So I watched "Capitalism: A Love Story" for the first time a few weeks ago, and I was wondering if there's any validity to the issues presented in the movie. Those individual issues that I see presented in the movie are as follows:
1) The reduction of the income tax rates on the wealthiest in the United States which puts too much of a tax burden on the middle class which causes them to fall into an exceedingly high level of consumer debt.
2) Fewer rights for employees and unionized labor as compared to other nations, and how this results in corruption by executives without workers to serve as an adequate check against executives in the running of the business.
3) How the costs of training professionals for certain occupations exceeds the income earned from an average salary in that occupation, which forces too many Americans into too high of a level of debt.
Obviously if government is going to subcontract some of its duties, it is government's responsibility to make sure those duties are being fullfilled competently, ethically, and legally. Something like this seems to be mainly about a lack of oversight on private businesses that performing government duties. Of course, the cost of providing the necessary amount of oversight and quality conrol measures may mean its no longer cost efficient to subcontract these duties, but if that's the case the government can simply reassume those duties.4) Corruption with regards to the privatization of government services, shown in the movie as the "Cash for Kids" scandal concerning juvenile detention centers.
5) The unfairness of the government bailing out banks but not families whose homes are being foreclosed on.
Just on the first part I don't quite see how that makes sense...
If you reduce the tax on the middle class they pay less in taxes, regardless of whether or not you also reduce it on the rich.
IE...if the middle class pays 30% of their income in taxes and that's reduced to 15%, then they're paying 15% less in taxes regardless of whether or not the wealthy are being charged 70% or 50%. The wealthy ALSO getting a tax break shouldn't magically make the middle class have to pay more in taxes in total because there's no way that would actually feasibly work.
Say you start with a middle class person making $100 and taxed at 30% and a high class person taxed at %50. The middle class person pays $30 in taxes. Now lets say you give that middle class person a 15% tax rate instead but keep the higher class person still at 50%, that middle class person now pays $15 in taxes. However, if you reduce the higher class person to 30% along with the middle class person being put to 15%, the middle class person still only pays $15.
So why in the world would reducing it on both cause the middle class to go into debt, but somehow reducing it JUST on the middle class would not?
That just makes no logical sense to me.
My brother, who is a bit more moderate than me, but still a libertarian leaning guy, watched this movie a few weeks ago and said it raised some interesting points. On his recommendation, I've been wanting to check it out.
I'm actually much more concerned the number of people who pay nothing in taxes. 47% of households in 2009 owed nothing in federal income taxes (or came out ahead thanks to tax credits). Even if you factor in payroll taxes which fund social security and medicare, 22% of households end up paying nothing into the federal coffers. It's easy to clamor for an expansion of government when you don't have to worry about paying for it. Source: 47% of households owe no tax - and their ranks are growing - Sep. 30, 2009
I don't object to progressive taxation, but I do think everyone should pay at least something. No free rides. Furthermore, I'd like to see the income tax brackets fixed and then tied together. All cuts or increases would be applied by the same percentage across the board. If you cut taxes by 10%, everyone's bill goes down 10%. Same if you want to raise it. No more of this tax those guys to pay for my entitlements. Everyone kicks into the pot. And everyone has a vested interest in seeing costs kept to a minimum.
I'm not sure how unions or worker's rights serve as a check on executive corruption. I'm failing to see the connection. Perhaps you could explain this?
I do think unions have helped contribute to the downfall of many American factory jobs. Unions often obtain and then vigorously defend excessive retirement benefits. People are still retiring at 65 (or earlier with many employers being forced to offer early retirement in order to shed workers) when the national life expectancy continues to creep up. More and more people are living to collect their retirement benefits for longer and longer and it puts a strain on companies. Plus, unions often make it difficult to fire, lay off, or demote subpar workers.
Now, I'm not saying unions are all bad. The idea that the average worker has the same negotiating power as the average employer is laughable and we only need to pick up a history book to see the abuses corporations used to heap onto their workers before unions helped equalize the balance of power. But clearly, I think some things need to change if we want to remain competitive in unionized fields.
This is a bit of a head scratcher for me. How is this even possible? The average 4 year public state school costs $7,605 a year for an in-state student. Multiply that by four years and a bachelor's degree costs about $30K. The average high school grad makes $30,400 annually. The average college grad with a bachelor's degree makes $52,200. Which means ifthe college grad lived at the same standard as the high school grad, he could pay off his student loans in two years and have cash to spare. Granted, most college grads are going to use a good portion of that extra income to upgrade their lifestyle instead of pay off low interest loans, but that's a personal choice.
Sources: College Costs - Average College Tuition Cost
Job Salary Earnings Comparison - College Degrees and High School Diploma
Maybe you could explain what I'm missing here.
Obviously if government is going to subcontract some of its duties, it is government's responsibility to make sure those duties are being fullfilled competently, ethically, and legally. Something like this seems to be mainly about a lack of oversight on private businesses that performing government duties. Of course, the cost of providing the necessary amount of oversight and quality conrol measures may mean its no longer cost efficient to subcontract these duties, but if that's the case the government can simply reassume those duties.
I would've preferred to see neither bailed out. Banks should be responsible for taking on too many high risk loans just as individuals should be responsible for buying homes they can't afford.
But they don't pay less to the government. If they pay 15% to the government they pay 15% to the government regardless if the rich pay 50% or 30%. And regardless of whether or not the rich pay 50% or 30%, if the middle class goes from 30% to 15% they gain relief by keeping more of their money. I see what you're saying, but what you're saying doesn't compute in my head as having the outcome you're saying.
