Comments on: The fierce urgency of fixing economic inequality http://blogs.reuters.com/lawrencesummers/2011/11/21/the-fierce-urgency-of-fixing-economic-inequality/ Sat, 21 Jun 2014 15:30:06 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: slowsmile http://blogs.reuters.com/lawrencesummers/2011/11/21/the-fierce-urgency-of-fixing-economic-inequality/#comment-310 Mon, 05 Dec 2011 00:14:26 +0000 http://blogs.reuters.com/lawrencesummers/?p=108#comment-310 I am slightly amused by Mr Summers reference to switching from “an industrial to a knowledge economy”. This seems to infer that America, due to the wonders of her knowledge and innovation, has no need to produce any manufactured goods. Or is this statement meant to justify the gross, unhealthy expansion of the financial sector in western economies today as a valid forfeit for manufactured and traded goods?

Sorry just won’t do Mr Summers. How can you put forward such blurry economic assumptions when America is limping uncompetitively along with a manufacturing sector that represents only 12% — 13% of US GDP ?

And no, you will not now be able to manipulate the Debt/Treasury cycle or the Floating dollar exchange rate to America’s advantage because many powerful mercantilist countries are so actively working against the dollar now.

Next time, try and avoid propaganda fluff Mr Summers.

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By: trevorh http://blogs.reuters.com/lawrencesummers/2011/11/21/the-fierce-urgency-of-fixing-economic-inequality/#comment-307 Wed, 23 Nov 2011 20:02:51 +0000 http://blogs.reuters.com/lawrencesummers/?p=108#comment-307 The problem with some idealistic liberals is that they want to create a perfect system. But nothing is perfect. People have tried to do it before, and failed badly: socialism, communism, collectivism, etc…

From my view point there are not just the rich and the poor on 2 sides. There are 4 of them. (There are not just left wing, right wing, there are also libertarian and populists). So we have
1. The undeserving fortunate mean-spirited selfish rich (the racist far right, the fraudulent corrupted fake-nice part of the left and most politicians)
2. The middle class
3. The unfortunate very poor with bad job/unemployed
4. The nice fortunate deserving noblesse obigue rich (These are the main driving force that moves mankind ahead, like the brain in a body, we must have them)

Government policies should be done so that we minimize both number1 and number3 as much as we can. Many mistakenly think that there are only two types, and it’s a zero sum game so if they reduce the rich (both 1 and 4), there will be less of the poor 3 and more of 2 and vice-versa.

It’s also important to note that there must be all of them. Trying to create a perfect system will unavoidably lead to utter failure. Live with it, suffering is part of life, we can only minimize it.

Tax rates, policy should be done to minimize 1 and 3 depending on the counts of all 1, 2, 3, 4. They cannot be rigid, they should change all the times accordingly.

One problem that the West have right now regarding inequality (inequality problem in the East is different) is that there are just too many of type 1.
(Lawyers, scammers, etc are examples) My personal view is that if we can precisely reduce 1 and 1 only. Things will largely solve themselves.

Another problem is that there are inequalities in the East, and in a connected global economy, this has significant impact on making inequality in the West worse.

The best way to pump up economic activities around the world right now depends on China. People in the East are extremely conservative, they save a lot of money. If China creates some sort of social safety net, they will have more confidence, spend and we will be on the way out of this recession quickly.

But in the end, we have to reduce our innate differences. At the same time, we have to allow personal liberty. Most of 2,3,4 are willing to mixed and reduce the root cause of inequality. 1 will never want to mix, we MUST respect their choice, we cannot force them. If we do, there will be chaos. 1 will go down by themselves, inbreeding will ultimately cost them in the long run.

Things are more complicated, and there are a lot more to say, but I hope my limited opinions here make sense and are of any use.

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By: OneOfTheSheep http://blogs.reuters.com/lawrencesummers/2011/11/21/the-fierce-urgency-of-fixing-economic-inequality/#comment-306 Tue, 22 Nov 2011 23:22:32 +0000 http://blogs.reuters.com/lawrencesummers/?p=108#comment-306 TexasBill,

You said: “OneOfTheSheep made a critical error…” which may or may not be true.

You then proceeded to discuss “unemployment” and “knowledge economy”. I did not address these issues in this thread. Perhaps you were referring to TommyPaine’s post?

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By: Mott http://blogs.reuters.com/lawrencesummers/2011/11/21/the-fierce-urgency-of-fixing-economic-inequality/#comment-305 Tue, 22 Nov 2011 17:18:18 +0000 http://blogs.reuters.com/lawrencesummers/?p=108#comment-305 Amazing – in this age of information and interconnectness, how quickly folks can identify the wolf under sheep skin.

Fierce urgency? Why?

It took 15+ years to slowly chip-away American competitiveness via unregulated free trade to the point where the local job-losses and polarization started slowing down the business growth.

This urgeant heart for economic inequality has little to do with the welfare of the nation nor the public but is to accelerate the demand in whatever manner it takes to business growth – that need not necessarily translate to local growth.

You want fast growth? See if you can talk to the 1% to see how much of th 275% they are willing to share with the 40-percenters in the name of economic equality. These folks are stuck at Bush-era temptations and are killing the growth and the future of this nation.

