"Here's a two-minute drill in soak-the-rich economics:"

[SpareRib]

Looks like Econ 101 to me.

http://online.wsj.com/article/SB124329282377252471.html

[SpareRib]

So we raise taxes on the rich and the tax coffers decline.  Who woulda thought?

[hawgbawb]

Evaporation of million dollar earners is mainly due to the recession and the ease of changing residency in Maryland particularly, since it is a small state geographically and most folks with $1M annual incomes own second homes. Easy to move to VA or PA or Delaware.

The point is well taken, but the lesson does not transfer as well to National vs. State, or to recession vs. non-recessionary environment.

[SpareRib]

Agreed that it may be more difficult to change residence on a national level, but I think the tax trend is self defeating.  Were I protecting millions (which I am not), I'd sure spend a little more for my tax accountant or tax attorney and tell him to be as creative as he could be within the limits of the law.

Can anyone list examples of when in the US raising taxes on high income earners actually provided a correlating increase in either the tax coffers or the economy?

[Road_Hog]

Evaporation of million dollar earners is mainly due to the recession and the ease of changing residency in Maryland particularly, since it is a small state geographically and most folks with $1M annual incomes own second homes. Easy to move to VA or PA or Delaware.

The point is well taken, but the lesson does not transfer as well to National vs. State, or to recession vs. non-recessionary environment.

I'll preface all of this by saying I'm not an economist and don't pretend to play one.  So, I don't know what economic theory you studied in college, but what I studied suggested that increasing taxes on the "rich" resulted in lower tax revenues.  In fact, I remember specific cases being cited as evidence.  And observing human behavior, it seems to hold true.  The megarich (Gates, Buffet, etc) don't care.  But I tend to believe others are influenced by such.

The bottom line is that a capitalistic society works well when incentives are present.  And when someone EARNS a dollar and has more taken out in taxes than he/she receives, that amounts to legalized theft.

[Masshog]

Case study after case study supports the idea that lower taxes mean more economic activity and produce more revenue. 

[SultanofSwine]

I believe it is fairly widely excepted that capital expenditures on infrastructure and the resulting job growth along with a fairly healthy dose of inflation are about the only path to refilling the hole we have dug. Does raising taxes or lowering them make that course more viable? Pretty simple in theory really, they need to hold tax rates at the current level or slightly reduce them and cut the hail out of pork and wasteful social spending. Too many piglets sucking on the gubmint teet as it is and this admin seems intent on growing more teets than balls.

[Silver Hog]

Case study after case study supports the idea that lower taxes mean more economic activity and produce more revenue. 

Agreed, but the poor want the hand outs for nothing and want the rich to pay for it!  So politicians do it for that reason alone. Redistribution of wealth, or trickle up poverty, call it what you will.

in Socialism, all are equally poor.

[hawgbawb]

Case study after case study supports the idea that lower taxes mean more economic activity and produce more revenue. 

No argument there. Our problem though has not been the tax side of the equation as much as the spend side.

[hawgbawb]

I'll preface all of this by saying I'm not an economist and don't pretend to play one.  So, I don't know what economic theory you studied in college, but what I studied suggested that increasing taxes on the "rich" resulted in lower tax revenues.  In fact, I remember specific cases being cited as evidence.  And observing human behavior, it seems to hold true.  The megarich (Gates, Buffet, etc) don't care.  But I tend to believe others are influenced by such.

The bottom line is that a capitalistic society works well when incentives are present.  And when someone EARNS a dollar and has more taken out in taxes than he/she receives, that amounts to legalized theft.

One could make the case that, with few exceptions, those making super-high incomes are doing so with the indirect assistance of the government. Typically they work in some sort of protected or privileged industry, for example. 

[john c]

One could make the case that, with few exceptions, those making super-high incomes are doing so with the indirect assistance of the government. Typically they work in some sort of protected or privileged industry, for example. 

Maybe we should institute a national seizure lottery.  Done by social security number.  Your number comes up and the government takes everything you have.  Numbers are drawn until the government quenches their lust for blood - I mean gets enough money to pay all the bills they incur.  One could make the case that the government should have it all anyway and they are being kind only taking what they need.

[Steef]

No argument there. Our problem though has not been the tax side of the equation as much as the spend side.

Well, we're gonna find out.

'Cause we are witnessing a 'spend side' on steroids.

Strangely, I'm not seeing any 'stimulation' yet.

