We Must Go beyond Microeconomic Regulation to Stabilize the Financial System, by Robert Wade: Responding to Jeff Madrick’s recent post on the US financial regulation legislation, Triple Crisis guest blogger Robert Wade argues for the need to consider “external” causes of the global financial crisis.
I agree with and admire the lucidity of Jeff Madrick’s post... But ... the focus on [microeconomic] financial regulation obscures the important role of “external” causes in contributing to financial instability (external to national financial systems), and obscures the pressing need for policy reforms to curb these external causes. I highlight two external causes: (1) national income inequality; and (2) international payments imbalances. I argue that if high income inequality and large international payments imbalances are not curbed,... microeconomic efforts to re-regulate and re-structure national financial systems will be eroded or swamped by the force of these more macroeconomic external causes.
On the role of income inequality, in the United States between 1976 and 2007 the top 1% of income recipients received almost 60% of ... real income growth. The figure is even more stunning if one takes just the 2000s: the top 1% received more than 70% of the total increase. On the other hand, through the 1990s and 2000s incomes in the bottom half of the American income distribution have stagnated.
One channel by which this soaring inequality contributed to financial instability is reasonably well known. The great bulk of the population on stagnant or near-stagnant incomes tried to increase their consumption and investment by borrowing. With easy access to credit they provided a rising demand for non-prime mortgages, car loans and the like. Their demand pushed up house prices, which enabled them to borrow against the rising value of their houses – to reach levels of debt completely unsustainable ... in the event that house prices stopped rising. ...
The other channel has received less attention, and it relates to the direct effect of the concentration of income and wealth at the very top. People at the top – high net worth individuals, investment funds, pension funds and the like – greatly increased the demand for complex financial products as they searched for ways to store their wealth. The proliferating billionaires around the world pressured organizations like Goldman Sachs and JP Morgan to supply them with complex financial securities. The investment banks generated huge fee and commission revenues by obliging, and neoliberal economic principles allowed the regulators to believe that the surging growth of complex financial instruments must be to the social benefit.
As long as this external pressure to supply complex financial securities for the super-rich to store their wealth continues, the financial system will remain prone to generate bubbles, followed by crashes. We know that modern capitalism can flourish with a much more equal distribution of income and wealth than in the United States, Britain and many other OECD countries. Reformers should use this argument to press for globally coordinated policy action to close down tax havens (to prevent tax avoidance), and to make the tax burden progressive rather than regressive, as it now tends to be, including capital gains.
The second deep external cause of financial instability is global payments imbalances. The key point is that the present system of international financial transactions ... tends to make finance the “master” and the real sector its “servant”... This relationship is a key driver of financial crises, and the key policy question is how to make the real sector the master and the financial sector its servant.
For example, Iceland (from where I write) over the 2000s had a floating exchange rate and unrestricted capital inflows. The result was something which the economics textbooks said should not happen:... huge trade deficits and at the same time the krona appreciated in value... According to the textbooks, the krona should have depreciated, so that ... the trade deficit would go down. But it did not. The government allowed free inflows of capital, and capital surged in to take advantage of Iceland’s high interest rates compared to rates in Japan, Switzerland and elsewhere (the central bank set high interest rates to try to curb the inflationary pressure caused by the money inflow). The inflow of capital pushed up the value of the krona, and the government assured the people – quite wrongly — that the high value of the krona reflected international confidence in Iceland, including in its banks.
In our present international financial system a country can be flooded with capital inflows (like Iceland), and must then let its currency appreciate or (if the exchange rate is fixed) suffer inflation; or both. Either way the trade deficit will worsen as exports fall and imports increase. Hence capital flows become the master and the trade flows become the servant, rather than the other way around. The toxic effect is to make many economies around the world vulnerable to a sudden withdrawal of capital, as happened in East Asia in 1997-98 and in Iceland, the Baltics and east and central Europe in 2008-09.
Without reforms to curb both these causes of financial instability we will likely experience further serious crises over the next decade. The sheer magnitude of the demand for complex securities in which the swelling ranks of the super-rich can store their wealth will swamp efforts to keep banks within prudential limits; as also will the sheer magnitude of cross-border capital flows (which are also a function of high income and wealth inequality at the top). ... The question is how progressive forces can exercise countervailing pressure, and what policy and structural changes they should advocate. Progressive tax reform and restrictions on capital flows in unstable times (and at least blue sky discussion of how a mechanism of coordinating exchange rate changes might be established) should be high on the agenda.

