Momentum behind Increasing the Minimum wage, all well and good, but it is not the Holy Grail.
Below I will explain how “Trickle Up” might be 700% more effective than Stupidparty “Trickle Down”. Warren Buffets concern, an individual fully conversant with the notions of trickle down economics, should get us all thinking long and hard about his warning about the Minimum wage
If present trends continue –the prospects for the struggling class remain dismal. Whilst improvements in the minimum wage will be beneficial to the struggling class – such an impact will be fleeting to both the beneficiaries and the economy as whole. This is because of a combination of events that if left unchecked will create a tsunami of misery, growing disparity and poverty. First we have the unsustainable income discrepancy trends (see charts below) – these trends are taking place in an environment of growing corporate power – an ability to hire and fire at will. Major Corporations can set wage levels by being the largest employer, unions have been emasculated, membership down from 20% in 1983 to 11.1% in 2014 and all this under a background of increasing technology where human labor will be competing against the remorseless penetration of machines. An Oxford University study concluded that 47% of U.S. jobs would be at risk within ten years as a result of robotics. The final nail in the coffin, for the American worker – is the destruction of the Democratic process to the point that many are already describing the U.S. as an Oligarchy. Regardless, it is now be obvious to everyone capable of critical thinking than US Democracy has been bought and paid for –to the extent that Congressman are solely interested in the needs of their donors, not their constituents.
Therefore America needs to embark on an overhaul of its fiscal policy and abandon various Myth. We will start by looking at what must not be done – and to do that we need to take a trip into the heads of the best and brightest Stupidparty economic minds. The last time we had a clear picture of what these minds were thinking was when Romney had his big chance to pitch his economic vision to an American public open to great ideas. This would logically take us back to Romney’s 2012 convention speech – as it related to the economy
In regards to the economy—he had a 5- or was it a 7-point plan that took up a mere 221 vacuous words (out of 4,094) in a remarkably fact-deprived outing. Each one of those plans could have been torn to shreds by a seventh grader from a good school district.
Let us quickly eviscerate every one of those 221 words:
1) By 2020 the USA will be energy independent.. well Obama will do that by 2018
2) Job retraining ya da ya.. Except his VP and the Stupidparty platform would cut such retraining.
3) Unlike Obama – he would implement trade agreements—except this being one of his numerous blatant lies…Obama had negotiated trade agreements
4) Cut the deficit – but he always refused to explain how, but Obama has done it anyhow.
5) Cut taxes for Business – but he adamantly refused to explain how such cuts would be funded.
6) Respect for Women – well may be the ones from his binders, no sign of such respect from his prior Mormon Misogynist activities
7) Unlike Obama I will not raise taxes on the Middle Class—except this was yet another of his numerous blatant lies, since Obama had done no such thing.
The Romney campaign could only dredge up one report that would support his austerity during deflation theory, a study that has since been discredited. In short – Stupidparty has one plan – trickle down, hand over the reins of power to the Corporations, forget the lessons of the Gilded age, the Great depression, and the 2008 Great recession. Unfettered capitalism is a disaster for virtually everybody.
The solutions are always the same, they remain the same –yet the penny never drops, because the powers that control the halls of Congress see that the solutions are not in their short term interests. But private business is by definition myopic when compared to the Government. That is why the Government should be in charge of healthcare –like virtually all other developed Countries, remain in charge of National Security, regulating business and sponsoring investments that need a longer window, have greater risk, than is acceptable to venture capitalists. Education, law and order, social security and research into medicine, space exploration, GPS, voice recognition, clean energy also come to mind.
Trickle Up – how come it is so much more effective?
