Affirmative Action's Lovechild: Bankruptcy

[JAMESBJOHNSON]

http://www.hno.harvard.edu/gazette/2003/10.30/19-bankruptcy.html

 

[Roxanne Appleby]

Not sure where AA fits into any of that; the article appears to be the usual concatenation of liberal "the middle class is over" alarmism combined with anecdotal examples of foolish lifelstyle choices that are made to seem to be not-choices.

A more useful example of frugality finger-wagging was in the Times a few weeks ago:


The Great Seduction

"Franklin made it prestigious to embrace certain bourgeois virtues. Now it’s socially acceptable to undermine those virtues. It’s considered normal to play the debt game and imagine that decisions made today will have no consequences for the future."

By DAVID BROOKS
NYT, June 10, 2008

The people who created this country built a moral structure around money. The Puritan legacy inhibited luxury and self-indulgence. Benjamin Franklin spread a practical gospel that emphasized hard work, temperance and frugality. Millions of parents, preachers, newspaper editors and teachers expounded the message. The result was quite remarkable.

The United States has been an affluent nation since its founding. But the country was, by and large, not corrupted by wealth. For centuries, it remained industrious, ambitious and frugal.

Over the past 30 years, much of that has been shredded. The social norms and institutions that encouraged frugality and spending what you earn have been undermined. The institutions that encourage debt and living for the moment have been strengthened. The country’s moral guardians are forever looking for decadence out of Hollywood and reality TV. But the most rampant decadence today is financial decadence, the trampling of decent norms about how to use and harness money.

Sixty-two scholars have signed on to a report by the Institute for American Values and other think tanks called, “For a New Thrift: Confronting the Debt Culture,” examining the results of all this. This may be damning with faint praise, but it’s one of the most important think-tank reports you’ll read this year.

The deterioration of financial mores has meant two things. First, it’s meant an explosion of debt that inhibits social mobility and ruins lives. Between 1989 and 2001, credit-card debt nearly tripled, soaring from $238 billion to $692 billion. By last year, it was up to $937 billion, the report said.

Second, the transformation has led to a stark financial polarization. On the one hand, there is what the report calls the investor class. It has tax-deferred savings plans, as well as an army of financial advisers. On the other hand, there is the lottery class, people with little access to 401(k)’s or financial planning but plenty of access to payday lenders, credit cards and lottery agents.

The loosening of financial inhibition has meant more options for the well-educated but more temptation and chaos for the most vulnerable. Social norms, the invisible threads that guide behavior, have deteriorated. Over the past years, Americans have been more socially conscious about protecting the environment and inhaling tobacco. They have become less socially conscious about money and debt.

The agents of destruction are many. State governments have played a role. They aggressively hawk their lottery products, which some people call a tax on stupidity. Twenty percent of Americans are frequent players, spending about $60 billion a year. The spending is starkly regressive. A household with income under $13,000 spends, on average, $645 a year on lottery tickets, about 9 percent of all income. Aside from the financial toll, the moral toll is comprehensive. Here is the government, the guardian of order, telling people that they don’t have to work to build for the future. They can strike it rich for nothing.

Payday lenders have also played a role. They seductively offer fast cash — at absurd interest rates — to 15 million people every month.

Credit card companies have played a role. Instead of targeting the financially astute, who pay off their debts, they’ve found that they can make money off the young and vulnerable. Fifty-six percent of students in their final year of college carry four or more credit cards.

Congress and the White House have played a role. The nation’s leaders have always had an incentive to shove costs for current promises onto the backs of future generations. It’s only now become respectable to do so.

Wall Street has played a role. Bill Gates built a socially useful product to make his fortune. But what message do the compensation packages that hedge fund managers get send across the country?

The list could go on. But the report, which is nicely summarized by Barbara Dafoe Whitehead in The American Interest (available free online), also has some recommendations. First, raise public consciousness about debt the way the anti-smoking activists did with their campaign. Second, create institutions that encourage thrift.

Foundations and churches could issue short-term loans to cut into the payday lenders’ business. Public and private programs could give the poor and middle class access to financial planners. Usury laws could be enforced and strengthened. Colleges could reduce credit card advertising on campus. KidSave accounts would encourage savings from a young age. The tax code should tax consumption, not income, and in the meantime, it should do more to encourage savings up and down the income ladder.

