Do you believe there's a tradeoff...

inlet13

...between equality and efficiency?


*******************************************************************************************************************


Here's an interesting article on the subject:

http://www.washingtonpost.com/opinions/obamas-simplistic-view-of-income-inequality/2011/12/19/gIQAeVmR5O_story.html?hpid=z4

Obama’s simplistic view of income inequality

By Charles Lane, Published: December 19

Statistics show rising income inequality in the United States. But, contrary to the impression created by the Occupy protests, and media coverage thereof, statistics also show that Americans worry less about inequality than they used to.

In a Dec. 16 Gallup poll, 52 percent of Americans called the rich-poor gap “an acceptable part of our economic system.” Only 45 percent said it “needs to be fixed.” This is the precise opposite of what Gallup found in 1998, the last time it asked the question, when 52 percent wanted to “fix” inequality.

Maybe Americans are Okunites — as in Arthur Okun, the late Yale economist and author of the 1975 book, “Equality and Efficiency: The Big Tradeoff.”

Okun saw free markets as a source of unparalleled human progress — and of big gaps between rich and poor. Indeed, he argued, markets are efficient partly because they distribute economic rewards unevenly. Government should try to smooth out income stratification, but such efforts risk undermining incentives to work and invest.

Hence the “big trade-off”: channeling income from rich to poor, Okun wrote, was like trying to carry water in a leaky bucket. He wanted to move money from rich to poor without “leaking” so much economic growth that the whole process became self-defeating.

The American public intuitively shares Okun’s concerns. Consider the responses to another question in the Gallup poll. Asked to rate the importance of alternative federal policies, the public saw both economic growth and redistribution as worthy objectives — but put the former well ahead of the latter. Some 82 percent said growth was either “extremely” or “very” important; only 46 percent said “reduc[ing] the income and wealth gap between rich and poor” was “extremely” or “very” important.

In short, the public wants fairness but retains a healthy skepticism about the federal government’s ability to achieve it.

As such, Gallup’s numbers do not bode well for President Obama’s effort, launched in a Dec. 6 speech at Osawatomie, Kan., to win reelection as a soak-the-rich populist.

The president, like Okun, acknowledged that the free market created “prosperity and a standard of living unmatched by the rest of the world.” But he explained the recent rise in inequality too simplistically, as the result of financial deregulation and the “breathtaking greed” it enabled.

And rather than tackle the big trade-off directly, Obama tried to sidestep it. Rising inequality “hurts us all,” he argued, implying that more widely distributed income would essentially pay for itself through higher growth. He alluded to a recent study showing “that countries with less inequality tend to have stronger and steadier economic growth over the long run.”

It’s true that International Monetary Fund researchers Andrew Berg and Jonathan D. Ostry reported in September that egalitarian developing countries grow faster than less egalitarian ones. But the lesson for mature industrial economies is unclear. Western Europe’s recent history suggests that flat income distribution accompanies flat economic growth. Which European country recorded the biggest decrease in inequality between 1985 and 2008? That would be Greece.

The president argued, as he has before, that more government spending on education and training is key to greater equality. No doubt education has been a source of social mobility in the past. Obama has taken some steps in the right direction, notably his “Race to the Top” program that conditions some federal educational aid on reform.

But lack of reform — not resources — remains the problem with U.S. education and with many other public-sector institutions, from housing to agriculture. The president has taken only modest steps to deal with this problem, which is not surprising given his party’s dependence on public-sector labor unions.

Public-sector unions and other interest groups wrap their causes in the rhetoric of equality. Often, what they’re really protecting are privileges that raise the cost of public services to everyone else — including citizens who earn a lot less than civil servants. Yes, Wall Street’s bonuses are stratospheric. But the New York Times recently reported that Medicaid was paying nine executives $500,000 or more per year to operate nonprofit homes for the mentally disabled.

Okun’s message is that equality is a public good, whose benefits — social cohesion, political stability and the like — are worth paying for. The trick is not to overpay.

know1

I don't believe equality is achievable.

inlet13

know1 wrote:

I don't believe equality is achievable.

