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Piketty definitely needs to respond thoroughly to the errors that Giles found, and Piketty's response so far is too flippant and superficial. This is serious st

by panarky 12y ago

Piketty definitely needs to respond thoroughly to the errors that Giles found, and Piketty's response so far is too flippant and superficial. This is serious stuff and it deserves a serious response. That said, those who don't want to talk about inequality are prematurely jettisoning Piketty's conclusions. A very simple way to measure inequality is the ratio of the wealth of the top quintile to the middle quintile. It's easy to see how this ratio escalated over the last 25 years. http://houseofdebt.org/2014/05/24/piketty-and-u-s-wealth-inequality.html http://houseofdebt.org/2014/05/24/piketty-and-u-s-wealth-ine... Spreadsheet errors notwithstanding, the inequality story is not going away.

AnthonyMouse 12y ago
The trouble is that the inequality story is a complete mischaracterization of the problem and it's very misleading about what the prospective solutions are. It leads people to believe that the issue is with John McCain owning houses across multiple states, when the actual problem is with the Koch Brothers owning Senators across multiple states. And what's the solution? Everybody says "tax the rich." The problem is that income taxes doesn't cause their wealth to decrease, they at best cause it to increase less rapidly. In practice they do nothing (or worse than nothing) because the biggest companies don't pay them anyway, and it creates a large competitive disadvantage for companies not large enough to engage in international tax avoidance, which makes the problem even worse. Meanwhile any money you manage to raise you can't spend until you first fight against a bunch of "domestic companies creating American jobs" who want to use it to fund Deep Water Horizon 2.0 or studies denying climate change or supply attack helicopters to the North Dakota state police, because aforementioned billionaires still have a thousand times more money than you with which to lobby Congress. The only way to fix any of it is to shut down K Street. Obviously that's a chicken and egg problem, because K Street is in a good position to protect itself, but if that's not your end game then you might as well stay home.
- alexeisadeski3 12y ago
  The only solution is to take power out of the hands of politicians. Get rid of K Street and something worse will take its place. Get rid of Congresses ability to regulate every detail of the economy and K Street will have a lot less to lobby for.
  - AnthonyMouse 12y ago
    There is certainly something to be said for placing clear limits on what Congress can do, but it's extraordinarily difficult to set out what they should be able to do ex ante and get it right. For example, it makes reasonable sense that the federal government should be in charge of the national defense, but then Washington is colonized by the defense industry which allocates itself a budget the size of Sweden's GDP. On the other hand, state governments have repeatedly demonstrated their ability to be captured by major industries within the state (e.g. coal in West Virginia, oil in Texas) and if it wasn't for the EPA those states would be [even more] uninhabitable, but we only have the EPA as a result of reading the commerce clause quite broadly. Making environmental regulations isn't specifically enumerated as a power of the federal government. I sometimes wonder if the problem isn't one of having too much accountability. If terms were twice as long then politicians could spend half as much time campaigning and wouldn't have to take as much money from private interests to stay in office. If federal senators went back to being appointed by the state legislatures there would be less voting but there would also be less unwarranted federal interference in state affairs. And so on.
    - alexeisadeski3 12y ago
      It's interesting that you bring up environmental issues. Those are especially tricky, since they deal with the commons: our air and water, which are typically not privately owned and thus are legally forbidden from being handled by the free market. And the military? Well, sure there are issues there. We can all agree on that. Now, the military and environmental regulation are inextricably linked to the economy, no doubt about that. And their impact on the economy can be large, no doubt about that either. But there is so much which the government gets involved with - and where there is SO much money to be made via lobbying and influence peddling - which the government really doesn't need to be involved in. I guess I'm saying that if the EPA and military corruption were the only issues we had to deal with, we'd be in a much better space than we are now.
      - AnthonyMouse 12y ago
        But those are just examples. You would have the same issue with state-level regulatory capture with finance in New York, or internet and other utility providers capturing the states they provide service in, etc. And then there's antitrust and copyright and other such things that essentially have to be done at the federal level because they have national scope. There are certainly things currently done by the feds that could be reasonably handed over to the states. Social security comes to mind as a big one. But social spending is hardly the area where moving that out of Washington would make the largest dent in K Street.
- specialist 12y ago
  Public financing of campaigns would shut down K Street's electoral (campaigning) influence. Lobbyists could then resume their focus on policy.
judk 12y ago
The top quintile is a useless bucket. It includes the top 1% and top 0.01%, which are of a completely different character from the rest of the top quintile. Those who control vast wealth hide in the watered down average -- Bill Gates does not belong in the same bucket as a young dentist.

