A R, the use of the word "redistribution" means "taking".
Getting money moving requires a reason for it to be moved. Right now, it's foolish for a company to expand plant or hire workers. Who's gonna buy what they make, over and above the present rate of sales? It is nothing more than prudence for an individual or a company to sit on cash or invest it in safe assets.
Now, if you could get rid of the present school of thought of our Glorious Leadership, there might be a chance to get things moving, but otherwise it's all just peeing in the whiskey.
You're from BATFE? Come right in! I use all your fine products!
So, yes, in the short term, it makes perfect sense under the current financial system for capitalists (people who employ private capital) to invest their wealth outside the main productive economy. It is prudent for them to do so under the current rules, legislation, technology, and law. And that's where the nations formerly productive capital sits and accumulates. Because of that trend, going back to the late 1970's, that malinvestment has meant a steady decline in the purchasing power of consumers. So to my way of thinking, the solution to freeing this idle capital is to get it into the hands of people who will spend it in the real economy via increased incomes, increasing demand, production, jobs, and wealth. Unfortunately it seems, that process - in technical economic language - is redistribution.
The alternative is to not redistribute that capital, and just let it carry on accumulating outside the productive economy. Allow that wealth - that has been redistributed from consumers to capitalists once already - to be exempt from further distribution. Just allow it to pile up in dead end financial instruments untouched and walled off. To allow one form of redistribution to continue unabated - that from consumers to accumulators - but to cap that redistribution at that point. I don't agree with that kind of artificial block on the natural cycle of redistribution, but that's just me. Others of course, disagree.
I don't speak American very well either.
You can almost see the gut-wrenching reaction in the faces of conservatives if you say the word "sustainability". They've all been trained by Glenn Beck and the conservative media to think that anyone using the word "sustainable" is a secret Agenda 21 operative out to enslave them for the New World Order.
When the reality is that I don't want anything to do with Agenda 21 or the NWO any more than they do, I simply want my garden and lifestyle to be able to improve each year and be easily picked up and carried on by my children.
"Sustainable" to me means not eating your seed-corn.
Anyway, I place the blame on rising rents solely on the government's shoulders. You can't put free money (or free anything) into the system and not have unexpected consequences like a sudden rise in cost of everything.
I don't get welfare and I don't pay taxes, but I'm impacted by it regardless. There's a set cost to produce a 10 pound bag of potatoes, but if the government is paying a certain amount in welfare then the 10 pound bag of potatoes is going to have an inflated cost to reflect that.
It's a truism that whenever the government creates a program to fight against a problem, they make the problem worse.
Post Katrina property insurance in south Louisiana increased monthly rents when lessors passed on the cost. With the upcoming flood insurance increases from the Biggert-Waters Flood Ins Reform Act of 2012 expect rents to be increased over the next five years to cover the costs. Beginning 10/01/12 the National Flood Ins Program (NFIP) will phase out subsidizied Pre-Firm rates (built before 12/31/74 or before the initial flood maps were published for their communities) for certain properties located in special flood hazard zones (A, AE, A1-30, AO, AH, V, VE V1-30 & D) OTHER THAN PRIMARY RESIDENCE & ONLY PROPERTIES RATED PRE-FIRM AND LOCATED IN HAZARD ZONE. Does away with "grandfathering" for these zones. Also means you need an Elevation Certificate on renewal if you do not already have one. Effects new policies 7/06/12 unless heir transfer when estate settled. The law states that the increase must continue each year until they reach their actuarial rates. Since rates are subject to increase each year it is difficult to know when the policy will reach their actuarial rates. MM
As used by our leading politicians such as the president, "redistribution" means taxing "the rich" and providing more subsidies to the bottom of the economic pyramid. It would not affect corporate giants like GE or Goldman-Sachs.
Again, though, the question arises as to investment into the "main productive economy". Just what is that? We're no longer a major smokestack-industry, blue-collar economy. While the percentage of GDP from industry is fairly constant over time, the number of workers in that production is drastically lower than in the past.
Parenthetically, I would not be surprised to learn that the highest-paid blue-collar workers are in the war-toy industry.
I just now read Chapter 9 of Stockman's book. It gives excellent time-line data as to how we got where we are today.
Again, though, when the velocity of money is very low, speeding up requires some reason.
Why would anybody invest "outside the main productive economy" beyond what might be termed charitable giving? Frankly, I don't even know what that is. Fund a museum? Fund a chair at a university? Donate to a church? Capitalists already do that. Gates, Getty, Buffett, the Kochs, Turner...
