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> There's no "pent-up demand" waiting to be unlocked by advertising. This is why any economic recovery plans that don't focus on growing the income of middle-

> There's no "pent-up demand" waiting to be unlocked by advertising. This is why any economic recovery plans that don't focus on growing the income of middle- and lower-class americans is doomed to fail. The rich can already buy anything they want, and they're saving like crazy. Until we unleash more demand from the lower- and middle-class, all efforts are futile. It's also why we should be focusing on, and supporting, raises in the minimum wage, reductions in work weeks (more demand for leisure goods and services), and decreased tax burden on the middle class. This necessarily implies a (potentially dramatic) increase in taxes on the wealthy. They can afford it. If someone claims they'll cut and run to a tax haven country -- let them. We'll do better without them around.

x5n1 11y ago
Wallerstein said that Capitalism has failed for the Capitalist class, what he means is that it's costing more and more to make a dollar. The reason that income is falling is because the Capitalist class expects to continue making billions against a market which is efficient. They just squeeze that profit out of the worker's paychecks. Ultimately, that's the problem. The Capitalist project has reached its end, but the shareholders don't want to admit that and entrepreneurs don't want to admit that to them... because why would you invest if you can't continue to make outsized gains against a market that doesn't support your vision of profit.
- mikerichards 11y ago
  And let me guess, since "The Capitalist project" has failed we're going to go back to those successes of the 20th century that caused so much human misery.
  - deciplex 11y ago
    I mean, I agree with you that Stockholm isn't the greatest city in the world to live in, nor Oslo, but they're not exactly filled to the brim with human misery, either.
    - noarchy 11y ago
      They're also not socialist, in the sense that the parent comment was (I think) hinting at. There's plenty of capitalism at work in both Sweden and Norway.
      - rjblackman 11y ago
        you are mixing up communism and socialism. socialism and capitalism are not mutually exclusive. the scandinavian systems are called "nordic socialism" for a reason.
        icebraining 11y ago
        Socialism doesn't have an agreed-upon definition. For example, the World Socialist Movement will tell you that it entails an end to private property and to trades using money[1]. Whether the Nordic model is really socialist is a subject of intense debate among the Left (as usual). [1] http://www.worldsocialism.org/english/what-socialism http://www.worldsocialism.org/english/what-socialism
        rjblackman 11y ago
        well the USSR under Gorbachev were considering moving to it (the nordic model) so I guess that gives some creedence to it's "left-ness"
        icebraining 11y ago
        Not even Lenin's USSR was considered Socialist by everyone (see the State Capitalism critiques, particularly by the anarchists), let alone the USSR under Perestroika!
    - brc 11y ago
      Norway, Sweden, Denmark and Finland are all capitalist countries with a high economic freedom index. That the voters choose to vote themselves high taxes for the purposes of high government spending is more a function of their culture than anything else.
  - ddoolin 11y ago
    Why does it have to be this way or that way? Are the only two ways really down and...down? I have a hard time believing that to be true.
  - x5n1 11y ago
