"Capitalists = Job Creators" is Completely Wrong

[DGuller]

"Class warfare" is GOP rich guy talk.  It's wrong and dishonest.

Then how would you like to characterize Obama's "taking advantage of loopholes" talking point?  An honest mistake?  Misunderstanding of the tax code?  A bright, shining truth?

Could be an actual truth.  A lot of the "capital gains" are capital gains only as far as IRS is concerned.

[Admiral Yi]

A signal that he thinks the tax code needs to be changed, so that the very rich pay more tax on their income from various sources.

He doesn't need to signal anything, he's already come out with an explicit statement in favor.  Several statements.

It's agitprop, designed to create more animosity towards the rich.

[The Minsky Moment]

Whenever I encounter a tricky question like this, I ask myself -- what would Johnny Maynard say?
I figure something like this:

Q.  What generates employment?
A.  Investment
Q.  Ok. What generates investment?
A.  It can come from either the private sector or the State.
Q.  Let's start with the private sector.  What determines the level of investment?
A.  The perception that one can make more money by investing and the availability of sufficient financing.
Q.  What drives the perception that investment will be profitable?
A. Several factors: (1) the belief that there will be sufficient buyers for the ultimate product (i.e. consumer demand); (2) the projection of cost (based on available technologies, labor rates, transport, etc) and (3) the degree to which the investor is willing to take risks ("Animal Spirits")
Q.  And what determines the availability of financing?
A.  The general supply of money and overall level of liquidity preference (i.e. the willingness of agents to hold long-dates illiquid commitments).
Q.  And what determines the level of State investment?
A.  The State just decides how much to invest and how.

So the "capitalist" does play a role in creating employment, but only through his capacity as a risk-taker.  The more wild gamblers, the more propensity to invest -- although capitalism being cyclical, heavy risk taking may increase investment and employment in the short run, but it may also make the bust part of the cycle harder.

[dps]

Even if increasing taxes on the wealthy were the solution to the problem, simply increasing the income tax rate isn't going to do the job.  The real reasons the very wealthy pay such an effectively low income tax rate isn't because the top tax rate is so low, but rather because they have so many tax loopholes available to them.

The overwhelming bulk of the explanation for lower average taxation of the rich is the lower rate on capital gains and dividends than on earned income.

"So many loopholes" is Obama class warfare talk.  It's wrong and dishonest.

Do you have me confused with Ide or something? 

[DGuller]

Whenever I encounter a tricky question like this, I ask myself -- what would Johnny Maynard say?
I figure something like this:

Q.  What generates employment?
A.  Investment
Q.  Ok. What generates investment?
A.  It can come from either the private sector or the State.
Q.  Let's start with the private sector.  What determines the level of investment?
A.  The perception that one can make more money by investing and the availability of sufficient financing.
Q.  What drives the perception that investment will be profitable?
A. Several factors: (1) the belief that there will be sufficient buyers for the ultimate product (i.e. consumer demand); (2) the projection of cost (based on available technologies, labor rates, transport, etc) and (3) the degree to which the investor is willing to take risks ("Animal Spirits")
Q.  And what determines the availability of financing?
A.  The general supply of money and overall level of liquidity preference (i.e. the willingness of agents to hold long-dates illiquid commitments).
Q.  And what determines the level of State investment?
A.  The State just decides how much to invest and how.

So the "capitalist" does play a role in creating employment, but only through his capacity as a risk-taker.  The more wild gamblers, the more propensity to invest -- although capitalism being cyclical, heavy risk taking may increase investment and employment in the short run, but it may also make the bust part of the cycle harder.

I'm going to put you down for "the rich pay too little in taxes".

[The Minsky Moment]

I'm going to put you down for "the rich pay too little in taxes".

You've misread.

[Neil]

Surely Keynes would have understood the limits to the state's power to invest.  After all, he was the one sent begging to Washington and Ottawa after the war.

[The Minsky Moment]

Surely Keynes would have understood the limits to the state's power to invest.  After all, he was the one sent begging to Washington and Ottawa after the war.

That was after the little pissant island of Britain, its Empire already in tatters, managed to generate war production on the level of the leading Great Powers, including more aircraft production then Germany and almost as much as the USSR.

[Neil]

Surely Keynes would have understood the limits to the state's power to invest.  After all, he was the one sent begging to Washington and Ottawa after the war.

That was after the little pissant island of Britain, its Empire already in tatters, managed to generate war production on the level of the leading Great Powers, including more aircraft production then Germany and almost as much as the USSR.

Is it that surprising that Britain, with her not insignificant Empire, was able to out-produce Germany in aircraft, especially since Udet pretty effectively bungled the Luftwaffe's design and supply, even by retardo Nazi standards?

[The Minsky Moment]

Is it that surprising that Britain, with her not insignificant Empire, was able to out-produce Germany in aircraft, especially since Udet pretty effectively bungled the Luftwaffe's design and supply, even by retardo Nazi standards?

Yeah it is surprising, given that at the same time Britain simultaneously engaged in a massive shipbuilding campaign, and given that maintaining the frayed links to the Empire probably cost as much resources as it brought back.

[Neil]

Is it that surprising that Britain, with her not insignificant Empire, was able to out-produce Germany in aircraft, especially since Udet pretty effectively bungled the Luftwaffe's design and supply, even by retardo Nazi standards?

Yeah it is surprising, given that at the same time Britain simultaneously engaged in a massive shipbuilding campaign, and given that maintaining the frayed links to the Empire probably cost as much resources as it brought back.

Would you consider the Dominions to be a part of the Empire?

At any rate, Britain's shipbuilding campaign is countered by Germany's enormous efforts to produce tanks and murder Jews.

[Ideologue]

A signal that he thinks the tax code needs to be changed, so that the very rich pay more tax on their income from various sources.

He doesn't need to signal anything, he's already come out with an explicit statement in favor.  Several statements.

It's agitprop, designed to create more animosity towards the rich.

Why is that bad?

[Admiral Yi]

Why is that bad?

I don't think policy should be driven by manufactured hatred.  Your results may vary.

[Ideologue]

It's not really manufactured.  It's there, just unfocused, or focused on the wrong things.

[CountDeMoney]

It's agitprop, designed to create more animosity towards the rich.

You've got a point;  the rich are quite able to generate plenty of animosity on their own.