Maule and Pappas on progressive taxation and the decreasing burden on the rich
by Linda Beale
crosposted with Ataxingmatter
Maule and Pappas on progressive taxation and the decreasing burden on the rich
Maule and Pappas have been engaging in a debate on progressive taxation and the decreasing burden on the rich. See Canonizing the Rich, Part 1, Part 2, and Part 3.
As Maule shows in his posts, the rich have an increasing share of the income (an even larger share of the economic income–because they benefit much more than ordinary folk from tax expenditures in the Code, from capital gains preference to charitable contribution deduciton to mortgage interest deduction to life insurance exclusion, and more of adjusted gross income, a tax concept that excludes much of economic income). But they pay a much smaller proportion of that income in taxes now than they did in the period when our country was the most prosperous shortly after WWII–a decline from about 50% of the income in taxes to less than 20% of it paid in taxes. Meanwhile, our country has slid into a deficit spiral from the combination of gigantic tax cuts under Bush that were of primary benefit to the ultrarich (the 2001 tax cuts were projected to cost about $1.6 trillion over the first decade and have cost about $700 billion so far) and the huge increase in government under Bush from militarization and his “preemptive war” policy (costs of the Iraq-Afghanistan wars in human lives greater than 5000 and in dollars running to the multiple trillions–especially when long-term health needs of Vets and replacement costs for the expensive equipment is factored in).
So why would anyone think that these disastrous policies of cutting taxes for the rich should continue? Such a policy has no good outcomes–deficits, inequality that threatens democracy with oligarchy, political instability, poverty and the disease, lack of education, despair and often violence that can come from it. I wouldn’t want to live in a country where the well off live entirely within isolated islands of gated communities, surrounded by deep zones of poverty. I much prefer a country built on communities based on sustainability, where the wealthiest are merely rich and not “filthy rich.” A salary for a hedge fund manager or a CEO of a million a day (not uncommon in twenty-first century America) is, simply put, obscene when it is 300 or 400 or even 500 times the salary of the average worker. No one “earns” that kind of salary–it is a corrupt gift from peers who want the same return favor when the manager sits on their salary board.
People who disagree with me on this tend to say that my opposition to such inequality is just jealousy. No, it is concern for the very heart of this country’s democracy. And I suspect many of those who defend the low taxes for the wealthy put in place under the four decades since Reagan took office do so reflexively–because they are wealthy themselves and don’t want to feel guilt for their undeserved fortunes, because they hope to be wealthy themselves and want to get in on the privileges enjoyed by the wealthy few, because they make their incomes by serving the wealthy and perforce take opinions favoring their clients, or because they have been so indoctrinated by freshwater economist thinking that they buy into the myths of the wealthy as the entrepreneurs that make our civilization possible. Whatever their reasons, it is discouraging to see this defense of the US as tax haven for the wealthy.
Linda
I agree with you, but if we are going to actually do anything about it we are going to have to find another way to frame the issue. The rich think they earned their money… except, perhaps for some, who are proud to have stolen it. And when they look at a tax “burden” of even 20% they don’t think of all the money they have after taxes, they think of the huge amount of money they pay in taxes, without connecting it in any way to the benefits they get from the government.
Then, I would go a little further. It is not hard for them to look at the “poor” and conclude that there is no way to help the poor. The poor simply don’t have the skills, or moral virtue, to do anything worth paying them more to do. AND, they would say, there is no “real” poverty in this country anyway. Even the poor have food stamps and subsidized housing, access to educatation, and do not have to live in squalor.
I am a little more than devil’s advocate in this. I think the problem of poverty a real problem, and I do not believe the poor are capable of solving it themselves. Nor do I believe that just “throwing money at it” will solve the problem, though it might, certainly, “help” the poor.
Maybe that’s enough for now. Or all I got anyway. What we need is someone who understands politics. The natural self interest of the rich, and the relative lack of ability of the poor will guarantee the problem only gets worse until something breaks. You would need a way to convince the middle class, while we still have one, to understand that we do have to tax ourselves, as well as the rich, enough to pay for the government we need. Time was, they could see that was in their own self interest. Anymore, all I see is everyone demanding lower taxes, at least on themselves.
What seems to be funny, is that we are running deficits now that may not be sustainable, not to pay for programs to help the poor, but to pay for wars and programs to help the rich… and EVERYBODY is too stupid to understand what they are doing to themselves in the long run.
