comprised of more psychology majors than engineering majors. But no one is suggesting that people who are good at math are stealing the nation's wealth from people who are not. That's not a catchy slogan.

Some people believe the problem with our economy is that social programs are sucking all of the money out of the system. If you have that view, you might conclude that the poor, the sick, and the elderly are stealing from everyone else. But that doesn't look good on a protest sign.

And what the hell does it mean to steal the national wealth anyway? If my flower shop does well, but your donuts shop doesn't, did I steal some national wealth from you? It might look that way on paper, but it doesn't tell you anything about what's going on.

The most objective explanation of our problem is that the economy is changing faster than humans can adapt. We have more high-end jobs and fewer unskilled opportunities. That's not anyone's fault. And obviously we have a smattering of rich crooks and rich people taking advantage of the system. That has to be addressed, but it's not the underlying problem.

Some say the government is the problem. But I think it is more accurate to say the government is failing to offer a solution. And that's because the government has also evolved more slowly than the world in general. It's an anchor on the economy. What we need is a form of government that is more nimble, and designed from scratch to support the economy.

And for that we need a constitutional convention. The genius of our constitution is that it has a big red button labeled "evolve." We just need to push it.

 
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Nov 5, 2011
I'm disappointed to see you reach for two very tired saws as a way to understand the OSW movement - "It's society's fault" (paraphrasing your comment - "the economy is changing faster than humans can adapt") and let's change the constitution ("... button ...").

Forget the shorthand "1percent" - nobody is saying that everyone that makes over 250k is evil. You know why people are angy - you listed the facts in your seven points.
What many people conclude from them is that some/many of the rich are *not playing by the rules* and are acting immorally - they are not paying their share of taxes, they are buying influence in politics to promote legislation they like an squash legislation that they don't, they are being paid outsized salaries for activities that are harmful to our nation's well-being and they (banks and others) are unfairly squeezing the underprivileged in order to make oversized profits. (this ignores the fact that much of it is done because the poor often don't plan well and don't understand math or complicated legalese very well - but it's still immoral and should be illegal).

The solution is not to change the constitution, it's to get people informed and involved in politics to such a degree that public opinion overwhelms the influence of the BigMoney lobbies on government and laws are passed to properly protect the most vulnerable Americans.
 
 
Nov 5, 2011
I'm disappointed to see you reach for two very tired saws as a way to understand the OSW movement - "It's society's fault" (paraphrasing your comment - "the economy is changing faster than humans can adapt") and let's change the constitution ("... button ...").

Forget the shorthand "1percent" - nobody is saying that everyone that makes over 250k is evil. You know why people are angy - you listed the facts in your seven points.
What many people conclude from them is that some/many of the rich are *not playing by the rules* and are acting immorally - they are not paying their share of taxes, they are buying influence in politics to promote legislation they like an squash legislation that they don't, they are being paid outsized salaries for activities that are harmful to our nation's well-being and they (banks and others) are unfairly squeezing the underprivileged in order to make oversized profits. (this ignores the fact that much of it is done because the poor often don't plan well and don't understand math or complicated legalese very well - but it's still immoral and should be illegal).

The solution is not to change the constitution, it's to get people informed and involved in politics to such a degree that public opinion overwhelms the influence of the BigMoney lobbies on government and laws are passed to properly protect the most vulnerable Americans.
 
 
+1 Rank Up Rank Down
Nov 3, 2011
I'm a little late to the party, but the top 1% does not create jobs. Jobs are created by demand. A "Job Creator" may be very clever in identifying a demand that others have missed or in creating something that will eventually be in demand, but calling that job-creation is like calling apple-picking apple-creation. The amplitude of the fluctuation of unemployment principally reflects the addition or subtraction of jobs in response to shifting demands. New types of jobs (finding a new apple tree) are certainly introduced over time, but not rapidly enough to affect the unemployment rate noticeably.

And, given that the US economy did not grow for three years (it is just now back to the size it was when the recession started), every single dollar that is "made" by one individual is a dollar that is not available to another person. And, when the Fed loans to banks at 0%, who loan that back out to the Treasury at 3%, the money that they "make" is money that the rest of us have to pay back, with interest, unless the economy has an enormous and unexpected growth spurt. People with enough spare cash to invest will earn a return on that investment, which makes them richer. But when the economy is not growing, that money either comes out of the pockets of those that live paycheck-to-paycheck, or onto the credit card that the next generation(s) will have to pay off, with interest. Thus, the top 1% are not only getting richer, but they are doing it at the expense of the bottom 99% until the economy beings growing, at which point they will capture the bulk of that growth and pay 15% capital gains tax on it.