    > "The Capitalist project" has failed Did you actually read what was written? It hasn't failed. It's failing to produce for Capitalist themselves in terms of profits. Capitalism has succeeded. But that means the journey is at its end. There is no going back, there is only going forward. And forward does not look like the present or the past. The cost of production is going up while the profits are going down. As a web person it's not hard for me to see. No one wants to pay for web development but want all the features. Technology enables this to some extent but there are limits to what can be done. The product has to be perfect and has to be free or nearly free. etc. etc. Sooner or later I will fail to deliver on expectations. http://www.faculty.rsu.edu/users/f/felwell/www/Theorists/Essays/Wallerstein2.htm http://www.faculty.rsu.edu/users/f/felwell/www/Theorists/Ess...
- eli_gottlieb 11y ago
  >Wallerstein said that Capitalism has failed for the Capitalist class, what he means is that it's costing more and more to make a dollar. The reason that income is falling is because the Capitalist class expects to continue making billions against a market which is efficient. They just squeeze that profit out of the worker's paychecks. I do recall some rather elaborate book, perhaps entitled Capital, being written about the tendency of the rate of profit to fall...
  - spopejoy 11y ago
    Careful now, people might think you mean Piketty
brc 11y ago
By growing the income, you mean growing their productivity so they make more money. Rising minimum wage and reducing hours does the exact opposite. Decreasing a tax burden is a good idea - but decreasing the tax burden on everyone. 'Tax the rich' while a popular strategy to single out a minority group, is ultimately a useless strategy as there aren't enough rich people to tax, and they already disproportionally pay more than anyone else. The UK dabbled in extremely high investment taxes at 98%. I think this would fall under your 'tax the rich' proscription. The unfortunate side effect was that investment was virtually stopped overnight and the country stopped growing GDP for two whole years, making everyone significantly poorer and destroying many industries and companies. Unfortunately I read this type of comment frequently, and they all fall into the trap of the 'daddy model of wealth' : http://paulgraham.com/gap.html http://paulgraham.com/gap.html But not all is lost, you did suggest that middle class income is key, understanding that productivity is the key to income growth is the key to that. However, cutting hours and increasing pay are the exact opposite to increasing productivity.
- crdoconnor 11y ago
  >Rising minimum wage and reducing hours does the exact opposite. Decreasing a tax burden is a good idea - but decreasing the tax burden on everyone. This is the exact same story we've been told for 30 years: if you want more jobs and more productivity just lower taxes. It didn't work then and it doesn't work now. It just enables the ultra-wealthy to siphon off wealth from the rest of society. Ultimately that hurts productivity. >The UK dabbled in extremely high investment taxes at 98%. I think this would fall under your 'tax the rich' proscription. The unfortunate side effect was that investment was virtually stopped overnight and the country stopped growing GDP for two whole years, IIRC this was actually due to the oil crisis. The US, on the other hand, dabbled in ~90% tax rates in the 50s when it experienced high growth levels never before seen since.
  - brc 11y ago
    Can you tell me how 'the ultra rich siphon off wealth from the rest of society?' I see this type of saying thrown around a lot, but I've never understood how those who believe it think the mechanism works, how you sequester wealth away so nobody else can benefit. Have you read the linked essay? Do you disagree with the central premise, that a society with no income inequality is a society that is not innovating and getting better?
aflyax 11y ago
Except for reducing tax burden on the middle class, amazingly wrong all around. Savings are not to be seen due to the inflationary policy of the FED.

