tag:blogger.com,1999:blog-2761684730989137546.post9027166091097019287..comments2024-03-29T02:19:19.866-04:00Comments on Mike Norman Economics: Net Worth vs. Financial Obligationsmike normanhttp://www.blogger.com/profile/03296006882513340747noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-2761684730989137546.post-10972637383756335392011-05-27T11:10:00.641-04:002011-05-27T11:10:00.641-04:00Michael Hudson makes the point that rent-seeking i...Michael Hudson makes the point that rent-seeking is largely function of tax policy. The wealthy, who garner most of the rent since they are the savers, aim to exempt rent from taxation and shift the tax burden to income. The wealthy also lobby for tax breaks and loopholes for income, and they employ lawyers and accountants to take advantage of them. The result is that taxation is regressive and its structure encourages increasing financial assets through rent over increasing real assets through productive investment. His solution is to tax gains from economic rent (land rend, monopoly rent, and financial rent) and exempt gains from productive investment and income from production.Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-44587716191149564692011-05-27T10:36:26.283-04:002011-05-27T10:36:26.283-04:00Crake,
The report's cited example, the Davis...Crake, <br />The report's cited example, the Davis-Bacon Act (requiring govt contractors pay union scale) is true enough but small ball compared to the truckload of benefits granted corporate interests (and the wealthy) to the detriment of taxpayers, consumers and competitors.<br /><br />David Cay Johnston has done yeoman's work reporting on "government interference in the market to privilege the privileged".<br />http://reason.com/archives/2007/12/28/the-cost-of-a-free-lunch<br /><br />Dean Baker has written on the same thing in the Conservative Nanny State.<br />http://www.conservativenannystate.org/<br /><br />The term "rent seeking" is only 40 years old, but a 100 years before that, Henry George applied the same concept to the ownership of land (and other monopolies).<br />http://en.wikipedia.org/wiki/Henry_Georgebeowulfhttps://www.blogger.com/profile/14987548132065830204noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-58333909869080993082011-05-27T10:22:56.441-04:002011-05-27T10:22:56.441-04:00Crake,
Nice short article.. I dont know if it is ...Crake,<br /><br />Nice short article.. I dont know if it is the govt spending per se that enables entities to get into the rent seeking positions... it sort of makes the case that regulation/permits etc.. help rent seekers establish their positions...<br /><br />Tom here has introduced me to the concept of rents over the months/years... and Tom I believe has read a lot of Michael Hudson on this topic....<br /><br />Resp,Matt Frankohttps://www.blogger.com/profile/11978352335097260145noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-63427752647556900252011-05-27T10:21:37.964-04:002011-05-27T10:21:37.964-04:00Two problems with household net worth. The first i...Two problems with household net worth. The first is that the housing market is double-dipping, and a great many homeowners are underwater already, with more to come. The second is that equities are overvalued unless the recovery is sustainable as government pulls back it support. In addition, the US is increasingly a two-tier society with the wealthy doing very well and the middle and bottom getting hit.Tom Hickeyhttps://www.blogger.com/profile/08454222098667643650noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-13340690807900008992011-05-27T09:45:10.338-04:002011-05-27T09:45:10.338-04:00Crake,
Probably the Banks (autos & homes)? Ap...Crake,<br />Probably the Banks (autos & homes)? Apartment REITs (new household formation)? Homebuilders? Certain retailers (new household furnishings)?....<br /><br />It would probably be pretty broad participation. The whole system in the west was/still is set up for rent seeking to a great extent...<br /><br />That said it probably gets back to incomes. Ive read Warren M put it: "get a job buy a car" (and you could add 'establish a household' to that).<br /><br />I'll see if I can add some sort of income series to this graph...<br /><br />Resp,Matt Frankohttps://www.blogger.com/profile/11978352335097260145noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-86516822907709603092011-05-27T09:38:30.396-04:002011-05-27T09:38:30.396-04:00On subject of rent seeking, what do you think abou...On subject of rent seeking, what do you think about this article I found:<br /> http://www.house.gov/jec/growth/rentseek.htm<br /><br />Does government spending and programs tend to lead to rent seeking, as that author states? And if so, is that necessarily a bad situation as that author opines or could it be a fruitful effort and one needed when the private sector and markets will not do something in a timely manner (for example, spending to boost alternative energy development which would pay much dividends in future – or space exploration with all the boons to science and future products)? In other words, is rent seeking, as that author defined it, always bad or can it provide benefits?Crakehttps://www.blogger.com/profile/07995319378514270093noreply@blogger.comtag:blogger.com,1999:blog-2761684730989137546.post-25899293032386245242011-05-27T09:15:32.078-04:002011-05-27T09:15:32.078-04:00“A bottom in the Obligations Ratio may be somethin...“A bottom in the Obligations Ratio may be something to look for as evidence of the "recovery" finally starting to broaden.” I think we need to see it bottom and the sharply rise, considering government spending, already too low, might be reduced. Bottoming with no sharp rise, probably just means the economy is treading water at best and possibly contracting at worst. <br /><br />A question – sorry if this seems selfish but if everyone is going off a cliff (popularity of reducing government spending), I do not want to follow. If we do avert a contraction in the cut to grow world via households increasing their debt, I want to increase/switch some equity exposure to strong rent seeking companies. What sectors or specific companies would be strong rent seekers?Crakehttps://www.blogger.com/profile/07995319378514270093noreply@blogger.com