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Larry Summers says Elizabeth's economics advisers are con artists


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Larry Summers, Clinton's Treasury Secretary, Obama's NEC director, winner of the John Bates Clark Medal, Harvard President, Chief Economist of the World Bank, pointed out the crooked ways of Emmanuel Saez and Gabriel Zucman - Elizabeth's economics and tax plan advisers.

 

https://www.cnbc.com/2019/10/21/larry-summers-says-the-democrats-wealth-tax-has-little-chance.html

 

"He said the data behind Zucman and Saez’s widely reported claim in their new book that the top 400 richest Americans pay a lower rate than the bottom 50% is “substantially inaccurate and substantially misleading.” To prove the point, he said he applied their algorithm to his own tax return to calculate his wealth and “it was not within a country mile – either in toto or on a category-by-category basis.”

 

At the panel with Summers, Saez admitted that “our numbers may be wrong,” but that people could read their book to decide."

 

As a reminder, Saez devised Elizabeth's tax plans and is the economics adviser for her campaign. So far her tax plans pay for 3 weeks of Medicare for All. Saez has been tasked with finding another $30 trillion.

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No self respecting American will vote for Warren. We have a lot of losers in this country, but not enough to elect her. Yea Trump is a piece of shit, but at least he s in the ballpark of sound policy where it matters. People are not stupid enough to risk dealing with these policies, because at the end of the day, things aren’t really that bad right now.

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Yes she is a con but please learn something from the Canadian election . She is tapping legitimate grievances. Make sure you have a counter, don't just dismiss it.

 

In particular you really need to have some kind of plan around climate change. It doesn't have to cost federal money , can be regulations but don't just say we don't care.

 

Same with lgbt. Such an easy win.  You just have to respect their rights.

 

I'm off topic and venting but I'm telling you, many people are on the fence. Don't disregard them.

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The important angle to look at sizing up Warren's chances really comes down to jobs. Look at how many large pockets of employment, such as, but not limited to, energy and financials she is perceived to pose major risk to. Then you have housing and real estate based services, which again relies of free flowing capital and deregulation. Does anyone really think Warren could take Pennsylvania? She probably has a hard time even getting Virginia. Georgia and Texas which Democrats love to claim are in play she would have no shot. Florida? See ya. Colorado she'd have to fight for. Nevada, no way. Ohio, no way. She'd have a hard time getting 150 electoral college votes.

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The important angle to look at sizing up Warren's chances really comes down to jobs. Look at how many large pockets of employment, such as, but not limited to, energy and financials she is perceived to pose major risk to. Then you have housing and real estate based services, which again relies of free flowing capital and deregulation. Does anyone really think Warren could take Pennsylvania? She probably has a hard time even getting Virginia. Georgia and Texas which Democrats love to claim are in play she would have no shot. Florida? See ya. Colorado she'd have to fight for. Nevada, no way. Ohio, no way. She'd have a hard time getting 150 electoral college votes.

 

At this point, Elizabeth is not on too many "regular" peoples radar scopes.

 

If she keeps going, and the other candidates fall apart, she will be.

 

I would think her Indian heritage is going to be a problem, A big problem.  If Elizabeth gets into debates with Trump, it is going to be brought up again & again & again & again.  Think of all the agitators outside who are going to go into Indian war whoops, tomahawk chops, and all that silliness, over & over & over.

 

Then you've got her pregnancy firing false claims.  She is about 20-30 years too late with that strategy.

 

Then you've got her association with Harvard, and how she got there.  Here in flyover country, that is a detriment.

 

As big a personality and goof as Donald Trump is....he is MUCH more relatable to the common man than Warren ever could be.

 

I don't see her getting any traction in the Black community, nothing with the auto unions.  I'm sure if she is the candidate, she will get their "official" backing.  Just like with Hillary, what good is the "official" backing if individual group members have no enthusiasm OR actually dislike her?

 

If Warren is the candidate, I don't see how she could even come close to 150 electoral votes.  It would be a disaster of Biblical proportions for Democrats.

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Biden keeps blowing himself up:

 

https://www.bloomberg.com/news/articles/2019-10-27/biden-suggests-he-d-be-a-one-term-president-campaign-update

 

"Joe Biden, among the front-runners for the 2020 Democratic nomination, suggested in an interview this weekend that if elected president, he might only serve one term.

