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There's tons of literature on it. Here's a good summary:

http://www.econlib.org/library...

Can't.

You should be able to do this, but politics gets in the way. People have an idea of what a bag of ice is "worth" and may be willing to wait hours for it, but won't adjust their internal valuation without long-term pricing pressures and will react strongly to the idea that they're being "ripped off."

http://www.econlib.org/library...

It's easy to forget that you're not buying ice. You're buying ice in a remote location in the desert where a lot of other people are also present, but no appreciable infrastructure is in place

Here is another source, in case you don't like Wikipedia: http://www.econlib.org/library...

If what you say was true, we would already be doing it.

[citation needed]

Done.

If you think that then you don't appreciate the size of the problem, nor the infinity of possible remedies.

Sorry, but there is simply no evidence that there is a problem that needs to be remedied. Go look at the actual data:

A more systematic analysis of the electoral fortunes of wealthy candidates found no significant association between electoral or fund-raising success and personal wealth.2 Related findings abound. For example, large campaign war chests carried over from the previous election do not deter challengers and confer no electoral advantage on incumbents. Similarly, large fund-raising windfalls attributable to changes in campaign finance laws have been shown to be unrelated to candidates’ subsequent electoral fortunes.3

Are campaign contributions the functional equivalent of bribes? The conventional wisdom is that donors must get something for their money, but decades of academic research on Congress has failed to uncover any systematic evidence that this is so. Indeed, legislators tend to act in accordance with the interests of their donors, but this is not because of some quid pro quo. Instead, donors tend to give to like-minded candidates.4

http://www.econlib.org/library...

I come at you from a base libertarian, market friendly ideology.

This discussion is no more about ideology than creationism is about ideology: people irrationally believe in creationism for ideological reasons, but that doesn't make opposition to creationism ideological. We're talking about simple, empirically verified economic facts.

The current, very imperfect system of agriculture has a very good track record in the "not starving" department.

Yes, and the system demonstrably works because of futures markets, global trade, efficiency of scale, and other free market mechanisms; it works despite of government subsidies and price controls (which, while costly, are still pretty limited relative to the market).

You can directly measure and demonstrate how using market mechanisms mechanisms reduces risks, reduces volatility, and improves food availability. The more countries utilize these mechanisms, the more secure their food supply is. We aren't talking about a hypothetical, idealized free market solution vs some working real-world compromise, we are talking about quid-pro-quo incrementally-reduce-market-interference-incrementally-gain-security kind of choices.

Conversely, there is not a shred of evidence that government subsidies of agricultural producers achieve the effects you claim they achieve, and there is no theory by which they would accomplish that. You are waving your hands for ideological reasons, I'm not. You're like a creationist arguing "irreducible complexity" despite two centuries of evidence to the contrary. (But there is tons of evidence that agricultural subsidies have numerous negative effects and are mostly a wealth transfer to the rich.)

Supporters of farm subsidies have argued that such programs stabilize agricultural commodity markets, aid low-income farmers, raise unduly low returns to farm investments, aid rural development, compensate for monopoly in farm input supply and farm marketing industries, help ensure national food security, offset farm subsidies provided by other countries, and provide various other services. However, economists who have tried to substantiate any of these benefits have been unable to do so (Gardner 1992; Johnson 1991; Wright 1995).

http://www.econlib.org/library...

Hey, it says right in TFS "lobbyists, paid-for politicians, and lawsuits" - what part of the Free Market doesn't have "lobbyists, paid-for politicians, and lawsuits"?

Can't you see how this is a problem with voluntary trade and not fascism?

Natural monopolies should never be for profit.

Wireline services aren't natural monopolies. Anybody watching TV on FiOS or making a phone call on Cable can attest to that.

But ... they are very frequently granted cartel or hegemony status, benefit from all sorts of incumbent protection regulations, and almost certainly feature regulatory capture. These are features of fascism, not monopolies, which is arguably much worse.

Depending on geography, roads may be natural monopolies. Dams on rivers, extraction of resources on a given land, that sort of thing. Water, gas, and electric services are usually granted monopolies, but if they abuse prices enough there's nothing that explicitly prevents a competing water or gas line, other than government interference. In the presence of such regulations, you'll see rainwater collection, solar panels, propane tanks, etc.