Posted by Mark Thoma on Tuesday, July 27, 2010 at 06:03 PM in Economics, Financial System, Income Distribution, International Finance | Stumble, Digg, del.icio.us, Reddit, Tweet, Share, Like | Permalink Comments (48)

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Rune Lagman said...
Why didn't the Icelandic Central Bank (CB) sell kronas to bring the currency down to reasonable levels?

Reply Tuesday, July 27, 2010 at 06:12 PM

Rune Lagman said...
"The question is how progressive forces can exercise countervailing pressure, and what policy and structural changes they should advocate."

It's a question of the kind of society we want. Do we want a society where everybody participates? Or do we want a society of "haves" and "have nots"?

If you want a more equal society, you need rules that level the playing field. Like progressive taxes, free education, etc. What I don't understand is why this isn't obvious.

Reply Tuesday, July 27, 2010 at 06:22 PM

paine said in reply to Rune Lagman...
"you need rules that level the playing field"

is that enough
make it fair then who gets a safety net eh ??

they lost fair and square
the safety net needs to be redefined
as a social dividend "earned" by citizen right
not "condition"

Reply Wednesday, July 28, 2010 at 05:27 AM

paine said in reply to Rune Lagman...
that the field is level is determined by who and how ????

meritocracy or just merit outcome

lots left undiscovered here
no room for complacency that the mountain top has been scaled simply because
the word fairness has become your guide

Reply Wednesday, July 28, 2010 at 05:29 AM

Rune Lagman said...
"Progressive tax reform and restrictions on capital flows in unstable times (and at least blue sky discussion of how a mechanism of coordinating exchange rate changes might be established) should be high on the agenda."

I'm not sure that restrictions on capital flow is needed. The CB should manage the currency such that the trade flows are balanced (roughly).

Reply Tuesday, July 27, 2010 at 06:27 PM

Glenn Marvin said...
Dare I say it but I am a proud capitalist and although I believe everyone should have a fair and equal opportunity to succeed if we did not have "The Haves" the "Have Nots" would be even worse off. People must be inspired to achieve not expect equality. I agree tax reforms are needed to reduce the evasion tactics of those that have the smarts to avoid paying their dues however it is very dangerous to turn this into an argument over the haves and have nots when it is more of a political discussion on how financial systems should be structured.

Reply Tuesday, July 27, 2010 at 06:39 PM

ken melvin said in reply to Glenn Marvin...
Yup, it's always been trickle down, hasn't it? And, economics is but a construct to justify this model, no?

Reply Tuesday, July 27, 2010 at 07:23 PM

Rune Lagman said in reply to Glenn Marvin...
"People must be inspired to achieve not expect equality."

Exactly, that's what we're aspiring to get to.

However, it demands a level playing field. When a minority holds all the resources, the playing field is not level. When access to education and opportunity depends on who you know rather than who you are, then it's not level.

Unless you want grandma to live on cat food in her old age, she needs something like social security. And if you want grandma to have that hip-replacement, she needs Medicare.

If you want to give Johnny a chance to improve himself, he needs access to education.

Unless you want uncle Billy to take on a third job to pay for that heart bypass, he needs access to health care.

Reply Tuesday, July 27, 2010 at 07:28 PM

reason said in reply to Glenn Marvin...
You mean like before the French Revolution? It is not clear that what you say is true. Take a bushman to a feudal country and see what he thinks about the situation. There is a very real chance that inequality (the situation) inhibits development in many ways. That does not mean that inequality (the possibility) is not valuable as an incentive. It is just that we should be careful to see the two as distinct.

Reply Wednesday, July 28, 2010 at 01:08 AM

paine said in reply to Glenn Marvin...
" if we did not have "The Haves" the "Have Nots" would be even worse off."

or is it the have nots being worse off
only make the haves better off

there must be a range beyond
which the switch occurs
i submit we are well above the switch point
and there isn't a higher still reswitch point

Reply Wednesday, July 28, 2010 at 05:31 AM

kthomas said in reply to Glenn Marvin...
Bullshit. You speak of a need for tax reform, and at the same time making us acknowledge the need for the existence of people who "Have", whose very existence gives life to the "Have nots".

Supplicating, servile philosophy, sir.

Reply Wednesday, July 28, 2010 at 08:12 AM

paine said...
on the right track

Reply Tuesday, July 27, 2010 at 07:06 PM

Goldilocksisableachblonde said...
"People must be inspired to achieve not expect equality."

That sounds like a bad line out of an old Price Pritchett worker-bee brainwashing pamphlet.

