Comments (85)

Dec 5, 2019 - 10:56am

i hate this commie cunt

Hello Wall Street, It’s Yours Truly. If you don’t see it here, I didn’t say it. — Former Buffalo Bills Tailback 1973 NFL MVP 1968 Heisman Trophy Winner 5x All Pro
Dec 5, 2019 - 10:58am

This would never pass. Retroactively dismantle companies? No way.

“The three most harmful addictions are heroin, carbohydrates, and a monthly salary.” - Nassim Taleb
Dec 5, 2019 - 11:29am

It's hard to see where the fight for ordinary citizens lies in this effort, much like the Trump trade war with China.

Amazon just doesn't make consumer goods more expensive or harder for consumers. Facebook is an entirely free service, along with its other properties.

I can't imagine her changing anti-trust standards in this way being realistic.

Dec 5, 2019 - 12:08pm

C'mon guys, play the tape forward. Any law that restricts what corporates can and cannot do HELPS advisory and legal work. Suddenly everyone needs to come up with new ways of maintaining and buying interest and control in new companies. Sounds like fees fees fees to me. Not to mention the spin-off bonanza that will occur.

In the last decade, as mergers have become more straight ahead, fee compression has occurred and more of the work has been taken in-house by clients.

Real talk, if you want to be a banker, you should be loving this proposal (I don't think it'll ever happen but hey) because it is guaranteeing that more CFOs will be calling up their banker and attorney and asking to establish a retainer.

Dec 6, 2019 - 12:29am


Noticeably absent ITT: the handful of leftist apologists that always post on WSO

great: eliminate non-competes, non-solicit, and right to organize
good: increased antitrust scrutiny
bad: retroactive examination of mergers, automatic ban on large mergers

Happy now, champ?

when you're accustomed to privilege, equality feels like oppression
Dec 6, 2019 - 5:20pm

Lester Diamond:

Nearly everyone thinks that, unless of course you are radical on either side

The data does not really suggest this. A high percentage of people identify as "moderates" or "independents" but if you poll people on individual issues, it is revealed that people have fairly extreme opinions. This is particularly the case on economic policy. There are actually very few economic conservatives. Republican voters tend to have fairly left of center economic views but extreme right of center social views. They would not personally identify their views as being at all leftist but the surveys speak for themselves. High percentage of republican voters are pro wealth tax, pro medicare for all, pro capital gains tax increase, etc. However, republican voters also have very right wing views on immigration and social issues.

In terms of economics, Democratic voters are actually very similar to the bulk of Republican voters. Both sides when surveyed on the issue are fairly left wing economically speaking. In terms of social issues, Democratic voters are surprisingly mixed! You wouldn't think this with all of the "SJW" stuff but when you survey self identified Democrats on social issues you find fairly mixed results (deportation, abortion, school choice, etc.). This is pretty clearly reflected in the Democratic primary polling. Biden is just a bland centrist who doesn't really say much of anything specific and tends to shun a lot of the progressive cultural issues. Warren and Sanders both pay the progressive left lip service but largely focus their message on lefty economics. All the "woke" candidates like Beto, Harris, etc. all did pretty poorly.

Americans/Voters like the idea of a "reasonable moderate" who will "get things done". However, the moderate voter does not really exist in any meaningful sense. Most people are fairly leftist economically and radically split on social issues.

Dec 10, 2019 - 10:08pm

Yes, but unfortunately our winner takes all election system causes more radical candidates on both to get elected. There’s a lot of research that shows that the average representative from both parties has been veering towards the extremes of the political spectrum. That’s how someone like Elizabeth Warren or, even better, Jeremy Corbyn can gain so much traction. I think we’d need to have a system that’s more proportionally representative to how people think. I know Maine and a handful of other jurisdictions are experimenting more with some kinds of proportionally representative electoral systems, I wonder whether it’ll decrease political radicalization in those races.

Quant (ˈkwänt) n: An expert, someone who knows more and more about less and less until they know everything about nothing.

Dec 6, 2019 - 12:02pm

Freedom and Equality are always involved in a tradeoff.

This is based on the premise that there are people out there that are much better at creating wealth. Thus the more freedom you give (capitalism) the more inequality you will get (Better abled people will rise to the top, or people w/ more resources).

The same is true on the opposite scenario, if you want more equality you have to even out the playing field to let less abled people gain wealth, and to do so you have to impose certain rules that will restrict the amount of freedom people and companies have.

The conflict lies in where is the sweet point. I personally think the States has the current best system where people get the freedom necessary to innovate and attract the best talent, yet w/ the restriction necessary that allows newcomers to rise to the top (a fully free economy would mean that there would be no competition due to old institutions monopolizing everything). However, I would add a subsidized healthcare system where a surgery doesn't mean lifetime debt, and some sort of university subsidy (Because education means less dumb shits)

People tend to forget a key comparable which is the 75% tax rate imposed in France in 2012 which only lasted 3 years before being dismissed as a failure.