Trickle up in it’s most magical form can be found in the the Charity by the same name. The concept is to provide grants (not loans) of about $150-$200 to the poorest of the poor in mainly rural areas. With the grant comes the infrastructure to help the beneficiaries (mainly women) manage their business’s. The success rates are staggering. This type of approach, alongside the the idea of investing in the most basic of infrastructure needs—such as teaching people how to build toilets, is having a remarkable, but hardly surprising impact. Having a sanitary environment in places like India can reduce diseases by up to 80%, plus providing a skill set that can be beneficial to the community. Such trickle up efforts are likely to make a huge dent in reducing extreme poverty around the globe. Trickle up not only potentially making the life of a billion or so people more tolerable, but also creating substantially more consumers for business.
So how can we apply this obvious logic to the US
Well as it happens the US has a huge unheralded poverty problem. Comparing poverty amongst different nations is quite complex, but however you slice the numbers (the World Bank, the CIA –take your pick), the USA ranking is quite pitiful. Stupidparty flat earth thinking simply stops at the nearest horizon and if you suggest for comparison a better performing country like Norway, then they simply yell “socialist.” What is wrong with poverty anyway? – moochers deserve poverty – I guess Children deserve the same level of empathy, the same lack of introspection.
The first column is a combination of various criteria including material, health and safety, and educational well-being. The USA has absurdly high and unnecessary poverty, clearly exacerbated by Stupidparty economic folly:
The Solution is hardly Complex:
70% of the US Economy is driven by consumerism. A healthy economy depends upon the consumer spending more. Therefore when the economy is facing a recession/deflationary environment – one needs to create conditions that allow the consumer to spend more. A stupidparty economist would demand tax cuts. They have a point—but yet choose to be blind to the bigger point. They do this because they are intellectually and morally corrupted. Bought and paid for.
To understand the game, we will need to understand one simple economic concept. Marginal Propensity to Consume MPC. I try and avoid jargon, but this is both important and easy to understand. If you were to be given $100 – how much would you spend?
We already know that as a general rule those on a lower income will have a propensity to spend a greater percentage of any additional income. This is out of necessity. Most already know that one of the most successful stimulus programs is food stamps. But Stupidparty Myths have created a false narrative and as such these Myths need to be debunked:
http://www.cbpp.org/research/the-relationship-between-snap-and-work-among-low-income-households http://www.motherjones.com/politics/2013/10/food-stamps-statistics-SNAP-economic-benefits
The key point in the above is that each $5 in Food stamps create $9 of economic activity. But according to a new study – even this is likely understating the disproportionately beneficial aspects of trickle up.
As Fortune Magazine refers to: “A new working paper looks at how the amount of wealth inequality can affect the marginal propensity to consume and the resulting implications for policy. The authors, economists Christopher Carroll of Johns Hopkins University, Jiri Slacalek of the European Central Bank, Kiichi Tokuoka of the Japanese Ministry of Finance, and Matthew N. White of the University of Delaware, built a model that tries to replicate the dynamics that determine the amount of wealth inequality in an economy. In figuring out the dynamics that lead to the current levels of wealth inequality in the United States, the model also reveals the marginal propensity to consume among households across the wealth spectrum of the nation.
“So what’s the actual real world importance of estimating marginal propensities to consume? Knowing which households are the most likely to spend an extra dollar can help make fiscal policy more effective. According to Carroll and his co-authors, any fiscal stimulus targeted toward individuals in the bottom half of the wealth distribution would be 2 to 3 times more effective than just a blanket stimulus.”
But I argue that even this underestimates the real impact of trickle up. Note how the study focus’s on the bottom half v everyone. The problem with that analysis is that they are hardly tackling the big Stupidparty elephant in the room. This is not a nation divided by the top 50% v the rest (if only) – this is a nation divided by the top 1% or even the top .01%.
The top 10%
Look at what happens when you are similarly lazy when talking about Income discrepancy trends— this was the chart from Forbes focusing on the top 10%:
The Top 1%
But Forbes is a pretty conservative publication, and I thought that the 10%/90% was likely to gloss over what Romney and his paymasters were really up to. So let’s also look at the graph from The Economist, which focuses on the top 1%.
