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Romney

Discussion in 'Serious' started by thehippoz, 13 May 2012.

  1. eddie_dane

    eddie_dane Used to mod pc's now I mod houses

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    Normally I wouldn't but I always value your thoughts Baboon, so I'll give it a shot since you asked.

    First let me say that sociologists make the worst economists :D

    It was interesting and a bit haunting because I recently tried reading the WHO report he refers to in the presentation and, quite honestly, I couldn't get past the preface defining the criteria by which countries would be ranked. It was a lot of self-serving and very non-empirical notions with their own vision of the world built right in so the data was not going to do me a lot of good. It was informative in the fact that it was a peek into the mindset of the UN and organizations like the WHO and what drives their decision making. Normally, I index (bookmark) everything I read for later reference for discussions like this but, honestly, I had no use for it after reading the first 20 pages -that's how bad it was because I index everything, including stuff I don't agree with.

    The other ironic part is that I'm almost done reading Alexis de Tocqueville's book Democracy in America. He was a french sociologist who traveled around the US in its formative stages (from around 1810-1837) to observe this new democracy and contrast it with European monarchies and France's new democracy. This has two relevant points. He defines "equality" in the traditional sense in that the society consists of people who have equal opportunity to advance and equal treatment under the law. This term of "equality" has recently been redefined to "equality of outcomes". This video's use of that term is obviously based in the latter definition. The other important point from this book that I am dealing with is that he posits that inequality is the root of all discontent in a society and even the basis of most wars. As he fleshes his conclusions out, I'm starting to come around on his form of thinking. In my opinion, the differences in the lack of equal opportunity in the traditional sense is real and the lack of equal results is mainly contrived and manufactured.

    The other thing that struck me is the heavy use of income disparities. This is something that is regularly used to make points about societal woes. For laypeople, it's very effective. But there are some striking things to know about income discrepancies. Firstly, these charts that are regularly used are categorical snapshots of any given population. The problem is that flesh and blood people are not categorical people. For example, of the people in the US that are in the bottom 20% wage earners don't stay in that quintile for long. Studies using census information shows that as little as 8 years later, only around 10% of those people remain in the bottom 20%. More remarkable, people that start in the bottom quintile end up in the top quintile within 20 or so years.

    Even though this seems to contradict what is shown in chart after chart used by sociologists, when you think about it, it makes sense. When people start out in the workforce they make a lot less than they do after they have built human capital and experience.

    Another key distinction to make is that income is not wealth. All charts referred to deal with income statistics. When a newly graduated doctor starts an office, they must buy a lot of equipment and hire staff. On average, they don't pull in an actual income the first 5 years of working as a doctor. Over time, as that equipment is paid off and they have developed a customer-base, it is easy for them to leap from the bottom quintile to the top inside of one year. Likewise, people who's income deals primarily in trading can be in the top quintile for years and drop to the bottom inside of one year. This doesn't mean that either is homeless or in need of welfare, they possess wealth but can make very little income. I mean look at Bill Gates, no one would question his wealth but I bet you anything he's making a lot less in "income" than he did the last year he was working full time at Microsoft.

    You may say that these are cherry-picked and isolated examples but there are also whole demographic examples of this regarding people in the age group of around 60-80. Leading up to their retirement, they are earning the highest amount of yearly income of their entire lifetime. Then they retire, they pay off their mortgages and, while they may have hundreds of thousands of dollars in a retirement account, they go from making $100,000 a year to only around $25,000 (basically they keep enough cash to pay their limited expenses, go on trips and squirrel the rest). They go from the middle-top to the bottom of INCOME earners.

    You may be saying so what. My point is that these charts that don't take in account of specifics of the demographics only one superficial sliver of information can tell a completely different story. And to use that as the foundation of policies to craft things like "equitable" tax policy can be downright dangerous.

    If you are genuinely interested in how this all comes about, I recommend Thomas Sowell's book Economic Facts and Fallacies. It is an easy, plain-language book to read that covers a lot of this.

