Thom is challenging Wayne Root - Economics that Libertarians & conservatives don't understand

[thoughtchallenge]

Reagan brought to the U.S. Supply Side Economics in 1981. Since that time tax policies have encouraged investments to the point that the U.S. is now overinvested. Corps are sitting on cash, because there is no demand for new products. This overinvestment has resulted in the "head and shoulders" shape of the DOW (98,2008,2011) as well as other bubbles- housing, oil, gold etc. We need Demand policies that encourage wealthy individuals to spend their money on personal consumption not investment

[pretorious700]

Hartmann is a statist apologist who really has no idea what he's talking about. Supply and demand? It appears he dozed off after his first econ 101 class.

[MsZeitgeist85]

@pretorious700 No Thom didn't doze off in Econ 101 class he just doesn't subscribe to your school of economics. No school of economics is the universally accepted truth. Just because you are an Austrian or Monetarist doesn't mean that someone else that is a Socialist or Kensyan is an economic illiterate.

[Lightmane321]

THIS IS BRILLIANT. WAY TO GO THOM HARTMANN. AWESOME!

[bonfirejovi]

Lastly the myth of predatory pricing is a proven fallacy and has never been instituted successfully. Thomas writes extensively on that issues. I

[bonfirejovi]

Thom Hartmann is obviously ignored the massive amount of economic literature that shows that minimum wages increases unemployment, regulations increase compliance costs and therefore raise entry barriers for competing small businesses which only big businesses can meet because they have the economies of scale to bear the cost. Government creates monopolies regularly through regulation raising entry barriers, subsidies, tax breaks to the privileged entities, protectionism and tariffs etc...

[judd73]

Thom should have Peter Schiff on for a debate. Somebody who predicted the economic collapse of '08 (I wonder if Thom did?), or another Libertarian-minded person like Ron Paul.  And not just for 6 or 7 minutes. That would be a better debate.

[luvcheney1]

@judd73 Thom is a nobody, why would known people waste their time?

[luvcheney1]

Who pays corporate taxes? Customers of those corporations are the source of their income. Tax a corporation, you pay the tax. Put a regulatory burden on it, you pay it. Let a lawyer sue a corp for billions, you pay it.

[dfjpr]

@luvcheney1 Surely cost-increases can't push up prices indefinately - doesn't supply-demand theory dictate that the company already charges the highest price it can? then cost rises will have to be absorbed, because any more price increases ought theoretically to decrease overall revenues.

If this were not so, the price would already be higher, until it reaches the point of revenue maximisation.

[luvcheney1]

@dfjpr You are right, but business will react. 1) Move out of the US, as 30 OECD nations avg 24% corp tax, US avg 39%. 2) Some businesses are less efficient ,so the weakest corps die, and supply of product decreases. Less supply will push price higher on Supply and Demand curve. Result either way, less product, less jobs. Prices can rise when there are fewer competitors.

[dfjpr]

@luvcheney1

Yes I can see that corps cud arbitrage international tax. So less US jobs for sure. Of course cost-cutting is the nature of shifting production to China etc generally, which through job-loss, reduces domestic purchasing power & thus shrinks effective demand.

On (2), if weak corps die, supply will stay steady, bcs their death was caused by more competitive competition who will fill the supply gap.

Not trying to say you're wrong per say, but make it a more rounded discussion.

[dfjpr]

So I guess it could be argued that freer trade, encourages arbitrage of international wages regulation & are shrinking US GDP and jobs, but that wages are more behind this than corp tax.

And further that if the corps did not evade the tax, but actually paid it (say every country has the same 24% tax) then the cost would hav to b absorbed in profits bcs the sale price is already the highest the market can support, and any attempt to cut wages wud weaken their demand-base.

[luvcheney1]

@dfjpr Because the US has state taxes in some states, the US avg corp is 39%, while the avg of the OECD is 24%. That is 15% of profit!! Many US corps dont pay our govt taxes, because they earn profit elsewhere, paid elsewhere. So, jobs, taxes, go elsewhere.