x5n1 11y ago

Wallerstein said that Capitalism has failed for the Capitalist class, what he means is that it's costing more and more to make a dollar. The reason that income is falling is because the Capitalist class expects to continue making billions against a market which is efficient. They just squeeze that profit out of the worker's paychecks. Ultimately, that's the problem. The Capitalist project has reached its end, but the shareholders don't want to admit that and entrepreneurs don't want to admit that to them... because why would you invest if you can't continue to make outsized gains against a market that doesn't support your vision of profit.

mikerichards 11y ago
And let me guess, since "The Capitalist project" has failed we're going to go back to those successes of the 20th century that caused so much human misery.
- deciplex 11y ago
  I mean, I agree with you that Stockholm isn't the greatest city in the world to live in, nor Oslo, but they're not exactly filled to the brim with human misery, either.
  - noarchy 11y ago
    They're also not socialist, in the sense that the parent comment was (I think) hinting at. There's plenty of capitalism at work in both Sweden and Norway.
    - rjblackman 11y ago
      you are mixing up communism and socialism. socialism and capitalism are not mutually exclusive. the scandinavian systems are called "nordic socialism" for a reason.
      - icebraining 11y ago
        Socialism doesn't have an agreed-upon definition. For example, the World Socialist Movement will tell you that it entails an end to private property and to trades using money[1]. Whether the Nordic model is really socialist is a subject of intense debate among the Left (as usual). [1] http://www.worldsocialism.org/english/what-socialism http://www.worldsocialism.org/english/what-socialism
        rjblackman 11y ago
        well the USSR under Gorbachev were considering moving to it (the nordic model) so I guess that gives some creedence to it's "left-ness"
        icebraining 11y ago
        Not even Lenin's USSR was considered Socialist by everyone (see the State Capitalism critiques, particularly by the anarchists), let alone the USSR under Perestroika!
  - brc 11y ago
    Norway, Sweden, Denmark and Finland are all capitalist countries with a high economic freedom index. That the voters choose to vote themselves high taxes for the purposes of high government spending is more a function of their culture than anything else.
- ddoolin 11y ago
  Why does it have to be this way or that way? Are the only two ways really down and...down? I have a hard time believing that to be true.
- x5n1 11y ago
  > "The Capitalist project" has failed Did you actually read what was written? It hasn't failed. It's failing to produce for Capitalist themselves in terms of profits. Capitalism has succeeded. But that means the journey is at its end. There is no going back, there is only going forward. And forward does not look like the present or the past. The cost of production is going up while the profits are going down. As a web person it's not hard for me to see. No one wants to pay for web development but want all the features. Technology enables this to some extent but there are limits to what can be done. The product has to be perfect and has to be free or nearly free. etc. etc. Sooner or later I will fail to deliver on expectations. http://www.faculty.rsu.edu/users/f/felwell/www/Theorists/Essays/Wallerstein2.htm http://www.faculty.rsu.edu/users/f/felwell/www/Theorists/Ess...
eli_gottlieb 11y ago
>Wallerstein said that Capitalism has failed for the Capitalist class, what he means is that it's costing more and more to make a dollar. The reason that income is falling is because the Capitalist class expects to continue making billions against a market which is efficient. They just squeeze that profit out of the worker's paychecks. I do recall some rather elaborate book, perhaps entitled Capital, being written about the tendency of the rate of profit to fall...
- spopejoy 11y ago
  Careful now, people might think you mean Piketty

brc 11y ago

By growing the income, you mean growing their productivity so they make more money. Rising minimum wage and reducing hours does the exact opposite. Decreasing a tax burden is a good idea - but decreasing the tax burden on everyone. 'Tax the rich' while a popular strategy to single out a minority group, is ultimately a useless strategy as there aren't enough rich people to tax, and they already disproportionally pay more than anyone else. The UK dabbled in extremely high investment taxes at 98%. I think this would fall under your 'tax the rich' proscription. The unfortunate side effect was that investment was virtually stopped overnight and the country stopped growing GDP for two whole years, making everyone significantly poorer and destroying many industries and companies. Unfortunately I read this type of comment frequently, and they all fall into the trap of the 'daddy model of wealth' : http://paulgraham.com/gap.html http://paulgraham.com/gap.html But not all is lost, you did suggest that middle class income is key, understanding that productivity is the key to income growth is the key to that. However, cutting hours and increasing pay are the exact opposite to increasing productivity.

crdoconnor 11y ago
>Rising minimum wage and reducing hours does the exact opposite. Decreasing a tax burden is a good idea - but decreasing the tax burden on everyone. This is the exact same story we've been told for 30 years: if you want more jobs and more productivity just lower taxes. It didn't work then and it doesn't work now. It just enables the ultra-wealthy to siphon off wealth from the rest of society. Ultimately that hurts productivity. >The UK dabbled in extremely high investment taxes at 98%. I think this would fall under your 'tax the rich' proscription. The unfortunate side effect was that investment was virtually stopped overnight and the country stopped growing GDP for two whole years, IIRC this was actually due to the oil crisis. The US, on the other hand, dabbled in ~90% tax rates in the 50s when it experienced high growth levels never before seen since.
- brc 11y ago
  Can you tell me how 'the ultra rich siphon off wealth from the rest of society?' I see this type of saying thrown around a lot, but I've never understood how those who believe it think the mechanism works, how you sequester wealth away so nobody else can benefit. Have you read the linked essay? Do you disagree with the central premise, that a society with no income inequality is a society that is not innovating and getting better?

aflyax 11y ago

Except for reducing tax burden on the middle class, amazingly wrong all around. Savings are not to be seen due to the inflationary policy of the FED.