Market forces in modern big business bureaucracies have the value of the legend of early Rome in historical Rome: they are a legend.
What that means is that modern big business bureaucracies have, to some extent, successfully insulated themselves against market forces by political means (including company-political means). What remedy would you propose?
I would argue that the biggest factor creating such insulation is regulation of commerce. Regulation of commerce benefits big companies as opposed to small companies, because the bigger the company the greater its political influence over the regulators. Hence, reducing the regulation of commerce would help to break up the upper-management vampirocracy your describe, since it would allow inefficient big firms to sink and more efficient small firms, led by management WORTH their pay, to rise.
But the Republican Party is the natural recipient for a rising aristocracy with its backbone in big business. The Republican party has long been susceptible to the interests of big business.
( ... )
Yeah, that was the argument against the estate tax most commonly heard. That is, that the very rich engage elite squadrons of tax lawyers to engage in avoidance strategies. Also, that the estate tax encourages consumption inequality, which presumably is the correct measure.
I'm also puzzled at the supposed relationship between the estate tax (and other such policies) and forex markets. For one thing, currency values have at best a tenuous relationship with such policies, and for another, most macroeconomists currently believe the dollar is overvalued, or above its long-run equilibrium. And this is because the U.S. is busily engaged in selling dollars (mainly to Asian central banks) to avoid the spike in interest rates that would actually involve doing something about the deficit, while large Asian banks (mainly the People's Bank of China) are busy buying up dollars so that they can keep their currencies (mainly the RMB) low so that their exports are cheaper for U.S. consumers. A gradual fall in the value of the dollar would actually
( ... )
I pushed no direct relationship between the Republican tax cuts and forex markets; it is the apologists for these things that maintain, with a completely straight face, that the tax cuts have "proved a boon" for the economy (I am quoting). And that being their argument, I have to point out that people who know more about economics than I do - the people in Singapore and Mumbai and Frankfurt and London and Hongkong who buy and sell the currencies of the world - do not seem in the least impressed with them.
As for the abuse of or defence against death duties, let me quote a legal maxim: abusum non tollit usum. The fact that people try more or less successfully to dodge a law does not prove that that law is wrong. It only proves that it ought to be enforced more firmly.
If people do say such a thing-and I wouldn't know, since I've mostly stopped reading anything in the popular press having to do with economics-then you're completely right, it's stupid. All I was objecting to was that people buy and sell currencies exclusively, or even largely, based on whether they agree with the economic policies of that currency's government(s). What the exchange rate does is balance the supply of dollars from net outflow of capital with demand for dollars to buy net exports. Bad economic policy might or might not affect the former, and even if you do care what "the Market" thinks of the Bush tax cuts, you can't figure it out by looking at the real exchange rate... you have to do some boring drudgery and actually look at all the potential causes and effects: in this case, for instance, the fact that the 2001 tax cuts evidently didn't do much, and that this business cycle recovery hasn't been that great as business cycle recoveries go
( ... )
Actually, it is not the Republican Party that is the usual choice of the ultra-rich (and of the corporate donations and media power that they control); it is the Democratic Party. The term ‘limousine liberal’ has a very real referent in American politics. What the American plutocrats have on the whole grasped, and few European observers can bring themselves to believe, is that the kind of left-wing policies favoured by the Democrats are obstacles only to small-business people, who must obey the laws, and not to the Fortune 500, who can buy their way out of compliance. The Democrats promise bread and circuses for the masses, and a suffocating mass of regulation to prevent upstart businesses from threatening the established owners of obscene wealth
( ... )
You should have waited for me to talk about the Democrats (working title: "mutant Democrats") before you sent a correction that, you will find, has no particular reason to exist. I am talking about a CLASS, not about the top two or three individuals. In the heyday of the two-party system in England, the richest two or three Dukes (Bedford, Norfolk, etc.) were always to be found among the Whigs. It was the mass of the aristocracy that voted Tory
( ... )
Re: I would throw myself on the mercy of a wealthy man before I would throw myself on the mercy of AfpbApril 28 2007, 20:48:14 UTC
Apart from "Mutant Democrats", I have written a little about crazed bureaucrats and the divorce industry in this article: http://fpb.livejournal.com/223823.html. Not sympathetically, you may be sure.
Comments 10
What that means is that modern big business bureaucracies have, to some extent, successfully insulated themselves against market forces by political means (including company-political means). What remedy would you propose?
I would argue that the biggest factor creating such insulation is regulation of commerce. Regulation of commerce benefits big companies as opposed to small companies, because the bigger the company the greater its political influence over the regulators. Hence, reducing the regulation of commerce would help to break up the upper-management vampirocracy your describe, since it would allow inefficient big firms to sink and more efficient small firms, led by management WORTH their pay, to rise.
But the Republican Party is the natural recipient for a rising aristocracy with its backbone in big business. The Republican party has long been susceptible to the interests of big business. ( ... )
Reply
I'm also puzzled at the supposed relationship between the estate tax (and other such policies) and forex markets. For one thing, currency values have at best a tenuous relationship with such policies, and for another, most macroeconomists currently believe the dollar is overvalued, or above its long-run equilibrium. And this is because the U.S. is busily engaged in selling dollars (mainly to Asian central banks) to avoid the spike in interest rates that would actually involve doing something about the deficit, while large Asian banks (mainly the People's Bank of China) are busy buying up dollars so that they can keep their currencies (mainly the RMB) low so that their exports are cheaper for U.S. consumers. A gradual fall in the value of the dollar would actually ( ... )
Reply
As for the abuse of or defence against death duties, let me quote a legal maxim: abusum non tollit usum. The fact that people try more or less successfully to dodge a law does not prove that that law is wrong. It only proves that it ought to be enforced more firmly.
Reply
Reply
Reply
Reply
(The comment has been removed)
Reply
Leave a comment