National Economics: Keynes or Hayek? Or something else?

[Utah]

True. And getting help from the government to the detriment of your competition helps, too.

This. 100 times this. Why don't people realize this. Walmart pays their employees so low that they qualify for food stamps. Then they have their employees shop at Walmart. Then they get tax breaks for more Walmarts.

Who pays for all those tax breaks and food stamps? You and I do. Why should Walmart make billions off you and me? Because they can afford lobbyists? Because they can create super PAC's to get their guy elected? How is that American?

All I am asking for is that Scratch gets the same breaks that Walmart gets. Take their tax breaks, plus the amount of money they get off food stamps, plus the money that they get from employees of theirs that are on food stamps and give that break to Scratch.

Let Scratch have a chance to compete.

Let have Mom and Pop grocery store have the same advantages Walmart has. Let Mom and Pop have the opportunity to create the millionaires Walmart has created. And let's be honest, if Mom and Pop had the same opportunities, they'd probably take better care of their employees, which would lead to less people on government aid, just like Scratch takes care of his employees.

[LA Ute]

This is an interesting take:

http://www.nationalreview.com/articl...-politics-envy

‘Money, it’s a crime,” said Pink Floyd. Or was that Bernie Sanders? It might as well have been.

“When the top one-tenth of 1 percent now owns almost as much wealth as the bottom 90 percent, that’s not fair,” Sanders told an energized crowd during his New Hampshire primary victory speech Tuesday. “The top three drug companies in this country made $45 billion in profit last year. That is an obscenity. . . . We must tell the billionaire class and the One Percent that they cannot have it all at a time of massive wealth and income inequality.”

Despite the noises about incarceration rates and climate change, the theme of Bernie Sanders’s campaign was clear: Moloch! Moloch! Nightmare of Moloch! And it’s working. Not only did the Vermont senator win Tuesday’s New Hampshire primary by 22 points; according to exit polling, he won men and women, moderates and liberals, those with college degrees and those without, those who own guns and those who don’t, and previous primary participants and first-timers. The only voters who preferred Hillary Clinton were those older than 65 and those from families making more than $200,000 per year.

In other words, envy sells. And make no mistake, that is what Sanders is selling. After all, socialism is inevitably a politics of envy: Wealth is by definition finite, so more in your pocket means less in mine — and if I have less than I want, it must be your fault. Because Sanders has no room in his cramped understanding of the world for the complex interplay of free economic actors, he must default to simplistic moral explanations — Greed!: of Wall Street bankers, pharmaceutical companies, and America’s 536 billionaires — and simplistic solutions: to wit, frog-marching Goldman Sachs executives down Fifth Avenue and divvying up their stuff. They’ll have less, so you’ll have more.

And everyone wants more.

Coincidentally, Donald Trump — who, like Sanders, crushed his nearest rival by 20 points — is exploiting the same itch. “We are going to make America great again,” he said in his own victory speech Tuesday night, “but we’re going to do it the old-fashioned way. We’re going to beat China, Japan. We’re going to beat Mexico at trade. We’re going to beat all of these countries that are taking so much of our money away from us on a daily basis.” And, later: “We are now going to make [deals] for your benefit. We’re going to make the deals for the American people.”

Unlike Sanders, Trump has no determinate position on any matter of public policy, but that’s of little importance. He is not pitching a movement; he is pitching himself. His promise is not any particular slate of policies; it’s Donald Trump writ large. An America with Trump at the helm is one in which America “wins,” like Trump wins; makes good deals, like Trump makes good deals. In Donald Trump’s America, everybody gets to live a little like Donald Trump. This is at least partly why Trump’s supporters are so vicious toward his detractors: The latter threaten their chances to live bigger.

It’s envy, en masse, on both sides. Somebody else has it (cheaper tuition, cheaper health care, business-class tickets, a Mercedes, &c.), and I want it. Under Sanders, top-hatted Uncle Pennybags will do the perp walk; under Trump, we’ll put the screws to Beijing and Uncle Pennybags himself will cut me in on the deal; but in either case, I get what should’ve been mine all along. And all for the low, low price of a vote.

Those who believe that politics is little more than personal psychodrama played out on a grand stage might be closer than usual to the truth this election cycle. Neither Trump nor Sanders, despite their claims, is ushering in a revolution. They are ushering in a politics more petty, vulgar, and low — more animated by voters’ base inclinations — than any in recent memory. If New Hampshire is any indication, voters are not about anything so high-minded as constitutional government or national security or racial justice or even “hope and change.” They’re about me getting mine, by hook or by crook.