That wasn't really an answer. Some could say that they don't believe efficiency is really achievable too. The question was do you see a trade-off between the two. In other words, as an economy moves more towards an equality do they lose growth (and vice-versa)?

7RayZ

There are a lot of models sustainable communities which are equitable.

I think it lies within the mindset. For us, to become a world of equitable global citizens there is going to have to be a trade-off, if the mindset change is urgent and immediate. With the "power" held by the few instead of the many considering the self few of a ruling class who will kill, propagate lies, twist the world to keep what they have, its a terrible wall to climb. I would think though bringing together people with this thinking that there needs to specific points of change which we all can see together in a global vision. Things like no more war, sustainable energies, feeding the starving, healthcare and education to promote the general well being for the future of the human race.

Like I keep saying, drop petty agendas to get ahead at the door, they can be seen easily when "power" is spread evenly amongst many people.

Only persons who will lose "growth" is the people who hold the power and the $$$. This is about the growth of the human existence not about growth of the economy.

inlet13

7RayZ wrote:

There are a lot of models sustainable communities which are equitable.

I think it lies within the mindset. For us, to become a world of equitable global citizens there is going to have to be a trade-off, if the mindset change is urgent and immediate. With the "power" held by the few instead of the many considering the self few of a ruling class who will kill, propagate lies, twist the world to keep what they have, its a terrible wall to climb. I would think though bringing together people with this thinking that there needs to specific points of change which we all can see together in a global vision. Things like no more war, sustainable energies, feeding the starving, healthcare and education to promote the general well being for the future of the human race.

Like I keep saying, drop petty agendas to get ahead at the door, they can be seen easily when "power" is spread evenly amongst many people.

Only persons who will lose "growth" is the people who hold the power and the $$$. This is about the growth of the human existence not about growth of the economy.

So, I'm jumping out on a limb here, but I'd assume from this quote above... your answer is "no"... there is no trade-off between economic growth and inequality?

7RayZ

When you've amassed everything in the wrong manner, petered out the world its people and then figure out you have nowhere to go with it?

Honestly, think about it.

Your really going nowhere, but a dead end.

7RayZ

There is no trade-off by the many because we the citizens of this planet hold nothing.

What the hell do "we" have left to trade? Someone has to make the move. But the more the few dont bend to majority of the people will be outraged. Simple, people know they deserve basic freedoms of their unalienable rights. Unfortunately, people will not just sit around and keep getting shat upon.

Its a choice at this point to either peaceable come to some consensus. Because if there is no giving by the top few the majority will take it back. If measures of peaceable global revolution fail well, what is the terrible alternative? Its called WAR, so far, fairly peaceable, as we are seeing around the globe.

The thing is the majority's outrage and negativity is feeding the same "Masters of War" would love to sell another World War to stuff their pockets and still keep themselves in power.

Answer: start investing in the future of mankind based on the the few things Ive said above.


Read the reports by the Peace Insitute. Peace is far more "profitable" than the selling of any war.

inlet13

7RayZ wrote:

There is no trade-off by the many because we the citizens of this planet hold nothing.

What the hell do "we" have left to trade? Someone has to make the move. But the more the few dont bend to majority of the people will be outraged. Simple, people know they deserve basic freedoms of their unalienable rights. Unfortunately, people will not just sit around and keep getting shat upon.

Its a choice at this point to either peaceable come to some consensus. Because if there is no giving by the top few the majority will take it back. If measures of peaceable global revolution fail well, what is the terrible alternative? Its called WAR, so far, fairly peaceable, as we are seeing around the globe.

The thing is the majority's outrage and negativity is feeding the same "Masters of War" would love to sell another World War to stuff their pockets and still keep themselves in power.

Answer: start investing in the future of mankind based on the the few things Ive said above.


Read the reports by the Peace Insitute. Peace is far more "profitable" than the selling of any war.

Let me rephrase the question again:

GDP measures economic growth. Use any measure of income inequality you like.

Is there a trade-off between GDP growth and income inequality?

You can't break the answer down into segments... it needs to be answered at the whole. In other words, this is a yes or no answer.

