Thursday, May 01, 2014

Mascot of the Month - Economic Nerd Thomas Piketty

Thomas Piketty is Mascot of the Month because, well, how many nerd economists get tarred and feathered for simply presenting a studious tome about economic growth rates over the past 200 plus years.
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Mr. Piketty has become the Right’s Latest Boogie Man simply by studying and publishing historical records of the rate of the return on Wealth (including Money, Land, Production, etc.).  In a nutshell, the rate of return on Wealth is about 5%.  Absent a higher than 5% growth rate, the Wealthy will get wealthy faster than the non-Wealthy can catch up (as a group).
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His point was that previous episodes where this didn’t occur in the 20th Century, were due to War where Wealth was destroyed (cities, farms, land, housing, etc.) – or the remarkable growth rates in the 50’s and 60’s where growth was above 5%.
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The right tends to hate him because he says there is no “invisible hand” that spreads this wealth out.  His point is that unless a population changes it (through taxes) in a capitalist democracy, the rich will always get richer.
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Now the Right has been calling him a Marxist or Communist, which he has specifically said, he is not.  In fact, he is just presenting the facts.  It is the first time in history such a massive set of information has been available over the long term.
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In particular he thinks inherited wealth is a bad thing.  We in the United States used to think the same thing, with inheritance taxes of 55% after the first $ 2 Million dollars or so.  Under George W. Bush, the rich did an amazing con job, labelled this a "Death Tax" and dropped it to 0 one year  then set it at 35% after a deduction of $5,000,000.  It is now at 40% after $5,000,000.
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Some of the best summaries of this information (judgment free) is found in VOX.
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For example (all from Vox)
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I suggest you do investigation before hating on or loving on Mr. Piketty.  But I do love anyone that has the Wall Street Journal's Panties in an uproar on the Op Ec page, but singing ithe book's praises in the news pages.

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