(Part 2) Best products from r/economy

I think downward social pressure is an important point in this discussion and raises a bunch of interesting economic and ethical issues .

Side stepping those issues for a moment, an interesting data point is Gregory Clark's book A Farewell to Alms which is about how downward social pressure impacted England in the 1600's. Clark's argument is that limited land and the Malthusian trap (which was more prevalent in England than Europe because England is an island) caused the children of rich children in England to move down the social ladder which crowded out the poor and essentially pushed them off the ladder. Clark also claims that these new lower class workers had more upper class values which made them more industrious and better works which in turn provided England with the labor force necessary to get a jump start on the industrial revolution, though this second claim clearly has issues (e.g. did the morals really make that big a difference; couldn't economic incentives teach people to be industrious rather than the values needing to be taught by wealthy parents or grand parents). That said, I think the first claim is spot on as a positive claim (though I don't endorse the normative claim that it's good since that smacks of social darwinism).

Jumping back to today, we were already seeing some of this happening prior to the great recession where lower middle class men aren't able to get married and start families because of poor financial prospects, driven partly by lack of education. I think the great recession though is only making things worse as the generation that graduated from 2008 to today is seeing similar diminished opportunities and will increase that downward pressure.

So it will be very interesting to see how this plays out. There's clearly huge economic concerns at stake (e.g. how do you stop people from investing $200k into education for a career which pays $30k and how do you stop the educational arms race) but there's also huge ethical issues too (e.g. is there an intrinsic value to education? who deserves to be educated and on what basis? what do you do about those who get left behind?).

The JP Morgan info looks consistent with the post. There were $7.8 billion in GAAP taxes, but the 10K (http://sec.gov/Archives/edgar/data/19617/000001961712000163/corp10k2011.htm) shows $3.7b in US Federal Taxes and $2.1b in US Federal Tax deferrals (page 279).

The agreements that usually exist between oil companies and foreign countries are explained in great detail in Twilight In The Desert (http://www.amazon.com/Twilight-Desert-Coming-Saudi-Economy/dp/047173876X). They typically agree to a revenue sharing arrangement with the country's dictator or national petroleum governance body.

Double taxation does not have relevance with these types of situations. US corporations doing business overseas are typically taxed at the foreign rate, while business done within our borders is taxed at the US rate, though there are loopholes caused by this tax policy that can be abused dramatically (http://en.wikipedia.org/wiki/Double_Irish_arrangement).

Usually, the more international a company's "value creation" segment becomes, the lower the average corporate tax rate. Many NASDAQ IPOs follow this trajectory, as small US companies expand factories or human capital internationally (take a look at how FSLR's tax rates dropped from 2007 to 2010 for example).

But there are definitely skewed parts of this analysis. State and local taxes are not included, and most tax deferrals have logically legitimate rationales.

I like Naked Economics by Charles Wheelan:
https://www.amazon.com/Naked-Economics-Undressing-Science-Revised/dp/0393337642

It is just a good intro book on some basics with examples and it is fun to actually read, so you absorb more of it.

There are allot of topics within Economics so after you explore some you should have a better idea of what you want to focus on.

If you like the Simpsons, Homer Economicus is one of my favorite "economic" books, but I am definitely biased on that one.
https://www.amazon.com/gp/aw/d/0804791716/ref=mp_s_a_1_1?ie=UTF8&qid=1484673928&sr=8-1&pi=AC_SX236_SY340_QL65&keywords=homer+economicus&dpPl=1&dpID=51etTg6WQLL&ref=plSrch
Really just entertaining with a little learning.

Anyway good luck.

imho "they" are the super wealthy of the world.

Is this a vast, dark conspiracy? No. They know that for them to continue gaining and holding power they need control a currency. The inevitable outcome is a concentration of those currencies. It's as simple as you and your neighbors all getting jobs because you know that it will pay your rent. Did you all "conspire" to get those jobs? No. You just all knew it was in your best interest. It was the logical next step for you.

