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David Erdman II
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Tax cuts for top earners fail because the theory is broken
(New Scientist)

Tax breaks for the wealthy were meant to trickle through society to benefit all. It didn’t work and inequality just got worse, says an economist

ADVOCATES of trickle-down economics argue that, when the rich get extra income, they invest it and create more jobs – and a higher income – for others. Those people, in turn, spend their extra money. Eventually the effect trickles down the whole system, making everyone better off, in absolute terms.

So, what seems like a moral outrage – giving more to people who already have more – is in theory a socially benign action.

The trouble is it hasn't worked. In the past three decades, states with pro-rich policies have seen economic growth slow, except in countries like China and Vietnam that needed to jump-start socialist economies.

In the UK, upward income redistribution since 1980 has seen the share of the top 1 per cent rise from 5 per cent of national income to over 10 per cent [https://www.tuc.org.uk/sites/default/files/tucfiles/How%20to%20Boost%20the%20Wage%20Share.pdf]. Yet the annual growth rate of income per person has fallen from 2.5 per cent between 1960 and 1980 to 1.8 per cent between 1980 and 2013. [http://www.jrf.org.uk/sites/files/jrf/prospect-jrf-lecture.pdf]

One reason is that the rich have not kept their end of the bargain – they didn't invest more; and inequality, linked to poorer health and societal damage, worsened. [http://www.newscientist.com/article/mg21028085.600-how-to-be-happy-divided-we-fail.html] Investment as a share of GDP used to be 18 to 22 per cent in the 1960s and 1970s but since then has been 14 to 18 per cent, except for a few years at the end of the 1980s.

Moreover, concentration of income at the top has boosted the political influence of the super-rich, allowing them to push for policies that benefit themselves but create harm in the long run. For example, the UK financial sector successfully lobbied for "light-touch regulation", which enabled it to earn a lot but led to the 2008 financial crisis. [http://www.bbc.co.uk/news/business-13032013]

It is well established that a less equal society has lower social mobility. When talented people from less privileged backgrounds cannot move up the social ladder, the economy's long-term dynamism suffers. An increasing number of studies show that, above a certain level, higher inequality harms growth. [http://www.oecd-ilibrary.org/social-issues-migration-health/trends-in-income-inequality-and-its-impact-on-economic-growth_5jxrjncwxv6j-en] Some are by the International Monetary Fund and Organization for Economic Cooperation and Development, which didn't use to be concerned about inequality.

Despite these failings, some politicians still back measures that benefit the wealthy, often citing trickle-down economics. In the UK, the Conservatives cut taxes for the top earners while in government. They want to slash inheritance tax for wealthier estates and cut the numbers paying higher-rate tax. [http://www.bbc.co.uk/news/election-2015-32302062] The UK Independence Party has a similar stance on higher-rate tax and wants zero inheritance tax.

The 35-year experiment with trickle down economics has failed for most people. Unfortunately, there is too much money and power at stake for its true beneficiaries to accept this reality and end this approach.

This article appeared in print under the headline "Defying gravity"

Ha-Joon Chang is an economist at the University of Cambridge. His latest book is Economics: The user's guide (Pelican)

http://www.newscientist.com/article/mg22630182.500-tax-cuts-for-top-earners-fail-because-the-theory-is-broken.html
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The future is the horseless carriage. Don't believe me?
 
How do you convince skeptical carriage riders that automobiles are the future? Schedule a race -a great race!
The following is an article from Uncle John’s Bathroom Reader It involved only a half-dozen cars and 17 men, but this was one race that not only made history- it changed it. Get a Horse In 1908 the promise of the automobile was just that- a promise. The industry was in its infancy, and most people still relied on horses [...]
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How to solve the high costs of education in America.
 