“A salary for a hedge fund manager or a CEO of a million a day (not uncommon in twenty-first century America)”
Umm, you have a different definition of “not uncommon” than I do I think. Incomes of $300 million or more a year are extremely uncommon. I think I’m right in saying that fewer that 300 people manage that in any one year. 0.00001% (?) isn’t common.
Secondly, absolutely no one at all earns a salary of that amount. You are conflating stock options, salaries and profit shares.
“the period when our country was the most prosperous shortly after WWII”
Prosperous, well, we’re all richer than we were then. Everyone. And there’s more of us, so the country is doubly more prosperous than it was then. Plus we don’t have a national debt of 200 and more percent of GDP (although the past and current administrations are looking to fix that).
“So why would anyone think that these disastrous policies of cutting taxes for the rich should continue? Such a policy has no good outcomes–deficits, inequality that threatens democracy with oligarchy, political instability, poverty and the disease, lack of education, despair and often violence that can come from it.”
As you point out, the deficits come from spending, not tax cuts. Political instability…..I tend to think that the US has less of this now that it did in the 50s and 60s when the country was more equal to be honest….you know race riots, mass demostrations, police loosing dogs on anyone with a coloured skin…..poverty has declined since then. Massively…..incidence of disease has declined since then….there is more education now than there was post WWII….violence has fallen since then.
So, if we were to look solely at the correlations you’ve tried to mention we would have to say that cutting taxes for the rich has led to imrpovements in many of the things you have mentioned.
If we’re to try and get causation out of it all, well, we still run up with that same problem. Of the problems you mention many have been decreasing as inequality has increased. So it’s very difficult indede to talk about tax cutting for the rich and the subsequent inequality as making them worse.
Apologies, I normally enjoy the posts here for even when I think that people are wrong I find that they’re wrong in an interesting way. This is simply a collection of soundbites plugged together with no actual analysis. If I wanted to read political speeches from the “all capitalists are bastards party” I’d go to their website, not Angry Bear which presents itself as an economics site.
coberly: “The rich think they earned their money… except, perhaps for some, who are proud to have stolen it. And when they look at a tax “burden” of even 20% they don’t think of all the money they have after taxes, they think of the huge amount of money they pay in taxes, without connecting it in any way to the benefits they get from the government.
“Then, I would go a little further. It is not hard for them to look at the “poor” and conclude that there is no way to help the poor. The poor simply don’t have the skills, or moral virtue, to do anything worth paying them more to do.”
It is easy to see how Los Ricos, in their board rooms and gated communities, can have such views, especially as they are self-validating. But the rich are a minority of voters. What about the rest of us who seem to share these beliefs?
Linda Beale: “A salary for a hedge fund manager or a CEO of a million a day (not uncommon in twenty-first century America)”
Tim Worstall: Umm, you have a different definition of “not uncommon” than I do I think. Incomes of $300 million or more a year are extremely uncommon. I think I’m right in saying that fewer that 300 people manage that in any one year. 0.00001% (?) isn’t common.”
I do not know the statistics, but here is a minor nit about English usage. “Uncommon” in this statement means “uncommon for the salary of a hedge fund manager or CEO”, not “uncommon for the salary of an American”.
And, yes, as you point out later, “salary” is the wrong word, “compensation” is the right word. 🙂
One of the results of our tax policy has been that the massive hoarding of wealth by a relatively small number of people has produced asset bubbles due to too much capital chasing too few profitable investments. This eventually results in a long period of deflation, as asset prices have to eventually return to what underpaid, overtaxed average people can actually afford. The rich in America have decided that it’s better to have a low capital gains tax rate rather than actually have any capital gains. After going a decade with a sideways stock market, I wouldn’t mind paying more in capital gains tax and reducing the tax burden on the bottom 50% if that gives them more income to spend which in turn results in actual capital gains for me.
Nice to see that Maule and Pappas hve reinvented the wheel. Not that their effort is unneceassary or redundent, but that doing so is required by the lack of honest reportage in our media. Look back over the many comments that I’ve poosted here and see a record that I fear only souonds like the proverbial “broken record” that repeats the same sound over and over again. In our country that report is thought to be anything other than the factual matter that it is. It’s “class warfare.” Yes, it is and the very ealthy are winning every skirmish and maintaining the upper hand in every battle. It’s “not supported by the data.” Yes it is, as Maule and Pappas clearly indicate, but it is much more common sense to accept that the free market and the invisible hand will guide us all to a better life. Except that it won’t and it hasn’t.