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By: matthewslyman http://blogs.reuters.com/lawrencesummers/2011/11/21/the-fierce-urgency-of-fixing-economic-inequality/#comment-304 Tue, 22 Nov 2011 15:41:47 +0000 http://blogs.reuters.com/lawrencesummers/?p=108#comment-304 Excellent article!

You’ve anticipated my next blog post, in which I’m planning to explain why the “free market” is not fair. Hint: difference between:
* Unearned income->
* Earned income->
* Take-home pay->
* “disposable income”

The last point is perhaps the most stark and obvious. The proportion of high salaries that are “disposable” is much greater than the proportion of disposable income within a working-class “take-home” salary. We all need to eat…

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By: Fishrl http://blogs.reuters.com/lawrencesummers/2011/11/21/the-fierce-urgency-of-fixing-economic-inequality/#comment-303 Tue, 22 Nov 2011 12:52:13 +0000 http://blogs.reuters.com/lawrencesummers/?p=108#comment-303 Income inequality in the U.S. has structural components, to be sure, but to ignore the policy components advanced by Republicans since the Reagan years is folly. Tax the rich. Close corporate loopholes. Invest in infrastructure. Get people back to work.

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By: TexasBill http://blogs.reuters.com/lawrencesummers/2011/11/21/the-fierce-urgency-of-fixing-economic-inequality/#comment-302 Tue, 22 Nov 2011 09:21:18 +0000 http://blogs.reuters.com/lawrencesummers/?p=108#comment-302 OneOfTheSheep made a critical error: Since the end of World War II, the lowest unemployment and some of the greatest growth in the wealth of the middle class has occurred in periods of high taxation. In 1953, the maximum marginal income tax rate was 92 percent; corporate taxes maxed out at 52 percent and capital gains were taxed at 25 percent. Unemployment was 2.9 percent. In 1968, the highest marginal tax rate was 75.25 percent, corporate taxes were capped at 52.8 percent and capital gains were still taxed at 25 percent. Unemployment was 3.6 percent. In fact, the highest unemployment from 1948 to 1974 was 6.8 percent in the recession of 1958. The next highest, 6.7 percent, was in the first year of John F; Kennedy’s administration. In the same period, the lowest the maximum marginal income tax rate went was 70 percent, the lowest corporate income tax rate was 48 percent. Over that period, the average unemployment rate was 4.8 percent. The average during Ronald Reagan’s two terms was 7.5 percent. During George H.W. Bush’s single term, when tax rates were their lowest in the postwar period, unemployment averaged 6.3 percent. George W. Bush’s Administration averaged 5.3 percent. With the same tax structure, the Obama Administration has averaged 9.5 percent. Incidentally the highest annual unemployment rate in the postwar era was 9.7 percent, recorded in 1982. All figures from the Internal Revenue Service and Bureau of Labor Statistics.

That said, the so-called “knowledge economy” is a sham. You can’t drive knowledge; you can’t eat knowledge; you can’t wear knowledge; you can’t live in knowledge. It’s a wonderful thing, but knowledge depends on a manufactured infrastructure and that’s where we’ve fallen down. We don’t have “globalization,” we have economic colonialism. For the most part, American corporations don’t have manufacturing done in China to sell their products to the Chinese, they have it done there to sell products to us. In fact, right now, American companies are pleading with the Chinese government to halt the improvements in worker wages and conditions because they are driving up costs. And they are moving to Vietnam and Bangladesh to find newer, and cheaper, labor.

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By: reuters11899 http://blogs.reuters.com/lawrencesummers/2011/11/21/the-fierce-urgency-of-fixing-economic-inequality/#comment-301 Tue, 22 Nov 2011 05:10:40 +0000 http://blogs.reuters.com/lawrencesummers/?p=108#comment-301 Mr Summers, why don’t you give us a lesson about this

http://www.pbs.org/wgbh/pages/frontline/ warning/

It would teach us many things especially your role in this financial crisis.

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By: XRayD http://blogs.reuters.com/lawrencesummers/2011/11/21/the-fierce-urgency-of-fixing-economic-inequality/#comment-300 Tue, 22 Nov 2011 04:37:12 +0000 http://blogs.reuters.com/lawrencesummers/?p=108#comment-300 ‘Today Congress voted to update the rules that have governed financial services since the Great Depression and replace them with a system for the 21st century,’ Treasury Secretary Lawrence H. Summers said. ‘This historic legislation will better enable American companies to compete in the new economy.’ [New York Times, Nov. 5, 1999]

http://forums.wallstreetexaminer.com/top ic/804393-lawrence-summers-the-glass-ste agall-act-and-enron/

ALONG with the above, Mr. Summers joined Mr. Greenspan and Mr. Rubin (of Citibank $100 million+ pay check) on TIME magazines cover as the

“COMMITEE TO SAVE THE WORLD”

http://www.time.com/time/covers/0,16641, 19990215,00.html

In a just world, these three should be stirpped of all their assets and be in jail!

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By: breezinthru http://blogs.reuters.com/lawrencesummers/2011/11/21/the-fierce-urgency-of-fixing-economic-inequality/#comment-298 Tue, 22 Nov 2011 03:49:20 +0000 http://blogs.reuters.com/lawrencesummers/?p=108#comment-298 A lot of thoughtful and interesting comments here but I especially like the way txgadfly puts things. Well said.

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