Defeating Useless Rich People

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Enki
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Defeating Useless Rich People

Post by Enki »

In two previous columns, I argued that left and right alike are confused by a failure to distinguish productive businesses that sell innovative goods and services from “rentier” interests — landlords, lenders, copyright holders and others — which use their natural or artificial monopoly power to extract excessive tolls, fees and other recurrent payments from the rest of society, including productive businesses. The fees or rents extracted by these interests constitute a kind of “private taxation” which — rather than public taxation — is the greatest threat facing America’s productive economy.
http://www.salon.com/2013/03/25/defeati ... ch_people/
Men often oppose a thing merely because they have had no agency in planning it, or because it may have been planned by those whom they dislike.
-Alexander Hamilton
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Enki
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Re: Defeating Useless Rich People

Post by Enki »

Private Sector Parasites
The term “rent” in this context refers to more than payments to your landlords. As Mike Konczal and many others have argued, profits should be distinguished from rents. “Profits” from the sale of goods or services in a free market are different from “rents” extracted from the public by monopolists in various kinds. Unlike profits, rents tend to be based on recurrent fees rather than sales to ever-changing consumers. While productive capitalists — “industrialists,” to use the old-fashioned term — need to be active and entrepreneurial in order to keep ahead of the competition, “rentiers” (the term for people whose income comes from rents, rather than profits) can enjoy a perpetual stream of income even if they are completely passive.

Rents come in as many kinds as there are rentier interests. Land or apartment or rental-house rents flow to landlords. Royalty payments for energy or mineral extraction flow to landowners. Interest payments on loans flow to bankers and other lenders. Royalty payments on patents and copyrights flow to inventors. Professions and guilds and unions can also extract rents from the rest of society, by creating artificial labor cartels to raise wages or professional fees. Tolls are rents paid to the owners of necessary transportation and communications infrastructure. Last but not least, taxes are rents paid to territorial governments for essential public services, including military and police protection.

All of these goods or services are necessary to make or distribute the goods and services generated by productive industry (which can be government-owned or nonprofit, as well as for-profit). If one or more of the sectors providing inputs or infrastructure to productive industry charges excessive rents, then industry can be strangled. Industry cannot flourish if too much rent is paid to landlords, if credit is too expensive, if excessive copyright protections stifle the diffusion of technology. Even progressives must concede that guilds or unions or professions can use the power of labor monopolies to demand excessive incomes for their members and that at some point high taxes really do strangle the economy. (The evidence of successful high-tax-big government countries like those of Scandinavia suggests that you can go safely up to about 40-50 percent of GDP going to government, assuming the taxes are well spent and raised largely by less-distortionary taxes including consumption, property and wealth taxes).
Men often oppose a thing merely because they have had no agency in planning it, or because it may have been planned by those whom they dislike.
-Alexander Hamilton
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Enki
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Re: Defeating Useless Rich People

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How Rich Moochers Ruin America
Low taxes on rentiers. In the late 20th century, the U.S. and a number of other capitalist countries made tax rates on capital gains lower than tax rates on wage income. This was supposed to encourage investment in productive enterprises, but in fact it merely provided the super-rich with windfall fortunes that have often been used for stock market and real estate speculation. Thanks to privileged tax treatment of capital gains, Warren Buffett complains that he pays lower taxes than his secretary, and Mitt Romney — the poster boy of rentier financial capitalism — paid 13.9 percent in taxes in 2010, lower than the combined employee and employer payroll taxes paid by low-income workers who pay no federal income tax (and not counting the state and local taxes that they pay). America’s rentier plutocracy has deployed campaign contributions to intimidate Congress into keeping taxes extremely low on those who make most of their income from investments, whether the investments enhance the American economy’s productive capacity or not.

Privatizing natural monopolies. The classic productive capitalist wants to found a company to provide a new, socially useful good or service and make money by sales. In contrast, the classic parasitic rentier wants to bribe the state legislature into privatizing and selling state roads so that he or she can make money without effort or innovation every time somebody drives and pays a toll. Not only progressives but mainstream conservatives used to agree that natural monopolies, such as many infrastructure services—water, electricity, transportation — should be either publicly owned or publicly regulated utilities. Today, however, some plutocrats, seeking guaranteed, recurrent streams of money for little or no effort, fund politicians and ideologues who favor privatizing or deregulating infrastructure and public utilities and cutting or voucherizing Social Security and Medicare, to force the elderly to buy financial products and costly health insurance from the rentier sector.

Anti-inflationary macroeconomic policy. The rentier class overlaps largely with the creditor class, much of whose wealth is in the form of debts that must be repaid by governments, businesses and individuals. In all times and places, the creditor elite has lived in fear that its wealth may be reduced by inflation, which permits the debtors to repay their debts in currency, which is nominally the same but in reality of ever-dwindling value.
Men often oppose a thing merely because they have had no agency in planning it, or because it may have been planned by those whom they dislike.
-Alexander Hamilton
Mr. Perfect
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Re: Defeating Useless Rich People

Post by Mr. Perfect »

It's breathtaking how committed you are to destroying the poor and swelling their ranks; breathtaking.