Go Beavers

inlet13 wrote:

know1 wrote:

I don't believe equality is achievable.

That wasn't really an answer. Some could say that they don't believe efficiency is really achievable too. The question was do you see a trade-off between the two. In other words, as an economy moves more towards an equality do they lose growth (and vice-versa)?

Do you think European countries that are more equitable have lost growth or efficiency?

dignin

inlet13 wrote:

7RayZ wrote:

There is no trade-off by the many because we the citizens of this planet hold nothing.

What the hell do "we" have left to trade? Someone has to make the move. But the more the few dont bend to majority of the people will be outraged. Simple, people know they deserve basic freedoms of their unalienable rights. Unfortunately, people will not just sit around and keep getting shat upon.

Its a choice at this point to either peaceable come to some consensus. Because if there is no giving by the top few the majority will take it back. If measures of peaceable global revolution fail well, what is the terrible alternative? Its called WAR, so far, fairly peaceable, as we are seeing around the globe.

The thing is the majority's outrage and negativity is feeding the same "Masters of War" would love to sell another World War to stuff their pockets and still keep themselves in power.

Answer: start investing in the future of mankind based on the the few things Ive said above.


Read the reports by the Peace Insitute. Peace is far more "profitable" than the selling of any war.

Let me rephrase the question again:

GDP measures economic growth. Use any measure of income inequality you like.

Is there a trade-off between GDP growth and income inequality?

You can't break the answer down into segments... it needs to be answered at the whole. In other words, this is a yes or no answer.

I could be wrong but what I think he/she is trying to say is that the question does not really matter (or you are asking the wrong question). It's the final outcome that matters. We cant continue going on the way we have been.....its not sustainable.

inlet13

Go Beavers wrote:

inlet13 wrote:

know1 wrote:

I don't believe equality is achievable.

That wasn't really an answer. Some could say that they don't believe efficiency is really achievable too. The question was do you see a trade-off between the two. In other words, as an economy moves more towards an equality do they lose growth (and vice-versa)?

Do you think European countries that are more equitable have lost growth or efficiency?

I'll be happy to answer this after you answer the question posed at the top of the page, .,.. the one the thread's about.

inlet13

dignin wrote:

I could be wrong but what I think he/she is trying to say is that the question does not really matter (or you are asking the wrong question). It's the final outcome that matters. We cant continue going on the way we have been.....its not sustainable.

ha ha... If the question doesn't matter.... Why not just bypass the thread?

It was just a question - a yes or no answer was all that was requested.

dignin

inlet13 wrote:

dignin wrote:

I could be wrong but what I think he/she is trying to say is that the question does not really matter (or you are asking the wrong question). It's the final outcome that matters. We cant continue going on the way we have been.....its not sustainable.

ha ha... If the question doesn't matter.... Why not just bypass the thread?

It was just a question - a yes or no answer was all that was requested.

Last time I checked....this board was about disscusion and debate. Just because you didnt get the answer you wanted doesnt mean its not valid.

inlet13

dignin wrote:

inlet13 wrote:

dignin wrote:

I could be wrong but what I think he/she is trying to say is that the question does not really matter (or you are asking the wrong question). It's the final outcome that matters. We cant continue going on the way we have been.....its not sustainable.

ha ha... If the question doesn't matter.... Why not just bypass the thread?

It was just a question - a yes or no answer was all that was requested.

Last time I checked....this board was about disscusion and debate. Just because you didnt get the answer you wanted doesnt mean its not valid.

Dude, I didn't get an answer period. The thread was created to ask a particular question to posters here. You, or others, can certainly come into threads and tell the OP you don't like the question if that's how you get your rock's off. Have fun with that.

7RayZ

GDP is only a small portion supported by private citizens and the largest portion is the monies spent by the government by the taxes collected. Idealistically, primarily the taxes paid into the system government are used to fund administrate this system, in a trust to fund the "will" of the people.

