News Donald Trump as president - is he serious?

[Dale]

But most Americans don't really have a good idea of the income or wealth distributions in our country. I think if you asked "if you make more than 97% of Americans, are you super rich?" most would say yes.

Then poor should just ask their super-rich friends for help. Since 3% of the population is super-rich almost everyone should have a super-rich friend or two.

 

[WhoWee]

I wasn't referring to professional small practices in my estimates of 200k+ earners. Lawyers, Doctors and Engineers in their own practice are in the 100k-150k a year range according to the BLS.

The doctors, for example, who DO make 200k+ generally are sub-specialists working for a hospital, not in practice for themselves. The lawyers in this range seem to mainly work for large firms. The marketing execs, CEOs, CFOs, etc- mostly large firms.

The point is, there aren't a lot of small business owners making 200k+. Near as I can tell, the most likely ways to get rich are a. inherit (still the best), and b. work for someone else.

The real question (IMO) is this - when deductions are eliminated - how many people will move UP into the $250k bracket?

 

[turbo]

Bush's tax cuts for the top few percent affected me, but I never really noticed. I worked for a low base salary and got a yearly incentive pay bonus based on the performance of my division. Frankly, I doubt that anybody in the over $200K/yr bracket would notice a modest increase in the marginal rate. If they do, they are people who are spending all that they make and have to cut back on expenditures. Too bad. What's wrong with paying your fair share and living within your means? Poorer taxpayers have to do it, or suffer consequences, including poor credit rating, ruinous interest rates, loss of home, etc.

Anyway, back on topic. Trump is not serious. He is a media-hog and every time he can make a splash, it gives him leverage with a gullible demographic that he'd like to skin. He wants to be president less than Palin wanted to remain governor of Alaska. As soon as her publicity flacks started fluffing her credentials as an author (really?) and a public speaker (really?), she was looking at some really big short-term paydays that dwarfed her salary as governor. Bye-bye. Trump is probably more addicted to pay-days and even less concerned with the well-being of this country than Palin is.

 

[Vanadium 50]

As of 2007, 1% of the population held over 36% of the wealth in this country. When they pay 36% of the taxes, I'll stop advocating for higher taxes on the wealthy.

For almost 49 hours.

Frankly, I doubt that anybody in the over $200K/yr bracket would notice a modest increase in the marginal rate... What's wrong with paying your fair share and living within your means? Poorer taxpayers have to do it, or suffer consequences

It's interesting how the wealthy's "fair share" moved up in the last two days. Two days ago, you argued 36% was fair. Today, you are arguing that 40% is too low. If I were in the category of the "wealthy", I would be wondering where it will stop? If it went to 50% would there be calls to make it 75%? If it were 75% would there be a cry for 90%?

 

[russ_watters]

I'd also like to hear an explanation of what quantity of wealth has to do with taxation. Turbo-1, are you suggesting that we tax people based on net worth instead of income? How exactly would this work?

 

[Char. Limit]

If you're going to argue about that stuff could you find a different thread for it, please?

 

[russ_watters]

Poorer taxpayers have to do it, or suffer consequences, including poor credit rating, ruinous interest rates, loss of home, etc.

?

1. The "poorer" taxpayers you are referring to are the upper middle class. People in the lower middle class and below do not pay federal income tax - that's currently about 45% of the population.
2. When rich people don't pay taxes, they also suffer the same consequences. So what is your point?

 

[Char. Limit]

Apparently the answer to that is no...

 

[CAC1001]

You do realize that 200k means you make more than 97% of US households? Do you think of the top 3% as rich? I generally do.

I don't. Making 200K a year is nowhere even remotely close to being "rich."

If you make 800k a year, you are doing better than more than 99% of America, which I would classify as super-rich, though I guess you can make a judgement call.

$800K a year "barely" might qualify someone as rich. It would more likely be "extremely well-off."

I define it in the following way:

There's lower-rich, with net worths around $1-$10 million. A person making $800k a year could fall into this category.

There's middle-rich, with net worths around $10-$100 million.

And then there's super-rich, which is $100 million and above.

When you study wealthy people, you'll find that in the world of wealth, even $100 million barely gets you in the door. "Super-rich" really could probably be defined as those with net worths of $500 million and up.

When Reagan's supply-siders predicted cutting spending would magically raise revenues, that didn't work out, not surprisingly),

There was nothing "magical" to it, the idea is that if taxes are too restrictively high, then reducing them can incentivize enough economic growth to create more revenue. And yes, it did workout, because in the mid-1980s, the deficit began shrinking.

What has become a Republican talking point is the idea that every time you lower taxes, you'll increase revenues. That is not true. After a certain point, lowering taxes lowers revenues, and raising them increases revenues.

It also can depend on how it's done, for example if you have higher rates with lots of loopholes, which you then change to lower rates while closing some loopholes (that was part of some of the major Reagan tax cuts).

Near as I can tell, the most likely ways to get rich are a. inherit (still the best), and b. work for someone else.

