From the NYT:
Housing Is Already in a Slump. So It (Probably) Can’t Cause a Recession.
The United States has had 11 recessions since the end of World War II. All but two were preceded by a big decline in the housing market.
Inside that bit of trivia lie some fundamental insights into housing’s outsize role in the business cycle, along with clues to suggest that the economy is on firmer footing than the increasingly pessimistic forecasts make it seem. The gist is this: The United States may or may not enter a recession this year, but if it does, housing is unlikely to be the cause, because it never really recovered in the first place.
“Housing is not in a position to lead this thing down,” said Edward Leamer, an economics professor at the University of California, Los Angeles.
How much it can help prolong the overall recovery is another matter. Home sales and prices have been sluggish in the face of rising interest rates. Still, the pace of construction, combined with pent-up demand from young adults, suggests that the sector should at least remain stable in the face of uncertainty elsewhere.
…
Even though housing does not account for all that much of the economy, its role in recessions is huge, because it is highly cyclical and sensitive to interest rates. Think of expansions and recessions as the cycle of things that go up and down a lot. Housing is a big determinant of where that cycle is headed because, unlike many other sectors, it has wide swings.
…
Sometimes downturns have other causes, but they only underscore housing’s role in economic cycles. The 1953 recession followed a decline in government spending after the Korean War, and the 2001 recession was driven by a decline in business spending after the dot-com bubble popped. Both were relatively brief and shallow — the 2001 recession was the least severe since World War II — in part because housing investment remained stable.
The most recent recession, from 2007 to 2009, offered one of the more exaggerated examples of housing’s guiding role in downturns. A recent report from the Federal Reserve Bank of St. Louis found that the construction sector accounted for a little over a third of the decline in output in the past recession, and about half of the job losses (a figure that includes laid-off construction workers and job losses in connected industries).
How does housing look now? Mixed, but mixed in such a way that the things most important to economic growth are the most stable.
…
In other words: Housing is in recession already. It might not get better soon, but it probably won’t get worse.
First
What “old person” things do you do?…Go to bed early on a Saturday
Pumps – Yesterday you were talking about how someone who makes $10mm and is taxed at 70% is still left with $3.0mm, which in your words, is more than most people make in a lifetime.
I don’t have an issue with the uber wealthy being taxed at a higher rate than others but what I do have a problem with is the forces that spend that money. What makes you think that the government will spend that $7.00mm in such a way that is more beneficial to society than the guy that earned it? Also – You do realize the impact that increased taxation has on the utlilty of labor? If you get 70 cents of every dollar I make over a certain amount, then I can tell you that I will care about earning that dollar 70% less vis a vis the dollars taxed at 25%.
Boken: good stuff
Bad week for fake news. Mueller hoax is winding down which was driving revenue for a while. Fake MAGA attack on no talent no look B actor was debunked. And now one of the nations top libel lawyers is pursuing defamation suits against wapo and other fake news sources for slandering MAGA high schoolers. Hopefully the coup de gras for some of them.
Would anyone ever be able to build a skyscraper if we consistently taxed wealth at that level 70 percent? How about building your own factory?
Would anyone ever be able to build a skyscraper if we consistently taxed wealth at that level 70 percent? How about building your own factory?
See “Atlas Shrugged”
GdBlsU45,
Did Mueller find the secret documents to that uranium deal? Oh wait, that was another story.
No one really wants to tax the rich more, but there is an unwritten law that says the uber-wealthy must give back. They don’t have to give their money away, but they have to use their massive fortune and power to help maintain the rest of society.
For example, the issue with tunnels and infrastructure in NYC. These 1%ers should be taking an active role in this. Why leave it to govt, why not attack the issue on your own with privately financed projects?
Carnegie understood this. Most of the 1% does not understand this today except for a given few. They should be taking an active role in getting infrastructure projects going. They should be taking an active role in helping build schools, museums, parks, and things of that nature. This society has been very good to you if you made it to the 1%, it’s only right that you start giving back instead of taking all the spoils for yourself.
What do we have today? Billionaires asking taxpayers to foot the bill for stadiums that they profit from. No help with infrastructure. Musk is the only individual trying to help with infrastructure and space exploration.
What are all these other individuals doing? When their tax bill comes due, they avoid it at all costs, to the point of setting up residence in another state to avoid the cost. When they invest in a business, they shake down the state and local govt in order to set up shop in said location. This is not right, and they need to understand the obligations that come with being that wealthy.
This mindset will not change right now with the 1%. They are in a bubble mindset. They only see other billionaires, and because of this, they lose touch with reality. Right now they are just obsessed with the competition of who can accrue the most money. That’s their purpose right now, to keep up with the jones at the billionaire level. They don’t really need more money, they just need more than the next billionaire in the name of competition. You have to remember, these are the most competitive people on the planet. This is what drives them to continue working hard towards more money. That 70% marginal tax rate will have no impact on their ambition. A 70% marginal tax rate on 100,000 will indeed have an impact on those earners ambition and productivity because they will directly feel it and give up. This will not happen with an individual earning 10 million dollars a year. Just totally different situations and mindsets to have the same effect.
Majority of today’s 1% class is greedy, doing what’s good for themselves, as opposed to what’s good for society and the human race in general. If you don’t want to deal with these obligations, don’t accrue billion-dollar fortunes. Let someone else do it and deal with the obligations that come with it.
homeboken says:
February 21, 2019 at 8:05 am
Pumps – Yesterday you were talking about how someone who makes $10mm and is taxed at 70% is still left with $3.0mm, which in your words, is more than most people make in a lifetime.
I don’t have an issue with the uber wealthy being taxed at a higher rate than others but what I do have a problem with is the forces that spend that money. What makes you think that the government will spend that $7.00mm in such a way that is more beneficial to society than the guy that earned it? Also – You do realize the impact that increased taxation has on the utlilty of labor? If you get 70 cents of every dollar I make over a certain amount, then I can tell you that I will care about earning that dollar 70% less vis a vis the dollars taxed at 25%.
Taxes are at the lowest rate for the rich since probably the advent of our country. Are any of them stepping up with infrastructure or creating businesses without tax incentives? So if they don’t willingly step up, you have no choice but to tax them to maintain society. How else are you going to pay for all this? Military, infrastructure, and education are EXPENSIVE. From the magic money trees? Society costs money…
So if the 1% doesn’t want to be taxed, then get govt out of the way. Finance these projects privately and leave govt out of it. This is how you make govt smaller. Someone has to pay these costs, so do something about it, instead of making us all pay for it collectively through the govt.
“For example, the issue with tunnels and infrastructure in NYC. These 1%ers should be taking an active role in this. Why leave it to govt, why not attack the issue on your own with privately financed projects?”
Read up on Modern Monetary Theory (MMT)
The Great Pumpkin says:
February 21, 2019 at 10:07 am
From the magic money trees?
My sister works as charity head for one of richest men in DC. As usual you have no clue. Vast majority of billionaires have own foundations and do give back. You may not like that it is a their direction and discretion and not directly boondoggle tunnel projects. Great story on this one. My brother was getting married and blocked dozens of rooms a year in advance at a Hilton in Mystic. 10 days before wedding some big convention comes in town. The greedy f*ckers told my brother that were canceling block and guests would have no rooms. Can you imagine the clusterf? My sister tells story to billionaire and he says ‘oh I know so and so. Let me talk to him’. That so and so was the global head of Hilton ops. Three days later, block was confirmed again. What a bunch of aholes.
As I have said numerous times on this blog, places are no longer cheaper than nj. This will give nj a nice competitive advantage in the next decade, being that their housing costs are on par or have passed ours, and their jobs are not coming close to paying as much as in nj.
“Residential real estate prices have risen so fast that even markets previously considered affordable are now beyond the reach of many. Prices in Denver have risen 90 percent since 2012.”
“Escalating prices, along with rising interest rates, deterred many home shoppers late last year. Prices in the Dallas area, which includes this neighborhood in Plano, are 76 percent higher than in 2012.”
“Prices have gone up so far so fast that even markets previously considered affordable are beyond the reach of many buyers. Home prices have risen by about 50 percent since 2012, according to Zillow, and many of the more affordable markets have shot up even faster. In Phoenix, home values have doubled since 2012, not adjusted for inflation. The Denver market is up 90 percent, Atlanta 84 percent, Nashville 78 percent and Dallas 76 percent. If people can’t afford a home in Texas, where can they?”
