Greece Watch...

[johnhemming2]

And you were a LIBERAL DEMOCRAT?

I am a Liberal Democrat. I don't understand why in being such I have to ignore reality and pretend things are not as they actually are.

The Greek Government have been following policies destined to cause havoc in Greece. I argued that this was foolish. The havoc is now happening.

[Little John]

It doesn't even matter if, after all cuts are made more equitably leading to the rich contributing to those cuts far more than they currently do, the final equation means the poor do not suffer appreciably less than they are currently. None of that matters, in the end.

What matters, for the sake of social cohesion, is that the poor can transparently see that the rich are not getting off scott-free. That whatever pain is to go around, goes around equitably. Especially so, given that it is predominantly the rich who composed the shitty tune and built the rackety stage on which the rest of us have all been compelled to dance.

What would keep the rich from just moving to wherever in the Euro-zone the tax burden on the rich was the least leaving the poor to carry the whole burden in Greece?

What you and the people you speak for fail to realise is that the numbers of the poor are rapidly rising and are also rapidly reaching the point of having nothing left to lose. Or, at least, insufficient left to lose to be any longer swayed by such ugly threats.

[johnhemming2]

At the moment everyone in greece is facing fuel and food shortages.

[adam2]

At the moment everyone in greece is facing fuel and food shortages.

MOST are facing food and fuel shortages but certainly not all.
Some are rich enough to buy food and fuel at almost any price. Money in a greek bank wont help much due to the capital controls, but cash or money in a foreign bank would help a lot.

Others who are by no means rich will have prudently stocked up during the good times. A few jerry cans of fuel, a few sacks of rice, and a few dozen cans of meat or fish would have been within reach of all but the very poor if purchased gradually. Those who have such supplies are now probably glad of them.

Still others have learnt to live a largely self sufficient life, producing most of their own food and fuel, as is often advocated on these forums. They will be much less affected by the shortages of food and fuel which I expect to worsen.

So yes, many are suffering from shortages but those who have prudently prepared are presumably very glad that they have done so.

[clv101]

In other words on an aggregate factual basis you are wrong. Only if you focus on a selection of the coalition's policies can you justify your argument, but if you take everything into account it is not true.

Thanks, I hadn't seen that.

So it seems our problems are even greater then? Despite policies falling on the rich, they/we are still getting richer.

I had in mind report like this:
"Richest 10% control 54.1% of Britain’s wealth, up from 51.5% in 2000 and 52% before financial crisis, says Credit Suisse"
http://www.theguardian.com/society/2014 ... dit-suisse

This from OECD:
Between 2005 and 2011 the average income of the poorest 10% in the United Kingdom fell 2% in real terms. While the average household income in the UK is slightly lower than in Germany and France, the average income of the bottom 10% in the UK is much lower.

Taxes and benefits reduce income inequality by a quarter in the UK. This is in line with the OECD average, but below other European countries such as France, Germany or the Nordics.
http://www.oecd.org/unitedkingdom/OECD- ... ity-UK.pdf

And information like this from high pay commission:
Video
http://www.neweconomics.org/blog/entry/ ... inequality

[Little John]

A tiny rise in the contributions of the rich means absolutely nothing in the absence of context.

For example, If I have an income of 500k per year and my tax contributions rise from, say, 52% to, say, 55%, in terms of impacting on my capacity to service my essential daily living costs, the rise in contributions is irrelevant.

However, if I have an income of, say, 15k per year and my contribution, directly and indirectly, rise form, say, 25% to, say, 28%, in terms of impacting on my capacity to service my essential daily living costs, the rise in contributions is significant.

[johnhemming2]

Still others have learnt to live a largely self sufficient life, producing most of their own food and fuel, as is often advocated on these forums. They will be much less affected by the shortages of food and fuel which I expect to worsen.

So yes, many are suffering from shortages but those who have prudently prepared are presumably very glad that they have done so.

Which is a fair point relevant to this forum.

I suppose the more general point is that people are facing shortages in that petrol stations etc are running out, but obviously some will get around this.

[johnhemming2]

So it seems our problems are even greater then? Despite policies falling on the rich, they/we are still getting richer.

A lot of issues are technologically driven also wages have been driven down by people willing to come to the UK to be officially "poor".

To me one of the bigger issues to face for the future is ensuring that people have meaningful lives within a wider society rather than just as relatively impoverished consumers.

The technological changes are continuing. (many of which are beneficial, but a lot of which reduce the demand for people do perform traditional work).

Economic models which worked in the 1960s don't work as well now.

[clv101]

A tiny rise in the contributions of the rich means absolutely nothing in the absence of context.

For example, If I have an income of 500k per year and my tax contributions rise from, say, 52% to, say, 55%, in terms of impacting on my capacity to service my essential daily living costs, the rise in contributions is irrelevant.

However, if I have an income of, say, 15k per year and my contribution, directly and indirectly, rise form, say, 25% to, say, 28%, in terms of impacting on my capacity to service my essential daily living costs, the rise in contributions is significant.

I'm starting to think the more significant issue isn't the changes in tax rates, but that over the last ~decade the dude earning £500k has seen their income increase significantly where those on £15k have flatlined.

