Re: WAY OT: Gas-Gouging Greenspan

On Sat, 17 Sep 2005 11:56:11 -0700, "Marcello" <marcello@xxxxxxxxxx>
quacked:

>
>"McDuck" <wallymcduckDELETEME@xxxxxxxxxxx> wrote in message
>news:4oeoi1hr38ndu6ar4e77ueu08jjmpj5lq7@xxxxxxxxxx

>>
>> Okay, I'll briefly address your example. A and B are both your
>> commission agents. They both work equally hard and take big risks. A
>> is lucky and the risk pays off, whereas B is unlucky and loses
>> everything. What is your "market" solution to this inequality --- do
>> we just tell B to be luckier?
>
>What you call luck others call good and bad decisions.

No, what I call luck is what everyone calls luck. You want to change
the example to some other example. Deal with the "luck" example. A
calls client X at 10 a.m. and makes the sale. B calls at 9:30 a.m. and
the line is busy. He calls back at 10:10 and misses the sale.


>If you want to
>punish the agent who made a smart decision in light of the fact that he
>might be surrounded by perennial failures who aligning themselves with what
>they believe to be good decision in light of countering conversational
>wisdom, then you will limit future opportunity in the name of a completely
>flawed ideal of equality.

I'm not punishing anyone. I'm recommending that the government tax
people who make a lot of money at higher rates than those who make
far, far less. There are some possible disincentive effects, but the
literature suggests they are pretty trivial. Remember, the USA did
pretty well in the post-WW II period with real corporate rates of 50%
and a top marginal tax rate of 91%. We can't do that now, for a
variety of reasons, but don't pretend that graduate rates stifle
incentives when there is almost no evidence for it.

>
>Let me counter with this question to your example. If agent A and agent B
>both take the position knowing very well that there is a high degree of
>failure among those who choose the field, let's say only a 50% success rate
>(in realty is even higher), and knowing this both agents decide to accept
>the position. Then by what stretch of your imagination should the agent who
>is successful be expected to support the agent who is unsuccessful,
>especially when once considers the fact that it is impossible to define what
>background and level of experience each agent has prior to the position.

We are all citizens, and we have a common responsibility. You
certainly concede that A, the successful guy, should pay some taxes
and that B, the guy with no income, should not pay. And you say you
favor a safety net for B. Your example does not get to the issue of
graduated rates. Assuming A makes really big money, I want to tax him
more (at a higher rate) than some other successful guy who makes a lot
less --- successful but just not as successful. Why not? Almost no
disincentive effects (indeed, might have some incentive gains, since
the lower-income guy probably values a dollar more than the higher
income guy) and a fairer distribution of income.

>Lastly, if the agent who failed winds up in a position after failing that
>causes him/her to lose everything, isn't that perhaps a sign that the agent
>may have made a better decision to be more prepared to take on such a risk.
>For all we know, the agent who succeeded had saved for 10 years to be able
>to sustain some failure for a length of time whereas the agent who failed
>had no savings thus was ruined by not closing a deal fast enough. And
>again, the successful agent should be expected to support the less
>successful agent who just made poor decision? Obviously not.
>
>
No, you agree (see above) that the successful agent should pay taxes,
and you agree the unsuccessful one should not pay. You really are
having trouble with my examples, which is not surprising, as they make
my points pretty well <g>.

>
>Now before you go on to suggest that this is assuming too many factors,
>understand that is the very point.you can never know all the factors of
>anyone's background and what they base their decisions on. All you can ever
>do in the name of fairness is assure that everyone is giving the same
>opportunity, and how they deal with that opportunity is up to them.
>
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>>
>> A is your risky commission agent and C is your coordinator. C has 4
>> small children and a sick mother to support. A is footloose and fancy
>> free. C really, relly wants to be a cmmssion agent and make the big
>> bucks, but she fears that if she is unlucky, all her loved ones will
>> perish, so she avoids the big risk for the sure pay check. How does
>> your "market" solution solve her problem?
>
>The solution is already in place. C at some point made the decision to have
>children that would depend on her, thus limiting her ability to assume
>certain risks, such as that of becoming an agent...whereas footloose A has
>no dependants. These are life's choices, and we all get to make them.
>Punishing those that chose one way just because things worked out better in
>the end is not fairness, it's ridiculously unfair.