[DeltaBoy]

Just proves RR was Right; Lower taxes helps the economy and the Bottomline at the Treasury dept.

[SultanofSwine]

Lower taxes only works long term if spending is under control. Whether it be the govt or your house, you can only run debt up for so long then the piper will be paid one way or the other.

[SpareRib]

Lower taxes only works long term if spending is under control. Whether it be the govt or your house, you can only run debt up for so long then the piper will be paid one way or the other.

Agreed.

Welp, taxes are headed up and so is spending.  I'm going fishing.

[Road_Hog]

One could make the case that, with few exceptions, those making super-high incomes are doing so with the indirect assistance of the government. Typically they work in some sort of protected or privileged industry, for example.

And how would one make that case?  Super-high incomes are a relative term, but what would you call protected or privileged industry?

Honest request here.  Let's look down the Fortune list for the first 25 companies.   I am curious as to what you classify as protected or privileged industry that receives "indirect assistance" from the government.  I think I know what you'll say, but have at it.  I even took the time to give you the list. 

1 Exxon Mobil
2 Wal-Mart Stores 
3 Chevron
4 ConocoPhillips
5 General Electric
6 General Motors
7 Ford Motor
8 AT&T
9 Hewlett-Packard
10 Valero Energy
11 Bank of America Corp.
12 Citigroup 112,372.0 
13 Berkshire Hathaway
14 International Business Machines
15 McKesson
16 J.P. Morgan Chase & Co.
17 Verizon Communications
18 Cardinal Health
19 CVS Caremark 
20 Procter & Gamble 
21 UnitedHealth Group 
22 Kroger
23 Marathon Oil
24 Costco Wholesale
25 Home Depot

[Road_Hog]

No argument there. Our problem though has not been the tax side of the equation as much as the spend side.

Agreed.  I've been saying that for a while myself.  I don't necessarily agree with the taxation side but we're spending ourselves into oblivion.  Our main issue seems to be the idea that everyone doesn't pay theirany share and we're losing incentives in this economy. 

You spend your money differently than someone else's money. 

[SultanofSwine]

Agreed.

Welp, taxes are headed up and so is spending.  I'm going fishing.

Atleast until you have been properly redistributed, then you can take your butt back to work

Fish bitin? Planning to go this weekend.

[SpareRib]

Atleast until you have been properly redistributed, then you can take your butt back to work

Fish bitin? Planning to go this weekend.

Work???  I spent a lifetime on straight commission. Therefore, according to most, I never had a job and am consequently unemployable.

Yep they're bitin' on the White.  If they keep the generation at 3 or less, I'm on the water tomorrow for a canoe float/drown your waders day.  Never had a bad day on the water.

(edit:  and when the day comes, I hope they just "properly redistribute" my ass all over the White River) 

[hawgbawb]

Well, we're gonna find out.

'Cause we are witnessing a 'spend side' on steroids.

Strangely, I'm not seeing any 'stimulation' yet.

There does seem to be a little stimulation.

Now what we are now experiencing is ironically sort of the Ronald Reagan approach to the Ruskies (spend like there is no tomorrow on defense, knowing that you will force the Russkies into bankruptcy).  BO is spending so much that he will force the Congress to get get serious about eliminating wasteful defense, etc. spending.

[SpareRib]

There does seem to be a little stimulation.

Now what we are now experiencing is ironically sort of the Ronald Reagan approach to the Ruskies (spend like there is no tomorrow on defense, knowing that you will force the Russkies into bankruptcy).  BO is spending so much that he will force the Congress to get get serious about eliminating wasteful defense, etc. spending.

Hey Bawb,  This is tongue in cheek, right?

[Steef]

There does seem to be a little stimulation.

Now what we are now experiencing is ironically sort of the Ronald Reagan approach to the Ruskies (spend like there is no tomorrow on defense, knowing that you will force the Russkies into bankruptcy).  BO is spending so much that he will force the Congress to get get serious about eliminating wasteful defense, etc. spending.

We could mothball the entire military...all branches...and not 'save' as much as Obama spends in one week.

[hawgbawb]

Hey Bawb,  This is tongue in cheek, right?

A little.

My personal leaning is for smaller government, but there is a time to pump money into the streets and that is during a severe recession.  The banks aren't lending and the consumers aren't spending.

I was/am an Obama supporter and am giving the Admin the benefit of the doubt at this point. I want to see big cuts kick in when the economy turns the corner.  Spending cuts have always been more difficult to enact than spending increases, but I cannot fault them for increasing spending during a recession (the deficit be darned).