Nobody is asking for "equality" , only for a degree of economic justice. You've got it backwards on the have/have not paradigm as well. A great many of the "haves" are facilitating their own conversion into "have-nots" as they destroy their customer bases. Why is it that so many haves are afflicted with such profound myopia ? Is it a result of spending too much time admiring the fine detail on all their greenbacks ? Would better lighting help ?

Reply Tuesday, July 27, 2010 at 07:13 PM

ken melvin said...
"People at the top – high net worth individuals, investment funds, pension funds and the like – greatly increased the demand for complex financial products as they searched for ways to store their wealth. The proliferating billionaires around the world pressured organizations like Goldman Sachs and JP Morgan to supply them with complex financial securities. The investment banks generated huge fee and commission revenues by obliging, and neoliberal economic principles allowed the regulators to believe that the surging growth of complex financial instruments must be to the social benefit."

Terrific!

Reply Tuesday, July 27, 2010 at 07:25 PM

Goldilocksisableachblonde said...
Thanks for posting this , Mark. It's a sign of how twisted the typical coverage of this debacle is , when a compelling argument like Mr. Wade makes here is a one in a million occurrence.

It's so simple , and so easy to see , and so intuitive , and yet rarely is it articulated in any but fringe venues. Anemic demand caused by anemic spending power among the masses. Huge debts accumulated by the masses as they try to simply maintain a lifestyle , let alone move up , on stagnant or declining real wages , even as they work more hours and accumulate more experience. Rapidly growing mountains of cash at the top of the income pyramid , with no productive investment outlet due to the weak demand , which then ends up in hyperactive "hot money" pools chasing speculative bubbles around the globe , before finally settling on Ponzi-based engineered finance in a quest for yield. Mega-corps hoarding cash or paying dividends and doing stock buybacks , but not investing a cent in production facilities.

That's the problem set we've got , which everyone who's been paying any attention should be familiar with. What alternative explanation for the cause of , and solution for , this problem set comes close to making as much sense -- compelling , blindingly obvious good sense -- as the one offered by Mr. Wade ?

I haven't heard it , and the reason , I believe , is that none exists.

Reply Tuesday, July 27, 2010 at 07:39 PM

Rune Lagman said in reply to Goldilocksisableachblonde...
Well said.

I'd like to hear Marks view on this.

Reply Tuesday, July 27, 2010 at 07:46 PM

paine said in reply to Goldilocksisableachblonde...
progressive pressure may have no long run chance to prevail
so long as rogs continue to play by the rules laid out
by the winners

the new deal was prog pressure prog countervailing power
as were the unions
however we got from those heights
down here to today

by the rules of the game
compensating losers
is nursing the casualties
a noble enterprise
but its not
ending the war

Reply Wednesday, July 28, 2010 at 05:38 AM

bakho said...
Similarities between the Great Depression and Great Recession
1. Increase in inequality
2. Unsustainable levels of debt
3. Structural unemployment GD- Mechanization of SG; GR Computerization of Mfg
4. Large asset bubble collapse
5. (Shadow) Banks over leveraged
6. Collapse of Financial Sector
7. Balance sheet recession
8. Large percentage of population lost wealth in asset bubble collapse
9. Collapse of demand
10. High Unemployment
11. Too timid fiscal response (Note that the Monetary response this time was much different, but still can not prevent high unemployment)

Reply Tuesday, July 27, 2010 at 07:44 PM

reason said in reply to bakho...
12 Large international financial imbalances.

Reply Wednesday, July 28, 2010 at 01:10 AM

bob mcmanus said...
A BIG Tobin transactions tax would help both. I think.

http://www.correntewire.com/government_prints_money_arabs_raise_price_oil_checkmate_thank_you

Stirling Newberry contra MMT

Reply Tuesday, July 27, 2010 at 07:47 PM

Jim Harrison said...
I've been making Wade's point about the macro effects of inequality for a couple of years now. Why haven't the professional economists addressed this issue? In the recent past, at least, I've only encountered it in comment threads. (I know this question is naive, but perhaps there is some principled reason to reject the possibility that inequality causes crashes, i.e. some problem with the idea over and beyond the inconvenience of making a point irritating to one's patrons.)

Reply Tuesday, July 27, 2010 at 07:54 PM

Rune Lagman said in reply to Jim Harrison...
Let's ask our host.

