Re: Laffer curve and supply side economics

Jim Blair wrote:

And what fraction of the world's population are they?

Less that 5% in US and less than 1% at world level. But they screw up
anybody else. As a proof that an international system of regulation must
be set up in place. Today they abuse the "free trade" to impose world
monopolies.


Maybe even strategic assets, like the controll of US strategic ports ;-)

ASIDE: I suspect Carl Rove or someone engineered this to aid Republicans
in the next election.
Just when their prospects are looking down, Bush gives them a chance to
"stand up to the President" on a National Security issue.


This is an interesting idea. Very interesting.
Politically speaking Bush is becoming a liability for GOP not an asset.
So such a move may make sense prior to elections. Let just hope it is not
going to work since GOP is a huge liability for US and for the rest of the
world.


Er, raising wages and incomes where the jobs "went".


The rise in wages there is small. However, the decrease in wages for US
middle class is going to hurt vacation destinations like Indonesia or
Thailand.

The tsunami hurt tourism there. Americans travel the world more than ever.

If you are talking about the travel betwen home and a remote workplace,
this is called commute :-)


....A lot of American middle class used to provide business for them.
Once the Americans can not afford to travel in vacation these
destinations are going to suffer. The increase in wages in China and
India is actually going to be compensated by decrease in wages in
Indonesia or Thailand.

Your prediction. The fact is that incomes have been rising in the 3rd
world for decades.
....
Actually (in the real world) incomes are up since 1980-82 for every US
income quintile.
And I assume that your (undefined) "middle class" is in there somewhere.


"""
Average incomes after adjusting for inflation actually fell from 2001 to
2004, and the growth in net worth was the weakest in a decade, the "Federal
Reserve" reported Thursday.
"""

http://news.yahoo.com/s/ap/20060223/ap_on_bi_ge/family_finances

The growth in worst is entirely due to housing bubble fueled by low interest
rates. The problem is that if the income is not going to pick up the bubble
may burst.


With the exception of uberrich shareholders in multinationals
corporations,
there are NO WINERS over all.

"over all"?? You mean over the last 25 years?

....The house prices drop ....

They have been rising.

Yes they did. But in order to pay this mortgages, population need income.
If the income is not going to pick up the bubble can burst.

That is your prediction, not a fact. I say cheaper houses would make
it easier for people to buy them.

Assuming that the average people still have money to buy.

Been to a WAL-Mart lately? Americans still buy.

They buy on credit.
And WalMart drove out a of business many mom&pop middle class retailers.


No, I assume this is reality:

http://econ161.berkeley.edu/TotW/world_income_dist.html

You repeat a mantra you do not understand (or rather you REFUSE) to
understand. And I repeat again to you.
Globalization it is not bad by itself. It actually can be very good.
Globalization is like any other tool, a knife for example.
You can not say about a knife that it is good or bad by itself. If it it
used to cut bread to feed poor it is good, if it is used to kill somebody
it is bad. No, it is not the knife faults or achievements. It is the guy
who handle it to take the respect or the blame.

This is exactly how the things are with globalization too. If you move some
jobs offshore so with money you save you reduce the poverty, the number of
uninsured and put freed people back in school to give them better jobs then
yes. The globalization can do wonders for the society.

However, if you use it in order to send more people in poverty to increase
the number of people unable to afford health care and to teach children
that the education is a liability rather than an asset then it is going to
be bad. Very bad.

Especially since this last model (beside social issues) it is unsustainable
from economic point of view. There are 2 reasons a person limit his
consumption:
1) affordability. He can not afford to buy what he can consume.
2) necessity. He already have everything he can consume.

If you move money from 1) to 2) the consumption it is actually going to
decrease. On long run, the economy is going to become unsustainable when
due to debt accumulated a lot of 1) won't afford to buy even cheapest goods
produced offshore.

This is what I am talking about. I am not against globalization itself, but
I am against the corporate robbery. And this new form of transnational
organized crime it is not going to help anyone on the long run.

We need regulations and we need to increase corporate taxes to finance
our progress. This is what I am talking about.


....We are talking about robbery
without borders.

That is what YOU see, I see a richer and more equal world.

Where ? I see otherwise.

I am looking at earth. Where are you looking?

I am looking at US.


and their economies will collapse too. Keep in mind I am not talking here
about smtg. that is going to happen tommorrow. But in a decade or so.

And how is your track record on predictions? "The Republican Party is
done" on the eve of their biggest election wins ever.

I didn't make such a prediction. YET !!!
However it is over due to be fullfilled :-)
They deserve to go into the trashcan of history where their obsolete
ideology belong.


.

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