If you want to get an idea of how they operate then read this book that details the creation of the US Federal Reserve. It's not boring, and is actually a fun read kind of like a spy novel since so much of what they did was covert.

I would greatly recommend that you read the book Pax Technica.

Here are some excerpts:
> In a world in which most of our political, economic, and cultural lives are mediated by networked devices, power lies in setting technical standards. Simply put, you either set technical standards or you follow them. International tensions over competing technology standards are only going to increase as governments and firms identify the engineering protocols, licensing arrangements, and telecommunications standards that will allow them to use the [internet] to advance their goals.

> Information activism is already a global ideological movement, and competition among device networks will replace a clash of civilizations as the primary political fault line of global conflict. Samuel Huntington famously divided the world into nine competing political ideologies, and described these as largely irreconcilable worldviews that were destined to clash. What is more likely, in a world of pervasive sensors and networked devices, is a competition among device networks. The most important clash will be between the people and devices that push for open and interoperable networks and those who work for closed networks.

> The dominance of technology over ideology has two stabilizing consequences. The first is that information activism is now a global movement. Every country in the world has some kind of information-freedom campaign that allows for a consistent, global conversation about how different kinds of actors are using and abusing digital media. The second is that the diffusion of digital media is supporting popular movements for democratic accountability. Some Silicon Valley firms build hardware and software for dictators, and as I’ll show in the next chapter the serious threat to the pax technica comes from the rival network growing out of China.

> The [internet] will help bring structure to global politics, but we must work for a structure we want. This is a challenging project, but if we don’t take it on our political lives will become fully structured by algorithms we don’t understand, data flows we don’t manage, and political elites who manipulate us through technology. Since the internet of things is a massive network of people and devices, structural threats will come from competing networks. There are two rival networks that seriously threaten the pax technica: the Chinese internet and the closed, content-driven networks that undermine political equality from within the pax technica.

> The Chinese internet is already the most expensive and elaborate system ever built for suppressing political expression. The Chinese are trying to extend it by exporting their technologies to authoritarian regimes in Asia and Africa. Russia, Iran, and a few other governments are also developing competing network infrastructures. The Chinese government controls the entire network, the network is bounded in surprising ways, and the network can, and does, mobilize to attack other networks.

> The Communist Party has developed a dedicated army to resist the spread of the technologies and values of the West. By one estimate there are more than 2 million “public-opinion experts,” a new category for jobs that involve watching other people’s emails, search requests, and other digital output. In other words, the army of censors is as large as the military, and often military units are given censorship and surveillance tasks.

> Government agencies need censors, but the government also makes tech startups and large media conglomerates hire their own censors to help with the task of watching the traffic. Pundits have referred to these people as China’s fifty-cent army because some get paid small amounts of money to generate pro-regime messages online. But that moniker makes the army of censors seem like freelancers who are inexpensive to hire. In actuality, they are a well-financed force deeply embedded in the country’s technology industry.

> Lots of other authoritarian regimes employ censors, but let’s put the numbers in perspective. If there are 2 million people occupied with Chinese censorship tasks, and 500 million users, that’s one surveillance expert for every 250 people. Aside from the human resources put into censorship and surveillance, China’s device networks have three unique features: the government controls the entire network, the network is bounded in surprising ways, and the network attacks other networks.

> First, the Chinese government owns and controls all the physical access routes to the internet. People and businesses can rent bandwidth only from state-owned enterprises. Four major governmental entities operate the “backbone” of the Chinese internet, and several large mobile-phone joint ventures between the government and Chinese-owned media giants offer additional connectivity.

> The research on China’s censorship efforts finds that the government works hard to support Chinese content and communication networks that it can surveil, and discourages its citizens from using the information infrastructure of the West. In one study, researchers went through the process of launching a social media startup in China. They took notes each time they encountered a new regulatory hoop to jump through, and they kept track of the amount of information they were making available to the state-security apparatus.

