U.S. income inequality worst since 1928

[viper37]

Why can't people understand such a simple concept as supply-side economics?

because you forget many factors.  And you make it an absolute game.

Rich people buy properties at higher costs = house values increase = lower income workers are pushed aside.
Rich people don't pay enough taxes = they tend to form an aristocracy, as in ancient europe.  The next generation inherit their wealth, with not much to do to maintain their standard of living (see Paris Hilton, no talent, but lots of money.  Do we want a nation of Paris Hilton?)
If decent education is not partly subsidized (directly or indirectly via student loans&grants), or if there are elite schools where the wealthy go and it's the only way to get a decent job, you can't become rich unless you are already rich.  Going back to aristocracy.
If health care is not subsidized and there's no way to get a decent coverage unless your employer offers one or unless you are already rich, than being sick or having an accident will prevent you and possibly the next generation from becoming rich.

[Ideologue]

How can education opportunities be the product of lower taxes?  You gonna get your two-year degree at General Motors U.?

[Savonarola]

How can education opportunities be the product of lower taxes?  You gonna get your two-year degree at General Motors U.?

You do know there was a General Motors Institute, right? 

It's called Kettering now http://en.wikipedia.org/wiki/Kettering_University and is quite different now.  At one time General Motors paid for tuition and salary during co-op.  Even when I was looking at college in 1990 General Motors Canada still did that.

[The Minsky Moment]

Empirical data does not support a strong connection between marginal individual income tax rates and overall national or regional economic performance.  That isn't suprising because even theoretically one wouldn't expect individual tax rates to have significant impact on firm supply decisions unless there were unusually high.  Other than some hard-core Laffer acolytes and Club for Growth types, the emphasis on the supply side tends to be focusing more on structural and regulatory barriers.

[DontSayBanana]

Empirical data does not support a strong connection between marginal individual income tax rates and overall national or regional economic performance.  That isn't suprising because even theoretically one wouldn't expect individual tax rates to have significant impact on firm supply decisions unless there were unusually high.  Other than some hard-core Laffer acolytes and Club for Growth types, the emphasis on the supply side tends to be focusing more on structural and regulatory barriers.

Sure.  The problem is nobody can agree on whether it's more ("more robust and comprehensive") or less ("leaner and more efficient") regulation that would provide the needed jump start.

Personally, I'm thinking it's a combination, and I just don't know enough to know which areas need to be targeted for stricter regulation versus which areas are being choked out by unnecessary red tape.  Good luck getting DC regulatory hawks to admit some red tape needs to go or getting deregulation ideologues to admit that some sectors have been running roughshod for far too long, though.

[Ideologue]

Ideologues are the worst.

[Admiral Yi]

When people talk about regulatory regimes they're usually referring to third world hell holes or Eastern European kleptocracies.

[Jacob]

When people talk about regulatory regimes they're usually referring to third world hell holes or Eastern European kleptocracies.

In what context?

I thought "regulatory regime" meant the a specific framework set up by regulations for conducting business and implied nothing about the content or quality of the regulations.

[Admiral Yi]

In what context?

I thought "regulatory regime" meant the a specific framework set up by regulations for conducting business and implied nothing about the content or quality of the regulations.

In the context of "we could generate a lot of growth by fixing the regulatory regime."  I.e., no more need for 35 permits from 4 different ministries to open a hot dog stand.

[Ideologue]

I bet you could generate lots of growths by deregulating hot dog stands.

[garbon]

Cancerous growths?

[Jacob]

In the context of "we could generate a lot of growth by fixing the regulatory regime."  I.e., no more need for 35 permits from 4 different ministries to open a hot dog stand.

Huh. Interesting. That's not what I mean at all when I speak of suitable regulatory schemes. Or rather, it's merely one (albeit important) component.

[Jacob]

Sensible regulatory schemes - in addition to being streamlined and not providing unreasonable hinderances for the carrying out of business as you point out - also have the following features off the top of my head:

- counteract monopolies and cartel forming
- ensure reasonable access to the market for new players
- ensures that innovation and successful risk taking is rewarded without stifling access for new players and leading to excessive rent seeking
- regulates to ensure reasonable solutions to fields where the tragedy of the commons and similar scenarios apply
- ensure reliable health and safety standards for workers and consumers
- set, provide, and monitor common standards where such will facilitate the carrying out of business
- ensures fair dealing and transparency and minimizes fraud and deception

... I think business flourishes where regulatory schemes have those features, more so than where they are absent.

[Sheilbh]

Sensible regulatory schemes - in addition to being streamlined and not providing unreasonable hinderances for the carrying out of business as you point out - also have the following features off the top of my head:

- counteract monopolies and cartel forming
- ensure reasonable access to the market for new players
- ensures that innovation and successful risk taking is rewarded without stifling access for new players and leading to excessive rent seeking
- regulates to ensure reasonable solutions to fields where the tragedy of the commons and similar scenarios apply
- ensure reliable health and safety standards for workers and consumers
- set, provide, and monitor common standards where such will facilitate the carrying out of business
- ensures fair dealing and transparency and minimizes fraud and deception

... I think business flourishes where regulatory schemes have those features, more so than where they are absent.

Yep. I'd agree with this. I think the bolded bit is one of the problems is that there's almost a corporatist element of big business and government working together to pass regulations that may have good intentions in theory, but in practice raise the cost for new players and restrict market access.

[crazy canuck]

In what context?

I thought "regulatory regime" meant the a specific framework set up by regulations for conducting business and implied nothing about the content or quality of the regulations.

In the context of "we could generate a lot of growth by fixing the regulatory regime."  I.e., no more need for 35 permits from 4 different ministries to open a hot dog stand.

As Berkut and I discussed the other day.  This is a real failing of the right as they view the only good regulation as no or very limited regulation.