Free college, free health care, and winning. This election is the Gollum-cry of the masses: WE WANTS IT. — Ian Tuttle is a William F. Buckley Fellow in Political Journalism at the National Review Institute.

Read more at: http://www.nationalreview.com/articl...-politics-envy

[Utah]

I don't like that article. It is a buzz word bonanza. A click bait fluff piece.

Look! Everyone is JEALOUS.

Of course people are. They were fed a huge pile of lies. What are you taught your whole life?

Go to school. Work hard. You will become successful. That isn't true anymore.

Let's compare a couple of things. My father and father in law both went to professional post grad programs.

My FIL graduated with $25,000 in debt. He made $75,000 his first year out.
My father graduated with $18,000 in debt after 10 years of schooling. He made $35,000 his first year out.

I know my business. Most people in my field graduate with about $300,000 in debt and that number is rising. The average salary for those people is $105,000 right out of school.

Do you guys NOT see the difference?

What is going on right now is not the same American that the baby boomers grew up with. Baby boomers get out of high school and went and worked at the mill with health insurance and an pension. They bought a house for $15,000 and a car for $1,500 while making $25,000 a year. That's easy. That's the American dream.

Compare that to this: People in my work graduate with $300,000 in debt. Houses are $250,000. Cars are $30,000. That is almost $600,000 in debt. They make $105,000 their first year out.

Salary of $105,000 vs $600,000 in debt

versus

Salary of $25,000 vs $17,000 in debt.

The system is broken and broken BIG time.

[LA Ute]

What is going on right now is not the same American that the baby boomers grew up with. Baby boomers get out of high school and went and worked at the mill with health insurance and an pension. They bought a house for $15,000 and a car for $1,500 while making $25,000 a year. That's easy. That's the American dream.

Speaking as a baby boomer myself, I think you're really talking about the baby boomers' parents' generation.

I do think there's a problem because I know my own kids are looking at an entirely different prosperity landscape than I was at their age. Still, I don't think the solution is for the government to step in and increase the forced redistribution of wealth that's already under way.


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[U-Ute]

The system is broken and broken BIG time.

True. But I don't agree with most of your sentiment here.

People need to learn to make sound financial decisions. Going into debt $300k for a $100k a year job isn't necessarily a good financial decision.

That being said, given how people can't afford houses it seems rather odd that house prices have stayed where they are. It appears that banks have put an artificial floor under the housing market so they don't lose money. They are doing this by not offering loans and keeping foreclosed homes off of the market. By controlling both the supply and demand they can keep house prices artificially high.

[Utah]

Speaking as a baby boomer myself, I think you're really talking about the baby boomers' parents' generation.

I do think there's a problem because I know my own kids are looking at an entirely different prosperity landscape than I was at their age. Still, I don't think the solution is for the government to step in and increase the forced redistribution of wealth that's already under way.


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I disagree. I think we need more regulation because all of the deregulation caused all of this. The best example of this is PacBell/AT&T in the 80's. Long distance phone calling was outrageously expensive. Why? Because there was practically a monopoly on long distance phone services.

The government stepped in, broke up AT&T/PacBell and suddenly competition reigned in everywhere, which lead to more people getting long distance, which led to where we are today, with long distance included in the cost. I can call any state in the country and not pay a penny more.

We need more regulation.

We need more taxation. We should go back to the additional tax brackets. What this does is two fold: It forces the Waltons to pay back what they use. 2 - It forces employers to take care of their employees.

You ever heard of the Christmas bonus? Wonder where it comes from? If you are taxed at 90% (let's take the Eisenhower tax bracket system), then come the end of the year your accountant looks at you and says:

"Bro, you've got $100 left over. You can do one of two things. 1 - You can pay it to Uncle Sam in taxes or 2 - You can reinvest it in your business. You can improve working conditions. YOU CAN BONUS YOUR EMPLOYEES. Your call."

Most employers bonuses out to their employers. JP Morgan gave their employees a year's salary as a bonus at one time. Why does this not happen as much anymore? It is simple: There is no incentive to.

Nowadays, your accountant says this: "Bro, you've got $100 left over. Congress has lowered taxes so low, you can keep it, or use it on your business."

So, what do the Waltons do? They keep it.


I don't think the question is jealousy, or taking money from those who "earned it" and giving it to those who "haven't earned it".

I think the question is this: Are the Waltons paying their share? They use more resources than anyone, yet pay some of the least of anyone?

Why? Why are we ok with that? Why is it ok that the Waltons use the most and pay the least?

Why is it that small business owner next to the Waltons uses 1/100th resources as the Waltons but pays TWICE as much? Does that makes sense?

