7 ms·

This is where I stopped reading: He writes that the upper class of FTE workers, who make up just one-fifth of the population, has strategically pushed for poli

This is where I stopped reading: He writes that the upper class of FTE workers, who make up just one-fifth of the population, has strategically pushed for policies—such as relatively low minimum wages and business-friendly deregulation—to bolster the economic success of some groups and not others, largely along racial lines. The idea that raising the top marginal tax rates 3-5% or raising the minimum wage 4 or 5 bucks will combat inequality is laughable. The cognitive dissonance between the cause of class (and the related race) inequality and the policies suggested to combat it never fail to blow my mind. Slavery was a legal, government subsidized industry. The Jim Crow south that systematically stripped the black community of their property rights was built on a system of state and federal laws. The highly regulated, highly subsidized mortgage loan industry had reams of racially divisive rules that barred the black community from building generational wealth during the most important period of general economic prosperity in perhaps the history of the world following WWII. American governments spent 200 years systematically robbing various ethnic groups of their rights, but bullshit pieces like this blame it on affluent white people that vote for candidates that have ideological problems with the minimum wage. Gimme a break. The cause of economic inequality is several generations of government disrespect of individual property rights and monetary policy that slants competition toward those that can pool assets - banks.

dnautics 9y ago
I think people don't fully appreciate the erosive power of monetary policy.
- eutectic 9y ago
  What do you mean?
  - throwaway2048 9y ago
    The amount of money being pumped into the economy by the federal reserve has done things like supercharge housing prices, because nobody can find a safe place to dump their new money, it all goes into real estate. This jacks up the price of housing for the middle class and poor to a ridiculous degree, to the point that in many markets over 75% (!) of post tax income is being spent on housing. I suspect this is the real reason we aren't seeing inflation from so much money being poured into the economy, all the money of the "have nots" is being sucked away by insane real estate costs, thus the prices of goods that are traditionally tracked by inflation indicators are unable to rise. This is what is meant by the erosive power of monetary policy, in a very real way it is destroying the wealth of everybody but the 1%, because they cant do anything but pour an increasing large share of their earnings into housing costs (which continue to escalate).
    - dnautics 9y ago
      ^^ yep! There's other more ways in which monetary policy siphons this eroded wealth to the rich. Mostly by foisting people and less-than-full-agency aggregation of 99%er wealth (pension fund manangers, etc) into corporate welfare via the stock market (because you need to make a return on investment to preserve wealth in the face of inflation). Another way the linkage between our monetary policy and economic structure creates inequality is by enabling the wealthy to take advantage of leveraged investments schemes (Forex, ETFs, etc) off of low-interest rate sources - the ibanks that fund these sorts of activities have a much more direct access to the federal reserve than you or I. The 'capitalism screws the poor' narrative is so tiresome, not because it is oft repeated, but because it truly misses the structural reasons why the capitalist system we have now screws the poor.
- bmh_ca 9y ago
  Please - Look up the monetists, who proposed 20% overnight lending rates to combat erosion (inflation/stagflation) back in the 1980s. The erosion we are experiencing is a brand of Monetary policy called Keynesianism - being ultra low interest rates to simulate growth - on the theory that growth would offset inflation; it did, but only - it appears - because wealth growth concentrated instead of disseminated. We are at the end game of Keynesianism, where we have to force a currency change to offset the dilution resulting from negative interest rates. That was a mouthful - point being - if this interests you, it's probably worth checking out monetists; they predicted our current spectre of stagflation. Which is all to say - monetary policy is a useful tool, a good rope - for pulling in inflation by raising the interest rate - but pushing a rope for stimulating it. Not all monetary policy is negative; the overnight lending rate was always intended to operate with a premium to punish poor lenders and reward good ones, and stimulate the economy by lowering lending burdens in times of stress, but monetary policy was never intended to replace fiscal and regulatory burden sharing between civilizations aims and capital investments. But that's what it's become - all capital investments are now passed off, in failure, to ultra low interest rates or bail outs, which is skewing the market.
  - dnautics 9y ago
    Even the monetists have a crazy appeal to authority that somehow an expert should "track the growth of the economy" (for some definition of "growth" and for some definition of "economy") and match inflation. All this does is Rob from the poor the social benefits of technological price deflation to chase this mythical good of "stability". Stability just means keeping the rich rich. Ultimately even self proclaimed monetist Alan Greenspan couldn't keep his hands off the dials and creatively interpreted economic growth to mean something that was nonsensical to anyone except the investment class.
    - bmh_ca 9y ago
      I'm not disagreeing on the point but you've failed to connect "track" to "rob". Also, Greenspan was clearly a Keynesian - and, IMO, rather/depressingly naive or proud, from his bio. Smart guy, horse blinders.
dikdik 9y ago
>The cause of economic inequality is several generations of government disrespect... And who makes up the government that writes and votes on these laws? And who uses their money to influence the people in these positions? My guess is the upper class of FTE works in the top 1/5 of the population? Although, maybe it's more apt to say the 1% or 0.1% who are not workers? Does the author include the business owners and elites in their top 1/5 of the population? Or are they a different subset as they are not workers?
- padobson 9y ago
  You're asking most of the right questions. But the real question you should be asking is this: what's the solution? Slavery. Jim Crow. Subsidized discrimination. The war on drugs. Several generations of government coercion used for evil. Peter Temin is advocating to fix the problem with more coercion. Am I supposed to believe that we've somehow evolved past prejudice? That prejudiced people won't gain influential office and use Temin's prescriptions to target those they hate? Sounds like more of the same. Let's break the wheel and give everyone the same opportunity.
scarface74 9y ago
Raising the minimum wage is definitely not the answer. It causes market distortions and hurts business and the people as a group who it should be helping. As a bleeding heart libertarian, I always wonder why liberals want to place more burdens on business - force them to pay more in wages and health benefits - instead of just having the government provide health care and increase the Earned Income Tax Credit and make it easier for employers to pass the EiTC to eligible workers through the payroll tax. In other words, just like the government can have business pass taxes to the government on behalf of the employees why not just the opposite, have the government give businesses credits to pay employees through the already existing EITC?
- padobson 9y ago
  I don't hate this idea. Leave the minimum wage alone, let inflation make it meaningless, and beef up the EITC.

