Found here. My Comments in bold.
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Economist Robert H. Frank says the rich would be better off — and so would the rest of us.
As part of our election series focusing on the issues that aren’t getting the attention they deserve in campaign 2016, we talked with Cornell University economist Robert H. Frank about how to address growing income inequality in the United States. (Is there any doubt that increasing taxes will be the answer?)
Economist Robert Frank is arguably the country’s leading expert on wretched excess.
Over the course of a four-decade career as a distinguished academic (he has written several college textbooks, including one with former Federal Reserve Chairman Ben Bernanke), the Cornell University professor has developed a curious subspeciality: Studying the lifestyles of the filthy rich and spectacularly successful.
His anthropological field guides to life among the extremely affluent, including Luxury Fever and his recently published Success and Luck: Good Fortune and the Myth of Meritocracy, have led him to one conclusion: The 1 percent are a problem. But not necessarily for the reasons you might think.
The reason the nation’s wealthiest have become a menace to the commonweal, Frank has concluded, is not because of how much more they make than the rest of us. It’s how much more they spend. (This is an incredible statement. How many times have we heard about the greedy rich hoarding their money? How many times has the Left declared that the rich don't create jobs? How many times have we heard that the rich need to be punished for not doing the right thing with their money?
But now we discover that none of these leftist talking points are true. That in fact the rich DO spend their money. They DO buy stuff, which has to be made by someone. They DO spread their money around. And this all is somehow a menace to society. I can't wait to find out why.)
For a society that has consumers (as opposed to private investment or the government) to thank for two-thirds of all its spending, that considers the Consumer Confidence Index a key measure of economic health, what Frank has to say might be regarded as unconventional, if not downright heresy. He prefers the term “radical pragmatism.” (Yes, indeed. Contravening the leftist narrative is heresy, and it is risky to violate the talking points. Amazingly, the professor not only avoids being burned at the rhetorical stake, but is commended Ms. Kiely. How does he pull this off?)
It’s not that Frank is a dour socialist who wants to completely level the playing field. (Hmm. An admission that leveling the playing field is actually an effort to impose socialism. If you let a leftist talk long enough, the truth about what he believes will eventually slip out.)
Let the rich have their baubles, he said. Just impose reasonable limits, and keep the rest to make investments that will benefit everyone. (Waaait a second. What constitutes "reasonable limits," and on what basis is this decided? Can you imagine the chutzpah of this? An outside party determining what is a reasonable amount of your money you can have for yourself?
And what about this "keep the rest" thing? The professor appears to believe that the government has the money first, doles out to people a "reasonable" amount, and whatever is left over belongs to it. However, that money belongs to the person first. The government inserts itself into the private financial affairs of people and simply helps itself to as much as it wants. There is nothing reasonable about this.)
“Who’s happier? A guy driving a $300,000 Ferrari on roads riddled with foot-deep potholes, or somebody driving a $150,000 Porsche 911 Turbo on well-maintained roads?” reasoned the professor, (OMG. Now it seems the government is the facilitator of happiness, and thus it is justified to "keep" more money so that the rich person will be happier. Apparently the rich person will not be able to afford the Ferrari but can buy the Porsche. Because the government has kept a "reasonable" $150,000 and spent it on roads, happiness abounds.
This is insane. But I guess we should be thankful for this little peek into the mind of a totalitarian who thinks government should mete out peoples' money as it deems appropriate, and ensure happiness by directing the buying choices of its citizens. Unreal.)
whose reed-thin physique suggests a long-distance runner, but who described himself as an unredeemed “car buff.”
Ultimately, given the advances in technology that is replacing humans in even complex jobs, Frank said in an interview with BillMoyers.com, the next president may want to consider an even more radical method of sharing the wealth: A guaranteed income and a broad public works program that would subsidize displaced workers to take on socially useful tasks like planting green spaces, transporting the frail elderly and assisting in day care centers. (Radical, indeed. Constitutional, no. Practical, no. Doomed to fail, yes. Tried before in other places with no successes, yes. Empowers government to be our nanny, yes.)
To Frank, the real source of the middle-class squeeze and much of the anger in the year’s presidential campaign, is both a matter of hard facts and human psychology.
