WHY ACTRESS JENNIFER LAWRENCE WORKS AS AN ACTRESS AND NOT AN INVESTMENT BANKER

Actress Jennifer Lawrence tried to boost her image through a feminist pandering diatribe back on October 13, 2015, titled Why Do I Make Less Than My Male Co‑Stars? Suggesting herself as a naif, Lawrence wrote, 

"When the Sony hack happened and I found out how much less I was being paid than the lucky people with dicks, I didn’t get mad at Sony. I got mad at myself. I failed as a negotiator because I gave up early."

Wages arise from capital. Where there is no capital, you never find wages (parts of Africa). Where there is high capital per worker, you find high wages (surgeons). Where capital is lower per worker, there are low wages (China, India) [See: SOPHIE'S CHOICE OF CAPITAL OR LABOR. A FREE-MARKETS LIBERTARIAN BECOMES AN ANTI-CAPITALIST AND PERPETUATES AN ECONOMICS MYTH].

Every movie print distributed is capital. When a movie print gets shown, a movie showing becomes wealth sold for the wealth in cash or other bank credit in such purchases and sales.

Where there are more copies of the same movie distributed, there is more capital supporting more showings. 

Among the world of movie goers, consumer preferences expressed in sales of cash or other bank credit for movie showings reveal some kinds of movies sell better than others. Those movies have more prints distributed (capital) and to the contractors (actors) who produce the work of those movies get higher payouts.

Jennifer Lawrence earns substantially more than Steve Buschemi or a 
James McAvoy precisely because distributors can make and sell more prints (capital) of the same Lawrence movie over a Buschemi or McAvoy movie. Yet, no one seems bothered by that reality.

In addition to more prints, those movies that have the highest sales worldwide, typically take more capital (special effects, the work of technicians, specialized cameras) to produce. Hence earnings are higher across the board for contractors (actors) in those movies. 

Worldwide, owing to biologically-driven culture — codified laws, codes of conduct — the law of averages reveals that male and female movie goers prefer seeing men doing the action of movies. Subsequently, actors get more screen time and dialogue time than actresses. Thus, actors are producing more capital each movie relative to actresses.

There is no conspiracy whatsoever why actors earn more than actresses on average. Why Jennifer Lawrence doesn't understand these matters likely is why she works an actress and not an investment banker.

Between August 2014 and August 2015, Lawrence, the 25-year-old Hunger Games actress banked $52 million pre-tax over 12 months to be the best paid actress. Lawrence earned $16.5 million more than second-ranked Scarlett Johansson ($35.5 million) precisely because Lawrence's movies had wider distribution (more capital).

Likely, Lawrence would never acknowledge she earns much more than most actresses and actors for that matter precisely because she is one of the lucky people with pretty faces and one of the lucky people with relatively fit bodies. 

Read more ...

WHEN IT COMES TO POVERTY, STUPIDLY, BILL GATES REVEALS HIS IMPOVERISHED BELIEFS.

Watch Bill Gates expose his stupidity before the world in this quickie interview given to Bloomberg TV.





Gates commits the fallacy of assuming the point when he claims, falsely, that "everyone believes in ... progressive taxation."

Calling something progressive is a rhetorical trick designed to deceive. After all, who could be opposed to something that suggests advancing? It's an idea borne from the Progressive Era with its adherents believing in a neo-socialism.

Rightly, it should be called exponential rate taxation.

Gates blathers the canard of public education and public medicine as the saviors of those impoverished. Never in the history of mankind has either eliminated poverty.

If Medicaid (Congress pays the bills for the poor) eliminates poverty, then why are there more Americans in poverty by head count than in anytime in the history of the USA?

Almost every year, there is record true public spending on education. If education were key, why has poverty never been eliminated?

Gates might be a mega billionaire from selling second-rate software through shoddy business practices, but that doesn't mean Gates is smart about everything. Gates is so stupid on the subject of poverty that he doesn't know 63% of households in the poorest fifth of America do not work.

It should be clear that with work comes income. Relying on meager welfare as income isn't going to lift anyone from poverty.

If members of Congress were serious about reducing poverty, they would 1) restrict immigration; 2) eliminate income taxation; 3) tax sales of extant property (right of ownership) at much higher rates than the sales of new property, whether as capital or as wealth.

As I showed you in SOPHIE'S CHOICE OF CAPITAL OR LABOR. A FREE-MARKETS LIBERTARIAN BECOMES AN ANTI-CAPITALIST AND PERPETUATES AN ECONOMICS MYTH, 1) wages arise from capital, 2) when there is an abundance of labor, there is little need for capital and thus wages are low.

Heed my dictum. Labor makes property. Capital makes property efficiently. 

Entrepreneur-adventurers only can use capital under increasing returns.  The permanent use of capital arises only under increasing returns whereby application of capital yields a proportional increase in output.

Without capital, there is little reason to organize workers. Without capital, everyone lives at bare subsistence.

And yet, here is Bill Gates, a supposed genius, advocating for Americans to erode their property through progressive taxation. Had Gates only read CAPITALISM. BECAUSE WITHOUT IT, YOU WOULD BE LIVING AS A BARE SUBSISTENCE SAVAGE, Gates might learn something about poverty and capitalism.