The fundamental problem is that Finance has eaten the rest of the US economy. It is now easier to make money with money that to make money by doing, making, or thinking. With enough capital, you can actually make money just by participating in a transaction between two other parties. And with real wages falling over time, fewer and fewer people have access to sufficient amounts of money to participate in this game. Instead, people are forced to pool their money in 401k plans and pension funds just to watch them collapse when they are invested in CDOs made up of predatory loans base on inflated home values that only serve to further tie up what little disposable income they have.

I think a large part of the anger directed at the "top 1%" is really directed at people in the top 1% that make their money by leveraging the assets of the bottom 99%, but always seem to come out ahead, even when they lose other people's money.
 
 
Nov 2, 2011
<quote>
From that set of facts, the illogical conclusion I'm starting to see is that the top 1% are stealing the nation's wealth. Villains! But how many people in the top 1% are engaged in some sort of evil? Is it 1% of the 1%? That's my best guess. I know a lot of people in the top 1%, and all they do is go to work. They hardly ever perpetrate evil. But they do create jobs for the 99%. </quote>

HAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHAHA!

They DO NOT create jobs for the others but steal that income from the people who employ! They do not create jobs because they are "good" at what they do but because they're within a system that let them do so! It's not their genius, it's just the ability (or the lack of ethics) to jump through the right hoops!

Probably we could instantly replace every single individual within the 1% with someone coming from the top 50% of this country and actually IMPROVE our economics!

For one Scott Adams, there are likely other 50 people who draw an equivalent strip but their drawings did not end up on the right desk and now they flip burgers for a living.
 
 
0 Rank Up Rank Down
Oct 27, 2011
Scott,

We have data on the top 1%:

http://www.newdeal20.org/2011/10/14/who-are-the-1-and-what-do-they-do-for-a-living-61759/

The answer is C level management and finance/real estate, which is a growing portion for some time.

"I know a lot of people in the top 1%, and all they do is go to work. They hardly ever perpetrate evil. But they do create jobs for the 99%."

Your a former engineer and and author. Your not in the right social sphere to meet a representative group of the top 1% or the top 0.1%.

"But how many people in the top 1% are engaged in some sort of evil?"

From my time working on Wall Street I would estimate that 80% of people there are:
1) Evil
2) Not evil but doing things that serve no social purpose at all other then trying to be faster then someone else or know something they don't that doesn't aid in the allocation of capital to productive purposes.
3) Some combination of #1 and #2
 
 
-3 Rank Up Rank Down
Oct 27, 2011
Oh yeah, I checked out that ease of doing business report from the world bank, and both denmark and norway rank above the UK.

Libertarians are often wrong, and make incorrect statements, but you technocrats are quick to jump on us by assuming that we are chest bumping, USA loving, Republicans.
 
 
Oct 27, 2011
>About the EU being highly capitalist by EU standards: maybe I overspoke, because I have no intention of doing a comparason across EU member states. But there's no question that the UK is highly capitalist compared with France, the Nordic countries, the Netherlands, and probably even Germany (see the ease of doing business rank by the World Bank, on which the UK is 4th and Germany 19th). All of these have much stronger economies and enjoy much better quality of life than the UK.

And ease of doing business is not what I'd call THE measure of individual freedom either.

And no, I don't care too much about most of the "quality of life statistics." I think that it is good to be healthy, safe, and have lots of opportunity, but I don't measure the quality of life merely by looking at some social statistics. It's why I hate listening to the people who call the USA "like a third world country" simply because life expectancy is 78 instead of 82. Oh no. Once again, not that I'm defending the USA, which I simply don't care about. I'm simply showing how irrelevant many quality of life comparisons actually are. I think that we've been thinking about all of these problems in exactly the wrong way for a long time.

But I'm just one of those stupid, evil libertarians hurp e durp!
 
 
Oct 27, 2011
>About the EU being highly capitalist by EU standards: maybe I overspoke, because I have no intention of doing a comparason across EU member states. But there's no question that the UK is highly capitalist compared with France, the Nordic countries, the Netherlands, and probably even Germany (see the ease of doing business rank by the World Bank, on which the UK is 4th and Germany 19th). All of these have much stronger economies and enjoy much better quality of life than the UK.

But you are pulling that "highly capitalist compared with etc," completely out of nowhere. Capitalism is more of a pejorative than a descriptive term about a specific system. This is just emotional speak. It isn't really based on anything concrete.

>As for your highly ideological theory about the gold standard...another theory, much more widely acknowledged, is that the cost of the war, including reparations owed to the Allies and debt owed to the United States, was the cause of inflation and overvalued products.

I'm pretty sure that it is well accepted that the misguided valuation of the pound after the return to the gold standard that caused the overaluation of british goods. This is all historical fact. It isn't an "ideological theory."

