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View Diary: Austerity doesn't work: New IMF report details the damage (167 comments)

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  •  I've argued that we take the carrot part (11+ / 0-)

    of that approach.

    I'm all for lower business taxes, if those lower business taxes are directly tied to addressing income inquality. The lower the gap between your hour employees and management, the lower your taxes.

    In the 1950s, CEOs made about 20 times their average worker. In the 1980s, it was about 42 times. Now it's 380 times.

    If companies want a 20% tax rate, let them use the 20-to-1 ratio. If a CEO wants to take advantage of that rate and still pay herself $1MM, then the hourly employee takes home 50K a year. Since most American business gross $2.4 million or less, and since most CEOs at that level don't have the 380x gap anyway and are in all likelihood closer to a 5x or 10x gap, you're lower takes on these true job-creators while adding stimulating the economy via increased payrolls. Where the policy would hurt, of course, is at the upper level where billion-dollar CEOs face a choice of tapping out at the highest tax rate (whatever it's set at -- 45%?) or putting more of their own salary into the company.

    It's a nifty idea in theory but I've gotten into it many times on lack of implementation feasibility, which is true. Still, something along those lines would be a win-win for Dems. We get to fight for lower taxes for true mom-and-pop shops while pressing for increased wages.

    •  Warren/Logothetis 2016 (1+ / 0-)
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      There's our win-win!  ;-)

      Wage & price controls would be difficult to implement, not in the least because they fly in the face of everything for which the Austrian School stands.  Those guys are going to fight this level of Keynesianism to the last ditch, but I'm with you - I think it makes sense, lowers and raises taxes in the right places, and compels the greedheads to put profits back into actually creating jobs as opposed to pocketing them.

      Now, we just need a few powerful legislators...

      •  ? (0+ / 0-)

        Are wage/price controls Keynesian?

        •  He was more about government stimulus (1+ / 0-)
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          and deficit spending; I'm using it here as a kind of shorthand for "government intervention in the economy," which is how our Hayek-following adversaries would see it.  Keynes was writing at a time when there were actual Communist (in name only) states, so his ideas about wage and price controls would have been colored by contemporaneous views of Stalin, but given the broad outline of his theories, I'm not certain he'd be opposed to these sorts of controls under a democratic regime - at least, nothing on the front page of seemed to outright preclude them:

              Keynes argued that full employment could not always be reached by making wages sufficiently low. Economies are made up of aggregate quantities of output resulting from aggregate streams of expenditure - unemployment is caused if people don't spend enough money.

              In recessions the aggregate demand of economies falls. In other words, businesses and people tighten their belts and spend less money. Lower spending results in demand falling further and a vicious circle ensues of job losses and further falls in spending. Keynes's solution to the problem was that governments should borrow money and boost demand by pushing the money into the economy. Once the economy recovered, and was expanding again, governments should pay back the loans.

              Economically and socially successful economies have significant contributions from both the government and the private sectors.

              Keynes's view that governments should play a major role in economic management marked a break with the laissez-faire economics of Adam Smith, which held that economies function best when markets are left free of state intervention.

          •  he would probably be so incensed (1+ / 0-)
            Recommended by:
            Unitary Moonbat

            at the idiocies of the American republican party, including the ever-popular sport of Debt Ceiling Crashing, that he'd be happy to smack them with something like wage controls.

            (I don't really know that. It's just a pleasant, cathartic image. Keynes himself would probably be bemused that he's being held up as a left-wing icon.)

            if necessary for years; if necessary, alone

            by SouthernLiberalinMD on Sat Jan 05, 2013 at 12:56:22 AM PST

            [ Parent ]

    •  or lower taxes in return for (0+ / 0-)

      investing here in the real economy--for building factories and railroads and shit like that, as opposed to rewarding these bastards for hoarding--and weird obscure forms of international gambling.

      if necessary for years; if necessary, alone

      by SouthernLiberalinMD on Sat Jan 05, 2013 at 12:53:10 AM PST

      [ Parent ]

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