Becca Vargo Daggett wrote:
It is true that pension funds hold 25 to 30 percent of financial assets in
the U.S. Yet the Congressional Budget Office estimates that over half of
corporate profits go to the wealthiest 1 percent of taxpayers. Only about 8
percent goes to the bottom 60 percent.
The Federal Reserve's Survey of Consumer Finance shows that the top one
percent of households owns 23 percent of all stock, the top five percent
owns half, and the bottom 60 percent owns only about 10 percent.
Mark says:
I'm sorry, this math makes no sense to me. If you agree that pension funds
hold 25-30 of the financial assets, how is it that the middle class has so
little money in the stock market? Are the pension funds all in the bond
market? I've had personal knowledge of public employee pension funds that
were invested in venture capital funds. Horror of horrors, the intent of
those investments was to make profits for the pension funds. And not all of
the employees of the company where the money was invested met the living
wage test.
It seems like you want the capital markets to be successful in some cases,
and fail in others.
Becca Vargo Dagget wrote:
Recall that both Bush I and Clinton raised taxes. Recall that Clinton was
elected when the economy was weak and there was a growing deficit. The idea
that there was a six or seven year lag
between the end of the Reagan administration and the start of the
"much-vaunted boom years" in is a right-wing campfire story.
Mark says:
Let's also remember the state of the economy when President Reagan was
elected, and the size of his two electoral victories.
Becca wrote:
The 90s boom was about productivity growth, brought on by technology.(There
was also the matter of that stock bubble.) Those technology investments were
not a result of the Reagan years, because the technologies did not exist in
the Reagan years. Nor were the innovations the result of some sort of free
market revolution kicked off by Reagan. The foundations for the
technologies of the information era were laid in the 1960s, mainly through
government sponsored research. The boom came because those technologies were
finally ripe, not because companies said, Hey, Reagan cut taxes so it's
finally safe to roll out all of those great ideas we've been sitting on.
The idea that innovation is financially driven is hooey.
Mark says:
Around which left-wing campfire did you hear this story? Was Bill Gates
using government employees to do research at Microsoft? I'll concede that
some technology advances comes out of government sponsored research. But
Becca, once somebody comes up with a great idea, they have to go out and
find capital to build and market it. That's where those evil private
markets that you dislike so much play a hand. The long-term financial
benefit of the Reagan fiscal policies was that an enormous amount of private
capital was freed up, because it wasn't being taxed to death. When people
and individual investors have more control over their cash, they might
choose to spend it, invest it, put it under the mattress, give it to
charity, or a combination of all those things. Sometimes the people who make
those choices are unethical or stupid. It's not a perfect system. But
government doesn't create capital. Government takes money from one person
and gives it to another.
Mark Hanson
Prospect Park
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