Dec 6, 2019 - 2:09pm

I hate this bill, and Warren, and every other phony intellectual like her. I think she's particularly dangerous because unlike Bernie who wears it on his sleeve, Warren tries to present her socialist bullshit as somehow not socialism but rather a purer "fairer" capitalism.

That being said, I want to clear up one thing. The power to retroactively unwind a deal isn't all that different from what the current antitrust laws allow. Currently, the Sherman Act allows a company to be broken up if it becomes a monopoly.

The reason Warren's proposal sucks is that it changes the standard of review from a consumer-focused standard to a standard that looks out for workers, entrepreneurs etc.

Today, if a company becomes dominant but consumers aren't harmed, we allow that company to remain as is. Even if the company's dominance leads to reduced wages, or makes it harder for new startups to compete.

And that is as it should be. Business doesn't exist to create jobs for people. It exists to serve the customer. The fact that jobs get created is just a byproduct of that.

If we start regulating as though the point of business is to employ people, the natural result will be that we prevent (or retroactively dismantle) efficient deals that make businesses do a better job of serving their customers, which is where sustainable job growth ultimately comes from.

Dec 8, 2019 - 5:19pm

Sherman and Clayton Antitrust acts clearly aren't being enforced.

The Sprint T Mobile Merger was allowed to pass under the rules that they couldn't raise prices for 3 years (simplification). The regulators who approved the deal essentially made it abundantly clear that they know that the merged company will raise prices because of increased market power.

Clearly bad for consumers, and bad for workers with skills only useful to the phone companies.

Ray Dalio has it right that wealth inequality is leading to populism, and that things need to move in the other direction or we'll get full blown communism and no one will have anything. No body likes to pay a higher tax rate, but I'd rather have higher marginal tax brackets than a socialist revolution.

Consumer focus only is what's often done in practice, but it isn't the only thing that's important. Clayton and Sherman allow for Monopsony and Oligopsony regulations as well because of market concentration amongst employers.

I don't like Warren because she's disingenuous and thinks everyone but her is stupid (Medicare for all without raising middle class taxes is ridiculous because they receive the benefit just as much as anyone else). Sanders seems more open to different ideas so long as he feels he's helping the poor, vulnerable, and veterans. His worst ideas are unlikely to make it through even a fully democratic congress with cloture. Biden is getting old, and let's all be honest here: Hunter Biden didn't deserve 600k a year to sit on the board of Burisma; do I think that should impact his father: it depends on Joe's involvement. That being said, Trump is using the office to enrich himself and provide favors to other countries. Until he releases all of his tax returns, we don't know if he is enriching himself, or he isn't worth what he says he is, or he's been lying to the IRS about what he makes, or something else. The NYTimes expose on his father's wealth transfers were remarkable in just how flagrantly they broke the law.

Dec 9, 2019 - 11:10am

You make a lot of good points and I think your comment is better for the top level than as a reply to me.

I'm saying that antitrust law should remain consumer focused; block/dismantle deals that hurt the consumer and let the others remain.

You're saying that consumer-harming deals have been allowed to go through. You give the example of Sprint/T-Mobile and I'll add another, which is the airline mergers of recent years.

But I don't hear you arguing that otherwise-efficient deals should be blocked/dismantled on grounds that they hurt workers or entrepreneurs. I suspect we agree that they should not be.

Inequality is a problem but its being blamed for everything and the solutions currently on the table are hurting everyone. Exhibit A is Amazon being pushed out of NYC by the socialist crowd who wanted more freebies & promises for workers.

Dec 9, 2019 - 4:01pm

Don't forget the creation of an enormous surveillance state apparatus which completely violates the Fourth Amendment which protects against unreasonable searches. Though Cheney was the architect and the Patriot Act ushered it in to "protect against terrorism" Obama had ample opportunity to dismantle the program and did nothing, which Donald Trump is doing now. American citizens are now ruled by an increasingly tyrannical government (across both political parties) which views us as subjects instead of free citizens.

"When governments fear the people, there is liberty. When the people fear the government, there is tyranny. The strongest reason for the people to retain the right to keep and bear arms is, as a last resort, to protect themselves against tyranny in government."

  • Thomas Jefferson

Dec 9, 2019 - 4:04pm

They get paid for their relationships, pricing, and ability to convince the executives that the structure of the deal will work out best for the executive (and the company if the executive is an owner manager). Everyone knows that the DCFs are bullshit used to justify the best pricing they can get the client, except for Masayoshi Son.