 

...Biden said. “It doesn’t mean I would run a second term. I’m not going to make that judgment at this moment.”"

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Back on topic: It should be noted that while some of their papers are controversial methodological-wise, if they keep up their productivity, they have a good shot at a Nobel Prize, so they aren't slouches either.  So while Larry Summers might have said some things, I have no doubt he still admires the output of Zucman and Saez as economists. 

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Not directly related to EW tax policy but a good read from Scott regarding Household debt, spending, and savings. Very much in start contrast to the political sentiment that's out there.

 

http://scottgrannis.blogspot.com/?_sm_au_=iVVrk13qNP2qNkDF

When you dig into the data, fascinating patterns emerge.

For the longest time, household net worth and household assets had grown proportionally to GDP growth which seems like a reasonable outcome. However, since the mid 90's, the growth in net worth and assets has decoupled from GDP growth, sometimes to significant degrees (dot-com period, real estate bubble period, the now period). For reasons that are beyond my comprehension, experts such as Mr. Grannis, in order to assess the long-term trend line, assume that levels now correspond to average levels.

When you decompose the assets as a % of GDP over time, real estate assets have remained pretty constant apart from what looks like a small bump (from 2002-7) in the long-term scheme of things but which, it seems, triggered the GFC. In the last 30 years and since the GFC, the most remarkable component comes from financial assets which, for instance, constituted about 60% of assets in the late 80's and about 75% now.

The most significant part of the growth in household net worth has come from financial assets (see chart #1 from Mr. Grannis' blog).

What may be relevant for analysis in relation to this thread is that ownership of equities has tended to be concentrated at the top and this concentration has increased significantly over the last 30 years, suggesting that the con artists may be onto something even if some of the policies they propose have the potential to be very detrimental.

It remains to be seen what will happen to the wealth effect, whatever that is.

"Gatsby believed in the green light, the magic promise of the future. He didn't realize that as we reach forward towards the dream, it moves even further away from us. We press on, like boats against the current, and all the time we are carried back into the past."

The Great Gatsby,  F. Scott Fitzgerald

 

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Therefore it becomes pretty obvious that the problem is lack of equity ownership and a very large portion of that can be fixed through higher allocation by government's pension plan such as social security.

 

Something else that is missed in today's world is that pretty much anyone with a $30,000+ salary is a millionaire. How so?

 

How much money do you make with a million in a 2-3% environment without taking much risk? So if you do a NPV of a $30,000+ salary you got your million AND security that it will continue giving you such after you stop working.

 

The one who has a million $ thinks about return on capital and capital preservation while the one who doesn't salivates with envy about all the goods and perks that would be bought. That is the famous story of lottery winners ending up with nothing.

 

My view remains that income inequality in rich countries is a huge whine and a creation by politicians using these arguments to rise to power.

 

 

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Something else that is missed in today's world is that pretty much anyone with a $30,000+ salary is a millionaire. How so?

Incredible the lengths people will go to rationalize away inconvenient facts.

 

Next time you meet someone on the federal poverty line, go tell them, "no wait, you're ACTUALLY worth about 600,000, so cheer up buddy!"

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2-

Therefore it becomes pretty obvious that the problem is lack of equity ownership and a very large portion of that can be fixed through higher allocation by government's pension plan such as social security.

 

Something else that is missed in today's world is that pretty much anyone with a $30,000+ salary is a millionaire. How so?

 

How much money do you make with a million in a 2-3% environment without taking much risk? So if you do a NPV of a $30,000+ salary you got your million AND security that it will continue giving you such after you stop working.

 

The one who has a million $ thinks about return on capital and capital preservation while the one who doesn't salivates with envy about all the goods and perks that would be bought. That is the famous story of lottery winners ending up with nothing.

 

1-

My view remains that income inequality in rich countries is a huge whine and a creation by politicians using these arguments to rise to power.

For 1-, in our imperfect but otherwise great advanced societies, there is a group composed of people who, through hard work, want to become like the top and there is another group who, through envy, want to replace the top. I would say the latter group would tend to grow at the expense of the former if the system becomes too unfair or even if the system is perceived to be too unfair. It's not the inequality that I'm worried about, it's the disconnect. Read this AM: The median net worth of a senator is approximately $3.2 million and the median net worth of the average U.S. household is $97,300. Confidence in political institutions is reaching all-time lows and some politicians are crafting a message and are taking advantage of the fact that they have a growing audience who has become unusually receptive to that message to an extent that the comfortable among us may not fully appreciate.