Wrongly, Gates believes that vaccinating every African child will miraculously lift Africans from poverty. The fix for African poverty does not lie in vaccines. Africans need what has lifted everyone else from poverty during the history of mankind:

• potable water and sewerage to inhibit most communicable diseases
• a futures market for food stuffs to insure a steady supply of food
• property, which is the individual's right of ownership
• putting property to purpose as capital under efficiency to produce wanted surplus for trade in purchases and sales as wealth

Gates suffers from the disease of the meddler and the delusion of being right merely because he became rich through capitalism.  It seems as if Gates has not done any serious investigating and thinking about reality. Instead, merely by being rich, Gates wants to impose his false beliefs upon the rest of mankind.

Gates yields for us a perfect example of the source of suffering among mankind. To the marrow, the cause of suffering arises from these:

• a desire for others to live to one's beliefs
• doing something about it

It matters not the scale, whether politicians despising the leaders of another country and amassing armies to do something about it or the squabbling of a husband and wife because one insists the other live according to the way he or she demands.

Disabuse yourselves from the foolishness of Bill Gates by reading many works on the subject right here on Bizarro Theater:

• POVERTY AND ENVY
• IT'S TALENT DIVERSITY AND NOT INCOME INEQUALITY
• THERE IS NO SUCH THING AS INCOME INEQUALITY
• OBAMA'S INCOME INEQUALITY SCARE STORY EXPOSED
• SPREADING WEALTH, INCOME INEQUALITY AND OTHER MANURE

Read more ...

OBAMA'S INCOME INEQUALITY SCARE STORY EXPOSED

Mark J. Perry, full professor of economics University of Michigan, Flint, shared a smart piece on Seeking Alpha (account needed) today on income inequality. I've written about income inquality before.

In short, the phrase income inquality makes for great political rhetoric precisely because almost all have an innate sense of 50-50 fairness. That said, income inequality is a bogus concept.

Anyway, Mark Perry shared this table which pulls back the curtain from all that hot air political rhetoric.



What jumps out is 63% of households in the poorest fifth of America do not work. Well, it should be clear that with work comes income.

As can be seen, Americans become (moving toward the highest fifth), richer when they work. The richest households are those where almost everyone in the household works.

As one moves toward richer households, one finds households consisting mostly of marrieds who are middle age with at least a bachelor's degree.

Of course, when guys like Obama take to the podium decrying income inequality, they fail to talk about the effects of rampant immigration upon working age population. Also, guys like Obama fail to talk about how much welfare those in the lowest fifth receive.

To see the effects of immigration on wages, read YET ANOTHER EMPEROR'S NEW CLOTHES JOBS REPORT DURING THE GREATEST DEPRESSION OF ALL-TIME and SOPHIE'S CHOICE OF CAPITAL OR LABOR. A FREE-MARKETS LIBERTARIAN BECOMES AN ANTI-CAPITALIST AND PERPETUATES AN ECONOMICS MYTH.

Also, Obama fails to mention that GDP has not grown during his presidency, but in fact has fallen almost every quarter save a couple way back in late 2009 and early 2010. To see this, read THE SECRETS OF AUTOMATED CLEARINGS, GDP AND THE ECONOMY. RECOVERY? WHEN?

Read more ...

MINIMUM WAGE IS AT AN ALL-TIME MINIMUM. IT SHOULD BE $20.12 AN HOUR, IF ...

Americans have reached a bad state when it comes to wages.

In PRICES HAVE BEEN FALLING FOR YEARS! INFLATION? MAJOR DEFLATION HAS BEEN UNDERWAY SINCE 2007. SO WHY DOES LIFE SEEM HARDER? THE ANSWERS ARE COMING NEO, I show the chart socialists and politicians don't want you to see.

Here it is, again:




Likely, this is the most important chart ever you shall see published regarding economy.

The chart says that true wages, or "real" wages if said by economists have been falling for years in lockstep because capital spending per prime age worker, those between 25 and 54, has been falling.

Contrary to what many believe, wages rise when capital rises. Wages are a consequence of producing wealth under efficiency. The more wealth produced and gained by each worker, the higher wages would rise. 

Socialists and other pro-labor agitators don't want you to know this because it  slays their dragon of trickery.

Capital spending increases when labor becomes pricier. Yet, when labor becomes abundant, capital spending falls. Since 1980, wages have fallen 41% and capital spending has fallen 49.5%. Not so coincidentally, the head count of prime age workers has risen 45.27%, a massive increase driven by immigration and descendants of recent immigrants.

In ELECTRICITY PRICES. SHOCKING, ISN'T IT? THANKS, NIXON, I tell of then president Nixon closing the gold window and thus decreeing the dollar no longer could be redeemed for gold. Before Nixon did so, 35 dollars bought one ounce of gold, by law. Today, the Federal Reserve note dollar buys the same as 9 cents of one gold-backed dollar did before Nixon slammed shut the gold window.

Let's have a look at the true minimum wage priced in True Dollars™.

In 1971, a minimum wage job paid $1.60 an hour. Today's true minimum wage is a measly 63 cents.

So today's minimum wage is 39.5% of the 1971 minimum wage. Today's minimum wage has fallen 60.5% from the 1971 minimum wage and 64.2% from the peak true minimum wage of 1980.

Back in 1971, my much older brother could afford car payments on a new Ford Pinto on his McDonald's fast-food job while working through his senior year of high school.