The best way to get rich is to start your own business. Inherited wealth accounts for only a fraction of most of the wealth generated today. Working for someone else is usually the worst way to become rich. You can earn a high income working for someone else, but otherwise, you are not going to become rich while working for someone else, aside from maybe working on Wall Street at one of those big firms or at a big corporation, and even then, it tends to take many years and you are an old person by then. And you have to put up with a lot of office and corporate politics in the process as well.

 

[CAC1001]

See page 695 of Principles of Economics for a discussion of the supply siders and their claims.

Which "Principles of Economics" text? Which author? Because there are multiple books with that name.

Also, revenue doubled because in non-recession times GDP grows every year.

I'd say Reagan's tax cuts helped pull the economy out of the recession. Paul Volcker's increasing interest rates helped blow up the deficit, but was necessary to fix the inflation of the time. Reagan took a lot of heat politically for providing the support to Volcker to keep interest rates as high as he did for as long as he did as well, as Congress didn't like it.

Reagan's tax cuts helped lead to a lot of new money flowing into the stock and bond markets that had previously been tied up in tax shelters.

Revenue more than doubled in the 50s, and the top marginal rate was 90%. The thing you have to look at are trends in revenue. How fast was revenue increasing before the cuts? How fast after?

The top-rate in the 1950s applied to the inflation-adjusted equivalent of someone earning many millions of dollars a year. It did not apply to the inflation-adjusted equivalent of someone earning $200K a year.

Also, remember the 1950s was right after WWII, when most of America's economic competition was still rebuilding. Some countries, such as the United Kingdom, adopted socialism outright to a good extent, which hamstrung their economy.

The U.S. in the 1950s also benefited from much of the infrastructure that had been created as part of the New Deal. What had previously been rural backwaters now had roads, bridges, airports, electricity, plumbing, etc...and thus became thriving economies.

Eisenhower's Interstate Highway System I would imagine also had a major impact on America's economic growth in the post-war years.

 

[russ_watters]

The fact that Trump is a birther with secret knowledge would be enough, I would think [CRACKPOT!], but he is a tea partier.
http://storyballoon.org/blog/2010/09/23/donald-trump-tea-party-is-extremely-powerful-and-i-love-it/

Trump uses words like "they" to refer to the Tea Party movement, so clearly he does not consider himself to be a member. But whether he is or isn't, so what? I'll have to infer from this attempt that you are trying to paint the Tea Party movement as just a bunch of crackpots with no political viability. Well sorry, Ivan, but you can't can't create a reality by arguing it in an internet forum. The reality that you clearly don't like is that the Tea Party membership includes a substantial fraction of Democrats and independents - about 41% ( http://thehill.com/blogs/ballot-box/polls/90541-survey-four-in-10-tea-party-members-dem-or-indie ). You can't change that by arguing about it here...though if you got enough money together, you may be able to change it with a massive advertising campaign.

Moreover, the Tea Party is a large and diverse group of people. The existence of one extremist/crackpot in the group (and there is certainly more than one) doesn't make the entire movement a crackpot/extremist movement any more than the fact that Maxine Waters is a Democrat makes the Democratic party an extremist/socialist organization.

What should scare the perceptive Obama fan about this is that it makes the Tea Party closer to the demographic center than Obama's support base!

Let me say that again for emphasis: for all the blather we get from all sorts of sources about crackpottery in the Tea Party, it is actually less extreme than Obama's support base was either at the 2008 election or today:

In the election, 35% of people who voted for Obama were Republicans or independents.
Today, 27% of people who "approve" of him are Republicans or independents (assuming the same fraction of the country is Democrats as before).

http://www.cnn.com/ELECTION/2008/results/polls/#USP00p1
http://www.gallup.com/poll/147140/O...utm_term=Politics+-+Presidential+Job+Approval

Contrast that with the Tea Party, which is 41% Democrat or independent.

 

[CAC1001]

Bush's tax cuts for the top few percent affected me, but I never really noticed. I worked for a low base salary and got a yearly incentive pay bonus based on the performance of my division. Frankly, I doubt that anybody in the over $200K/yr bracket would notice a modest increase in the marginal rate. If they do, they are people who are spending all that they make and have to cut back on expenditures. Too bad. What's wrong with paying your fair share and living within your means? Poorer taxpayers have to do it, or suffer consequences, including poor credit rating, ruinous interest rates, loss of home, etc.

You are right, they could, THE PROBLEM is that the government would go on spending as they are. The status-quo would not change. The Democrats do not want to cut spending as is, let alone if tax revenues were increased due to a minor tax increase on high-earning folks.

Anyway, back on topic. Trump is not serious. He is a media-hog and every time he can make a splash, it gives him leverage with a gullible demographic that he'd like to skin. He wants to be president less than Palin wanted to remain governor of Alaska. As soon as her publicity flacks started fluffing her credentials as an author (really?) and a public speaker (really?), she was looking at some really big short-term paydays that dwarfed her salary as governor. Bye-bye. Trump is probably more addicted to pay-days and even less concerned with the well-being of this country than Palin is.