Dec 9, 2019 - 4:02pm

@PteroGonzalez" Appreciate the compliment! You're probably right about that.

I think that how you define "hurting" workers is really difficult. For over 100 years people have been saying that innovation will eliminate jobs and people will be permanently unemployed. I think that until now it's been a really stupid argument, but now that machines are able to almost completely take over all human tasks in a multitude of industries, unless capital is distributed more evenly, some people could permanently drop out of the work force. If you're incapable of thinking for yourself and coming up with new ideas, you're going to be useless in 30 years in the economy. It's unfortunate but the bottom 10th of the population IQ wise is going to be in even rougher shape in 30 years without transfer payment increases. They will get angry and rebel when it gets that bad.

At the end of the day if a business doesn't change to keep up with its competitors, it will collapse leading to an enormous capital loss as well as immense job losses. Who takes more risk? In absolute dollar value capital owners have far more to lose by not making necessary creative destruction changes. In terms of emotional well being and liquidity issues, workers suffer more. At the end of the day, executive skills transfer better company to company than employer specific job skills for low or medium skilled workers.

NAFTA was a difficult thing to do, but it kept American car manufacturers competitive for a much longer time than they would have been otherwise. 90% of job losses in manufacturing are do to automation, which reduces end costs for consumers, the other 10% of losses have been caused by jobs being shifted overseas where labor is cheaper, which also leads to consumer gains.

I don't look at mergers with regards to consumer or pro business, so much as from an economics dead weight loss perspective. So I don't really care that much when oil companies merge to raise prices, because the price increase mitigates negative externalities of pollution. But if a medical producer (hospitals, pharma, PBMs, etc.) merges there are primarily downsides on the consumer end, so that's why the consumer is generally the focus.

I don't like Warren's idea of putting workers in charge of 40% of the board of companies, because the makeup of workers might counteract necessary changes to keep the company competitive, in order to save their jobs temporarily.

The Amazon NYC issue is a different thing altogether. I think there should be a federal 100% tax on state level tax credits to businesses. At the end of the day, it makes it so that the end municipality is always stuck with a bunch of subsidized jobs and increased usage burdens on public resources. If you look at the size of the tax breaks they tend to pay for like 10 years salary per job. At the end of the day the total number of jobs doesn't increase because of the subsidy/tax break, and it results in inequitable treatment for companies that don't engage in this type of bidding process, which is only really accessible to very large companies. Joe Schmo the sole proprietor attorney can't ask the state of New York for a tax break to move to the 50th floor of a NYC skyscraper. It's clearly unfair, but congressmen don't want to criticize their corporate donors that are also most likely to benefit from the tax breaks.

Dec 9, 2019 - 4:18pm

I hope we all agree (you and I certainly do) that if we fully design an economy around favoring innovation and unfettered capital efficiency, we are going to make the least-skilled people less valuable. In a vacuum, that is a problem.

There seems to be two solutions that people propose to solve that problem.

  1. Limit progress to prevent or delay the problem from ever happening. In other words, regulate. This will reduce overall societal wealth in countless ways . . all of the ways that technology makes life cheaper, healthier, more efficient, better etc etc. If we agree to limit progress, we are agreeing to live shorter and less enjoyable lives just to make sure that a subset of the population can remain employed.

  2. Allow progress to continue and set up a system so that some of that wealth creation goes to protect those whose skills will be left behind. Yang is the loudest voice on this but I don't want to give him all the credit because I suspect most libertarian-minded folks are also envisioning something along similar lines . . let the pie grow big and have some faith that we aren't a society of heartless savages who will leave unskilled folks to die in the streets.

Route 2 has its problems and questions but compared to Route 1 its an easy call in my view.

Dec 9, 2019 - 4:53pm

FiveThirtyEight put out a post saying they are covering Yang as a major candidate because he has extraordinary low name recognition, but absolutely dominates the field as he gains recognition. They basically said that they can't rule out Yang dominating the primary as more and more people get to know who he is and what he stands for.

I think the Libertarians don't have a clue about economics, but I like that they are anti-war generally. Republicans generally just think that the responsibility to take care of those left behind rests with the Family; the whole thing falls apart for me because some people don't have family. Welfare programs have a lot of problems with incentives and waste, but on the whole of it if 90 people are helped for every 10 people that don't deserve the benefit I'm okay with the overall program (though I would do my best to eliminate the waste).

Dec 10, 2019 - 9:16pm

I don't see any viability of a UBI system, nor any ways to offset the huge costs. I would be much more open to Yang if he had called for a system of targeted basic income, wherein the income provided by the programme would cover the basic living expenses and costs to skill up (say up to $12-18k), while the minimum wage is also bumped up to be much higher than the basic income level (say at around 18k-24k annual). That would discourage people from actively seeking poverty and preventing misuse of BI.