With limited exception the mass media is in the hands of those same extrodinarily wealthy elite. Even the stars of the common man have become uncommonly wealthy feeding their listners a plethora of half baked economic, political and social ideas. Glenn Beck plays the fool and is richly rewarded to do so. Forbes estimeates Beck to take in about $30 million in 2009, http://www.forbes.com/forbes/2010/0426/entertainment-fox-news-simon-schuster-glenn-beck-inc_3.html Rush Limbaugh is doing better, but has been at it a lot longer. Again Forbes provides the data indicating that Rush is pulling in in excess of $50 million annually,
http://www.forbes.com/lists/2009/53/celebrity-09_Rush-Limbaugh_YNXQ.html . The media is feeding the frenzy and keeping the public debate dumbed down to a level that even the common man can understand. Unfortunately the common sense distributed as economic science is the BS of mass marketing entertainment.
Everyone seems to miss the biggest problem and that the inequality in income is bad for the economy. That in the long run because of it the rich will be poorer and the poor will be much poorer. That this inequality in income will lead to the USA being a second or a third world country, poorer than Mexico. By the next we will be the ones trying to sneak into Mexico to find work. This inequality in income called the “gini index” correlates to “low income”. The reason for this is that while the rich creates “production” it is the poor and the middle class that creates “demand”. As the poor and the middle class get poorer demand will decrease and the economy will shrink. All of the excess wealth the rich have will not be used to increase production because there is not demand but will instead be used for worthless speculation that fuel boom and bust cycles that will rapidly destroy our economy and our country and make us a third world country. Is is sad that there is almost no way of stopping this since greed will make sure it happens.
Amazing is it not that even here there are some who think that a million a day in compensation is not a problem because there are so ‘few’ who make that?
Get a clue.
Min
not sure i understood your last sentence. the rest of us who should be voting to correct the problem. or the rest of us who share the beliefs i ascribed to the rich?
answer is both. i tried to indicate that includes even me up to a point. i don’t like to pay taxes. especially when the tax code is not transparent and onerous. i do think i earned my money, and i do think a lot of the poor really are …. not able to do work that commands a decent wage.
that’s why i think we need a better way to convince the rest of us that we need to pay taxes. we also need to get some control of our country away from the bankers and military-industrial complex.
don’t mean to be cliche about that… just suggesting a place to start looking for answers. pretty sure the “it’s no fair” approach will not work, whichever way you look at it.
Tim Worstall
thank you for providing an example of what I was trying to warn linda against. your argument would work better if you didn’t come up to the line “so it’s spending and not tax cuts that cause the problem.”
of course i’d be glad to cut spending, too. but until you actually cut the spending, or demonstrate that growth in the economy will service the debt, cutting taxes is irresponsible to the point of insanity.
and if you cut the spending, you better be prepared to deal with the consequences… not by hiding behind the gates of your estate.
min
moreover 300 people is not uncommon. don’t care if that’s one in a milion or one in ten million. in fact, if it was one in ten it would not be such a problem. i think that Linda was trying to say that there are lots of people who have more money than god knows what to do with.
Jack
it’s not class war unless the poor fight back. robbing the poor is just what the rich do.
Peter John
and the problem is ..?
that’s the way the world worked in the eighteenth century and the rich were happy with it. the poor lived in the dirt and the rich gambled for fun and profit. it looks like we are headed back there. it’s a kind of gravitational hole that people get sucked into unless they are vigorous enough to stop it. as long as the american middle class thinks of itself as “going to be rich some day” they will vote for people whose policies favor the rich and destroy the middle class. by the time they wake up they will be lucky to have a row and a hoe.
tim is suffering from a form of what i call percent paresis. by reducing the number to something with a lot of decimal places he can make it look small.
i think that this is another version of the “earth is a small planet in a huge universe therefore nothing that happens here is important” kind of “thinking.”
Government spending has created the world that the wealthy enjoy–a world where they can walk the streets, jog in the parks, drive on the roads, all with little realistic fear of being robbed or murdered. Some income security is mandatory for the creation and maintenance of such a world. Desperate people won’t go quietly into the night, nor will they voluntarily remain in tight little conclaves and suffer. A wealthy person cannot live in Haiti in the same comfort ejnoyed by such a person in the US. Being surrounded by squalor, misery, and hatred is pretty uncomfortable.