I think Trump is very serious. I also think Palin is very serious. But I think neither one of them really knows enough about what they are talking about regarding anything (Trump especially!).

The attention Trump is drawing I think is based on two major misconceptions:

1) The idea that being a successful businessperson means one knows anything about economic policy. I see it at other forums a lot. People I saw would say about Mitt Romney, "He'd be GREAT for President! He'd fix the economy immediately!" Or about Trump: "Trump is a great businessman, so he is exactly the person we want running the biggest business in the world, the U.S. economy."

It amazes me how many people actually think the President "manages" the economy, but unfortunately, they do. Being a successful businessperson doesn't mean one knows squat about economic policy.

2) The idea that because one is an expert in one subject, that this means they are qualified to discuss other subjects with equal authority. Trump may be a fantastic real-estate guy, but this doesn't mean he knows anything about the different areas of policy.

 

[CAC1001]

I was watching Sean Hannity tonight, and Charles Krauthammer, a conservative I respect highly who has been extremely critical of Trump, said that Trump called him. He said he was expecting to be subjected to a tirade, but he said that Trump was very cordial and respectful and that they had a discussion about various issues, including Trump's ideas like taking control over the Iraqi oil.

Krauthammer said his opinion of Trump's ideas has not changed, but that he has a higher opinion of Trump as a person for his politeness and that he thinks Trump is very serious about running.

 

[Dale]

If they do, they are people who are spending all that they make and have to cut back on expenditures. Too bad. What's wrong with paying your fair share and living within your means?

I agree with you here. People who spend all that they make should have to cut back, pay their fair share, and live within their means. I think you have a double-standard in how you apply this correct principle.

 

[ParticleGrl]

I don't. Making 200K a year is nowhere even remotely close to being "rich."

So the top 3% of America's earners aren't rich? What counts as rich then? The top 0.3%? The top .00003%? I could live for more than a decade on 200k. If I made 200k a year, I could easily be a millionaire within a decade without even having to invest wisely.

Also, if 200k isn't rich, what number do you think counts as poor? 20k a year? 30k a year? 40k a year?

There was nothing "magical" to it, the idea is that if taxes are too restrictively high, then reducing them can incentivize enough economic growth to create more revenue. And yes, it did workout, because in the mid-1980s, the deficit began shrinking.

Reagan's cuts were early in his first term, and the deficit exploded. At no point in Reagan's administration was the deficit lower than under previous presidents. When Clinton raised taxes, he moved us into a budget a surplus.

No tax cut in the history of the United States has raised revenue. The Reagan cuts come closest, but revenue still did not return to trend. If the Laffer curve is valid, the turn around point is higher than tax rates in the US have ever been.

When Clinton raised taxes, guess what- the deficit was reduced.

The best way to get rich is to start your own business. Inherited wealth accounts for only a fraction of most of the wealth generated today.

Where are you getting your numbers? It might be true that inherited wealth accounts for only a small fraction of generated wealth, but it does seem to account for a tremendous amount of wealth in group you'd call the "super-rich." While small businesses might be generating lots of wealth, its mostly in the < 200k range Sam Walton's heirs alone fill out a non-trivial percentage of the richest thirty or so people on Earth.

Starting a business is a long-shot- most people who start businesses never get to even the 200k mark- it takes both skill and a tremendous amount of luck. Sub-specializing in invasive cardiac surgery will consistently net you 500k-800k a year by your late career. It takes a lot of skill, but far less luck. Further, if you are making 200k-500k, you can invest your money in other people starting businesses, which dramatically increases your odds over those people starting only one business.

Which "Principles of Economics" text? Which author?

Case and Fair.

The top-rate in the 1950s applied to the inflation-adjusted equivalent of someone earning many millions of dollars a year.

Actually, something like 1.5 million, not many millions. Regardless, my point was that looking at the revenue before and after a tax cut without paying attention to the trend in revenue/GDP is silly. The revenue rose consistently in the 1950s because the GDP was exploding. Look at something like this, and fit different growth rates to it:

http://www.multpl.com/us-gdp-inflation-adjusted/

Does it look like the growth trend changes substantially after the 1980 tax cuts? Is there any evidence of a dramatic change in growth from (say) the 70s after those cuts? Not that I can tell.

 

[CAC1001]

So the top 3% of America's earners aren't rich? What counts as rich then? The top 0.3%? The top .00003%? I could live for more than a decade on 200k. If I made 200k a year, I could easily be a millionaire within a decade without even having to invest wisely.

Yes, I'd say the truly rich probably are something more like to top 0.3% or the top .003%.

Also, if 200k isn't rich, what number do you think counts as poor? 20k a year? 30k a year? 40k a year?

"Poor" is when you flat-out cannot afford the basic essentials, or only can afford them at a very bare minimum.

Reagan's cuts were early in his first term, and the deficit exploded. At no point in Reagan's administration was the deficit lower than under previous presidents. When Clinton raised taxes, he moved us into a budget a surplus.