Reply Tuesday, July 27, 2010 at 08:04 PM

Goldilocksisableachblonde said in reply to Jim Harrison...
Here's another area of inquiry you won't see the professional economists touch with a ten-foot pole :

Consider this : Since the late 1970's or so , the share of total income flowing to the top 1% of income earners has gone from 7-8% to about 21-22% , according to Piketty and Saez. Say a 13% swing. That means the bottom 99% have seen their share of the pie shrink by that same 13%.

Additionally , most of the growth in the top 1% share has occurred in the narrow slices at the top of that cohort , i.e. the top 0.5 , 0.1% , etc.

Now , in an economy whose GDP is 70% consumption , you'd think economists would have reams of data describing the consumption habits of that top 1% , .5% , .1% , etc. , since if they're significantly underconsuming relative to the rest of the distribution , it will have noticeably adverse effects on the economy , and increasingly so as their income share continues to grow.

Yes , you'd think the professional economists would be all over this , analyzing datasets , building predictive models , etc. , so a big problem with weak consumer demand doesn't sneak up and bite us on the ass.

But you'd think wrong. They don't have the data , or if they do , they don't want anyone else to see it , because you can't find it anywhere.

The marginal propensity to consume of some deciles in the bottom half of the income distribution was greater than 1.0 during the peak lending boom , as people spent 100% of their incomes , then supplemented that spending with borrowed money. This is why food stamps and UI checks have high multipliers , because people receiving them typically have no other money to draw from.

Tax cuts , on the other hand , have weak multipliers. Why ? Who pays most of the income tax ? The rich , so they also receive most of the money when taxes are cut. The rich also have lower marginal propensities to consume , and thus you get a weak multiplier with tax cuts.

So , a typical American spends most or all of his next dollar of income. How much does someone making a $1 million/yr spend out of his next dollar ? 10 cents , maybe ? How about the hedge fund guy making a $1 billion/yr ? You'd have to say zero , because the smallest coin we have is a penny and he wouldn't be spending near that much.

Again , in an economy where 70% of GDP is consumption , this would seem to be important info to have. So why don't we have it ?

Anyone?

Reply Tuesday, July 27, 2010 at 08:31 PM

Mark Thoma said in reply to Goldilocksisableachblonde...
We mostly have to rely on the government for such statistics since we don't have access to tax data, etc.

I've worried about this more generally:

http://moneywatch.bnet.com/economic-news/blog/maximum-utility/policymakers-need-better-and-more-timely-economic-data/363/

Reply Tuesday, July 27, 2010 at 09:14 PM

Goldilocksisableachblonde said in reply to Mark Thoma...
Yes , and during the 8 years of Bush I bet they weren't too keen on disclosing data about rich folks. Didn't we only get to see the income data on the top 400 earners once Obama took over ? It was witheld in prior years , as I recall.

I agree with you on the data collection. We really need to get more granular in many areas -- like the tails of the income distribution , for example.

Sometimes I think there's a gov't data collection manual that says : " Hear no evil , See no evil , Speak no evil , Record no evil "

Reply Tuesday, July 27, 2010 at 09:41 PM

fred said...
The real question is why the rest of the top 10% is not more concerned about what the top 1% is up to? The rest of the top 10% DO still have the power to reform things. If there is no reform, it is because the rest of the top 10% (other than the top 1%) are not concerned about what is happening. Why not?

Reply Tuesday, July 27, 2010 at 08:04 PM

Mark Thoma said...
This is from October, 2008, and it came up many times after that. Also, I believe Krugman recently posted a set of slides from a talk he gave on this topic):

http://economistsview.typepad.com/economistsview/2008/10/does-wealth-con.html

Reply Tuesday, July 27, 2010 at 08:09 PM

Jim Harrison said in reply to Mark Thoma...
Thanks! That's exactly the kind of response I was looking for. But I'd still like more info on the prevalence of this line of thinking among professional economists.

Reply Tuesday, July 27, 2010 at 08:17 PM

Goldilocksisableachblonde said in reply to Jim Harrison...
So would I.

Lots of journalists and bloggers have recently highlighted the issue of income inequality increases over the past few decades.

The difference in Mr.Wades article is that he suggests that there's a cause and effect between income inequality and the financial crisis , and relates it to the increased consumer debt burden as well as to the proliferation of exotic financial instruments.

I think it's strange that we haven't seen so many articles like this by now that Wade's thesis would be the commonly accepted explanation for the crisis.

Reply Tuesday, July 27, 2010 at 08:55 PM

Rune Lagman said in reply to Mark Thoma...
Thanks Mark.