Top 1% and their Tax Burden. (Wiki)
The Top .01% taking Control – Hence the term Oligarchy:
In 1978, CEOs took home 26.5 times more than the average worker. They now make roughly 206 times more than workers, EPI found. The pay isn’t always tied to the performance of their businesses—as ThinkProgress has noted, CEOs at companies like Bank of America often pocket huge pay increases, even as the company’s stock price plummets and jobs are cut.
As Warren Buffet stated in the Wall Street Journal: “In 1982, the first year the Forbes 400 was compiled, those listed had a combined net worth of $93 billion. Today, the 400 possess $2.3 trillion, up 2,400% in slightly more than three decades, a period in which the median household income rose only about 180%”.
By comparing the top 1% – the picture becomes a 100% more egregious than by taking the top 10%. If you drill down to just the CEO types –the top .01% then it gets far worse still. So simply comparing the MPC (Marginal Propensity to Consume) of the top 50% v every one -strikes me as missing a vital point.
Do you think that the people who have bought up the Democratic process give a dam about a household of income of say $60,000 – putting them in the top 50% of households. Of course not, Stupidparty is only interested in cutting taxes for people earning more than around $400,000 — the top 1%. Now if you compared that sector with households with income of say $30,000 – what will happen to the MPC then? I would venture to guess that the MPC for the $30,000 household might get closer to an economic multiplier of 7-10; compared to an economic multiplier of say 1.1 for the top 1% of households. (Refer back to the MPC chart above.) This means that providing stimulation to the poorest is likely 7 times more effective than providing tax cuts for the very wealthy.
In view of the above what should be happening. Surely the wealthy should recognize that the stronger economy that would be created by unleashing the hungry appetites of the Struggling class would actually help them more than tax cuts. But again the political dialogue is controlled by the very rich who in many cases find ways to pay zero tax anyway. Mitt Romney clearly had gone numerous years without paying any taxes. Who would know better than fellow Mormon, clued into Mormon dynasty, (i.e. the Huntsman’s) than Harry Reid? Romney – who had known for many years that he would eventually have to release some tax returns – once he did so – he had to artificially inflate his taxes to make it look like he was paying >13%. These guys are gaming the system – a system that they have corrupted.
But the regular wealthy guys, those people capable of thinking beyond the end of their myopic hairy noses, capable of taking an interest in the humanity that exists outside of their tribe – these people should recognize that economic stimulus should be focused on the less well off. They should recognize a social responsibility of providing a living wage, help employees attain skills; lead a productive, healthy lifestyle. This would also mean more resources in public education, public healthcare (it is absurd that employers should be burdened by this responsibility), leaving the company with a stronger healthier work force, creating more consumers – who create more profits for business.
Therefore merely focusing on improvements to the minimum wage is a bit of a red herring. The penny must drop that trickle up simply works far better than trickle down, especially so at the extremes, and all tax policies must be drafted in an environment where not only does one get the best bang for your buck, but also and co incidentally will lead to the reversal of the present unsustainable income discrepancy trends.
Oh – you were looking for the Holy Grail. Well as it happens – we have had it all the time, hiding in plain sight:
In 2011, the top 10 percent of taxpayers accounted for 45.4 percent of all AGI and 68.3 percent of all income taxes paid. Taxpayers in the top 5 percent accounted for 33.9 percent of all AGI and 56.5 percent of all income taxes paid. The top 1 percent of all taxpayers accounted for 18.7 percent of all AGI and 35.1 percent of all income taxes paid.
You also suggest something almost “criminal” that CEO’s make 206X more than workers. Please explain why this has any relevance to a worker who was given a job THEY APPLIED FOR, benefits in many places, and able to support his family? If an employee is worth more than his salary based on his contribution to the company, he should get a raise.or he has the freedom to move to another place where their value is more appreciated.
Workers are a commodity and their “value” is set by their skillset, work ethics, and ambition.
In 2011,latest I could find, the top 10 percent of taxpayers accounted for 68.3 percent of all income taxes paid.