The deficit exploded due to Reagan's tax cuts and the Federal Reserve fixing inflation. The deficit began shrinking some years later. It stopped when the stock market crashed in 1987. President George H. W. Bush also signed a large tax increase in the hopes of balancing the budget and it did no such thing (I think Congress had promised him they would reduce spending for every dollar of increased revenue, but did not do this).

Bill Clinton's signed a tax increase in 1993, and then in 1994 the control of the Congress moved to the Republicans, and Clinton basically said, "The era of big government is over" and pivoted. The surplus under Clinton I'd say was from a combination of a few things:

1) Remember George H. W. Bush had slashed defense spending because of the Soviet Union ending

2) Clinton's tax increase (with him then not being able to engage in big-government afterwards)

3) The Republicans pushed through welfare reform

4) Bill Clinton completed NAFTA

5) Clinton signed a capital gains tax rate cut, which increased revenues (cutting capital gains taxes will tend to increase revenues in the short-term)

6) There was a major stock market bubble, the Dot Com bubble. The deficit was shrinking big-time at the height of the real-estate bubble under President Bush to, and if it had lasted a few more years, and Bush had been able to remain president a few more years, the budget probably would have been balanced under Bush too.

No tax cut in the history of the United States has raised revenue. The Reagan cuts come closest, but revenue still did not return to trend. If the Laffer curve is valid, the turn around point is higher than tax rates in the US have ever been.

I think it depends. Taxes were slashed in the 1920s and revenues boomed, there was a bubble then too though. Also, the rates had been pretty high from WWI: http://www.cato.org/pub_display.php?pub_id=3015

I think it depends on the tax, how it's cut, and also the rate it was at.

When Clinton raised taxes, guess what- the deficit was reduced.

And when Reagan cut them, it also started reducing itself, just took a couple of years. The deficit was reduced under Clinton because he couldn't engage in big-government the way he had been initially attempting. He did not govern as a big-government Democrat. Also I am not arguing that raising taxes won't increase revenue. But it must be done with control on spending too.

Where are you getting your numbers? It might be true that inherited wealth accounts for only a small fraction of generated wealth, but it does seem to account for a tremendous amount of wealth in group you'd call the "super-rich." While small businesses might be generating lots of wealth, its mostly in the < 200k range Sam Walton's heirs alone fill out a non-trivial percentage of the richest thirty or so people on Earth.

http://blogs.wsj.com/wealth/2008/01/14/the-decline-of-inherited-money/

Sam Walton's heirs I think are an anomoly, because his fortune is fairly new still, and Wal-Mart keeps growing. Most inherited fortunes, over time, dissipate, due to the family growing so large, poor investment decisions, taxes, the family spending it, and inflation.

Most of the Forbes 400 are self-made: http://www.realclearpolitics.com/articles/2007/09/the_forbes_400_as_a_lesson_in.html

Starting a business is a long-shot- most people who start businesses never get to even the 200k mark- it takes both skill and a tremendous amount of luck. Sub-specializing in invasive cardiac surgery will consistently net you 500k-800k a year by your late career. It takes a lot of skill, but far less luck. Further, if you are making 200k-500k, you can invest your money in other people starting businesses, which dramatically increases your odds over those people starting only one business.

Starting a business is definitely a long shot, but it is the best way to get rich. Most of the super-rich folk did not get rich by being a corporate executive, sports athlete, rock star, movie star, or anything like that. It was by starting a business and being successful at it.

Investing in businesses is a very tricky business that, when successful, can be great, but also a major loss of money when they don't work out (as often happens).

Actually, something like 1.5 million, not many millions.

$1.5 million literally at the time or in inflation-adjusted dollars? Because $1.5 million a year in the 1950s would be something like $30 million a year today I'd imagine, or somewhere around that.

Regardless, my point was that looking at the revenue before and after a tax cut without paying attention to the trend in revenue/GDP is silly. The revenue rose consistently in the 1950s because the GDP was exploding. Look at something like this, and fit different growth rates to it:

http://www.multpl.com/us-gdp-inflation-adjusted/

Does it look like the growth trend changes substantially after the 1980 tax cuts? Is there any evidence of a dramatic change in growth from (say) the 70s after those cuts? Not that I can tell.

A booming GDP will definitely increase revenues. I think part of what you are saying has to do with the economy maturing. When an economy is young, it can grow at very high rates (for example the Chinese economy). I think (but can't find any hard numbers) that the U.S. economy grew at soemthing like 5% a year during the Great Depression for example. 5% would be great right now. The U.S. economy in the 1950s, even though America had been around for over 100 years, was still very young. You had once rural areas now becoming vibrant booming economies, so GDP boomed.

You are correct that the overall rate of growth of the U.S. economy in the 1970s and the 1980s wasn't really different. I would imagine this just being that the U.S. economy in the 1970s was a bit younger than in the 1980s, so even though a time of high unemployment and high inflation, it still grew at a rate similar to that of the 1980s (although I don't know for sure if that's why). The 1980s was a time of low unemployment, low inflation, and a tremendous amount of wealth creation. Also remember that part of the 1980s included the Volcker Recession, created by Paul Volcker at the Federal Reserve from 1981 to 1982 by hiking interest rates. If you want to look at what could be called the "Reagan economy," it probably starts around 1983-ish, which was pretty positive from then on. If you calculate the average GDP growth rate during the 1980s, it gets a major denting when you include the first two to three years due to the recession.