However, its so insanely corrupt. Investments into health and human services, education, infrastructure and the like is GONE, stolen and then perverted funds. I can go into length of discussion on this. In short:

So now the people who have profited the most and corrupted this system without providing the services they were contracted to do by the government, now do not even want to pay back into the governmental system of which they originally benefited from. Plus, then use the monies to empower lawmakers who perpetuate bad businesses of which are set up to fail to begin with to take the government $$. This is just one scam amongst the myriad of others.

Leaving the majority of the common people paying taxes with nothing, and picking up the tab and the sweat equity on their BACKS! Still comes down to the simplicity of the the corruption and theivery of $$ and power.

You want the GDP to grow, you want jobs start enforcing accountability and contracting people of integrity to run governmental programs people are paying for and expect.

By the way, where is the GAB?

inlet13

Your posts are very hard to read. But, I'll take a stab at one part:

7RayZ wrote:

GDP is only a small portion supported by private citizens and the largest portion is the monies spent by the government by the taxes collected.

This is not factual. GDP = Consumption + Investment + Government Spending + Net Exports.

Consumption, at least in America, is by far the largest % of the above equation. Government is certainly not. So, anyone who claims "the largest portion is the monies spent by government" is off.

mookeywrench

There's no trade off between equality in potential and efficiency, but there's a huge trade-off between equality in results and efficiency.

7RayZ

inlet13 wrote:

Your posts are very hard to read. But, I'll take a stab at one part:

7RayZ wrote:

GDP is only a small portion supported by private citizens and the largest portion is the monies spent by the government by the taxes collected.

This is not factual. GDP = Consumption + Investment + Government Spending + Net Exports.

Consumption, at least in America, is by far the largest % of the above equation. Government is certainly not. So, anyone who claims "the largest portion is the monies spent by government" is off.

Thats what I was taught. The government is the largest purchaser/consumer of goods and services and the fuel of the economy.


You are going to post that equation above and tell me that government is not the hugest chunk of change of that?

7RayZ

I get the feeling you are relying alone on the power of corporations as the ruling factor and the sole power of the GNP. the Reaganomics trickle down equation that corporations ALONE make jobs and therefore are the decision makers on policy.

This why a government isnt run like a corporation it should be run as a democracy.

puremagic

If the premise of America culture is that economic growth equals prosperity, then the inequality among its population should retain a balance. With any economic growth period we should see statistics that demonstrate a corporate growth, a growth in the middle class and a shrinkage in the poor class. In any economic downturn, the machine that makes up the federal government (the White House, Congress and the Courts) have the responsibility to step in an restore a balance among its population. Yet, every time we try to discuss the disparity of economic growth and the inequality among its population – its reduced to the wealthy vs the poor or the job makers vs the government.

The inequality has outgrown the economic growth because, we've allow our prejudices and economic woes to be manipulated by sound bites and politicians, we have become trapped in this whole federal government vs wall street, forgetting that it is the democracy of America that allows Wall Street to exist. Congress would have the public believe it is Wall Street that allows America to exist because without Wall Street, there would be no jobs, yet the BAILOUT proved that without America's buying power Wall Street would not exist. This is the message that OWS has failed to get across – it's not about the 1%, hell Bernie Madoff exposed the vulnerability of the wealthy – the OWS message being lost is that, the banking industry and Wall Street financiers should not be allowed to govern or regulate America. The federal government, as elected by the people, and wall street have to act in concert to stabilize the America economy and its inequality because the American market is the trend sitter and if people can not sustain their earnings and buyer's power, then Wall Street will fail.

This author is wrong because President Obama does recognize this fact and the policies he has tried to push through would have jumped started the process to restore overall economic balance and reduce the inequality among the American public. Yet, Congress, has fought every attempt made to jump start this economy, except for the Bailout and would have you believe that Corporations and the wealthy who pay less than their fair share of taxes, whom receive government subsidies to maintain their businesses, whom receive tax loopholes to shelter their wealth, who create jobs with no long time security, less benefits and depend on State and federal health programs for their part-time employees or shift workers – are willing to restore a balance economy and create equity – keep thinking that!

Go Beavers

inlet13 wrote:

Go Beavers wrote:

inlet13 wrote:

Do you think European countries that are more equitable have lost growth or efficiency?