If we take the average of the true minimum wage in every year the minimum wage raised by law, that average would be $1.33. Today's minimum wage has fallen 52.3% from that average of $1.33.

To equal the average minimum as calculated above, in today's gold-less dollar, the minimum wage would need to be $15.19. To equal peak minimum wage set in 1980, today's minimum wage would need to be $20.12!

In BUT IT IS FOR INEQUALITY! AT WHAT POINT DO PEOPLE STOP EXPONENTIALLY DOUBLING DOWN ON STUPIDITY?, I called for an end to minimum wage as well as an end to specific welfare. The combination of minimum wage and welfare amounts to a subsidy to employers whose capital structure gets predicated on using minimum wage workers on the whole.

As no one would work at a loss (wages - living expenses), would-be workers would reject all wage offers at less than break even. 

So the right move is the end minimum wage laws and all political interference in trade. Another right move would be to restrict immigration for the next 10 years and perhaps longer. 

If the Congress would evict the 20 million or so illegal aliens residing in the USA, a significant chunk of the pool of low wage bidders would be erased. That would go far to pressure wages upward for no-skill workers.

You can't end poverty merely by giving people welfare. It doesn't work. Think about it. Poverty exists even though there is TANF, SNAP, Section 8, Pell, Medicaid, Medicare and so on.

There are no means by which living standards can better that do not involve the increase in wealth per capita of prime age workers. To discover how to make increasing returns to capital is to solve the problems of poverty and lowering living standard. 

For those who doubt the connection between capital spending and wages even when shown to their eyes as above, Miha Zupan tells the story of rapid rise of Koreans.

Read more ...

THOMAS PIKETTY, REVIVALIST PREACHER OF BORN-AGAIN SOCIALISM. THE SECOND GREAT AWAKENING OF SOCIALISM HAS COME TO AMERICA

Socialism Revivalist preacher Thomas Piketty has written the new millennial age bible for crypto-socialists everywhere luring them from the shadows to the new socialist church.

This Second Great Awakening of Socialism is sure to stimulate reformers seeking to remedy the evils of society, which they believe capitalism drives, as they strive to usher in their anticipated Second Coming of progressive Utopia.

This Second Great Awakening, this socialist resurgence could alter life, worsening life for working Americans unless stopped.

Already we have seen mass-scale camp meetings such as Occupy Wall Street. Those who flocked to Occupy Wall Street listened to revivalist oratory and sang hymnody. Many unwitting Americans who watched on their taxpayers' financed, welfare-funded, big, flat screens have been converted to socialistic thought through this enthusiastic preaching.

Second Great Awakening socialist revivalists pull chapter-and-verse from their playbook of trickery railing against purported evils of capitalism, damning capitalists and crying for mercy for all of the down trodden workers and welfare needy-greedies.

Piketty has become the Henry Ward Beecher of the Second Great Awakening of Socialism, luring many to come forth and become worshippers, baptized into a Born-again Socialism.

Piketty's Postmillennialist socialism theology is a call to purify society of capitalism as preparation for the return of Socialist Utopia. This is why Piketty calls for Progressive reforms.

Yet, Piketty's demonic false religion is easily exposed, which I have done in these:

• Thomas Piketty, 696 Pages Of Foolery Destroyed In Less Than Five Minutes
• Ut Oh, Someone Better Tell Thomas Piketty About L > G Too
• More Bad News For Thomas Piketty P > G Too!

SERMON OF THE PAST DEVOURS THE FUTURE

Piketty preaches a fire and brimstone sermon of "the past devours the future." Piketty strives to seduce the minds of seekers with such phrases as 

"A market economy based on private property, if left to itself, contains powerful forces of convergence, in particular with knowledge and skills; but it also contains powerful forces of divergence, which are potentially threatening to democratic societies and to the values of economic and social justice.

"The principal destabilizing force has to do with the fact that the private rate of return on capital, signified as "r", can be significantly higher for long periods of time than that rate of growth of income and output, as signified by "g". 

"Hence, since inequality r > g implies that wealth accumulated in the past grows more rapidly than output and wages, this inequality expresses a fundamental logical contradiction. The entrepreneur inevitably tends to become a "rentier", more and more dominant over those who own nothing but their labor. Once constituted, capital reproduces itself faster than output increases. i.e. the past devours the future."

Few know that Piketty stole his now famous line from the late 19th century-early 20th century French philosopher Henri Bergson (1859–1941) who said, “The pure present is an ungraspable advance of the past devouring the future." 

Bergson is the guy who believed in élan vital, an invisible force that could be harvested, embedded into an inanimate thing, and activated with electricity to create life!

But is it true? Does "wealth accumulated in the past" that becomes capital devour wages and output? It turns out, this is the central contradiction of Piketty rather than capitalism.

According to reality, rather than hoarding their wealth, rentiers take their year before return, levering up their wealth to create more capital, putting their wealth at risk!

In short, the present creates the future! And that is what capitalism and credit is all about. 

In 77 of 84 years, rentiers — landlords and dividends earners — for every $1 rentiers earned, spending on capital rose by more than $1 in the following year. In 69 of 84 years, spending on capital by entrepreneurs — farmers and proprieters — rose by more than $1 for every $1 earned. 

In short, through the genius of credit, capitalists leveraged their wealth to bring forth capital into the now. This is how an economy grows.