The jury is still out.

[SpareRib]

A little.

My personal leaning is for smaller government, but there is a time to pump money into the streets and that is during a severe recession.  The banks aren't lending and the consumers aren't spending.

I was/am an Obama supporter and am giving the Admin the benefit of the doubt at this point. I want to see big cuts kick in when the economy turns the corner.  Spending cuts have always been more difficult to enact than spending increases, but I cannot fault them for increasing spending during a recession (the deficit be darned).

The jury is still out.

Like you I'm for smaller government.  I also agree that we needed to pump money into the economy, but can't agree with the direction of the flow.  I don't see what is happening as stimulus, don't approve of the benefactors, and ain't comfortable with picking up my share of the tab.

To me, what is happening looks more like a bank heist and a social experiment.

For my kids sake, I hope history proves me dead-assed wrong.

[Steef]

Like you I'm for smaller government.  I also agree that we needed to pump money into the economy, but can't agree with the direction of the flow.  I don't see what is happening as stimulus, don't approve of the benefactors, and ain't comfortable with picking up my share of the tab.

To me, what is happening looks more like a bank heist and a social experiment.

For my kids sake, I hope history proves me dead-assed wrong.

Yup.

Well said.

[hawgbawb]

Like you I'm for smaller government.  I also agree that we needed to pump money into the economy, but can't agree with the direction of the flow.  I don't see what is happening as stimulus, don't approve of the benefactors, and ain't comfortable with picking up my share of the tab.

To me, what is happening looks more like a bank heist and a social experiment.

For my kids sake, I hope history proves me dead-assed wrong.

I have some real heartburn with the notion of bailing out the "too big to fail" banks."  I am very conflicted about it.  I vehemently oppose the idea of awarding the clowns who really ought to go to jail. On the other hand, I don't want to further damage the hobbled economy.

A real conundrum.

[SpareRib]

Sultan implied that they are going to "properly redistribute" me.

I think I'll go fishing tomorrow. 

[The Hogfather]

Laffer Curve

[SultanofSwine]

Spare touched on the Great Redistribution being pawned off as stimulus and he is right. If the intentions were well placed the emphasis would be on things such as infrastructure spending where there would be REAL production from REAL jobs and an encouragement from the top to those who have been in trouble to get your house in order. Instead, there is a 110% effort being made to take care of the banks because they directly impact the Fed Reserve and that is where the power is. That is compounded by a tremendous effort to promote more credit(debt) and spending(too much of which is the public's problem).

It's not the fall that gets you, it the sudden stop.

If we maintain the current course, the only qoestion is...how do you brace yourself for impact?

[SpareRib]

...
If we maintain the current course, the only qoestion is...how do you brace yourself for impact?
[/quote]

Learn to dig worms and bait safety pins?  Can I do it?  That's the qoestion!   

[SultanofSwine]

Dude...I told you I grew up in West Memphis.

[john c]

Dude...I told you I grew up in West Memphis.

Please allow this minor sidetrack.  Started visiting with an older gentleman at the supermarket deli counter in Missouri the other day.  Long story short, he was from West Memphis (moved here in 1948) and had a great name.  Mr. Knight's given first name - Friday.

[john c]

I have some real heartburn with the notion of bailing out the "too big to fail" banks."  I am very conflicted about it.  [b]I vehemently oppose the idea of awarding the clowns who really ought to go [/b] to jail[/b]. On the other hand, I don't want to further damage the hobbled economy.

A real conundrum.

You are referring to politicians aren't you?

[Niels Boar]

Laffer Curve

If you notice, the optimum tax rate on that Laffer curve is not 0.  Ergo, nobody believes that cutting tax rates always increases revenue or even pays for itself.  There is obviously an optimum somewhere between 0% and 100%.  In a system as complex as the economy, it would be highly simplistic and dubious to assume that the optimum set point is a constant under all conditions.  For instance, had taxes been raised around 2004, it might have dampened the real estate bubble that was growing, which might have dampened the current recession. Decreasing taxes could only feed it.  It's hard to argue that feeding a bubble is good policy.  During a recession cutting taxes would seem to be a very good idea. 

[john c]

The Laffer Curve needs to be replaced by the Laffing Obama curve wherein the tax rate will be zero for most residents of the US.

