Jinn

No your use of quotes just helps inform me of your view of the problem; your focus is first on saving the "rich" from those poor, burdensome taxes.

__________________
"I'm typing on a computer of science, which is being sent by science wires to a little science server where you can access it. I'm not typing on a computer of philosophy or religion or whatever other thing you think can be used to understand the universe because they're a poor substitute in the role of understanding the universe which exists independent from ourselves." - Willravel

roachboy

tocqueville was one of the most insightful folk to grasp what american democracy was, back when it was, long ago in a time-space erased by american capitalism.

but ace, he believes in what's "real"
because he's not a french aristocrat, you see.
french aristocrats are not real.
ace is real and he believes it.
that's why he's smarter than alexis de tocqueville was.

__________________
a gramophone its corrugated trumpet silver handle
spinning dog. such faithfulness it hear

it make you sick.

-kamau brathwaite

aceventura3

It is clear to me that actually explaining my view is not good enough. So, I will ask questions that will lead you to my view. I will start with this one.

If you have an opportunity to earn an extra $100 from work, how much effort will you put into earning the extra $100 if it will be taxed at a rate of 100% - before you collect it? One week after you collect it? One year after you collect it? After you die?

---------- Post added at 02:35 PM ---------- Previous post was at 02:30 PM ----------

Come on, how about a little intellectual honesty. What I posted about Tocqueville was factually correct. His views in a modern context is problematic as it relates to a commentary on American democracy in the context of economic opportunity. I acknowledge value in his views, but are you suggesting that there are no problems or the problem as I described? Gee whiz - in your dislike of me, my style or whatever - you come across as petty. Grow-up.

__________________
"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

roachboy

i dont dislike you ace.
you just say so many stupid things....

tocqueville talks about democracy in america in the 1830s.
i reference the argument and i situate it quickly in a historical context.

your powerful "critique" of the point is that tocqueville comes out of a historical context.

well no shit ace.
i said as much in the post.

__________________
a gramophone its corrugated trumpet silver handle
spinning dog. such faithfulness it hear

it make you sick.

-kamau brathwaite

aceventura3

First for anyone interested here is a link to the book in question, I recently read it since it came up in this discussion:

DEMOCRACY IN AMERICA - Google Books

Second, Tocqueville writing is clearly influenced by his aristocratic background.

On the issue of wealth being passed from generation to generation, I note page 121, first full paragraph in his book he states that equality is connected to economic opportunity - I see that as a good thing. In European style aristocracy wealth was pass in whole from generation to generation not subject to break-up, not necessarily due to taxation, but due to the entire estate passing to a single heir without break-up as opposed to the system developed in the US where estates were subject to division to heirs. The implication of this is not having an entrenched aristocracy. Democracy nurtures economic opportunity through the creation of economic equal opportunity.

__________________
"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

aceventura3

At this point, I am going to assume no one is going to answer the questions because of the appearance of an obvious setup.

What would have been an intriguing answer is if someone said - I would put in the same amount of effort because even if the effort gives no benefit directly to me, there is a benefit to society or to others.

Unfortunately, no one actually thinks that way, not even socialists, communists, etc., their real interest is to derive benefits personally or to society through the effort of others. And that is why these systems ultimately will always fail and the system will gravitate towards allowing individuals to directly benefit from their efforts and motivations to get "rich".

__________________
"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

Derwood

what real system is in place that is an equivalent of "earn $100, taxed $100"?

__________________
"You can't shoot a country until it becomes a democracy." - Willravel

aceventura3

There are examples in this thread. Under our current tax code people face these choices constantly - where through the loss of tax credits and certain deductions an increase of a $100 in income could cost a person that $100 or more.

In many of these cases it involves working poor trying to get ahead - one day you are getting $$$ from government through a program, you earn some $$$ from work and the entire amount from government goes to zero because you no longer qualify. In this context you can argue a benefit from government is not a part of our tax system, I don't. For example you have a job paying taxes that in part supports our unemployment system, you then loose your job and start collecting - ifyou collect $200 per week, you won't take a job paying $100 per week until your benefit runs out.

"Rich" people have experts working on their behalf to find loop-holes and they have choices - they can manage their tax burden. Poor people do not have these experts and they don't have many choices - in some cases it is stay poor or get screwed. Much of this is thanks to liberals who think they are doing good but are not - and there are some liberals who know what they are doing and they just don't really care about the working poor, they just pretend to.

{added} There are better ways to do all of this. For example unemployment insurance - don't make it all or nothing, for low income people allow it to be a supplement to income they earn through work - allow them to get ahead, to save.

__________________
"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

Marvelous Marv

Welfare, in its many forms? If you work, you lose 100% of the chunk of other people's money the government gives you every month.