[luvcheney1]

@dfjpr If the govt raises taxes, the weaker competitors will die, leaving enough new business for the existing companies. If NOT, then they will raise prices intil the market decides not to buy, and the weak die. Or, move the capital into a better returning area, or industry. Each way means less business, less jobs, less profit.

[dfjpr]

@luvcheney1 "If NOT, then they will raise prices intil the market decides not to buy" ... this is the bit tht cud be a bit of a straw-man, companies should be doing this in the first place, lest they wish to make inefficient profit.

"a better returning industry." corp tax applies to all industries

+ corp tax is only applicable once the corp already makes a profit, staff are tax-deductible anyway so no reason to cut there.

I guess corp tax works fine apart from international arbitrage.

[luvcheney1]

@dfjpr There are Corporations that consistently sell into the market at prices lower than the market will bear. These are very efficient corps that are on a path to ever greater market share. WalMart, for example. If taxes rose too much, they could get more if they chose to. As for all corps pay same max rate, yes. But all industries dont earn the same profit %. Groceries, WalMart, etc less than 4% of revenue. Drug corps 16%. Staff is cost, cutting costs raises profit.

[luvcheney1]

@dfjpr Many companies charge less than competitors. WalMart, Arco, McDonalds $! menu, do so to grow market share. Staff are a cost, and reducing costs raises profit. Our economy has fallen far, but corporations now presently making profits again. Why? They have jettisoned the losing parts of their corps. They are leaner now, have far less employees, and the least profitable activities are gone. I dont always agree with you, but your posts reveal you are way smarter than most folks.

[dfjpr]

@luvcheney1 On second glance I can see what you're saying, less product less jobs. I sense this is happening due to regulatory, arbirtage.

Either of some barriers to completely free trade, or international cooperation in tax-policy would be necessary to shift the tax burden back into profit levels.

Also, I don't consider that 24% corp tax wud kiil a corp; 1stly, the tax isn't due until a profit is made. 2ndly, it is only 24% of the profit.

[luvcheney1]

@dfjpr Too bad the US is at 39% instead of 24%. We are losing tax revenue, jobs by putting taxes so high, its better to leave. Labor cost is also a problem but I read somewhere the labor in a GE refrigerator (to assemble) is only 9/10ths hour. So, if an American gets $20 and the Chinese zero, it still is only an $18 disadvantage on labor. On a $700 refrigerator, that not a problem. BTW, 2 deep water American oil rigs that were in the gulf, are on their way to Africa. Never to return.

[episcospanky]

Astonishing to me that the left are as big as morons as the right.

What is this guy? - an answer to morons from the left?

I linked to this page from a The Nation site - a publication that has lost all relevance. Sad.

[jimlaregina]

Outside of Ralph Nader, I don't think anyone can shoot down a B.S. argument faster than Thom Hartmann. Mr. Hartmann refutes Mr. Root's "states with most unionized employees" comment as if he knew Mr. Root would say it in advance of the interview.

[lynchmobb2000]

Hey Wayne, let's get rid of contract law, contract enforcement and limited liability... okay... Wayne... Wayne?

[luvcheney1]

Notice at 5min, 20 secs Thom says that as small business people, we have the opportunity to "Zero Out" our taxes at years end? Wayne asks, "thats good, right?". Thom says "its entirely good". As a radio announcer, and best selling author, He might actually be rich too, but he wont pay his own taxes, and rants always about taxing the rich. He "zeros out" though.

[arcturus33333]

I don't know who has the most idiotic ideology, libertarians or republicans. When confronted with obvious truth they will try to say up is down.

[randyguitarman13]

Conservatives and Progressives are easily the "most idiotic" ideologies...

[bonfirejovi]

@arcturus33333 Actually it is Keynesians and progressives that have the most idiotic ideology. Thom Hartmann is an economic illiterate and his fallacies have been refuted numerous times. 8 months on and what do you have to say about the failure of the stimulus? Keynes, Obama, Marx are all failures as history shows. Your probably one of those ignoramuses that think Hoover is the epitome of free markets.

[seamoremonster]

Always relevant, always intelligent...at least on your part Thom.