[Niels Boar]

I will leave this as an exercise for the student.  But it is interesting to go here

http://www.usgovernmentrevenue.com/downchart_gr.php?year=1940_2009&view=1&expand=&units=b&fy=fy10&chart=F0-total_10-total&stack=1&size=l&title=Total%20Revenue&state=US&col=c

where you can easily chart yearly total government revenue and income tax revenue.  Then go here

http://www.taxfoundation.org/taxdata/show/151.html

where you can get a history of income tax rates.



Some amateur, superficial observations in playing with these tools:

1. Revenue almost always increases despite huge fluctuations in tax rates.  Revenue over the last 70 years has decreased, I believe, only 4 times from the previous year and never two years in a row.  Caveat: I don't believe these numbers are inflation normalized.  You can see a normalized graph here:

http://www.marktaw.com/culture_and_media/TheNationalDebt.html

It is still pretty much monotonically increasing (sans tech bubble bursting) probably due to population growth.  Curves of US population (http://en.wikipedia.org/wiki/Demographics_of_the_United_States) and revenue both look parabolic on inspection.

2.  Revenue continued to increase as Reagan dropped the top tax rate from 70% down to 28%.  One question here, though, is how did tax shelters change.  The super wealthy were never giving 70% of their income to the US government.  What was the real decrease in taxes?  I'm suspicious that income tax revenue is also a fairly smooth curve, but tax rate isn't.  It's hard to believe that any economic benefits or liabilities associated with changing tax rates are instantaneous.  For instance, the highest tax rate dropped 12.5% from 1986 to 1987, but somehow income tax revenue went up 76 billion.  Wouldn't you expect to see a dip in income tax revenue that year followed by all the economic benefits in subsequent years as the tax returns stimulated the economy?   

3.  A noticeable plateau occurs after the top tax rate fell to 28%, and revenue increases sharply after the top tax rate goes back up to almost 40% in the early 90's.  What was the influence of a recession followed the tech bubble here?

4.  Be careful about trusting what anybody says on this issue.  Since revenue generally goes up and the tax code is very complicated, it is pretty easy to manipulate these numbers to say what you want politically on either side or to see what you want to see.  The tax rates over the last 30 years are a choppy curve.  The revenue curve is relatively smooth.  It is difficult to decouple one variable in a system that depends on many.  That is why predictions by economists from both sides are frequently way off the mark.

[Niels Boar]

Anybody else catch Laffer and Stephen Moore on CSPAN.

Laffer spent five minutes railing against the notion of energy independence because

1)  Trade is inherently good.  Letting the Saudi's provide us with cheap oil is just how economics should work.  "They have the oil. We can use it."  I believe that is how he put it.

2)  It's politically good for us to have petro dictators dependent on us for their economy because, in any case, trade embargoes don't work, citing North Korea.

He spent the next five minutes railing against environmentalists blocking offshore oil drilling.  His main reasoning here seemed to be that, if we don't, Indonesia will, and they will soil their own beaches.  I'm serious.  He was talking about Indonesians gleefully putting oil on wildlife.

I'll pause here and see if anybody else catches a contradiction.  Hint: you should have question even if you find each individual point to be perfectly sound and logical.

If energy independence is inherently a bad idea with dire consequences, what is the point of promoting energy independence by drilling offshore?  The whole point of drilling offshore is to negate rising prices as demand outstrips supply, i.e. so we won't have to buy expensive foreign oil.  If we really had no need for energy independence because we can remain awash in cheap oil, drilling offshore is unnecessary, politically counterproductive, and environmentally unsound according to his initial supposition.   If drilling offshore is a good idea, it can only mean that we are being driven to energy independence by necessity. In which case energy independence is a very good idea because the alternatives will be really expensive energy or no energy.

The whole "embargo" argument was just bizarre.  First, not buying a product from a country does not equal embargo.  To my knowledge, we don't buy a lot of CPU's from Guyana. We do not have an embargo on their semiconductor industry either.  Presumably, if we didn't need their oil, Saudia Arabia would be free to sell it to, say, India.  Saudia Arabia is only in trouble if their oil is obsolete.  Laffer's argument seemed to be that energy independence was a bad goal even if we could achieve it.  Importing billions of dollars of oil that finances religious schools is economically and politically  better for us than exporting billions of dollars of energy technology.