The top 1 percent of all taxpayers accounted for 35.1 percent of all income taxes paid.
47% paid zero or received refunds. What would be “fair”, in your opinion? Top 10% pay ALL the coast of a corrupt,wasteful government? Almost 50% of workers paid no income tax!
http://taxfoundation.org/article/summary-latest-federal-income-tax-data
The demand for a $15hr minimum wage, essentially by SEIU’s major efforts to UNIONIZE hundreds of thousands of fast food and retail workers,is a “crime”, a crime against those people “working” for $7.25 an hour in a burger store flipping burgers or making french fries!
Actually, if
they perform and show “value added” to the business in their demeanor with customers, their interplay with other workers, there is no holding back from promotions to even assistant manager or manager of a shift.
The math is simple, and that’ why these staged demonstrations with paid activists and pretty signs is criminal. $15/hr is $600 a week, is $30,000a year for basically doing a job that can be learned in several days.(And that is before workers comp, & corporate Social Security and Medicare matching expenses. The first casualties will be teenagers seeking their first job, as so many of us did in America.
You would have eliminate almostall job opportunities for urban kids, many not graduating High School, and those that do earning a diploma in too many instances not worth the paper
printed on.
I’m sorry to say teens and under educated young men and women are not worth the starting salary of teachers across America.
And what of those employees in the business who have delivered to the company and have seen earnings rise to the $15-$20 level? Wont morale suffer in the organization when they see new, unskilled workers coming into work earning what they have worked so hard to achieve?
Some unions are waking up to the idiocy in pushing for the $15hr wage, and seek exemption from LA minimum wage law
they helped pass | http://fxn.ws/1Rx3X99
Promise and Passion has been the play-book of failed liberal social engineering. Like the “promise, passion and LIES” that shoved Obamacare down the throats of the 85% of Americans who liked their healthcare, legislated wages will cost jobs and, wherever possible, result in more skills being accomplished by robots.
.
You seem to be be missing the point, by a rather wide margin, which is to try and figure out what happens if these various trends continue. This seems to be beyond your scope. If an oligarchy is fine by you then just say so. The rest of what you say is waffle. By way of example I am not the least bit interested in debating the minimum wage and your linear opinion – a phased increase over many years, that will morph anyway, it does not really interest me that much, and the whole point of the article was that it is not the solution- which if you had read the article objectively instead of re actively, you would have twigged. But basically what you say is non sense on the subject, your comments regarding unions in the context of the big picture referred to in the article, just makes your assertion silly. Next time read the article properly and if you are happy with the trends just say so instead of being a bullshit artist. Your comments about Obamacare are feeble minded – unless you were campaigning for the single payer or Public option (but you weren’t were you – because you are quite happy to have 60,000,000 with out healthcare, the US system ranked about number 50 and Americans paying 50% more than necessary all because you are Mathematically incompetent and do not give a dam about the economic damage, misery, disease and death caused by an absurd healthcare system)Those health care comments you make merely confirms that your ability to think critically is significantly damaged, assuming you ever had such an ability.
Absolutely right
Increasing the minimum wage would be very beneficial to the lower class. A higher salary would mean a higher take home pay for the employees. But it could also mean a decrease in employment for some companies because they can not afford to employ more. Studies have shown that this is not always the case. One study showed that even if there was an increase in the minimum wage, the employment still increased. Yet another study was done in another area, and the result is the opposite. We know that an increase in pay would benefit more people. As a university student, it helps me in my part time job.
The vast majority of the “mooching” 47% are retired (and contributed taxes their entire working lives already), or perhaps, not old enough to work yet? Including those groups sure makes that statistic shocking doesn’t it? Just don’t think about the fact that higher wages for everyone in between retired/underage and top 10% would mean they would pay taxes at all or even more taxes, thus sharing more of the burden, and becoming less “moochersome”. A fact like that could make your head explode.
I guess I had presumed that that fact was a given. The actual amount of moochers is less than 5%, if I recall correctly.