 

For 2-, the idea needs to be considered but there are huge risks. First, this introduces financial risk. I may be very wrong here but going all in at this point sounds like what Newton did when he re-entered his position in South Sea stock {which idea BTW was the main point of the above post). Also, the US public institutions have become quite poor at funding long-term obligations and, given the typical return assessment risk inherent to including stocks, such move would risk increasing further the inter-generational inequity through the kick down the road principle. Second, even if one could somehow establish some kind of safeguards with appropriate governance, there is a political risk whereby the government would become a large player in capital allocation decisions concerning the equity owners in the private market. Third, I would say central investing in equities would facilitate gliding the slippery slope suggesting that using leverage in our partially induced ultra-low interest rate environment to be the next 'logical' step. Tell me where I'm going to die so I don't go there.

 

The stock market domination has become a worrisome situation and the bottom 90% may have an unusual inclination to consider centrally-based value destroying ideas:

https://finance.yahoo.com/news/the-richest-1-own-50-of-stocks-held-by-american-households-150758595.html

 

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The reason we need income inequality is to disincentivize people who sit naked all day in a circle, smoking a bong (like Dem Congresswoman Katie Hill).

 

And to incentivize people like farmers who work hard from dawn to dusk producing food for bong smokers.

 

If everybody in the country got paid the same, everyone would want to just smoke a bong and leech nonprofits like Katie Hill. What would you eat?

 

Something else that is missed in today's world is that pretty much anyone with a $30,000+ salary is a millionaire. How so?

Incredible the lengths people will go to rationalize away inconvenient facts.

 

Next time you meet someone on the federal poverty line, go tell them, "no wait, you're ACTUALLY worth about 600,000, so cheer up buddy!"

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If everyone got paid the same, why work hard to discover new drugs. Work hard all your life to become a scientist, discover a new cure, and then AOC and Katie Hill show up and confiscate everything.

 

If that is what AOC wants, everybody would want to just smoke a bong and become a grant writer like Katie Hill.

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Have I missed the legislative or political proposal to enforce 100% equal income for every citizen in the USA? I don't think so because it does not exist. Nobody is pushing for exact income equality.

 

What people are pushing for are policies to reduce the drastic increase in the rate of inequality we've seen over the past 30-, 40-, 50-  some-odd years. It's pretty much gone hyperbolic.

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People in Silicon Valley pay most of their income in taxes as it is. Apart from the marginal tax rate of 50.3% on ordinary income, 54.1% on short-term capital gains, they also property taxes in the tens of thousands of dollars per year, e.g. 30k - 40k.

 

How are they supposed to pay their huge mortgages and also save for retirement?

 

There is nothing left. Lying Liz has not yet told us how she is going to fund Medicare for All. Her wealth tax by her own numbers raises only 1/16th of what she needs for all her "plans".

 

Have I missed the legislative or political proposal to enforce 100% equal income for every citizen in the USA? I don't think so because it does not exist. Nobody is pushing for exact income equality.

 

What people are pushing for are policies to reduce the drastic increase in the rate of inequality we've seen over the past 30-, 40-, 50-  some-odd years. It's pretty much gone hyperbolic.

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Something else that is missed in today's world is that pretty much anyone with a $30,000+ salary is a millionaire. How so?

Incredible the lengths people will go to rationalize away inconvenient facts.

 

Next time you meet someone on the federal poverty line, go tell them, "no wait, you're ACTUALLY worth about 600,000, so cheer up buddy!"

 

Next time you meet someone on the poverty line ask them how many packs of cigarettes they smoke a day, how many lottery tickets they buy and how much they spend on beer.

 

Half a pack a day would be about $4, say 1 $10 lottery ticket a week and one 6-pack of natural light beer a week $5. = 2k a year and 6% of income (assuming 30k).