There can also be a high barrier to entry that makes competition a poor finance decison. If your whole town is wired for cable it takes a lot of money to go after that market because you have a large investment with a slow initial pay-off. But again, FTTH has been done in competitive markets - there just needs to be billions to back it.

One definition of free enterprise that the US government conveniently chooses to ignore:

Business governed by the laws of supply and demand, not restrained by government interference, regulation or subsidy, also called free market.

This is a definition of a free market that even Adam Smith would not have recognized. It was not regulation per se that he was opposed to, but mercantilism and state granted monopolies. He looked favorably regulations which protected workmen (citation Wealth of Nations I.10.121). He was also in favor of regulating banks where their actions endanger society, even at the expense of curtailing natural liberties (citation: Wealth fo Nations II.2.94
).

The free market is free of price or supplier choice regulations. It's not necessarily free of regulation per se, such as regulations of weights and measures, of worker or consumer safety, or even of public morality (e.g. drugs and prostitution).

In any case you can't use the actions of states to indict the federal government for hypocrisy, although there is plenty of other material for that.

One definition of free enterprise that the US government conveniently chooses to ignore:

Business governed by the laws of supply and demand, not restrained by government interference, regulation or subsidy, also called free market.

This is a definition of a free market that even Adam Smith would not have recognized. It was not regulation per se that he was opposed to, but mercantilism and state granted monopolies. He looked favorably regulations which protected workmen (citation Wealth of Nations I.10.121). He was also in favor of regulating banks where their actions endanger society, even at the expense of curtailing natural liberties (citation: Wealth fo Nations II.2.94
).

The free market is free of price or supplier choice regulations. It's not necessarily free of regulation per se, such as regulations of weights and measures, of worker or consumer safety, or even of public morality (e.g. drugs and prostitution).

In any case you can't use the actions of states to indict the federal government for hypocrisy, although there is plenty of other material for that.

See, what happened to those days was that gradually, colleges realized they could keep raising prices past what the government could pay, because they knew families of students could pay more. Colleges built palaces to "education", dormitories with gold plated faucets, gymnasiums, new buildings that were completely unnecessary simply because they could. All the while, tuition kept going up - the government saw that tuition was increasing at universities, so they'd raise the amount of subsidy, then the college would raise tuition above that to the point where families were bled just as much as before. Eventually, the bottom dropped out, the government said enough is enough, and held or dropped subsidies. Colleges, so used to 10% pay raises for tenured professors and unwilling to live with 20 year old dorms, screamed - "they're cutting our funding!" - so they just saddle their students with the maximum loan allowance they can - because they know they can get it - just to keep the gravy train coming. The more the government allows students to borrow, the more money colleges will charge.

It's economics at work. It's called Rent Seeking Behavior. If there is money to be gotten, it will be.

Here's a journal paper someone wrote on it.

Here's a bunch of resources on this from a think tank.

Pro or Con, Uber is pushing the boundaries and bringing some clarity to the old system. Some terms for discussion:

Rent seeking

People are said to seek rents when they try to obtain benefits for themselves through the political arena. They typically do so by getting a subsidy for a good they produce or for being in a particular class of people, by getting a tariff on a good they produce, or by getting a special regulation that hampers their competitors. Elderly people, for example, often seek higher Social Security payments; steel producers often seek restrictions on imports of steel; and licensed electricians and doctors often lobby to keep regulations in place that restrict competition from unlicensed electricians or doctors.

Fascism

Where socialism sought totalitarian control of a society's economic processes through direct state operation of the means of production, fascism sought that control indirectly, through domination of nominally private owners. Where socialism nationalized property explicitly, fascism did so implicitly, by requiring owners to use their property in the "national interest" - that is, as the autocratic authority conceived it. (Nevertheless, a few industries were operated by the state.) Where socialism abolished all market relations outright, fascism left the appearance of market relations while planning all economic activities. Where socialism abolished money and prices, fascism controlled the monetary system and set all prices and wages politically. In doing all this, fascism denatured the marketplace. Entrepreneurship was abolished. State ministries, rather than consumers, determined what was produced and under what conditions.