BTW, I am not saying the economy of the 80s was solely due to Reagan. There were multiple factors: the start of the utilization of high-yield debt by Michael Milken (junk bonds) which was used to finance a lot of new companies, the invention of the leveraged buyout (which helped to streamline a lot of inefficient companies), Reagan's tax cuts which led to more money in the stock and bond markets, and deregulation in certain industries (part of which was also started under Carter and Ford). Also price controls on gasoline were ended.

Overall it seems we had a high-yield debt (or junk bond) bubble in the 1980s, then a Dot Com bubble in the 1990s, then a real-estate and credit bubble in the 2000s. I wonder if we will have another bubble between 2010 to 2020?

 

[ParticleGrl]

"Poor" is when you flat-out cannot afford the basic essentials, or only can afford them at a very bare minimum.

So what income do you judge that to be?

I think it depends. Taxes were slashed in the 1920s and revenues boomed

Tax were slashed, and near as I can tell, GDP continue to grow at trend. Cato has an ideological point to make, so they always show you the plot starting the year taxes were cut. A more illustrative plot is to extend the plot a decade back, so it runs from 1910-1930. Then you can see that the 1920s tax cuts lowered the revenue trend. Just like they always have.

Most of the Forbes 400 are self-made

I'm not going to go through the whole list- after all the top 400 people is a different demographic (the top 0.000001%) than the super-rich. Its the super-super-super-super rich.

Even still, by my count something like 1/4 of them in the first hundred or so inherited, in some cases inheriting a several hundred million dollar company and turning into a several billion dollar company, in other cases just inheriting (the Kochs, the Mars family, the Walton family, the Butt family, Cargill family, etc).

Another large percentage, slightly more than a quarter did it by investing in other people's businesses. And yet more did it by working for successful businesses (the Steve Ballmer's of the list). It seems to me that inheriting, and investing both beat out actually starting a company, and latching yourself as CEO or CFO to a successful startup works well too.

But again- the top 400 is a ridiculously small demographic, and may well not be representative of the top 0.1% or even the top 0.01%. Better to look at some larger set of wealth holders.

Starting a business is definitely a long shot, but it is the best way to get rich. Most of the super-rich folk did not get rich by being a corporate executive, sports athlete, rock star, movie star, or anything like that.

But according to the IRS and BLS data, that's exactly how most people in the 500k+ range did it (which would be the top 0.3% or so).

Investing in businesses is a very tricky business that, when successful, can be great, but also a major loss of money when they don't work out (as often happens).

Investing in a business is less risk than trying to start your own. First, your exposure is limited to what you invest, and second, you aren't putting in your own time. If starting a business is a good way to get rich, investing in dozens of other people's businesses is a better way to get rich (assuming you have the capital).

$1.5 million literally at the time or in inflation-adjusted dollars?

200k in 1950s dollars is about 1.5 million in todays dollars.

You are correct that the overall rate of growth of the U.S. economy in the 1970s and the 1980s wasn't really different.

Which means that its very difficult to honestly claim that Reagan's tax cuts helped grow the economy. Suddenly you have to assume that some other factors were somehow "holding it back" and tax rates kept it from being worse. I think its more honest to suggest that supply-side economics is left on shakier ground, since there is no discernable change in growth after the cuts. While tax rates might have some bearing on economic growth, it isn't nearly as important as other factors.

I would imagine this just being that the U.S. economy in the 1970s was a bit younger than in the 1980s, so even though a time of high unemployment and high inflation , it still grew at a rate similar to that of the 1980s (although I don't know for sure if that's why). The 1980s was a time of low unemployment, low inflation, and a tremendous amount of wealth creation.

It would be hard to argue that the 70s economy was any less mature than the 80s economy. Developing nations GDP can grow quickly because there is a lot of low hanging fruit- purchasing modern resources allows for incredible productivity gains. The US couldn't do that in the 70s or the 80s.

Also, Unemployment was not markedly lower in the 80s than the 70s. http://research.stlouisfed.org/fred2/data/UNRATE.txt

the invention of the leveraged buyout (which helped to streamline a lot of inefficient companies)

I think leveraged buyouts are among the worst innovations in modern financial history. There is plenty of literature that suggests that leveraged buyouts lead to restructuring firms for short term profitability, rather than long term sustainability (at least in part, to pay off the bonds used to purchase the company).

Overall it seems we had a high-yield debt (or junk bond) bubble in the 1980s, then a Dot Com bubble in the 1990s, then a real-estate and credit bubble in the 2000s. I wonder if we will have another bubble between 2010 to 2020?