The facts are that globalization and technology have promoted “winner-take-all” economies in which “winners” are able to completely shut out people and companies whose skills (or luck) and products are just marginally less than their own. That has led to “an enormous concentration of economic rewards,” Frank said.
The psychology is that when we humans have it, we like to flaunt it. Among the super-wealthy, Frank said, has triggered a “spending cascade” that forces people further down the income ladder to work more and more hours or go deeper and deeper into debt to keep pace. Call it trickle-down consumerism. (Is this the way you live your life, dear reader? Do you see the rich buying Ferraris and yachts and feel the uncontrollable urge to keep up? Do you ramp up your spending to unsustainable levels because the rich are spending their money? No? Me neither.
The professor's hypothesis is absurd. If anything, peoples' lifestyle choices are based on mass media programming which is beholden to leftist politics. Comedians are preachy, movies are laden with the leftist agenda, advertising tells us what the beautiful people do, and news shows continually reinforce leftist truth. And politicians try to force us to do their bidding by manipulating taxes and the law to achieve desired outcomes.
But the professor blames the rich, that is, people we don't know and have no contact with.)
Whatever you do, just don’t call it keeping up with the Joneses on steroids. Frank finds that too judgmental. (And we know how leftists hate to judge. Interestingly, the professor judges those who he finds "too judgmental.")
The reason the median family is spending 50 to 75 percent more to buy a house that’s at least 50 percent bigger than the ones they bought in 1970, or proud parents are spending more than three times as much on weddings than they did in 1980, Frank says, has less to do with envy or status-seeking than what he calls “context.”
To explain, Frank recalls a house he lived in when he was a young Peace Corps volunteer in rural Nepal. It had two rooms, no plumbing and no electricity. “Never once during the two years I lived in that house did it ever occur to me for an instant that the house was unsatisfactory in any way,” he said. (Hmm. The professor now projects his tastes and ways of thinking to the rest of us. Because something never occurred to him, then that something should never occur to us.)
But he acknowledges, “if I lived in a house like that in Ithaca,” his home town in upstate New York, “it would have been shameful… a clear signal that I’d failed in some spectacular way to meet even the minimal expectations of society.” (So we should be happy according the professor's expectations as opposed to our own. And the fact that we aren't is apparently the fault of the rich.)
Yes, on one hand, what Frank is describing is classic peer pressure. “There’s a sense in which people are a prisoner of what others do,” he said. But, he added, the consequences of not meeting the minimal expectations of society can be very real: “The better schools are located in the neighborhoods where the houses are more expensive,” he said. So middle-class families “bid up the prices, of course, in the better school districts.”
But if he believes “you can’t escape context,” Franks also is convinced that “it’s a problem we can solve politically.”(No, it's not.)
How his proposed “ steeply progressive consumption tax” would work: (Yes, of course. We always knew it would be increased taxation on the eeevil wealthy.)
Taxpayers would report to the IRS how much they made and how much they saved. The difference is their consumption. Frank envisions a “big standard deduction, say $30,000 for a family of four” that would mean “people in the bottom half and slightly above would pay no more tax than they do under the current system.” (This amounts to lifestyle regulation. The professor thinks that government should make choices about peoples' lifestyle, steering them to certain behaviors via taxation. The professor tries but fails to make it sound reasonable, but the totalitarian bent of the Left is hard to disguise.)
“Once your consumption goes beyond a certain point, though,” he said, “the rates begin rising.” How much? “Let me not frighten you,” Frank hesitated, evidently forgetting his context (speaking to a journalist). “But I’ll say, suppose it were 100 percent for people consuming already $5 million a year or more, what would that mean?”
It would mean the $1 million yacht might cost the purchasers $2 million. Or the $10 million New York City penthouse suddenly gets a price tag of $20 million. Frank doesn’t think it will stop luxury spending. But, he predicted, “By making additional purchases for people at the top of the ladder much more expensive, that would steer money out of those purchases and into savings and investment.” (We must now conclude that the professor is ignorant. He began by telling us that it would be better for a rich person to buy a cheaper Porsche than an expensive Ferrari. Now he tells us that maybe the Porsche isn't a good thing either. Apparently the government should have the power to "steer money" to its preferred places.
