Is the frame "Income Inequality" gonna fly?

[Axulus]

After 25 years in the restaurant industry, fifteen as an independent owner/operator and the last ten as a consultant, I have both observed and experienced just about every type of financial problem imaginable. As all restaurant veterans already know, this is a business that is very unforgiving when it comes to achieving bottom line profits. Based on the 2010 Restaurant Industry Operations Report published by The National Restaurant Association (and Deloitte & Touche LLP), average pre-tax profit margins range from 2-6% (2% for Full Service and 6% for Limited Service restaurants).

http://rrgconsulting.com/ten_restaurant_financial_red_flags.htm

Profits are going up, but well below the average profit margins in the economy as a whole:

Also, these industries and minimum wage/low wage worker share of workforce appear to be correlated:

Net margins for S&P 500 are averaging 9%.

Here are industry margins for S&P 500 companies:

Notice that healthcare "equipment and services" and retailing are right at the bottom of the list.

For clarification on the healthcare categories:

The Global Industry Classification Standard and the Industry Classification Benchmark further distinguish the industry as two main groups:

health care equipment and services; and

pharmaceuticals, biotechnology and related life sciences.

The health care equipment and services group consists of companies and entities that provide medical equipment, medical supplies, and health care services, such as hospitals, home health care providers, and nursing homes. The latter listed industry group includes companies that produce biotechnology, pharmaceuticals, and miscellaneous scientific services.[5]

 

[dismal]

Perhaps he meant they "Work for large corporations" by delivering them pizzas or doing their landscaping.

 

[SimpleDon]

The problem with the labor theory of value is that it puts the cart before the horse.

The labor that goes into something says nothing about it's value. The labor that goes into something says what it's minimum price will be. Absent a monopoly the market will force the price down to this value + a reasonable profit margin.

That is entirely compatible with most LTOVs including Marx's. None put cart before horse in the way you imagine.

The big difference is that Marx ignores the demand side of things--if the price people are willing to pay for it is less than the cost to produce the price doesn't come down, the product simply isn't on the market, or is only on the market as a specialty item for those few willing to pay the cost.

Nope, nothing to do with Marx - as a fair few here will have read enough to know.

Of course, it wouldn't be totally unfair to characterize Marxism as the opposite of supply side economics, as being only concerned with the demand side. Demand side economics, if you will. The entire point of Marxism was to get rid of capital, except for the commonly held capital.

Of course, the idea of supply and demand setting prices wasn't an idea that any of the classical economists, Smith, Ricardo, Malthus, Mill, Marx, etc. held. They all pretty much held to the labor theory of value.

I have an interesting paper on Marx and the labor theory of value.

It starts out with,

Once upon a time there were orthodox Marxists who believed that Marx is infallible and therefore the labour theory of value cannot be wrong. After 1982 orthodox Marxists still exist, but they have changed their minds. They think that Marx is infallible and therefore does not have a labour theory of value.

Love it!

No, I didn't go through his math. His point is that Marx used the wrong LTOV. Perhaps you can explain it to me sometime. I mainly referred to it so that I could quote the joke above.

 

[Axulus]

The Marxist labor theory of value has been criticised on several counts. It predicts that profits will be higher in labor-intensive industries than in capital-intensive industries, and empirical data contradicts this. This is sometimes referred to as the "Great Contradiction."

http://en.wikipedia.org/wiki/Labor_theory_of_value

The "Great Contradiction" is also an inconvenient truth for those leftists who claim that profits are made by and large by exploiting workers and paying them low wages .

If this hypothesis were true, we'd see profits accumulate to those industries and companies who hire the most workers and utilize the most number of worker hours and pay the lowest average wages (maximizing the level of "exploitation", using leftist-marxist speak). It follows directly from the hypothesis. However, the empirical data contradicts this.

 

[SimpleDon]

OK, but the point still is that you can't bring up what Costco does implying everyone can do it because the reason Costco does it is to gain an advantage over those who do not do it.

- - - Updated - - -

You actually don't understand why the strategy of getting better employees by paying more than others is not something everyone can do?

Think about it for a while.

Can WalMart do it?

Walmart has a different strategy. They appeal to a different customer.

I know WalMart has a different strategy. That's why I asked can they do it instead of stating that they do it. Can they do it? Do they make enough money to compensate that their employees better?