Really? That is your view of society? Did C had a choice whether to
have a sick mother? Would it matter to you if C, when she had her
kids, was married to some guy who ran off with someone else and left
her in the lurch?

Anyway, I do find it amusing that some people seem to view children as
providing no social benefit. Perhaps you (not you personally, of
course) will change your view when my kids (not my kids personally, of
course) are paying for your social security


>
>
>
>
>>
>> A and D are both thinking of taking the big risk and being commission
>> agents. A is born with genes that induce him to be a risk taker. D is
>> born with genes that make him very, very wary of taking risks. How
>> does your "market" mechanism account for this inequality?
>
>Your comment is based on pure speculation that such a gene exists which
>obviously until proven is not worthy of discussion. But I will say this, as
>through my very own experience in the field I can attest that so much of
>sales ability and intelligent risk taking is perceived as instinct by many,
>the fact remains I have seen time and time again countless examples where
>both attributes are learned, and while I obviously am not actively studying
>the issue nor have the credentials to post a concrete hypotheses on the
>subject, I can tell you through my experience which is abundant I believe
>with certainly that these traits are learned, and not instinctive at all.
>And generally those that resort to suggesting they are instinctual are
>almost always very same people that chose not to put in the time to learn.

Actually, it is now well established that a propensity for risk taking
is inherited. Explains in part why women are much more risk averse, on
average, than men. I have no problem with your not knowing this, of
course, and you make no real claims. And I do agree that part of a
propensity for risk taking is social. However, the social context in
which one grows up has a large luck component.

>
>
>
>
>>
>> A has a rich father, so he can take whatever risks he wants with the
>> certainty that Daddy will come to the resque. E is born of poor
>> parents and has to bear all the consequences of his risks. So A makes
>> the big bucks s a commsion agent, and E is forced to play it safe.
>
>E has the same oppotunity as eveyrone else in the field who has become
>successful by starting with nothing. A just as might be less motivated (as
>is often the example) becuase there is no urgency for success based on the
>fact that he can rely on his father. As long as the equality of opportunity
>exists, then fairness is achieved. There is not underlying rule that one
>has to have money to enter the game, nor is there any rule that suggests one
>has to even have any education. The rules are that you must have the proper
>credentials and act according to the laws and real estate regualtions.
>After that, oppotunity is wide open.

I say A and E are unequal. You reply that E and F are equal. Well,
perhaps, but that does not explain why the inequality between A and E
does not justify different treatment of A and E. In any event, you
claimed that the market handled the inequalities --- I'm showing you
it does not and can not.

>
>
>
>>
>> We could, as you can imagine, go on and on. The point is that
>> inequalities in outcome are rarely justified, and the few cases where
>> they are justified are not sufficient to call into question a
>> redistributive policy. Now, I do agree that really steeply graduated
>> rates in the middle class cannot be justified, based on examples of
>> the type you gave (and I previously gave). that is why I do not favor
>> such rates. I favor exemption for the poor (the current situation),
>> pretty flat rates for the middle class (pretty much what we now have)
>> and fairly heavy taes onthe rich (what we used to have).
>
>Let me take the counter approach for a second so that I may offer up a
>thoughtful question. Let's hypothetically assume that redistribution of
>incomes based on classes was fair...that being the case, how can you
>overlook the adverse affects this eventually has on the middle and lower
>classes you are trying to distribute fairness to in the first place?


That is a fair question, but with a false premise. I agree fully that
one has to take into account possible disincentive effects. The
literature shows that those effects are not large at high income
levels. At middle income levels, we do see disincentive effects to be
more substantial. As previously stated, I'm mostly interested in
redistribution at the high end, where those effects are not important.
But it is important to look at them and be concerned about them if
they are large. I have looked.

Economists note two effects of higher taxes. One is the substitution
effect --- you substitute leisure, for example, for work. The other is
the income effect --- you work more to make up for the lost income.
These effects have opposite signs and can offset each other. At very
high incomes, the substitution effect is trivial because almost anyone
earning income when they are really rich is really not that interested
in leisure --- they work for the power and glory, not just the money.
And the income effect is also small, but it would tend to make the
person work more.

