OT: Predictions for 2016 Presidential Election

[livinincali]

[quote=FlyerInHi]The New Deal and tax policies reduced the wealrh gap and provided opportunities. Before that, the depression and lack of social safety made millions of destitutes.[/quote]

Not really. Most of the wealth gap came off in 1929-1930 before those policies came to be. Wealth gap was pretty flat as new deal policies came online. It shrunk again going into world war 2, could have been some lingering effect from new deal policies. Look at the chart below. When were the significant changes downward in the wealth gap. Not when taxes were being changed but when stock markets/asset prices collapsed. High marginal taxes rates may have stopped the wealth gap from growing during the 1940 to 1980 period, but you had a war and rebuild after the war and a bear market for 2 decades during that time so maybe it’s just a coincidence.

[FlyerInHi]

Livinincali, keep in mind that during great recessions and depressions, asset values and incomes drop sharply. Business deals drop off so top earners may not earn anything, but they have wealth saved from previous years. Income and wealth inequality work together, but wealth inequality is more worrisome.

Regular workers who are laid off don’t have accumulated wealth as safety net.

Stock market crash and depression are not the solution to inequality. Too much suffering and iddle productive capacity that retard human advancement. No economist would advocate that.

[an]

[quote=FlyerInHi]Livinincali, keep in mind that during great recessions and depressions, asset values and incomes drop sharply. Business deals drop off so top earners may not earn anything, but they have wealth saved from previous years. Income and wealth inequality work together, but wealth inequality is more worrisome.

Regular workers who are laid off don’t have accumulated wealth as safety net.

Stock market crash and depression are not the solution to inequality. Too much suffering and iddle productive capacity that retard human advancement. No economist would advocate that.[/quote]
Although economist might not advocate for it, but that’s the best solution to shrink the wealth gap. Historical data proves that it works. In any other booming economy, the smarter and richer people will find ways to increase their wealth at a much faster rate than those who earn minimum wage.

Even with the taxing of capital at a higher rate than income, my bet is that the Trump of the world will still increase their wealth at a much faster rate than you or I.

[SK in CV]

[quote=AN]Although economist might not advocate for it, but that’s the best solution to shrink the wealth gap. Historical data proves that it works. [/quote]

Sorry, that’s just wrong. Severe market crashes invariably lead to high unemployment. Unemployment invariably affects the lower and lower-middle economic classes disproportionately. Only in backwards world is that a path towards closing the wealth gap.

[ltsddd]

[quote=FlyerInHi]Stock market crash and depression are not the solution to inequality. Too much suffering and iddle productive capacity that retard human advancement. No economist would advocate that.[/quote]

If anything, a depression will widen the wealth gap even more. The richest will still have plenty to eat and still have plenty left to hoard up even more assets on the cheap.

[an]

[quote=SK in CV][quote=AN]Although economist might not advocate for it, but that’s the best solution to shrink the wealth gap. Historical data proves that it works. [/quote]

Sorry, that’s just wrong. Severe market crashes invariably lead to high unemployment. Unemployment invariably affects the lower and lower-middle economic classes disproportionately. Only in backwards world is that a path towards closing the wealth gap.[/quote]
Where have you been in this last crash? Yes, there were a lot of unemployment, but there were a lot of foreclosed upper middle class people too. Everyone was destroyed pretty evenly across board. Even the ultra rich were taken down a few notches.

With that said, I agree that it would be a backward world. But that’s the only proven way to reduce the wealth gap. I don’t think your tax proposal would do it. But we’ll never know.

[livinincali]

[quote=ltsdd]
If anything, a depression will widen the wealth gap even more. The richest will still have plenty to eat and still have plenty left to hoard up even more assets on the cheap.[/quote]

It didn’t before in the 1930’s during the great depression. The wealth gap stayed pretty much flat during that period of time. Asset price destruction is the only thing that has meaningfully shrunk the wealth gap in the past 100 years. I’m not saying it’s a good solution and doesn’t come with severe consequences but for those of you advocating that’s the biggest problem with society I’ve offered a solution that is proven to work.