Walmart has announced that they are going to be raising their wages for 9 million workers to a minimum of $9.00. If this was already known then I missed it.

 

[ronburgundy]

The "Great Contradiction" is also an inconvenient truth for those leftists who claim that profits are made by and large by exploiting workers and paying them low wages .

If this hypothesis were true, we'd see profits accumulate to those industries and companies who hire the most workers and utilize the most number of worker hours and pay the lowest average wages (maximizing the level of "exploitation", using leftist-marxist speak). It follows directly from the hypothesis. However, the empirical data contradicts this.

Strawman prediction. It only predicts a low-wage-labor and profit association among companies, when comparing within industries, not across industries. Massive profits can be made by labor exploitation, and Wallmart and McDonalds are examples of it. They make more than competitiors in their industries largely by exploiting more labor. In general the large companies that employ the most min wage workers are highly profitable. It is a strawman to claim the theory predicts cross industry comparisons to always favor companies with more employees. The theory does not deny the economic power of capital to create and control markets toward the end of greater profits. That is perfectly compatible and downright supportive of leftist economics. Low wage labor exploitation and market control via capital are not mutually exclusive and often used in concert.

 

[Axulus]

The "Great Contradiction" is also an inconvenient truth for those leftists who claim that profits are made by and large by exploiting workers and paying them low wages .

If this hypothesis were true, we'd see profits accumulate to those industries and companies who hire the most workers and utilize the most number of worker hours and pay the lowest average wages (maximizing the level of "exploitation", using leftist-marxist speak). It follows directly from the hypothesis. However, the empirical data contradicts this.

Strawman prediction. It only predicts a low-wage-labor and profit association among companies, when comparing within industries, not across industries. Massive profits can be made by labor exploitation, and Wallmart and McDonalds are examples of it. They make more than competitiors in their industries largely by exploiting more labor. In general the large companies that employ the most min wage workers are highly profitable. It is a strawman to claim the theory predicts cross industry comparisons to always favor companies with more employees. The theory does not deny the economic power of capital to create and control markets toward the end of greater profits. That is perfectly compatible and downright supportive of leftist economics. Low wage labor exploitation and market control via capital are not mutually exclusive and often used in concert.

Where are you getting that Wal-Mart is making more than their competitors?

Their net profit margins for the year ending 1/31/14 were 3.4%

Compare this to the consumer discretionary retail margin of 4% and the consumer staples retail margin of 2.9%.

What is the average profit margin of McDonald's franchisees, and how does that compare to the fast food or restaurant industry as a whole (NOT corporate, which is a franchising company and hires few minimum wage workers, if any)?

Where is your empirical data to support any of your claims above? Please define "labor exploitation" in a quantitatively measurable way, and demonstrate that those companies/industries that have higher measures of "labor exploitation" are more profitable than ones with lower measures, controlled for whatever other variables you believe to be relevant.

 

[SimpleDon]

"Class warfare"?

Your slavish devotion to the aristocracy is... well, your tenacity is admirable anyway.

Yes, there has been class warfare going on for decades, but despite what they tell you to think at FOX News, it's not the middle class waging "class warfare" on the aristocracy. The mere fact that you are upset that we ask the aristocracy to stop waging class warfare on the rest of us proves that this framing cannot work because people like you have been too thoroughly programmed by the extreme right wing media.

Seeing as the top tax rate is the highest it has been in almost 30 years, and the proportion of federal taxes paid for by the top 1% is the highest it has ever been before in the history of the country, the financial sector just had the largest package of new regulations added since the great depression, the healthcare system had the largest overhaul since Medicare was enacted 50 years ago, and government spending in the US (federal, state and local) is higher as a percent of GDP compared to at any other point in the history of the country, what battles do you see that the "aristocracy" has won? Which battles is it winning?

Oh, my.Let's go through these.

Seeing as the top tax rate is the highest it has been in almost 30 years,

This is correct, the maximum tax rate is now 39.5%. It was raised to help pay for the ACA. That discussion is below.

Before 1980 when we had the highest sustained growth in our history, the top tax rates where 70%.