Doesn't to me.

[wally]

....

The system is broken and broken BIG time.

I graduated with $3,000 of student debt 11 years ago with my graduate degree. I only needed that loan because I blew my budget that year on an engagement ring, and I wasn't sure if the hottie I was conning into marrying me would have it checked out to see if I slipped her a CZ instead of the real deal.

Here's how I did it: I lived cheap as hell in dingy basement apartments and worked throughout my college career. I ate beans and rice and every free food I could find. I accepted the fact that I would probably have to be happy attending a "domestic" college option for in-state tuition credit instead of going to some exotic location for the experience of a lifetime! My college decisions were very utilitarian. I chose a degree based off of market demand for it and based off of my general aptitude for it.

The country does not owe anybody an easy living. even if I accept your numbers at face value, and assume that the $105k and $300k are static, why can't those people live like they are only making $65k (guess what, a lot of people actually do this!), and pay off the debt in 5 years? What is the tragedy here?

Also, one more minor quibble: you keep inferring that "the Waltons" are somehow using public infrastructure that they didn't pay for, or inadequately paid for. This is false. Corporations pay quite a bit in this regard. Whether by the fleet registration fees and fuel taxes, or the water and sewer impact fees they pay for a new facility that they build, they are paying their way, and usually pretty fairly, at least where I come from.

[Diehard Ute]

I graduated with $3,000 of student debt 11 years ago with my graduate degree. I only needed that loan because I blew my budget that year on an engagement ring, and I wasn't sure if the hottie I was conning into marrying me would have it checked out to see if I slipped her a CZ instead of the real deal.

Here's how I did it: I lived cheap as hell in dingy basement apartments and worked throughout my college career. I ate beans and rice and every free food I could find. I accepted the fact that I would probably have to be happy attending a "domestic" college option for in-state tuition credit instead of going to some exotic location for the experience of a lifetime! My college decisions were very utilitarian. I chose a degree based off of market demand for it and based off of my general aptitude for it.

The country does not owe anybody an easy living. even if I accept your numbers at face value, and assume that the $105k and $300k are static, why can't those people live like they are only making $65k (guess what, a lot of people actually do this!), and pay off the debt in 5 years? What is the tragedy here?

Also, one more minor quibble: you keep inferring that "the Waltons" are somehow using public infrastructure that they didn't pay for, or inadequately paid for. This is false. Corporations pay quite a bit in this regard. Whether by the fleet registration fees and fuel taxes, or the water and sewer impact fees they pay for a new facility that they build, they are paying their way, and usually pretty fairly, at least where I come from.

I know of people who took out thousands in student loans....because they made poor financial choices. They've never graduated, most of that money didn't go towards school.

Corporations do pay a lot. And in many cases they do things like pay off duty officers because they're needing more coverage than the government can provide. (Something anyone who chooses to do so can do btw)

I'll just sit here and wonder how my wife and I both have done just fine while living on modest government pay. We live comfortably with no debt. And we certainly aren't making the $100,000 a year being suggested for teacher pay by Utah.


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[Utah]

True. But I don't agree with most of your sentiment here.

People need to learn to make sound financial decisions. Going into debt $300k for a $100k a year job isn't necessarily a good financial decision.

That being said, given how people can't afford houses it seems rather odd that house prices have stayed where they are. It appears that banks have put an artificial floor under the housing market so they don't lose money. They are doing this by not offering loans and keeping foreclosed homes off of the market. By controlling both the supply and demand they can keep house prices artificially high.

I agree with your debt idea. BUT, the problem is, what college degree doesn't put you in that type of debt? Look at our beloved University of Utah:

Average cost per year for resident: $16,000
Average cost per year for non-resident: $34,000

Times that by 5 years (the average amount of time needed to get your degree) and you have these numbers:

Average cost per year for resident: $80,000
Average cost per year for non-resident: $170,000

How many jobs with bachelor's degrees pay that much money? And that doesn't even count post-grad work that is even more expensive.

In high school, you are told to go to college. You gotta go to college. College is the way to success. Looking at those numbers, you see that is bullshit. For most college graduates, they were scammed and scammed big time. Most graduates are now stuck with a noose around their necks that will drag them down for the next 30 years....why 30 years? Because as soon as they graduate, their payments are so high, they are forced to refinance to a 30 year loan.

The system is broken. Big time.

[Utah]

I graduated with $3,000 of student debt 11 years ago with my graduate degree. I only needed that loan because I blew my budget that year on an engagement ring, and I wasn't sure if the hottie I was conning into marrying me would have it checked out to see if I slipped her a CZ instead of the real deal.