Foundations are bs. It’s the equivalent of a high school popularity contest amongst the 1%.
When was the last time a new museum was created? They put the artwork in their own homes now or some private art collection for their family and friends to store their wealth.
Why is our national infrastructure shot? Who is to blame? Govt? Where is govt going to get the money when we are constantly lowering taxes? Where is the money going to come from?
The 1% are making off like bandits, that’s why the billionaire class continues to grow at an extremely fast rate. They dodge their tax bill while sucking out more and more of the capital in this country and instead take that capital to invest in other countries or drive up real estate prices at the top. Invest in infrastructure and education for god’s sake. The state of our infrastructure and schools is a joke…..it needs investment asap.
Bystander says:
February 21, 2019 at 10:26 am
My sister works as charity head for one of richest men in DC. As usual you have no clue. Vast majority of billionaires have own foundations and do give back.
In Costa Rica!
“Bill Gates says: tax super-rich more. But he repeats “worries” the super-rich will evade high taxes.
Criminals often try to evade laws. Do we then give up on laws or do we strengthen enforcement?”
“Bill Gates is concerned about the high budget deficits being run by the U.S., and said if taxes are ultimately increased to make up the shortfall, then it’s appropriate for wealthy people to pay much higher taxes.
“We only collect about 20 percent of GDP and we spend like 24 percent of GDP. So you can’t let that deficit grow faster than the economy,” the world’s second-richest man said during an interview on CNN’s “Fareed Zakaria GPS” broadcast on Sunday. The U.S. national debt climbed past $22 trillion in the past week.
Proposals have circulated recently for the richest Americans to again face a top marginal tax rate of 70 percent, as they did during much of the 1970s before it was lowered by President Ronald Reagan, and for other wealth-focused measures to be taken to address rising income inequality in the U.S.”
““Even when that rate was high, the actual collection because of ways people could defer wasn’t — never got above 40 percent, actually,” the Microsoft Corp. co-founder said.
“If you go about doing this additional collection, of course you want to be progressive, you want the portion that comes from the top 1 percent or top 20 percent to be much higher,” he said. “The big fortunes, if your goal is to go after those, you have to take the capital gains tax, which is far lower at like 20 percent, and increase that.”
Taxing capital gains income and ordinary income at the same rates would get rid of a lot of complexity, said the philanthropist, who has a net worth of $97.2 billion, according to the Bloomberg Billionaires Index. Hedge funds tend to try to shift their tax liabilities over to the capital gains column.”
“He said he’d been “the biggest proponent of having the estate tax collect more money. It was at 55 percent, it’s now down from that, with a much bigger deduction.””
https://www.bloomberg.com/news/articles/2019-02-17/gates-says-capital-gain-taxes-best-way-to-tap-big-fortunes?srnd=premium
“Bill Gates isn’t going to suddenly be altruistic and give advice to help others… even his charities benefit his own motive. It’s time to make corporations and super wealthy pay their fair share through taxes. At the same time should these said corporations and wealthy people off shore their gains, penalties should replace the taxes they are evading.”
“Off-shore tax havens have to end and we have to start holding the wealthy class accountable again. If they don’t want to participate they can move off-shore and exploit other societies, just not this one.”
“It’s time to make corporations and super wealthy pay their fair share through taxes.”
Not with my vote your not going to raise taxes, Pumkin. Just look at what higher taxes has done to the budget of New York with their 2 billion shortfall. I’ll vote no.
Every time they raise taxes, the lower/middle class pay for them while the wealthy find a way around it. There’s no tax increases that we have enacted that aren’t regressive.
John Rockefeller started the Rockefeller Institute for Medical Research…an institution that has had 23 Nobel Laureates. Do you want to know how many lives his institution saved/improved? It can’t be quantified. Would it have been better if he was simply taxed at 70%?
All I’m saying is that there has to be a way to fund this government. Right now it’s in debt. How do you allow families to accrue massive wealth, yet leave the govt in perpetual debt? Then you allow these families to just pick up their wealth and ship it to another country to protect said wealth from the costs it took to create it? What about the debt created from building that wealth? They used the infrastructure and they used the education system to develop that wealth…..so now they just get a free ride on those costs created from building that fortune?
This is what I’m questioning. I’m not attacking the rich. I’m simply asking why they don’t contribute to paying for the costs they create. They use the infrastructure, military, and education system much more than the avg man. Why should the avg man be left with the costs of this on an equal basis? Did the avg man benefit as much as the 1% from these investments with our tax dollars? So why should the 1% not pick up a bigger share of the cost?
Just look at a sports stadium. Taxpayer goes into debt paying for it, but who benefits? Who gets left with the paying for overpriced tickets and overpriced food/parking? If you can’t see how the 1% are hosing this country, you are blind.
Don’t you think it’s weird that Gates and Buffet both think they should be paying much more in taxes? Now why is that? Why in the world would they think such a thing?
If the government wasn’t such a corrupt POS, I’d have less of an issue allowing them to share my wealth.
The End Is Nigh (clot Edition):
A woman celebrating her husband’s birthday at a ritzy Michelin-starred restaurant in Spain died after eating mushrooms that can be poisonous if not cooked properly.
Maria Jesus Fernandez Calvo, 46, ate a dish of rice and morchella mushrooms at RiFF restaurant in Valencia on Saturday night, the Telegraph reported.
Her hubby and 12-year-old son were also sickened, as were 18 other diners, according to Spanish newspaper El Pais.
Calvo, an optician, died Sunday morning at home after suffering bouts of vomiting and diarrhea — though it’s not clear whether she died from poisoning or asphyxiation from vomit in her lungs.
She and her family were enjoying the special RiFF tasting menu comprised of Mediterranean dishes, including the potentially deadly meal of rice and morchellas.
Morchellas, also known as true morels, are considered a delicacy in France. They can’t be consumed raw because they contain hydrazine toxins, which are destroyed through cooking.
Health inspectors are now probing whether the mushrooms served were properly prepared — or if they were actually “false morels,” which resemble morchellas and contain gyromitrin, a toxin that can damage the liver.
Raw food samples taken from the restaurant are being tested at the National Toxicology Institute, said regional health chief Ana Barceló.
“We will have to wait … before we can determine whether it was the ingestion of a food that directly caused her death, or whether it prompted a state that led to this fatal outcome,” she said.
RiFF’s chef and owner Bernd Knöller voluntarily shut down the restaurant pending the inspection and expressed his “deep sorrow” over Fernandez Calvo’s death.
“I have offered my complete cooperation to the Valencian health authority from the very start in order to clear up the facts, with the hope that we can establish the causes as soon as possible,” said Knöller, who began his culinary career in the UK in the 1980s.
The German chef said the restaurant was given a clean bill of health in an initial inspection Monday.
RiFF earned its Michelin star in 2009.
The patrons who were also sickened, including Fernandez Calvo’s husband and son, suffered mild symptoms of food poisoning and have since recovered.
The Michelin guide praises Knöller for his “innovative cuisine” and notes the eatery’s “particularly interesting wine list.”
Meal prices range from $40 to about $120.
“This is based around the highest quality, seasonal, local products to create successful culinary combinations and interesting set menus,” the guide says.
It doesn’t matter how high taxes go. It will never be enough.
Just look at European countries that pay higher taxes than us and still run massive deficits. It is the nature of how governments work. Greed and corruption.
I’ll vote no to any tax increases. Look at how it is effecting New York and soon New Jersey. You are going to end up hurting the people you want to help with higher taxes.
The rich have sheltered their income for decades, and whole industries exist as a result.
But aside from the fortunate few, the masses will clamour for theirs. Sure they didn’t earn it, but when has that technicality ever mattered.
Reminders for the mentally challenged – Atlas Shrugged is a mediocre dime store novel. Nothing more. It’s barely literature. It’s not reality.
Wouldn’t it would be great if we could edit Pumps’ brain to either enhance cognition or unlearn language?
https://www.technologyreview.com/s/612997/the-crispr-twins-had-their-brains-altered/
Atlas Shrugged is a treatise depicting the failure of government to strong arm the private sector through coercion, regulation and threats. It’s occurring before your eyes.
