Fiscal Cliff MEGATHREAD: Wile E. Economy falls off, lands in cloud at bottom

[Ideologue]

But there's only so much wealth you can extract from organizing the efforts of others before it becomes both 1)unfair from a moral perspective and 2)socially dangerous.  I.e. 21st century declining America.

The reasons you gave are really the heart of the matter.  And it's really one reason, since the risk of social unrest arises from people thinking it's so damn unfair they have to resort to violence.

No, it's a separate reason.  The social danger is not solely Occupy-type annoyances, riots, or full-scale proletarian revolution, but the far more likely case that democracy will falter in the face of oligarchy, through a combination of corruption and political power following economic power, which we've seen happen within many societies, as well as between many societies, where substantial economic inequalities are present.

[dps]

But it isn't that surprising.  I don't look at fair compensation from a market-anarchic standpoint.  I look at fair compensation first and foremost from a central planner's standpoint.  And from that vantage one asks what is enough to keep the incentive for people to organize labor and capital?  We know from history that a confiscatory top rate does not destroy those incentives (though I do think good arguments can be made that rates in the 70s, 80s and 90s may be too high).

Keep in mind that with our current tax structure, it's not clear that changing the rates makes all that much difference in what the most wealthy members of society pay in taxes, partly because much of their wealth is not directly tied to their income, and partly because there are so many ways for them to legally deduct much of what they do have in income.  Getting rid of almost all deductions would probably raise more in tax revenue than doubling the top rate (thogh of course, at what income the top rate kicks in would also play a big role--a top rate of 60% that kicks in at $100,000/yr would have a substantially different affect than a top rate of 60% that kicks in at $2,000,000/yr).

[Admiral Yi]

No, it's a separate reason.  The social danger is not solely Occupy-type annoyances, riots, or full-scale proletarian revolution, but the far more likely case that democracy will falter in the face of oligarchy, through a combination of corruption and political power following economic power, which we've seen happen within many societies, as well as between many societies, where substantial economic inequalities are present.

You think there's a reasonable possibility the US will turn into, say, Pakistan because of inequality?  I don't see it.  I don't think there was an increase in corruption during the Jazz age, nor in the 80s or 90s.  In fact I think the causality usually runs the other direction, from corruption to inequality. 

[Razgovory]

You don't think there was an increase in corruption in the 1920's?

[Admiral Yi]

You don't think there was an increase in corruption in the 1920's?

[CountDeMoney]

You think there's a reasonable possibility the US will turn into, say, Pakistan because of inequality?  I don't see it.

Plenty of bombings and assassinations during the anarchist movements and labor strife of the 1880s onward.  Or did those have nothing to do with economic inequality? 

[CountDeMoney]

You don't think there was an increase in corruption in the 1920's?

That'll be a "No", Raz.

[Neil]

You don't think there was an increase in corruption in the 1920's?

Everyone knows that it did.  Prohibition is hard on a society.

[Admiral Yi]

Plenty of bombings and assassinations during the anarchist movements and labor strife of the 1880s onward.  Or did those have nothing to do with economic inequality?

We were discussing Ide's thesis that inequality breeds corruption and the concentration of political power, not whether it breeds discontent.

Though to answer your question, it seems to me what you are describing was largely a result of large numbers of immigrants who had already adopted the class warfare paradigm.

[mongers]

Is this going to be averted or do I only have another 5 shopping to get in the canned goods and guns ?

edit:
guns redacted, read catapults.

[CountDeMoney]

We were discussing Ide's thesis that inequality breeds corruption and the concentration of political power, not whether it breeds discontent.

Corruption, meh, that's an independent variable, and concentration of political power?  Don't need even inequality for that to happen.

Though to answer your question, it seems to me what you are describing was largely a result of large numbers of immigrants who had already adopted the class warfare paradigm.

But they meant well.

[dps]

Though to answer your question, it seems to me what you are describing was largely a result of large numbers of immigrants who had already adopted the class warfare paradigm.

But they meant well.

Did Yi just play the "Outside Agitators" card?

[CountDeMoney]

Did Yi just play the "Outside Agitators" card?

They were all overeducated Jews or pissed off swarthy types from Europe anyway, never had any reason for homegrown anarchists here, you know.

[Razgovory]

You don't think there was an increase in corruption in the 1920's?

That'll be a "No", Raz.

That strikes as a bit odd, considering that it was age of prohibition and Harding administration.  Maybe he's thinking about Korea or something.

[Ideologue]

No, it's a separate reason.  The social danger is not solely Occupy-type annoyances, riots, or full-scale proletarian revolution, but the far more likely case that democracy will falter in the face of oligarchy, through a combination of corruption and political power following economic power, which we've seen happen within many societies, as well as between many societies, where substantial economic inequalities are present.

You think there's a reasonable possibility the US will turn into, say, Pakistan because of inequality?  I don't see it.  I don't think there was an increase in corruption during the Jazz age, nor in the 80s or 90s.  In fact I think the causality usually runs the other direction, from corruption to inequality.

Massive economic inequalities between classes can over time evolve into massive political inequalities, for example in Republican Rome--and in early industrial America.  E.g. railroads, mining stakes, anti-union laws, and so forth.

It's true, of course, that they can run the other way, e.g. the Soviet Union, where political inequalities begat economic ones, but that's not germane here.

The danger of this kind of aggregration is not solely because of the likelihood of hard or soft corruption, that is monied interests directly buying favors from politicians or indirectly influencing the electorate via dominance of media, etc.--though such danger exists.  But it is also because this kind of aggregation creates structures that we rely on, that become too big to fail, and become increasingly above the law in their pursuit of profit--even though their reason for existence is not to provide to the commonwealth, but generate wealth for private interests.  Does any of this sound familiar?

You can also see it more subtly in things like tax breaks given to Wal-Marts and BMW plants (to name a few examples from my hometown) because they "create jobs."  Sure, it's true that jobs were created locally, and it was probably a net gain for the community, and as a practical matter I'm not opposed to those specific instances, but the "fair share" BMW should have paid in terms of property taxes was discounted because of their superior bargaining position, and the willingness of local government to except capital from the rules everyone else has to follow.

It is seen further in cries from business that they need X or Y to remain competitive, etc.  Like right-to-work laws or tort reform.

It's not impossible to imagine an America where political and economic power are identical.