Again your absolutely correct
The reason AGI vs Income tax percentage shares are the ones used by rich business interests to push these anti-tax the rich, anti-social welfare agendas is because it makes it appear as though the rich are taxed too high. The truth of the matter is that AGI is taxable income after deductions, of which the rich can take far too many. Beyond that even is the point that much of the earned wealth by those top 10% are not taxable at all. When you add in the fact that the Income tax alone only accounts for a percentage of taxation, and the remaining percent heavily burdens the poor more than the rich, and it becomes easy to see that these conservative agendas are just plain false narratives.
People should really stop using the twisted framework that the rich interests in this country want them to use. The republican party, and both the conservative and libertarian movements in this country want to reframe much of our debate in order to serve the interests of the wealthy at the expense of the poor. The people are smart enough, and examples like the one above is clear enough, that we will no longer stand for the privileged rich buying out every facet of our government and using it to their advantage while the middle class dies a slow death. There is REAL change coming in this country, for the better of the people, the middle class, and the poor. People can continue to choose to ignore the problem, or they can rejoin reality and become a part of the solution conversation.
Thank you your insight, you are spot on. It also drives me nuts that so many people where upset about Obama letting the Bush tax cut expire as per the original intent.
Any one earning say $500,000 should have very little problem bringing down their taxable income down below $400,000 via creative expensing, retirement planning and defined benefit plans- and that is all before you hire a cutting edge accountant, and trust lawyers. Hence Romney paying Zero taxes for many years before creatively bringing his tax rate up to 13% so that it would not look absurd in his final disclosure, for a year he knew he would have to make public
The working middle class pays all the the taxes and absolutely gets nothing but deeper in debt.when is this country going to wake up and see what is going on
The working middle class pays all the the taxes and absolutely gets nothing but deeper in debt.when is this country going to wake up and see what is going on
How much were you paid to write this nonsense?
I guess (well hardly a guess)if you had something of substance to say, you would have said it. This is all further proof that Stupidparty disciples have nothing, no substance, no evidence of critical thinking skills, no facts. All you have is pointless insults. All such conversations end with revealing and very sad efforts to label the messenger -as the message is evidently irrefutable
Touché Patrick, exquisite riposte! I am following in Britain with bated breath, entranced by your wit and simply chilled to the bone how eerily similar the 99% (of which I am one) are being treated by the 1% in both our countries at the moment, and indeed by the élite the world over.
So enjoyed and, considering the ocean, very easy to follow; basically only the politicos names’ change, their intent remains exactly the same.
Thank you!
I shall return. ☺
Yes the trend lines in the UK are almost as bad in terms of Income discrepancy – but the quality of political debate is infinitely better. The corrupting power of money in politics far less.The problem right now is not so much that Cameron is in charge, but that the opposition is non existent. The growth of the Scottish National party is hugely damaging to politics south of the border. The British I believe will not tolerate an SNP -LAB dominated in Government. You might be interested in my analysis of the election result, -because on the Monday before the election I knew almost exactly what was going to happen. I actually checked Ladbrokes to place a bet, but did not follow through.(Although Cameron winning an absolute majority was touch and go in my mind) It drove me nuts when every one was so surprised and then said the polls were wrong. In fact the polls over the that week end were precisely correct -hence the election day result. So this is what happened on election day: https://stupidpartyland.com/1/post/2015/05/the-shocking-uk-election-result-was-not-shocking-at-all.html
Can’t pay anything because I’m deep in debt exactly because of the tax breaks the 1percent if the don’t want to pay their fair share they should move to a country that loves their philosophy
What percentage of total national income did the top 10% “earn”?
Jane is using the same BOOOSHIT others do.
AGI this — you idiot fucks don’t count much income in that AGI shit game trick. The most money I ever made, didn’t even FUCKING SHOW UP THERE.
When you pieces of shit can discuss “income” and AGI honestly, I will quit hating you bastards.