Credit is expected profits of the future embodied in property. Thus, credit is a kind of conditional property. Credit embodies estimates of prices for future sales and prices for future outlays.

Credit arises from worthful rights, rights to existing goods, rights to expressible services, rights to future profit should such materialize. The one who extends credit, in truth, buys a right of action against the borrower for a preferential share of profit, should profit materialize.

Reality reveals the irreality of the socialist revivalist preacher Piketty. The irony of it all is that Piketty preaches heresy relative to the reality of trading property for profit, but his preaching gets absorbed as orthodoxy as standard academia economics.

Read more ...

MORE BAD NEWS FOR THOMAS PIKETTY P > G TOO!

In UT OH, SOMEONE BETTER TELL THOMAS PIKETTY ABOUT L > G TOO, I show how the growth in compensation to labor often outstrips the growth in the economy.

In THOMAS PIKETTY, 696 PAGES OF FOOLERY DESTROYED IN LESS THAN FIVE MINUTES, I show the deep flaws in Piketty's thought, flaws of false premises leading himself to false conclusion.

Now, I reveal the latest bombshell.

Piketty writes his doomsday pronouncement as R > G by which he means "the past devours the future." Other than being French, socialist-leaning and an academician with no business experience, Piketty believes that if the return to capitalists grows faster than the economy, we're all dooomed.

What Piketty fails to get is that capitalists get paid from profits, after all other bills get paid, including taxes to politicians and wages to workers.

Piketty doesn't get this inescapable fact of reality precisely because he is an academician who lives in the pretend world of economics rather than being a man of commerce and industry who lives in the reality of trade.

So what is the bombshell you ask? Ready?

Riffing off Piketty's inequality, I have shown the return to laborers often grows faster than the economy, or L > G.

And now I give you, P > G! That's right.

Here is the year-over-year growth or decline in GDP, compensation to laborers, return to capitalists and spending by politicians. As you can see, in the early years, spending by politicians outsized the economy to such a degree, the rest of the chart is hard to read.





And here is the chart of the same data transformed by log scale so all can better see what is going on.




In 41 of 85 years since 1929, spending by politicians using taxes to fund borrowed cash and credit has grown faster than the economy. Written Piketty-style, P > G.

In 26 of 85 years, spending by politicians grew faster than the economy while compensation to laborers grew slower than the economy! In 23 of 85 years, spending by politicians grew faster than the economy while return to rentiers grew slower than the economy.  Even worse, in 27 of 85 years, spending by politicians grew faster than the economy while return to entrepreneurs grew slower than the economy!

In a whopping 83 of 85 years, spending by politicians as a share of GDP was bigger than either the share of GDP returned to rentiers or the share of GDP earned by entrepreneurs. You would have to go all the way back to 1929 - 1930 for when pols spent less that rentiers or entrepreneurs earned.

You would need to go back all the way to 1951 for when the last time politicians spent less as a share of GDP than capitalists earned.

Once again, during the Reagan-Clinton prosperity (1986-1999), when spending by politicians grew much less than the economy, the economy boomed a prosperity came to all.

And once again, Piketty's pipe dream of more taxation and more spending by politicians would be poison rather than medicine.

For more on the Reagan-Clinton prosperity, check out PARTY OVER OOPS OUT OF TIME. YOU SHOULD HAVE PARTIED LIKE IT WAS 1999.

PIKETTY, THE USEFUL IDIOT

Piketty wants to curtail capitalism, remove competition among capitalists in their fight to buy shares of profit from entrepreneurs. Piketty wants to make it easier for the biggest capitalists who would remain standing in Piketty's Dystopian future masquerading as Fairness-Rhetoric Utopia.

If Piketty were to get his way, the western world would move ever closer to a neo-fascist, neo-feudal system. Individualism and freedom would at long last get crushed by the power elite.

Piketty is dangerous, especially dangerous to the wage-earning working man.





For the other articles which school Piketty, read

UT OH, SOMEONE BETTER TELL THOMAS PIKETTY ABOUT L > G TOO

and

THOMAS PIKETTY, 696 PAGES OF FOOLERY DESTROYED IN LESS THAN FIVE MINUTES.

Read more ...

IT'S TALENT DIVERSITY AND NOT INCOME INEQUALITY

The world has those of good and those of evil. The facts are the same for both. 

What you weigh as worthy of you gives to you your perspective. To look at the world seeing but evil is the art of pessimism. To throw evil into the background is the art of optimism.

To see income inequality is to live as the pemissist. To believe others tell you that income inequality is evil is to fall a trick of those who are in evil themselves.

Rightly, there is talent diversity and it is from talent diversity that income inferiority arises. 

As I have spelled out before, there is no such thing as income inequality.

Talent is will one has to trade the skills one has for cash and credit in a purchase and sale. 

Most never discover their talent and by that all should understand that most never discover the skills they have nor the skills they could get, which they would be gung-ho willing to trade for cash and credit.

All recognize the talents of Robert Downey, Jr., Hugh Jackman, Lady Gaga, Justin Bieber, Taylor Swift . Almost no one questions why these talented entertainers should earn $75 million (Downey), $55 million (Jackman), $80 million (Gaga), $58 Million (Bieber), $55 million (Swift) [see Forbes here and Forbes here ]. 