You are forgetting the savings and loan bubble (the original housing crisis), the foreign currency bubble leading to the Russian default, etc. Loosening depression-era regulation on the financial sector seems to have destabilized the world economy or something.

 

[Al68]

See page 695 of Principles of Economics for a discussion of the supply siders and their claims.

I'm just too lazy to keep responding to everything, but I would note one thing here.

First, I don't have a copy of that text. The last economics text I looked at was very different from the economic textbooks of the past. College economics courses have apparently devolved into a politicized pseudo-science taught by Marxist ideologues with books written by Keynesian propagandists, if the last textbook I saw is any indication. Yes, it had a section on "supply-side" economics that purposely misrepresented it, also.

 

[WhoWee]

Anyway, back on topic. Trump is not serious. He is a media-hog and every time he can make a splash, it gives him leverage with a gullible demographic that he'd like to skin. He wants to be president less than Palin wanted to remain governor of Alaska. As soon as her publicity flacks started fluffing her credentials as an author (really?) and a public speaker (really?), she was looking at some really big short-term paydays that dwarfed her salary as governor. Bye-bye. Trump is probably more addicted to pay-days and even less concerned with the well-being of this country than Palin is.

It sounds as if you agree Trump and Palin are more dangerous to the Obama re-election campaign if they don't run?

 

[turbo]

It sounds as if you agree Trump and Palin are more dangerous to the Obama re-election campaign if they don't run?

I don't know if Obama's candidacy is in any danger, but if Trump and/or Palin were on the GOP ticket, Obama would win in a landslide. Just my opinion, of course, but neither of them have acquitted themselves well with the mainstream. Tea-partiers may swoon, but I think average Americans shudder at the thought of such reckless characters in power.

 

[WhoWee]

I think Trump is very serious. I also think Palin is very serious. But I think neither one of them really knows enough about what they are talking about regarding anything (Trump especially!).

The attention Trump is drawing I think is based on two major misconceptions:

1) The idea that being a successful businessperson means one knows anything about economic policy. I see it at other forums a lot. People I saw would say about Mitt Romney, "He'd be GREAT for President! He'd fix the economy immediately!" Or about Trump: "Trump is a great businessman, so he is exactly the person we want running the biggest business in the world, the U.S. economy."

It amazes me how many people actually think the President "manages" the economy, but unfortunately, they do. Being a successful businessperson doesn't mean one knows squat about economic policy.

2) The idea that because one is an expert in one subject, that this means they are qualified to discuss other subjects with equal authority. Trump may be a fantastic real-estate guy, but this doesn't mean he knows anything about the different areas of policy.

I think people tend to believe the President when he promises to focus like a laser on jobs (for instance).

Then his laser focus turned to education?
http://www.kval.com/news/116483733.html
"Obama says he wants to focus "like a laser" on improving education."

Now, it's deficits?
http://news.yahoo.com/s/ap/20110422/ap_on_bi_ge/us_obama
""At the beginning of your term you spent a lot of time talking about job creation and the road to economic recovery," the questioner told the president. "Since then, we've seen the conversation shift from that of job creation and economic recovery to that of spending cuts and the deficit.""

ALSO FROM THE SAME LINK: (my bold)

""If we don't have a serious plan to tackle the debt and the deficit, that could actually end up being a bigger drag on the economy than anything else," Obama said.

The economy has rebounded since the early days of Obama's presidency. But the unemployment rate is 8.8 percent and millions of jobs cut during the recession haven't returned. A questioner at Obama's town hall meeting in Reno, Nev., on Thursday said both he and his wife were out of work."

THEN THE TOPIC CHANGED - SAME LINK: (my bold)
"A question submitted for Obama online during the Facebook town hall put the public's frustration simply: "The housing crisis will not go away."

Obama didn't reject that assessment. He said the housing market was the "biggest drag" on the economy."[/I]


It seems to appear the President lacks a laser focus and a comprehensive plan and needs guidance in the area of real estate - maybe he should name Trump a czar?

 

[WhoWee]

I don't know if Obama's candidacy is in any danger, but if Trump and/or Palin were on the GOP ticket, Obama would win in a landslide. Just my opinion, of course, but neither of them have acquitted themselves well with the mainstream. Tea-partiers may swoon, but I think average Americans shudder at the thought of such reckless characters in power.

Do you think it's possible that voters will tire of big boisterous rhetoric pre-election (this time) and seek out a candidate that talks specifics (or at least explains what he/she means) and makes sense?

 

[Vanadium 50]

It seems to appear the President lacks a laser focus

I think you must have misheard him. Perhaps he meant "focus like a laser pointer."

 

[Char. Limit]

I think people tend to believe the President when he promises to focus like a laser on jobs (for instance).

Then his laser focus turned to education?
http://www.kval.com/news/116483733.html
"Obama says he wants to focus "like a laser" on improving education."

Now, it's deficits?
http://news.yahoo.com/s/ap/20110422/ap_on_bi_ge/us_obama
""At the beginning of your term you spent a lot of time talking about job creation and the road to economic recovery," the questioner told the president. "Since then, we've seen the conversation shift from that of job creation and economic recovery to that of spending cuts and the deficit.""

