From a great interview on Alter.net –
“LP: Some say that if we redistribute income in a more equitable way, people won’t want to work as hard. Is that true? What happens to our motivation to work when things are so inequitable?
JS: One of the myths that I try to destroy is the myth that if we do anything about inequality it will weaken our economy. And that’s why the title of my book is The Price of Inequality. What I argue is that if we did attack these sources of inequality, we would actually have a stronger economy. We’re paying a high price for this inequality. Now, one of the mischaracterizations of those of us who want a more equal or fairer society, is that we’re in favor of total equality, and that would mean that there would be no incentives. That’s not the issue. The question is whether we could ameliorate some of the inequality — reduce some of the inequality by, for instance, curtailing monopoly power, curtailing predatory lending, curtailing abusive credit card practices, curtailing the abuses of CEO pay. All of those kinds of things, what I generically call “rent seeking,” are things that distort and destroy our economy.
So in fact, part of the problem of low taxes at the top is that since so much of the income at the very top is a result of rent seeking, when we lower the taxes, we’re effectively lowering the taxes on rent seeking, and we’re encouraging rent-seeking activities. When we have special provisions for capital gains that allow speculations to be taxed at a lower rate than people who work for a living, we encourage speculation. So that if you look at the design bit of our tax structure, it does create incentives for doing the wrong thing.”
The burgeoning inequality in the US is rotting civil society away, the sooner the US decides to address the issue the better.
bleatmop
Mystro
The Arbourist
Dead Wild Roses 
11 comments
July 5, 2012 at 3:58 pm
Alan Scott
The Arbourist ,
I found one phrase quite interesting. Rent seeking .
LikeLike
July 6, 2012 at 8:03 am
VR Kaine
curtailing predatory lending, curtailing abusive credit card practices, curtailing the abuses of CEO pay. All of those kinds of things,
Funny – government plays a big role in creating those problems then lefties want the government to play a big role in “curtailing” those problems. Would be not much different with Republicans, but the weakness of any financial reform (see Dodd Frank) is in direct proportion to the money Democrats get from Wall Street.
This is what you get when a mass public demands nothing but “jobs” from a government and cheap gasoline prices and cares about none of the details in-between. It creates a gap that the smart can exploit takes advantage of, and as the mass public get more fearful and learned-helpless they get more stupid and taken advantage of. The smart haven’t gotten smarter, either, the stupid have just gotten more lazy and more dependent on others to do the real work for them, making the inequality gap bigger.
People have to elect these controls into government or they won’t happen. Keep the focus on jobs and oil prices, however, and government won’t have to introduce controls that upset their lobbyists (aka future employers) and donors. Peoples’ ability to be stupidly distracted is where the blame starts here, in my opinion.
Alan – “rent-seeking” – I agree, it’s an interesting choice of words and I’m not entirely sure his meaning here. At any rate, I think it’s funny how “fair-share” lefties think the rich have some diabolical plan to enslave and rob them. Every “rich” person I know simply laughs at all the money everyday people leave on the table for them by choice, and therefore, they make no apologies when they take it.
To me, the rent-seekers are more the mass public who rent everything from their skills to their bodies to their lives.
LikeLike
July 6, 2012 at 8:53 am
The Arbourist
Funny – government plays a big role in creating those problems then lefties want the government to play a big role in “curtailing” those problems.
When righties get their people into office and they deregulate the shit out of the economy and the greedy elites plunder the nation because now they can, its not a big deal. When people call for a rebalancing only then it becomes a problem to bray about? Huh.
, I think it’s funny how “fair-share” lefties think the rich have some diabolical plan to enslave and rob them. Every “rich” person I know simply laughs at all the money everyday people leave on the table for them by choice […]
Gaming the system heavily in your favour isn’t particularly diabolical, rather it is merely a product of what concentrated wealth and power can do for people.
You missed the line that poor should be pulling themselves up by their bootstraps; I’m shocked Vern, usually your conservative repertoire of wisdom is more complete.
LikeLike
July 6, 2012 at 10:02 am
Alan Scott
Verne,
From what I have found ‘ Rent seeking ‘ means government granting special subsidies and monopolies to certain businessmen . The more powerful government becomes, the more common this ‘crony capitalism’ becomes. I thought it very odd that left wing class warriors should adopt a term which is the opposite of open market capitalism to bash open market capitalism
No one can deny the rampant rent seeking that has gone on for 3 plus years in Washington .
LikeLike
July 7, 2012 at 7:03 pm
VR Kaine
When righties get their people into office and they deregulate the shit out of the economy and the greedy elites plunder the nation because now they can, its not a big deal.