There are dozens of things that could be done. But the most important is to shift values. Franklin made it prestigious to embrace certain bourgeois virtues. Now it’s socially acceptable to undermine those virtues. It’s considered normal to play the debt game and imagine that decisions made today will have no consequences for the future.

http://www.nytimes.com/2008/06/10/o...5ff1415fc0a4c4c0&ei=5070&emc=eta1&oref=slogin

 

[keeblercrumb]

Soviet Era Condom

http://www.hno.harvard.edu/gazette/2003/10.30/19-bankruptcy.html

JB..... How on earth did you get from this article to "Affirmative Action"???????

Get a grip man!

It is a cautionary tale about the impact of housing costs, HEALTH CARE, CHILD CARE/EDUCATION, and automobile ownership (my emphasis added!) which have left the Middle Class significantly worse off then it was 30 years ago!

Damn… JB…. Sometimes you let those racist instincts get the better of you….

-KC

 

[JAMESBJOHNSON]

KEEBLER & ROXANNE

Think about it and you'll get the connection.

KEEBLER

I didnt mention race. Affirmative Action covers more ground than race.

 

[Katyusha]

The tax code should tax consumption, not income...

The FairTax Act of 2005, a consumption tax that would abolish sections A & B of the Internal Revenue Code. A consumption tax is what many think is the ideal way to tax the population (if there have to be taxes at all), but there are problems with the idea right now, and first and foremost is our federal government's sheer unwillingness to watch its own spending. For a consumption tax to be "revenue neutral" (bringing in the same amount of money that the current income and gift/estate taxes do), it has to be 30% of every dollar spent at this time. And that doesn't include the state and local sales taxes that would be tacked onto the price of everything.

In other words, if you're purchasing something with a base price of $100, you could wind up paying $140 or more for it depending on what your state and local tax rates are. Now imagine what that 40% or more would do to the prices of things you buy on a regular basis. What's your income currently being taxed at? Our total taxes amount to 27% of our income (income taxes and payroll taxes), with state and local sales taxes adding about 8%. I like the idea of 35% more than at least 40%. Yeah, we'd be taking home our entire paycheck, which sounds really good. But at the end of the month we'd be left with less than what we're currently left with (and yes, I am aware that the Act includes a monthly rebate depending on your spending level so that the ultimate tax you pay is graduated depending on what you spend, the way the income tax is currently graduated depending on what you earn).

Another problem is that the federal government can't regulate what the states do with their own tax codes; the FairTax Act has to allow state governments to leave their own codes intact if they so wish. So the income, gift and estate taxes are gone. The IRS is gone. Americans now get to take home a paycheck that no longer has federal taxes taken out of it. What's to stop the states from raising their own income and sales taxes through the roof, now that they think we have more money to pay for it?

A consumption tax cannot be put into practice in this country right now, not without a drastic overhaul of the state and federal governments' spending habits, and not without thoroughly re-educating Americans about how to save and spend their money, and all this has to happen FIRST. Something like that gets put into practice now, and all the poor along with at least half of the middle class will be out on the streets.

 

[Katyusha]

JBJ is talking about women being allowed into the same positions as men via Affirmative Action, hence the title of this thread.

 

[keeblercrumb]

Rocket? No... just glad to see ya!

JBJ is talking about women being allowed into the same positions as men via Affirmative Action, hence the title of this thread.

Of course! How could I have missed that! There was that little bit about both spouses working making 75% more than one there was a single spouse working, not twice as much.... It would appear we have a ways to go....

-KC

 

[Katyusha]

Of course! How could I have missed that! There was that little bit about both spouses working making 75% more than one there was a single spouse working, not twice as much.... It would appear we have a ways to go....

-KC

Yeah we do.

 

[Roxanne Appleby]

The FairTax Act of 2005, a consumption tax that would abolish sections A & B of the Internal Revenue Code. A consumption tax is what many think is the ideal way to tax the population (if there have to be taxes at all), but there are problems with the idea right now, and first and foremost is our federal government's sheer unwillingness to watch its own spending. For a consumption tax to be "revenue neutral" (bringing in the same amount of money that the current income and gift/estate taxes do), it has to be 30% of every dollar spent at this time. And that doesn't include the state and local sales taxes that would be tacked onto the price of everything.

In other words, if you're purchasing something with a base price of $100, you could wind up paying $140 or more for it depending on what your state and local tax rates are. Now imagine what that 40% or more would do to the prices of things you buy on a regular basis. What's your income currently being taxed at? Our total taxes amount to 27% of our income (income taxes and payroll taxes), with state and local sales taxes adding about 8%. I like the idea of 35% more than at least 40%. Yeah, we'd be taking home our entire paycheck, which sounds really good. But at the end of the month we'd be left with less than what we're currently left with (and yes, I am aware that the Act includes a monthly rebate depending on your spending level so that the ultimate tax you pay is graduated depending on what you spend, the way the income tax is currently graduated depending on what you earn).

