The System and Mentality that Are Hurting this Country

I was just thinking about that today. Had the USSR still be the power it was today, we'd not be having these problems. I think the quote is absolute power leads to corruption absolutly. Since we have no reason to get better, we're going to fail.

End Pessimistic view...

 

Is sanctitud a word??

 

Is it a coincidence that marginal tax rates are enormous in Europe and that worker productivity is horrendous compared to the US?

Actually i believe productivity rates in much of Western Europe on an hourly basis are just about equal to the US. We just work so many more hours.

I know you are espousing conservative doctrine of low taxes, but you should try to make anargumnt for this. Some of us just don't accept it on faith.

 

Khan, I wish we had an economist to talk about this in an intelligent fashion.

The realtionship between tax rates and productivity is I'm sure a very complex one. It is definitely not the simplistic, near faith based one of bumper sticker eoncomics.

If my taxes are too high, say 90% and I have enough to get by I might decide not to work. This does not mean that a worker who is in the 25% bracket and has needs or wants would decide not to work at all or less because he might get into the 31% bracket.

It is not a fact to assume he wouldn't. Sorry. Human behavior is complex.

Ptroductivity also has to do with the education level and health level of the entire work force. Lower taxes can impact negatively on this aspect of productivity.

Sorry, Khan, you will have to do some thinking or explanation.
I just won't accept your declaration on this.

BTW if you are such an economic honcho, and can make an intelligent case for increasingly lower taxes, why didn't you try to bite into the Krugman thread?

 

I'm sorry, but in my experience, virtually any statement preceded by that line will invariably contradict itself...

 

Yep. Kinda like saying 'nearly every authority who has put pen to paper would agree...'

 

No, it is not ok. You cannot possibly compare your knowledge of economics to that of a history PhD student from Saskatewan State, practically the Harvard of the Great White North. After all, he does claim to live with eleven nude models...

 

In that case, I would challenge you to take up glynch's suggestion to bite into the Krugman thread. It is a long read, but I would really love to hear your take on that one.

 

Khan, there is a reason that hearsay is considered unrelibable.

Provide some sort of a link if you are trying to be persuasive.

I agree, and Krugman did in his article, that we got a little temporary stimulus our of Bush's tax break for the rich. Not as much as could have been gotten by giving it to the poor or middle class or not as long term as we could have by government spending on education infrastructure, highways, power grids.

Returning to productivity. Doesn't infrastucture help productivity?

If education, health of the work force and infrastructure doesn't help make a workforce productive what does? Don't just give me the conservative answer of low taxes for the wealthy, no minimum wage, overtime laws, safety regulations, environmental regulations. They can all lead to an uneducated, unhealthy workforce working their asses off ,but that isn't all there is to productivity.

 

We bankrupted the USSR in the arms race. If anything, their demise is a lesson in what happens if a country spends too much on defense and not enough on its people.

Other factors unquestionably contributed (the economic model was indeed flawed), but the role of the Cold War cannot be overstated.

 

a quote:

At its most basic level, labor productivity is simply the ratio of output to labor input. That is, if the quantity of labor remains constant while output increases, there is said to be an increase in productivity. In recent years, there have been developments in productivity theory that have advanced the concept of ‘multi-factor’ productivity (the more modern terminology for ‘total factor’ productivity) which recognizes that capital and other inputs, not just quantity of labor, are also determining factors of output.

But while the concept of productivity is simple to understand in theory, its simplicity also reveals its shortcomings. Productivity is a term that is, by its very nature, both theoretical and unmeasurable. No analysis can ever fully account for all the inputs and outputs of an economy—the best one can hope for is an accurate estimate.
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This gives a picture of how productivity is a multi-factor determined. To try to use it as a sdimplistic reason for pushing tax breaks for upper income folks is just propaganda.

 

I'd like to chip in my two cents, and make it a dollar since it's going to get long winded like a MacB post.

The reason for USSR's collapse is fundamental and goes beyond tax rates, arm race and lack of productivity.

Communism failed because of lack of personal motivation. To achieve economic equality communism promised, the rich and evil became the scapegoats of social inequalities. Rich people who runs a business are considered as capitalistic bloodsuckers, an image derived back from the Karl Marx's age.Under true communism private ownership of a business or property is either discouraged or even outlawed. The only places for the majority of people to get jobs are the state owned farms or factories. As a result of it, distribution channels are also run by government. In other words, free market only exists on petty levels such as barbershops. Major industries such as communication, light and heavy industries, energy and transportation etc are all state owned and run.

The government instead of market decides what and how many to produce and many things were rationed. Since private ownership is discouraged and free market is weak. It generates grand complications that communism cannot solve.

The lack of the invisible hand of free market can't be understated. Under the pressure of free competition a private owned business would want to save every penny to cut down the cost. Under communism, since the management is just doing what it's told to do and doesn't face punishment of a free market, the incentive for cost cutting, human resources planning and technological advance is weak. The consequent low efficiency results in lots of waste.


The lack of private ownership drives a dagger into the heart of entrepreneurship, as a brilliant state owned factory manager won't get rewarded millions even he's made a Warren Buffet decision. On the other hand, he'll be punished if he made a mistake. This doesn't just pertain to management level decisions but also other lower sectors. People would be conservative, putting avoiding mistakes above taking riskes and advance.

Plus, the overemphasis on superficial social equality dampens spirit of hard working. A CEO of a big factory with thousands of workers doesn't get a lot more pay than an average worker. What's the incentive to work hard when employment and retirement pension are guarenteed by the great socialistic government! If one does twice the work than another, they get the same pay. High to middle management positions are limited, average workers aren't allowed to open their business to work for themselves. Average folks don't see great future but stagnant status quo, they tend to just go through motions instead of working hard. In short, communism makes people lazy.

Yet human nature is wanting more and more. Although on the surface the pay discrepancy is narrow, people with power would invent ways to benefit themselves. They make rules that favor themselves in terms of general living conditions such as education, housing and ration allocation. People without power would want to climb up the ladder to get more power and better benefits. With no fear of bankruptcy under free competition for lack of able men, management promote the guys that they like instead of those who are able but refuse to obey and kiss a$$. The best way, therefore, to beat the system is kissing a$$ instead of proving one's worth through innovation and hard working. Of course, some people are good at both and some people gets promoted by the virtue of their abilities, but overall, one has to be politically swift to thrive in the system.

Now that some of the high positions are filled with economically inept but politically sneaky officials, the next thing they would do is to form up gangs and cover for each others' mistakes while slanting the position of other gangs. The other able men have to copy the same tactic to preserve their positions. The invisible, constantly changing interpersonal connections soon develop into a massive web within the country that's impossible to thoroughly identify and break. Everything became political, even economical decisions.

Thus is the evil of communism. It's just a matter of time for communism to fail due to its grave natural flaws.