I find it particularly interesting that not only does Uber do background checks on its drivers and allows the rider to rate the cabbie and cab, it also allows the cabbie to rate the rider, potentially increasing safety for the cabbie in ways that the government model does not and can not. Cabbie murder is a real thing and government does not offer a solution. But it's still not surprising that the cartel members are upset that their cartel membership is losing value.

Pro or Con, Uber is pushing the boundaries and bringing some clarity to the old system. Some terms for discussion:

Rent seeking

People are said to seek rents when they try to obtain benefits for themselves through the political arena. They typically do so by getting a subsidy for a good they produce or for being in a particular class of people, by getting a tariff on a good they produce, or by getting a special regulation that hampers their competitors. Elderly people, for example, often seek higher Social Security payments; steel producers often seek restrictions on imports of steel; and licensed electricians and doctors often lobby to keep regulations in place that restrict competition from unlicensed electricians or doctors.

Fascism

Where socialism sought totalitarian control of a society's economic processes through direct state operation of the means of production, fascism sought that control indirectly, through domination of nominally private owners. Where socialism nationalized property explicitly, fascism did so implicitly, by requiring owners to use their property in the "national interest" - that is, as the autocratic authority conceived it. (Nevertheless, a few industries were operated by the state.) Where socialism abolished all market relations outright, fascism left the appearance of market relations while planning all economic activities. Where socialism abolished money and prices, fascism controlled the monetary system and set all prices and wages politically. In doing all this, fascism denatured the marketplace. Entrepreneurship was abolished. State ministries, rather than consumers, determined what was produced and under what conditions.

I find it particularly interesting that not only does Uber do background checks on its drivers and allows the rider to rate the cabbie and cab, it also allows the cabbie to rate the rider, potentially increasing safety for the cabbie in ways that the government model does not and can not. Cabbie murder is a real thing and government does not offer a solution. But it's still not surprising that the cartel members are upset that their cartel membership is losing value.

Privatize profits, socialize losses.

Capitalism and communism, finally united in harmony.

Again.

Go hand in hand.

Instead of a short, one-sided view from Wikipedia, here is a careful discussion:

http://www.econlib.org/library...

The standard-of-living debate today is not about whether the industrial revolution made people better off, but about when. The pessimists claim no marked improvement in standards of living until the 1840s or 1850s. Most optimists, by contrast, believe that living standards were rising by the 1810s or 1820s, or even earlier.

Your facts seem to be less than accurate. For example, in the UK, the minimum wage for 16-17 year olds was set in 2004 and started increasing in 2006. Mysteriously, the unemployment rate for 16-17 year olds in the UK started heading up right at the same time until it almost doubled. Probably just a coincidence, right?

Increases in the minimum wage cause unemployment among those who are less valuable to an employer than the minimum wage. They work the same way as every other law setting a price floor. Price floors doesn't exactly have controversial effects.

Clearly, I was talking about the money taken away from a business through taxation -- not about personal income tax.

Your assertion was that every dollar paid in taxes is a dollar not paid in salary, that if taxes are lowered then salary goes up in 1:1 correspondence.

And you make the old dumb argument that the "rich people won't starve without their money." They don't spend it on food or on personal needs.

That is an argument for marginal utility of dollars, which is not in my post; I'm identifying the difference between income from growth and income from economic rent. If a guy only made $10k a year on economic rent and you taxed 100% of it, it would create no deadweight loss, his gross income is irrelevant.

We distinguish between taxation that causes deadweight loss and taxes that do not. A tax on an economic rent does not. The general goal of neoliberal taxation is to collect as much rent as possible from deadweight, non-Parero optimal activities.

You are talking about personal income tax. I am talking about income tax on business.

I'm talking about taxes in the most general case. If you put a 10% tax on the sale of apples, apple vendors may lose that money from their profits, or they may pass the costs on to the people buy apples (losing nothing), or a mix of the two. The mix is determined by the elasticity of demand for apples -- if people can replace apples with a supplemental good, or elect to buy them less, then apple vendors can't pass on the tax. If a good has inelastic demand, a good like gasoline, which only very slowly responds to plaice signals, then 100% of the tax will be passed on in the price and none of the company's income available to invest will be affected.