Generally, I agree, but I’d tweak your statement to say that we have more money to invest than productive investemnts that Wall Street can find. There probably are good investments out there, but contrary to the belief of many, Wall Street is hardly a perfect tool to find them. And the growth in credit was MAINLY , through Mortgage Equity Withdrawal, spend on consumer goods, not new factories or other productive investments. At least the dot com bubble gave us a lot of dark fiber, which might conceivably be used for something instead of McMansions and plasma screen TVs.
Which is why tax cuts (like the “death tax’) are sold based on their benefit to the well-off or merely wealthy even when they mainly benefit the obscenely rich.
Tim:
16.1% of GDP in tax revenues in 2004, the last time seen in 1951 and resulting from the combined 2001/2003 tax breaks. Page 26-27 http://www.whitehouse.gov/omb/budget/fy2011/assets/hist.pdf Who cuts taxes before cutting spending?
The CBPP and others have consistently pointed out the 2001/2003 tax breaks, the wars in Iraq and Afghanistan, two recessions, and the resultant lackluster job creation had more to do with the deficits than increased spending from 2002 onward.
In the absence of greater employment, it is your desire to contract the economy even more by cutting fed gov spending at the same time as state govs are contracting? Less violence and poverty? Is that why there is now the highest percentage of the population in prison now and the largest globally at an average cost of $22,000 annually? Of this prison population, it is those who have subsisted in poverty and minority who have the greatest percentage of a race in prison. And the percentage of those in poverty in the US has continued to decrease since 2001 or has it?
Your comments do not have a sound basis.
talk, talk, talk.
imo, the power of the rich elite has become so entrenched that the only solution left is violence.
Coberly:
“…that’s the way the world worked in the eighteenth century and the rich were happy with it. the poor lived in the dirt and the rich gambled for fun and profit. it looks like we are headed back there…”
The rich were happy with it so long as the poor weren’t able to rise up against their overlords. By the end of the eighteenth century the rich were worrying very much about receiving a very close haircut indeed. That was back in the day of needing real training on the use of weapons and their effective deployment. Today, not so much. Almost anybody can maintain and use a simple assault rifle with some effectiveness, as we’ve seen throughout the Third World conflicts. If the rich has reason for only some concern three centuries ago, they will have much more concern today. That’s especially true in a nation which has turned gun ownership into a religion.
Don’t know if we’ll ever get a chance to vote on it. We have this serious problem. As long there is a single republican anywhere, he/she will and can screw up the best laid plans of mice and the Democratic Party.
The stealth party is exerting their influence on the Democrats even now and making them consider regressive taxes like a VAT or national sales tax and increase energy costs somehow in spite of the good guy’s sincere desires to soak the rich.
When the wealthy seize control of government, the wealthy cannot help but destroy the society which supports them.
In the short term it is in their separate interests to corrupt the system to their benefit. That is, they will seek their own benefits ahead of the people’s, first by becoming the instruments of government policy, then by bending government policy to their interests. They will cooperate to do this, and secure advantage over the people. Securing advantage, they will plunder the wealth of the people. This is what (most of) the national debt is. It is what the people ‘owe’ the rich. Instead of paying taxes, wealthy ‘loan’ the money to the government, which it then has to pay back. The wealthy have used their power to cause this.
In securing their separate interests, they will cooperate in gaining favors, They will trade for votes. This is not ‘zero sum’ as regular trade is, but each party gains, and both their influence on, and burden on, government and the people, will expand. That is, through the instrument of government, they each acquire disproportionate wealth. And since all resources are competed for, others, the people, are at a disadvantage. The system becomes rigged.
But then they will compete, they must compete, to secure advantage over each other, and further advantage over the people. The government becomes an instrument of competition, as they compete for its favors. Those who do not compete will be at competitive disadvantage.
So all the wealthy are forced to compete against each other. They will compete to cause the government to pursue purposes to their own separate ends, which is the very definition of corruption. These interests, the benefit of the wealthy, harm the system, and the people, necessarily, by the law of externality: Those costs which can be externalized, will be. Thus the costs of the benefits to the wealthy will be laid upon the people, until the wealth of the people is exhausted. We are seeing this happening in the present ‘recession.’ […]
When the wealthy seize control of government, the wealthy cannot help but destroy the society which supports them.
In the short term it is in their separate interests to corrupt the system to their benefit. That is, they will seek their own benefits ahead of the people’s, first by becoming the instruments of government policy, then by bending government policy to their interests. They will cooperate to do this, and secure advantage over the people. Securing advantage, they will plunder the wealth of the people. This is what (most of) the national debt is. It is what the people ‘owe’ the rich. Instead of paying taxes, wealthy ‘loan’ the money to the government, which it then has to pay back. The wealthy have used their power to cause this.
