/biz/ - Business & Finance

Yes. BUT. Not how Washington wants you to think. They want you to think all of the extra money corporations save will be 're-invested', creating jobs in the private sector funded with 100% of the extra money.

But it's never 100% that gets re-invested. Not even 50%.

So it "does" work slightly, but the results are negligible. Generally the money at the top, stays at the top.

Cutting taxes helps create jobs. Obviously. That's what this boils down to. If you're taxing wealth earned at 90%, then how the heck is a business supposed to grow and hire more people? Taxes should be zero, then many more would could become rich.

>>391598
>>391591
>mfw some people believe this

>>391577
trickle down economics is a political buzzphrase with no real meaning

>>391598
>if everyone keeps all the money the earn everyone will be rich
shit nigga what are you doing

>>391642
>The only time I spend money is when I pay taxes

This is what you just said.

>>391598
yeah man, why not take it one step further and give extra tax returns to business owners so then everyone can be even richer!

>>391591
>>391598
There is literally zero incentive for corporations to take extra tax money and and give it to anyone in the company that is not a shareholder. 90% of that money stays firmly at the top,and the rest is used to hire more entry-level employees, not to increase any existing wages.

Eh. Trickle down economics doesn't really work in a sense that it guarantees that people will spend their profits. Even if there was 0% taxes it isn't guaranteed that the market forces will force people to reinvest the money they are sitting on. I mean when you say a billionaire has 1 billion dollars it usually doesn't mean he's spent 1 billion dollars into high risk investments to spur job growth. The natural forces indicate that people will spend money normally when it follows that spending will give them more money, not create jobs. It might, but its not always sure.

That said, state capitalism guarantees job creation when you tax (or just create money) and pay people to do a certain job. This could be fix roads, teach kids, dig holes just to fill them back in again.

The Chinese model of state capitalism seems to created massive GDP growth for the past 20 years. You may not like the concept or the political reality, but it seems to work well enough to put them on a road to be the dominate economic power around 2025 or so. Maybe sooner.

Also state capitalism turned 1933 Germany from a broke 50% unemployed country to the first country that got itself out of the depression and almost took over the western world.

Just saying.

State capitalism works.

What proponents of trickle-down economics are actually claiming is much stronger than just that "billionaires spend money". Billionaires obviously spend a lot of money.
What they're actually claiming is that free markets will alleviate inequality through some trickle-down mechanism. The point being that rich people might spend money, but this might have little effect on inequality. They claim that it does. However, there is no evidence that free markets will or do produce greater equality.

On the other hand, state capitalism also produces high levels of inequality. Inequality in China is actually greater than in the US (it's close).
>>391744

>>391577
It's wrong because it assumes that people who made something of themselves, work, or have acquired money, somehow owe something to deadbeats, criminals, rap music fans, and drug addicts.

>>391753

Noone ever said that the free market fixes inequality. The free market makes everyone richer, which is what happened in china.

>>391577

It is considered to work by every single successful country. The countries that don't believe in it are shitholes.

>mfw reading this thread
>Implying the rich sit on their piles of money and don't reinvest it
>Implying every single corporation would rather pay dividends to shareholders instead of reinvesting increased profits into the company so they can make even more money
>No one mentioning the effects of spending versus saving in the short term versus the long term
>No one mentioning globalization

Christ. Its like nobody in /biz/ can into Economics.

The fact of the matter is that wages are universally considered an expense to businesses, not an investment. They have every incentive to pay workers as little as possible, so the last thing they're going to do with extra money is start hiring tons of people, and they are definitely not going to increase wages for the employees they already have. In fact, the better long-term investment is to automate as many jobs away as possible. This is a game only the capitalists can win, which is why you should be trying to to become one yourself. As the number of humans on the planet continues to rise, the value of any individual workers falls.

>>391598
>inb4 that's stupid why would we cut taxes when we could give money to the government which is literally worse than throwing it in the trash

>>391577
Nope they don't , its a neoliberal feel-good scam and the goyim bought it, hook like and sinker.