Too bad for the factory workers who make the products in question. I guess they'll be out of a job. The rich guy was "steered" into "investments," which is somehow better. The rich guy is now incentivized to buy stocks in companies rather than the products of those companies. So all these rich people will stop buying products, and the stock they were encouraged to buy will fall because the companies are selling less product.
Left unexplained by the professor is what the companies do with the money they received via the rich man's investment. Do they just sit on the money, or do they buy things with it?
If that all makes no sense to you, join the club.)
In 1980, Frank said, the average expenditure for a wedding was $10,000; last year, $31,000. (There is mounting evidence that the professor is incompetent. Does he not understand the effect of inflation? It's an easy matter to calculate the buying power of 1980 dollars as compared to 2016 dollars. When adjusted for inflation, there is very little difference.)
“Nobody thinks the people getting married who are spending $31,000 are happier,” he said. “In fact there’s some evidence that they are less happy because the extra debt they take on creates problems for them.” (There's the professor worrying about happiness again. He seems to really believe that his big government plans will make people happier.)
It’s not that he’s looking to put florists out of business, but Frank argued, “florists and gratuitously expensive weddings aren’t inherently a better form of employment than people planning landscaping in public spaces. There are lots of things we could do that would generate employment that I think people would value more highly.” (More social engineering. The professor really thinks it's a good idea for government to decide what is valuable work and what isn't. This has always failed, because socialism must fail. Government central planning has always failed because it always dictates according to its objectives. This makes the people serve the government instead of their own private objectives.)
Top on his list: Improved infrastructure. Noting that the American Society of Civil Engineers estimates the cost of the overdue maintenance at $3.6 trillion, he said that should be the top of the nation’s agenda. (That is, government has failed to maintain our valuable capital assets, so let's reward it with more money.)
Further down the road, Frank said, the next president may need to focus on growing “concern that new advances in AI — artificial intelligence — are putting people out of work who never thought they’d be automated out of their jobs.” As an example, he cited radiologists. That’s causing economists like him to have doubts about whether the labor market will continue to create enough new jobs to replace the ones that innovation destroys. (Now we discover the professor is a luddite. He thinks that technology is taking away jobs. And because of, this, I'm sure he wants more government intervention.)
“We’ve started to hear now even conservatives calling cautiously for a basic income guarantee,” said Frank, (And there it is. Because AI is coming, radiologists will be out of jobs, and thus we need a basic income guarantee.)
who recommends that it be “too small to [allow people to live] wholly at taxpayer expense,” but able to be supplemented with low-income jobs “in the old tradition of public works employment.” (Sounds a little like welfare, doesn't it? Because you can keep getting welfare if you don't make to much money. This has the effect of keeping people on the dole because there is a disincentive to actually have a good paying job. They lose their benefits, so they choose to stay in minimal and menial jobs .
So the author's "American Dream" is subsistence living. No hope, no future, nothing but a minimal existence. All of this thanks to a graduated punishing sales tax on the rich.)
“A good life can never be had with just private consumption,” he said. “You need good schools, you need good roads, you need safety features to keep people from harm. And those expenditures contribute to well-being too.” (Yeah, people never had good lives until infrastructure came about. Hooray for infrastructure!)
Frank doesn’t expect his recommendations to come to fruition overnight. (No, the socialist is perfectly content at revolution by increment.)
"This is not a natural way for people to think about things,” he said. (Ah, there we have it. Socialism is not natural. It is foreign, it is contrived, it is controlling and expects to be served rather than to serve. It is contrary to human nature. It is evil.)
But, he noted, other once-unthinkable things, such as a tax on carbon consumption and legalized gay marriage, gained rapid acceptance once they had gathered momentum. “Things happen incrementally until they don’t,” said Frank. “Revolutions, when they come, are never widely predicted.” (Sorry to steal his talking point. I wrote my point before reading this last paragraph.
The professor happily admits that it's an incremental revolution, which always means the old order (America, limited government, constitutional guarantees, freedom of choice and personal liberty) must be abandoned in favor of the proletariat overthrowing the bourgeois.
And it has to be incremental, because otherwise socialist revolutions tend to get bloody.)
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