I was also perplexed by Stephen Moore's proof of how much the middle class has benefitted from economic expansion the last thirty years.  According to Moore, in 1987 only "Gordon Gekko" could afford a cell phone.  Now they are ubiquitous.  That shows how much wealthier the middle class is now.  This fact apparently had nothing to do with technological innovation in integrated circuits and telecommunications and a tech bubble that created a huge surplus in bandwidth coupled with the positive feedback of the economies of scale that sent cell phone prices plunging.  The middle class still couldn't afford Gekko's phone.  The phones got a lot cheaper.  He could be absolutely right about the middle class, but that example makes no sense. 

These two guys got together to write a book about how to run the economy. 

[Road_Hog]

Yet you're lapping up Paul Krugman's stuff by the barrel.  Can we get some balance out of someone that is well known?

I would have liked to heard the interview but it might take me a bit to find CSPAN. 

I had a really long day and you wrote more stuff than I care to digest at this point.  I agree trade is inherently good.  But I don't see how us pumping more oil into the market contradicts that or hurts that.  I would love to see more oil in addition to alternative forms of energy.  I'm not sure this economy can make it on $4-5/gallon at the pumps again.  I could be wrong but it seems to me something has to be cut or Americans will leverage up again.   

[snoblind]

One could make the case that, with few exceptions, those making super-high incomes are doing so with the indirect assistance of the government. Typically they work in some sort of protected or privileged industry, for example. 

You mean like congress, presidents and ex-congressmen & presidents?    Sorry, cheap shot, but you tossed that softball out there and I couldn't resist.  back to serious discussion...

[snoblind]

Anybody else catch Laffer and Stephen Moore on CSPAN.

Laffer spent five minutes railing against the notion of energy independence because

1)  Trade is inherently good.  Letting the Saudi's provide us with cheap oil is just how economics should work.  "They have the oil. We can use it."  I believe that is how he put it.

2)  It's politically good for us to have petro dictators dependent on us for their economy because, in any case, trade embargoes don't work, citing North Korea.

He spent the next five minutes railing against environmentalists blocking offshore oil drilling.  His main reasoning here seemed to be that, if we don't, Indonesia will, and they will soil their own beaches.  I'm serious.  He was talking about Indonesians gleefully putting oil on wildlife.

I'll pause here and see if anybody else catches a contradiction.  Hint: you should have question even if you find each individual point to be perfectly sound and logical.

If energy independence is inherently a bad idea with dire consequences, what is the point of promoting energy independence by drilling offshore?  The whole point of drilling offshore is to negate rising prices as demand outstrips supply, i.e. so we won't have to buy expensive foreign oil.  If we really had no need for energy independence because we can remain awash in cheap oil, drilling offshore is unnecessary, politically counterproductive, and environmentally unsound according to his initial supposition.   If drilling offshore is a good idea, it can only mean that we are being driven to energy independence by necessity. In which case energy independence is a very good idea because the alternatives will be really expensive energy or no energy.

The whole "embargo" argument was just bizarre.  First, not buying a product from a country does not equal embargo.  To my knowledge, we don't buy a lot of CPU's from Guyana. We do not have an embargo on their semiconductor industry either.  Presumably, if we didn't need their oil, Saudia Arabia would be free to sell it to, say, India.  Saudia Arabia is only in trouble if their oil is obsolete.  Laffer's argument seemed to be that energy independence was a bad goal even if we could achieve it.  Importing billions of dollars of oil that finances religious schools is economically and politically  better for us than exporting billions of dollars of energy technology.

I was also perplexed by Stephen Moore's proof of how much the middle class has benefitted from economic expansion the last thirty years.  According to Moore, in 1987 only "Gordon Gekko" could afford a cell phone.  Now they are ubiquitous.  That shows how much wealthier the middle class is now.  This fact apparently had nothing to do with technological innovation in integrated circuits and telecommunications and a tech bubble that created a huge surplus in bandwidth coupled with the positive feedback of the economies of scale that sent cell phone prices plunging.  The middle class still couldn't afford Gekko's phone.  The phones got a lot cheaper.  He could be absolutely right about the middle class, but that example makes no sense. 

These two guys got together to write a book about how to run the economy. 

that will be a book I won't be reading.  I don't really think any of the individual points are sound so I'm having trouble with the contradiction you mention.  Could it be that technological advances and demand is what drove down the cell phone prices and the same could be applied to energy?

[hawgbawb]

You mean like congress, presidents and ex-congressmen & presidents?    Sorry, cheap shot, but you tossed that softball out there and I couldn't resist.  back to serious discussion...