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As a landlord - albeit a very small one - I don't see the "greedy and rapacious" bit that clearly. Since we moved to the higher ground of our bug out location a couple of years ago, I've been renting my little cottage on the Gulf Coast. It's fully paid for, so there's no mortgage to service.
Still, after insurance and property taxes (the two biggest hits), as well as all the lesser expenses, it's hardly any sort of goldmine. My area's somewhat economically-depressed, so rents aren't that high to begin with. If I left the place empty it would no doubt eventually be vandalized or torched and - though I haven't checked lately - I'm pretty sure my insurance would climb even higher. So yes, I rent it, but my net profit isn't anything to brag about. If I was servicing a mortgage on the place I might be "building equity," as the commercials love to say, but it would be a monthly cash drain.
As far as unreported rent income goes, don't make me laugh. I think you'll find it's a lot easier to do that if you've got a college room mate staying in a spare bedroom, but if you own the house it's very easy for TPTB to slap a tax lein on the place. You can't exactly throw your spare house in the back of the pickup and dissappear at 3:00 am!
I'm reminded of one of my favorite historic anecdotes that comes to us by way of the Roman historian Tacitus, if my memory is correct. The Romans were prodigious builders as we all know. Each Emperor left his mark in great buildings, civic undertakings, and monuments, many of which are with us to this day. These were made of stone primarily, and the stone had to be cut and quarried at some far off place, manhandled down to rivers, laboriously loaded onto barges, unloaded, and through brute strength of many hands and aching backs, assembled into amphitheaters, aqueducts, triumphal arches, and what have you. It turns out that one inventive fellow approached Seutonious (I think) with a marvelous new system of transportation that would cut the time and labour necessary by some great degree (his actual proposal was not recorded). Innovation and technology. But Seutonious was horrified at the prospect. If we employed this new system (the emperor replied), it would result in the unemployment of thousands, and it was not the job of Roman leadership to unemploy people, but to employ them. Building monuments remained slow and laborious, and Roman taxes continued to be used for the benefit of all those employed in the task. I love that story.
We today live in a cult of technology and innovation we equate with progress and civilization. The human costs seem to us to be irrelevant. So, robotics that steal jobs and financialization that steals wealth are celebrated and accepted at face value. That regular people suffer as a result is almost beside the point. The market demands these things, and the market is always right, and regular humans wrong. Using the power of the state and its taxes for the widest benefit of the most people has become a nasty and reviled concept. Seutonious would be mortified.
Technology is increasing the productive capacity of some people beyond anything ever experienced before in history, and the benefits of that productive capacity - due in part to technology - is accruing to fewer and fewer, in greater and greater amounts. The contractors who build our monuments are still receiving the full price for their work, but with technology, their individual share of the benefit is increasing at the expense of all those folks who formerly did the work. Those forgotten workers are Seutonious's worst nightmare - unemployed and hungry citizens.
And because of technology, it pays capital less and less to invest in simple rock rollers and manhandlers, when that accrued benefit can now be invested in an endless morass of technology driven financial instruments that simply make money from having money. We celebrate that as innovation and civilization, impossible without the unfettered capitalism that makes it all possible. Of course, there is a limit to this, when enough people at the bottom call a a halt out of hunger and desperation, something Seutonious was only too keenly aware of. But we, in our arrogant western way, are too blinded by the bling it provides to see beyond. To us, the party can go on forever uninterrupted and unchecked. We have no sense of time or history. We live only for today and limit our thoughts about the future to pithy soundbites of ideology, swatting down anything we don't want to hear, or that conflicts with our tribes brave new worldview.
Here is the immutable lesson of history, the basis of Setonious's fear. That you can make all the pronouncements you want, build all your monuments in any way you please, mangle the language and twist its meaning into any pretzel that suits you, but in the end, human beings demand economic security and if, unlike Seutonious, you don't provide it for them, they will take it for themselves. That is the lesson of history.
It's distilled wisdom.
We argue about what constitutes economic security, we scare each other with stories of how the government/illegal aliens/liberals/sasquatch are coming to take it away with us, and we discuss the practical methods of obtaining economic security.
But I've never seen the spoken word that we, as human beings, simply demand that economic security and it will be provided for us or we will take it.
I think someone else said it before when they spoke about life, liberty, and the pursuit of happiness. But that comes down to economic security too.