__________________
"The problem with socialism is that you eventually run out of other people's money."
Margaret Thatcher

Derwood

People don't really "earn" welfare, though, right?

__________________
"You can't shoot a country until it becomes a democracy." - Willravel

aceventura3

What do you consider welfare?

Using one example of how this issue is confusing, consider the earned income tax credit. To get this credit a person has to have earned income, but not too much earned income. With the credit, the person can get back all taxes paid to the federal government, plus in addition they get the remainder of the credit in the form of a check from the federal government. Is that welfare? A person or family can loose 100% of the tax credit if they make too much money.

Here is another editorial with facts supporting the premise:

The Great Escape - IBD - Investors.com

The pattern is pretty clear.

__________________
"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

filtherton

It think that it's pretty clear that in discussions like these, the words "taxes" and "welfare" have little actual meaning. They're just code words. It won't be long before someone starts claiming that roads are welfare.

No doubt we should take the editorial extra seriously because the facts were chosen with great care.

The only clear pattern is that it's difficult to predict how tax-based revenue will change in the future.

Minnesota in the 2000s is a pretty great example of why conservative economic policies fail when it comes to actually keeping government in the black. The great fiscal genius that is Tim Pawlenty, he of the "No New Taxes (but we'll impose a shitload of fees)" pledge was consistently unable to come up with a budget that didn't rely on shifting costs down the road or raiding money set aside for something else. One of his main problems was that despite the old canard that reducing taxes actually increases gov't revenue, he was met with consistent budget shortfalls. If I were IBD, I'd make this connection and let the reader come up with their own flawed conclusion, but I'm not, so I'll just say that the economy is complicated, and that the people who seem to have certainty regarding it are the ones who are the most confused by it.

aceventura3

I gave a specific example and asked you to give your definition of a term, there was no "code" in that.

How many examples of the same thing to we need before we take it seriously. Here is an excerpt from another view from today's WSJ:

Michael Boskin: Obama's Economic Fish Stories - WSJ.com


No it is not. The general trend is easy to determine regarding tax policy, the difficulty is in isolating tax policy from other variables. Rational people respond in predictable ways.

Paulenty wants to keep taxes low and cut spending, the DFL controlled legislature has a different agenda, isn't that conflict the root of the budget problems in Minnesota?

__________________
"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

filtherton

Nice. Note how they point out the fact that there isn't a consensus about the effect of the stimulus, but then right after they imply that there is a consensus about why the stimulus failed. It's weird that they'd ignore the idea that the effects of the stimulus were small because the stimulus wasn't big enough.

Aside from the "rational people behave in predictable ways" fallacy, you basically just rephrased what I said, which is to say that it is difficult to make a revenue forecast that adequately account for the effects of reality.

The DFL is pretty good at capitulation. Cuts have occurred frequently, with local governments picking up the slack. The point is that conservative fiscal policy hasn't done the state any favors.

loquitur

"rational people behave in predictable ways" fallacy

That's actually not a fallacy at all. The problem is with presuming consistent rationality. People don't always behave rationally even if they behave mostly rationally. The reason economic models have any validity at all is because most people behave rationally most of the time. Think of it: how could anyone know whether a price is fair or reasonable if they didn't behave rationally?

Another issue is whether rational people could disagree about what the right economic decision is. That in turn rests on what different people value. But in the end it comes down to price - people may be willing to pay more for something they value more. But that doesn't mean people who aren't willing to pay it aren't rational, it only means they place different values on the transaction.

roachboy

or it could mean that the word "rational" is vaporous in this context.

just saying.

__________________
a gramophone its corrugated trumpet silver handle
spinning dog. such faithfulness it hear

it make you sick.

-kamau brathwaite

Baraka_Guru

You know, I was thinking that it is best to say, "People behave in predictable ways when they are being rational."

__________________
Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot

roachboy

or you could say that rational is a characteristic imputed to people who behave in predictable ways. so it's be a synonym for predictability in a sense, but one links it to some putative subjective mode (being "rational" follows from the capacity to be predictable, so the latter is an expression of the former).

__________________
a gramophone its corrugated trumpet silver handle
spinning dog. such faithfulness it hear

it make you sick.

-kamau brathwaite

ring

So then one could conclude that Ted Bundy was acting rationally;
since serial killers predictably keep on killing.

I need a feinting couch, for I'm experiencing a case of Vicks-Vapor-Rub overdose.

I am not one bit remorseful for the thread heist.

filtherton

The only place a statement like "rational people behave in predictable ways" isn't a fallacy is in an econ textbook. This is because in an economic textbook it's a tautology: Predictable Behavior -> Rationality and Rationality -> Predictable Behavior.