Speaking of failures – Trump is widely seen as a Russian asset. This will not end will for the guy.
I wonder if Essex is a half-wit, half-white like Obama?
I agree with you on taxes and corruption, and I’m sure everyone in this country does.
What you are asking for is spending cuts. Good luck with that. You can drive the economy off the cliff cutting govt spending at the wrong time.
Remember what govt debt is. It’s nothing more than money owed to us. The debt is our money. Govt doesn’t hold any money. The deficit is just the lending that we make to the government. The fiscal deficit is so high because we are demanding more bonds, that is, we want to save more than the private sector is willing to invest. Here lies the problem and why I advocated that the almighty private sector start investing in infrastructure and education on their own. They refuse to take the risk to maintain society and instead force govt to take it on. They then weezle out of paying the full cost by avoiding their true tax bill.
Just be honest with yourself, do you really feel the 1% are putting in their fair share for the cost of society based on how much they make? Remember, the cost of society is the investments needed to make the business work. Without investing in education and infrastructure, there is no future for making money. Why the hell are we heading down that road? It’s idiocracy.
At the end of the day, a business can only be as strong as the infrastructure and education system that feeds it. Skip the costs on these two and it’s over long-term. It’s why Somalia sucks for business. It has no taxes, but also no structure in place to support investment in education, infrastructure, or upholding the law.
Joe says:
February 21, 2019 at 1:17 pm
It doesn’t matter how high taxes go. It will never be enough.
Just look at European countries that pay higher taxes than us and still run massive deficits. It is the nature of how governments work. Greed and corruption.
I’ll vote no to any tax increases. Look at how it is effecting New York and soon New Jersey. You are going to end up hurting the people you want to help with higher taxes.
Spending cuts are inevitable. See New York as an example.
Watch the cuts that will probably tax place with the New Jersey state budget for the next fiscal year.
https://www.nj.com/hudson/2019/02/pay-hike-for-jersey-city-public-safety-director-puts-him-in-200k-club.html
The “Public Safety Director” job in New Jersey (and maybe elsewhere) has to be one of the most egregious examples of waste and cronyism. For example in JC, the job at over $200k a year is to oversee the PD and FD… that also have Chiefs making over $200k a year. What the f do these people do all day? They’re almost always double-dippers, too. At least this one double-dips from New York… but he also runs at least one other company. I wonder how much time he puts into this full-time job?
Some interesting items in there…
“City spokeswoman Kimberly Wallace-Scalcione disputed the characterization of Shea’s shift in salary as a pay hike. It was a cost-of-living increase and that’s not the same, said Wallace-Scalcione.”
“The city estimated it would spend $222 million in base pay for all 2,000 full-time employees last year. The median salary for a full-time city worker is $45,250. The median household income in Jersey City is about $62,000.”
“Seven employees who work directly for Fulop received hikes of 10 percent or higher, including… Nancy Warlikowski, Fulop’s scheduler, now makes $110,000, a 5 percent hike from October. Allison Solowsky, his deputy chief of staff, makes $105,000, a 14 percent increase.”
“The city can hike pay for division directors though, so hikes ranging between 11 percent and 24 percent went to Christine Goodman, cultural affairs director; Michael McLean, immigrant affairs director; Soraya Hebron, chief diversity officer; and Judi Ann Reilly, who runs the city Resident Response Center. All now make $90,000.”
It’s all a cycle. If you are going to cut govt spending, you need to do it when the economy is hot. You can’t do it when the economy busts, that’s when you have to increase govt spending to prevent a total crash.
During a bust, the private sector has pulled back on spending. Combining this with a cut in govt spending equals disaster. So you have to either cut spending during a boom period, or you have to grow the economy to trim the ratio of debt to gdp.
Joe says:
February 21, 2019 at 2:27 pm
Spending cuts are inevitable. See New York as an example.
Watch the cuts that will probably tax place with the New Jersey state budget for the next fiscal year.
Trump didn’t cut anything except government revenue especially from the rich. So the game now becomes to figure out how to pay for all this. Go ahead, cut government spending drastically, but the private sector better start making the investments in the economy asap from their new found tax savings. Of course they won’t, and are more than likely to store their money in paintings, high-end real estate, or off-shore accounts (stock buy backs anyone?). Anything that presents a low risk of losing their money. They refuse to risk their money on improving society. This is why infrastructure is in such bad shape in this country, they only want govt to take the risk of investing in infrastructure.
So what’s the answer? You have to tax them in order to make said investments in infrastructure and education. They will not do it on their own. You have lowered their taxes to no end, and they have not once stepped up to the plate with privately financed infrastructure and education investments.
Love him or hate him, if you live in NJ, there’s now a strong chance you won’t even be able to vote for Trump if you want to. They plan to kick him off the ballot in NJ.
https://www.northjersey.com/story/news/new-jersey/2019/02/21/nj-bill-trump-2020-ballot-releases-tax-returns/2926652002/
What are you talking about?
The economy is not going bust. I’m still voting no to tax increases.
If the public education system doesn’t work, why isn’t the private sector creating an educational option that provides good quality education that everyone can afford?
If building infrastructure is so expensive through govt, why hasn’t the amazing private sector stepped up and do it on their own at a much lower cost? Who is stopping them? No one, but themselves. They refuse to risk money on that. So the govt is left to make the investment no one else wants to, but that is needed. Then these same clowns claim that the cost is too high for the govt funded project and that they could get it done much more cheaply on their own. So why don’t they step up to the plate? Musk is the only guy trying on his own with the tunnel projects. Everyone else does not want to risk their money. They only want to create an environment where their family will never go broke for generations because their wealth is protected like fort dix from risk.
*fort knox
Federal tax revenue is at an all time high.
Congress makes the “cuts”
The Great Pumpkin says:
February 21, 2019 at 3:34 pm
Trump didn’t cut anything except government revenue
Punkin, you really are ignorant and just write down your imaginations. This is perhaps the most blatantly uninformed statement I’ve seen you write:
“Taxes are at the lowest rate for the rich since probably the advent of our country. ”
What do you think the income tax rate was before 1913, when the 16th amendment was passed? BTW, Washington was elected in 1789, so there was about 125 years of a United States operating under the constitution without any federal income tax. The majority of the history of the U.S. the average federal income tax on everyone was zero. Here’s the average effective tax rate on the rich since 1913:
https://taxfoundation.org/taxes-rich-1950-not-high/
They were higher in the 20teens than they were up until WW2. The top 1% have paid average effective rates fluctuating around 35% since the end of the Vietnam war. Only got over 40% around WW2, Korean, & Vietnam wars.
Whether you are talking about marginal or average tax rates, you are wrong, and still the village idiot.
Red states should make some obscure laws to keep democrats off the ballot.
Watch how fast a law like that will divide the nation and make even more people reject the outcome of an election.
Punkin,
Again, you are ignorant and idiotic. It is government that owns the right of ways and permits that make it impossible for the private sector to build transportation infrastructure. Trump should have done something big to change it, but he didn’t and he won’t. Even in backwards countries there is more and better private management of transport infrastructure. Lots of private container terminal operators in much of the world. Toll roads and bridge concession in parts of the world. The US and Canadian freight rail system is private, and quite efficient, supported by annual capital investments of over $10bn per year from the industry. Excellent airports in Zurich, Amsterdam, Copenhagen, Frankfurt, Cancun, Cabo, Tijuana among others are private concessions listed on stock markets. Hong Kong’s subway system is a publicly traded stock. But government doesn’t generally like the efficiency of private enterprise getting mixed up in their slush funds and plum jobs. You think The Port Authority or the MTA are willing to let more efficient businesses to take over their patronage machines?
You want to see what happens when private enterprise tries to build infrastructure in NJ? Go buy some cement to fill in the pothole on the stretch of highway in your front yard, and then stand in the middle of that road with a cup and a sign that says: “Mike’s Toll Road. Fee 10 Cents”. Your wife or kids can hold the sign when you’re busy “working”. Report back to us how much money you make before the cops haul you in.
Who cares? Those electoral votes are already bought.