I'll be happy to answer this after you answer the question posed at the top of the page, .,.. the one the thread's about.

You're quite the stickler, but it's your thread, so it's your rules. I'm glad you're so interested in hearing what I have to say.

I would say for the most part that it doesn't. Sure, they could be huge taxation that could reduce efficiency, but we're nowhere near that.

The article could be better written. I think the writer takes some liberties with trying to make some points.

There's this: "Government should try to smooth out income stratification, but such efforts risk undermining incentives to work and invest." This is the classic conservative complaint whenever the issue of raising taxes comes up, but I don't think the fear plays out in reality.

I'm not sure how he came up with this conclusion from the Gallup poll: "In short, the public wants fairness but retains a healthy skepticism about the federal government’s ability to achieve it." It seemed to me that they were rating growth as more important than reducing the income gap, which makes sense when the economy is in the tank and millions are desperate for a job. Then he goes for the reach, saying that the numbers don't bode well for Obama.

This is misleading: "Public-sector unions and other interest groups wrap their causes in the rhetoric of equality. Often, what they’re really protecting are privileges that raise the cost of public services to everyone else — including citizens who earn a lot less than civil servants." Relative to positions in the private sector that are similar in task and education requirements, public sector employees earn less money.

Then the writer lays this turd at the end: "Yes, Wall Street’s bonuses are stratospheric. But the New York Times recently reported that Medicaid was paying nine executives $500,000 or more per year to operate nonprofit homes for the mentally disabled."

polaris_x

puremagic wrote:

If the premise of America culture is that economic growth equals prosperity, then the inequality among its population should retain a balance. With any economic growth period we should see statistics that demonstrate a corporate growth, a growth in the middle class and a shrinkage in the poor class. In any economic downturn, the machine that makes up the federal government (the White House, Congress and the Courts) have the responsibility to step in an restore a balance among its population. Yet, every time we try to discuss the disparity of economic growth and the inequality among its population – its reduced to the wealthy vs the poor or the job makers vs the government.

The inequality has outgrown the economic growth because, we've allow our prejudices and economic woes to be manipulated by sound bites and politicians, we have become trapped in this whole federal government vs wall street, forgetting that it is the democracy of America that allows Wall Street to exist. Congress would have the public believe it is Wall Street that allows America to exist because without Wall Street, there would be no jobs, yet the BAILOUT proved that without America's buying power Wall Street would not exist. This is the message that OWS has failed to get across – it's not about the 1%, hell Bernie Madoff exposed the vulnerability of the wealthy – the OWS message being lost is that, the banking industry and Wall Street financiers should not be allowed to govern or regulate America. The federal government, as elected by the people, and wall street have to act in concert to stabilize the America economy and its inequality because the American market is the trend sitter and if people can not sustain their earnings and buyer's power, then Wall Street will fail.

This author is wrong because President Obama does recognize this fact and the policies he has tried to push through would have jumped started the process to restore overall economic balance and reduce the inequality among the American public. Yet, Congress, has fought every attempt made to jump start this economy, except for the Bailout and would have you believe that Corporations and the wealthy who pay less than their fair share of taxes, whom receive government subsidies to maintain their businesses, whom receive tax loopholes to shelter their wealth, who create jobs with no long time security, less benefits and depend on State and federal health programs for their part-time employees or shift workers – are willing to restore a balance economy and create equity – keep thinking that!

can i get a "hell yeah"!?? ... i'll keep repeating it ... the game is rigged ... whole thing needs to be blown up ...

cincybearcat

puremagic wrote:

Corporations and the wealthy who pay less than their fair share of taxes

Oh, so you bought that bullshit Obama been peddling. Good for you.

It's time to stop making people that earn a good living and corporations that provide jobs and benefits for many the devil. After all, you want those devils to pay for everything.

In the same vein, the corporations and "wealthy" should not be described as "Job Creators". It's the bullshit language that Obama and the Republican leadership in Congress have brought us that keep anything from getting done. They are trying to get the people to go after each other to keep the people from realizing that they (Executive and Legislative branches) haven't done hardly anything to help.

puremagic

cincybearcat wrote:

puremagic wrote:

Corporations and the wealthy who pay less than their fair share of taxes

Oh, so you bought that bullshit Obama been peddling. Good for you.