> Second, the Chinese resist Western device networks by making sure that connections within China are extensive and reliable, and connections to the rest of the world less so. Chinese device networks are bounded by the Great Firewall of China, as we call it in the West, though the more poetic translation is the Golden Shield Project. Some consider it the largest national security project in the world, and its singular task is to protect Chinese internet users from access and exposure to outside content.

> Third, the Chinese government is aggressively assaulting international information infrastructure. Corporate cyberespionage, design emulation, patent acquisition, and technology export are the key weapons of this attack. Some of these are subtle defenses that smack of cultural protectionism, while others are aggressive strategies for attacking outside networks. Cyberattacks on Western news media regularly originate from within China.

> The Chinese are trying to win over other nations, co-opting the device networks of poor countries into nodes of their rival network. The Chinese are not just seeking to protect their citizens from the West, they are aggressively expanding their networks to rival the pax technica through cultural content, news production, hardware, software, telecommunications standards, and information policy. In terms of content and news, their rival strategy involves:

> • Direct Chinese government aid to friendly governments in the form of radio transmitters and financing for national satellites built by Chinese firms.

> • Provision of content and technologies to allies and potential allies that are often cash strapped.

> • Memoranda of understanding on the sharing of news, particularly across Southeast Asia.

> • Training programs and expenses-paid trips to China for journalists.

> • A significant, possibly multibillion-dollar, expansion of the People’s Republic of China’s (PRC’s) own media on the world stage, primarily through the Xinhua news agency, satellite and internet TV channels controlled by Xinhua, and state-run television services.

> China’s aggressive efforts to build a rival network are not the only form of resistance to the device networks of the pax technica. The Russians have been successfully pioneering another strategy, one emulated by Venezuela, Iran, and some of the Gulf States. The Russian gambit is not to build its own network from the ground up, it is to join the internet by sponsoring pro-regime internet users to generate supportive commentary online.

> The critical rivalry in the years ahead will not be between countries but between technical systems that countries choose to defend. Rival information infrastructure is the single most important long-term threat to international stability. The empire of the Western-inspired, but now truly global, internet isn’t the only major system in which political values and information infrastructures are deeply entwined. Indeed, there are many internets.

Okay your first two links are to blogs that only publish work by Austrian economists. Hardly objective analyses. Even if SO did drop the cost of gas, that says nothing of who bore the brunt of the cost. It says nothing of the enivronmental costs of their business practices. It says nothing of how they treated their workers. And still sidesteps the point of how the monopoly was formed by business practices that are anti-competitive and would completely overcome any advantages of a strictly free-market system. As I mentioned before, costs aren't the only metric we should use in judging a civilization.

> This is how high profits counter-intuitively accelerate the trend towards lower price and higher quality (witness computer and cellphone progression).

It isn't the fact that profits were high that drove this trend. It's the incredible volume of demand that drove prices down. Again, see the history of Bell Labs for this as far as computers and cell phones go. It was a government-sanctioned monopoloy that made these possible.

Your DC link was unfortunate, but was just a case of idiots in government. This isn't something inherent in governments. There are more than enough idiots in management. Luckily we live in a democracy that can be changed with an informed electorate.

> Insurance companies profit only because of the fact that it costs MORE to have health insurance for most people than it costs to NOT have it. It's risky to not have health insurance, but if you are of normal health, you come out ahead financially by not having it. Also, [5] many hospitals, doctors give discount for paying cash

I'm not sure what the point is you're trying to make. This is all obvious. The point is that you never know your future health states. The fact that doctors give discounts for paying cash is analogous to people not paying interest rates when they pay off their credit cards on time. But in the real world, most people can't afford to do this. As I mentioned before, the number one cause of individual bankruptcy in the US is due to medical bills.

> Consumer Reports is a private regulatory agency. Amazon ratings are a consumer-driven regulatory agency. Yelp too. Ebay feedback, etc. Your social network is a regulatory agency.

Okay so you never actually meant regulatory agency. Consumer Reports is a consumer advocacy magazine. Amazon, Yelp, and Ebay are a sort of word-of-mouth that only exist due to technology developed by the government and public-private parternships. And Yelp has recently been accused of removing negative reviews if the businesses pay up. None of these can do anything about abuse of workers or pollution or anything else industry has a history of doing.