Progressive taxes with their redistributive effects are one of the ways to correct the huge income inequality that we currently have. One of the Republicans' tax cut plans is to cut the top rate to 35%, the corporate tax rate from 35 to 25% (while maintaining all of the tax loopholes that cut the effective tax rates that corporations pay to 12% currently with the 35% nominal rate,) and to eliminate all of the taxes on corporate dividends and capital gains.

What do you believe that this would do the income inequality? The estimate that I have seen is that it will save those who earn in the middle 20% of earners ~$66 a year and the top 0.01% an average of more than $400,000 a year.

and the proportion of federal taxes paid for by the top 1% is the highest it has ever been before in the history of the country,

Think about that. We cut the top rate by roughly half and the top 1% pay more in taxes than they ever did. Why is that? Can you think of a reason why this is the case? Hint: Think about the subject of this thread, increasing income inequality.

the financial sector just had the largest package of new regulations added since the great depression,

Could this have any relationship to the fact that that same financial sector caused, through its own ineptitude, the largest financial crisis since the Great Depression?

The fact that regulations are written by every administration in droves is a sign not that the government wants to proactively handcuff businesses. That they sit around dreaming up needless, unwarranted regulations. In spite of what candidates say when they are running for office, an ever increasingly complex economy requires ever increasing number of regulations.

The best thing about capitalism is that it rewards innovation and risk taking that benefits society. The worse thing about capitalism is that it rewards innovation and risk taking even more for actions that harm society. This is why we have to have laws and regulations to control and limit capitalism. It is is exactly the same reasons that we have to have laws and regulations that limit personal behavior. Why we have policemen, courts and jails to handle criminals.

the healthcare system had the largest overhaul since Medicare was enacted 50 years ago,

Because the health care system was costing us 17% of GDP and the costs were going up two to three times the general rate of inflation every year. Primarily because of the needless insertion of the for profit motive into medical care. This in no small part due to the obscene amount of excess financial capital, more than four times what is invested in the real economy every year. This excess financial capital also tries to get into other areas that aren't appropriate for profit making businesses, education, fighting wars, prisons, operating roads, etc.

The high cost of medical care was made worse because of the large number of people who weren't even covered by health care insurance. This resulted in a high level of bankruptcies and debt. The high cost of medical care, more than twice the average of our competitors left us at a disadvantage in trade.


and government spending in the US (federal, state and local) is higher as a percent of GDP compared to at any other point in the history of the country,

Not true. Except for the aftermath of the Bush deregulation derangement caused financial crisis government spending is about the same as it always has been. This is one of the "I wish that it was true" of the right wing. Like "Obama is spending more than any president in history" or that he is a muslim.

what battles do you see that the "aristocracy" has won? Which battles is it winning?

Well, for one thing it has convinced you of the falsehoods that you parroted above. And that the rich need more money to have the incentive to work while everyone else should be paid less to provide them that same incentive. (You must have forgotten this one. No need to thank me.) And what, the rich have convinced 47% of the electorate that they should be economically disadvantaging themselves in order to increase the incomes of the already wealthy in order to have less growth in the economy.

 

[ronburgundy]

Strawman prediction. It only predicts a low-wage-labor and profit association among companies, when comparing within industries, not across industries. Massive profits can be made by labor exploitation, and Wallmart and McDonalds are examples of it. They make more than competitiors in their industries largely by exploiting more labor. In general the large companies that employ the most min wage workers are highly profitable. It is a strawman to claim the theory predicts cross industry comparisons to always favor companies with more employees. The theory does not deny the economic power of capital to create and control markets toward the end of greater profits. That is perfectly compatible and downright supportive of leftist economics. Low wage labor exploitation and market control via capital are not mutually exclusive and often used in concert.

Where are you getting that Wal-Mart is making more than their competitors?

Their net profit margins for the year ending 1/31/14 were 3.4%

Compare this to the consumer discretionary retail margin of 4% and the consumer staples retail margin of 2.9%.

Margins are not a measure of actual profit made, which for Wallmart was about $17 Billion in profits in 2013. How many of their competitors made 17 Billion in profits last year? Low margins doesn't mean you are not making massive profits off of low wage labor.
There are 2 general ways to profit from cheap labor. 1) Price the product way above the cost of the cheap labor, but that means high price and low volume of sales. 2) Pay your labor shit, below the consumer value of what they produce, so you can have below value prices and sell large volumes at modest margins, resulting in massive net profit.