>Being absorbed into the war effort was not in the least the same as being thrown into the meat grinder. Only a small percentage of the soldiers drafted were ultimately killed.

Oh phew!

>Shipping supplies abroad actually increased the drain on the economy (although it did guarantee that the soldiers and people creating the tins of corned beef and freighters were actually fed). Then there's the fact that rearmament was significant in curing the Depression -- and this started before the war started.

Every recession of the 1800's experienced a recovery with NO jobs programs, NO deficit spending, and NO expansionary monetary policy. Why do people act like the government deserves a ton of credit for the fact that the great depression ended and reversed at some point?
 
 
-1 Rank Up Rank Down
Oct 27, 2011
>Not true. *Those who could afford it* could do all those things.

By government law, not they couldn't. Up until fifty years before the famine, Irish catholics COULD NOT own land, attend schools, or settle near company towns.
 
 
-2 Rank Up Rank Down
Oct 27, 2011
>Incidentally, it's worth mentioning that your idea of "violence" is not mine. If I wanted to know whether one society was more violent than another, I would ask about things like crime rates, incarceration rates, murder rates, the probability of any given person dying violently. Based on those figures, I would conclude that America, for instance, was more violent than Sweden, and Somalia more violent than either one. But you, I guess, would look at tax rates and enforcement, and come to the opposite ranking. Just a note.

This is simply wrong. Why do people attack libertarians by attacking the USA? I'm not here to defend the US which is far from a libertarian country. And saying that the USA is "more libertarian" is also quite meaningless since marginal differences in taxation rates do not a libertarian world make. I would agree that incarceration rates and military spending should be considered when measuring the level of violence in society. You are making my point, that when it comes to statist violence, the USA is ahead of many European countries.

Try not assuming what the other person believes in a discussion.
 
 
Oct 26, 2011
No one was in a better position to make this warning than President Eisenhower, the General of the US Army.
http://www.youtube.com/watch?v=8y06NSBBRtY
His predictions came true and now we have the 1% er's to deal with. No matter what the proposed solutions are, it will not work as long as corruption rules the system. It appears the masses throughout the world may have finally had enough and are demanding that their voices be heard. There are great changes in the works.
 
 
Oct 26, 2011
“I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country; corporations have been enthroned, an era of corruption in High Places will follow, and the Money Power of the Country will endeavor to prolong its reign by working upon the prejudices of the People, until the wealth is aggregated in a few hands, and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of war.”

– Abraham Lincoln
 
 
Oct 26, 2011
gr8hands,
So what if not every product is mass produced? Your point is totally worthless if it has been reduced to a statement of obvious fact that has no bearing on the wealth of the intended customer. Yes, there are some high end products that only the wealthy will ever be able to afford. Again, so what?
 
 
Oct 26, 2011
gr8hands,
you are right companies can make a lot of money targeting the 1%. But, the point of my posts is that they can make much more money once the product becomes available to the 99%. Companies can and do get much, much wealthier selling to the 99%. My example was chosen to illustrate my point using an actual product and a small number of people. 300 million is 3 million times the size of my sample population. Multiply all of my numbers by 3 million and you are still making 4.5 times as much selling to the 99%. So any time you like you can make whatever you can get selling to the 1%. I'll get more selling to the 99%.

Selling to the 99% is the entire point of companies like Wal-mart, Target, Mac Donald's and so on. They do it because they've already done the same math and have come to the same conclusion.
 
 
Oct 26, 2011
gr8hands,
it is you that is wrong. The 1% do tend to get most know products first because they can afford them when they are expensive. However, lets say that a new product comes out. Let's try to use a concrete example so lets say DVD players. If I remember correctly DVD players were around $1000 to $1500 dollars when they first came out. If we have 100 people and only the top 1% can afford it then we've sold 1 DVD player at say $1250. Nowadays it is possible to get a better DVD player than those initial models for about $75. Now lets say that 75 out of the remaining 99 people can afford them. Now we get $5625 dollars in sales. Looks to me like we might be making 4.5 times as much money selling to the 99%.

What's more, if the 1% hadn't bought those initial models then no one would have the chance to buy them because the manufacturer would've discontinued them.
 