Yet when the shareholders of the firms that hire the likes of Downey, Jackman, Gaga, Bieber and Swift, earn millions, most decry such as evil capitalists.

If you lack talent and if you believe that talent is born, then you need only look to the genetics of your parents. If you are lacking talent, then it's your parents' fault, your grandparents' fault, their parents before them and thus all of your ancestry.

If you lack talent and you do not believe that talent is born but rather comes from focused effort, then you need only look to yourself. You alone are to blame for your income inferiority.

If you have what you believe is talent but few are willing to bid high enough to buy your talent in a purchase and sale, you can delude yourself and blame everyone in society of property, which is the only society that strangers can form, for failing to see and appraise your talent according to your self-deluded fantasy.

Or, you can (wo)man up, stop having a sook, and set yourself to work acquiring talent that others are willing to buy at high prices in purchases and sales. 

However, if you agitate in a mob to have income inequality turned into an equality by force, leveraging government for one's friends and oneself at the expense of others, you become a teeny tyrant, differing only by degree but not by kind from Leopold II, Hitler, Mao, Stalin, and Pol Pot.

It's immoral to force people to comply for whatever the cause, no matter how noble sounding. 

For more on the Religion of Inequality preached in the false churches everywhere, read other fine articles right here on Bizarro Theater.

Read more ...

UT OH, SOMEONE BETTER TELL THOMAS PIKETTY ABOUT L > G TOO.

Thomas Piketty has rallied every crypto-socialist living in the western world today with his 696-page doorstop, Capitalism in the 21st Century.

Piketty has produced a veiled attack against capitalism by attacking capitalists. How did Piketty do it?

Piketty believes that if the rate of return earned by capitalists exceeds the the rate of growth of an economy, we're in trouble. To quote Piketty, "the past devours the future." 

Piketty writes his doomsday pronouncement as R > G.

Already, I have dismantled Piketty's lame argument in THOMAS PIKETTY, 696 PAGES OF FOOLERY DESTROYED IN LESS THAN FIVE MINUTES. So let's have some more fun with Piketty.

Interestingly, we could examine the return to laborers relative to GDP. We could call the return to laborers L.

So, let's put Thomas Piketty's theory to the test.

Lest someone decry that I have cherry-picked the data, this is how far back the records go courtesy of your friendly neighborhood Bureau of Economic Analysis of the Department of Commerce.

Capitalists have been defined as farmers, proprietors, landlords and those receiving dividends. Mind you, capitalists were restricted to merely landlords and those receiving dividends, then the share of GDP to capitalists would be much smaller still.

Laborers are those receiving compensation as employees in the form of wages, salaries and supplements to wages and salaries.

First, someone should tell Piketty, that every year since 1929, the share of GDP going to laborers has exceeded the share going to capitalists.





Here is the year-over-year growth or decline in GDP, compensation to laborers and return to capitalists. Whenever the red line is above the blue line, the growth of compensation to laborers growing faster than the growth of the economy. Likewise, whenever the orange line is above the blue line, the return to capitalists is growing faster than the growth of the economy.

In 83 of 85 years, the sum of compensation to laborers consisted of 50% of GDP or greater.


 


For private sector labors, in 37 of 85 years since 1929, L_p > G. For capitalists, in 40 of 85 years since 1929, R > G. 

Now let's have a look at capitalists if we break out "rentiers" and entrepreneurs. Rentiers are landlords and those getting paid dividends, or those living on income from investments. Entrepreneurs are those who own farms and businesses.

Again, as above, the red line is above the blue line, the growth of compensation to laborers growing faster than the growth of the economy. Whenever the the orange line is above the blue line, the return to capitalists is growing faster than the growth of the economy. the green line is about the blue line, the return to entrepreneurs is growing faster than the growth of the economy.

Likewise, whenever any of those lines fall below the blue line, the economy is growing faster than returns to the respective "classes."

After breaking out R into rentiers and entrepreneurs, both rentiers and entrepreneurs lose a year when returns to either exceeded growth in GDP. Said another way, only in 39 of 85 years did the rate of return to either rentiers or entrepreneurs exceed the growth rate of GDP.

From above, you can see that it is tough being entrepreneurs. As the economy goes, so goes it for laborers. Rentiers experience stretches of better growth and stretches of sub-par growth relative to GDP.

After breaking out capitalists into rentiers and entrepreneurs, the share of GDP going to laborers greatly exceeds the share going to rentiers and entrepreneurs.

To socialists and crypto-socialists alike, rentiers are hated worse entrepreneurs. Yet, as a "class," rentiers get the least share of GDP.

The upshot of all the above is this. Piketty tells a false story from mythology. 

THE TRUE PROBLEM

Ironically, Piketty argues to increase the problem, not fix it so the problem gets cured.

So what is the true problem? IT'S ALWAYS CRONY POLITICS, CRONY GOVERNANCE AND CRONY REGULATORY CAPTURE and TRY CRONY POLITICS, CRONY GOVERNANCE AND CRONY REGULATORY CAPTURE BECAUSE THERE IS NO SUCH THING AS CRONY CAPITALISM.

Piketty wants to double down, creating even more crony politics, crony governance and crony regulatory capture. In short, Piketty wants to turn the world into the failure known as France!