Here's how I did it: I lived cheap as hell in dingy basement apartments and worked throughout my college career. I ate beans and rice and every free food I could find. I accepted the fact that I would probably have to be happy attending a "domestic" college option for in-state tuition credit instead of going to some exotic location for the experience of a lifetime! My college decisions were very utilitarian. I chose a degree based off of market demand for it and based off of my general aptitude for it.

The country does not owe anybody an easy living. even if I accept your numbers at face value, and assume that the $105k and $300k are static, why can't those people live like they are only making $65k (guess what, a lot of people actually do this!), and pay off the debt in 5 years? What is the tragedy here?

Also, one more minor quibble: you keep inferring that "the Waltons" are somehow using public infrastructure that they didn't pay for, or inadequately paid for. This is false. Corporations pay quite a bit in this regard. Whether by the fleet registration fees and fuel taxes, or the water and sewer impact fees they pay for a new facility that they build, they are paying their way, and usually pretty fairly, at least where I come from.

Nice story. It isn't reality anymore. I graduated from Utah in 2006 with zero debt as well. It was $6,000 a year to go to Utah then.

It is now $16,000 a year for schooling. That's almost three times as much. Your story is exactly what I am talking about. Your experience isn't reality anymore.

Also, with $300,000 in debt and a salary of $105,000, after taxes and student loan payments, you are left with about $45,000.

The country does not "OWE" anyone anything. BUT, why was ok for you to go to school for as cheap as you did, when it is now almost three times more expensive? Do you not see a problem there?

So, you say the Waltons pay their fare share when their taxes are <15%? And Scratch pays 29%? And Scratch uses a heck of a lot less public resources than the Waltons do?

[Utah]

I know of people who took out thousands in student loans....because they made poor financial choices. They've never graduated, most of that money didn't go towards school.

Corporations do pay a lot. And in many cases they do things like pay off duty officers because they're needing more coverage than the government can provide. (Something anyone who chooses to do so can do btw)

I'll just sit here and wonder how my wife and I both have done just fine while living on modest government pay. We live comfortably with no debt. And we certainly aren't making the $100,000 a year being suggested for teacher pay by Utah.


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Do you mind me asking when you start working? How much did you pay for your schooling?

[Utah]

Also, one more minor quibble: you keep inferring that "the Waltons" are somehow using public infrastructure that they didn't pay for, or inadequately paid for. This is false. Corporations pay quite a bit in this regard. Whether by the fleet registration fees and fuel taxes, or the water and sewer impact fees they pay for a new facility that they build, they are paying their way, and usually pretty fairly, at least where I come from.

When Romney ran for president his tax returns showed that he payed 13% in taxes. 13%. Are you ok with that? When you probably pay double the taxes that he does?

I'm not talking about going after the rich because they are rich and they suck and I'm not rich and that makes me sad. I want everyone to be rich. I want everyone to have the opportunity to be rich.

I'm talking about just evening out the playing field. If the Romney's/Buffet's/Waltons are paying 13% in taxes, why am I paying 29%?

[wally]

Nice story. It isn't reality anymore. I graduated from Utah in 2006 with zero debt as well. It was $6,000 a year to go to Utah then.

It is now $16,000 a year for schooling. That's almost three times as much. Your story is exactly what I am talking about. Your experience isn't reality anymore.

Also, with $300,000 in debt and a salary of $105,000, after taxes and student loan payments, you are left with about $45,000.

The country does not "OWE" anyone anything. BUT, why was ok for you to go to school for as cheap as you did, when it is now almost three times more expensive? Do you not see a problem there?

So, you say the Waltons pay their fare share when their taxes are <15%? And Scratch pays 29%? And Scratch uses a heck of a lot less public resources than the Waltons do?

When I went to school, in state tuition was about $2-2.5k per semester for me. now it is about $3.5k. ( Reference: http://fbs.admin.utah.edu/income/tui...on-calculator/ )

I think that my experience can still be "reality" for the frugally inclined, but not for those with an entitled mindset.

Again, reading comprehension: Taxes are only part of the revenue that funds public utilities, and even then, when it comes to most local utilities (water, sewer, garbage, etc.) it is based on a percentage of PROPERTY tax, not income tax. So a person in a $1M home will pay a lot more than a person in a $200k home.

Where are you getting this information? every so often one of my siblings comes up with all of these kinds of concerns and it usually has roots in some over-simplified or downright false Exposé show that is intended to rile people up on emotion rather than encourage critical thinking.