Alternatively you could confiscate assets via some sort of wealth tax, but the only examples of that seem to be in countries that move from capitalism to communism/socialism. I don’t know that a move like that would be any better in terms of economic consequences.

I do know that beating around the edge of the bush with minimum wage increases and financial transaction taxes isn’t going to have a meaningful impact. It might help but probably only in bending he growth curve down a bit. The wealth gap will still be getting larger just at a slower pace. Maybe you could do enough to manage to hold the wealth gap at the current levels, although at some point you may trigger asset price destruction with your policy implementation. Set a financial transaction tax too high and stock market crashes because of it.

Realistically we’re bound to have another asset price crash sometime in the future. Maybe the correct course of action when that happens is to just let it play out on it’s own. Let the bad debt be written off. Let the people that made malinvestments go bust. Don’t have the fed setting interests rate at -5% and buying all kinds of bad debt just to save the bankers millions and billions. I think if you let that scenario play out you’d have decades of strong growth after the pain is over. Unfortunately if you are in your 60’s now and have significant assets to fund your retirement now, a booming economy 10+ years from now after you lost 50% of your wealth, isn’t very appealing.

[SK in CV]

[quote=AN][quote=SK in CV][quote=AN]Although economist might not advocate for it, but that’s the best solution to shrink the wealth gap. Historical data proves that it works. [/quote]

Sorry, that’s just wrong. Severe market crashes invariably lead to high unemployment. Unemployment invariably affects the lower and lower-middle economic classes disproportionately. Only in backwards world is that a path towards closing the wealth gap.[/quote]
Where have you been in this last crash? Yes, there were a lot of unemployment, but there were a lot of foreclosed upper middle class people too. Everyone was destroyed pretty evenly across board. Even the ultra rich were taken down a few notches.

With that said, I agree that it would be a backward world. But that’s the only proven way to reduce the wealth gap. I don’t think your tax proposal would do it. But we’ll never know.[/quote]

No. Everyone was not destroyed across the board. And I never claimed that there was no damage done at the top end of the economy during the recent crash.

Families whose fortunes went from $500 million to $300 million were not destroyed in the same way as those families who lost their upper middle class jobs, and had their homes foreclosed were. Nor the same as the lower income group that lost their jobs and didn’t get new ones for 2 to 3 years. The former group was angry they lost a lot of money. The latter two had their entire lives turned on its head. They are not the same.

A crash is not the only proven way to reduce the wealth gap, though I’ll admit that economic models are sketchy at best for taxes doing the trick. Calling those models proof could be an exaggeration. However there are some reasonably strong economic models that tie the ever increasing wealth gap to the tax preferences shown to capital over the last 35 years. It’s not unreasonable to argue that reversing that policy will also reverse the wealth gap. It’s surely preferable to a crash that is sure to put millions out of work and cause significantly more suffering than the wealth gap does. Killing the patient with the cure isn’t the answer.

[an]

[quote=SK in CV]No. Everyone was not destroyed across the board. And I never claimed that there was no damage done at the top end of the economy during the recent crash.

Families whose fortunes went from $500 million to $300 million were not destroyed in the same way as those families who lost their upper middle class jobs, and had their homes foreclosed were. Nor the same as the lower income group that lost their jobs and didn’t get new ones for 2 to 3 years. The former group was angry they lost a lot of money. The latter two had their entire lives turned on its head. They are not the same.