by panarky 12y ago

AnthonyMouse 12y ago

The trouble is that the inequality story is a complete mischaracterization of the problem and it's very misleading about what the prospective solutions are. It leads people to believe that the issue is with John McCain owning houses across multiple states, when the actual problem is with the Koch Brothers owning Senators across multiple states. And what's the solution? Everybody says "tax the rich." The problem is that income taxes doesn't cause their wealth to decrease, they at best cause it to increase less rapidly. In practice they do nothing (or worse than nothing) because the biggest companies don't pay them anyway, and it creates a large competitive disadvantage for companies not large enough to engage in international tax avoidance, which makes the problem even worse. Meanwhile any money you manage to raise you can't spend until you first fight against a bunch of "domestic companies creating American jobs" who want to use it to fund Deep Water Horizon 2.0 or studies denying climate change or supply attack helicopters to the North Dakota state police, because aforementioned billionaires still have a thousand times more money than you with which to lobby Congress. The only way to fix any of it is to shut down K Street. Obviously that's a chicken and egg problem, because K Street is in a good position to protect itself, but if that's not your end game then you might as well stay home.

alexeisadeski3 12y ago
The only solution is to take power out of the hands of politicians. Get rid of K Street and something worse will take its place. Get rid of Congresses ability to regulate every detail of the economy and K Street will have a lot less to lobby for.
- AnthonyMouse 12y ago
  There is certainly something to be said for placing clear limits on what Congress can do, but it's extraordinarily difficult to set out what they should be able to do ex ante and get it right. For example, it makes reasonable sense that the federal government should be in charge of the national defense, but then Washington is colonized by the defense industry which allocates itself a budget the size of Sweden's GDP. On the other hand, state governments have repeatedly demonstrated their ability to be captured by major industries within the state (e.g. coal in West Virginia, oil in Texas) and if it wasn't for the EPA those states would be [even more] uninhabitable, but we only have the EPA as a result of reading the commerce clause quite broadly. Making environmental regulations isn't specifically enumerated as a power of the federal government. I sometimes wonder if the problem isn't one of having too much accountability. If terms were twice as long then politicians could spend half as much time campaigning and wouldn't have to take as much money from private interests to stay in office. If federal senators went back to being appointed by the state legislatures there would be less voting but there would also be less unwarranted federal interference in state affairs. And so on.
  - alexeisadeski3 12y ago
    It's interesting that you bring up environmental issues. Those are especially tricky, since they deal with the commons: our air and water, which are typically not privately owned and thus are legally forbidden from being handled by the free market. And the military? Well, sure there are issues there. We can all agree on that. Now, the military and environmental regulation are inextricably linked to the economy, no doubt about that. And their impact on the economy can be large, no doubt about that either. But there is so much which the government gets involved with - and where there is SO much money to be made via lobbying and influence peddling - which the government really doesn't need to be involved in. I guess I'm saying that if the EPA and military corruption were the only issues we had to deal with, we'd be in a much better space than we are now.
    - AnthonyMouse 12y ago
      But those are just examples. You would have the same issue with state-level regulatory capture with finance in New York, or internet and other utility providers capturing the states they provide service in, etc. And then there's antitrust and copyright and other such things that essentially have to be done at the federal level because they have national scope. There are certainly things currently done by the feds that could be reasonably handed over to the states. Social security comes to mind as a big one. But social spending is hardly the area where moving that out of Washington would make the largest dent in K Street.
specialist 12y ago
Public financing of campaigns would shut down K Street's electoral (campaigning) influence. Lobbyists could then resume their focus on policy.

judk 12y ago

The top quintile is a useless bucket. It includes the top 1% and top 0.01%, which are of a completely different character from the rest of the top quintile. Those who control vast wealth hide in the watered down average -- Bill Gates does not belong in the same bucket as a young dentist.