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Problems with Capitalism?

  1. Jun 6, 2015 #101

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    I think you mean FSLIC.

    The moral hazard came about because FSLIC paid 100% of deposits, not 100% of insured deposits.
  2. Jun 6, 2015 #102


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    right. thanks for the correction.
  3. Jun 9, 2015 #103


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  4. Jun 22, 2015 #104
    http://www.equality-of-opportunity.org/images/mobility_geo.pdf [Broken]









    High-income kids who don't graduate from college are 2.5 times more likely to end up rich than low-income kids who do.




    After examining the records of 18,869 people, and dividing them into three categories, the rich, the prosperous and the poor, Clark and Cummins agree. They suggest that the passing on of wealth is far more persistent over the generations than previously acknowledged, noting that there is a “significant correlation between the wealth of families five generations apart”. Put simply, the descendants of the wealthy of 1858 are still much wealthier than the average person in 2012.


    In Italy, Portugal, Turkey and the United States, young people from families with low levels of education have the least chance of attaining a higher level of education than their parents. In these countries, more than 40% of these young people have not completed upper secondary education, and fewer than 20% have made it to tertiary education.







    http://www.brookings.edu/~/media/Research/Images/0/123/052015-Chart.jpg?la=en [Broken]


    White high school graduates have more wealth than black and hispanic college graduates



    In reality, however, only 4% of Americans travel the rags-to-riches path, according to new research from the Economic Mobility Project of the Pew Charitable Trusts. And a great many who are born into the poorest segments of the population are stuck there for life, a finding that suggests the U.S. has much to do to improve social mobility.

    Forty-three percent of Americans raised in the bottom quintile of household income remain there a generation later (with income of less than $28,900 in 2009 dollars, adjusted for family size). Twenty-seven percent rise up slightly into the second quintile, 17% land in the middle of the distribution, and 9% end up in the 4th quintile.

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  5. Jun 24, 2015 #105


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    Yes, all of those stats document the inequality different ways and some look at causes (and I'm pretty much aware of all of them), but none examine the cause I asked about. That bothers me a lot (it isn't you: I don't think people who research the issue are examining my question). It seems political to me that researchers focus on external factors and don't even address the possibility that internal factors (choices) impact inequality/mobility.
  6. Jun 24, 2015 #106
    You are incorrect. At the very least they show an implicit relationship between intergenerational mobility and education, though I don't think that is the only cause.
  7. Jun 24, 2015 #107


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    Please explain in more detail. Recently we had a thread about a cartoon purporting to show how much harder it was to get an education if you are poor than rich. There were several factors, not all related to money, and none explored were internal.

    It sounds like you are saying that because a rich person has more money, the money itself explains why they can go to college. Maybe that's your "implicit relationship". Well that isn't enough for me. I don't want to accept an implication, I want to know the facts.

    The numbers are never going to be equal, nor should they be. But in order to know if they are good or bad and how to fix them if they are bad, we need to actually know the causes, not just guess.
    Last edited: Jun 24, 2015
  8. Jun 24, 2015 #108
    I would like to see data on which sectors the wages have stagnated, in which it has grew, and in those it has fallen; I think it's easier to make an analysis and find the culprit once we have it broken down by sector. I can find it for a given year, but not a timeseries of it, would someone be so kind to post something about it?
  9. Jun 24, 2015 #109


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    What are "sectors"? Do you mean for the different income levels across the population as a whole? I last posted that data here:
    Inequality - Maybe not so bad?

    Or do you mean by industry? Or something else?
  10. Jun 24, 2015 #110
    Yes industry sectors I mean.
  11. Jun 24, 2015 #111


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  12. Jul 1, 2015 #112


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  13. Jul 1, 2015 #113
    You raised an interesting subject - so what one should do if gov was running deficit year after (on very popular stuff like early retirement) and reach a point where creditors lose faith in gov ability to repay debts?

    Because of such heavy spending I also don't understand why you classify that as bad "issue with the financial side of Capitalism", and not as an issue of an irresponsible version of socialism facing the day of reckoning?
  14. Jul 1, 2015 #114


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    Not sure what you mean about socialism. Can you explain?

    I think Krugman clearly explains why he thinks it is bad.
  15. Jul 1, 2015 #115
    Yes, I know Krugman point. He is absolutely right that austerity strangles economy in crisis. Just there is a problem here - what else to do, when country credit credibility is low? Especially now, when ECB monetary policy is a lose as possible (even negative interest rates) so default Krugman advice is already implemented. Greeks leaving Eurozone? Cool, even that time I'm in full agreement with him.

    I mean Greek society was voting all the time nice socialistic parties, that were providing them with all nice features of socialism (early retirement, hiring plenty of civil servants, etc). As long as they could borrow that on markets everything was fine. Now when they run out of other's people money - that's a capitalism flaw?
  16. Jul 1, 2015 #116


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    This is not an area that I feel competent to delve into in detail and would welcome information and the opportunity to learn.

    Here are a couple of sentences from Krugman's article on Greece.

    Yes, the Greek government was spending beyond its means in the late 2000s. But since then it has repeatedly slashed spending and raised taxes.Government employment has fallen more than 25 percent, and pensions (which were indeed much too generous) have been cut sharply. If you add up all the austerity measures, they have been more than enough to eliminate the original deficit and turn it into a large surplus.

    So why didn’t this happen? Because the Greek economy collapsed, largely as a result of those very austerity measures, dragging revenues down with it."
  17. Jul 1, 2015 #117
    But you already diagnosed problem deep enough to claim that's a capitalism fault :D

    This problem is being discussed:
    (quite a few nice stats are being quoted)

    You selected quite unlucky subject for your ideological bent. ;)

    The second challenge is that when you are showing that one solution don't work, to suggest an alternative one... and the tricky part starts...
  18. Jul 1, 2015 #118


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    You want to accuse me of ideology. That is not only unfair but also shows that you think ideologically rather than rigorously. Dialogue does not seem to be your preference. Your aggression has ended this thread,as far as I am concerned anyway Too bad. There is much to think about here.
    Last edited: Jul 1, 2015
  19. Jul 1, 2015 #119
    You first reach a conclusion: "capitalism fault" (paraphrase), and later admit that's actually in that area, where you already reached a conclusion you do not "feel competent"? Really, I'm really more used to idea, that one first analyses a problem, before reaching conclusion, especially a far reaching one.

    Yes, I accuse you of ideology. And of desperate search for data that you don't fully understand, which you cherry pick to confirm your beliefs. When you picked very poorly this time (Greece), you just feel offended that I pointed it out and started arguments ad persona.
  20. Jul 1, 2015 #120
    First - a technical question - how are you going to measure internal causes? I understand why you want to measure that, why you see a some flaw in measuring only external factors... but how to measure that?

    Second - now, with Greece, you have a country, which didn't have especially adverse external conditions, but somehow it seriously underperformed. Something inside those people... but how to measure / pinpoint that...

    (yes, human capital, but it assessment would be done mostly ex post)
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