    Regarding the quote you pulled abou the American dream... I mentioned the redefining of the word equality earlier, this too has been redefined to suit certain people's need for rhetoric. The American dream is, in a word, "freedom". Yes some have taken it to themselves to mean "doing better than my parents did" or "having a house, a car and kids". Those are all products of the dream, not the dream itself. Even the meaning of the term "freedom" has been twisted in recent history from the traditional definition "Power is the ability to limit other people's options, freedom is the exemption from that power" to "freedom from want or need". The latter having virtually no purpose in practical conversation because in some terms it means you need to be, basically, protected from yourself, and in others it's some enigmatic boogyman that can be changed out whenever the argument falls apart.

    I don't mean to diminish the science of sociology, I think it is an important study to analyze and chronicle the development and societal habits of varying cultures. But because of their particular vision of the world and the perspective on their study, they would be the last group of people I would choose to craft domestic policy. To borrow an old cliche, "Experts should be on tap, not on top".

    *Another interesting point to make regarding his conclusions and the last slide... During the whole presentation the US was the worst in everything. His main suggestion was a progressive tax system to "equalize" society. Another one of my favorite economists, Veronique de Rugy recent wrote about the actual progressive nature of the US's tax system compared to the EU. This actually caused quite a stir in economists circles causing her to be attacked and even got the notable Paul Krugman coming to the defense of her attacker saying that he wasn't "mean enough" when he attacked her for her conclusions. People get really touchy when data interrupts their vision of the world.

    http://reason.com/archives/2012/04/16/taxation-american-style
     
    Last edited: 17 May 2012
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  2. lp1988

    lp1988 Minimodder

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    I do find a few problems with this example. The money is going to hit the bank regardless of how you put it into society, if you give it to the poor people they will use it to pay back their mortgages or even if they buy anything this will very likely result in the bank being included at some point. Secondly while the leverage effect is indeed a reality then why not simply give the money to the bank, this was actually what was done with the bailout. Thirdly again you could skip a link and make a fund to give out small loans to new entrepreneurs, a method that has been used before to great effect. And finally the ones these tax cuts really would matter for already has cash ready for investments, both companies and private have a lot of savings as it is and if they really was that intent on investing then why don't they do so with the money they already have?

    The theory still have to account for the problem with to whom are these new customers going to sell their products, wile it does get a little going with making the store there is still no costumers. On top of this as you say many will go down on the way resulting in more foreclosures and the banks asking for more money. Another problem is when you keep cutting taxes at some point there are going to be no more tax to cut.. The logical result of that theory is simply that all taxes should be paid by the middle and low income groups, just like they did in the dark ages :p

    And a few other flaws That people like David Johnston and Robert Reich have been cutting into.


    I believe I have seen his work before as the quote is actually one I have used before myself :D

    The discussion between me and Eddie is solely based on if the economy as a whole grows using supply side theory but not how it grows or what effects these may have on the equality of the economy as this is a different talk where ethics and morals are bound to be included, which makes everything that more messy.

    There are many reasons why equality is to be sought out as it makes a world of difference. lower crime rate, few or no homeless people, high social mobility, A social security (loosing your job is no big deal) and a lot of other good things. It is really no more than using the golden rule, would you not like others to help you if you were in trouble, if yes well then you have an obligation to help others when they are in trouble simple as that.
     
  3. eddie_dane

    eddie_dane Used to mod pc's now I mod houses

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    I guess all Greece has to do then is borrow more money and disseminate it to the middle-class - problem solved.
     
  4. eddie_dane

    eddie_dane Used to mod pc's now I mod houses

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    Wait, now they are going to pay their mortgages with the $1000? I thought they were all going to go out and get haircuts. How does paying their mortgage for a month stimulate the economy? If it all goes to the bank anyway, why not cut out the expensive middle man and just let people do it?
     
    Last edited: 16 May 2012
  5. Da_Rude_Baboon

    Da_Rude_Baboon What the?

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    Thanks Eddy that was actually the quality of response I was hoping to receive. :rock: His message resonated with me but then I have a Eurocentric view of the world and live in a country with a socialist leaning so it is good to have some balance and different point of view.