 
+1 Rank Up Rank Down
Oct 26, 2011
I agree with most of what Scott says here. But I do disagree with what he says about the economy changing faster than people can adapt to. In a free market, the economy changes because it is adapting to the people and the people must also adapt to the changes they have brought about in the economy. There is a 'feedback loop' that keeps things tending toward balance. The economy will continually seek equilibrium though it may never actually achieve it for long. In a command economy such as ours, the economy tries to work on the same principle but there is interference in the loop that comes from the government. The government keeps things out of balance by trying to force the economy to what it feels is the proper equilibrium. The problem is that there are millions of variables that determine the state of the system and they are interrelated in complex ways. Not only must the government be right about the 'proper' equilibrium, it must also know what to manipulate to achieve it. What's more the economy is very dynamic and it will not stay in equilibrium for more than a very short time. There is absolutely no way to control such a system from a central point with any degree of certainty. Therefore, the government, no matter how nimble it may be, has no chance of controlling it properly.

The question is not just whether the free market or central planning is perfect. Neither are. The question is which obtains the best results over time. History says that free markets do.

For those of you who say we have free markets and look where it has go us, I would like to point out that as soon as the Fed started mandating interest rates back in 1914 we left the free market behind. We have become more and more centrally planned since then with the government getting its hands into everything from the auto industry to the size of our toilet bowls. I say look where that has got us.
 
 
Oct 26, 2011
It's not just the unemployed who are angry with Wall Street CEOs. Almost everyone with a 401(k) took a big hit from 2008 to 2009 and has probably taken more hits recently. When the people who rated and sold junk bonds as AAA get rich instead of going to jail, something is wrong. Congress has effectively legalized fraud on the largest scale. And Congress has made it legal for large businesses to pay them to write preferential tax policy.
 
 
Oct 26, 2011
Correction: the UK is 7th, Germany is 19th. USA is 4th. Netherlands is 31st. There appears to be no correlation between ease of doing business rank and quality of life.
 
 
+1 Rank Up Rank Down
Oct 26, 2011
@ tkwelge

Being absorbed into the war effort was not in the least the same as being thrown into the meat grinder. Only a small percentage of the soldiers drafted were ultimately killed. Shipping supplies abroad actually increased the drain on the economy (although it did guarantee that the soldiers and people creating the tins of corned beef and freighters were actually fed). Then there's the fact that rearmament was significant in curing the Depression -- and this started before the war started.

As for your highly ideological theory about the gold standard...another theory, much more widely acknowledged, is that the cost of the war, including reparations owed to the Allies and debt owed to the United States, was the cause of inflation and overvalued products. The payment could have been given in trade goods, but the libertarians of the time, obsessed with money as they always are, didn't like that idea. So even though every great power quite comfortably had the resources to cover all expenses and feed everyone, the lack of organization in the economy was such that this capacity didn't matter one jot. Monetarist policies, like printing off more bank notes, didn't help anything. What did help was giving people jobs, even despite that the raison d'être for these jobs was to fight the most wasteful and destructive war in the whole of human history.

Regarding EU and big government: yes, government revenue as a percentage of GDP isn't a perfect measure of government size. But where is your evidence that Spain, Ireland and Greece are big government countries by EU standards? If you don't have any such evidence, then you don't have an argument.

About the EU being highly capitalist by EU standards: maybe I overspoke, because I have no intention of doing a comparason across EU member states. But there's no question that the UK is highly capitalist compared with France, the Nordic countries, the Netherlands, and probably even Germany (see the ease of doing business rank by the World Bank, on which the UK is 4th and Germany 19th). All of these have much stronger economies and enjoy much better quality of life than the UK.
 
 
-1 Rank Up Rank Down
Oct 25, 2011
>Anyway, your argument is laughable. Ireland, Greece and Spain aren't obviously bigger government than, say, the Nordic countries. More reckless, yes, but that doesn't mean bigger government. Look up government expenditure as a percentage of GDP, and you'll see that Spain, Greece and Ireland are not at all the highest among EU member states.

Is spending as a percentage of GDp THE measure of the size of government? I disagree.

>The data we have goes totally the other way. The EU has much higher government spending as a percentage of GDP than the USA...and also higher or just as quality of life by most measures.

But if you look at PPP adjusted dollars spent per capita, the USA is one of the highest spending countries per capita in the world. As a percentage of GDP our government is smaller, but we have a much larger GDP. In terms of the actual value spent on each citizen, the US government is just as big as most EU countries. Also, I'd look into other laws and regulations before deciding how big a government is.

>The UK is profoundly capitalist by EU standards, and its economy is among the worst.

So slightly less taxation is the difference between a socialist country and a capitalist country? I'm sorry, but labeling any country you've mentioned, be it the US or any EU country, "more capitalist" is basically nonsense. It's a strange sort of sports fandom that people have with economic statistics that they automatically correlate spuriously to any policy that they can.

According to the index of economic freedom, which looks at several factors besides just the tax rate, the UK is between the netherlands and finland. Switzerland, Ireland, Denmark, and Canada (i know it isn't an EU member) all rank higher than the UK on the index.
 
 
 
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