They only get their people into office because the sheep sleep and prefer to remain sheep instead of “shepherding” their own lives with a more longer-term focus than their next shiny thing.
When people call for a rebalancing only then it becomes a problem to bray about? Huh.
Haha. Right, and what’s this supposed “call for a rebalancing”? Occupy? That’s braying if there ever was. An opportunity for change wasted and made a joke of by inept children who are just as elitist as the people they pretend to be against, proving how much of a joke they really are and why their movement hasn’t amounted to shit after years of whining.
You missed the line that poor should be pulling themselves up by their bootstraps
Nope, that’s always there and goes without saying, evidenced by the many who do and escape their often self-inflicted misery. Heaven forbid the rest follow their example and actually do things for themselves to improve their quality of life.
Spend some time in a city like Vegas where unemployment is second worst in the country and see how many of those unemployed still load their SUV’s up with four flats of beer and junk food for a 4th of July weekend, then only to bitch at the cashier at Albertson’s that they no longer offers discounts at the pump for grocery purchases.
Think these people have read any Chomsky lately, or even one book in the past five years for that matter besides “50 Shades of Grey”? Yet they’ll give you 100 reasons why they need $150/mo cable and their $100/mo iphone. These are who you lump in as your poor just as you lump in every self-starter and business person as an “elite”, showing me that you’ve never truly been one of either and know little of what you pass on from thought leaders here. Live with some of these people. The “struggle” for half these people isn’t a struggle at all – it’s a life filled with ridiculous indulgences they’ve convinced themselves to be needs, just as the “elites” on the other end have.
This is the problem, and it’s a problem that exists at both ends.
Regardless, if “fair share” lefties think their pet project so-called poor deserve more, then by all means they can simply go out and earn more in order to give it. The bootstrappers out there will be happy to tell them how it’s done. ;)
LikeLike
July 7, 2012 at 7:09 pm
VR Kaine
Yep, and the lefties insist on shucking any sort of responsibilty for it, starting with the fact that they can’t admit they willingly and ignorantly elected another crony capitalist.
LikeLike
July 8, 2012 at 7:51 am
The Arbourist
These are who you lump in as your poor just as you lump in every self-starter and business person as an “elite”, showing me that you’ve never truly been one of either and know little of what you pass on from thought leaders here.
I’ve never been an astronaut or a oceanographer either, but if given facts and insight about them one still can make cogent arguments that involve them.
Regardless, if “fair share” lefties think their pet project so-called poor deserve more,
The more egalitarian a society is, the better socioeconomic outcomes are for all members of said society. Changing toward a less imbalanced society, would be good for everyone including the rich.
LikeLike
July 8, 2012 at 2:34 pm
Rob F
If you go over and read what actual economists think, you’ll find that ~80% of them agree that redistribution of wealth/income is a legitimate role for a government. In other words, it’s not asking five economists and getting six opinions, but rather asking five economists and getting two.
Clearly then, the real debate ought to be over how much redistribution should be done, or whether method A versus method B is more appropriate, and the like, not over whether redistribution should take place.
LikeLike
July 8, 2012 at 2:50 pm
The Arbourist
the real debate ought to be over how much redistribution should be done, or whether method A versus method B is more appropriate, and the like, not over whether redistribution should take place.
This statement collides with (and skewers) so much of the fallacious right wing rhetoric out there. I feel the heads asploding (Socialism!!!11!!!1) even as I type this comment.
Well stated Rob, carry on. :)
LikeLike
July 8, 2012 at 4:22 pm
VR Kaine
I think there’s two types of debators of that from the right:
1) The kind that dismiss every part of the discussion simply based upon the word “redistribution” (which is stupid, because money is redistributed all the time)
2) The kind that are more concerned with how that redistribution occurs, particularly with excessive taxation, and what the actual (not theoretical) impact of that will be in today’s (not 1970’s, 80’s, 90’s, or 2000’s) economy.
LikeLike
July 8, 2012 at 4:39 pm
VR Kaine
Agreed. Every business is inherently in the practice of redistributing wealth, so anyone who attributes the phrase solely to socialism and doesn’t recognize its key role in capitalism is a fool.
What I don’t like about either side’s version of the phrase is that no matter who gets elected, if people aren’t smarter about things this time around, any money that does get redistributed to the bottom is just going to end up right at the top again in a matter of a few years anyways. we need to be asking the better questions about bills being proposed, or policies being introduced that go beyond what a newspaper headline or talking point can answer.
LikeLike