    As an interesting aside I recently finished Neil Olivers excellent History of Scotland (which I would highly recommend to anyone regardless of any Scottish connections) and the section covering the Scottish enlightenment, diaspora and American war for independence was very memorable. Benjamin Franklin visited Scotland to meet the members of the enlightenment but was equally moved by the plight of the average Scott. It is interesting to note at the time that the American colonists had far more political representation and paid 50 times less tax than the Scotts!

    You have timed that well as I have just finished my current book and have now purchased this for the kindle. I have a growing list of your reading recommendations. :D



    Thanks I will have a read through that as well. I had no interest at all in economics but Freakenomics and it's sequel opened my eyes to what it is really about and now I see it's effects in everything. Reading the History of Scotland also showed how todays problems and economics are no different to those hundreds of years ago.
     
  6. eddie_dane

    eddie_dane Used to mod pc's now I mod houses

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    Your book recommendation actually dovetails with recent interests as well. I must finish Paul Johnson's A History of the American People first but Sowell covers the Scottish enlightenment in several of his books and it is something I've been interested in diving deeper into. After all, it produced Adam Smith :thumb:

    I'm putting it on my list. Thanks.

    He was on a recent episode of Uncommon Knowledge recently and he mentions it several times. (it's long but worth while).
     
  7. Sea Shadow

    Sea Shadow aka "Panda"

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    I just thought I would take a chance to poke my head in and say hello and compliment all parties on keeping things civil. Of course this is the serious discussion forum and it is to be expected, but I do appreciate the thorough and well thought out responses.

    I acknowledge that almost all sides have their merits and all ideals have pros and cons. I can certainly see how different systems work in different parts of the world. Personally I am of the opinion that there is not a "one size fits all" style of economy. I do not have a great knowledge of economics or sociology, but simply wanted to add some anecdotal experiences from my journeys around the United States.

    In a nation where you have plenty of people who are content to sit at the bottom, it tends to drag others down with them. Not to say anything of humanity as a whole, but in my experiences traveling about the United States I find that there is more than the occasional individual who is content to catch a free ride.

    I have not traveled abroad and the extent of my international travels is limited to a few brief vacations to Canada, as such I cannot say if this behavior is common around the world. Though it does bring to mind the thought of culture, and how different societies have different views of work ethic and putting forth effort. I imagine that while there are what I would term "freeloaders" in many parts of the world, the issue may be more or less prevalent depending on the culture of the society in that location. In rural communities and in cities of industry it seemed to me as though it was more common for people to have strong work ethic. Almost everyone knew what it meant to work and even the thought of just idling about doing nothing was disgusting to many.

    On the flip side of the coin, I have found that people raised with little history of work or reason to work would often continue that cycle. In some of the more economically depressed regions of the nation I have found that people became complacent in their situation and did little to try to improve their own situation. They still put forth effort, but in an entirely different manner. Frequently, they would be trying to game the welfare system for as much "free" stuff as they could. This is despite how much effort it took for them to actually obtain welfare aid; which to me seemed more difficult than going and working what others would consider a regular job. Though occasionally I would meet an individual who detested their financial situation and they did everything they could to rise out of that situation and make a new life for themself.

    Interestingly enough I also saw the same situation in affluent areas. Granted there was a dichotomy in these areas. Parents who raised their children in a manner that taught them the value and importance of work often saw their children grow to become motivated and successful in life. At the same time there were other families where their children were given everything on a silver platter and they never had to work for a thing in their life. These families often saw the wealth disappear after the first generation as the children would spend the money on frivolous pursuits. Their children would sometimes be motivated to work after loosing that wealth, and other times they would be content to sit at the bottom and not have to work at all, regardless of how much or how little they had to get by with.

    This also brings to mind the notion of what some may call "old money" where a family amasses a large amount of wealth and this wealth stays within a family for many generations. I have come across only a few of such families, and I must admit I am honestly impressed. It is rare to find a family that can be so financially frugal over the course of many generations. Granted this does little to help an economy.