Who cares if you increase tax for rich, do so and they will just ship more jobs overseas to china and other countries while people cry "muh middle class"

and yes 90% marginal tax is an exageration

>>391809
Very good, succinct summary. Thats exactly why China dominated the markets, producing 90% of the shit the world consumes - because everyone wants cheaper shit, and noone cares that it means every other Joes job gets sent overseas, as long as theirs is safe. Its a race to the bottom, and "we aint seen nothing yet" - expect feudal rental arrangements and chinese style factory towns within the next 20 years, when the value of labor goes down to their level, and any labor protections are removed by the neocons + neolibs.

>>391761
Vancouver was also rated #1 in Quality of Life. Quality of life for the globalized rich. Vast amounts of normal people - those who can't understand markets are much worse off since say NAFTA came into place than before. Housing, basic necessities, food prices are through the roof, jobs moved in Mexico/China. Qui bono?

>>391809
>>391852
though China was fed by the west capitalists. on its own, china wouldn't be able to have all those ipod factories.

>people actually being brainwashed enough to believe in the "trickle down" strawman progressives came up with
>implying trickle down was ever even tried
>implying the federal reserve isn't responsible for this fucking disaster we have right now
>implying you aren't getting poorer because the federal reserve steals the purchasing power of your wages and savings and GIVES it to the fucking 1%

Liberals and leftists are corporate whores.

>>391849
Then why do jews do everything in their power to prevent any "trickle down" economics from ever occurring?

Why do they worshiping keynesian economics so much?

>>391862
Are you an idiot or just a troll? Jews love trickle "down" economics.

>>391871
Lol no they don't you fucking idiot.

You have no fucking idea what trickle down economics even means. All it is in your head is "EBUL RICH CAPITALISTS EXPLOITING LABOURERS, EBUL MEAN BANKERS" when these bankers you love so much get all of their money from central banks you support.

Go jerk off to huffington post you leftist shit eater.

"Trickle down economics" is the biggest scapegoat ever.

If you ever use this term you are a dogmatic idiot who bases his political views off buzzwords.

>>391744
>billions of people living under authoritarianism and poverty because their government artificially suppresses their currency
>works
lol no

>>391878
Holy shit, you're mad kid. Way to try to put words in my mouth, idiot.

>>391884
but it's what you actually believe

sup biz, it works sometimes. I work in construction and the boss is building a $3.5 million dollar project. he is building it with his own money so he can make more money. He hires guys buys materials and is spending money in the process. because of his desire to earn money others too are earning money.

>>391916
>pre 1971
>semi gold standard
>relatively low spending, taxes and inflation
>massive boom

>post 1971
>complete fiat money in control by central bank
>MASSIVE spending, MASSIVE inflation, MASSIVE corporate welfare
>stagnation and poverty
>Literally EVERYTHING keynes wanted

Why do you leftist psychopaths love to lie so fucking much?

Just kill yourself.

>>391928
It works all the time, it's basically the only thing that works.

What prevents it from working is the bullshit keynesian system we have right now where peoples wages and savings are destroyed by central bankers who steal our purchasing power and give it to parasitical bankers and corporations who don't actually have to produce.

End the fucking federal reserve.

>>391782
this

>>391916
Also, you can see on your fucking graph the 1971 mark where the fucking divergence started to occur.

http://en.wikipedia.org/wiki/Nixon_Shock

You fucking idiot.

>>391658
what is wage clearing, god damn does anyone here have any idea how competition of wages work. They do have incentive to rise the real wage to preserve purchasing power, firms compete for the best workers through wages.

>>391932
What's your argument?

>>391577
No such thing as trickle down economics. What does exist is free market thinking where allowing the market to effectively allocate resources without the disturbance of government leads to overall better national welfare. it boils down to taxes taken is money that is not effectively used to its fullest, when a company has profit it doesnt sit in retained earnings for too long, it is used to finance further capital and attract investors which like a merry go round effects everyone. the problem with taxes is that the money is not used effectively or efficiently and any intervention through fiscal or monetary policy only raises the price level in the long run and leaves the real economy unchanged.