Piketty wants to curtail capitalism, remove competition among capitalists in their fight to buy shares of profit from entrepreneurs. Piketty wants to make it easier for the biggest capitalists who would remain standing in Piketty's Dystopian future masquerading as Fairness-Rhetoric Utopia.

If Piketty were to get his way, the western world would move ever closer to a neo-fascist, neo-feudal system. Individualism and freedom would at long last get crushed by the power elite.

Academicians like Piketty are among the priesthood who conjure up mythology, mythology which justifies action against unorganized individuals by the power elite. So Piketty would become a winner in a neo-fascist, neo-feudal future.

REAGAN-CLINTON VS THE NADIR OF SOCIETY, BUT ZENITH OF AMERICAN SOCIALISM

During the Reagan-Clinton prosperity (1986-1999), in 12 of 14 years, compensation to laborers grew faster than GDP. The same held true for capitalists, though the two years in which GDP grew faster differed for capitalists than laborers.

I lived through the 1970s otherwise known as Sucking-in-the-70s as the Rolling Stones called those years as well as the Reagan-Clinton prosperity of 1986 through 1999. In the 1970s gave us polyester junk clothes, long lines and odd-even days at gasoline pumps, and NYC a graffiti-wasteland.

Oh and not-so-coincidentally, the growth of return to capitalists ran far below the growth of GDP as well as far below the growth of compensation to laborers.
Yet, during the Reagan-Clinton prosperity, everyone had jobs, good times, cotton clothes and good music.

For more on the Reagan-Clinton prosperity, check out PARTY OVER OOPS OUT OF TIME. YOU SHOULD HAVE PARTIED LIKE IT WAS 1999.

Seriously, everyone should stop listening to academician economists. They have gotten everything wrong since the inception of the field. I give you a taste of this truth in WHY IS THE ECONOMY SO HORRIBLE? BECAUSE ACADEMIA ECONOMICS IS FAKE.

Read more ...

THOMAS PIKETTY, 696 PAGES OF FOOLERY DESTROYED IN LESS THAN FIVE MINUTES

A French egghead academician with no business experience, Thomas Piketty, believes he has discovered the fatal flaw of capitalism so much so that Piketty wasted time writing an almost 700-page book about it and something like a whopping 15 years of his life researching it.

Piketty believes there is relationship between the rate of growth of an economy as expressed by GDP and the rate of return enjoyed by capitalists. 

Piketty calls the rate of return earned by capitalists R and the GDP, G. Piketty claims that when the return to capitalists is greater than GDP growth (R > G), "the past devours the future." 

The return to capitalists (their share of profit) can grow faster than GDP, easily. However, there is a limit, a limit Piketty fails to see precisely because Piketty knows nothing of trade and thus authentic economics.

If Piketty knew reality he would know this: 

The return to capitalists never can exceed total profit. All returns to capitalists are shares of profit and not sales.  

Profit is what is stands after paying expenses, including all wages and what politicians take as their taxes.

GDP is merely the sum of all sales. Alternatively, GDP can get calculated as the sum of all incomes. It means the same.

It's irrelevant if return to capitalists has grown at 9% or 90%. It's irrelevant that return to capitalists for any firm or all firms grows faster than GDP. 

Always, profit is a fraction of sales. Said another way, always, profit is a fraction of GDP. 

In the end, profit acts as limit. It's impossible to have a share of profit exceed 100%. 

Piketty needs a lesson in trade, or commerce, or what is truly authentic economics and not the foolery of academia economics.

The entirety of trade, or commerce, or real economics ties up with two words — property and profit.

All trade gets governed by one one, true, infrangible law and one axiom — the Law of Prices and the Axiom of Profit. The Law of Prices holds the winning bids of purchase and sale in the face of what is on offer set the price. The Axiom of Profit holds the sum of sales must at least equal the cost of production or the producer goes to ruin. 

The name for property put to making stuff is called capital. The name for property put to purchase and sale for cash and credit is wealth.  

Though most think of property as things possessed, property always has meant the right of ownership and never the thing owned. Only when property gets created, can trade arise between two persons. 

Without profit from effort, anyone would lack buying power to buy anything else. Without property, no one can trade. 

At less than break even, anyone would stop trying to produce property. No one works at a loss.

When profit is growing on the same sum of sales, this means producers are becoming more efficient. When profit is growing on increasing sales, this means ever more of the whole economy are gaining buying power and becoming efficient. This ever more includes workers and entrepreneurs.

What Piketty fails to realize that when he Piketty says "capital reproduces itself faster than output increases," in so many words, Piketty has said capital reproduces itself faster than wealth. 

This is good! All should want capital to grow faster than wealth! Without capital there can be no wealth! 

In CAPITALISM. BECAUSE WITHOUT IT, YOU WOULD BE LIVING AS A BARE SUBSISTENCE SAVAGE, I show how laborers would toil barely producing anything, living by bare subsistence without capitalism.

Again, because Piketty only understands the fake world of academia economics and doesn't understand the real world of trade, Piketty fails to see that when the rate of return to capitalists is growing faster than profit, capitalists are enjoying greater bargaining power against entrepreneur-adventurers.

Interest is a price and conforms to the Law of Prices. In the credit market, capitalists bid down in a Dutch auction against each other. Entrepreneur-adventurers bid up in an English auction against each other.