    On the opposite end of the spectrum from the notion of old money, was the self made entrepreneur or person of business. These individuals came from diverse backgrounds and all financial situations. They would take the initiative to go out on their own and make their own future. They were not stopped by what they were told they could or could not achieve. They were often found in the most affluent of communities as they were willing to take the biggest risks. Their wealth was also the most volatile as I saw many rise from lower income households to the top of the financial brackets in a matter of years. I also saw some lose it all and fall back to the bottom, though most would just try again to rebuild as they had done it one or more times before.

    One particular individual who stood out to me was a young man in his mid 30's who explained to me that he had been homeless on over a dozen occasions. He told me of how he grew up in an impoverished family that had no desire to change their lifestyle. He hated that attitude so much that he did everything he could think of to try to start businesses. Some more successful than others. He would take risks and often the companies would fall apart, costing him his house, his car(s), and his other assets. He did not let this deter him and he would start again at the bottom, climbing his way up until he took too bold a risk and lost it all again. He explained how he learned from these experiences and each time he was more successful than the last. He told us that even if he lost everything again and had to start over, he was confident that he could have a house of his own and a car to drive within 10 months. At the time we met him he was living in a small apartment complex that he owned and operated, and he seemed to be doing fairly well for himself.

    I myself come from a fairly affluent background, but it is of the more volatile nature. My parents were both from lower income households and they worked hard to make it to where they are now. We have seen our share of ups and downs, but through it all my parents have always made the most of what they had. They always did everything they could to improve their situation and teach us so that we might strive to improve our lives as well. I am not ashamed to admit that my family is considered part of the upper percentiles with regards to finance. I watched my father loose his company once before and I also watched him build another one. I watched my mother do everything she could to assist and help through times thick and thin. She went from an extravagant lifestyle to patching holes in clothing just to save money while helping my father with the family company. Together they provided me with an example of how to live within my means and what it meant to work. Lessons that I am now trying to apply in my own life now that I am on my own, building my own future.

    Edit:
    Though I must say, in a society that rewards risk and sacrifice, it is hard to imagine still making those risks and sacrifices for no potential of reward. It is talk of such a notions that has me really torn on the upcoming election. I have yet to make up my mind on who will be my candidate of choice, as the issues are many and varied. It is never a cut and dry issue, and with parties becoming increasingly polarized, I find it is sadly a matter of trying to figure out who will do the least amount of damage, rather than who will do the most good for our nation.
     
    Last edited: 17 May 2012
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  8. eddie_dane

    eddie_dane Used to mod pc's now I mod houses

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    That was a really sincere and relevant take on contemporary life. Normally, I don't like anecdotal arguments but this was really good.

    You make an excellent point about risk and reward. Many vocal critics of a capitalistic society is that it unjustly rewards the successful - that it is a profit-based system, it is not. It is a profit and LOSS based society. A lot of people conveniently forget the loss part, which is the most important part of a capitalistic society, it naturally sends the message to all "this doesn't work" and it is squeezed out seamlessly but not without pain.

    Many advocate the reduction, or even the outright removal, of risk. That we have evolved passed such a crude and simplistic system. My only problem with that is that, at every single tern, when governments take the opportunity to mitigate risk, 99% it comes at the cost of the freedom to choose and limits options for everyone in the now and in the future. This "siege mentality" that I call it never has the desired results it proposed to accomplish leaving people years later what the hell were we thinking? What's worse is when enterprising critics then seize upon the failures of a hobbled system and say it doesn't work when, in many cases, it was the handicaps imposed on it, that had a great deal of responsibility for the problem.

    I believe it is a fundamental part of human nature to respond to incentives and constraints and to work toward their own self-interest (whatever that interest may be - sometimes physical, others spiritual). No evolution of social theory will change that. And any social theory that denies this basic element of human nature is bound for failure if not outright disaster.
     
    Last edited: 17 May 2012
  9. Da_Rude_Baboon

    Da_Rude_Baboon What the?

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    I had time to watch the linked interview today and it was very interesting. I agreed with some of his ideas but disagreed on many more but until I read the Facts and Fallacies book to get a better understanding of his ideas I will with hold judgement and further comment. The interview was very politically charged and one sided as they both had the same ideology and viewpoint. I'm a lot more used to the UK style of interview and it would have been good to see somebody challenge Sowells views so he had to defend them and elaborate further.