[American Voices]

"I can’t wait to dupe the system by gaining knowledge without totally destroying my future."
Arizona State University has announced a new program allowing students to enroll in freshman online courses and pay for a class only if they pass and plan to use the credits, which will help them reduce the risk of going into huge debt.
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http://www.phoronix.com/scan.php?page=news_item&px=SuperTuxKart-0.9 SuperTuxKart 0.9 has been released! This is the very significant update to this open-source, penguin-themed racing game. SuperTuxKart 0.9 introduces its new engine that now requires OpenGL 3.1+ with providing significantly better graphics potential.
Phoronix is the leading technology website for Linux hardware reviews, open-source news, Linux benchmarks, open-source benchmarks, distribution screenshots, interviews, and computer hardware tests.
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Congress makes more money during its off hours than its work hours.
 
Excellent piece by +Ezra Klein on lobbying. 

Corporations now spend about $2.6 billion a year on reported lobbying expenditures – more than the $2 billion we spend to fund the House ($1.16 billion) and Senate ($820 million).

Why is that bad? Klein discusses two reasons.

1.  Congress outsources its thinking to lobbyists. No member of congress can be expert on all the issues that cross their desk. ...

[Lobbyist's] spells are powerful when cast upon obscure subparagraphs, technical amendments, and legislation that will never make headlines. It's in that vast gap between how many issues members of Congress — and their staffs — can know and care about, and how many issues they're being asked to vote on, where lobbying is most powerful. And there is so, so much money in that gap.

The way it will work is that an obscure tax break that neither the congressman nor his staff has ever heard of will be set to expire. Neither the congressman nor his staff will have any particular opinion as to whether the tax break should be renewed. But the congressman will get a request for a meeting from a lobbyist who has been a big supporter of his campaigns. It'll only take 20 minutes, the lobbyist promises, no big deal.

And you know what? The lobbyist will make a good case for keeping that tax break. The lobbyist, after all, was hired because she is good at making cases. She will walk in prepared, knowledgeable, charismatic. She'll know how the tax provision will affect businesses in that member's district — maybe she'll even have brought some business owners from the congressman's district along. Hell, she might even know the congressman already, or have worked for him in the past (more on that in a minute). Corporate America is buying a lot of talent with that $2.4 billion.

But even if the lobbyist makes a bad case, the congressman may never realize it. Congress has a very limited amount of money with which to inform itself. Corporate America has vastly more money with which to inform congress. It's easy to make an argument sound good when no is arguing the other side.

That's what those numbers show: the forces of corporate lobbying have much more money to "inform" Congress than Congress has money to inform itself.

2. Money makes the door revolve.

Congress is no longer a destination but a journey. Committee assignments are mainly valuable as part of the interview process for a far more lucrative job as a K Street lobbyist. You are considered naïve if you are not currying favor with wealthy corporations under your jurisdiction. It's become routine to see members of Congress drop their seat in Congress like a hot rock when a particularly lush vacancy opens up.

As disgraced lobbyist Jack Abramoff wrote in his memoir:

I would say a few magic words [to a staffer]: "When you are done working for the Congressman, you should come work for me at my firm."

With that, assuming the staffer had any interest in leaving Capitol Hill for K Street—and almost 90 percent of them do, I would own him and, consequently, that entire office. No rules had been broken, at least not yet. No one even knew what was happening, but suddenly, every move that staffer made, he made with his future at my firm in mind. His paycheck may have been signed by the Congress, but he was already working for me, influencing his office for my clients’ best interests. It was a perfect—and perfectly corrupt—arrangement.

Ezra Klein's solution

We need to pay members of Congress and their staff more, and give Congress more money to build up its own informational resources. [We] need to "invest more in government by giving government, especially Congress, the resources to hire and retain the most experienced and expert staff."

Since no one likes Congress, no one likes the idea of giving Congress more money. But spending about $2 billion annually on an organization that collectively controls around $4 trillion in annual spending is a recipe for disaster. The less of our money we spend on Congress, the more of our money lobbyists are going to convince Congress to spend on their clients.