I feel like I'm a pretty motivated determined guy but tbh sometimes i don't hold a candle to you. My hat is off to you. Your commitment to creating and destroying people into poverty is beyond my ability to fight back. You will definitely win this fight.
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Enki
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Re: Defeating Useless Rich People

Post by Enki »

Mr. Perfect wrote:It's breathtaking how committed you are to destroying the poor and swelling their ranks; breathtaking.
LOL
I feel like I'm a pretty motivated determined guy but tbh sometimes i don't hold a candle to you. My hat is off to you. Your commitment to creating and destroying people into poverty is beyond my ability to fight back. You will definitely win this fight.
Keep on keeping on you job producer you.
Men often oppose a thing merely because they have had no agency in planning it, or because it may have been planned by those whom they dislike.
-Alexander Hamilton
Mr. Perfect
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Re: Defeating Useless Rich People

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I doubt I will. I know you aren't into politics, current events or financial matters, but job destroyers are dramatically beating the job creators, you guys are winning decisively. I can't beat you at this game. All I can do is hangout in Galt's Gulch and watch as the hoi polloi consume you, but I will munch popcorn. I may light up a cigarette John Galt style and trace a dollar sign in the air for dramatic effect.
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noddy
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Re: Defeating Useless Rich People

Post by noddy »

its true to say that investing in rental homes for transient and young people is a perfectly helpful activity.

however, their is something twisted about the focus on rent seeking and the lack of alternatives to housing as an investment in the west... its a cultural thing and not fixable by rules because both the left and right middle class are both addicted to it.

some would say its the breakdown in society and its priorities, the lack of care adults have for the affordability of housing for the next generation and the contempt that has grown for anyone who isnt a double income middle class empty nester.
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Mr. Perfect
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Re: Defeating Useless Rich People

Post by Mr. Perfect »

I think that you have to question the primate status of anyone who can't think this through before writing that article, let alone posting it.

If you raise taxes on renters, is more or less housing put on the market. Any ideas?
Last edited by Mr. Perfect on Tue Mar 26, 2013 6:20 am, edited 1 time in total.
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noddy
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Re: Defeating Useless Rich People

Post by noddy »

it means more expensive houses...the outcome of choice for the FIRE worshiping middle class, id cynically suggest the chances are good.
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noddy
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Re: Defeating Useless Rich People

Post by noddy »

i do remember adam smith had something to say on the profit seeking versus rent seeking nuances.. a stronger focus on affordable private housing rather than government subsidised rentals is perhaps a more beneficial angle for society as a whole.
ultracrepidarian
Simple Minded

Re: Defeating Useless Rich People

Post by Simple Minded »

Wow, kinda a scarey title..... I think I have seen this movie before.

When the utopian demogue gives you the choice of being one whom they find USELESS cause you don't share their vision of HOW THE WORLD SHOULD WORK.... or being one whom they find USEFUL cause you do share their vision of HOW THE WORLD SHOULD WORK.... I opt for being ruled by the benign neglect of King Noddy the Indifferent.

All three articles reminded me of what us cool kids were chanting in the 1960s. Kinda fun thinking like that again.... those were good times!

I still don't trust anyone over 30.....

How are the taxes and the health care in Noddy's Niche?
noddy
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Re: Defeating Useless Rich People

Post by noddy »

noddy's niche is coppin a pounding from the australian federal gutterment and is going backwards.. luckily im not alone in this boat and the next federal election is looking like a massive destruction of the labour goons.

in the abstract utopian perfection of noddyville, im favouring the loony libertarian minimum income approach with bugger all government services and the only tax being a consumption tax from which the proceeds get split between everyone.
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Simple Minded

Re: Defeating Useless Rich People

Post by Simple Minded »

noddy wrote:noddy's niche is coppin a pounding from the australian federal gutterment and is going backwards.. luckily im not alone in this boat and the next federal election is looking like a massive destruction of the labour goons.

in the abstract utopian perfection of noddyville, im favouring the loony libertarian minimum income approach with bugger all government services and the only tax being a consumption tax from which the proceeds get split between everyone.
Count me in.

I suspect that attraction of noddyville will be like honey to those who think "If I am unhappy, the cause of my unhappiness must be due to my own thinking/behavior/perspectives!" and like vinegar to those who think "If I am unhappy, the cause of my unhappiness must be due to the thinking/behavior/perspectives of others!"

Not sure if it is nature or nurture. But I know which perspective is functional and which one sells better.....

Regarding your title, king noddy the wise, king noddy the indifferent, Sir Noddy, noddy the non-descript, buddy, hey pal...... it all works for me.
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