Here were talking about something much more serious and tricky than the distributional analyses for policies mentioned above. It comes back to Piketty's work on the capital-labour split. Why is income from capital (rent, dividend, interest, profit) increased more than income from labor (wages, salaries, bonuses)... to such an extent that rate of return from capital is greater than GPD growth. This situation leads nowhere good - and can't really be addressed by the kind of policy tweaks governments prefer.

Coming back to Greece, if there were to be tens of billions of write-downs, these would be felt by capital - just the area that needs to have its rate of return clipped if we aren't to continue to exacerbate inequality.

[clv101]

The technological changes are continuing. (many of which are beneficial, but a lot of which reduce the demand for people do perform traditional work).

Indeed, I recently read James Barrat's Our Final Invention: Artificial Intelligence and the End of the Human Era and Nick Bostrom's Superintelligence. Figuring a way of maintaining human relevance and value is maybe the 2nd challenge of the 21st C. (after keeping folk and the biosphere alive!).

[adam2]

Here were talking about something much more serious and tricky than the distributional analyses for policies mentioned above. It comes back to Piketty's work on the capital-labour split. Why is income from capital (rent, dividend, interest, profit) increased more than income from labor (wages, salaries, bonuses)... to such an extent that rate of return from capital is greater than GPD growth. This situation leads nowhere good - and can't really be addressed by the kind of policy tweaks governments prefer.

Coming back to Greece, if there were to be tens of billions of write-downs, these would be felt by capital - just the area that needs to have its rate of return clipped if we aren't to continue to exacerbate inequality.

The income from capital has not of course increased in every case, but as you point out, the increase in income from capital has in many cases outpaced income from labour.
I suspect that part of the reason is planning and environmental controls that make new capital investment problematic, and thereby increase the income from existing capital investment.
An existing mine for valuable minerals can be very profitable partly IMO because environmental restrictions discourage investing new and competing capital in mining.
In the UK at least, capital invested in housing can produce generous returns, partly because planning rules restrict the supply of new and competing housing that in a free market would bring rents down.

[johnhemming2]

The technological changes are continuing. (many of which are beneficial, but a lot of which reduce the demand for people do perform traditional work).

Indeed, I recently read James Barrat's Our Final Invention: Artificial Intelligence and the End of the Human Era and Nick Bostrom's Superintelligence. Figuring a way of maintaining human relevance and value is maybe the 2nd challenge of the 21st C. (after keeping folk and the biosphere alive!).

I think you may be right. Resource depletion as an issue has gone out of the media for the moment, but remains a real issue. Fracking is neither as bad as some people claim it to be nor a long term solution to energy needs.

Greater efficiency and things like solar energy are useful solutions, but they do nothing about the changing nature of the economy - much of which is ordinarily driven by technology - that is when you don't have idiots like Varoufakis in charge.

[johnhemming2]

The income from capital has not of course increased in every case, but as you point out, the increase in income from capital has in many cases outpaced income from labour.

As a self-employed computer programmer for the last 30 years (although my company was incorporated about 10 years ago) the model which looks at the division between capital and labour is flawed.

Actually Greece had (had) a lot of self employment.

Companies like Microsoft and Apple did not start with a lot of capital, they are about innovation.

More traditional ventures such as bakeries, manufacturing etc can be looked at more that way. However, the need for "Labour" per se in those organisations is now less. That is where society's challenge remains.

Greater inequality is a symptom of this, but we have to look at the issue of the cause rather than just trying to treat the symptoms.

[snow hope]

Another IT person - interesting that so many people on this forum have IT backgrounds....maybe worth a poll?

I thought one of the key objectives and ideas behind industrial and digital technological progress is that we would progressively move from a 6 day to 5 day to 4 day working weeks, as we all became "better-off". This happened to some extent but then stopped in my opinion in the 70s/80s as we got more greedy and of course wanted evermore......then we got into the situation where both partners in a marriage required to work to afford everything they wanted to consume/own.

I didn't wake out of this walking dreamland that most people exist within until I was 40. It was a bit like taking the red pill... lol

A lot of this has of course been controlled by the corporatocracies by advertising and thus controlling people's expectations. I could go on but I am sure you get the jist.... We are where TPTB want us to be...

[3rdRock]

Another IT person - interesting that so many people on this forum have IT backgrounds....maybe worth a poll?

I thought one of the key objectives and ideas behind industrial and digital technological progress is that we would progressively move from a 6 day to 5 day to 4 day working weeks, as we all became "better-off". This happened to some extent but then stopped in my opinion in the 70s/80s as we got more greedy and of course wanted evermore......then we got into the situation where both partners in a marriage required to work to afford everything they wanted to consume/own.

I didn't wake out of this walking dreamland that most people exist within until I was 40. It was a bit like taking the red pill... lol

A lot of this has of course been controlled by the corporatocracies by advertising and thus controlling people's expectations. I could go on but I am sure you get the jist.... We are where TPTB want us to be...

+1. Once you've determined the difference between 'needs' and 'wants', you reduce your dependency upon the corporatocracies. Simples!