[Scratch]

The problem with pointing out the low rate on corporate dividends is the fact that it ignores the 35% corporate income tax rate. In other words, if a company Mitt Romney owns makes $10 million in profits, the company has to pay $3.5 million in corporate taxes before paying Mitt's dividends, which if it's 13%, would mean Mitt would pay an additional $845,000. The actual tax rate on those corporate profits, therefore, is about 43.5%. That's a lot higher than what you're paying.

And as for your claims that Wal-Mart is costing us tons of money, first, look at what Wally has pointed out regarding Wal-Mart's economic contributions Additionally, studies that say that the existence of Wal-Mart has lowered shopping bills by $250 billion a year. That means that Wal-Mart, from a purely financial basis, is a huge economic boon to this country. Again, big does not equal bad because of the savings economies of scale provide to all of us. You say that all of us are paying for Wal-Mart to exist, but Wal-Mart's existence is really saving American consumers (and, quite often, the most needy American consumers) huge amounts of money.

[Rocker Ute]

Utah points out something troubling and it ties this back into sports. NFL guys go broke because they make financial decisions like Utah described students are doing. Go to school and finance everything and leave with $300k in debt. Even worse, go buy a house and a new $30k car and finance all of that too. Never considering potential income or when that might dry up. It's all pretty stupid.

I was recently talking to a college kid who was complaining about his debt. He had no job and when I suggested he get one he looked at me like I was crazy and said, "I don't want to get stressed out, I just want to focus on school."

Nice thought that has no place in reality. I couldn't believe it. I'd personally hire a guy with a lower GPA that told me he worked through college than an entitled kid like this one.

I got through school like Wally did. I lived very modestly, I drove a junker, I didn't eat out, I mooched off of good souls for food too. I worked nearly full-time and took night classes. I took lots of hours. I applied for scholarships anywhere and everywhere. I got out debt free.

Then I worked for a couple of years, saved up money and did the same for grad school.

Then when I graduated I drove a clunker for another 7 years. The 1993 Pontiac Bonneville does have its charm.

No there aren't the same handouts and no there aren't things like pensions any more. (Although the rant about JP Morgan bonuses... have you read about the Goldman Sachs bonuses? Those suckers are alive and well).

But anyway, no there aren't handouts but there is also more opportunity with innovation. There is an entire tech sector that allows you to make millions selling $1 apps while sitting in your jammies. Work conditions have never been better.

The system may be broken but not in the way you think. It is broken because college students are making such horrible financial decisions.

One other thing regarding careers, I'll tell you the same thing I've told a number of people including kids in college who can't pick a major. You need to get over the notion of job satisfaction. It doesn't exist. Yes it will be nice if you love every minute of your work but for 99% of the population they don't experience that. Pick a job that you can succeed at and find satisfaction in meaningful things, like family and friends. Nobody ever put on their tombstone, 'I wrote 20,000 legal contracts...'

Finally, Walmart. I was at Walmart a couple of days ago... I'll say this as nicely as possible... A good number of the employees there are essentially unemployable at any other location. If it isn't employment there, it is for the LDS church or otherwise out on the streets.

But there they get training and can move up or on. Minimum wage isn't and shouldn't be considered a permanent wage. If you are on minimum wage for more than a year the problem isn't the system, it is you.

I am all for a hand up -- you might say I'm preoccupied with that notion right now. But that is what it is. You don't want to be a greeter at Walmart for the rest of your life, you want to move up or move to another organization that will pay you better because you have some skills and have shown some stability. You could reasonably argue that Walmart is taking a risk on a lot of people and keeping them off the streets.

And I don't want to belittle that. I admire anyone who seeks honest employment and there is no shame in that. But we've all got to keep improving and moving up.


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[Scratch]

Great post, Rocker, and I'm in the same boat. As an undergrad I almost went to Duke, but ultimately spoke to a lot of people (including a Rhodes scholar with degrees from Oxford, Yale, and Stanford) who convinced me that the smart financial decision would be to go to the U on scholarship. Even on scholarship I worked full time (making minimum wage) and actually graduated with a little savings (not much, but certainly no debt). I then decided to incur law school debt because it made sense financially to do so. I worked my butt off, my wife (who I married at the end of undergrad) worked her butt off, we drove an old Toyota for years (and only had one car for about 6 years), lived in crappy apartments, and graduated from a very expensive law school with under 100K in debt.

There are more good career paths out there than ever before, but people need to accept personal responsibility for their choices when they refuse to work hard and make poor career decisions (including poor educational decisions, because college is a career decision). As long as people keep making these horrible decisions the market will keep letting them make those decisions.