It works the same way with the labor market, if you put a tax on a business activity, this may result in lower salaries, but wether it does or not depends on the labor market they're operating in. It's possible that they can't afford to offer lower salaries because people wouldn't accept the work, they'd be able to find work somewhere else, in which case the costs either come from profits or from another activity. Your analysis above is operating with the assumption of a completely inelastic market for the company's goods, a completely inelastic labor market, the firm is collecting no economic rents of any kind, and is working at a perfect and unimprovable level of efficiency and productivity. The assumptions are wildly unrealistic.

None of this is relevant to your extremely general point, which can be summarized as "taxes is the suxx0r." But your specific, original claim that taxes always deprive workers of wages is simply not true in many cases.

Again, in what universe would a government-enforced monopoly be called "capitalism"?

C'mon, man, that's Page 1 of the fascism playbook.

...and recognize this for what it is. Fascism.

Do you mean "authoritarian police state" or fascism?

I know, Sex Pistols and The Young Ones, but say it with me: "Authoritarian Police State". To not call it by its proper name is to give it a pass.

You have to admit that you live in an police state before you can do something about it.

Sure, if you want to read a failed 19th century book on Political Economy. There are countless other pipe-dream books on Political Economy you could sample from, too, though.

Maybe Henry George's Single Tax theories, for instance.

There's no reason to only focus on obsolete economic theories like classical Marxism. For dabblers, there are other ideas that haven't been given the chance to be the gargantuan failure that Marxism has been.

How does that work ?

Corporatism/fascism. Oh, wait, you mean that rhetorically, didn't you?

I would like particular sources that it did not "systematically lower standards of living"

See here.. Even the pessimists think that there was only a very slight decline in the standard of living in the earlier stages of the industrial revolution, while the optimists think there was a moderate increase. Even more telling is the following from that source:

The standard-of-living debate today is not about whether the industrial revolution made people better off, but about when. The pessimists claim no marked improvement in standards of living until the 1840s or 1850s. Most optimists, by contrast, believe that living standards were rising by the 1810s or 1820s, or even earlier.

In other words, the disagreements between economic historians cover only a small range. No one believes that those evil machines turned the average Briton from a happy prosperous person into a poverty stricken wretch. They'd been poverty stricken wretches for centuries. Were it not for the industrial revolution, they'd still be that way.

If you mean that it didn't lower the mean standard of living...well, that's what you expect if you take the lower end of the economic curve and truncate it. So that, again, is not a contradiction. People who died aren't counted. ... In a way, it's like a plague. The survivors of the plague are wealthier than they were before, because in many cases those who owned property are no longer there to claim it. But this does not imply that it's wrong to fear the plague. You don't know that you, and those you care for, will be a survivor.

British life expectancy rose consistently starting in the mid 18th century which, coincidentally or not, was about the beginning of the First Industrial Revolution (typically dated 1760). The increase in life expectancy continued throughout the 19th century.

The sky did fall. The protestors of the 1800's were correct. The people displaced by technology in the 1800s fell into poverty and early death, and England, for instance, was home to immense poverty and despair.

You're repeating a common myth about the First Industrial Revolution. Here is a description of the actual changes in standard of living of most Britons (bottom 65%) during that era. There is some debate, but even the pessimists talk about only a very small decline in standard of living. There is much evidence for the optimists view that there was a modest increase. No economic historian thinks that there was the sort of dramatic decline you describe.

I appreciate Black's contributions to our understanding of modern pricing, but here I have no clue what he's talking about. The basis of all modern economics since Carl Menger is the law of marginal utility, which implies the subjective theory of value. I can't tell what is meant by "value" here but it's certainly not in the meaning of virtually all economics for the past century.

That's not the definition of efficiency, since efficiency too is subjective... Black is describing one possible method of evaluating efficiency, which like any, is completely arbitrary.

Eventually you have a poor class that doesn't have the freedom to do anything at all and a rich class that can do anything.

Actually that's the empirical result of the current fascist policies in the US. Of course, authoritarian socialists call this 'capitalism' to try to re-frame the debate as one between fascism and socialism, but since fascism is a flavor of socialism, socialism actually has the burden of proof vs. capitalism.