This better bargaining power of capitalists has arisen because there are not enough capitalists engaged in intra-capitalist competition and not enough entrepreneur-adventurers at all.

Entrepreneur-adventurers are futures speculators who ensure enough capitalists remain in business, but not too many. Thus, entrepreneur-adventurers are natural regulators of capitalists.

When there is too much bureaucracy with too much regulation, this pushes up costs and stands as a barrier to entry for too many would-have-been-otherwise entrepreneur-adventurers. The shrinking field of entrepreneurs leads to better bargaining power for capitalists.

Robert E. Litan of the Brookings Institute has revealed for the first time in 30 years, business "deaths" in the U.S. exceeded business "births" and only 600,000 net new jobs were created in each quarter of 2012 (Declining Business Dynamism in the United States: A Look at States and Metros).

So as a campus Marxist, what is Piketty's prescription to cure the ills of his false conclusion? Why Piketty sounds the socialist battle cry — Tax the rich! Off with their heads!

Of course, Piketty can't see implication of his prescription. Curtailing capital will result in far fewer products and thus far fewer ventures. Worse, curtailing capital will lead to less employment and much lower wages owing to more employment competition for fewer jobs on lower capital. 

Instead, the winning move would be to end all subsidy for the poor and end minimum wage laws. Subsidy to the working poor ends up being a subsidy to capitalists.

It is an unassailable fact of trade, that absent subsidy of workers in the form of welfare, wages would rise. No one would work at a loss (wages - living expenses). Market forces would force employers to pay more.

A wage is a price and conforms to the the Law of Prices. Even laborers get constrained by the great Axiom of Profit. 

All laborers also are capitalists as labor is the poor man's capital. Labor is the sale of work through time.  

Labor without capital results in bare subsistence savagery. It is to capital alone that profit can arise. 

Labor creates property. Capital creates property efficiently so profits might get earned. 

Profits whether realized or expected are the source of all prices. 

Piketty is clueless. Piketty doesn't understand reality. Piketty lives by irreality forged from indoctrination.

After the fall of the Berlin wall and the dissolution of the Soviet Union, all believed the idiocy of socialism at long last had died. Yet, campus Marxists are like cockroaches. You can't kill them. And the lie in wait for times to spread their diseases into the minds of the young and desperate.

For a look at Piketty and the numbers, check out UT OH, SOMEONE BETTER TELL THOMAS PIKETTY ABOUT L >G TOO.


For even more, read THOMAS PIKETTY, REVIVALIST PREACHER OF BORN-AGAIN SOCIALISM. THE SECOND GREAT AWAKENING OF SOCIALISM HAS COME TO AMERICA

Read more ...

POVERTY AND ENVY

There is profit and loss for everything. We calculate profit or loss by subtracting income less expenses. In the absence of intervention, some things would not get sold for long as the sum of sales could not yield a profit. 

All humans start out at a loss, their lives subsidized by their parents. Calories consumed, be those food calories and heat calories, are their expenses. 

Welfare collectees live at a loss. In short, they do not produce anything that anyone wants and thus even if they produced something and with output surplus, still they produce at a loss. They get kept alive only out of the goodness of others in charity or by the nefarious schemes of welfare-doling collectivists who need them to justify their acts.

WHY POVERTY AT ALL?

Poverty arises because the impoverished do not output at all or fast enough things that can become wealth.

ABSOLUTE POVERTY AND RELATIVE POVERTY

There are two kinds of poverty — absolute poverty and relative poverty. 

Absolute poverty deals with those living by operating at a loss. They do not produce anything that anyone or enough want such that they at least break even. In short, they do not earn their calories.

Relative poverty arises from the Politics of Greed and the Rhetoric of Envy. It's all around you.

"It's not fair that the guy over there gets a $50 million bonus because he works as an investment banker and has gained skills, which lets him materialize wealth that far exceeds his costs in doing so, while I march here in the streets of lower Manhattan sipping on my non-fat, mocha double latte, sending the latest updates of Occupy Wall Street on my 4G smart phone, that my parents mostly pay for the bill! At least I paid for the snazzy case from what I earned working my job at Big Box Retailer, which my snazzy dual major in Transgendered Women's Studies and Ebonics Literature helped me secure, thankfully. I am the 99%!"

Truly, THE GREEDY ARE THE ONLY PROBLEM THE WHOLE EARTH OVER.
 

PROPERTY AND PROFIT

The entirety of trade, also said as commerce or commercial life, ties up with two words — property and profit. Without profit from effort, anyone would lack buying power to buy anything else. Without property, no one can trade. 

Though most think of property as things possessed, property always has meant the right of ownership and never the thing owned. Only when property gets created, can trade arise between two persons. 

The name for property put to making stuff is called capital. The name for property put to purchase and sale for cash and credit is wealth. 

Persons can profit when they produce surplus property in something such that the sales of their surplus exceeds the cost of their living. 

Labor is the poor man's capital. The wage worker buys living space, food and transport. He gains property in those things. Those things are his capital, which he needs to produce his labor.

From his labor, he expresses skills through time, which all call work. Property in his work is his wealth. 

He trades his wealth in a purchase and sale for wages with his employer. Wages are the wealth his employer trades away.

His wages less his expenses to live become his profit.

Read more ...

