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The way I see it, unrestrained capitalism creating boom and bust cycles and wealth inequality were what lead to the upheavals of the previous century. We suppos

The way I see it, unrestrained capitalism creating boom and bust cycles and wealth inequality were what lead to the upheavals of the previous century. We supposedly learned our lesson after the great depression, but then in the 1980's had a change of heart and decided that government meddling in capitalism was the real problem and started going back to the old ways. Slashing taxes and regulations Which has lead us into a new period of boom and bust cycles and wealth inequality. I know that's an oversimplification and not particularly technical, but the same can be said of this article.

NoPiece 12y ago
You acknowledge it is an oversimplification, but is it even true? Taxes have shifted around, but in aggregate, they haven't been slashed. Taxes as a percentage of GDP were 26% in 1979, 26.4% in 2012, and haven't fluctuated more that a couple points. There has been some deregulation since the 80, but there also has been massive regulation. Yes banks escaped regulatory oversight, but the vast majority of businesses deal with greater regulatory burden that was present 35 years ago.
- breakyerself 12y ago
  It's about who is paying the taxes. Top marginal tax rates were incredibly low until recently and still are much lower than they were 50 years ago. Also the share of the taxes being paid by business is lower than post WWII. I don't know how you think regulating coal is going to keep the economy safe. Different industries are regulated for different reasons. The financial industry is regulated to protect the rest of the economy from the irrational behavior of investors.It's pretty significant to the subject were discussing.
  - NoPiece 12y ago
    Even though the top rate in 1979 was 70%, the effective marginal tax rate on the top quintile was 27.6%, which is pretty close to what it is now. It isn't meaningful to just compare the historic top rate because the tax code was different, and allowed for larger deductions, with a lower minimum tax. I don't think coal regulation is particularly important one way or the other. The problem is that as industry with influence, like finance, were able to escape legitimate regulation, the total amount of regulation on business has roughly doubled since the mid 70's, which is a drag on the size and resilience of the economy.
raintrees 12y ago
Aren't the boom and bust cycles more due to central banks, rather than capitalism, itself? I have read it successfully argued that the United States hasn't yet practised true capitalism, but rather forms of mercantilism.
- raintrees 12y ago
  Found the book: How Capitalism Saved America, Thomas J. DiLorenzo, 2005.
- gizmo686 12y ago
  I suspect that boom and bust is more fundamental than that. The essential problem seems to be that when there is an opportunity for profit, capitalism very efficiently drives us to exploit said opportunity. In almost all cases, this causes a usage of said opportunity beyond sustainable levels leading to an inevitable bust.
- breakyerself 12y ago
  I'm going from memory here. Not 100% positive, but I believe Andrew Jackson abolished central banking and Woodrow Wilson brought it back. There were no shortages of booms and busts in between. The period with the least booms and busts was post WWII to probably the S&L crisis in the 1980's
raverbashing 12y ago
I see Boom and Bust cycles as an effect of the natural feedbacks and delays of the economic system Basically http://www.facstaff.bucknell.edu/mastascu/econtrolhtml/sysdyn/sysdyn2.html http://www.facstaff.bucknell.edu/mastascu/econtrolhtml/sysdy...

NoPiece 12y ago

You acknowledge it is an oversimplification, but is it even true? Taxes have shifted around, but in aggregate, they haven't been slashed. Taxes as a percentage of GDP were 26% in 1979, 26.4% in 2012, and haven't fluctuated more that a couple points. There has been some deregulation since the 80, but there also has been massive regulation. Yes banks escaped regulatory oversight, but the vast majority of businesses deal with greater regulatory burden that was present 35 years ago.

breakyerself 12y ago
It's about who is paying the taxes. Top marginal tax rates were incredibly low until recently and still are much lower than they were 50 years ago. Also the share of the taxes being paid by business is lower than post WWII. I don't know how you think regulating coal is going to keep the economy safe. Different industries are regulated for different reasons. The financial industry is regulated to protect the rest of the economy from the irrational behavior of investors.It's pretty significant to the subject were discussing.
- NoPiece 12y ago
  Even though the top rate in 1979 was 70%, the effective marginal tax rate on the top quintile was 27.6%, which is pretty close to what it is now. It isn't meaningful to just compare the historic top rate because the tax code was different, and allowed for larger deductions, with a lower minimum tax. I don't think coal regulation is particularly important one way or the other. The problem is that as industry with influence, like finance, were able to escape legitimate regulation, the total amount of regulation on business has roughly doubled since the mid 70's, which is a drag on the size and resilience of the economy.

raintrees 12y ago

Aren't the boom and bust cycles more due to central banks, rather than capitalism, itself? I have read it successfully argued that the United States hasn't yet practised true capitalism, but rather forms of mercantilism.

raintrees 12y ago
Found the book: How Capitalism Saved America, Thomas J. DiLorenzo, 2005.
gizmo686 12y ago
I suspect that boom and bust is more fundamental than that. The essential problem seems to be that when there is an opportunity for profit, capitalism very efficiently drives us to exploit said opportunity. In almost all cases, this causes a usage of said opportunity beyond sustainable levels leading to an inevitable bust.
breakyerself 12y ago
I'm going from memory here. Not 100% positive, but I believe Andrew Jackson abolished central banking and Woodrow Wilson brought it back. There were no shortages of booms and busts in between. The period with the least booms and busts was post WWII to probably the S&L crisis in the 1980's

raverbashing 12y ago

I see Boom and Bust cycles as an effect of the natural feedbacks and delays of the economic system Basically http://www.facstaff.bucknell.edu/mastascu/econtrolhtml/sysdyn/sysdyn2.html http://www.facstaff.bucknell.edu/mastascu/econtrolhtml/sysdy...