Love him or hate him, if you live in NJ, there’s now a strong chance you won’t even be able to vote for Trump if you want to. They plan to kick him off the ballot in NJ.
https://www.northjersey.com/story/news/new-jersey/2019/02/21/nj-bill-trump-2020-ballot-releases-tax-returns/2926652002/
NEWSFLASH!!! Water is still wet.
Punkin,
Again, you are ignorant and idiotic.
1:55 you seem mentally disturbed.
I call bs. Govt doesn’t get in the way of lobbying. If the 1% really wanted to invest in infrastructure, govt is the only thing preventing them? Their lobby machine can’t get passed this. Simply amazing I tell you. You really believe this?
They want no part of infrastructure investment. It’s hard to profit off infrastructure. This is the part you completely miss. Instead you trick yourself into believing that govt is getting in the way of them making these investments which is laughable. These guys are driven by low risk profit driven investments. They already have their immense wealth and have no desire to risk losing it. They only want slam dunk easy investments to maintain their wealth. So they leave govt with the risky expensive investments that don’t produce much profit for the investor(most likely going to take a loss), but provide long term profit and value to all the businesses and individuals that use said infrastructure
Same with education. It’s hard to build a profitable model that will educate EVERY SINGLE CHILD. Only way to make this possible is through public education. It’s impossible to create a privatly owned education system that will educate every single child in our country. Simply impossible. Hence, why they only offer private education to rich kids that can actually afford it.
No One says:
February 21, 2019 at 4:06 pm
Punkin,
Again, you are ignorant and idiotic. It is government that owns the right of ways and permits that make it impossible for the private sector to build transportation infrastructure
Again, in the relationship between cost of govt and taxes paid, they are paying the lowest rate ever. Why do you think the debt is going so high? They cut taxes and force govt to increase spending.
You see our military. You think that cost was there in 1850? There is no way in hell that you can have our military without an income tax. Facts!
No One says:
February 21, 2019 at 3:43 pm
Punkin, you really are ignorant and just write down your imaginations. This is perhaps the most blatantly uninformed statement I’ve seen you write:
“Taxes are at the lowest rate for the rich since probably the advent of our country. ”
Think of how much higher it would be if we didn’t make all these tax cuts. Just because it’s at an all time high, doesn’t hide the fact that trump cut off revenue by a trillion dollars. Which is fine, but cut off govt spending if you want to lower the revenue. Why didn’t trump cut spending? He knows it will crash the economy under his leadership. He will leave that part for the guys down the road.
D-FENS says:
February 21, 2019 at 3:42 pm
Federal tax revenue is at an all time high
You are fake news.
“You see our military. You think that cost was there in 1850? There is no way in hell that you can have our military without an income tax. Facts!”
D,
At the end of the day, you have to question politicians that are for cutting taxes, but not spending. Why won’t they cut the military budget? Why won’t they cut the education budget? Why won’t they cut the infrastructure budget? Those cuts will hit hard. Despite what you think of govt wasting tax dollars, why is it almost impossible to find the wasteful spending? Probably because there is not as much wasteful spending as you think. Go ask fat man Christie how that worked out….he was dedicated to finding waste in nj govt and how much did he find? Rest my case.
Same could be said of trump. How much waste did he eliminate? Not much..,
Joe,
You realize the first income tax our nation created was to pay for the civil war? Keep thinking you can have ultra low taxes with the most advanced military in the world. Costs lots of money.
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I’m pretty sure your daughter enjoys that.
i’m Pretty sure i’m Black from the waist down my Man…..
Jews..in..Spaceeee..
Israel flying to moon after SpaceX launch
CAPE CANAVERAL, Fla. (AP) — An Israeli spacecraft rocketed toward the moon for the country’s first attempted lunar landing, following a launch Thursday night by SpaceX
University of Chicago = RockU
Blue Ribbon Teacher says:
February 21, 2019 at 12:53 pm
John Rockefeller started the Rockefeller Institute for Medical Research…an institution that has had 23 Nobel Laureates. Do you want to know how many lives his institution saved/improved? It can’t be quantified. Would it have been better if he was simply taxed at 70%?
ok….. that is funny
The Original NJ ExPat says:
February 22, 2019 at 6:10 am
I’m pretty sure your daughter enjoys that.
i’m Pretty sure i’m Black from the waist down my Man…
Guess it’s inevitable that the private sector will have to step in to fix our infrastructure.
No one, check out the second quote below. The hate for toll roads is to blame for lack of private investment. People like to feel like they are not paying for something. Still think the private sector is a bunch of pu$$ies for not lobbying the govt to take on the infrastructure issue, esp here in nyc. Put your best lobbyists to work and make America great again.
“These private-sector-generated numbers are still much smaller than global infrastructure needs. But they are also much larger than what we can ever reasonably expect the world’s governments to devote to infrastructure. Rather than banging on government for not delivering, maybe it is time to change the model. Bringing the private sector centrally into the big infrastructure challenge seems both essential and inevitable. So long as private gain can be married with public benefit (and NSW seems to have done this well), why wouldn’t Washington, and the world, try it?”
“Why hasn’t the U.S. embraced private sector involvement through PPPs the way Australia has? The simplest answer is more political than economic: Private sector involvement is widely seen as antithetical to the public good. Think about all the negative reactions to toll roads.”
http://knowledge.wharton.upenn.edu/article/u-s-needs-embrace-private-sector-involvement-infrastructure/
“For David Besanko, a professor of strategy at the Kellogg School, this is not just an issue for public policy wonks and politicians—it is something future business leaders should worry about as well. In fact, some might consider partnering with the public sector to fund major projects.
“Infrastructure is a vitally important component of a nation’s balance sheet,” he says, “and there’s no doubt we need more investment.” In fact, the nation will need to spend twice as much on highways just to receive a B—the grade experts say will keep it safe and serve its needs.
Decades of complacency around funding have led to a trillion-dollar infrastructure-funding gap. So where will this investment come from? The American public has little appetite for fees or tolls, and Congress has so far failed to come up with a viable long-term solution. The gas tax has remained at 18.4 cents per gallon since 1993. In addition, the public is more skeptical of federally funded projects. In part, this is a marketing problem: few can name the thousands of federal projects that have turned out well, but everyone remembers the Bridge to Nowhere.
The backlash against national funding of projects has been disproportionate,” Besanko says. “Yes, there were abuses, but those abuses constituted a small percentage of overall spending. Big projects still require large amounts of money.”
Given the fiscal and political restraints on public funding, ambitious public works projects like the Interstate Highway System appear to be a thing of the past. Which means the private sector may have a significant role to play in the future.
“When it comes to investing in infrastructure, the public-private partnership (PPP) model has a lot of potential,” he says. “But it needs to be done wisely and it has to serve the public’s interest. That’s the challenge we face today.””
““Ultimately the public is going to have to make a greater investment,” Besanko says. “This has always been the struggle. People forget the interstate highway bill barely made it through Congress in 1956. So we shouldn’t kid ourselves about the ease of getting these things done.””
https://insight.kellogg.northwestern.edu/article/can-the-private-sector-solve-the-us-infrastructure-crisis
Taxing the rich and taking all their wealth will only fund the US government for what a year? Then what?
Unsurprisingly the Kraft Heinz thing has gone bad. These private equity lbo type deals are the real predatory capitalism. I would have no problem if these Romney buffet deals were taxed 90%. They take someone else’s money, leverage up, swap some paper, gut the workforce, part out the company and take huge payouts. No skin in the game and No value added.
6:10 ur old lady said she’d like it but once I checked her out I was grossed out.
Juice,
Why would it be productive to tax all their wealth? That would hurt our economy.
I think we can agree that they are not overtaxed (how could you accrue billions in a couple of years if you are overtaxed?). What we are asking from our almighty 1% class is to step up and invest in infrastructure and education system for the long-term health of our economy. They have lived off the investments in education and infrastructure from the 1950s/1960s. It’s time to step up and invest in the veins and heart of our economy….infrastructure and education. We have not done so in a very very long time.
If the investment isn’t privately funded, then you have to raise taxes. A choice must be made.
Why am I not surprised that no one on this page understands how marginal tax rates work? A 70% rate would only apply to the income made above $10 million. The first $19,000 of a billionaire’s income is taxed at the exact same rate as someone who makes $19,000 and that matching rate continues all the way up the income scale.