In securing their separate interests, they will cooperate in gaining favors, They will trade for votes. This is not ‘zero sum’ as regular trade is, but each party gains, and both their influence on, and burden on, government and the people, will expand. That is, through the instrument of government, they each acquire disproportionate wealth. And since all resources are competed for, others, the people, are at a disadvantage. The system becomes rigged.
But then they will compete, they must compete, to secure advantage over each other, and further advantage over the people. The government becomes an instrument of competition, as they compete for its favors. Those who do not compete will be at competitive disadvantage.
So all the wealthy are forced to compete against each other. They will compete to cause the government to pursue purposes to their own separate ends, which is the very definition of corruption. These interests, the benefit of the wealthy, harm the system, and the people, necessarily, by the law of externality: Those costs which can be externalized, will be. Thus the costs of the benefits to the wealthy will be laid upon the people, until the wealth of the people is exhausted. We are seeing this happening in the present ‘recession.’ […]
Tim —
50s and 60s …..poverty has declined since then.
Poverty rate declined during the 60’s, but not since. Since then, it’s wobbled a bit, but rose to a double peak surrounding Reagan-Bush I, declined under Clinton, and increased again under Bush II. Actual number in poverty increased significantly under Reagan and both Bushes. Policy matters.
http://1.bp.blogspot.com/_demjwEAaVyw/SqlV0eb0KkI/AAAAAAAAAOo/QdG2KamG3Dg/s1600-h/Poverty.gif
People at the poor end have had a slowly declining standard of lining since Reagan. We are, most assuredly, not all better off.
So, if we were to look solely at the correlations you’ve tried to mention we would have to say that cutting taxes for the rich has led to imrpovements in many of the things you have mentioned.
Never mind declining GDP growth, more people in poverty, a serious squeeze on the middle class, and a collapse in the M1 money multiplier?
I suggest you read here more.
Cheers!
JzB
Ced –
It’s worse than that. Democrats now are to the right of Rebulicans, even as recently as Nixon. Meanwhile, Republicans have sailed off the ideological map into pure obstructionism and idiocy.
We are seriously screwed.
JzB
yuan –
Unfortunately, you may be right.
Sadle,
JzB
praha
i have talked about people losing their heads, but the rich think they’ve got it figured out. probably they do. private armies seem to work pretty well, and they have night vision goggles.
“Democrats now are to the right of Rebulicans, even as recently as Nixon. Meanwhile, Republicans have sailed off the ideological map into pure obstructionism and idiocy”
This is the “Overton Window” in practice.
Just remember that Overton was a conservative.
What gets me is that all economic analyses of tax policy fail to actually look at LAND VALUES.
Buying our renting our personal space on this planet is the dominant expense from all of our after-tax income, yet all discussions of tax policy simply ignore the interplay of after-tax income with rents and land values.
Henry George, along with the proto-Progressive intelligentsia of late 19th century San Francisco, developed what I think is the defining thesis in his “Progress and Poverty” economic treatise.
To me, it makes sense that taxes and land values are locked in inverse proportion. Show me a low tax regime, and I’ll show you an area with high rents and land values, simply because demand for desirable land exceeds the supply, and the supply simply cannot be increased, resulting in “excess” household earnings pushing up land values.
And I think this dynamic is why high-tax regimes like the Eurosocialist ones work with high taxation — high taxes limit our ability to bid up the price of land, a win/win AFAICT.
IMHO, people who actually understand economics should be arguing for high taxation for quality government services, it’s the closest thing to a free lunch we’re going to get, economically.
http://homepage.ntlworld.com/janusg/coe/cofe01.htm
Tim
You are right. We should all be proud and celebrate what has been accomplished in this society. Violence has decreased, race inequality has lessened, health has improved and fewer people live in abject poverty.
Now, how did this happen? Racial issues were addressed legislatively primarily. We made descrimination illegal and actually punished it. Has it had side effects/unwanted outcomes? Sure, what action doesnt? But the fact remains it was an active govt that aided this improvement not people simply deciding on their own to stop screwing over people because of the color of their skin.
Violence has decreased partly as a result of the racial issue being addressed and increased SPENDING by govts on law enforcement and education and treatment of alcohol/drug abuse and a focus on domestic violence crimes
Health care has improved largely because of improvements in the understanding and treatment of communicable diseases (via PUBLIC HEALTH officials) and prenatal care. These were largely publicly funded initiatives.