So what's your opinion on the subject?

Reply Tuesday, July 27, 2010 at 08:27 PM

Mark Thoma said in reply to Rune Lagman...
I don't have anything more conclusive on this than the raw correlations in the data above, so I can't say much beyond mere speculation. But it doesn't seem like something you can rule out a priori, and I'm glad to see people like Krugman shining more light on it as that may lead to a more thorough examination of this hypothesis.

Wish I could say more.

Reply Tuesday, July 27, 2010 at 09:17 PM

Rune Lagman said in reply to Mark Thoma...
Thanks, Mark.

However, Krugman also answered something equally non-committal when pressured on the issue on income inequality. So Krugman is in your camp on this issue.

As Goldilocks stated above, professional economists generally avoid opining on the ramifications of income inequality. I'm really curious, why economists are so afraid of discussing the economic ramifications of income-inequality.

It seems to me, that how the pie is divided up is a very important economic issue. So I don't quite understand how any economist can seriously discuss macro-economics without addressing the issue of income-inequality and how it impacts the whole economy. At least the neo-classics have a theory and aren't afraid of stating there opinion on the issue.

Reply Wednesday, July 28, 2010 at 12:16 PM

Trainwreck said...
Until we decide we don't need cheap electronics, furniture, and other crap, and until we decide we don't need to be afraid of China, and until we decide we don't need cheap fuel and oil, we will continue to be slaves to foreign labor markets. Until we decide to appreciate American labor, and until we decide that Americans are our true allies, we will suffer through this depression and destroy American families. Until we decide we are a nation called America, we are fools that will be manipulated by the international masses, to our destruction.

Alex. Hamilton understood what it was to be American and he was willing to protect it with the American System.

Free Trade is the death of our nation.

Reply Tuesday, July 27, 2010 at 09:13 PM

paine said in reply to Trainwreck...
"we are fools that will be manipulated by the international masses"

international corporations are hardly well described as
international masses

who be your" we " here btw ??

i submit we
--that is most of us--
indeed made "consumer" choices

but out of cards dealt us
by a "them"

we didn't create these choices
in fact by the rigged set up we couldn't create these choices

yearning for protectionism
as higher patriotism leads to
mussolini
its a game for loser nations not aging hegemons

britain after the early victorian period
never shed its open border policy
toward incoming products
not until it had hammered itself back into a dwarf

Reply Wednesday, July 28, 2010 at 04:50 AM

Icarus said...
I would suspect that the top 10% actually believe that the gains made by the top 1% are justified, and the stagnant incomes/realities of the bottom 50% are as well justified.

The market value of non and low skilled labor has plummeted due to a globalized supply chain. That high school grad (or barely that) in the midwest is no longer worth a 'middle class' salary. There are better options in the global marketplace for labor.

Income inequality also leads to unfortunate political inequality...that problem may not be solvable, with a 1st ammendment which links spending on political capital to 'free speech'.

In any discussion on income inequality, we must also consider the changes in cost structure due to continued innovation and productivity. The lower quintile can now have color tv's and good plumbing. The concept of class consciousness seems quite immature, as people live 'content' in their tv induced slumber.

Reply Wednesday, July 28, 2010 at 03:24 AM

paine said in reply to Icarus...
"I would suspect that the top 10% actually believe that the gains made by the top 1% are justified, and the stagnant incomes/realities of the bottom 50% are as well justified."

so would i

yes some rentiers might want to "share"
their "good fortune"

but the self made types
do they usually want
to share "rewards for hard work "

as for the small rentiers with only a little boodle
charity begins at home

these are a distribution of status appropriate reactions
large numbers of contraries resist
but the system can bepend on stable majorities adhereing to best interests
of the shifted few not the coarse masses

Reply Wednesday, July 28, 2010 at 04:33 AM

paine said in reply to Icarus...
"The lower quintile can now have color tv's and good plumbing"

and the debt load that comes along with it

Reply Wednesday, July 28, 2010 at 04:34 AM

Glenn Marvin said...
Like I have said I agree the system needs to change however we still need to have incentives for people to build, create, put their necks on the line for great reward as when the reward is great, the effort to succeed is great but when government takes all the reward away, many will not try or want to succeed as much and we will be left with a society based on mediocrity and conformity.

I agree in part with trainwreck where so many in society have been living beyond their means in a I want it now consumer market full of crap products with rediculously short lifespans and as consumers we all need to take more responsibility for our actions and look after our own.