A crash is not the only proven way to reduce the wealth gap, though I’ll admit that economic models are sketchy at best for taxes doing the trick. Calling those models proof could be an exaggeration. However there are some reasonably strong economic models that tie the ever increasing wealth gap to the tax preferences shown to capital over the last 35 years. It’s not unreasonable to argue that reversing that policy will also reverse the wealth gap. It’s surely preferable to a crash that is sure to put millions out of work and cause significantly more suffering than the wealth gap does. Killing the patient with the cure isn’t the answer.[/quote]
Yes, I agree those in the $300M+ weren’t affected like the rest of us. But that’s the 0.1%-er. I feel like those people will continue to grow their wealth at much faster rate than the rest of us. Which is why I say your proposal won’t change that either. As I stated, the power of compound interest will guarantee that their wealth will grow at a much faster rate, which mean the wealth gap will only continue to widen.

The wealth gap between the upper middle class (the top 10%) and the bottom 90% as well. So, your tax proposal might slow down the wealth gap speed between the top 10% and the 90%, but I don’t think it would affect the 0.1%. But again, I think it would only slow down the wealth gap speed, but I don’t think it would decrease the wealth gap.

I wasn’t talking about model. I was talking about what happened in the past. If your goal is to reduce the wealth gap, then bad economic condition is the best way to achieve that. When you have good economic time, those who are already well off will be the group that will benefit the most of the booming economy. Talking about data vs model, has there ever been a time in the past where wealth gap decrease while there’s an economic boom? We can however, point to decreasing wealth gap during economic collapse though. So, if you can point to a time where there’s an economic boom and a decrease in wealth gap, then we can analyze the tax policies and various economic policies at the time to see what we can do today to achieve both economic boom and closing of a wealth gap. I actually would love to have both economic boom and decrease wealth gap. That means everyone would be well off. I just don’t think changing some minor tax policy would achieve it.

[flyer]

I know the following stats don’t apply to us Piggs, but for most of the population, I think we’ll see more and more evidence of the wealth gap as more and more people head into their retirement years–and this is across all generations–per the article below.

Sad to read that only 22% of Americans feel prepared for retirement.

http://www.fool.com/investing/general/2015/12/06/the-average-american-is-woefully-unprepared-for-re.aspx

[phaster]

[quote=Rich Toscano][quote=carli]
…most everything bearishgurl is stating is completely inaccurate, false and made up in her own mind with no apparent basis in fact whatsoever.
[/quote]

I don’t know about you guys, but I’m thinking we have a contender for a new website slogan.[/quote]

Déjà vu

[quote=phaster][quote=bearishgurl][quote=phaster]

[snip irrelevant commentary and conjecture]

-snip-[/quote]

uhh, phaster, nice try but if you think this bleached whale “people-of-Walmart” couple you depicted here watching an implosion from their (polluted backyard?) in rural Nevada are representative of SD City and County retired workers, you need to see your eye doctor, pronto.

For the most part, we are fitter and trimmer than the Gen Y college-student set who comes back “home” for the holidays to work out at the gym we work out in all year-round!
[/quote]

irrelevant commentary??

[quote=INTERNAL MONOLOGUE]the pot calling the kettle black, WTF???

so how to use a MADE UP B$ PHRASE “subconscious-psychological-interpretation(s)?” which struck IN A MOMENT OF boredom/divine-inspiration, while prioritizing the structure of a “rant”[/quote]

hate to take credit for something that I never intended so for now I’ll go along w/ your subconscious-psychological-interpretation that the couple is representative of SD City and County retired workers

truth is I selected the photo because it was the first non-military, civilian color image that came up when I typed the phrase “watching nuclear explosions” using google image search and never gave it a literal “second” thought!

https://www.google.com/search?q=watching+nuclear+explosions

my reason (as if anyone cares) was basically wanted to stay away from “scary” military nuke images because of headline news (at the time)

http://www.wired.com/2016/01/science-can-tell-if-north-koreas-test-was-really-an-h-bomb/

your post(s) in general indicate a lack of critical-thinking and this last post indicates you’re vein/insecure about appearance/self-image

to address the issue of “self-image” insecurity, found is a photo of a “fit and healthy” miss mushroom cloud w/ admirers so you can self-project a positive image of SD City and County retired workers,… happy?