Education has improved because of the PUBLIC initiatives as well.
I do not mean to shortchange what private parties have done in the attainment of these improvements but to act like this was happening BECAUSE of these lower taxes (and increased wealth inequality) on the upper classes ignores the reality of the situation. Govt programs can actually positively affect the lives of citizens.
“I wouldn’t want to live in a country where the well off live entirely within isolated islands of gated communities, surrounded by deep zones of poverty”.
I’m told New Zealand is nice, though perhaps a bit quiet. Very good if you’re the outdoors type, I believe.
All this and more. They do think that they, the 1%, are ‘we the people’. and they (conveiniently) believe that, in re the underclass, it is their own damend fault (Ronnie’s blame the victim is alive and well, thank you). The workings are something to behold, e.g.: Chevron doesn’t want to hear about global warming, Chevron deposits a few $mil each in a few banks and those banks knock global warming because it pays to knock global warming, likewise with insurance, contractors, suppliers, … And die guten frau , they go forth and sit on the boards of foundations, charities, etc. and volunteer at the local elementaries all the while spreading the lord’s word or at least kncking down the devils. Funnily, they don’t tell their unders that they are replacable, yea even interchangeable. It is this ‘we the people’ group that calls the shots through the likes of Reagan and Gavin newsome and Barack Obama.
How did we let jobs worth doing become unable to “command a decent wage”?
Where was it decided that people who clean our offices, drive buses, and cook and serve our food shouldn’t be able to afford to live in the cities where they work? Not to mention teach our children. I think I missed some meetings.
“Poverty rate declined during the 60’s, but not since. Since then, it’s wobbled a bit, but rose to a double peak surrounding Reagan-Bush I, declined under Clinton, and increased again under Bush II. Actual number in poverty increased significantly under Reagan and both Bushes. Policy matters. “
That’s nonsense. Sorry, but it is. The problem is the way that the poverty line itself is calculated. We do not include most of the things we do to reduce poverty when calculating the number in poverty. Which is insane and different from every other OECD country.
So, here’s what happened. Great Society stuff comes in, there’s welfare (TANF) and poverty rate fall. That is, both actual poverty (because the poor have more money) and the poverty rate as measured.
Then, starting around 1975, there’s a bi partisan thought that actually, we shouldn’t just be giving the poor money. We should be changing incentives instead. So we get the EITC, we get Section 8 housing vouchers, we get expansions of eligibility for Medicaid. And we start spending much more money on alleviating poverty. The EITC has been expanded several times. So the poor are getting more money.
But the poverty rate is staying stable. WTF?
How can we be spending more to alleviate poverty and yet not be alleviating poverty?
Ah, well, you see, the secret is that we don’t count what we are spending on alleviating poverty as alleviating poverty. when we caluculate the poverty line we include the direct cash that the poor get (TANF). But we do not include money coming through the tax system (EITC) or benefits in kind (Section 8 and Medicaid). That’s how poverty stays static even as we spend more on it. We ignore what we’re spending!
Census has done the sums (for 2004 at least) showing what the effect is when we do include all this spending. Poverty rate is around 8% and near nothing for children.
What we have here is a simple measurement problem.
“People at the poor end have had a slowly declining standard of lining since Reagan.”
And that is simply laughable. The absolute standard of living of the poor has not been falling since 1988 (or even 80). Even if household incomes have stayed static (as some allege) households have been getting smaller meaning that income per capita has been rising strongly. Yes, after inflation.
“Now, how did this happen? Racial issues were addressed legislatively primarily. We made descrimination illegal and actually punished it.”
Ah, well, I have a slightly differernt view here, sorry, but I do. I tend to think that the law follows the changing moods of the populace, not the law changing the moods of the populace.
Neither you nor I were around (well, I certainly wasn’t, not at an age where I was paying much attention anyway) when the Civil Rights Acts (as an example, ) came in. But we can apply ourselves to the one that’s unfolding in front of us right now, gay marriage. I know a little more about the UK situation (my native country, so not surprising I know more about it than I do the US) and I’m absolutely certain that it’s not brave legislators taking the lead, it is legislators following the common mood.
It’s taken a good 50 years to get a modicum of “gay rights”, this is true, from decriminalisation in the 50s (maybe early 60s) to the current legality of civil partnerships. The country I actually live in, Portugal, has just passed a gay marriage law (absolutely equal to hetero marriage, not a half way house).