[Scratch]

I don't know a thing about economics, but I know I don't like the idea that we deserve all our advantages.

Absolutely correct. As has been said in this thread, nothing is fair, and there will be plenty of instances where someone works hard and makes good choices but can never compete with trust fund kids. That said, in America, the person who works hard, makes good choices, and accepts personal responsibility will be successful (absent completely uncontrollable disasters). The problem is that our culture isn't particularly good at infusing those values and helping people develop the ability to make good choices.

[Rocker Ute]

For many students, it makes more sense to focus entirely on school, get good grades, and come out with $100,000 in debt than it does to work for minimum wage, get lousy grades, and come out with $90,000 in debt. If you can work and still excel in school, great. That probably means you were given significant talents and will be successful. If, however, work is killing your GPA, grades are the better long term investment.

Sorry guys, but these "when I was your age" lectures don't do it for me. I've had the same experiences you and Scratch describe - I suspect most of us have - but we were set up for success from day 1. I've done the poor grad student thing too, but I never got close to true desperate poverty. I don't know a thing about economics, but I know I don't like the idea that we deserve all our advantages.

Becoming a doctor and incurring that kind of debt... Okay. Going to a prestigious law school... Okay. Going to b-school at the U and refusing to work and racking up enormous debt... Dumb.

Among other things besides getting a job he didn't need to be living with his wife in a fairly nice rental house in my neighborhood. Nor did they need to drive the cars they did. In state tuition for business school is no reason to come out with massive debt.



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[LA Ute]

Sorry guys, but these "when I was your age" lectures don't do it for me. I've had the same experiences you and Scratch describe - I suspect most of us have - but we were set up for success from day 1. I've done the poor grad student thing too, but I never got close to true desperate poverty. I don't know a thing about economics, but I know I don't like the idea that we deserve all our advantages.

To summarize what's already been said here, there's no doubt that everyone comes to adulthood with different advantages, even if those advantages arise simply from God-given talent. It isn't fair, it's just life. The question is, what, if anything, should the government do to compensate for those differences?

[U-Ute]

The problem with pointing out the low rate on corporate dividends is the fact that it ignores the 35% corporate income tax rate

Corporations keep all of their profits offshore to keep from paying those taxes. In the case of GE, they actually got a refund a few years ago. This is why I believe we need to drop the corporate tax rate to whatever rate would bring all that money onshore, then tax capital gains at the same rate as income to encourage companies to invest in their employees instead of their shareholders.

. In other words, if a company Mitt Romney owns makes $10 million in profits, the company has to pay $3.5 million in corporate taxes before paying Mitt's dividends, which if it's 13%, would mean Mitt would pay an additional $845,000. The actual tax rate on those corporate profits, therefore, is about 43.5%. That's a lot higher than what you're paying.

The money he makes is on buying/selling stocks which is taxed at capital gains rates. CEO's cut expenditures (lay off staff, move operations overseas) to artificially boost stock prices, which they get back in stock options, again taxed at capital gains rates. Employees are excluded from this loop.

At issue here is the ability make an income purely based on capital gains.

And as for your claims that Wal-Mart is costing us tons of money, first, look at what Wally has pointed out regarding Wal-Mart's economic contributions Additionally, studies that say that the existence of Wal-Mart has lowered shopping bills by $250 billion a year. That means that Wal-Mart, from a purely financial basis, is a huge economic boon to this country. Again, big does not equal bad because of the savings economies of scale provide to all of us. You say that all of us are paying for Wal-Mart to exist, but Wal-Mart's existence is really saving American consumers (and, quite often, the most needy American consumers) huge amounts of money.

But at what cost? Their employees do put a strain on the welfare system. Cheaper isn't necessarily better. McDonalds is cheap too but it will kill you.

[NorthwestUteFan]

Funny Wal-Mart anecdote: during the run up to the 2008 election one of the Democratic candidates held a rally at a Barnes and Noble in Manchester, NH. The B&N happened to be situated in a Wal-Mart parking lot. During the speech he launched into a diatribe about Wal-Mart and their poor salaries, lack of benefits, etc.

Afterward one of the Boston papers ran an editorial about the speech, and showed the actual numbers. In fact the Wal-Mart employees across the board made a few dollars more per hour, and had better benefit packages than, their equivalent counterparts at B&N. (checkers vs checkers, stockers vs stockers, managers vs managers, etc). And in fact the store manager for that particular Wal-Mart had a salary and bonuses of over $125k-$150k, plus very good benefits.