Well, Okay, but I was really thinking about banks being regulated by the Federal Reserve (whose Board of Governors are all former bankers), like physicians whio are self-regulated by State Boards composed of practicing physicians, like big pharma execs whose businesses are regulated by the FDA, which is in bed with big pharma.  By the insurance industry, which is typically regulated by a state insurance commission that is pretty much bought and paid for by the insurance industry. Like stock and bond brokers who are regulated by the SEC, which is in bed with the financial industry.

Take a look at almost any high income profession or industry and you will find that they are protected by the State or Federal government.

[Road_Hog]

Well, Okay, but I was really thinking about banks being regulated by the Federal Reserve (whose Board of Governors are all former bankers), like physicians whio are self-regulated by State Boards composed of practicing physicians, like big pharma execs whose businesses are regulated by the FDA, which is in bed with big pharma.  By the insurance industry, which is typically regulated by a state insurance commission that is pretty much bought and paid for by the insurance industry. Like stock and bond brokers who are regulated by the SEC, which is in bed with the financial industry.

Take a look at almost any high income profession or industry and you will find that they are protected by the State or Federal government.

Three things here:
1)  If you feel this way, why are you always pushing for so much government interference in the economy?
2)  Even if there are no other professions on these regulatory bodies (which I would like to see evidence of more than your generalizations) would you prefer that the accountants regulate doctors, engineers regulate insurance professionals, and insurance professionals regulate the college doctors?  C'mon now.  That wouldn't make any sense either.
3)  I find it incredibly that because someone is in a field they are somehow receive indirect assistance by the government to earn a living. 

Example 1: Let's take a kid straight out of college with an accounting degree, a masters degree in either the same field or an MBA, a solid GPA, and a CPA.  The kid is hired by Company X, which is a subsidiary of Private Equity Company XYZ.  Please tell me how that person does so with indirect assistance by the government.  This ought to be good and is going to be quite a chain if you put this one together.  And if you do, please see Number 1. 

Example 2:  Take an insurance agent (auto, life, doesn't matter).  Tell me how many policies the government indirectly sells for the agent.  I've never seen a government employee make a cold call.  And I've sure haven't seen responsible people not want to insure their assets.  The state says people must carry minimum liability automobile insurance, post a bond with the state, etc.  Again, that's quite a chain if that's your argument.  No one is getting rich off of state mandates.

Have a nice weekend bawb.

[Masshog]

Re the Laffer/Moore book.  Read it. 

[hawgbawb]

Three things here:
1)  If you feel this way, why are you always pushing for so much government interference in the economy?
2)  Even if there are no other professions on these regulatory bodies (which I would like to see evidence of more than your generalizations) would you prefer that the accountants regulate doctors, engineers regulate insurance professionals, and insurance professionals regulate the college doctors?  C'mon now.  That wouldn't make any sense either.
3)  I find it incredibly that because someone is in a field they are somehow receive indirect assistance by the government to earn a living. 

Example 1: Let's take a kid straight out of college with an accounting degree, a masters degree in either the same field or an MBA, a solid GPA, and a CPA.  The kid is hired by Company X, which is a subsidiary of Private Equity Company XYZ.  Please tell me how that person does so with indirect assistance by the government.  This ought to be good and is going to be quite a chain if you put this one together.  And if you do, please see Number 1. 

Example 2:  Take an insurance agent (auto, life, doesn't matter).  Tell me how many policies the government indirectly sells for the agent.  I've never seen a government employee make a cold call.  And I've sure haven't seen responsible people not want to insure their assets.  The state says people must carry minimum liability automobile insurance, post a bond with the state, etc.  Again, that's quite a chain if that's your argument.  No one is getting rich off of state mandates.

Have a nice weekend bawb.

1)  question 1:
Regulation is needed. Self regulation doesn't work. It's the foxes guarding the henhouse. Ask Milton Freidman.
What to do?  --Get as much of the money out of politics as practicable. Right now we have a good ole boy system whereby the XYZ profession/industry trade group pumps money to get their elected officials of choice elected, then tells said elected officials who to appoint to the regulatory board that they have to deal with.  Did you know that often the very profession/industry that is being regulated actually calls for the regulation, so that they can manipulate the marketplace to their advantage?  Then they support "anti-regulation" Republicans.
The Republican solution has historically been "get the government out of the way" which in practice is really "You boys are free to regulate yourselves however you want."
The Dems are a little better, because they at least have a modicum of belief in the idea of regulation.   A good example is healthcare. Compare the annual inflation rate of healthcare under Dem ad Repubs and you will find it higher under Repubs, due to their "look the other way" mentality, when it comes to regulation.