Wallmart and most of the min wage employers use #2, and make massive profits doing it. Paying low wages is the foundation of their profits, because it (and not product quality) leads to low prices that generate high volume.

A side benefit to #2 is that the low prices and high volume allowed by cheap labor drive competitors out of business or force them to adopt your model and pay their workers shit, in order to lower prices. Either way, the workers wind up with fewer and fewer options and thus allow for even lower wages continued low wages. And consumers wind up with fewer options, which increases volume, in a cycle that produces more and more people at lowest wages while a few at the top make more and more profit.

 

[Axulus]

Where are you getting that Wal-Mart is making more than their competitors?

Their net profit margins for the year ending 1/31/14 were 3.4%

Compare this to the consumer discretionary retail margin of 4% and the consumer staples retail margin of 2.9%.

Margins are not a measure of actual profit made, which for Wallmart was about $17 Billion in profits in 2013. How many of their competitors made 17 Billion in profits last year? Low margins doesn't mean you are not making massive profits off of low wage labor.
There are 2 general ways to profit from cheap labor. 1) Price the product way above the cost of the cheap labor, but that means high price and low volume of sales. 2) Pay your labor shit, below the consumer value of what they produce, so you can have below value prices and sell large volumes at modest margins, resulting in massive net profit.

Wallmart and most of the min wage employers use #2, and make massive profits doing it. Paying low wages is the foundation of their profits, because it (and not product quality) leads to low prices that generate high volume.

A side benefit to #2 is that the low prices and high volume allowed by cheap labor drive competitors out of business or force them to adopt your model and pay their workers shit, in order to lower prices. Either way, the workers wind up with fewer and fewer options and thus allow for even lower wages continued low wages. And consumers wind up with fewer options, which increases volume, in a cycle that produces more and more people at lowest wages while a few at the top make more and more profit.

You have to control for sales volume which is why net profit margins should be used. You can't just use a dollars to dollars comparison as your basis. Obviously you'll make far more dollars in profit if you have more locations, more square footage, more sales per square footage, etc. None of which has anything whatsoever to do with wages.

The rest of your post is just babbling your far-left talking points without proving any justified basis to declare Wal-Marts profits as "massive" (when one controls for relevant variables I describe above), nor did you even attempt to justify the notion that lower waged companies within an industry have higher profitability. You just assert it without any empirical support whatsoever.

 

[SimpleDon]

Maybe Marx liked his Apple products and realize your claim was full of bunk seeing a premium is added to the price that has absolutely nothing to do with the cost of the product production.

Note what I said about monopolies. Apple has a monopoly on iProducts. If you don't like the price, go Android.

And you're not going to accomplish your objective in most markets. When you shift money away from profits the field looks less inviting--more players leave, fewer enter. Eventually profits come back to the normal level. (And the reverse also happens--when a field has too much profit you get new players driving down the price. You can only sustain excess profit if you have a monopoly.)

Or they just raise the price of the service / product in order to adjust to the increase in Labor costs. You keep talking as if this isn't an option. If all low wage corps have to do this, the increase will be across the board.

And when you raise the price of the product you're back where you started, just with inflation added to the mix. If you raise the minimum wage from $8 to $10 and the price of widgets goes up from $8 to $10 in response to the increased labor cost you might feel you have done good but in reality you have done evil.

Once again, we want to increase wages in order to decrease profits. This is what will happen. I don't know how you believe that prices are set but no matter how you believe that prices are set this will be the only outcome of a modest increase in wages.

If you believe in the Econ 101, Austrian/Libertarian fantasy that supply and demand set prices, obviously there will be no change in prices because of modest increases in the wage bill. Profits will decrease, that is all. An increase in the wage bill won't change supply and it won't change demand.

The reasons that this is a fantasy are many. But the major one is that if supply and demand did force prices down to the marginal product, the cost of producing the last possible product that a producer can make, in the modern industrial production facility there would be no profits made.

If you live in the real world and have any experience in business you understand that most prices are based on the average costs of production plus a markup to cover fixed costs and to provide a profit. That this is the price that sells out the existing production capacity of the plant to spread the overhead costs out to as many products as possible. This maximize profits which is what every businessman wants to do. If labor costs go up it is not possible for the producer to raise his price because he already has it as high as it can go and utilize all of the production capacity.