>>391932
Why did Keynes want massive spending, inflation and corporate welfare?

>>392035
Wow, everyone look at this temporarily embarrassed millionaire!

>>392037
I missed the part where you responded to my argument like an adult.

>>392036
read road to serfdom, paints a picture of europe after the war. Keynes was just the champion of the times and he and his followers were advocates of central planning, the idea that government could effectively plan the economy and it would be more efficient then anything the private sector could do.

>>391861
>the fed is the cause of our economic problems

muh 1%
lol go take an econ course

>inb4 universities are leftist brainwashing institutions

>>392059

That's not even really true. The book for my last microeconomics course had a whole chapter on how minimum wage is unfair because it forces employers to the pay their employees too much and kills jobs because they can't afford to pay their workers.

Apparently, the supply and demand for jobs will magically reach optimal levels and everyone lives happily ever after all if there were no minimum wage laws.

>>392059
>>the fed is the cause of our economic problems
But it literally is lol.

Why are you such a corporate cocksucker?

>>392036
Because he was a delusional fascist retard.

>>392041
I missed the part where you made a coherent point implicating that Free Market Jesus™ can allocate resources well to the poor.

Or that workers(middle and lower classes) have a history of being served well by the holy hand of the Free Market.(You... have read the history of worker rights efforts... right?)

Or that there is such a thing as public goods, highways, infrastructure, which is best to not leave to privateer rent-seeking enterprises.

>>392049
So what? Keynes studied post war Europe and how governments subsidized the rebuilding process and thought that since governments were able to control the post WW2 economy that they then should? Due to effectiveness?

You can be more specific and revealing instead of just suggesting to read something. I'm not incompetent and everything said here is just deductive reasoning.

>>392101
>Free Market Jesus™
Ahhhhh statist religious fundamentalists like to project.

Calling freedom a religion is like calling atheism a religion.

>can allocate resources well to the poor.
Except it can and always did:
http://www.freenation.org/a/f12l3.html
Also look up mutual aid societies and private retirement and how they were superior to our shit system of poverty we have today.

>Or that workers(middle and lower classes) have a history of being served well by the holy hand of the Free Market.
Um are you forgetting the fact the market is the fucking REASON they have much higher living standards now than they did 150 years ago?
Do you even remember the gilded age?

>Or that there is such a thing as public goods, highways, infrastructure, which is best to not leave to privateer rent-seeking enterprises.
>m-m-muh roads

>>392101
>ROOOOOOOOAAAAAAAAAAAAAADDDDDDDDDDDSSSSSSSSSS!!!!

the free market is people working together to solve problems, voluntarily. it's a wonderful thing and it works really well.

>>392162
This.

:^)

>>391607
>mfw
Where?

>>391577
>everyone would be better off if no one produced anything

>>392109
Have you ever been on a toll road, nigga?

>>392077

Minimum wage is advocated as a means for reducing income inequality. In its best implementations, increasing minimum wage has allowed the least skilled workers to be paid marginally more than they were before while causing no job loss in the short run and only marginally decreasing job growth in the long run, all while having no effect on household income inequality.

Tax credits targeting the poor are a much better way of reducing income inequality if you insist on using public policies that focus on wealth redistribution. This is because tax credits don't potentially hamper total economic output in the same way minimum wage can potentially hurt it.

That said, investing in the human capital of the lower class and providing incentives for companies to base their operations within the United States is the best policy for promoting economic growth within the United States and increasing the standard of living for US citizens.

>ITT: people who don't know how the US economy works

>>391861
The data you are posting is adjusted for inflation, you idiot.

>>392481
Thoughts on a universal basic income?

>>391598
Are you fucking stupid?

The wealthy do NOT "create jobs", the middle class consumers are responsible for the growth of the economy. E.g., tax the middle class more/rich less, and you get less consuming--->economy stagnates.

>>391758
Wrong. There is not, and has never been a "free market" in China nor anywhere else in the world.