*Similar points apply to lobbying by unions and advocacy organizations. But the magnitude of their spending is simply much lower. "For every dollar spent on lobbying by labor unions and public interest groups, large corporations and their associations now spend $34," writes Drutman. "Of the 100 organizations that spend the most on lobbying, 95 consistently represent business."

Yes, but ... .  The preceding is the best argument I know for smaller government. Where by smaller government one means a government that has less control over how money is spent and how the economy is run. The less money there is for lobbyist to get for their clients, the less it will be worthwhile to fight for it.  

But is that possible? I don't see how. Our economic and governmental system requires certain activities to be centralized. And that means there is a limit on the minimal size of government. Unfortunately, that limit is very large, which means that we can't shrink government to the point where it is not worth the lobbyist's money.

The other solution. A culture of incorruptibility. But even if we have that, those in charge need information to make honest decisions. If we don't give them the resources needed to get that information, it will be provided by those who have a vested interest in where the information points. 

So I think +Ezra Klein is correct. We need a much stronger civil knowledge service. One that is competent to provide the needed information and one populated by people of incorruptible character. That's not impossible, but it takes a lot of work to get there. 
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It's All A Matter of Perspective
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David Erdman II

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He's lookin good these days.
 
Vintage Red , anyone? ;)

Apparently, Wine isn't the only thing that gets better, as it ages...

Lenin's corpse does, too...

Appellation d'origine contrôlér?

~RA
Russian scientists have developed experimental embalming methods to maintain the look, feel and flexibility of the Soviet Union's founder’s body, which is 145 years old today ;
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Marin County to get more interesting.
 
Good for Lucas
After his wealthy neighbors opposed his effort to build another studio, George Lucas decided to build affordable housing for the poor instead with his own money. Now they're enraged.
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Yo. We need to get me a pad in Marin. I definitely meet the income qualification. 
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#mobilegeddon  is at hand!
 
Is your web site ready for Google's Mobilegeddon?

Google is changing its search algorithm tomorrow to favor mobile friendly sites. The change is being called Mobilegeddon because sites that are not sufficiently optimized for viewing on a smartphone will be knocked down the rankings in Google search results. The research firm Portent said that 10,000 websites out of the top 25,000 sites failed Google's mobile-ready test, including the Department of Homeland Security. 

Is YOUR site ready?

https://youtu.be/5F0JAHKNSqE?t=14m54s

#mobilegeddon
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Now it makes sense. If you're a "night person", you can drink caffeine in the evening and have no problems sleeping. I never was so lucky. Incidentally, I consider myself a "morning person". Go figure.



As you might expect, even among students, caffeine intake progressively decreased throughout the day in the study group. However, a small number of participants continued their intake of caffeine well into the night. The metric known as “wake after sleep onset,” or WASO, was used as the primary measurement of sleep disruption. “Our data indicate caffeine strongly influences WASO in those who self-identify as morning-type,” the researchers found. “It affects WASO less so in those who are neither type, and does not appear to affect WASO in those who are evening-type. To our knowledge, there have been no previous reports linking the effects of caffeine and chronotype.”
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Rob the poor to pay the rich. anti-Robin Hood.
 
Tell everyone the truth: conservative policies of the Republican Party are guilty of the majority of the national debt.

"This debt explosion has resulted not from big spending by the Democrats, but instead the Republican Party’s embrace, about three decades ago, of the insidious doctrine that deficits don’t matter if they result from tax cuts." - Ronald Reagan Director of OMB David Stockman

Source article:  http://www.nytimes.com/2010/08/01/opinion/01stockman.html

#Quote   #Deficits   #NationalDebt   #Economics   #Politics   #BorrowAndSpend   #FiscalConservatism  
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You guys aren't paying attention... tax cuts on the rich and businesses will decrease the deficit because they will improve the economy! More people will pay taxes!

Just don't look at the historical reality when that has been applied. It's easy not to when your head is buried firmly in the sand.
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Chicken and waffles is not a thing so much in CA as it is in the South. So its great to see these kinds of dishes accessible here. Go and get the chicken and waffles. You won't regret it.
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