[Diehard Ute]

Corporations keep all of their profits offshore to keep from paying those taxes. In the case of GE, they actually got a refund a few years ago. This is why I believe we need to drop the corporate tax rate to whatever rate would bring all that money onshore, then tax capital gains at the same rate as income to encourage companies to invest in their employees instead of their shareholders.



The money he makes is on buying/selling stocks which is taxed at capital gains rates. CEO's cut expenditures (lay off staff, move operations overseas) to artificially boost stock prices, which they get back in stock options, again taxed at capital gains rates. Employees are excluded from this loop.

At issue here is the ability make an income purely based on capital gains.



But at what cost? Their employees do put a strain on the welfare system. Cheaper isn't necessarily better. McDonalds is cheap too but it will kill you.

In Utah many Utah STATE employees qualify for welfare. Seriously. Perhaps we ought to start there first before moving onto the private sector?

And we also need to address what choices all employees have made.

Do you not have the skills to earn a large wage yet have had 5 kids because you believe somehow you'll be taken care of? I know of several families like this. Is that really the employer or the governments issue?

It's society's issue. We do a lousy job at teaching choice and consequences and personal responsibility

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[chrisrenrut]

Funny Wal-Mart anecdote: during the run up to the 2008 election one of the Democratic candidates held a rally at a Barnes and Noble in Manchester, NH. The B&N happened to be situated in a Wal-Mart parking lot. During the speech he launched into a diatribe about Wal-Mart and their poor salaries, lack of benefits, etc.

Afterward one of the Boston papers ran an editorial about the speech, and showed the actual numbers. In fact the Wal-Mart employees across the board made a few dollars more per hour, and had better benefit packages than, their equivalent counterparts at B&N. (checkers vs checkers, stockers vs stockers, managers vs managers, etc). And in fact the store manager for that particular Wal-Mart had a salary and bonuses of over $125k-$150k, plus very good benefits.

According to a CNN article last year, the average wage for Walmart retail employees is close to $13/hour. Still not great, but a lot better than has been quoted as part of previous examples. Also, like Rocker said, these employees are working jobs that fit their skill level. If they are skilled and work hard, they'll have opportunities to move up.

[Sullyute]

I just want to say that i have enjoyed this thread. I agree that the tax laws need to be gutted and rebuilt from the ground up. But i don't see that happening with our current politcal stagnation. I would love to see a true leader from either party sacrifice his or her chance at re-election and makes some difficult decisions that would hurt in the short term but help in the long term (stabilize social security, upgrade infrastructure, gut the tax code, less spending on military, lower the deficit, etc.). A pipe dream, i know.

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[Ma'ake]

Economics is my academic background.

Increasing economic inequality is a serious concern among economists, and not for the reasons others cite: social justice, fairness, etc.

China today is wrestling with fairly serious economic instability, in large part because there is no social safety net, and the Chinese culture emphasizes frugality, savings, etc. China's economy is about 50% consumption based. The US economy is about 70% consumption.

(The Chinese government has been trying to encourage greater spending among their growing middle class, with poor results. Since the Chinese economy grew mostly on cheap exports, and the rest of the world is saturated with cheap Chinese products, or otherwise are struggling with economic growth themselves, it's having a boomerang effect on China.)

Why is excessive savings bad? Because in economics, Savings = Investment, and so excessive amounts of savings are not justified by underlying economic activity. Economies can't grow by 50% a year, for a variety of reasons, and so you end up with excessive money chasing business prospects that can't meet the expectations of the investors.

Individuals can save at very high rates, but if *everyone* did that, the economy would nosedive. Put another way, a national economy is not like a family budget, because what I spend money on becomes your job, and vice versa. Zero or negative savings is undesirable, too, certainly.

As economic inequality increases, it has a negative impact on aggregate growth, because the very wealthy have very high savings rates, money that is not being recirculated in economic activity in the form of demand for goods and services, jobs created, etc.

Here's some startling information: the US economy is roughly comparable to other advanced economies, in terms of economic inequality. Where the US diverges from other advanced economies is in tax structure, and social spending. US taxes on the wealthy are comparatively low, and the US spends lower amounts of money on "transfers", ie, social programs.

This is why the US GINI index is worse than the rest of the developed countries, and moving toward 3rd world levels.

(The topic of economic inequality is uncomfortably ironic, for me, personally, because while my academic background is Economics, my career has been in IT. Technology is having an acute impact on inequality... and not in the right direction. Technically gifted people can and do have an impact far beyond the traditional measure of economic contribution, ie, "the sweat of the brow". Any two IT professionals in the same job can differ in productivity levels by 10 times, easily. Even the Scandinavian countries are seeing technology widen inequalities, very quickly, and these are the countries that strongly cultivate the "we're all in this together" ethic.)