dnautics 9y ago

I think people don't fully appreciate the erosive power of monetary policy.

eutectic 9y ago
What do you mean?
- throwaway2048 9y ago
  The amount of money being pumped into the economy by the federal reserve has done things like supercharge housing prices, because nobody can find a safe place to dump their new money, it all goes into real estate. This jacks up the price of housing for the middle class and poor to a ridiculous degree, to the point that in many markets over 75% (!) of post tax income is being spent on housing. I suspect this is the real reason we aren't seeing inflation from so much money being poured into the economy, all the money of the "have nots" is being sucked away by insane real estate costs, thus the prices of goods that are traditionally tracked by inflation indicators are unable to rise. This is what is meant by the erosive power of monetary policy, in a very real way it is destroying the wealth of everybody but the 1%, because they cant do anything but pour an increasing large share of their earnings into housing costs (which continue to escalate).
  - dnautics 9y ago
    ^^ yep! There's other more ways in which monetary policy siphons this eroded wealth to the rich. Mostly by foisting people and less-than-full-agency aggregation of 99%er wealth (pension fund manangers, etc) into corporate welfare via the stock market (because you need to make a return on investment to preserve wealth in the face of inflation). Another way the linkage between our monetary policy and economic structure creates inequality is by enabling the wealthy to take advantage of leveraged investments schemes (Forex, ETFs, etc) off of low-interest rate sources - the ibanks that fund these sorts of activities have a much more direct access to the federal reserve than you or I. The 'capitalism screws the poor' narrative is so tiresome, not because it is oft repeated, but because it truly misses the structural reasons why the capitalist system we have now screws the poor.
bmh_ca 9y ago
Please - Look up the monetists, who proposed 20% overnight lending rates to combat erosion (inflation/stagflation) back in the 1980s. The erosion we are experiencing is a brand of Monetary policy called Keynesianism - being ultra low interest rates to simulate growth - on the theory that growth would offset inflation; it did, but only - it appears - because wealth growth concentrated instead of disseminated. We are at the end game of Keynesianism, where we have to force a currency change to offset the dilution resulting from negative interest rates. That was a mouthful - point being - if this interests you, it's probably worth checking out monetists; they predicted our current spectre of stagflation. Which is all to say - monetary policy is a useful tool, a good rope - for pulling in inflation by raising the interest rate - but pushing a rope for stimulating it. Not all monetary policy is negative; the overnight lending rate was always intended to operate with a premium to punish poor lenders and reward good ones, and stimulate the economy by lowering lending burdens in times of stress, but monetary policy was never intended to replace fiscal and regulatory burden sharing between civilizations aims and capital investments. But that's what it's become - all capital investments are now passed off, in failure, to ultra low interest rates or bail outs, which is skewing the market.
- dnautics 9y ago
  Even the monetists have a crazy appeal to authority that somehow an expert should "track the growth of the economy" (for some definition of "growth" and for some definition of "economy") and match inflation. All this does is Rob from the poor the social benefits of technological price deflation to chase this mythical good of "stability". Stability just means keeping the rich rich. Ultimately even self proclaimed monetist Alan Greenspan couldn't keep his hands off the dials and creatively interpreted economic growth to mean something that was nonsensical to anyone except the investment class.
  - bmh_ca 9y ago
    I'm not disagreeing on the point but you've failed to connect "track" to "rob". Also, Greenspan was clearly a Keynesian - and, IMO, rather/depressingly naive or proud, from his bio. Smart guy, horse blinders.

dikdik 9y ago

>The cause of economic inequality is several generations of government disrespect... And who makes up the government that writes and votes on these laws? And who uses their money to influence the people in these positions? My guess is the upper class of FTE works in the top 1/5 of the population? Although, maybe it's more apt to say the 1% or 0.1% who are not workers? Does the author include the business owners and elites in their top 1/5 of the population? Or are they a different subset as they are not workers?

padobson 9y ago
You're asking most of the right questions. But the real question you should be asking is this: what's the solution? Slavery. Jim Crow. Subsidized discrimination. The war on drugs. Several generations of government coercion used for evil. Peter Temin is advocating to fix the problem with more coercion. Am I supposed to believe that we've somehow evolved past prejudice? That prejudiced people won't gain influential office and use Temin's prescriptions to target those they hate? Sounds like more of the same. Let's break the wheel and give everyone the same opportunity.

scarface74 9y ago

Raising the minimum wage is definitely not the answer. It causes market distortions and hurts business and the people as a group who it should be helping. As a bleeding heart libertarian, I always wonder why liberals want to place more burdens on business - force them to pay more in wages and health benefits - instead of just having the government provide health care and increase the Earned Income Tax Credit and make it easier for employers to pass the EiTC to eligible workers through the payroll tax. In other words, just like the government can have business pass taxes to the government on behalf of the employees why not just the opposite, have the government give businesses credits to pay employees through the already existing EITC?

padobson 9y ago
I don't hate this idea. Leave the minimum wage alone, let inflation make it meaningless, and beef up the EITC.