In neither the fantasy economics is nor the real economics would it pay to lay off workers because of a wage increase. Because in both cases each worker was hired for the extra production that they add. If the employer were to fire an employee then not only would the employer lose the amount of the wage increase for the workers who remain from his profit, he would lose the production that the laid off workers provided along with all of the profits and overhead coverage from the lost production. The employer would in all cases make the most profit by producing the same amount of products and selling them at the same price that he has the demand for that fills his production schedule with work.

Once again, as I tirelessly always add, if you believe that a wage increase causes either a price increase or it results in unemployment, you have explain to me why all wage increases don't cause the same problems. Why doesn't the CEO's or your wage increase result in price increases or in lay offs?

There can be wage inflation. But this only happens across the whole economy when we are at true full employment. When everyone who wants a job has a job. And there is still more demand for products. The producers start to increase wages to convince workers that have jobs elsewhere to change jobs. This is can cause inflation or it can be caused by inflation, in which case you have spiraling inflation, inflation that causes more inflation. If we have these conditions there is too much money in the economy and we have to soak up some of it by increasing taxes that soaks up the excess money or the cruder method of increasing interest rates to try to prevent the money creation that goes with too many loans creating too much money.

 

[Loren Pechtel]

Sure, but it's ridiculous to claim, as Loren did, that a $1 rise in the MW will translate into a $1 rise in unit prices.

Once again the infinite pool of profits shows up.

There are only two places the money could come from--profits or raising prices. You always feel it can come from profits with no attempt to analyze the situation, thus you must consider the profits to be infinite.

In the real world the chains of cause and effect have more than one step.

 

[Loren Pechtel]

It's going to depend on the industry and company. A hyper-competitive industry like restaurants or retail will tend to pass the majority of their cost increases to customers, with a large number of those that are unable to being at high risk of closing up all together.

The vast majority of minimum workers work for large corporations making record profits with zero danger of closing their doors. Their sales volumes are so high per employee hour that even if 100% of a $1 increase in MW were passed onto consumer prices, it would mean about 1 cent increase in price per product.

I just saw these numbers yesterday, but have to find the source again.

A citation is definitely needed here. An awful lot of minimum wage workers are in fields like fast food--which has a large number of franchises that own one store each.

 

[Loren Pechtel]

Strawman prediction. It only predicts a low-wage-labor and profit association among companies, when comparing within industries, not across industries. Massive profits can be made by labor exploitation, and Wallmart and McDonalds are examples of it. They make more than competitiors in their industries largely by exploiting more labor. In general the large companies that employ the most min wage workers are highly profitable. It is a strawman to claim the theory predicts cross industry comparisons to always favor companies with more employees. The theory does not deny the economic power of capital to create and control markets toward the end of greater profits. That is perfectly compatible and downright supportive of leftist economics. Low wage labor exploitation and market control via capital are not mutually exclusive and often used in concert.

Walmart is only a high profit enterprise if you look at raw $ rather than %--and you should look at %. McDonalds doesn't look so hot, either, and is a red herring anyway because of franchises.

 

[Jimmy Higgins]

Maybe Marx liked his Apple products and realize your claim was full of bunk seeing a premium is added to the price that has absolutely nothing to do with the cost of the product production.

This is just silly. The cost of phone and tablet production definitely plays a key role in determining Apple's pricing.

What part of the word "premium" did you not understand in my post?

If production costs were cheaper, competitors could sell their products for a lower price.

And they do.

This would drive Apple's prices downward to maintain market share.

It doesn't because despite the higher cost people pay the premium for the Apple product because of brand loyalty. Do you really need this explained?

Furthermore, even if only Apple's production were cheaper, they could sell more units by offering a lower price and increase profits.

Except it would cheapen the brand.

Their current production costs play a key factor in determining the profit maximizing price.

:rollseyes: Not shit, really? Maybe you could point out where in my post I said otherwise. Why is every right-wing argument a strawman these days?

 

[Loren Pechtel]

Once again, we want to increase wages in order to decrease profits. This is what will happen. I don't know how you believe that prices are set but no matter how you believe that prices are set this will be the only outcome of a modest increase in wages.

I take it you like depressions? Because that's what you're actually trying to get.

