North Carolina4h ago
The theory of economic rents would be unbelievable 50 years ago. Now not so much. Take the EpiPen. Developed by the Defense Department as an anti-nerve agent injector it eventually morphed into the product we know today. Same technology. The public paid for its development but the private sector ended up with its rights.
So that occurred in the mid-70s. Patents at best last 18 years. You do the math. We’re 40 years into the patent protection using a process known as Evergreening.
That’s one example of hundreds of ways we’ve allowed the private sector to steal money from the public.
On the other hand let’s look at how a few massively wealthy families like the Kochs & Waltons who inherited their wealth have set up anti-labor orgs like the Federalist Society or Heritage to rail against Unions & worker rights.
We now live in a culture that has actual workers hating the only “rights’ groups designed to help them. That culture change has been fully paid for by these same rich families to create an “alternative” media of a conservative echo chamber to lie.
Trump is simply the natural progression of the lies these folks have perpetrated in public and in the courts for decades.
Republicans wouldn’t be pushing unpopular tax cuts and other draconian legislation if we had transparent and verifiable vote counts – ballots counted with observers present on election night at polling places (before the chain of custody is broken). That’s what other democracies do.
Computer scientists have proven over and over that voting machines are easily hackable, and it can be done by using self-deleting code. Why would computerized election fraud be out of the realm of possibility when we have overt manipulation: voter suppression, gerrymandering, big money, and a stolen Supreme Court seat?
A must read on computerized voting: https://tinyurl.com/y9xx63f6
“As the twentieth century came to a close, a brave new world of election rigging emerged, on a scale that might have prompted Huey Long’s stunned admiration. We see that two major events have paved the way for this lethal form of election manipulation: the mass adoption of computerized voting technology, and the outsourcing of our elections to a handful of corporations that operate in the shadows, with little oversight or accountability.
“This privatization of our elections has occurred without public knowledge or consent, leading to one of the most dangerous and least understood crises in the history of American democracy. We have actually lost the ability to verify election results.”
Joseph Stalin: “The people who cast the votes decide nothing. The people who count the votes decide everything.”
Steamboat Springs, CO11h ago
We had the solution in the 50s; high tax rates on high incomes. If 90% of that extra income above a certain amount goes to the government, it makes more sense to put the money into the company, rather than to the exec. My grandfather amassed a fortune under those conditions, when the workers could make enough for a decent, middle-class living with disposable income. Most of society benefited from a strong middle-class.
With the coming of the automation age, we need to totally rethink what it means to be a society of humans. Do we selfishly try to gather everything to ourselves, or do we share what we get with those around us? Cooperation is what created civilization; selfishness will always destroy what we have built.
Maurice F. Baggiano
Jamestown, NYMay 3
All political party ideologies aside, we are a constitutional democracy first and foremost, which is – dare I say – a higher ideal than free commercial enterprise. Our Founding Fathers recognized this, and so did the states, when they enacted and ratified Art. I, Sec. 8 of the Constitution, giving a governmental body, our Congress, the authority to regulate interstate and international commerce. By authority of the Commerce Clause, our founders made Big Business answerable to us and subject to our regulation through our elected representatives.
Some folks today have forgotten this. For reasons that make no sense to me the proponents of unregulated free market capitalism think that our country would be better off if we leave Big Business alone, if we let it govern itself, no matter how it affects our lives. To me, these folks seem to value fate over cultural self-determinism, the interests of the few, over the interests of the many, affluence, over need.
But it is need, the needs of the many, that is the foundation underlying democracy. Serving the few, by empowering them to do what they want, regardless of the consequences of their actions, disempowers the rest of us from self-governance. This is a moral hazard of the laissez-faire economic model of many “conservative” politicians today, based, in part, on the ideology of Ayn Rand, rather than on the ideology of a democratic republic and elected representation.
It’s time to tax stock buybacks, starting around 25% and rising to 50%. The corporation would remit the money to Uncle Sam when it buys the stock.
Since you get less of what you tax, they would reduce buybacks and do dividends instead. So you have to treat dividends as ordinary income progressively, say for persons making over $200,000.
P.S. It’s time for the CBO and JCT to report stock buybacks as a tax expenditure; they are a way for the rich to avoid paying even reduced tax rates on dividends. Right now, the top 1% get about $300 billion per year in tax expenditures. The next 19% get $500 billion or so. So we could roughly balance the budget without raising taxes on the bottom 80%.
Northern Westchester, NY9h ago
As Dr. Krugman notes, the GOP premise for the tax cut is that if corporations retain more profit they will spend more on investment, and raise wages.
