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Summers on Piketty

47 pointsby marojejianabout 11 years ago

8 comments

nopinsightalmost 11 years ago
The impact of technology on inequality is already quite pronounced in a number of occupations. For example, many after-school teachers in Asia are now outcompeted by star teachers enhanced by video and computer-aided teaching platform.<p>&gt; For example, I suspect we will soon see the rise of educator superstars who command audiences of hundreds of thousands for their Internet courses and earn sums way above the traditional dreams of academics.<p>This is already happening in Asia. A South Korean tutor makes $4 million a year. A tutor in Thailand built and owned an 18-story tutoring center in a downtown area.<p>[1] <a href="http://www.forbes.com/sites/jamesmarshallcrotty/2013/08/11/south-korean-tutor-makes-4-million-a-year-can-you/" rel="nofollow">http:&#x2F;&#x2F;www.forbes.com&#x2F;sites&#x2F;jamesmarshallcrotty&#x2F;2013&#x2F;08&#x2F;11&#x2F;s...</a> [2] <a href="http://image.soidb.com/bangkok/zm/105100922_01.jpg" rel="nofollow">http:&#x2F;&#x2F;image.soidb.com&#x2F;bangkok&#x2F;zm&#x2F;105100922_01.jpg</a>
acr25about 11 years ago
Ah, I remember summers on Piketty. The fresh seafood, the smores, the fireworks. Ferry horns in the distance. And, oh yeah, the global wealth tax.
bsbechtelabout 11 years ago
Does anyone think his solution of a global wealth tax will actually help lessen inequality? This solution seems simplistic and naive to me, and puts those at the bottom of the ladder at the mercy of these &#x27;global wealth tax collectors&#x27; instead of the wealthy. I don&#x27;t see much difference in these two, other than one group is at the mercy of market demands, and the other is supposedly at the mercy of a democratic populace. Correct me if I&#x27;m wrong, but he didn&#x27;t write anything about actually empowering those at the bottom of the economic ladder, did he? Where are those solutions being offered up?
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carsongrossabout 11 years ago
The elephant in the room, of course, is Mr. Summer&#x27;s object of desire, the Fed.<p>Until the Fed is dealt with and the financial sector is subject to true market forces, it will continue to dominate the economy and produce destructive malinvestment.
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elchiefalmost 11 years ago
Larry&#x27;s opinion is irrelevant. If you call yourself an Economist, and missed the bubble+collapse, you should resign, and stop talking.<p>&quot;Summers oversaw passage of the Gramm-Leach-Bliley Act, which repealed Glass-Steagall, permitted the previously illegal merger that created Citigroup, and allowed further consolidation in the financial sector. He also successfully fought attempts by Brooksley Born, chair of the Commodity Futures Trading Commission in the Clinton administration, to regulate the financial derivatives that would cause so much damage in the housing bubble and the 2008 economic crisis. He then oversaw passage of the Commodity Futures Modernization Act, which banned all regulation of derivatives, including exempting them from state antigambling laws.&quot;<p>...<p>&quot;Rajan warned that this bonus culture rewarded bankers for actions that could destroy their own institutions, or even the entire system, and that this could generate a &quot;full-blown financial crisis&quot; and a &quot;catastrophic meltdown.&quot;<p>When Rajan finished speaking, Summers rose up from the audience and attacked him, calling him a &quot;Luddite,&quot; dismissing his concerns, and warning that increased regulation would reduce the productivity of the financial sector.&quot;
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selmnooabout 11 years ago
&gt; So why has the labor income of the top 1 percent risen so sharply relative to the income of everyone else? No one really knows.<p>Really? Isn&#x27;t this what the bigger half of the book is about? It&#x27;s because of rentier&#x2F;patrimonial-capitalism, opportunity not being equally distributed in the system, etc.
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timtasalmost 11 years ago
A good analysis of Piketty by some real economists: <a href="https://www.youtube.com/watch?v=aL90pISm7Y8" rel="nofollow">https:&#x2F;&#x2F;www.youtube.com&#x2F;watch?v=aL90pISm7Y8</a>
alexeisadeski3about 11 years ago
At a time when taxes are obscenely high - at least in the US - the discussion should be of massive cuts, not new taxes. Alas, I am not optimistic. People have suffered for <i>generations</i> under horrific conditions. No reason it can&#x27;t happen here.<p>Or to be more precise: No reason it can&#x27;t happen here again. Don&#x27;t forget slavery and Native Americans.<p>EDIT: Moved this from a sub post to here:<p>A lot of people are evidently misinformed about the state of US taxation. Since several have responded to my previous post with similar statements, I&#x27;ll just take the top post and address the whole issue in one go.<p>1. <i>The US has low tax rates relative to the rest of the world</i><p>For low earners, yes. For high earners no.<p>Re low earners: Federal income tax is low, SS contributions are moderate, but - and this is key - sales taxes (VAT) are extremely low, excise taxes on fuel are extremely low, and import duties are generally extremely low. Car registration, government fees, etc are all generally moderate to extremely low.<p>Re high earners:<p>a) Income taxes are <i>extremely</i> high. See <a href="http://en.wikipedia.org/wiki/List_of_countries_by_tax_rates" rel="nofollow">http:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;List_of_countries_by_tax_rates</a> , sort by &quot;Individual (max)&quot;, and note that only France, Belgium, Sweden, and Aruba are higher.<p>b) Corporate tax is <i>extremely</i> high. Note that many will correctly state that some corporations are able to avoid some of the corporate tax. This is true, though overstated if you only follow what the NYT reports. For domestic US corporations doing business only in the US, their <i>effective</i> corporate rate will range between 35% and 45%, depending on their state.<p>e) Estate taxes. We pay 50% of our net worth upon death on all assets transferred to our descendants. A truly morally repugnant tax, this one. Passing on our advantages and earnings to our children is a great joy to many people.<p>d) Tax enforcement is insanely strict. Prison sentences and hefty fines await those who transgress.<p>e) We can&#x27;t leave: American citizens pay tax to the US government even if they reside elsewhere. If we give up our citizenship, we must pay the US government between 30 and 40% of our net worth. The US is the only OECD nation to do this.<p>2. <i>US taxes are lowest they&#x27;ve been since XX!&quot;<p>This is true for low and middle earners, whose current tax rates are very low. Not true for high earners. The US tax code is the most progressive in the OECD.<p>The last tax reform was under Reagan. He traded high tax rates with lots of loopholes for moderate tax rates with few loopholes. Since then, the few loopholes have largely been closed (with exceptions, such as the popular </i>middle class* home interest deduction) whilst rates have risen substantially.<p>See the wiki link above: top US income tax rates are the fifth highest in the world.<p>3. <i>Overall US taxation is low!</i><p>As detailed above, the US taxation regime is the most progressive in the OECD. But taxation is still not low. At 34% of GDP[1], it&#x27;s higher than Canada and only 5 points lower than the UK. 11 points less than France.<p>[1] <a href="http://www.usgovernmentrevenue.com/total" rel="nofollow">http:&#x2F;&#x2F;www.usgovernmentrevenue.com&#x2F;total</a>
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