As Ace used the phrase (Governmental revenue forecasting is easy because rational people are predictable) it's definitely not true. On an individual level it doesn't apply because people acting in a completely rational capacity do unpredictable things all of the time. It is only in hindsight that we attach the rational label to their motivations. Even then, the act of attaching the rational label to a person's thoughts is highly subjective. On a more macro scale, the phrase doesn't apply, because then you're looking at the emergent properties of a complex system, which are defined by the system's individual components acting in concert and which are not necessarily all that predictable.

Even if it weren't a fallacy, the idea that "rational people behave in predictable ways" is fairly meaningless as anything other than a guiding principle, because the type of awareness and computing power required to predict anything of economic significance with any amount of certainty doesn't exist.

aceventura3

Usually I say: People do what they think is in their best interest.

---------- Post added at 08:27 PM ---------- Previous post was at 08:21 PM ----------

What is the point of government economic policy if there is no component of predictable behavior?

Given something like the mortgage interest tax deduction, isn't that predicated on the belief that home ownership is good and that the deduction is in place to encourage home ownership?

Given something like fines issued by government for unwanted behaviors by individuals or entities, aren't those predicated on the belief that a negative economic impact will discourage unwanted behaviors?

__________________
"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

filtherton

Forecasting revenue requires specificity, you have to make assumptions based on limited information. It's a far cry from simply predicting the behavior of automata.

aceventura3

Revenue forecasting is common. There is no doubt assumptions are made, and the accuracy and thoughtfulness that goes into those assumptions will have a major impact on the accuracy of the forecast, accuracy can be virtually certain especially when the laws of large numbers are in play. What we are really talking about is calculus - I say it is "science" not "art".

__________________
"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

filtherton

I'd say it's more stats than calculus.

I don't think your distinction between science and art reflects reality. Science is an art form, especially when prognostication is involved.

loquitur

forecasting is only as good as the assumptions used. And one of the assumptions is about what rational people would do, but there are way too many variables for anyone to know what different people value, so as a result, even assuming rationality, prediction is hard.

At the gross level, certain things do hold true, like the downward sloping demand curve and the upward sloping supply curve. But that's a very blunt instrument.

This just underscores that Hayek was right - central planning always fails because the planners can never have all the information they need, when they need it, in order to make good decisions -- and because they are subject to the same irrationalities as everyone else.

roachboy

you could use similar kinds of models to demonstrate that crowds moving through open corridors will tend to break left when confronted by an obstacle.
because that tendency is consistent, so predictable, it's also rational, isn't it?

__________________
a gramophone its corrugated trumpet silver handle
spinning dog. such faithfulness it hear

it make you sick.

-kamau brathwaite

Baraka_Guru

This is likely to be the case. The issue, then, is calculating the difference between what they think and what they know.

The bottom line: people are seldom as rational as they think they are. The market is driven in large part by emotions. Even if you take household money matters, emotions tend to play a larger role than people would like to accept.

__________________
Knowing that death is certain and that the time of death is uncertain, what's the most important thing?
—Bhikkhuni Pema Chödrön

Humankind cannot bear very much reality.
—From "Burnt Norton," Four Quartets (1936), T. S. Eliot

filtherton

I think people routinely do things that they know are counter to their best interest. Cigarette sales and the obesity epidemic are good examples. I think people tend to choose ease and convenience over their own best interest. If this were not the case our economy would be vastly different.

aceventura3

It is both. The ability to develop predictive formulas is calculus.

I will re-read this line of discussion but it seems that some are taking issue with the ability to predict behaviors and forecast with accuracy. I think it can be done and is not a guessing game even when the behaviors of people are involved.

---------- Post added at 01:12 PM ---------- Previous post was at 01:03 PM ----------

Rational behaviors do not always result in correct behavior or the most logical behavior. Correct behavior may require information that a rational person does not have or an analysis that a rational person does not do. However, given consistency, rational behaviors that do not lead to correct behavior can be explained and predicted.

Las Vagas, given the odds of winning games of chance against the house, should not exist based on what one would consider rational behavior in the context of correctness. But it does, and the folk who build and operate casinos, very easily predict the behaviors of their visitors.

---------- Post added at 01:20 PM ---------- Previous post was at 01:12 PM ----------

There is certainly obsessive, compulsory and addictive behaviors, but there is also a person who makes a choice between the benefits of immediate gratification and the long-term costs.

__________________
"Democracy is two wolves and a sheep voting on lunch."
"It is useless for the sheep to pass resolutions on vegetarianism while the wolf is of a different opinion."
"If you live among wolves you have to act like one."
"A lady screams at the mouse but smiles at the wolf. A gentleman is a wolf who sends flowers."

filtherton

I'm thinking you mean calculus in the more general sense.

Nobody is saying that it can't be done accurately. It is difficult to do accurately precisely because there is typically a significant amount of guesswork required in predicting the behavior of groups of people. It is always a guessing game, even if one is unwilling to admit that guesswork is involved.