Among the upper middle class, you see more of the substitution effect
--- doctors playing golf on Wednesdays instead of seeing patients if
the money from their work is not enough. But, if they have a big
mortgage, the income effect might offset it some or fully.

<snip>
>>
>> You think that a rich kid has the same opportunities as a poor kid?
>> What planet are you from? All us carbon units understand that there is
>> huge inequality in opportunities everywhere, based on difference in
>> genes, upbringing, family wealth and influence, on and on. Do you
>> really disagree?
>>
No response? Okay.


<snip>
>> Because he has more money, and he "earned" that money through social
>> actions. He did not invent taxi cabs or build the roads on which the
>> cabs travel or create the economic opportunities that would make
>> people want to take a cab, etc. ,etc. so society has a claim to a
>> portion of his income, and the bigger the income, the bigger the
>> claim. However, the social claim is not as strong as it is with
>> millionaires and billionaires, who also exploited the system in one
>> way or another (and I am assuming legal exploitation through some
>> economic rent).
>>
>
>Again, if you are of the beleif that the more one becomes success the more
>one exploits others, then we are never going to get anywhere.

Do you understand the concept of economic rents? I'm mainstream here.
I'm not asserting that the rich always exploit people --- but I am
saying that they exploit some economic rent.

>
>
<snip>

>>
>> If you favor the welfare state, as you now claim, then you favor at
>> least some redistribution. But you seem to think it is fine on the
>> spending side but not on the taxing side. Quaint view. Do you want to
>> tax the poor and then give it back through welfare? If not, then, like
>
>This is only true if you consider the current welfare system, to which I
>wholly object to as its a colossal failure. Your whole basis is that
>welfare be run as a system of handouts, of which I never advocated nor do I
>agree with in any part. A social safety net only translates into monetary
>handouts on the far left.
>
I don't follow you at all here.
<snip>
>>
>> I think the natural tendancy of a capitalist state to have huge
>> concentrations of wealth in the hands of a few has been mitigated by
>> graduated rates. Japan and a few other countries, which had more
>> effective taxes on the rich, had less inequality at the top, although
>> that is now changing as well. Of course, inequality in the US is
>> increasing very rapidly, and Bush has unleashed that inequality with
>> his low rates and lax enforcement policies.
>
>And a pushing downward force on the top will always affect those in the
>middle and bottom as well, a point always overlooked with the progressive
>taxation theorist.

We don't overlook it, We have a name for it. We call it the trickle
down theory. We don't give names for stuff we overlook. But it is a
discredited theory, nutty on its face and not supported by studies.

>Let's not also discount that perhaps the natural
>tendency is also a compilation of natural motivation, dedication, and
>long-term interest in success. There have always been less people willing
>to pay the price for success than those give-up at the earliest failure, so
>one naturally would expect such a tendency.

I don't know what this means. But Liberals do favor the market. We
just want to adjust market outcomes for what we perceive to be some
unfair outcomes.

>
>
>
>Its a real shame that your viewpoint includes distaste for those few who
>give up so much time, dedication and hard work to succeed while insisting
>they should be punished for doing so while others sit back and watch and
>wait to lay claim to those very successes while doing little to succeed on
>their own. I think your viewpoint on Bill Gates success could not be a more
>shining example as you are clear in your distaste in his successes while
>completly overlooking the thousands upon thousands who have benefited with
>good and secure paying jobs for doing far less than Gates ever had to and
>then suggesting Gates has exploited society in spite of the fact that he
>created thousands of additional taxpayers and given out financial security
>through employment to so many.
>
>

I don't have a distaste for successful people. Where did you get that
idea? I just want to tax them on their huge gains at a fairly high
rate. Nothing personal, I assure you. I'm happy to tax unsuccessful
people at high rates if they happen to have a lot of income.

As for Gates and Microsoft, well, you can like or dislike Microsoft.
You can boast about the jobs it has created, much of it offshore or
through importation of foreign laborers, or you can complain about all
the jobs it destroyed and the innovations it has inhibited through
what the courts have found to be illegal monopoly practices. I'll say
out of that debate. I simply note that he is enormously wealthy, has
paid a pittance in taxes, and is the poster boy for why the rich
should be paying more than they do.
--McDuck
.

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