Monday, November 22, 2010

Clarity Rarity

If the most successful investor in history says something as obvious as a full moon about economics, will anyone listen? What will it take for the Foxobaggerbeckians to admit that their demand for tax cuts is based on greed and nothing else? Admit that they couldn't care less about history, and even less than that about the common good.

"I think that people at the high end, people like myself, should be paying a lot more in taxes. We have it better than we've ever had it," he told ABC's Christiane Amanpour in a clip played on "This Week" on Sunday.

When Amanpour pointed to critics' claims that the very wealthy need tax cuts to spur business and capitalism, Buffett replied, "The rich are always going to say that, you know, 'Just give us more money, and we'll go out and spend more, and then it will all trickle down to the rest of you.' But that has not worked the last 10 years, and I hope the American public is catching on."

He's right about everything but that hopey thing at the end. Clearly, denialism of reality, simplification of hard stuff and rationalization of selfishness have become the new norm. If the recent election doesn't demonstrate that, nothing does.



    Go down to graph #9 (Composition of income by group).

    Looks like the bottom quintile is getting a pretty good deal due to wealth transfer.

    Looks like the top 1% (>1 million/year income) are creating ~1/2 their wealth due to capital investment returns.

    The top 400 (i.e. Warren Buffet) are making most of their income from Capital gains.

    In your opinion, based on that data, who exactly should be taxed more? how? how can we prevent the group you want taxed more from using tax loopholes to lower their tax burden? How can you prevent the top 2-4% (>200K but < 500K) from voluntarily regressing into a lower tax bracket due to decreased production to avoid excess tax burden and thus furthering the gap between rich and poor?

    Except for the top 1% (capital gains) and the bottom quintile (wealth transfer), the composition of incomes chart looks pretty fair since most American's derive the majority of their incomes from old fashioned labor.

    What could Obama's logic be in raising taxes on the top 2-4% considering they earn money mostly through labor and are some of the countries most productive citizens; representative proof that "The American Dream" is still attainable through hard work?


    p.s. Happy Thanksgiving

    p.p.s. I wanted to ask your opinion on the "new" surgical "sub-specialty" of Acute Care Surgery/Surgical Critical Care. Good opportunity Gen Surgeons? Good for patients? Is a fellowship really necessary? Isn't this just traditional Gen Surg under a different name?

  2. PT: you have to skip over a lot of graphs to get to #9 (Eight, if my math is correct.) The bottom quintile that are doing so well, according to you, make about $9K/year.

    At its heart, the question is about what we expect of a society. Whereas it's nice (if sorta unChristian) to think it ought to be every man for himself, make it or die, in all but the most un-diverse and autocratic societies, it's pretty much impossible. People can, and do, argue about the proportions, but most agree that government has a role in providing some things for everyone, and some things for those in most need.

    Redistribution is a loaded word, used to great effect by the right wing. (Coincidentally, tomorrow's post addresses this stuff, too.) But there was no greater redistribution than the one Bush engendered; it was just that it was up, not down.

    The rationale for returning a small percentage of people to not-quite or the same rates as they had when they flourished under Clinton is that the Bush cuts went too far, and drove us toward ruin. Reversing course should affect those least hurt by raising taxes.

    Likewise, I'd hazard that the definition, for the purposes of your article, of "labor" is a little loose. The CEO, for example, that earns 400 times what his workforce does, with better bennies to boot, is, no doubt, considered a "laborer." Once again, it's worthy of debate whether bosses ought to make that much more than their employees, especially if it's at the expense of decent conditions of pay, bennies, etc. I'm a capitalist, and I think Bill Gates deserves the money he made. He also, however, provided really well for his employees; including stock. But I also think that our society is better off if it provides things, too.

    People will never agree on the balance point. Mine is to the left of yours, and to the right of some of my friends. But it's hard to argue that the current situation has it right, that we can lower taxes further, cut entitlements to those that need them, ignore education, roads, dams, and survive. Something has to give. Some people have to give a little more, some have to get a little less.

    As to your final question: it's basically a surgical hospitalist, of which I was the first in our community for a while: now they have enough to provide 24/7 coverage, and it's a good deal for everyone. Were it still the case that general surgery residents finished training with the skills we had acquired in those bad old days, there'd be no need for most of the fellowships that most take: GI, biliary, breast... Same with hospitalism.

  3. One of the more amusing signs I saw at the Loa Angeles satellite Rally for Sanity was "Restore the JFK Tax Cuts."

    [For those of you not of the senior-citizen persuasion, under JFK the top marginal tax rate was cut from 91% - what it had been under Eisenhower - to 70%. He wanted it cut to 65%, but Congress wouldn't go that far.]


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