Not saying it IS wrong, god knows I'm not an economic master. I just don't understand it. I understand the notion of it putting more of the burden percentage wise on the middle class theoritically...but that doesn't change how much money they have in their pockets and thus how much money they need to borrow.
1) The reduction of the income tax rates on the wealthiest in the United States which puts too much of a tax burden on the middle class which causes them to fall into an exceedingly high level of consumer debt.
2) Fewer rights for employees and unionized labor as compared to other nations, and how this results in corruption by executives without workers to serve as an adequate check against executives in the running of the business.
3) How the costs of training professionals for certain occupations exceeds the income earned from an average salary in that occupation, which forces too many Americans into too high of a level of debt.
4) Corruption with regards to the privatization of government services, shown in the movie as the "Cash for Kids" scandal concerning juvenile detention centers.
5) The unfairness of the government bailing out banks but not families whose homes are being foreclosed on.
The blame can't be laid on the steps of capitalism.
We have designed our education system with the government, using mandates and all sorts of other things, with the preconceived notion that more education for everyone = good jobs for everyone.
In a country full of Einsteins, Einstein has work on the garbage truck, has to clean office building and has to flip burgers.
I think we subsidize education way to much.
Do you think the income gap between those without college degrees and those with college degrees have an effect on this too? I mean the generations before us could expect to get a basic job that would cover their livelihood while having only a high school education. But nowadays only low-paying jobs will hire non-college graduates. So the best way to ensure getting any non-minimum wage job is to get a degree. But that doesn't guarantee that the job will pay enough to pay back the loans for that degree. Still, without a degree, the person will have very little chance of making any higher earnings.
I really hoped the way I worded that makes sense...
I think it is interesting that many "rightists" are concerned about how many people don't pay a net income tax because I think that many conservative politicians favor more people not paying as of an income tax so that money can instead be paid to private businesses that those conservative politicians tend to advocate.
I am not against a minimum income tax of some form. Especially if instead of paying money to the government a person can instead pay it through some kind of service on behalf of the government at the rate of the minimum wage. That way, those who don't want to or can't pay into it can instead pay into it through their labor.
Also, would you be opposed to having additional brackets on the high end of the progressive tax scale, so that someone who earns $10 million pays a higher rate than those who earn $1 million?
The way the film says that unionized workers help stem corruption in a business is because they get a say in how the business is run. There's much more bargaining between the workers and the executives, and because of that there are fewer abuses of workers by executives and management. The film also goes so far to state that the business operates better because of it.
I also understand the predicament that union pensions established corporations put on them when they compete against newer businesses who are not burdened nearly as much by pensions. That kind of thing is bad for everybody - the business, the pensioners, and the workers.
The thing is I don't know what could be done about that. Off the top of my head, I would say regulate pensions so that every business in a certain industry must pay the same amount of money into a pension per worker, so that every company, no matter how new or old they pay the same amount per worker. But that would take away the bargaining power of the union and give it to the government, and would have to implemented on the state level.
Do you think that instead of using unions America would be better suited to use guilds instead? A guild could set minimum standards of pay and working conditions for people in certain fields without taking away individual bargaining power. After all, look how well the Screenwriter's Guild of America did when it went on strike to secure minimum standards for their group without unionizing. Do you think guilds could be a good way for American workers and professionals to secure minimum pay rates and working standards without giving power to unions?
The specific example used in the film were airline pilots. Moore interviewed several airline pilots who were paid so little that they had to use food stamps. One airplane pilot said that she would be in debt to about $1 million for her training but her salary would never match to pay it off. The movie also showed a portion of a Congressional hearing with testimony from airline pilot Capt. Chesley B "Sully" Sullenberger III, who did the "miracle landing on the Hudson River," talk about how his pay was cut 40% and his pension was now worthless. A Huffington Post article on that can be found here: Chesley "Sully" Sullenberger To Congress: My Pay Has Been Cut 40 Percent In Recent Years, Pension Terminated
Here is another article about how those getting college degrees aren't getting jobs that require them. Granted, though, the article didn't specifically state that the jobs they were getting didn't pay them enough to pay off their student loans. The article is here: Career detour: Graduates say lessons learned in college don't always translate into jobs - RedEye
Here is another article about how a graduate at a for-profit college, the Art Institute of Ft. Lauderdale, had to resort to being a stripper after paying $70,000 for a degree that is worthless. The article is here: Stripper says for-profit college degree
But one problem there is ensuring that the government is performing adequate oversight, instead of political officials doling out contracts in exchange for kickbacks.
Is there some type of method you prefer to provide adquate oversight of both government officials and the private companies that are given contracts?
Well, the reason why people buy homes they can't afford is because the lending businesses gave them easy credit, which I think artificially inflated the prices of homes, which led to the credit bubble. The government giving out mortgages to the poor for homes they couldn't afford did't help either.
One reform I proposed is to make a regulation that all housing companies are required to build a percentage of homes in such a way as to be affordable by the poor. For instance, if a housing company wanted to build a community with 100 homes affordable by the middle class, they'd have to build a community elsewhere of, say, 25 homes priced to allow the poor to get a mortgage on but that they could still make a profit off of. That way, the poor would always have housing affordable to them instead of that land being used only for housing for middle class homes that give housing companies a greater profit margin.
Even when we look only at internal migration, the barriers are formidable. Wherever people seem particularly keen to own their own homes—as in the United Kingdom, Spain, and some U.S. states—employment suffers as a result. English economist Andrew Oswald has shown that across European countries, and across U.S. states, high levels of home ownership are correlated with high levels of unemployment. More conventional factors such as generous welfare benefits or high levels of unionization don't explain unemployment nearly as well as the tendency to own houses. Renting your home and staying flexible do wonders for your chances of always finding an interesting job to do.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?