>We can take risks for discounts, or be conservative and pay a premium for a trusted brand, and when that trusted brand starts overcharging, people like me step in and offer a new solution at a better price.

This really depends on what you're talking about. We shouldn't have to risk that discounted item being unsafe or dangerous or snake oil. Not everyone can afford items that are too expensive. And sometimes the profits just don't exist for goods and services at the price point that people can afford them at.

>Let's say there's a mafia. They steal from everyone, but they use the money to fund research projects. They steal half of what everyone earns (total cost of govt taxation over what things would cost without it, includes regulatory costs), but they take credit for everything that is done by the researchers they pay with the stolen money. Some people defend it, and say "without the mafia stealing from everyone and paying some of the people to research things, it would be impossible to get humans to create amazing things!" That is absurd, that human society requires guns to our heads to make us innovate.

Or let's say there's a charity that everyone chips into. They build roads so we can transport goods. They organize police forces so thieves don't rob us. They have fire departments so our homes don't burn down. They fund a military to protect us from foreign threats. They fund scientific research so that our children don't die of diseases that we suffer from or so that energy costs go down in the future from new and cheaper sources of energy.

Do you think ideas just pop into people's heads? You really really need to read up on some science history. I really hate to repeat myself, but you are incredibly ignorant and should educate yourself if you really want to argue that your magical free market could have built the world we live in. Private industry has no financial incentive to fund basic science research. Without basic science research, there can't be future applied science research. Without applied science research, there can't be future engineering in that field. Humans don't need guns to their heads to innovate. That's why we got together and use our tax dollars to fund basic science. But private industry sure as hell needs a gun to its head or else they risk pissing of their shareholders for throwing away profit on research they won't see an ROI for decades or centuries.

> Venture capitalists are the exact opposite of govt research, and they have funded every major advance in the past 20 years.

Buuuulllllllsssshhhiiiiiiiittt. Holy crap don't even try to act like you know what you're talking about. Are you gonna tell me that it was a VC who funded the Human Genome Project? It was a VC who funded CERN? It was a VC who put Rovers on Mars? You are completely divorced from reality.

NASA ended shuttle launches because America doesn't give a damn anymore. And those private enterprises you claim have no government funding . . . they get their grant money through NASA. It's called contracting. And in case you were unaware, contracting is done using tax dollars. Those engineering firms don't do it out of charity. They have to get paid like anyone else.

Learn some fucking history.

I am reading a GREAT book by Dean Baker called "Plunder and Blunder: The Rise and Fall of The Bubble Economy". Great stuff, illustrates very clearly what led to our current economy, a great timeline of policy mistakes by Reagan and Clinton, and other things.

>...and the rich can move to another country quickly with a good percentage of their money

It's adorable that you think their money even resides in the United States to begin with. There's a good book coming out soon about this called "Moneyland" (and the author was just on an episode of Planet Money).

Short answer: All economic growth derives from increases in efficiency. The govt could help with that by reforming patent system (remove the trolls), remove useless regulation (e.g. ADA compliance that is really an extortion racket), and ensure a level playing field (big banks vs small credit unions).

Long answer: See William Bernstein's "Birth of Plenty", which is an excellent economic history book http://www.amazon.com/Birth-Plenty-Prosperity-Modern-Created/dp/0071747044/

That's the consensus of most economists, and countries which started out with low paid labor intensive industries like India, S. Korea, China and Japan are evidence that sweat shops do mature.

A good book on the subject is In Defense of Globalization. it's a well rounded look at the benefits and problems the system has had.

It seems safe to say that Globalization and trade liberalization has done more to help the developing world that any system yet tried.

That's a bit sensationalist... You can get a Kindle copy for $8.52 or a paperback copy for $10... http://www.amazon.com/When-money-dies-nightmare-collapse/dp/0718302141

It's a historical account of the hyperinflation that occurred in Germany after WW1 (due in part to the huge economic sanctions and reparations placed on them for "causing" the great war).