Let's try doing away with corporations first, and then we can have the debate about which is working better. I suspect capitalism will win, but it will always fail if governments pick the winners and losers, because that destroys the basis of capitalism, which is information flow based on money. From an information theory perspective, socialism has several bottlenecks that will always result in a sub-optimal solution, but so does fascism.

And that's just the utilitarian perspective, for those who wholly discount freedom and are indifferent to violence. Since the socialists/fascists have taken control of the money supply, minimum wage has fallen from an inflation-adjusted $22/hr to $7 per hour (in 2013 dollars), so they have quite a lot to answer for if they want to claim superiority on class distinctions.

Because standing up to employers got you shot, unions started out as political organizations. OSHA and such wouldn't exist if unions didn't petition for them. Separating unions from politics is as easy as separating the Democrats or Republicans from politics.

Actually that's not how they started nor is it why. The first unions formed along racial lines by white people who were tired of minorities (mainly Chinese or "yellow" people) taking their jobs for lower wages:

http://www.econlib.org/library/Enc/LaborUnions.html

Not surprisingly, therefore, black leader Booker T. Washington opposed unions all his life, and W. E. B. DuBois called unions the greatest enemy of the black working class. Another interesting fact: the “union label” was started in the 1880s to proclaim that a product was made by white rather than yellow (Chinese) hands. More generally, union wage rates, union-backed requirements for a license to practice various occupations, and union-backed labor regulations such as the minimum wage law and the Davis-Bacon Act continue to reduce opportunities for black youths, females, and other minorities.

And OSHA has never actually proven to be beneficial. Workplace accidents were on a very linear decline both before and after OSHA was formed, but merely because the trend continued, people in favor of OSHA just assumed that OSHA was the cause when in reality it was not. That trend began when employers for the most part realized that they could attract more talent if they would make their work environment safer. This started rather famously with the DuPont black powder manufacturing (which was very dangerous work) in the mid 1800's. There never was a government mandate for safety in that case; it was entirely a voluntary decision by a corporation (and we all know corporations are evil, right?)

If you sign a contract (in a right to work state) indicating that if the union votes to strike, you will strike, you should never be held to the contract you signed of your own free will? Why do you hate contracts?

To call that a straw man would be quite an understatement. That last bit aside: First, in a right to work state there is never a requirement to sign such a contract to begin with unless they want to, so nobody really does. Second, people can and do strike in right to work states (I remember Qwest doing that 8ish years ago here in Arizona) so it isn't as if you have to pay dues to some union boss just for the privilege of being able to do so.

And just by that last example alone, you can pretty plainly see that people don't have to answer to two separate bosses and forfeit part of their paycheck in order to seek redress against an employer that they see as being unfair. They can if they'd like to as well, by the way, as those workers did formalize a union and had another strike in 2012 (at this time the company was named CenturyLink.)

The term just brought that piece to mind, and how outdated its basis is nowadays. But the woman use coined the term "rent-seeking" in the 1970s should have used a different phrase, because it isn't about rent.

This article has a rebuttal I can agree with. http://www.econlib.org/library/Enc/RentSeeking.html

They use the term to describe people’s lobbying of government to give them special privileges. A much better term is “privilege seeking.”

Anyhow, thanks for the lesson, and have a nice weekend. (For myself, the Magic Pre-Release is tomorrow night. That's where my rent money is going this month. ;^) )

If privatization meant an end to subsidies, and an end to monopolies, and an end to price gouging and fixing.. sure. None of it has. We just give the profits to private entities.

Then that's fascism. Stop railing against privatization if the problem is fascism.

Seems you need to be educated on an idea called tragedy of the commons.

Yeah, the point of trade secrets is that you keep them secret, but it's your job to do so, not the public's. Having criminal laws that punish leaking of trade secrets has to be one of the worst types of fascist corporatism. If the patent system ever had any merit, even in theory, then trade secret laws would work against patents. That might even be a legal theory that could be used to defeat such laws in the US.

Civil liability is, of course, entirely reasonable.

And what is the name for all of the businesses who just merrily went along with government requests?

Corporations. They make fascism much easier to implement. An out of control judiciary provides the nudges necessary to force most businesses to adopt a corporate form.

