Neo Liberal Economic Theory  

FrankienJohny 58M/44F  
9 posts
6/30/2020 1:31 pm
Neo Liberal Economic Theory

Today's capitalism is not the same as it was when I was a . We allowed corporations to become legal entities for one thing. When I was a company's took care of their employees. They paid for medical and retirement benefits. Plus, they paid wages that allowed for a healthy and prosperous middle class.

The so called American Dream was actually within reach back then. Not possible in today's economy. Wages have basically remained the same for 40 years. Yet the cost of living has increased so much that for many if not most Americans it is a struggle just to keep a roof over their heads and food on the table.

Getting a four year degree from an accredited university and even going to Grad school was actually affordable. Now you have to go into debt for life to pay for it. With no guarantee of career success.

Capitalism is out of control. The 1% do not pay taxes or contribute anything to the betterment of our society. They do not give a shit about the rest of us. They only want our money. All of it.

I guess you could say that conservative Neo Liberal Economics has very efficiently turned the US into a third world country. Not for the 1% but the other 99%. Shouldn't we change this?

discreteSteve62 52M
2070 posts
6/30/2020 7:13 pm

Higher education is increasing in cost far more rapidly than the economy because of an economic process called "Baumol's cost disease". An economist named Baumol observed that the cost of employing live musicians had greatly increased compared to other services and most products. He observed that the amount of manufactured goods that can be produced through one hour of manufacturing labor, or the amount of farm goods produced by one hour of farm labor, had dropped dramatically, thanks to automation. But the amount of live musical entertainment that can be produced by one hour of musician's time can't be increased at all (except, I suppose, to the extent that amplifiers can make the music audible to a larger audience), because live entertainment doesn't take to automation. So, when one trades the cash value of one hour's worth of manufactured or farm goods for the cash value of one hour's worth of live music, the cash value of the live music has increased in cost.

Although Baumol used live music as the example, it applies to anything that doesn't take well to automation, most notably education and health care. And that is why a degree that cost a few hundred dollars per semester -- something that a student could pay for along the way, with summer jobs -- now often costs more than an expensive car, and occasionally as much as an inexpensive house. Another reason, of course is that most state governments have cut back dramatically on subsidies for higher education, but Baumol's is the main reason.

The rest of your point is on target though. The people with the most income and wealth pay much less in taxes than they receive through the value of a stable society; almost all of the businesses that make them rich couldn't exist without the economic value of an educated public and a functional society. During World War II and for many years after, the top marginal income tax was as high as 94%, and even as recently as about 1980 it went as high as 70%. Some people find those figures outrageous, but they don't get that the 94% figure didn't mean that they paid 94% on everything, just 94% of income over about (adjusting for inflation) three million dollars per year.

And corporate taxes have been cut from about 48%, with fairly limited deductions and loopholes, to today's 21%, with lots of deductions and loopholes.

The tax cuts are at the core of almost all the woes troubling us now -- except racist police brutality and the problems directly resulting from the stupidity of the Mobster in Chief.

FrankienJohny 58M/44F  
11 posts
7/1/2020 1:49 am

Baumol's cost disease. Well, I'm retired an old and certainly no pro but thanks for clearing that up. Makes it easier to connect the dots. The point is that our country is in deep shit. I still blame the elitists for all of this fucking trouble. Which includes the Mobster in Chief and his henchmen. The 1% vs the other 99%. We have them out numbered so why are we allowing them to continue?

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