I think you're speaking your own language here.

Right. I was just pointing out that people frequently don't have their own best interests in mind when making decisions and that any economic theory that ignores this fact is inadequate when it comes to predicting human behavior.

roachboy

yeah ace, i was talking about stochastics.

never mind.

__________________
a gramophone its corrugated trumpet silver handle
spinning dog. such faithfulness it hear

it make you sick.

-kamau brathwaite

filtherton

Stochastics are nice because you can dispense with lots of pesky assumptions and let the data speak for itself. For instance, you can use data to show that groups of people are predictable independent of assumptions regarding rationality.

roachboy

that was why i mentioned the example. but the response sucked the wind away.

__________________
a gramophone its corrugated trumpet silver handle
spinning dog. such faithfulness it hear

it make you sick.

-kamau brathwaite

filtherton

I'm getting the impression that ace doesn't deal in uncertainties.

loquitur

of course it's rational. In a country where people tend to walk on the right side, it stands to reason that they'll pass an obstacle in their path by going left, where there will usually be more space open, than on the right, where there will by definition be less space (because the obstacle is in their path, and theyr'e on the right). How is that not rational?

More to the point, though, unless you are positing that people are generally random, which strikes me as an absurd position, the default assumption has to be that people are generally acting rationally - defined as acting in pursuit of what they value. Seen that way, the obese person acts rationally because s/he values the nice feeling from having the cheeseburger and fries right now more than possibly being thinner after four or five more months of discipline. You can dispute that judgment (I know I do) but it's not irrational. It totally is a function of what people value. People's true preferences and values get revealed through their actions. This happens all the time. And it accounts for charitable instincts as well. People can value good things or bad things.

In this context, irrationality would be, say, choosing to pay more for an item without also getting some other benefit such as convenience. There's a difference between matters of judgment, as to which people can disagree, and matters of rationality.

roachboy

that one can impute the category "rational" to an action without that action involving a conscious choice simply confirms the position i've been arguing over the last few posts.

in the example of crowds tending to break to the left, you have a regularity of action. you can say it's rational by doing what you do--inserting it into a grid or frame that makes it so. so a regularity is rational is a regularity so long as that regularity is social (as over against an automatic reflex).

but that usage of rational has nothing to do with the sense in which ace was trying to use the term, which is restricted to economic theory. it has even less to do with the traditional western philosophical notion of a rational subject.

the term's vaporous.

__________________
a gramophone its corrugated trumpet silver handle
spinning dog. such faithfulness it hear

it make you sick.

-kamau brathwaite

loquitur

well of course it's inserted into a frame. These actions don't exist independently of their contexts.

filtherton

Loquitur, I don't think that the ability to impose a rational explanation onto collective behavior is at all equivalent to showing that the actors involved were behaving rationally.

loquitur

Well, Filtherton, we as human beings have no way of understanding other people except by our observations of their actions, which are naturally affected by our own interpretations. If you assume that you yourself are rational, and that the people you interact with generally are rational as well (defined in approximately the same way as you define it for yourself, or at least within some reasonable range), then your interpretation of how others are acting will be influenced by that.

As I said, this stuff can't exist in a vacuum. People act in context, and the observers observe in their own context as well.

I just think it's a huge (and hugely arrogant) step to say that people -- more specifically, other people -- act irrationally. You're imposing your own values that way, rather than granting others the respect of their own decisionmaking. Absent mental illness of some kind, in most cases you just can't make a pronouncement that others are behaving irrationally; all you can say is that they are making a judgment different from yours.

It's like buying a lottery ticket - most economists will say it's irrational to buy lottery tickets because they have only an infintessimal chance of winning. Yet millions of people buy them. Are they all nuts? No, not at all. That's because they are not buying just an infintessimal chance of winning; they are also buying that sense of possibility and anticipation, because (as the ad goes here in NY) "you have to be in it to win it." Until the bet is lost and they toss the ticket in the trash, they have an interlude of thinking there is a chance, however remote, of ending their financial worries. I bet if you asked most lottery buyers whether they expect to win, they'll say "no, probably not. But you never know, lightning can strike." Is that irrational? Not to me it isn't. Maybe a different judgment than I would make, but hardly irrational.

filtherton

Part of the problem is that different people have different definitions of rational. I think that most people act rationally most of the time. The definition of rational that I'm using is completely subjective. I include myself in the above generalizations.

Regardless of any arrogance I may have, you still can't really credibly assume that patterns evident in group behavior are proof that members of the group are acting rationally, even if they probably are. Right? It would be a tad unconventional to observe the collective behavior that is a stampede and conclude that the animals must be rational because they all seem to be conforming to a certain pattern of behavior. Part of making good observations when your perspective is limited is recognizing your limitations and not extrapolating unnecessarily.