“Pumps – Yesterday you were talking about how someone who makes $10mm and is taxed at 70% is still left with $3.0mm, which in your words, is more than most people make in a lifetime”
The private sector caused the Great Depression. The government’s new Deal fixed our infrastructure and created a middle class which lasted until corporations got their hands on our government again. 99% of medical research is done by government, universities, or a combination of the two. The private sector poisons people when there’s no regulations. You are dumb.
The Great Pumpkin says:
February 22, 2019 at 9:01 am
Guess it’s inevitable that the private sector will have to step in to fix our infrastructure.
If you enjoy women getting the sh!t beat out of them when they don’t listen and dream of having your very own oil refinery in your backyard, then this is the book for you!
Fast Eddie says:
February 21, 2019 at 1:44 pm
Atlas Shrugged is a treatise depicting the failure of government to strong arm the private sector through coercion, regulation and threats. It’s occurring before your eyes.
ChiFi found that daughter job soooo funny that the black dick he had i his mouth almost slipped out in a fit of lafffffing!! But he managed to finish he’s detail oriented like that….
I was making a point. I was showing that even if they were taxed 70% ON THEIR ENTIRE EARNINGS, still left with 3 million. So how in the world is a 70% marginal tax on incomes over 10 million so unfair? That was my point.
I actually put up a post yesterday highlighting the fact that most people don’t understand marginal tax rates. You know how many times I have heard individuals say to me that they should not work overtime because it will send them into a higher tax bracket? I’m like huh? Okay, and why is this a bad thing? Just because you go into a higher tax bracket, doesn’t mean your entire income is taxed at the highest rate.
Ottoman says:
February 22, 2019 at 9:32 am
Why am I not surprised that no one on this page understands how marginal tax rates work? A 70% rate would only apply to the income made above $10 million. The first $19,000 of a billionaire’s income is taxed at the exact same rate as someone who makes $19,000 and that matching rate continues all the way up the income scale.
“Pumps – Yesterday you were talking about how someone who makes $10mm and is taxed at 70% is still left with $3.0mm, which in your words, is more than most people make in a lifetime”
This place is literally infested with losers. But you knew that…
People don’t have the appetite for raising taxes. So you have to have a partnership between public and private to address the infrastructure issue. You need trillions of dollars to be invested in our infrastructure. So unless we raise taxes, the only way we are going to find the investment dollars is through a public/private partnership. They let the bill for infrastructure go too long, and too much needs to be fixed at once.
At the end of the day, I do trust public more than private. Why? Both are governed by human nature, but with private industry, the players can become all powerful. Basically, they become gods among men. Look at Bezos. There is nothing to check and balance his power. With govt, as we see with Trump, there are a ton of checks and balances. I’ll take public any day of the week on this premise. I know human nature well and there needs to be checks and balances on their greed and lust for power.
Ottoman says:
February 22, 2019 at 9:35 am
The private sector caused the Great Depression. The government’s new Deal fixed our infrastructure and created a middle class which lasted until corporations got their hands on our government again. 99% of medical research is done by government, universities, or a combination of the two. The private sector poisons people when there’s no regulations. You are dumb.
“Taxing the rich and taking all their wealth will only fund the US government for what a year? Then what?”
Juice, stop it. Just stop already. You need to play by the rules.
Don’t ever let pesky facts get in the way of the liberal agenda.
Scorsese is spending $140 million on his latest movie. I wonder how that would have ever gotten to the point of being funded under a 70% tax rate.
Easy….partnership. Why does one individual have to be in control of it all?
Blue Ribbon Teacher says:
February 22, 2019 at 10:10 am
Scorsese is spending $140 million on his latest movie. I wonder how that would have ever gotten to the point of being funded under a 70% tax rate.
chifi – Have you noticed that T-bills are returning more than CDs now? I just bought 8-weeks at auction, 99.626667
You missed the point, it would have never happened. None of it. Hollywood wouldn’t even exist. Why do you have such a problem with a man paying out $140,000 million dollars to workers that make a film happen?
Under this ideological 70% tax rate, Ford Motor Company, General Electric, Westinghouse, none of that ever came to fruition and we are still a 3rd world nation.
I question how hard anyone has ever worked if they are advocating a 70% tax rate on anything.
Partnership income gets taxed at the individual rate, so it doesn’t change the dynamic that high tax rates diminish the ability to invest. If someone makes a big profit and wants to reinvest that in their business, high tax rates make that more difficult.
Today’s near 50% tax rates definitely makes it more difficult and slower for me to accumulate capital and reinvest in my partnership.
I remember reading many years ago how the biggest businesses generally like high tax rates. Because they are big, it’s easier for them to negotiate loopholes in the tax system that favor them. At the same time high tax rates make it more difficult for smaller competitors to reinvest and grow to threaten them. The real surprise is that free markets are among the most progressive forces on earth – creating new inventions, new more efficient and effective processes to satisfy human needs, while those that are against it typically use government to prevent things from changing due to this dynamism.
I have a confession to make. Pumpkin was the one who texted this to me. He is a financial genius!
The Original NJ ExPat says:
February 20, 2019 at 8:09 am
If anyone wants to take a flyer on an Indian stock, I’m putting on a position in VEDL, in fact I have been taking some profits in NGLOY to buy VEDL, I see my move as a very complex arbitrage. VEDL and NGLOY (AAL on the London exchange) have a complicated relationship that orbits around Indian billionaire Anil Agarwal, largest shareholder of Anglo American. I’ll leave you to your own research because it is too long and complicated for me to explain here.
GBU45, I think KHC has less to do with buyouts and more to do with the atrophy at two former historical consumer market leaders.
If you are a consumer products company and you miss the demographic target – widely – bad things happen. At this point KHC is simply two drunks holding eachother up, temporarily.
Same thing with one of the most famous brand names ever, Kodak. There’s a Harvard case study in there. They were first with on-line management of photos. They should have been Facebook – the trusted exchange of saved experiences among friends. They actually started down that path. You would upload your digital photos…..and then pay them to print them and mail them directly to whomever you chose. Realizing that they continued to lose analog revenue but desperately trying to hold onto the old technology, they doubled down on the wrong end of the demographic curve and installed DYI printers in every corner drug store at a cost of $20k each….see ya, finally put out of its misery with a bankruptcy filing in 2012.
I don’t have a strong feeling regarding the buyout shops and these types of companies. One way or another these corporations are dead, they just don’t know it yet. I’m indifferent whether they wander off into the woods and decompose like Kodak or fall prey to the LBO shops. Arguably, if the buyout guys gut them before they’re dead they at least provide nutrition higher up the food chain rather than to the forest floor.
I think those who want s0cial1sm aren’t even paying their own cell phone bills.
Berniephone?
https://www.youtube.com/watch?v=tpAOwJvTOio
That’s why, when it comes to Consumer Staples, I only invest in Top Ramen and Kimberly Clark.
If you are a consumer products company and you miss the demographic target – widely – bad things happen.
American farm exports are expected to plunge $1.9 billion in fiscal 2019, compared to the previous year, largely due to President Donald Trump’s trade war with China, according to the U.S. Department of Agriculture.
Soybean exports have been hit particularly hard, the agency’s chief economist, Robert Johansson, told the USDA Outlook Forum in Washington on Thursday, Reuters reported. Because of the trade dispute, soybean exports to China will have “plummeted by 22 million [metric] tons, or over 90 percent” through this month,
leftwing – Heh-heh, that’s nicely worded.
I’m indifferent whether they wander off into the woods and decompose like Kodak or fall prey to the LBO shops. Arguably, if the buyout guys gut them before they’re dead they at least provide nutrition higher up the food chain rather than to the forest floor.
I don’t have enough time to find a direct link but will and post it.
Data was just on CNBC:
Percent of Total Fed Personal Income Taxes Paid by earnings level:
Top 1% Pay 43% of total (record high)
Next 19% Pay 44% of total
Bottom 60% Pay 4% of total
More from CNBC, attributed to the IRS
The Top 1% earned 20% of the Total Adjusted Gross Income of the nation…
Contrast that percentage to them paying 43% of the tax load…..