 

Not saying this is true of everyone nor am I saying these people have zero excuses and they all should be millionaires upon retirement. Plenty of people are in crap situations with a very slim chance of getting out. But 2k compounded at 6% for 30 years is probably about 350k. Add in their SS, possibly 401k with match and they would have a sizable chunk for retirement. A bit anecdotal but I worked at a veneer plant/ lumber yard one summer. Everyone would take 2-3 smoke breaks a day talked about lotto and how they couldn't wait to get off and drink or head to the local watering hole. Not saying I blame them as that job was miserable, but I'd imagine that trend exists among many low income factory type jobs.

 

There is also smart people like this guy:

https://www.cnbc.com/2016/08/29/janitor-secretly-amassed-an-8-million-fortune.html

 

 

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Well I don't know much about Warren or her policies other than you call her a Liar, but I mean I could also call you a Liar for fear-mongering posts about communist-era income equality, so I guess that doesn't mean much.

 

What I do know is there are multiple laws and policies which exacerbate income inequality, that to me seem unfair both as written and as executed. And I think corrections to our effective tax regime and our enforcement regime would do a lot of economic good for this country.

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Poverty in a lot of cases is a choice. Poverty in America is also pretty damn good compared to poverty in other parts of the words. Wealth inequality is kind of an issue, but not nearly as big of one as the politicians make it out to be. They just know its divisive and an easy way to win overt voters without losing many votes(IE the only votes they'll lose are billionaires, and even still, many are down the ballot democrats regardless).

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I hear this all the time:

 

Poverty in a lot of cases is a choice. Poverty in America is also pretty damn good compared to poverty in other parts of the words. Wealth inequality is kind of an issue, but not nearly as big of one as the politicians make it out to be. They just know its divisive and an easy way to win overt voters without losing many votes(IE the only votes they'll lose are billionaires, and even still, many are down the ballot democrats regardless).

 

Next time you meet someone on the poverty line ask them how many packs of cigarettes they smoke a day, how many lottery tickets they buy and how much they spend on beer.

 

Half a pack a day would be about $4, say 1 $10 lottery ticket a week and one 6-pack of natural light beer a week $5. = 2k a year and 6% of income (assuming 30k).

 

Not saying this is true of everyone nor am I saying these people have zero excuses and they all should be millionaires upon retirement. Plenty of people are in crap situations with a very slim chance of getting out. But 2k compounded at 6% for 30 years is probably about 350k (its 167k by the way, but why do math when proving a point?). Add in their SS, possibly 401k with match and they would have a sizable chunk for retirement. A bit anecdotal but I worked at a veneer plant/ lumber yard one summer. Everyone would take 2-3 smoke breaks a day talked about lotto and how they couldn't wait to get off and drink or head to the local watering hole. Not saying I blame them as that job was miserable, but I'd imagine that trend exists among many low income factory type jobs.

 

How poor do you want people to look before you consider it a problem?

 

Many of those people pulling down 30k per year can drive a $20k car ($300/month), have a new iPhone 10 ($40/month), live in a decent place in the Midwest or South ($900/month), a new 65-inch TV every 3 years ($30/month) and smoke and play the lottery ($160/month). The problem is these people have no savings and no sick time which leads to repossessions of all those financed luxuries, credit card debt, payday loans, etc.   

 

You and I can afford to buy those things outright without the 5-15% interest on those payment plans and don't worry about having a car repossessed if we get sick for a month. When a financial shock happens we throw the bonus back in the emergency fund and go on with life. They are paying 15%+ interest for years. 

 

I agree people could be making better financial decisions and should be living within their means, but extending yourself and keeping up with the Jones' is part of the culture at every income bracket perpetuated by easy access to credit extended by the class who more or less subists on moving money around.

 

The consumer credit industry has been set up so those with money can make 10% a year on it and while providing the have nots with the incentive of living like they have money. If there is not enough incentive, don't worry, we have a $200B/yr advertising industry to help it. 

 

Wealth inequality is increasing:

 

400px-US_Wealth_Inequality_-_v2.png

 

Thus far, there has not been a successful political solution to the trend. Maybe there isn't a political solution. But thus I think as a country, we are closer to and trending toward  the opposite of:

 

If everyone got paid the same, why work hard to discover new drugs. Work hard all your life to become a scientist, discover a new cure, and then AOC and Katie Hill show up and confiscate everything.

 

If that is what AOC wants, everybody would want to just smoke a bong and become a grant writer like Katie Hill.

 

 

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