ALSO FROM THE SAME LINK: (my bold)

""If we don't have a serious plan to tackle the debt and the deficit, that could actually end up being a bigger drag on the economy than anything else," Obama said.

The economy has rebounded since the early days of Obama's presidency. But the unemployment rate is 8.8 percent and millions of jobs cut during the recession haven't returned. A questioner at Obama's town hall meeting in Reno, Nev., on Thursday said both he and his wife were out of work."

THEN THE TOPIC CHANGED - SAME LINK: (my bold)
"A question submitted for Obama online during the Facebook town hall put the public's frustration simply: "The housing crisis will not go away."

Obama didn't reject that assessment. He said the housing market was the "biggest drag" on the economy."[/I]


It seems to appear the President lacks a laser focus and a comprehensive plan and needs guidance in the area of real estate - maybe he should name Trump a czar?

So you're mad because he wants to do more than one thing at a time? Sounds like a dumb thing to accuse him of to me.

 

[WhoWee]

So you're mad because he wants to do more than one thing at a time? Sounds like a dumb thing to accuse him of to me.

His "laser focus" (in 2 areas - split beam laser?) and 2 different references to the biggest drag on the economy (in about 2 minutes?) aside - it sounds like Trump has the requisite experience to address job creation, business recovery, and of course real estate - that President Obama specifically does not.

 

[lisab]

Do you think it's possible that voters will tire of big boisterous rhetoric pre-election (this time) and seek out a candidate that talks specifics (or at least explains what he/she means) and makes sense?

Hmm, when I think of a person who does not engage in "big boisterous rhetoric", Donald Trump most certainly does *not* come to mind.

 

[WhoWee]

Hmm, when I think of a person who does not engage in "big boisterous rhetoric", Donald Trump most certainly does *not* come to mind.

I'll pose this differently. This far away from the election, most people are not interested generally. However, Trump the personality and Palin the phenom have them engaged almost from an entertainment perspective as compared to the President that is speaking to a fundraising base and people concerned about the economy - that want answers - is that fair?

My point is that as the election nears - won't people begin to listen more carefully to what the candidate says (this time) and ignore the "show"?

 

[CAC1001]

So what income do you judge that to be?

It depends on where you live. Different areas of the country have different cost of living.

Tax were slashed, and near as I can tell, GDP continue to grow at trend. Cato has an ideological point to make, so they always show you the plot starting the year taxes were cut. A more illustrative plot is to extend the plot a decade back, so it runs from 1910-1930. Then you can see that the 1920s tax cuts lowered the revenue trend. Just like they always have.

I don't know if they did or not. However the idea of tax cuts in the 1920s icnreasing revenues I can see as more reasonable because the rates were very high and also a stock market bubble developed. They hiked taxes after the 1929 crash to try to balance the budget, but that didn't have a very good effect on the economy.

I'm not going to go through the whole list- after all the top 400 people is a different demographic (the top 0.000001%) than the super-rich. Its the super-super-super-super rich.

Depends how you define super-rich. I don't really see how anyone could define someone making hundreds of thousands a year as "super-rich." Hundreds of thousands a year will not allow you to pay cash for a car that costs $400K or $500K brand-new. "Super-rich" people, to me, can afford such cars easily. They can afford a yacht. They can afford a private jet. They live in mansions that cost $10-$50 million.

Even still, by my count something like 1/4 of them in the first hundred or so inherited, in some cases inheriting a several hundred million dollar company and turning into a several billion dollar company, in other cases just inheriting (the Kochs, the Mars family, the Walton family, the Butt family, Cargill family, etc).

Don't know about the others, but the Kochs did not "just inherit." They started with a company making millions of dollars and turned it into a conglomerate making about $80 billion a year, over a period of many decades. Also, my point was that the majority of the super-wealthy today are self-made. I didn't say all were.

pquote]Another large percentage, slightly more than a quarter did it by investing in other people's businesses.

That is still self-made.

And yet more did it by working for successful businesses (the Steve Ballmer's of the list). It seems to me that inheriting, and investing both beat out actually starting a company, and latching yourself as CEO or CFO to a successful startup works well too.

Inherited wealth is rarer. Rising up in a large corporation takes many years, and dealing with a lot of politics. Being part of a successful startup can be great, but those are rare.

But again- the top 400 is a ridiculously small demographic, and may well not be representative of the top 0.1% or even the top 0.01%. Better to look at some larger set of wealth holders.

Generally the top 400 are all billionaires, so yes, there are a lot of other rich people worth in the hundreds of millions not on that list.

But according to the IRS and BLS data, that's exactly how most people in the 500k+ range did it (which would be the top 0.3% or so).

Which IRS data? Movie/sports/rock stars do not make up the majority of rich people. There are lots of successful CEOs, but there are plenty of successful business owners too.

Investing in a business is less risk than trying to start your own. First, your exposure is limited to what you invest, and second, you aren't putting in your own time. If starting a business is a good way to get rich, investing in dozens of other people's businesses is a better way to get rich (assuming you have the capital).