But I’m absolutely certain that it’s not been the changes in hte law which have changed people’s minds about these things: I’m certain that it is that people’s minds have changed and the politicians have realised this and changed the law.
Tim
Its not a matter of simply changing peoples minds. Its a matter of affecting behaviors and improving society. The legislative efforts did in fact criminalize many behaviors that were previously accepted and that BY ITSELF made a difference. Many black people were spared harassment, torture or simple increased inconvenience in their lives because of what the govt did. Yes there were citizens who supported it but as many conservatives have pointed out, if those statutes had been put up for votes at the state level, those states that were the worst offenders would unlikely have had the popular support to change the law, a prime example of tyrrany of the majority. Peoples minds have changed through the years and ALMOST no one today will admit to wanting to descriminate against anyone (they do sometimes have interesting definitions of descriminate however), to argue that the goasl was to change peoples minds first is silly, the goal was to punish unwanted behaviors and allow time to show people the ignorance of their ways. People who are prone to discriminatory behavior still exist, but very few now would consider stringing up a black person an acceptable way to show your dissatisfaction with their behavior.
Tim
your idea of what is laughable is a bit strange, but just so you know
i don’t coun’t welfare as reducing poverty. it may reduce the misery of poverty, but the problem of poverty remains. i don’t think the answer is to increase incentives. the poor have plenty of incentive to get out of poverty. they lack the means. it seems to be inevitible that one of the efficiencies of the free market is to create poverty.
you might also have noted that the means for reducing poverty that you tout all involve government spending, which you started out saying was the problem.
Tim
you are parsing cause and effect a bit strangely. the people reach a tipping point where they decide to rectify a long standing injustice. they help the process along by passing laws that make it illegal to practice the old forms of injustice.
greg
i don’t know who overton was. i am reasonable comfortable with the idea that a democracy settles down to a tension between “conservative” and “liberal.” what i am not comfortable with is that very bad people can grab either, turn it into “ideology,” play on the fears and ignorance of the people, and put themselves in power for their own evil purposes. presently the danger appears to be from those calling themselves conservatives, aided, sadly, by some calling themselves liberal.
the devil always has agents in both camps.
ken
i mostly agree, but i have to point out that “the lord” said that many would come in his name and preach falsely. he recommends judging a tree by its fruit. but it is not clear that he recognized the human inability to make fine distinctions. so that if someone claims to be a christian and does bad things that proves to most people that “christians” are bad people, or that “christianity” is false.
i don’t want to insist that it is “not false.” but i do wish people would learn to make finer discriminations.
coberly: “moreover 300 people is not uncommon.”
Only 300? Like the Spartans? (And we know what happened to them!)
Why, the ueber-rich are an endangered species. Unless they are allowed to practice polygamy, they might go extinct.
min
the 300 Spartans were uncommon. i am afraid the over-rich are common.
Tim Worstall: “ I tend to think that the law follows the changing moods of the populace, not the law changing the moods of the populace.”
There is an interaction. It is not simply one thing following from the other. The law, well, legitimizes things. Sure, people fight to repeal and reform laws, but still we tend to accept what is legal. Changing the law provides momentum to broader social change.
Tim: “Neither you nor I were around (well, I certainly wasn’t, not at an age where I was paying much attention anyway) when the Civil Rights Acts (as an example, ) came in.”
Well, I was. And, given the bitter civil rights battles of the 50s and 60s, in which people were murdered, even by the police(!), I was amazed to see how where I grew up, the South, which had had de jure segregation, quickly adapted to integration. To be sure, fringe hate groups still existed, but everyday life went along almost as though there had never been any segregation. Beliefs were slow to change. I remember a relative, after going to Chinatown in San Francisco, remarking how “they are happier among their own kind.” But behavior changed quickly.
Tim: “But we can apply ourselves to the one that’s unfolding in front of us right now, gay marriage.”
Civil disobedience among gays in the 60s (in the U. S., anyway) led to de facto decriminalization as anti-gay laws ceased to be enforced. Later they were repealed. Since that time, despite gay-bashing and murders, the gay rights movement has made a great deal of progress. Do you think that would have been possible without the legal gains of the 60s and 70s?
Changing the law produces change in behavior, and that, in turn induces change in attitude and belief. This is not a slippery slope, as changes always induce opposition. But legal change does not simply follow attitudinal change.