Profit margins are only high because the economy got trashed. Your changes will have a lasting effect--when profits go back to normal the pressure will still be there--and will devastate the business community. I'll take the current situation over that any day!

The reasons that this is a fantasy are many. But the major one is that if supply and demand did force prices down to the marginal product, the cost of producing the last possible product that a producer can make, in the modern industrial production facility there would be no profits made.

No, because they'll stop at the point where the profit margin drops too low.

If you live in the real world and have any experience in business you understand that most prices are based on the average costs of production plus a markup to cover fixed costs and to provide a profit. That this is the price that sells out the existing production capacity of the plant to spread the overhead costs out to as many products as possible. This maximize profits which is what every businessman wants to do. If labor costs go up it is not possible for the producer to raise his price because he already has it as high as it can go and utilize all of the production capacity.

Sorry, but the average cost of production is dependent on how much you produce. You don't get the simple relationship you're talking about. I've been close enough to management to see that producing as much as possible is not a good idea. There's a sweet spot where going either higher or lower will hurt you. (Pushing too hard means more errors, more downtime and a bigger disruption for any given problem.)

In neither the fantasy economics is nor the real economics would it pay to lay off workers because of a wage increase.

In your simplistic world where a company has only one product that's true. In the real world where every company produces multiple products it's not so simple. I don't care if you make only 3" red widgets, you still have multiple products. Consider off the top of my head: Order time to delivery time. Customer service. Quality control. These are all products you deliver even though they don't appear on the invoice.

As the cost of providing a product rises you can see cutbacks. Consider how hard it is to get customer service when dealing with an online business that doesn't do much in the way of customer service. (For example, many years back I got a bogus charge on my credit card statement from iTunes. As the law requires there was a phone number--but it was answered by a recording saying to contact them through their website. That was impossible as I didn't even have an account. Presto--the rep immediately ruled in my favor without any further investigation.)

Once again, as I tirelessly always add, if you believe that a wage increase causes either a price increase or it results in unemployment, you have explain to me why all wage increases don't cause the same problems. Why doesn't the CEO's or your wage increase result in price increases or in lay offs?

You still don't seem to be able to understand the difference between wage increases that are forced on a company vs wage increases they decide upon. (Note, though, that even ones they decide on may do them harm--a marginal company may be driven under by the need to offer more to keep workers.)

There can be wage inflation. But this only happens across the whole economy when we are at true full employment. When everyone who wants a job has a job. And there is still more demand for products. The producers start to increase wages to convince workers that have jobs elsewhere to change jobs. This is can cause inflation or it can be caused by inflation, in which case you have spiraling inflation, inflation that causes more inflation. If we have these conditions there is too much money in the economy and we have to soak up some of it by increasing taxes that soaks up the excess money or the cruder method of increasing interest rates to try to prevent the money creation that goes with too many loans creating too much money.

It doesn't have to be across the whole economy. Any sector with full employment will experience the pressure even if the rest of the economy is trashed.

 

[Canard DuJour]

That is entirely compatible with most LTOVs including Marx's. None put cart before horse in the way you imagine.

The big difference is that Marx ignores the demand side of things--if the price people are willing to pay for it is less than the cost to produce the price doesn't come down, the product simply isn't on the market, or is only on the market as a specialty item for those few willing to pay the cost.

Nope, nothing to do with Marx - as a fair few here will have read enough to know.

Of course, it wouldn't be totally unfair to characterize Marxism as the opposite of supply side economics, as being only concerned with the demand side. Demand side economics, if you will. The entire point of Marxism was to get rid of capital, except for the commonly held capital.

It would be somewhat unfair. Marx puts both supply and demand side arguments in the context of capitalism, which he reckons inevitably cycles between crises of either kind (think Britain 1979 - 2008). He fingers the same gremlin in both : the antagonistic labour-capital relation - though he's especially scathing of the capitalist "bourgeois" class which he sees as advantaging from it and preserving it via the state. The entire point (insofar as there is one) is to get rid of the labour-capital antagonism which hamstrings a potentially post-scarcity economy.

Now one might disagree entirely with Marx, but still bugger all to do with the uninformed musing of certain people here.

Of course, the idea of supply and demand setting prices wasn't an idea that any of the classical economists, Smith, Ricardo, Malthus, Mill, Marx, etc. held. They all pretty much held to the labor theory of value.