2)  Question 2:
Agreed. The problem is the trade/professional orgs typically are dominated by the industry/profession's guys that pledge to watch out for the selfish interests of "their guys."  They game the system. For example, the AMA submits to the Governor their recommendations for the State Medical Boards. The state governors typically rubber stamps their recommendations. What are needed are independent and ethical people, who are admittedly hard to find. Other things that can be done are insist that the regulatory boards include some folks who don't benefit from the industry regulation being overseen, and require term limits.

3)  Question 3:   See above

Example 1:
See response to number 1.  Let me tell you how accounts get rich off the government:  1st, they help devise and perpetuate an incredibly complicated tax code, along with their tax attorney partners in crime, (remember the IRS is a Government agency) which is a gigantic public works program for accountants.  They also make it pretty difficult to become a CPA through (State government) licensing. Between the two, they insure that CPA's make a pretty good living.

Example 2:   
Don't even get me started on the insurance industry. Take the auto industry. I'm required to have auto insurance, even though I am financially able to pay cash for about 30 new cars. And if some guy rear ends me while I'm stopped at a red light, my rates will go up. How can they get away with that?  Because the industry owns the State Insurance Commissioner. And health insurance is practically highway robbery.

Any more questions?

[hawgbawb]

To simplify the above post, ALL REGULATION IS NOT CREATED EQUAL.

The devil is in the details.  If you believe that regulation is inherently evil, and have cynical, low expectations for it's effectiveness, it tends to become a self-fulfilling deal.

[Road_Hog]

Example 1:
See response to number 1.  Let me tell you how accounts get rich off the government:  1st, they help devise and perpetuate an incredibly complicated tax code, along with their tax attorney partners in crime, (remember the IRS is a Government agency) which is a gigantic public works program for accountants.  They also make it pretty difficult to become a CPA through (State government) licensing. Between the two, they insure that CPA's make a pretty good living.

CPA's do MUCH more than taxes.  You've chosen to completely ignore private practice, analysts working for corporations, and a whole host of other jobs.  Difficult to become a CPA?  Yeah, the average Joe isn't getting a CPA.  Plenty of people receive that certificate.  It's not easy but would you want the average Joe doing some of these types of endeavors?

Example 2:   
Don't even get me started on the insurance industry. Take the auto industry. I'm required to have auto insurance, even though I am financially able to pay cash for about 30 new cars. And if some guy rear ends me while I'm stopped at a red light, my rates will go up. How can they get away with that?  Because the industry owns the State Insurance Commissioner. And health insurance is practically highway robbery.

Don't purchase auto insurance.  Post a bond instead if you can buy in the neighborhood of 30 brand new cars.  I don't mean this rudely, but put your money where your mouth is so to speak.  Why would your rates go up in an accident where you're not at-fault?  I'm still waiting on that example of a property/casualty insurance getting rich hand over fist selling that 25/50/25 liability insurance. 

With all due respect bawb, I don't get what you're trying to see happen:
-Your argument seems a bit circular.  You want more regulation but don't like the regulatory bodies and seem to have no logical answer for improving the system.  I'm sorry, you can't have an engineer heading up the Sarbanes-Oxley committee which you seem to think is a necessity.

-Your argument seems unfounded.  You seem to think almost person making a decent living couldn't do so without a regulatory agency. 

It seems like to me you would keep bouncing back and forth between two alternatives with nothing ever changing.  I'm personally for gutting several government agencies.  IRS, USPS, etc.  I'm sure we could make a really long list.

It doesn't make much sense to me but it's a good discussion. 

 

[Road_Hog]

To simplify the above post, ALL REGULATION IS NOT CREATED EQUAL.

The devil is in the details.  If you believe that regulation is inherently evil, and have cynical, low expectations for it's effectiveness, it tends to become a self-fulfilling deal.

I don't agree with regulation in theory but I understand that it has to exist in some form.  It's currently too encumbering.  The government is entirely too involved in our economy and has been for some time.

[hawgbawb]

The real issue to me is that the governance of the regulatory bodies is poor.
No question that some of the rules need to change, but often it's just poor enforcement of existing regs.