    I am also somewhat surprised that he has written about the Scottish enlightenment as the brief mention in the interview showed a distinct lack of knowledge on the subject. The protestant reformation of Scotland in 1560 led by John Knox was a particularity brutal and violent time but Knox insisted that all the people of Scotland should be taught to read so they could interpret the bible and Gods words themselves. This led to the highest literacy rate any where in the world and was a direct contributing factor for the enlightenment, along with the presence of three of the oldest universities in the English speaking world. Surviving records today show that the average man on the street was buying or borrowing books on the latest ideas on farming, religion, philosophy and science. The enlightenment was not reserved for the elite few who are famous today, it was for everyone. His assertion that the Scots where an "ignorant people" before the reformation is unfounded. His comments on the Scots having to learn English to become successful is also wide of the mark.
     
  10. eddie_dane

    eddie_dane Used to mod pc's now I mod houses

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    The show is a Hoover Institute video podcast, it is certainly politically biased. The host is a former Reagan speech-writer and Sowell is absolutely conservative. Sowell doesn't write a specific history of the Scots so much as cite them, as well as the Chinese, Germans and other cultures in how they succeed. This was just a two line mention in the spontaneous context of an interview. This is why I wanted to dive into it with more detail.

    One of his overall points is how people expect equal outcomes from different groups but there are all types of traits and conditions that contributed to the advancement of different people around the world through history from geography to who got conquered by whom. The nuts an bolts of it aren't the point only that people can be considered one thing and, given different circumstances, can be something else.
     
  11. eddie_dane

    eddie_dane Used to mod pc's now I mod houses

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    Providence has stepped in, almost like Tom knew we were having this discussion. Food for thought
     
  12. Da_Rude_Baboon

    Da_Rude_Baboon What the?

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    Thanks for link Eddy. Have you read Melons book?

    BTW I'm currently on the chapter about education in the Facts and Fallacies book which has made me laugh quite a lot. I work in a University and it's all the things we complain about on our tea breaks. :D
     
  13. eddie_dane

    eddie_dane Used to mod pc's now I mod houses

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    I have not read Mellon's book, only books about him The Forgotten Man being the most prominent one, although it's not about him specifically, it's a history of the great depression. I'm glad you like Facts and Fallacies, I appreciate his ability to convey the complex in a plain spoken manner and with the occational zinger.
     
  14. eddie_dane

    eddie_dane Used to mod pc's now I mod houses

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    Now it's your turn.

    Speaking of Eurocentric point of view. I recently came across this essay by Toomas Hendrik Ilves (President of Estonia). I found it very eye opening. Obviously he has leanings toward America but I found his perspective fascinating and I'm curious how it contrasts with your POV. In my opinion, I have a hard time finding fault with his take on the evolving global socio-economic landscape. I can't deny what he describes as Americas shift in priorities toward Asia and I also feel a sense of dread at the idea of moving away from Europe but I think he may be right.


    It's fairly long but here are some relavent bits:

    sorry for the thread revival, I tend to ruminate on thoughts and ideas weeks after their expiration date.
     
    Last edited: 7 Jun 2012
  15. Risky

    Risky Modder

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    Thanks for the link, e_d. Ther's a lot to think about in that essay. I hope it gets the readership it deserves.
     
  16. Da_Rude_Baboon

    Da_Rude_Baboon What the?

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    I have printed the essay and will have a read of it tonight and get back to you.
     
  17. DXR_13KE

    DXR_13KE BananaModder

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    Romney or Obama?
    Who and why?
     
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  18. eddie_dane

    eddie_dane Used to mod pc's now I mod houses

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    I pretty much said my peace on pg1
     
  19. DXR_13KE

    DXR_13KE BananaModder

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    It was a question for the forum in general.

    edit: Looking at your answer you just want someone to make those 3 things... you do not care who or what he is... right?
     
    Last edited: 7 Jun 2012
  20. Showerhead

    Showerhead What's a Dremel?

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    Is there much difference?
     

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