Better yet, here's a free pdf copy of the entire book: http://www.goldonomic.com/When%20Money%20Dies.pdf

Lemme dig up the exact examples but a good start is Hamilton's Blessing. In there it explains the lengths people would go to hide income and how the 90% rate produced unnecessary resource allocation.

The corporate tax structure is the primary vehicle allowing the rich to hide income from taxation. I'm not going to go into the details of corporate tax law for that would bore you to tears but there is a reason billionaires purchase "money losing" sports teams. They can shield income in other business with the artificial loss. A good portion of the tax cheats set up a series of shell corporations to pass the money through. While eliminating the corp tax wouldn't completely eliminate this, it might reduce the incentive.

If the corporate tax system is removed the rich would be taxed on their portion of the business's profit. For example, if you own 60% of the company, you are taxed on 60% of the stated revenue (defined by the irs) as well as receive 60% of the tax deductions for that business. The business then has no reason to hire an army of tax accountants and bury the IRS in phone book sized tax returns. It can focus on maximizing revenue and profit and let the shareholders worry about the taxation.

Corporations are only taxed on the taxable income generated in the usa. To reduce this, companies shift profits overseas and use currency manipulation to reduce the amounts owed. The usa is one of the few countries that taxes its citizens based on their worldwide income instead of the income generated only in this country. By eliminating the corp rate and going to a single system of taxing all income, it would allow that individuals global income to be taxed, not merely corporate profits recognized here at home.

I remember a stat in the (fantastic) book The Second Machine Age that showed similar levels of automation in factories in China as the US, so it's really something that goes well beyond the cost of labor.

​

Good article, thanks for sharing

no surprises here, China is currently playing catch-up. They will stabilise at a much lower level of GDP-per-capita than the US (in the next 10-20years, with growth trend slowing throughout the period). The only way they will get close to US productivity is by radical overhaul to their political and economic system, eg mass privatisation of state industries, freely floating currency, greater transparency of governance etc. These are all reforms that would erode power from the elites that currently enjoy it, so these changes are unlikely.

http://www.amazon.com/Bird-Cage-Legal-Reform-China/dp/0804743789
http://www.amazon.com/Why-Nations-Fail-Prosperity-ebook/dp/B0058Z4NR8

>I find it very funny when Americans talk about socialism

Here's an Austrian fellow who wrote a book on socialism, if you're interested: http://www.amazon.com/Socialism-An-Economic-Sociological-Analysis/dp/0913966630

The PDF is online for free, as well.

>I'll just say that total deregulation, total free market, will lead to catastrophe

I don't really see any evidence that's the case.

That’s the whole premise of The General Theory. Inflation lags behind growth when intervention is properly implemented. Properly is obviously the operative.

That noted, it’s easy to screw up interventionism. See: Venezuela. It’s also easy to screw up laissez faire. If industry is allowed to acquire protectionist regulation, certain firms behave like leaches with the morals of goats. Granted, that’s not really laissez faire either, it’s rent-seeking interventionism. Federal Reserve economist Rajan & Zingler’s Saving Capitalism From The Capitalists explains the latter fairly well. Fortunately there are a plethora of remedies to the problem available under US law.

The Wordly Philosophers a great book explaining how we came to think of economics today by looking at it's most influential thinkers

Stigum's Money Market a fundemental look at how modern money markets work

History of Economic Thought looks at economics throughout history, taking into consideration the unique historic and cultural context of different schools of economic thought.

https://www.amazon.com/Creature-Jekyll-Island-Federal-Reserve/dp/091298645X

https://www.amazon.com/History-Money-Banking-United-States-ebook/dp/B0049H938A/

https://www.amazon.com/Creature-Jekyll-Island-Federal-Reserve/dp/091298645X/ref=sr_1_1?s=books&ie=UTF8&qid=1466801204&sr=1-1&keywords=creature+from+jeckle+island