Lastly, from the IRS by way of CNBC:
50% of the wage earners in this country don’t pay any federal income taxes other than withholding, equating to an effective federal tax rate of 4%
Blue,
First, a business can grow by reinvesting its profit into the business to avoid taxes.
So your position is baseless.
Let’s imagine if this is not the case though. It’s called crowd funding. Don’t use a high marginal tax rate on income over 10 million to claim that investments would vanish. It’s not the case.
Plus, the high marginal tax rate will not prevent people from amassing fortunes. There will still be billionaires. You make a 100 million, you are still taking home like 34 million in a given year.
At the end of the day, infrastructure needs to be paid for. You are simply taking from that individual through taxes and using it to fund society. Society comes first before individual investments. There is no hollywood if you don’t have the infrastructure to support it. You can invest all the money you want into hollywood, but if the infrastructure and education system can’t support it, it’ s a total waste. That’s the road we are heading down if we don’t start investing in infrastructure or education.
If you play there, then why not buy CP? What do gov-ies do that A-1/P-1 or a solid A-2/P-2 not give you for 30-270 days.
The Original NJ ExPat says:
February 22, 2019 at 10:25 am
chifi – Have you noticed that T-bills are returning more than CDs now? I just bought 8-weeks at auction, 99.626667
ok, so I guess they all have a way to avoid the 70%. So no extra revenue generated then? Why bother at all?
Bringing it home to NJ:
WOODBRIDGE – This town has some new bragging rights. It’s now the proud home of 2019’s Miss India USA. Kim Kumari, from Iselin, won the crown at Royal Albert’s Palace in Fords in the longest-running annual Indian pageant outside of India. News India Times says Kumari, 18, and a graduate of JFK Memorial High School, was chosen over 75 contestants from 26 states. She is studying to be an optometrist and hopes to help children from third-world countries learn the importance of eye care. Kumari will represent the United States at the 2019 Miss India Worldwide pageant in Mumbai this September, perhaps wearing a JFK Mustangs jacket.
AOC is the one for me…..
“And so it’s not to say you get rid of agriculture, it’s not to say we’re gonna force everybody to go vegan or anything crazy like that. But it’s to say, ‘Listen, we gotta address factory farming. Maybe we shouldn’t be eating a hamburger for breakfast, lunch, and dinner. Like, let’s keep it real.’”
Here’s one she tweeted that exposes how corrupt and fcuked up Washington DC is. It’s one we all can agree on.
https://twitter.com/AOC/status/1095763596062150656
Guy nails it. Shows the hypocrisy at play. He also shows that they will find a way around it like they always do.
“However, there’s now the question of what composes income. People who make more than $10 million a year typically aren’t receiving it all as salary. More likely much comes from investments and payments from partnerships and business ownership. That falls under capital gains tax which circumvents the marginal tax rates.
Finally, people who make a lot of money and enjoy doing so won’t suddenly decide to give it all up and live the simple life, perhaps putting some time in as a barista at a Starbucks, pouring shots and maybe taking abuse. They’ll keep making money. If they wanted, they could donate a lot to charity and reduce their taxes, or find a tax shelter, or any of the many other techniques people with money for smart advisors already use to minimize their tax exposure.
And that’s where the disingenuous nature of Schultz and his ilk comes in. They aren’t really worried that capital formation will suddenly disappear or that the wealthy will seek simplicity in a monk’s cell. They are mad that someone might take what they say is theirs.
But then, they’ll shake their heads and object when workers who make their billions possible—the people who generally solve the problems and do the work and develop the new ideas and bear the brunt of customer anger—want a bigger share. At least one that reflects most recent economic history. Those people don’t want to have what is their biggest asset, their time on this planet, to be whittled away for less and less so people at the top can profit without them getting something as well, rather than effectively investing in an enterprise for no return.
You can’t argue for one and then claim that the other is unreasonable.
Whether or not you like the idea in principle—and you might not for various reasons—if we’re going to have a policy discussion, we should do so based on the actual suggestions people make and their likely outcomes, not on misdirection and intellectually and emotionally dishonest proclamations.”
https://www.forbes.com/sites/eriksherman/2019/01/31/the-big-flaws-in-arguments-against-a-70-percent-marginal-tax-rate/#52448db81103
ChiFi you still renting you relentless piece of human excrement?
Now you realize that they are not overtaxed?
Whatever rate they are paying, they are not coming close to paying with their arsenal of professional tax avoiders. F them. They take and take….and then cry it’s not enough.
Blue Ribbon Teacher says:
February 22, 2019 at 11:19 am
ok, so I guess they all have a way to avoid the 70%. So no extra revenue generated then? Why bother at all?
The only people crying are the ones clamoring for a 70% tax rate. The US government isn’t smart enough to collect taxes and businesses can easily come up with a way to skirt them in as little time as 1 day into the new taxes.
Better just to tax imports.
I think you know my “client”.
If you play there, then why not buy CP? What do gov-ies do that A-1/P-1 or a solid A-2/P-2 not give you for 30-270 days.
^^^ “Is the return guaranteed?”
I guess it is a bad day to be named Kraft……
Yes…… due to circumstances related to withholding, shifting income streams, tax credits and overall income taxes, we are receiving a $7,500 refund, as opposed to going into our pocket for $2,000 last year.
ExEssex says:
February 22, 2019 at 11:44 am
ChiFi you still renting you relentless piece of human excrement?
You need good faith and credit guarantee on a 270 day exposure?
The Original NJ ExPat says:
February 22, 2019 at 12:07 pm
I think you know my “client”.
If you play there, then why not buy CP? What do gov-ies do that A-1/P-1 or a solid A-2/P-2 not give you for 30-270 days.
The Original NJ ExPat says:
February 22, 2019 at 12:09 pm
^^^ “Is the return guaranteed?”
Now I’m wondering if Pumpkin and Essex are the same person.
FWIW…. I have huge real estate exposure here….
http://www.teda.gov.al/wp-content/uploads/2015/04/kurth_durres.pdf
I don’t. Imagine someone who has not been employed since 1963.
You need good faith and credit guarantee on a 270 day exposure?
Liberals can’t even do basic math.
It in in their nature to act like criminals trying to steal money.
“Taxing the rich and taking all their wealth will only fund the US government for what a year? Then what?”
It’s actually not too bad. I take a couple million and do it her way, and a couple million and do it my way.
It’s actually a great challenge. I started CD ladders (instead of cash at 0.01%) when 1 year rates were 0.7%, 3 month rungs. It didn’t work out so bad.
Different Kinds of Stupid
Feb 20, 2019 by Morgan Housel
You can ace the most prestigious grad school and then spend years in prison for insider trading. It’s happened. And the decision to risk everything on a trade that nets you a few percentage points is the kind of thing someone with half the IQ will look at and say, “How stupid are you?”
There are types of smart that have nothing to do with intellect. And there are types of stupid that have nothing to do with unintelligence.
Smart is the ability to solve hard problems, which can be done many ways. Stupid is a tendency to not comprehend easy problems. It’s also is a diversified trait.
A few kinds of stupid prevalent in business and investing:
1. Intelligence creep: Not knowing the boundaries of what you’re good at, and assuming talent in one area signals skill in all others.
Dictators are never marketed as just good at politics. They’re portrayed as superhumans, masters of everything. Joseph Stalin was born Joseph Jughashvili, but changed his name to a word that translates to “Man of steel.” North Korea said Kim Jong Il shot 11 holes in one on his first round of golf, was an architectural master, and a music virtuoso.
An innocent version of this happens when you’re good at one thing, so you and those around you assume you should be good at all other things.
Take the investor who is gifted at, and made a lot of money doing, one kind of strategy (merger arbitrage) and then extrapolates that confidence into something they have no experience in (gold, macro, politics, predicting recessions). The odds of a disappointing outcome then round to 100. Of course they do – the kind of nuance and skill needed to, say, forecast global interest rates is not the kind you thing you can pick up in a year.
The important thing is most investors without big success in one strategy would never consider betting their portfolio on a new, disparate strategy. They’re more likely to stick to what they know. You need intelligence in one strategy to make you think, with confidence, that you’re good at all the other ones.