since you mentioned it, my second thought is the couple is gazing east-ward (possibly standing in California??? and looking toward Nevada??? the only way to know for sure which state(s), is to locate/match the specific “land-scape” shown)

[quote=INTERNAL MONOLOGUE]to see if (bearishgurl’s) subconscious-psychological-interpretation about the photo has any basis in reality lets try a simple experiment

GIVEN she first suggested the photo is representative of SD City and County retired workers AND is set in (polluted backyard?) in the state of Nevada [SO AS stated the couple is located “somewhere” in the state of Nevada AND in the real world that indicates they would have to be facing West-ward (toward the state of California)]

so with the photo on an iPad/iPhone, go out side (on a sunny day) and hold the device arms length away looking first to the east, then toward the west AND see first hand which orientation makes common sense (hint, note the shadows!)[/quote]

I deduced general direction(s) by noting the right side of the image is illuminated (thinking where the sun is in the sky – to the “south”) AND the shadows fall on the people/blast-cloud on the left hand side, so this indicates “north” (given the spherical geometry of the earth)

http://scienceline.ucsb.edu/getkey.php?key=629

[quote=INTERNAL MONOLOGUE]should I acknowledge anything I post about psychoanalytics is PURE B$ because I’ve never taken a psych class or read a psych book BUT did watch pixar’s “inside out” which might count as sorta something…

what about noting other observations about the photo that suggest the image was photoshopped???

http://gizmodo.com/5930971/tourists-watching-nuclear-explosions-is-a-terrible-idea-but-a-great-facebook-photo

nah, should close out and move on…[/quote]

WRT this tangent, “Gedankenexperiment” tells me your transference-interpretation of a photo which you described/interpreted as bleached whale “people-of-Walmart” couple watching an implosion from their (polluted backyard?) in rural Nevada is PURE B$ to mask self-image insecurities and a simple SCIENCE experiment in the real world can be done to confirm the diagnosis

now back to the serious topic at hand since this is an economics message board where it clearly states at the bottom of the page… In God we trust. Everyone Else Bring Data!

BUT before looking at data, it might be useful to recall lessons taught in middle school, specifically the topic about “compound interest” and basic money management skills (which is key to surviving/thriving day to day in the modern day world)

if you have a mortgage, then perhaps you might have heard that you can pay off a loan much faster, by “annually” making an extra — 13th — mortgage payment,… what an extra mortgage payment does is directly reduces the principal balance on the loan by the amount of the payment (and the observed effect is exponentially decreasing the payback period)

NOW lets (re)examine ACTUAL “historic” published documents/text (i.e. Data!)

City pensioners get ’13th check’ bonus

More than $6.1 million has been distributed to retired San Diego city employees in the form of a “13th check” — beyond their usual 12 monthly payments — making this year’s holiday bonus the largest such payout in the history of the three-decade-old practice.

But it’s become a source of conflict as the city’s pension system faces a $2 billion shortfall in promised payments, which remains a taxpayer burden and has led to budget crises in the past at City Hall.

http://www.sandiegouniontribune.com/news/2015/dec/18/13th-check/

Though SDCERS investments were earning well above the 8 percent rate of return estimated by the system actuaries, under normal conditions investments surpluses are required to make up for below-average returns in other years to achieve the average rate of return. Therefore, unless the actuaries’ estimates are grossly incorrect, in the long run true “surplus earnings” are impossible. The use of surplus earnings for the purposes other than maintaining the pension system, such as to expand existing benefits should be viewed as a loan from the system THAT WILL REQUIRE REPAYMENT IN THE FUTURE.