>>391782
>forgetting that investing money doesn't automatically grow the economy
A billionnaire only gets returns on his investments because companies grow, and companies grow because the middle class consumers spend their money and the cycle repeats itself.

Without a strong middle class who spend an enormous amount of their income on consumerism (which makes the economy grow and creates more jobs), there would be no economic growth.

Capitalism doesn't scale. A billionnaire does not spend 1000x as much as a millionnaire, probably not even 10+x as much.

>>391861
Do you not realize that the current credit system is the only viable one?

Fractioncal reserve banking is the only system that guarantees easy credits, making business ventures easier to start.

>>391881
>doesn't work
Well, it DOES work, look at the economic growth they've had. Nobody said it's "muh freedom, muh democracy", merely that it's economically viable. Don't mix your western political views into it.

Something like this.

>>392526

You're just proving him right.

>>392530
Not really. He said "implying the rich just sit on their money, not reinvest it", and that's irrelevant. The rich would not be rich if people wouldn't buy shit and thus make their stock values grow.

Ergo, you need consumers too, not only investors.

>>392529

God damn bullshit pictures. Those nations at the bottom are the biggest RECIEVERS of free money in the entire Union. Most nations above them pay so that their countries don't collapse, and they don't even show gratitude.
Fucking medditereans, might as well be Africans.

>>392529
Italy should be on the top because all yuropoors are paying for berlusconi's orgy parties.

>>392529
lel I'm Irish, we've received so much money since joining the EU it's unreal. And now you're bailing us out buahahaah

>>392526
>>392531

I don't disagree. The middle class, with its good balance of propensity to spend versus save, means that policies which give them extra money will help out the economy in the short run by boosting demand and in the long run by increasing investment in capital. If you read my post, you'll see that I was criticizing the people in the thread on both sides as they failed to acknowledge basic principals of macro economics.

Look at the price of plasma televisions from the 90s to now.

Rich people invest their money in securities and stocks, so the money does get used to support the economy. It doesn't have to be re-invested directly for the money to support public welfare.

Scandinavian mixed economies produce far superior results than muh free market.

Brit fag here, we're getting raped by the Tories who are privatising us out...to France and China.

>>391577
>Do trickle down economics work?
No. It's just part of a long list of justifications why the rich should have more privileges than the poor.

>>391753
Depends on if you're sorting by gini income inequality or gini wealth inequality, the two countries are nowhere near each other in terms of wealth.

>>391577
Hmm, take money from everyone, then give it to one guy so he can spend it.

Only to Keynesian lunatics. To everyone else it's a transfer of wealth, which ALWAYS result in economic destruction.

>>392540
>F-Fucking m-mediterraneans mang!
I didn't get a cent of your money, though.
Why are you blaming _me_?

Oh, well. You're a /pol/ stormweenie.

>>391850

ha ha ha

try to take a service job overseas. what are they gonna do send all restaurants and auto shops to china.

this flight of capital argument is bullshit. there is no better place for a rich person to make money than in the US.

>>391932
>>391934
>>391940
>>391879
>>391861

dude... get a fucking life...

get off /pol/ and actually learn some shit that isn't spewed by libertarian think tanks.

There is a reason every goddam country on the planet left the gold standard and it's because it's not practical to tie all money to a finite resource.

The only reason the idea of returning to the gold standard is around is because dumb, paranoid fucks like you.

>>391577
They only work if the rich people SPEND their money...which they can't do since they have so goddamn much

>>392881
>keynesian
lol wtf is your definition of keynesian?

Yes

Considering that the vast majority of the lifestyle and luxury of the 99% comes about through systems, products, and services invented by less than 1% of the population, yes, indeed, there is a massive trickle-down.

>>391744
Agreed. The whole point of a civilized country's government is to complete the demands of the people. People just hate mixing government and business, but it's the only way to do it. The Chinese, quickly solved their dilemma of starvation. China used to be this weird country where they were capable in terms of military but were a lot like a third world country. The U.S is now in that dilemma. China turned shit around, using state Capitalism to successfully give people what they need.
>>391782
Pick up a book idiot. No one is investing that capital. No one knows how business will turn out. That's why people don't invest in them. Also the Rich are the rich because of their assets not because of their investments. Made rich guys spend their years investing and then turn the profits into assets or at least pile up the money.