The Overton window refers to the idea that at any one time there are a range of political options, a “window” so to speak. Overton pointed out that a way to move the window to previously unexplored territory is to push for somehting extremely far to the side you wish to move it, that way your true goal, which may have been outside the window before will now be seen as a reasonable compromise. I believe this is what we are seeing in America today. The right is so radical that center right politicians like Obama can be viewed through the new window as extreme leftists.
No argument about where the devil lives…………………he lives in us all.
min
have to tell you
a good friend (chinese american) took is to a real chinese restaurant… for chinese not for tourists… i can tell you they ARE happier among their own kind. or at least unhappier when outsiders invade their territory.
i think its a law of nature. the problem of racism is not to make it illegal, but to keep people from hurting each other because of it. if they can do that long enough the racism itself will mostly go away.
greg
thanks. and yes.
about the devil. i’m not so sure about overtons window. i think the radical right really means it. though it is certain the real power uses both the right and the left to keep the people’s minds busy while the rulers do what they need to do.
amateur
i agree with you whole heartedly. anyone who has a job should make a decent wage. that is somewhere near twice the minimum wage, but i’d settle for the “median” even though that is not statistically possible. unless of course some of the overpaid people got paid less.
there are people, however, and i know them well, who aren’t worth hiring. what it would take to get these folks to deserve a decent wage is a bit of a mystery. but i am sure that a good part of it is that our “economy” no longer needs the kind of work they can do, or at least not much of it. or at least is not willing to pay a decent wage to do it… and so these people, rather than work for less than they are worth, turn to other things.
please note, i don’t exactly ‘blame’ them. but i do get tired of dealing with them.
I think Tim’s comment misses the essential purpose of antipoverty initiatives. They are not meant to end poverty but actually just to make sure it stays invisible.
One of the lessons of the Great Depression that I fear may have been lost was the significant ways masses of desperate hungry people became a drag on what was left of the still functioning economy.
If a guy driving to work sees one homeless person holding a sign at an intersection occasionally he probably doesn’t think much about it. But if sees 3 the next week, then 10 and 30 in the following weeks it starts affecting decision making by the people who are still gainfully employed… Gee maybe we don’t need to buy that car this year… This probably isn’t a good time to take that trip… Junior probably ought to stay at the pizza joint this winter and think about going to college after the job market picks up next year…
There is a critical mass of visible poverty that starts undermining discretionary spending that after all, supports most of us in our jobs. An economy where the majority of participants withdrew to the barest essential necessities would probably be about 1/3 as large as the existing one. The constant tinkering with anti poverty formulations doesn’t change that critical mass. It’s only done to try to keep people off the streets as cheaply as possible.
And despite the howls of indignation it would likely set off this is why some future antipoverty program will likely include some allowance for internet access and possibly even basic cable. I don’t laugh at this idea because I know how non essential my own work is to the survival of most of my neighbors.
amateur
you are by no means wrong. bread AND circuses of course. think what seeing their elders eating out of dumsters after they cut SS is going to do for the spending habits of the young. but hell, whoever said capitalists were smart?
Tim:
Your point was whether the poverty rate was decliming or not. In one sense, Jazz has it correct. Since Eisenhower when it was ~22%, it has declined to a low of ~11% during Clinton. It has increased since then during the Bush Administration and into Obama. The economics during Bush never floated enough boats as were floated during Clinton. Lackluster job creation?
Urban Institute discusses the issues of TANF and other programs which are BELOW the minimums necessary to subsist. http://www.urban.org/center/lwf/census_statistics.cfm “New Income and Poverty Statistics and the Social Safety Net”
“Although pretax cash income understates the resources available to low-income families because it fails to consider the value of food stamps and the value of refundable tax credits like the EITC, the poverty line is way below what it takes for a family to cover basic living costs today. Doing so has become even more difficult as costs of the most important household expenses—food, transportation, and housing—have increased over the past year.”
PS:
Here is a Census Table which includes the transferrs. Note in 2008. it has not decreased below 12.5%. Government nonmeans-tested income includes social security, unemployment compensation, workers’ compensation, veterans’ payments other than pensions, government retirement/survivor pensions and annuities, government disability pensions, governmental educational assistance and economic stimulus payments. The economic stimulus payments are included with nonmeans-tested government cash transfers even though they began to phase out for single filers with adjusted gross incomes (AGI) over $75,000 and joint filers with AGI over $150,000. http://www.census.gov/hhes/www/cpstables/032009/rdcall/2_001.htm Go to here: “Percent Below Poverty Level After Taxes”