They so often use wishy-washy tools to convict people it beggars belief. WTF is mail/wire fraud? WTF is obstruction of justice? The Book doesn't clearly tell. And if they find you talked to somebody about this then they'll slap conspiracy on top of it. The general strategy seems to be to slap charge upon charge upon charge onto those cases in the hope that something might stick. And this is usually when juries will pronounce somebody guilty of a couple of the dozens of charges and send somebody into the slammer for things that are hard to understand. It also doesn't help that judges tend to be former DAs. Or that DAs use plea bargains to bully somebody to bear witness against their main mark.

Also don't the Feds still pay corporate whistleblowers a percentage of the fines? A couple of years back I read of a guy who got 40 Megabucks for this.

As a private person I'd be much more afraid of the DOJ than some faceless corp.

And what is the name for all of the businesses who just merrily went along with government requests?

Corporations. They make fascism much easier to implement. An out of control judiciary provides the nudges necessary to force most businesses to adopt a corporate form.

The tragedy of commons will need more explanations.

A lot of social welfare is the creation of cheap public goods (for example, farm subsidies or overly cheap flood insurance). These typically get abused unless there is a strong barrier to consumption, which usually includes monitoring of potential recipients and regulation of their behavior and activities.

And if the game is indeed zero-sum GDP-wise

My view is that social welfare collectively is a net loss GDP-wise. As I mentioned in my previous post, most social welfare boils down to taking something from one party and giving to another. That creates the zero sum game since one can then lobby government to change the balance of such wealth transfers to be more to their advantage.

Building cooperating societies runs against natural laws of competition, and this is what humanity has been doing successfully for millions of years.

Humanity has been doing both. I'll just note here that the societies that stopped competing, no longer exist.

Competition is naturally robust, and cooperation is artificially robust as well.

"Artificially robust"? That's the hot house flower right there. Sure. we can make just about any system nominally stable as long as we throw enough resources into it. That's "artificially robust". But not every system is stable even if no additional resources are sacrificed. That's "naturally robust".

And do you have studies to back that? On the last 30 years, we have been seeing GDP increasing and GDP wage share decreasing. I am interested if you find a GDP per capita wage share plot for the last 50 years.

And what about the 30 years before that?

You merely have a very provincial viewpoint on this. I already explained why the developed world is seeing a relative decline in wages (note the first figure shows the US wages tracking closely with GDP per capital for 30 years until the turmoil of the mid 70s, which incidentally is also about when the US labor force was exposed to competition from developed world labor) ever since I first posted in this thread.

I should also note that a drop in average or median wages is not in itself an indication that things are getting worse. The previous link describes how immigration can lower various aggregate measures of income while simultaneously increasing the income of everyone involved.

Arresting someone for what amounts to a civil offense seems like government power overreach to me, otherwise known as fascism.

I think you're mixing up authoritarianism with fascism, which gets tricky in this case because authoritarianism is a facet of fascism and in this case the rationale for the overreach is fascism. But government power overreach, broadly, isn't the same thing as fascism, no matter what The Young Ones thought.

but you fucktarded USians want your precious "individual liberties" so much that you are brainwashed into believing that the free market will cure everything

You're not terribly far off, but still significantly. The people here are indoctrinated to believe that they are granted freedoms, and that they must support a fascist system to maintain those freedoms.

Very few Americans actually understand about liberty and free markets because those choices are told to be dangerous to them. The government and its schools work against liberty and free markets at most opportunities.

Usually, this sort of thing is called "regulation". Pretty common really. Most countries have laws.

You're right - I got the gist wrong from the summary. They're definitely talking about controlling businesses, not running it themselves. That's economic fascism when it implements a preference ("so that they are not going to see things they shouldn't"). If it prevents crime, that's an exercise of police power. 'Regulation' can cover both and many other feedback mechanisms, so it's non-specific in this regard.

Do you just use words like "fascism" randomly with no understanding whatsoever of their meaning?

Link for the GP.

They'd tell us to STOP NOW, before it gets any worse, and to hold on dearly to our liberties. Ah, fuck it...as long as you get to destroy the Tutsis, you're OK with it. Tyranny shmirrany!

The thing is though that it wasn't a waste of money. We got a stinking big profit out of it.