The concept of surplus earnings is easily misunderstood, so sometimes these earnings are used inappropriately.

page 286

Handbook of Frauds, Scams, and Swindles: Failures of Ethics in Leadership edited by Serge Matulich, David M. Currie

https://books.google.com/books?id=VLxvUV8xFsgC&pg=PA286&lpg=PA286&dq=san+diego+pension+13th+check&source=bl&ots=ZKEjv0C-rD&sig=RHojR7aJR0Ehb8mScjQnxLIhW6M&hl=en&sa=X&ved=0ahUKEwjJl76j3vLJAhVO4GMKHR1RAJkQ6AEIKTAC#v=onepage&q=san%20diego%20pension%2013th%20check&f=false

anyone able to grasp the power/implications of “compound interest” then reading the published reports should be very disturbed at the mis-management/incompetence/corruption since the PRIMARY CAUSE as to why the “magnitude” of the SD public pension “unfunded” problem exists is due to a simple math concept that was suppose to be learned in middle school…

as-reported for the past three decades the “surplus earnings” (aka 13th payment) was diverted to Gubment-Pensioner(s) every holiday season INSTEAD OF being used for the original goal of trying to make sure the long term average return of the portfolio was achieved (about about 8% as per actuaries’ design-estimates)

if anyone is able to think critically about “compound interest” then they will see that making an annual extra mortgage payment and making an extra payment to Gubment-Pensioner(s) every holiday are two side of the same coin; one side allows a mortgage debt to be paid “down” much sooner, the other side makes the debt to pile “up” exponentially over decades!

(bearishgurl) since you have taken the blue pill – its apparent you believe whatever you want to believe!

for all other(s) who dared take the red pill, the BOTTOM LINE seems to be as long as the “surplus earnings” (aka 13th payment) is siphoned off every holiday season for Gubment-Pensioner(s) INSTEAD OF being used to maintain the pension system designed target return rate, the SD pension system as currently structured/operated AND using nothing more than “honest” common sense and middle school math tells us, that the un-funded DEBT issue will basically ALWAYS grow!

http://www.doughroller.net/investing/power-of-compounding-interest/%5B/quote%5D

PS the existing website slogan, In God we trust. Everyone Else Bring Data! works for me…

[phaster]

[quote=flyer]I know the following stats don’t apply to us Piggs, but for most of the population, I think we’ll see more and more evidence of the wealth gap as more and more people head into their retirement years–and this is across all generations–per the article below.

Sad to read that only 22% of Americans feel prepared for retirement.

http://www.fool.com/investing/general/2015/12/06/the-average-american-is-woefully-unprepared-for-re.aspx%5B/quote%5D

speaking of the general population, “Piggs” and retirement planning ever consider the parallels to classic story of the three little pigs?

https://www.youtube.com/watch?v=9kT2Kt8TVPU

[Coronita]

[quote=phaster]
speaking of the general population, “Piggs” and retirement planning ever consider the parallels to classic story of the three little pigs?

https://www.youtube.com/watch?v=9kT2Kt8TVPU%5B/quote%5D

There’s a big problem with the 3 little pig story relative to real life. In real life, the pigs that built home out of straw and wood will complain and then demand government to make them whole. And that doesn’t matter what political party they associate with, as we clearly now see.

[flyer]

“speaking of the general population, “Piggs” and retirement planning ever consider the parallels to classic story of the three little pigs?”

Although the core causes go far deeper than this story illustrates, I can see the parallels with regard to how, among the unprepared, the wealth gap will take more and more people down with it as it grows exponentially in the coming decades.

In addition, the stats indicate that even many in the top 20% have not planned well for retirement, so it seems likely that the wealth gap may widen as more and more people across all generations enter their retirement years.

[FlyerInHi]

Flyer, that’s a feature of capitalism as described by Thomas Pikety in his book.

The New Deal gave the vast majority of Americans opportunities to move up the social ladder. But as capital and establisment become ensconced, then the wealth gap widens. Think back of how you grew up and the exposure to different social economic classes. There weren’t any gated communities or vast housing tracts where all the houses are worth about the same like there are now.

If we believe that the wealth gap is a problem, then only a new New Deal will solve the problem.

[Author]

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