An important investing skill is defining what you’re incapable of and staying away from it.
2. Underestimating the complexity of how past successes were gained in a way that makes you overestimate their repeatability.
There’s a thing in biology called Dollo’s Law that says organisms can never re-evolve to a former state because the path that led to its former state was so complicated that the odds of retracing that exact path round to zero.
Say an animal has horns, and then it evolves to lose its horns. The odds that it will ever evolve to regain its horns are nil, because the path that originally gave it horns was so complex.
Dollo’s Law affects investors and CEOs with a unique kind of stupid.
There are things that, once lost, will likely never be regained, because the chain of events that created them in the first place can’t easily be replicated. If you realized how valuable those things are you’d be more careful about risking their loss.
Brand is one. Brands are so hard to build, requiring the right product at the right time targeted to the right users who want that one thing, produced in the right way by the right people, all done with consistency. Once lost it is nearly impossible to regain, because of odds of building a successful brand in the first place were so low. So when management cashes in brand equity for short-term gain, I want to shout, “Stop! This isn’t a factory that you can just rebuild when it’s broken. If you lose that brand it’s gone for good.”
Teams are another. Success is often personalized among one person, discounting how important members of their team were to a win. That one person will often marginalize their team, or go out on their own, only to learn the hard way how vital others were to what they considered to be “their” success. And once disbanded that specific team will likely never return.
3. Discounting the views of people who aren’t as credentialed as you are, underestimating the special knowledge they have since they’ve experienced a world you haven’t.
A different kind of stupid is not believing that there are different kinds of smart.
Only seeking the input from those who fit your singular definition of smart misses the masses whose knowledge wasn’t measured by standardized tests. And those masses, with lower credentials than you, have likely experienced a world that you haven’t, which gives them a perspective you don’t have.
Solving problems means understanding how people behave. And you’ll only understand how lots of people are likely to behave if you open your mind to their views, opinions, goals, and solutions. Even people who are different than you. Especially people who are different than you.
4. Not understanding that in the classroom the game is you vs. the test, but in the real world it’s you vs. coworkers, employees, customers, regulators, etc., all of whom need to be persuaded by more than having the right answer.
This is a cousin of #1 above. It’s common when technical founders assume their ability to design a great product is correlated with their ability to manage hundreds of people, when in fact those things can be miles apart.
People who create the best products are often able to do so specifically because their thought process isn’t restricted by norms that ground most people. But that same trait can make them counterproductive bosses, because the “rules-don’t-apply-to-me” mindset that’s so effective when building a new product can be disastrous when managing people, especially as a company scales. Very talented engineers, designers, product people can make HR and managerial decisions for which the only response is, “How stupid are you?”
The first rule of natural maniacs: No one should be shocked when people who think about the world in unique ways you like also think about the world in unique ways you don’t like.
5. Closed-system thinking: Underestimating the external consequences of your decisions in a hyperconnected world, or dismissing how quickly those consequences can backfire on you.
There’s a thing in economics where the professor says “assume a closed economy.” You model how an economy works assuming zero trade with, or influence from, other countries. Then you drop that assumption, view at the world as it actually operates, and BOOM … the original models are useless.
One kind of stupid is when you assume your business decisions live in their own closed economy, and the things you do either don’t affect others, or if you know they do, you underestimate those people’s ability to turn around and stick it back to you.
This is especially true in today’s world where things aren’t just connected; they’re an untangleable web where nothing is more than a few degrees removed from everything else in the world. If you mistreat your employees, or your customers, or your suppliers, and assume that it’s OK to do so because those actions will be contained to those people, the odds that your actions will eventually become known to someone who’s indispensable and who you rely upon are greater than they’ve ever been.
Bernie Madoff summarized this idea a year before his scheme unraveled. “In today’s regulatory environment, it’s virtually impossible to violate the rules,” he told an audience in 2007. “This is something the public doesn’t really understand. It’s impossible for a violation to go undetected. Certainly not for a considerable period of time.”
BTW, in the last six months I think I endorsed two issues. NGLOY in September and VEDL a few days ago. I’m not a pump and dumper, obviously.
“Liberals can’t even do basic math.
It in in their nature to act like criminals trying to steal money.”
It’s certainly one or the other….
The top 1% pay 43% of income taxes due, and the bottom 60% pay nothing.
Yet somehow the wealthy “aren’t paying their fair share”.
Can one of these idiot liberals please explain how the people paying the majority of the bill are “taking and taking” from people who are literally paying nothing?
It takes a serious bending of the laws of basic math, utter stupidity, or a criminal soul to make those assertions.
In the town hall interview with Howard Shultz, he started talking about how his goal would be to lower the taxes the middle class pays. They immediately fire back, “what should you as a billionaire pay?”. They didn’t even care about his point, which should be the primary interest of everyone in that audience. They are so brainwashed into thinking that they are being cheated by business owners instead of being cheated by the people they pay taxes to.
12:28 i’m Pretty sure you would be able to tell the difference. I’m the guy who’ll kick your f::cking teeth down your throat if you fxck with me IRL . Not sure bout pumps.
“Essex says:
February 22, 2019 at 1:26 pm
12:28 i’m Pretty sure you would be able to tell the difference. I’m the guy who’ll kick your f::cking teeth down your throat if you fxck with me IRL”
I’ve met ExPat. In a throwdown IRL, my money is on him.
Essex in IRL. As if.
Good article.
This quote is what people at the top need to understand. You might have started the company, but you were not the sole reason for its success. Ayn rand needs to learn this.
“Teams are another. Success is often personalized among one person, discounting how important members of their team were to a win. That one person will often marginalize their team, or go out on their own, only to learn the hard way how vital others were to what they considered to be “their” success. And once disbanded that specific team will likely never return.”
How many on this blog are guilty of this with me?
“Discounting the views of people who aren’t as credentialed as you are, underestimating the special knowledge they have since they’ve experienced a world you haven’t.
A different kind of stupid is not believing that there are different kinds of smart.
Only seeking the input from those who fit your singular definition of smart misses the masses whose knowledge wasn’t measured by standardized tests. And those masses, with lower credentials than you, have likely experienced a world that you haven’t, which gives them a perspective you don’t have.”
And that passage describes lefty to a tee. His team is smart, the other team is full of idiots.
After you drive up in your pink Barbie convertible with extra tampons in the glovebox?
12:28 i’m Pretty sure you would be able to tell the difference. I’m the guy who’ll kick your f::cking teeth down your throat if you fxck with me IRL . Not sure bout pumps.
Pumps – Is there anyone less credentialed than you?
I’m sure you have some framed certificates from being a good mail sorter, so I guess that’s something.
How many on this blog are guilty of this with me?
“Discounting the views of people who aren’t as credentialed as you are
That’s why I have compassion for the common worker, I was there. I understand their perspective even though I moved on to the professional class.
The Original NJ ExPat says:
February 22, 2019 at 2:33 pm
Pumps – Is there anyone less credentialed than you?
I’m sure you have some framed certificates from being a good mail sorter, so I guess that’s something.
The clown class maybe?
9:35 (Ottomator) “The private sector caused the Great Depression. The government’s new Deal fixed our infrastructure and created a middle class which lasted until corporations got their hands on our government again”
Actually, the New Deal was failing. Unemployment spiked up considerably in the mid to late 1930s. It was only WWII that saved Roosevelt’s asz. The War created massive deficit spending, comparatively, and primed the economic pumps.
The Hoover Dam was built by private enterprise, contracted by the Government. It was finished ahead of schedule and below budget.
Ex, don’t even try. He’s an idiot not because he’s on the other ‘team’, but because he’s an idiot.
I’ve never bragged about credentials or used them as a measuring stick. If anyone has any clue on my undergrad it’s only from my discussion of their sports. Graduate, have never made any mention, no one on here has any clue. Career, I pointedly cared less and often snubbed regular trappings of ‘rank’. Every manager over me knew my view…responsibility, authority, pay. Fill those buckets and I could give a sh1t about the rest.
Better, my last business relied substantially on two people. A partner who graduated on the six year plan from a middle of the road school at best but had an almost supernatural ability to expertly manage diverse people. And a blue collar manager who could (and frequently did) hold things together with spit, glue, and gum (and the oxyacetyline on the back of his truck).