That's "The Seen". What else didn't happen because all that money was diverted to AIG? That money doesn't come out of thin air - it's either taxed or inflated. If taxed, people don't have the money to spend directly. If inflated, people are paying more for everything and (in a constant-level-salary environment) decrease their spending elsewhere.

How many, e.g., dance studios, went under because families had to cut back on extras because their grocery bill went up by 50%? These diffuse long-tail effects are what Bastiat termed "the Unseen" and are always ignored by politicians because the People let them get away with that.

Given that the last couple of rounds of quantitative easing had zero impact on inflation

But the Fed continues to pay interest on excess reserves of banks held by the Fed. If they stopped doing this, it would free up this tremendous amount of money, and I suspect you would see inflation.

We can tell from other parts of the world that simply focusing on austerity makes things worse, not better.

The track record is that tax cuts cause stimulus, but there is no evidence that spending increases cause economic stimulus, and there are many counter examples where cutting spending in combination with tax cuts has been stimulative.

That said, the US probably has more leeway to raise taxes than say Greece, as we actually have a ton of wealth, and Greece just doesn't.

It is true that Mediterranean countries would likely be better off massively deregulating their labor rules and selling off state owned enterprises than "austerity".

Its an open question as to whether corporations should be taxed at all, a question that even economic theory can't agree on.

I can see both sides of the issue.

There is an interesting article on this issues located here http://www.econlib.org/library/Enc/CorporateTaxation.html

The upshot seems to be that the appearance of fairness is the best rreason any one can come up with. The counter argument is that shareholders own the corporation, so why not tax them.

In any event its s fairly good read.

Wages are meaningless to talk about growth. What matters is standards of living.

http://www.econlib.org/library/Enc/StandardsofLivingandModernEconomicGrowth.html

Standards of living have SKYROCKETED and companies producing new products (which they need cash reserves and profit incentive to do) is what increases standard of living. Someone in 1970 may have earned more on an inflation adjusted term, but they are living a more lavish life today with less money and have better health and more life expectancy to boot. How many people in 1970 had a color TV? A car with airbags? A cordless phone? A place to argue with other people around the world?

Corporations are not hurting anyone when they have lots of cash on hand. You act like corporations are people, but they aren't... That money will eventually get spent for salaries (taxed), capital investment (taxed), buying back shares (taxed), dividends (taxed), or other investments (taxed). Sitting on it simply gives the company greater stability and long term growth. But our government is not good at planning for the long term. Hell it seems like they can't see past the next election most of the time. Companies want to be around for the long haul, most aren't in business to make a quick buck and be gone tomorrow.

The situation is more dire than you know - no one person knows everything needed to make a pencil.

Consider even just the lead-

I, Pencil: My Family Tree as told to Leonard E. Read

My "lead" itself—it contains no lead at all—is complex. The graphite is mined in Ceylon. Consider these miners and those who make their many tools and the makers of the paper sacks in which the graphite is shipped and those who make the string that ties the sacks and those who put them aboard ships and those who make the ships. Even the lighthouse keepers along the way assisted in my birth—and the harbor pilots.

The graphite is mixed with clay from Mississippi in which ammonium hydroxide is used in the refining process. Then wetting agents are added such as sulfonated tallow—animal fats chemically reacted with sulfuric acid. After passing through numerous machines, the mixture finally appears as endless extrusions—as from a sausage grinder-cut to size, dried, and baked for several hours at 1,850 degrees Fahrenheit. To increase their strength and smoothness the leads are then treated with a hot mixture which includes candelilla wax from Mexico, paraffin wax, and hydrogenated natural fats.
   

Free and open societies may allow some injustices to occur. But the notion that totalitarian (not fascist) societies don't is just totalitarian propaganda.

Propaganda for a type of government is silly; the people actually in charge can and will make all the difference. The larger problem is that forms of government last across generations, and what might be right for one generation (a dictatorship with a benevolent king) can be terrible the next (the benevolent king's evil son). This is equally true with democracies, republics, federations, and all other forms of government; even anarchy might do alright for a generation or two before devolving into depravity and evil.

Part of the question of what government is best is about planning for this multi-generational span, and the modern answer (constitutional republics, especially with the legislative/judicial/executive breakdown) seem to do alright. However, especially now that the world's changing, we are getting a good look at some of the flaws, and I fear a little bit for the future. Given the complexity of the system, I wonder how it could possibly be fixed without someone using nearly dictatorial powers to overcome it.