You can only really invest in other people's businesses to that degree by already being rich. And even then, it is risky.

200k in 1950s dollars is about 1.5 million in todays dollars.

http://en.wikipedia.org/wiki/Internal_Revenue_Code_of_1986#Progressivity_of_the_1954_Code - don't know how accurate this is, it says the 91% rate applied to the equivalent of about $3.75 million in today's dollars. Still not much difference though.

Which means that its very difficult to honestly claim that Reagan's tax cuts helped grow the economy. Suddenly you have to assume that some other factors were somehow "holding it back" and tax rates kept it from being worse.

One could assume that the growth rate would have been lower if not for the tax cuts. Part of the Reagan tax cuts included closing up loopholes as well. One other thing to keep in mind is that Reagan's tax cuts were only "supply-side" regarding the upper-brackets. His tax cuts for the lower and middle-income brackets would have been demand-side, or Keynesian.

I think its more honest to suggest that supply-side economics is left on shakier ground, since there is no discernable change in growth after the cuts.

Since the economy was "older" perhaps the growth rate was higher than what it otherwise would have been. The idea of supply-side economics is to increase investment, and hence add more goods/services to the economy, as opposed to demand-side, which seeks to control demand. For example, some economists said the Reagan tax cuts would overwhelm the economy with demand, and thus spike inflation even higher. But the supply-side tax cuts were not to increase demand, they were to increase supply, and thus counter the inflation.

In this sense, I think supply-side economics can be very viable, depending. "Demand-side" tax cuts can also have a supply-side effect if they impact small businesses that fall under the lower and middle-income tax brackets.

While tax rates might have some bearing on economic growth, it isn't nearly as important as other factors.

Taxes I think are very important, along with other factors.

It would be hard to argue that the 70s economy was any less mature than the 80s economy. Developing nations GDP can grow quickly because there is a lot of low hanging fruit- purchasing modern resources allows for incredible productivity gains. The US couldn't do that in the 70s or the 80s.

The 1980s did see a lot of streamlining of what were previously bloated, inefficient companies, so it would be interesting to see if what kind of productivity gains exactly were made during the 1980s.

Also, Unemployment was not markedly lower in the 80s than the 70s. http://research.stlouisfed.org/fred2/data/UNRATE.txt

One thing about this I find interesting is that Ronald Reagan was re-elected in 1984 by a historic margin. So to most of the population, it must have looked like the economy had improved a lot. Maybe because of the inflation being lowered.

I think leveraged buyouts are among the worst innovations in modern financial history. There is plenty of literature that suggests that leveraged buyouts lead to restructuring firms for short term profitability, rather than long term sustainability (at least in part, to pay off the bonds used to purchase the company).

Depends on how one looks at it. That's part of the reason why LBOs were so good at making companies efficient during the 1980s. Shareholder accountability was something pretty rare when the 1980s started. By loading companies up with debt, LBO firms forced the management to focus on what the company was good at, as opposed to spending money on bloating the company into areas that were not very profitable. Some companies were so bloated that they essentially had to break up the company and sell it for parts, and dissolve the management. Companies also became much more accountable to their shareholders.

LBOs also can provide for the opposite, providing a haven companies that were too obsessed with short-term profitability. Companeis don't focus on short-term profitability because of LBOs, they focus on it because the shareholders, which often include large institutional investors, put tremendous pressure on the management to squeeze every fraction of a cent they can in quarterly profit increases.

An LBO firm can provide a company a haven from this so tey can focus on the long-term. Yes, not all LBO firms have done this, and there were some legitimate corporate raiders in the 1980s too.

But there is a large body of work that shows that overall, LBO firms do more good than bad, and create value. If they lost investors' money consistently, they would have died out as an asset class.

quote]You are forgetting the savings and loan bubble (the original housing crisis), the foreign currency bubble leading to the Russian default, etc. Loosening depression-era regulation on the financial sector seems to have destabilized the world economy or something.[/QUOTE]

The S&L bubble was tied into the high-yield debt I think. I am aware of the foreign currency bubble, but I meant domestic bubbles. I would not blame these on loosening Depression-era regulations though. I think it is far more complex than that when one looks at it.

 

[CAC1001]

I'm just too lazy to keep responding to everything, but I would note one thing here.

First, I don't have a copy of that text. The last economics text I looked at was very different from the economic textbooks of the past. College economics courses have apparently devolved into a politicized pseudo-science taught by Marxist ideologues with books written by Keynesian propagandists, if the last textbook I saw is any indication. Yes, it had a section on "supply-side" economics that purposely misrepresented it, also.

From what I can garner, undergraduate level economics seems to teach Keynesianism a lot. High-school level too. But graduate-level, according to University of Chicago economist John Cochrane, gave up on Keynesianism long ago.

 

[rootX]

Trump seems had a really rough dinner:

https://www.youtube.com/watch?v=k8TwRmX6zs4

https://www.youtube.com/watch?v=7YGITlxfT6s