I have an interesting paper on Marx and the labor theory of value.

It starts out with,

Once upon a time there were orthodox Marxists who believed that Marx is infallible and therefore the labour theory of value cannot be wrong. After 1982 orthodox Marxists still exist, but they have changed their minds. They think that Marx is infallible and therefore does not have a labour theory of value.

Love it!

No, I didn't go through his math. His point is that Marx used the wrong LTOV. Perhaps you can explain it to me sometime. I mainly referred to it so that I could quote the joke above.

For me, it rapidly became unreadable after that I'm afraid.

 

[Axulus]

Oh, my.Let's go through these.

Seeing as the top tax rate is the highest it has been in almost 30 years,

This is correct, the maximum tax rate is now 39.5%. It was raised to help pay for the ACA. That discussion is below.

Before 1980 when we had the highest sustained growth in our history, the top tax rates where 70%.

Progressive taxes with their redistributive effects are one of the ways to correct the huge income inequality that we currently have. One of the Republicans' tax cut plans is to cut the top rate to 35%, the corporate tax rate from 35 to 25% (while maintaining all of the tax loopholes that cut the effective tax rates that corporations pay to 12% currently with the 35% nominal rate,) and to eliminate all of the taxes on corporate dividends and capital gains.

What do you believe that this would do the income inequality? The estimate that I have seen is that it will save those who earn in the middle 20% of earners ~$66 a year and the top 0.01% an average of more than $400,000 a year.

and the proportion of federal taxes paid for by the top 1% is the highest it has ever been before in the history of the country,

Think about that. We cut the top rate by roughly half and the top 1% pay more in taxes than they ever did. Why is that? Can you think of a reason why this is the case? Hint: Think about the subject of this thread, increasing income inequality.

the financial sector just had the largest package of new regulations added since the great depression,

Could this have any relationship to the fact that that same financial sector caused, through its own ineptitude, the largest financial crisis since the Great Depression?

The fact that regulations are written by every administration in droves is a sign not that the government wants to proactively handcuff businesses. That they sit around dreaming up needless, unwarranted regulations. In spite of what candidates say when they are running for office, an ever increasingly complex economy requires ever increasing number of regulations.

The best thing about capitalism is that it rewards innovation and risk taking that benefits society. The worse thing about capitalism is that it rewards innovation and risk taking even more for actions that harm society. This is why we have to have laws and regulations to control and limit capitalism. It is is exactly the same reasons that we have to have laws and regulations that limit personal behavior. Why we have policemen, courts and jails to handle criminals.

the healthcare system had the largest overhaul since Medicare was enacted 50 years ago,

Because the health care system was costing us 17% of GDP and the costs were going up two to three times the general rate of inflation every year. Primarily because of the needless insertion of the for profit motive into medical care. This in no small part due to the obscene amount of excess financial capital, more than four times what is invested in the real economy every year. This excess financial capital also tries to get into other areas that aren't appropriate for profit making businesses, education, fighting wars, prisons, operating roads, etc.

The high cost of medical care was made worse because of the large number of people who weren't even covered by health care insurance. This resulted in a high level of bankruptcies and debt. The high cost of medical care, more than twice the average of our competitors left us at a disadvantage in trade.


and government spending in the US (federal, state and local) is higher as a percent of GDP compared to at any other point in the history of the country,

Not true. Except for the aftermath of the Bush deregulation derangement caused financial crisis government spending is about the same as it always has been. This is one of the "I wish that it was true" of the right wing. Like "Obama is spending more than any president in history" or that he is a muslim.

Had to address this one.

It is true, see the following graph

what battles do you see that the "aristocracy" has won? Which battles is it winning?

Well, for one thing it has convinced you of the falsehoods that you parroted above. And that the rich need more money to have the incentive to work while everyone else should be paid less to provide them that same incentive. (You must have forgotten this one. No need to thank me.) And what, the rich have convinced 47% of the electorate that they should be economically disadvantaging themselves in order to increase the incomes of the already wealthy in order to have less growth in the economy.

Which falsehoods - you seemed to agree with every one except the last one (but provided your perspective on why you think they are true). Can you elaborate?

How are 47% economically disadvantaging themselves? What are the magical economic opportunities you believe the government can provide them?