It depends, you idiot fuck, on how you get the money. If you get it like Romney did, from closing down factories and giant fucking sweat shops in China, guess what you idiot fuck? It does not show up on AGI.
But if you go work your fucking ass off, as a roofer, a dentist, a neurosurgeon. all your income will show up in AGI.
Guess what you fuck tards, you ass wipes have set up a system of lies. You shit heads make me sick./
Start discussing income honestly and you wont be so fucking stupid — or dishonest
Exactly these are the assholes that are ruining this country with there pure fucking greed
Clearly a class in basic economics such as the multiplier effect is in order. Poor ppl spend everything they earn they have to. A dollar spend generates $1.70 into economy. Keep adding more and more such minimum wage jobs and the impact multiplies
Give tax breaks to wealthy they don’t spend it they send funds abroad where they generate better interest!
The #RWNJ #teabaggers are freaking out because they know they have been exposed!
I do accept as true with all of the concepts you have offered in your post. They’re really convincing and will definitely work. Still, the posts are very brief for beginners. May you please extend them a little from next time? Thanks for the post. febdafbceeacdedk
My main concern was that my blogs are too long – they tend to be longer than generally accepted practice. I try really hard not to get the reader too bogged down -hence the extensive use of hyperlinks -thus giving the reader the option to explore more. Regarding my analysis of the relative benefits of trickle up – I believe that the maths is pretty dam convincing, yet the conclusions seem to be very far removed from standard thinking. I find this very odd.
Some genuinely great information, Glad I discovered this. Good teaching is onefourth preparation and threefourths theater. by Gail. kckabdaeekgeckef
Thank you for your input.
certainly like your website however you have to check the spelling on several of your posts. Many of them are rife with spelling problems and I to find it very troublesome to inform the truth nevertheless I will surely come back again. gfaebdddeeefcafa
Yes, I realize that that is an issue. Some pieces are copy edited, many get corrected as I go through them again. It is quite tough to proof read ones own work – but I will try and show more patience. I made a number of corrections – but I am sure some errors will still persist
Speaking of spelling errors, you should have said, “I too,” not “I to.” If you are going to be a grammar Nazi, learn proper grammar and spelling first!
PS – directed at Smithd, not you, Patrick. Thanks for the article. I enjoyed it.
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You don’t need a 180 IQ or a PHD in economics to see and understand why this article has a ring of truth in everything the author says. Congress for the most part is bought and paid for by Big Business and the top 10% and we have made this possible by voting the way we do. The two party system has a strangle hold on who can run for public office. In all but a hand full of States you can not run for President as a write in candidate unless you have a number deligates from one of the two parties support you as a candidate. Then there’s the electoral college which limits the likelihood you will become President. This equals power by the wealthy and for the wealthy!
Nice Post. Thanks for sharing.
I guess actual amount of moochers is less than 5%, And i have a great doubt how could you collect this much of data about this, its really impossible with out putting effort on it. Hats off to you
This is probably the best explanation of the REAL REASONS why our economy isn’t what it used to be. Being highly educational and factual with out hiding some numbers to make things look better or worse for partisan reasons. I do however wish the source had a less divisive name. A fantastic read regardless of your party line.
Thank you. Stupidparty is the name of the book – and it is plain from the reviews that no one regards the title as unfair -I knew that it might cause some offence on initial reading – but to call it anything else would have been dishonest, plus the accusation emanated from a Stupidparty Leader (Bobby Jindal, he used two words) Bare in mind the term Stupidparty (one word) is my word and I get to define it. In reality it is a polite euphemism for what is really going on.
The pay is n’t always tied With the performance ….
Nice Post
Government should be in charge of healthcare –like virtually all other developed Countries, remain in charge of National Security, regulating business and sponsoring investments that need a longer window, have greater risk, than is acceptable to venture capitalists.
Obviously correct — but few Americans understand how idiotic their health system is until one reaches 65 — then it works pretty well — because its socialized. This means it helps society rather than harming it,