It's time to stop making people that earn a good living and corporations that provide jobs and benefits for many the devil. After all, you want those devils to pay for everything.

In the same vein, the corporations and "wealthy" should not be described as "Job Creators". It's the bullshit language that Obama and the Republican leadership in Congress have brought us that keep anything from getting done. They are trying to get the people to go after each other to keep the people from realizing that they (Executive and Legislative branches) haven't done hardly anything to help.

Ok, maybe the anger got the best of you, but I don’t understand what point you’re trying to make.

-You claim I’m buying into Obama’s peddling.

-You lost me on the whole ‘devil’ this ‘devil’ that chatter

-In your last paragraph you seem to agree that the failure of the White House and Congress not being able to work together towards solving this problem – Is the Problem.

So what have I written that has made you so angry or am I misunderstanding the point you're trying to make.

polaris_x

puremagic wrote:

Ok, maybe the anger got the best of you, but I don’t understand what point you’re trying to make.

-You claim I’m buying into Obama’s peddling.

-You lost me on the whole ‘devil’ this ‘devil’ that chatter

-In your last paragraph you seem to agree that the failure of the White House and Congress not being able to work together towards solving this problem – Is the Problem.

So what have I written that has made you so angry or am I misunderstanding the point you're trying to make.

he still believes the rules of the game are fair and that any success or failure of the current economics fall squarely on the president ... he has yet to recognize the corporatization of gov't and how these corporations goal of mass profit is achieved not through the market but through preferential treatment and privilege ...

cincybearcat

puremagic wrote:

cincybearcat wrote:

puremagic wrote:

Corporations and the wealthy who pay less than their fair share of taxes

Oh, so you bought that bullshit Obama been peddling. Good for you.

It's time to stop making people that earn a good living and corporations that provide jobs and benefits for many the devil. After all, you want those devils to pay for everything.

In the same vein, the corporations and "wealthy" should not be described as "Job Creators". It's the bullshit language that Obama and the Republican leadership in Congress have brought us that keep anything from getting done. They are trying to get the people to go after each other to keep the people from realizing that they (Executive and Legislative branches) haven't done hardly anything to help.

Ok, maybe the anger got the best of you, but I don’t understand what point you’re trying to make.

-You claim I’m buying into Obama’s peddling.

-You lost me on the whole ‘devil’ this ‘devil’ that chatter

-In your last paragraph you seem to agree that the failure of the White House and Congress not being able to work together towards solving this problem – Is the Problem.

So what have I written that has made you so angry or am I misunderstanding the point you're trying to make.

I quoted it to help you out.

cincybearcat

polaris_x wrote:

puremagic wrote:

Ok, maybe the anger got the best of you, but I don’t understand what point you’re trying to make.

-You claim I’m buying into Obama’s peddling.

-You lost me on the whole ‘devil’ this ‘devil’ that chatter

-In your last paragraph you seem to agree that the failure of the White House and Congress not being able to work together towards solving this problem – Is the Problem.

So what have I written that has made you so angry or am I misunderstanding the point you're trying to make.

he still believes the rules of the game are fair and that any success or failure of the current economics fall squarely on the president ... he has yet to recognize the corporatization of gov't and how these corporations goal of mass profit is achieved not through the market but through preferential treatment and privilege ...

Stick to talking about something you know.

7RayZ

People may not understand the devil's arithmetic on the economic model of capitalism.

John Nash's game theory and theoretic equation which caused for the mess we have today. It isnt his fault he was just doing what the government hired him to do.

Adopting some Proutist Economic theories could help.

Im just SIMPLY telling you the problems in the system NOW rigging of the cash cow AND HOW IT WAS RIGGED.

7RayZ

'

can i get a "hell yeah"!?? ... i'll keep repeating it ... the game is rigged ... whole thing needs to be blown up ..."

I just saw this,


Simple.