KILLING THE MIDDLE CLASS AND THE "WE WANT YOU TO BELIEVE CAPITAL GAINS INCOME IS DIFFERENT" TRICK

Today, I read Stop Favoring Investors, Speculators over Middle Class by noted demographer Joel Kotkin, who is one of the few eggheads whom I like.

In the article, Koktin laments about being victim of a mafia-style shakedown when it comes to paying taxes to California legislators. 

Many believe they are middle class, but they are not. In BUT WERE YOU EVER IN THE MIDDLE CLASS?, I strip out the political rhetoric to render the most meaningful definition for the phrase middle class. 

The middle class consists of those who earn at least 51% of their income from labor and who are free-and-clear title owners to an improved parcel.

Most are among the bottom class. The bottom class consists of those who earn 100% of their income from labor or who are given up to 100% of income from welfare or some combination thereof and who rent their living space. 

Few are among the top class. The top class consists of those who earn at least 51% of their income from investments and who are free-and-clear title owners to an improved parcel, which is land with a house upon it.

The elite of the top class earn 100% of their income from investments.

Kotkin is right as have been many others. The middle class shrinks ever smaller day-by-day. In PARTY OVER OOPS OUT OF TIME. YOU SHOULD HAVE PARTIED LIKE IT WAS 1999, I show that Americans enjoyed a Reagan-Clinton prosperity era but have since suffered under a Bush-Obama hard times era.

Adroitly, Kotin points out, "Most galling is that, while the middle class has endured ever-higher taxes, those who have benefited most from the Bernanke-Obama “recovery” continue to get the biggest tax breaks. This is largely the investor class, who have been able to reap the benefits of the stock-market boom..."

In PAID CORPORATE TAXES IN DEPRESSION! CORPORATE PROFITS IN A BUBBLE!, I show how corporate profits have been in a bubble since Q3 2001 while corporate taxes paid has been in a depression since Q3 2007.

Kotin goes further saying that "the rich and corporations have all sorts of ways to avoid taxation – like offshore accounts – but the real class divider is capital gains." In short, Kotin calls for an overhaul of the federal tax code to "to stop favoring investors and speculators over middle-income earners."

The current bad design of commercial life for Americans has gamed the system unfairly for those afraid of competition. Rightfully, Senators and House members of the U.S. Congress are to blame. 

After all, members of Congress are the men and women who devise all the rules under which you live.  Members of Congress establish all of the regulation to stifle competition, thus protecting some who are entrenched with power.

In IT'S ALWAYS CRONY POLITICS, CRONY GOVERNANCE AND CRONY REGULATORY CAPTURE and in THE GREEDY ARE THE ONLY PROBLEM THE WHOLE EARTH OVER, I show how Congress gets away with foisting such a bad design upon you.

Kotin proposes what I have proposed for awhile now, taxing all income the same, whether from capital gains or from selling labor. As bad and immoral as income taxation is, as long as income taxation is going to exist, then capital gains should be taxed at the same rate as ordinary wages and salaries precisely because all income is the same.

All income is the same. Claiming there are different kinds of income and then trying to justify one's false beliefs around such is neither scientific nor accurate.

As I explain in REAPING DAY APPROACHES. THE REAPER COMES TO REAP YOU. ANOTHER TAX DAY IN AMERICA COMES, wage earners get shafted because they lack deduction on their capital. Wage earners cannot write off legitimate expenses such as food, which is energy for the mind and for the body; clothing and rent, which are shelters for the body and mind; transport, which is how wage earners bring to market (their workplaces) their wealth for sale (their work); medicine, which is how wage earners restore damaged bodies and minds; fitness, which is how wage earners educate their bodies; and skills acquisition, which is how wage earners educate their bodies and minds.

All taxpayers, who cannot shift their otherwise compulsory tax burdens upon others, subsidize the capital of incorporated firms since the rules of law let enterprise-adventurers write off capital, sometimes as direct expenses and sometimes as depreciation expenses. In short, for incorporated firms, any profits earned get earned on eventually free-to-them capital.

Any trade is merely a purchase and sale for cash or credit, which can be settled by cash. In WHY IS THE ECONOMY SO HORRIBLE? BECAUSE ACADEMIA ECONOMICS IS FAKE, I show the entirety of trade, or commerce, or real economics ties up with two words — property and profit. 

Without profit from effort, anyone would lack buying power to buy anything else. Without property, no one can trade. At less than break even, anyone would stop trying to produce property. No one works at a loss.

Labor is the poor man's capital. Capital and labor are not distinct, separate producing agents. 

The wage worker buys living space, food and transport. Those are his as capital needed produce his labor. From his labor, he expresses his skills through time, which all call work. His work is his wealth.

He trades his wealth in a purchase and sale for wages with his employer. Wages are the wealth  his employer trades away.

His wages less his expenses to live become his profit.

The investor or capitalist sells credit or cash and buys a future contract for profit. The entrepreneur-adventurer or borrower sells forward a profit share and buys credit or cash. 

The profit share gets calculated as a multiple of the sum lent or paid. What gets called interest is merely part of the profit share paid out in parts as insurance against loss.

In INTEREST, CAPITALISTS AND FUTURISTIC TIME COPS, I reveal why interest as a kind of income exists.

Let's face it. The American dream, truly which means entering into the middle class, owning a house free-and-clear, has been foreclosed upon for many.

Read more ...