>>392101
>roads

>>395413
So artists, engineers, and scientists are the 1%?

>>391744
Job creation =/= the creation of wealth

>>396049
That must be why they all make so much money

>>392481
> More tax credits to the poor...

The bottom quintile's adjusted federal marginal income tax rate is already just 2%.

>>396049
The one with the breakthroughs, yea.

>>391744
You know their economy is basically an artificial bubble right now, don't you?

Once their housing bubble pops...

>>391577
>variable 'work' is not defined

>>397890
It might be, but playing their cards right they can stabilize. Japan was the China of the 80s. They stabilized as soon as they made changes to adjust for U.S investment trends. Soon after they stabilized their market and they started to do things their way. China however is far from that. U.S only continues to create profits in China because of marketing and brand recognition of their products. Chinese on the other hand don't really allow the kind of things we Americans typically do. When U.S stops investing, which is already happening, then who will buy the factories? It's more than a housing bubble however, when the price of those factories are bought too expensive and sold for a huge loss.

>>391753
>high levels of inequality
The two largest levels of income inequality in the US occurred in the years 1928 and 2007

>>391852
>feudal rental arrangements and chinese style factory towns within the next 20 years

and what made the fuedal system disintegrate?
A GREAT Plague!

Just like in the mid 1300s we need one and only after this will the human population shrink to the extent that a person's labor is actually worth something and a person is able control their lives

>>391756
it must be nice to have such a black and white worldview.

capitalism is trickle-down economics

>>398082

lol you mean now?

Cause income inequality is at its worst now

>>392027
>firms compete for the best workers through wages.

Yeah, outside the country... in fucking India or China.

Remind me again how this benefits an average American with a two digit IQ?

>>391841
>implying there would be an interstate highway system if Eisenhower didn't build it with govt funds
>implying there would space exploration if it wasn't for the government

>>392522
Easing taxes on either class could benefit the economy in theory. You can prefer to ease taxes on the middle
class because you might say they're the ones that need it.

>>392109

Why do we have US Army? It'll be much more efficient if we have private armies.

>>398597

Well the thing about the government being the buyer of road construction means they are monopsony (single buyer, many sellers).

Which in turn in theory can get the best prices for the roads.

If individuals had to purchase road share time from private companies they wouldn't get the best deal simply because they have to compete with other buyers.

Otherwise... Private armies and police sounds like a bad idea because the highest bidder of their funding could make them selectivity follow rules of their choosing.

Arrest or kill people of their choosing as well I suppose. Then they could install lawmakers and judges of their choice to alleviate any legal problems if they really cared about having a farce as being legal at that point.

>>398590
>>best workers
>>in china

So what's it like having a job that dirt poor chinese can steal from you?

>>391577

Well the bailouts supposedly saved the economy, so apparently yes.

>>391577
It will trickle down!

>>391577

>Do trickle down economics work?

Leftists will tell you no, while pushing their proven failure of an ideology. Economists will tell you, for the most part, yes. Growing business creates jobs, which in turn grow more businesses. Businesses pursue profit which leads to growth and jobs. More jobs means lower unemployment, which means more wage competition, which means higher wages. It's a positive loop where everyone benefits.

Leftists however will keep repeating their line about how "da rich r evil xDDD". No doubt, a lot of rich people do bad things for money, but assuming that every rich person or even the majority somehow "exploit" people is absurd and a baseless accusation.

Trickle down economics is something of a misleading term as the benefit to the lower classes is much more than a trickle. Should be called waterfall economics.

>>391658

We can agree that corporations exist to make money, yes? We can agree that they will seek to maximize profits at all times and act rationally in pursuit of this goal?

Then they will reinvest in themselves in order to grow and multiply their earnings potential for the next period.