And, naturally, the people involved may have different definitions of what a "fixed" system looks like, which is part of what makes it so dangerous to involve dictatorship...

"Even if the law would let you get away with it, I won't." That's not how most people view a free and open society, although arguably it is necessary to maintain one.

That society would be neither free nor open.

Free and open societies may allow some injustices to occur. But the notion that totalitarian (not fascist) societies don't is just totalitarian propaganda. So, the actual choices available are freedom or (soft) slavery.

It's amazing how few people have actually addressed your question.

You're right to point out that many high-income (and thanks for not conflating "high-income" with "wealthy") taxpayers earn most of their income from capital gains (and interest and dividends). But Romney's plan does not propose eliminating capital gains tax for high-income individuals -- that's only for taxpayers with AGI below $200,000 (citation here). It does keep in place the lower capital gains tax rates that were part of the 2001-2003 Bush tax cuts -- the rationale being that lower rates on money earned from investment *should* lead to more investment and growth in the overall economy.

Broadening the base means things like capping or eliminating the number of deductions that people can claim on their tax returns. High-income people would pay taxes on a greater portion of their overall income. Romney has refused to commit to a specific proposal on this part, so we're left to speculate. Harvey Rosen has an interesting analysis of how it *could* be mathematically possible to "broaden the base" enough to offset the lower rates -- even with very little additional growth generated via the lower rates. In a nutshell:

• 1. Tax employer-provided health insurance as income -- could result in a lot of new tax revenue.
• 2. Tax "inside buildup" -- a type of tax-sheltered life-insurance income.
• 3. Keep the home mortgage deduction only for lower/middle-income earners. People in the top tax bracket might not get any of the usual deductions for medical expenses, charitable donations, or state and local taxes paid.

You can argue that a Romney administration would never go that far in eliminating deductions and loopholes, but that's different from "mathematically impossible". The Rosen paper puts all of this in a chart so you can compare the effects of different assumptions.

There's a pretty comprehensive round-up of people making the case that Romney plan could work here. (Yes, it's from a libertarian perspective. No, I'm not an economist or a libertarian myself.)

Was there a shortage of ice, or was the vendor just jacking up prices cause he could. Also how high did the prices go.

If there was no shortage, and he raised prices extremely high (say more then 300% of typical) then there is a logical argument that he was price gouging.

Link to story. Article implies they were charging at least 4.5x the non-emergency cost of ice. Note that some places have very restrictive definitions of gouging; in Alabama for instance, it's unlawful to charge more than 1.25x the previous 30-day rolling average during a declared emergency.

How society should react to that I am torn about though.

I think we have a natural distaste for explicit gouging (as opposed to the hidden type that teleco's and cable companies and patent trolls get away with). Munger's article makes a good anecdotal case that legislative responses to this emotional reaction aren't necessarily in the best interest of disaster victims. OTOH, there are counterexamples where it seems like businesses really abused public trust (like the hotels that jacked up prices on 9/11 to milk stranded air passengers).

Well you can give this a quick read.

http://www.econlib.org/library/Enc/CapitalGainsTaxes.html

Relevant passage here:

For example, after the 1981 capital gains tax was cut from 28 to 20 percent, real (all figures in this section are 2004 dollars) federal capital gains tax revenues leapt from $29.4 billion in 1981 to $36.6 billion by 1983—a 24 percent increase. After the capital gains tax was cut in 1997, the receipts from capital gains taxes rose from $66.9 billion in 1996 to $114.7 billion by 1999, an increase of more than 71 percent.

And it brought in less revenue. Capital gains cannot be increased without REDUCING revenue. Every economist recognizes this, but the collectivists keep claiming that it doesn't matter "it's an issue of fairness." Well, life ain't fair, and raising taxes to DECREASE revenue and capital seems pretty asinine.

Yeah, what side of the Laffer Curve are we on again? Thought so...

Your ignorance is showing. This is about Capital gains taxes, not income taxes. Capital gains has been played with so many times that the revenue reaction is clear and well-understood, not like wild unknown somewhere between 0% and 100%.

If you dismiss the evidence then you must be anti-science.