Both irreplaceable. Both highly valued. Not because they were different but because they were intelligent and correct. Unlike our resident idiot.
Quite frankly, at our age anyone that has to be enlightened through study about those items that the idiot posts rather than know them is, in fact, an idiot. QED for him.
“Capitalism can get you what soc1alism wants faster than soc1alism can get it for you”
I need to rip the sh!t out of a financial adviser who fcuked over a friend of mine. Does anyone know a good attorney that handles personal injury related to retail investors?
You realize that marrying a fun-time girl with a Northeastern degree doesn’t make a guy who dropped out of Clifton High School to work at the Post Office part of the professional class, right? If you need clarification I’ll be glad to message your wife on facebook so she can explain it to you.
That’s why I have compassion for the common worker, I was there. I understand their perspective even though I moved on to the professional class.
“She is studying to be an optometrist and hopes to help children from third-world countries learn the importance of eye care.”
Maybe she can tell those children to stop staring at the iPhone screens when they are assembling them.
From all of the pictures I see, Pumps wife had a great time in Boston while he was sorting letters in Clifton. She was hot. He was not.
She is studying to be an optometrist and hopes to help children from third-world countries learn the importance of eye care
That’s just the line she gave at interviews to distinguish herself from the rest of the kids who said they want to “help people”. They are all full of shit. They want to make a lot of money…but that line doesn’t get you into med school.
Probably the best Noonan column in a very long time….
……. and this crack at AOC….. “It was you, Fredo.” lol
OPINION
DECLARATIONS
Welcome to New York, Amazon—Now Go Home
Progressives put out the unwelcome mat, and city dwellers will pay the price for years to come.
By Peggy Noonan
A last word on Amazon and New York City. The story’s over but it doesn’t stop hurting. Twenty-five thousand jobs lost, maybe 40,000 when all is said and done, and of all kinds—high-tech, management, white-collar, blue. All the construction, and the signs and symbols of a coming affluence: the streets lit bright, the sidewalks busy, shops and restaurants humming, hiring. The feeling of safety you have when you pass doorways on the street at night and can hear laughter and conversation on the other side.
This is not just “a loss,” it is a whole lost world. And it is a watershed event for my town. After Amazon’s withdrawal no major American company will open a new headquarters here for at least a generation. No CEO is going to do what Jeff Bezos did, invest all that time and money, do all the planning, negotiating and deciding, only to see it collapse in bitter headlines because the politicians you’re making the deal with can’t control their own troops, and because in the end it is summoning a humiliation to do big business in a town whose political life is dominated by a wild and rising progressive left.
Their issues were tax breaks and unionization.
Should corporations, especially big, megarich ones, be given tax benefits for locating in a city or state? No, actually. They should come in simply as grateful and eager new citizens, especially in a place like New York, since there’s nothing like us. But that is not the world in which we live. In this world politicians are desperate to expand the tax base and brag about creating jobs. Companies can and do press every advantage. New York City and state offered Amazon almost $3 billion in future tax breaks. (Newark and New Jersey offered $7 billion; everyone’s desperate.) New York state said that over the next 25 years Amazon’s presence would yield $186 billion in positive economic impact, including $14 billion in additional tax payments. The progressives who dominate New York’s City Council charged those numbers came from consultants hired to support the deal. Fine, assume they doubled the actual benefits: That would mean $93 billion in positive economic impact, $7 billion in tax payments. Still a huge benefit to the people of New York, and a lifeline for a state experiencing, according to Gov. Andrew Cuomo, more than $2 billion in tax shortfalls because the rich keep moving out.
Jeff Bezos was the rich guy who wanted to move in.
Amazon was knocked because it wouldn’t promise to unionize. I favor private unions: A certain claimed equality, a certain balance between a huge company’s management and the working man or woman, is not the worst thing in the world. And people more than ever need to belong to something. If Amazon were unionized it would cost them, and, warm little humanitarians that they are, they would immediately pass the cost on to consumers. That cost increase might function as a little boost to neighborhood retailers. And we all want neighborhood stores to get a boost because they’re our neighbors. They talk to us; they are part of the community; they make life more human. But you can’t expect Amazon, which is a business, to walk in declaring: We’ll not only help you unionize, we’ll organize your first strike!
When Amazon withdrew, Mayor Bill de Blasio, in his embarrassment and fear, decided he’d bluff his way through with tough talk. Amazon ran because they couldn’t take the heat. “You have to be tough to make it in New York City.”
Oh you he-man, you stud. Those bland little Amazon drones are real softies. They work for the richest man in the world and their job is to make him richer and if they don’t, they’re fired. Half Mr. Bezos’ business plan involves selling things for a dime less. They’d strangle you for a nickel.
Here is the truth: New York’s progressives weren’t tough, they were weak. They don’t know how to play this game.
You want to be tough and mean, get what you want, and keep those jobs for your constituents? Here was the play:
You don’t unleash the furies and hold hearings where crowds jeer, hiss and chant “GTFO, Amazon has got to go.” You don’t put stickers on every lamp pole saying “Amazon crime.” You don’t insult and belittle their representatives. You don’t become Tweeting Trotsky.
You quietly vote yes, go to the groundbreaking, and welcome our new partner in prosperity. Then you wait. And as soon as the new headquarters is fully built and staffed, you shake them down like a boss.
You move on local issues—high rents, crowded subways. To help on unionization you get the next Democrat in the White House to sic the National Labor Relations Board. You go to your friends in the big New York papers and say, “Amazon’s cruel, the shifts are so long the elevator operators are peeing in bottles, Bezos dropped his wallet and when the receptionist picked it up it broke her back.”
And Mr. Bezos, whose life is changing, who by now is a prince of the city with the fanciest friends—he can’t stand being killed every day! Also it’s 2021 and he’s worth $250 billion, and he says, “What the hell, give them half of what they want.”
What’s he going to do, leave? The place has been built, billions have been spent.
That’s real left-wing hardball: You catch it, then you skin it.
They let their prey go. What second-rate slobs run this town.
Opponents came out early, hard and full of rage. Jimmy Van Bramer, the preening councilman whose district included Amazon’s site: “The mayor and the governor caved to the richest man on Earth and then handed the bill to each and every New Yorker.” Rep. Alexandria Ocasio-Cortez didn’t wait a week after her election. Politico, Nov. 13: “She ripped the reported tax breaks the company will receive and described the local community’s reaction to the news as ‘outrage.’ ” Actually the community was for it; ideologues were against it. Amazon is rich, she said in a tweet: “The idea that it will receive hundreds of millions of dollars in tax breaks at a time when our subway is crumbling and our communities need MORE investment, not less, is extremely concerning for residents here.” Sometimes she seemed to think New York was literally handing Mr. Bezos a $3 billion check. Sometimes she seemed to know that wasn’t true but found it helpful to mislead. Like Mr. de Blasio she scrambled in apparent shock when Amazon backed out, and chose a triumphalist dodge. “Anything is possible: today was the day a group of dedicated, everyday New Yorkers & their neighbors defeated Amazon’s corporate greed.” No, everyday New Yorkers did not do it. They wanted the jobs. It was you, Fredo.
It would all be funny if it weren’t for that lost world. The 25,000 families getting a new paycheck, the mothers and fathers suddenly able to send their kids to the local Catholic school, the busy sidewalks, the lights. Instead, the books unbought in the store that didn’t open. The talent unhired and unmet.
Think of it that way and it breaks your heart. Really: breaks it.
Who needs amazon when you can just legislate your way to prosperity with $15 minimum wage?
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So massive deficit spending is good?
“Actually, the New Deal was failing. Unemployment spiked up considerably in the mid to late 1930s. It was only WWII that saved Roosevelt’s asz. The War created massive deficit spending, comparatively, and primed the economic pumps.”
Lefty,
You are highly intelligent, I just wish you were more open minded.
Pumpkin,
You are not.
Lefty,
You are highly intelligent
LOL
Companies can and do press every advantage. New York City and state offered Amazon almost $3 billion in future tax breaks. (Newark and New Jersey offered $7 billion; everyone’s desperate.)
5:28 chifi – Thanks for the Noonan article, it was priceless!
Health is not valued till sickness comes.
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