But corporations are already awash in capital. Publicly traded S&P 500 companies have been spending about $600 billion per year on stock buybacks and issuing another $800 billion annually in dividends—that’s $1.4 trillion annually—and they are still sitting on piles of cash.
Imagine if some of that money went to rebuilding infrastructure or paying off crushing student debt, thus freeing those students to spend more money in the economy.
And remember that funds for those buybacks and dividends come from retained earnings, not debt.
In other words: prior to the tax cut, corporations already had more than enough free cash to raise their level of investment and raise wages if management decided to do so, and still have piles of cash left in the bank.
So this tax cut, as formulated, is nothing more than a gratuitous and shameful handout to the wealthy.
It reminds me of Tribute paid to royalty by serfs.
And all of America—and our children and grandchildren—will be paying the cost of that Tribute for years to come.
Charleston, SC10h ago
Good news! Apple’s cash on hand represents the world’s 43rd largest GDP, ahead of Finland, Peru, Romania (the EU’s fastest growing economy) and every country in Central America and Africa, except Mexico, South Africa and Nigeria. Bad news: that cash, which is growing thanks to lower US tax rates, isn’t returning to the US. Apple says foreign taxes, currency rates means much of it will remain where it is. Apple’s US building plans are long term. Apple’s US wages? Much of Apple’s manufacturing is contracted out, to China.
Trump’s appropriation of economic success always lacks details and specifics. He ignores the painful gaps between Republican policies and family prosperity/safety nets. He has ramped up military arms exports; 2017’s $76 billion was a record year. To tax cuts, Trump has added fiat pricing (tariffs) and quotas (beginning this week). His use of executive power to fix prices and restrict supply will result in shortages and high prices.
His cronies are swiftly emptying the world’s largest public treasury and giving away national resources through leases and deregulation. HUD is raising rents on the poor. Congressional Republicans added a $1.5 billion in debt this year, stolen from healthcare. But Trump wants billions for a wall. DeVos tries to cut public education funding and Trump seeks to defund Planned Parenthood’s family planning, undercutting women’s health. Apple not withstanding,Trump is more about punishment and wealth than family prosperity.
Southern CaliforniaMay 3
The reverse osmosis of the flow of money, from government to corporations, was always the point of money in politics.
Both parties have accommodated their donors over the years, albeit to varying degrees of indebtedness and loyalty. That is, until the 2016 election, when one candidate out and out lied about his intentions when it comes to policy, while the other, skirted pointed questions and issues that arose each time new emails and memos were published.
The public still wants a higher minimum wage. The gaps in the economic divide are widening daily, with the bare necessities, housing, food, and transportation, continuing to be increasingly difficult for a wider swath of Americans to provide for themselves.
Apple and many other corporations that are sure to follow suit, buying back shares, rather than investing in America, is sure to raise the voters’ ire even more than it was in 2016. The question one must ask is whether our politics will have been sufficiently cleaned up by 2020, with the occupants of both the White House and Blair House having been swept out by the Russia investigation, and Congress turned over to Democrats who’ve learned their lesson? The other question one must ask is whether voters will have had their fill of the Conservative/Libertarian economic scam, or whether the eternal promise of that chance to realize the American Dream still has a pull so strong that no lie could ever be too big?
This one is on “demand Side” policy, never even discussed by the mainstream… to socialist, I guess, for the right wing orthodoxy of the overprivileged elites who own both parties and almost all of the “establishment” politicians- along with mowt of everything else…
San Diego11h ago
I’m always disappointed that in discussions about supply side stimulation there’s not a corresponding conversation about the demand side. Anyone who has spent substantial time working in a company knows that when market strategy is discussed, most of the conversation turns on whether there will be demand for the product or service under consideration at a price that will result in profitability. If the answer to this is yes, investors can be found whether the company has the money in the bank or not. No one in a sensibly run company thinks: geeze, the government gave us all this money, let’s go spend it. They study the market first, then decide what to do.
The key to profitability is that the market (that’s usually the bottom 90% who do most of the consuming) has to be willing and able to pay the target price. If the market can’t afford the price, it doesn’t matter how much cash the company has in the bank. Wise management is going to decide not to proceed.
This pretty obvious situation indicates that stimulating the demand side by reducing taxes on the consumer class is much more likely to create economic growth than supply side stimulus.
It’s one thing to have an idea that’s wrong and doesn’t do what you say it will. It’s much worse to have an idea that does the exact opposite of what you say it will, which is the result of supply side thinking. Why don’t pundits ever point this out?