[U-Ute]

In Utah many Utah STATE employees qualify for welfare. Seriously. Perhaps we ought to start there first before moving onto the private sector?

And we also need to address what choices all employees have made.

Do you not have the skills to earn a large wage yet have had 5 kids because you believe somehow you'll be taken care of? I know of several families like this. Is that really the employer or the governments issue?

It's society's issue. We do a lousy job at teaching choice and consequences and personal responsibility

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I'm not saying we should force Wal Mart into paying people more. My point is that the way things are structured now, we encourage corporations to not take care of their workers.

That being said, the last time I checked the State of Utah offered benefits to offset the lack of a paycheck (pension, insurance, etc). That may no longer be the case with the budget cuts that states have had to make (except for Legislators of course).

[Diehard Ute]

I'm not saying we should force Wal Mart into paying people more. My point is that the way things are structured now, we encourage corporations to not take care of their workers.

That being said, the last time I checked the State of Utah offered benefits to offset the lack of a paycheck (pension, insurance, etc). That may no longer be the case with the budget cuts that states have had to make (except for Legislators of course).

Well when your pension is based on the salary you earn I don't believe that's an offset.

An employee who makes $17 an hour will receive a pension of roughly $21,000 a year after 30 years in the position. And that's people hired prior to 2011. Those who were hired after get $13,000 a year after 35 years.

While the state has decent insurance still, most municipalities have dumped the good insurance due to rising costs.

Legislators get retirement after a much shorter service period, and they also get health insurance. Something other state and local employees do not get.

Something many would find interesting. The average starting pay for a teacher in Utah is roughly the same as a DCFS social worker with a masters degree and 10 years experience.

When I hired on to the police department we had 1,500 people apply for 20 positions.

Today we're lucky if we get 200. Our dispatch center is lucky if they get 7-10 qualified applicants for 5 positions.

Most of this is the low pay coupled with the gutted benefits system


DCFS turnover is out of control. Mostly because of lack of pay and no raises beyond an occasional 1% cost of living raise (which is usually outpaced by the increased employee insurance cost)


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[Two Utes]

I don't like that article. It is a buzz word bonanza. A click bait fluff piece.

Look! Everyone is JEALOUS.

Of course people are. They were fed a huge pile of lies. What are you taught your whole life?

Go to school. Work hard. You will become successful. That isn't true anymore.

Let's compare a couple of things. My father and father in law both went to professional post grad programs.

My FIL graduated with $25,000 in debt. He made $75,000 his first year out.
My father graduated with $18,000 in debt after 10 years of schooling. He made $35,000 his first year out.

I know my business. Most people in my field graduate with about $300,000 in debt and that number is rising. The average salary for those people is $105,000 right out of school.

Do you guys NOT see the difference?

What is going on right now is not the same American that the baby boomers grew up with. Baby boomers get out of high school and went and worked at the mill with health insurance and an pension. They bought a house for $15,000 and a car for $1,500 while making $25,000 a year. That's easy. That's the American dream.

Compare that to this: People in my work graduate with $300,000 in debt. Houses are $250,000. Cars are $30,000. That is almost $600,000 in debt. They make $105,000 their first year out.

Salary of $105,000 vs $600,000 in debt

versus

Salary of $25,000 vs $17,000 in debt.

The system is broken and broken BIG time.

You are speaking nonsense. "Go to school, work hard. You will become successful. That isn't true anymore." Really? Says who? I guarantee you if you choose the right profession, go to school, work hard, be smart, YOU will become successful.

If you borrowed 300k to go to school other than law, medicine or and ivy league business school or equivalent, you are dumb. if you received one of these degrees, if you work hard and have half a brain you will become successful.

I had some really damn rough years when I started out in the practice of law. I often wondered if I could make it in the field of law. I wasn't getting paid jack (and contrary to you folks nowadays, the legal market here was definitely worse in the early-mid 90s than it is now). Some of the folks I worked for were complete POS'es But I made it. I did the 10,000 hours in a bunch of different things. I'm a decent lawyer now. And my life is better. But I still work my ass off.

Dan, go to school, get a good degree, work hard, don't be stupid with your money and YOU will become successful. Unless of course you have been defeated already (or perhaps you want to be defeated).

[U-Ute]

A Harvard Business School research paper on Shared Prosperity in America.

[mUUser]

.....I know my business. Most people in my field graduate with about $300,000 in debt and that number is rising. The average salary for those people is $105,000 right out of school......

May I ask what was your field of study and where did you go to rack up that kind of debt?