Another problem is that the federal government can't regulate what the states do with their own tax codes; the FairTax Act has to allow state governments to leave their own codes intact if they so wish. So the income, gift and estate taxes are gone. The IRS is gone. Americans now get to take home a paycheck that no longer has federal taxes taken out of it. What's to stop the states from raising their own income and sales taxes through the roof, now that they think we have more money to pay for it?

A consumption tax cannot be put into practice in this country right now, not without a drastic overhaul of the state and federal governments' spending habits, and not without thoroughly re-educating Americans about how to save and spend their money, and all this has to happen FIRST. Something like that gets put into practice now, and all the poor along with at least half of the middle class will be out on the streets.

Huh, well I certainly didn't expect to get wrapped into a debate about the "Fair Tax" here, which I find unrealistic politically, but in concept not unreasonable. Your characterization of it's effects is wrong, though. You are only looking at half the equation - the 20 or 25 percent levy on sales to consumers. Figure in the other half - every individual and firm in the supply chain leading up to the final consumer not paying any income tax - and the net effect is no increase in prices in the aggregate. The tax is revenue neutral - no more wealth is transferred from the private economy to the public sector than at present.

But again, I'm not a supporter of this concept, for a variety of reasons, and think its passionate supporters are misguided.

Actually, the consumption tax I would favor is a revenue neutral carbon tax. Primarily to get the whole "we're all gonna die " global warming alarmism thing off the public policy debate table, and put a stake in the heart of the corrupt, dishonest, monumentally destructive "cap-and-trade" scam. But also because consumption taxes are more economically efficient than income taxes. That is, more wealth would be created and we would all be better off. The version I've described in political threads about global warming offsets a steep but phased-in carbon tax with reductions in marginal income rates, and provides means-adjusted, refundable tax credits (or even prebates) to ensure that no income level pays any more than under the status quo. (Individuals who use more than the average amount of energy would pay more, and so have an incentive to change their habits and adjust their lifestyle to reduce that - that's what you want, isn't it greenies and GW alarmists?)

 

[JAMESBJOHNSON]

KEEBLER & KATY

Actually I wasnt thinking of women, either.

Affirmative Action created an unnatural demand for quotas, plus created incentives that arent based on performance or productivity. That is, lotsa people were lured from their natural habitats to the deep end of the pool where performance counts. And when the government contracts/grants expired or they found themselves in a position marked for extinction, they were fucked.

I've observed this phenomenon many times.

 

[keeblercrumb]

KEEBLER & KATY

Actually I wasnt thinking of women, either.

Affirmative Action created an unnatural demand for quotas, plus created incentives that arent based on performance or productivity. That is, lotsa people were lured from their natural habitats to the deep end of the pool where performance counts. And when the government contracts/grants expired or they found themselves in a position marked for extinction, they were fucked.

I've observed this phenomenon many times.

Whatever, JB, but the connection with the article remains pretty tenuous. It had nothing to do with productivity or performance....

But okay, you explained what you meant and it WAS an interesting article....

-KC

 

[JAMESBJOHNSON]

KEEBLER

Not at all. Youre simply not considering unintended consequences or how people get to where they are.

Youre a lot more interested in smearing me than the issue.

 

[Boxlicker101]

The article that JB posted was supposedly about comparing the Seventies to the 21st century. However, the poster in the background was of Rosie the Riveter, from the early 1940's.

I believe that in the 1970's, two income families were actually the norm or, at least, very common. Even in the 1950's, there were many working married women.

Affirmative Action, when it started, was a perfectly good idea, but it quickly became a matter of quotas, which meant hiring or promoting based on race or gender, rather than strictly on ability or the promise of ability. To some degree, this was done before, but such a practice became illegal in 1964.

It has been implied that women, on average, make less money than man. Well, duh, that's because they frequently work at lower-paying jobs than men. Two persons, regardless of race or gender, doing the same job and doing it at the same level of skill and experience, should be paid the same. However, a person with a stressful job that required multiple decisions and long hours probably deserves more than a person who works forty hours a week at simple tasks with little or no stress. This is regardless of gender.

By the way, when I started working for the state of CA, I actually benefited from afirmative action. The state had very few male clerical workers and, being a man, I was hired. At the same time, I was probably at least as capable as others who might have been hired.