I am lucky enough to come from New Zealand where we have a relatively good health and education system however we still have far too much of a welfare state mentality where the expectation of many is for all to be provided. I have spoken to chain smoking mothers in some of the poorest areas of the country and listened to them moan about not having enough money to buy shoes for their children. These same mothers spending $20 a day on cigaretes and buying fast food most nights. I know what its like I came from those streets and while there is a serious lack of social education each person has the ability to take positive action and change their lives not wait for a handout from the govt(and no I am not auditioning to be Tony Robbins next assistant)

Reply Wednesday, July 28, 2010 at 03:40 AM

paine said in reply to Glenn Marvin...
total hocus pocus
no one has proven the direct connection between achievement and greater and greater rewards
the opportunity to achieve is far more signifigant then the material reward for achievement

"i did it because i wanted to be rich and famous "
is a rationalization as much as
"i did it to help my fellow humans
and canines too "

faust has his motives
but their are deeply complex and not related to obvious
"intended" outcomes by some identifiable
set of "personal motives"
their orgins reach back to faust's own social origins as an active intention driven
but only shallowly self aware being

Reply Wednesday, July 28, 2010 at 04:43 AM

ken melvin said in reply to Glenn Marvin...
Rroving?

Reply Wednesday, July 28, 2010 at 05:58 AM

reason said in reply to Glenn Marvin...
So you realise that some people are rational, but you none the less put your faith in rational incentives.

Reply Wednesday, July 28, 2010 at 07:38 AM

cm said in reply to Glenn Marvin...
"chain smoking mothers in some of the poorest areas of the country and listened to them moan about not having enough money to buy shoes for their children"

Such examples exist everywhere but they are a small minority. But they are apparently always good for being trotted out as "representative" examples of no-gooder welfare.

Reply Wednesday, July 28, 2010 at 10:40 AM

cm said in reply to cm...
IOW how many such people do you know and how many others?

Reply Wednesday, July 28, 2010 at 10:42 AM

paine said...
"national income inequality"
is a poor euphemism indeed
for MNC policy hegemony
its not our rentier class per se that "produced "
our present good old limited liability
amerikan
job class strangulation

international portfolios for anne and the like ought not take the heat for simply riding on the global system built by corporate amerika

forget income inequality its like brown fear eco mania
it it freaks itself out by looking at
"outcomes" and not causes

i guess because outcomes are what matter so long as you're not the exploited soul in the middle of the rat warren
running BIG INC's maze every day

admittedly
dramatic inequality
is an aquired taste
so what
it still just a tate
okay equality tastes sweet its a built in pleasure
but we gotta stop dreaming of sweets and start
aiming at the tower boys that produce this utterly bitter set of outcomes
not for their taste but for
their injustice their cheating
their break neck charge for gold and glory
over our busted souls and wallets

as the evil hayek sez

dictatorship isn't bad in and of itself
so long as it produces a good outcome

what follows from that ??
corporate capitalism isn't bad
since it produces a good total outcome
for the sake of our merit class souls
however
we need to force the winners to be charitable
to the losers
by upping the transfer flow and of course
educating the losers kids for the great race
to the top

Reply Wednesday, July 28, 2010 at 04:21 AM

paine said in reply to paine...
our system generates inequality
to re-generate itself
to end inequality as a dynamic ferocious ever widening fault line running above the income range
of roughly 80% of american souls
we need to utterly transform the system of production not simply re distribute
the rewards of its outcomes

the scam is to disguise theft as
social welfare enhancing achievement

a thief that gives 30% of his "take"
back to "the little people"
is still ....a thief

Reply Wednesday, July 28, 2010 at 04:27 AM

Rune Lagman said in reply to paine...
Paine,

what's your solution?

Reply Wednesday, July 28, 2010 at 12:27 PM

paine said in reply to Rune Lagman...
its been tried
most recently in nepal

Reply Wednesday, July 28, 2010 at 03:04 PM

Bruce Wilder said in reply to paine...
Compare and contrast:

"corporate capitalism isn't bad
since it produces a good total outcome
for the sake of our merit class souls
however
we need to force the winners to be charitable
to the losers"

"a thief that gives 30% of his "take"
back to "the little people"
is still ....a thief "

I'm having a little trouble with the logic chain, here, paine.

If the "winners" are winners, by winning at cheating and theft, how plausible is forced charity
----------
paine said in reply to Bruce Wilder...
bruce
i'm merely posing as an apologist there
apologists use logic
like a three dollar hooker

but the trust fund liberals must be placated now and again
by dear old dad