Also what I don't seem to fathom is why is the US even taxing the bottom of the barrel, while giving tax cuts to the top? Even Bernie doesn't tackle the bottom's tax while focusing on the top. The bottom of the pile, people deemed below the poverty line should be paying zero tax, period.

GoldenCinderblock: "I keep spending all my money on exotic fish so my armor sucks. Is it possible to romance multiple females? I got with the blue chick so far but I am also interested in the electronic chick and the face mask chick."
Dec 11, 2019 - 11:49am

The PC culture makes it so that the real existence of class structures is overlooked and underestimated by people like Warren.

If you say there is no intrinsic separation between classes, just a wealth disparity, then why not focus on pushing more charitable funds to wealth enhancement in poor, lower class communities?

Dec 11, 2019 - 4:51pm

@PteroGonzalez" My Name is Jeff Income Tax and No Tax are completely different, and that's what got Romney in hot water in 2012.

In many cases people slightly above the poverty line pay quite a bit in tax because they spend more than they earn to stay afloat. If you spend 120% of what you earn, and you pay 6.25% sales tax in Massachusetts (I know this doesn't apply to all goods/its hypothetical) then you'll wind up paying (6.25%*1.2) 7.5% of your net income on sales taxes, without anything else going on at the state or federal level. That being said at the federal and state level for people at or below the line, you can receive subsidies that can add to a net benefit.

It is remarkable how we tax people who already can't make ends meet.

Effective tax rate + market distortions are the only things that people should care about. Most middle income earners pay higher tax rates than the richest 1500 people in the country. I support a progressive capital gains tax that scales up to the top marginal income tax rate for Billionaires. It isn't fair that Lucy Lou pays 34% as a corporate lawyer, and Warren Buffett pays 17% on his capital gains. When you make that kind of money (500 Million Dollars +), the marginal tax rate has absolutely no distortionary impact on your investment behavior because you're still so fucking wealthy that you couldn't spend all the money on consumption goods in 10 lifetimes without buying absurd shit like 700+ foot super yachts.

If you can't support a progressive capital gains tax (wealth taxes are difficult to implement and create distortions), you can probably at least support inheritance or estate taxes. If I could pay my taxes after I've died I would definitely prefer it to what I'm currently doing.

Dec 11, 2019 - 6:22pm

It’s not fair that capital gain depends tax should be progressive.warren Buffet actively manages his money and hence he earns it. Not to mention that his investments group employs many people. If you try to enforce a progressive tax you basically punish people who make wise investments. That’s the last thing that should be done as it’s the people who make poor investments (08 financial crisis) that hurt the economy.

Dec 12, 2019 - 10:00am

It is remarkable how we tax people who already can't make ends meet.

You've captured my sentiment here. There are so many people who are forced to pay indirect taxes through their day-to-day expenditures, and while they are eligible for government rebates, they are either not knowledgeable of such initiatives, or the procedures to apply are just too cumbersome.

Personally, I would stand in support of tailored consumption taxes coupled with a reasonable inheritance-estate tax for UHNW, and a targeted basic income programme for the poor.

GoldenCinderblock: "I keep spending all my money on exotic fish so my armor sucks. Is it possible to romance multiple females? I got with the blue chick so far but I am also interested in the electronic chick and the face mask chick."
Dec 12, 2019 - 10:02am

Fun fact, the US already did that before. Merck USA used to be a subsidiary of Merck KgaA until Roosevelt took over it during WW2. Now Merck USA is bigger than the original Merck.

GoldenCinderblock: "I keep spending all my money on exotic fish so my armor sucks. Is it possible to romance multiple females? I got with the blue chick so far but I am also interested in the electronic chick and the face mask chick."
Dec 11, 2019 - 8:05pm

Buffett himself says that it is unfair that people like him pay 17%, while his secretary who he pays above market rate for has an effective tax rate 10-15% above his.

A flat tax would be fair in a world where the playing field is level, but it isn't. So there's a multitude of federal programs that are designed to level the playing field a bit by taxing the richest and providing net tax benefits to the poorest. Providing an equal opportunity for every American unfortunately means that you're going to have to take more on average from winners and distribute to the losers in our society.

I'm all for eliminating waste in how we tax and how we distribute money. But the paradigm in which the rich pay more is one I'm fine with. Taking 40% of a person's 10 billionth marginal dollar of capital gains instead of 20% just doesn't bother me if we are taxing earned income at a top marginal rate of 39.8%. It only matters if it distorts the person's behavior. Buffett isn't going to stop making good investments because his marginal tax rate on his 25 Billionth Dollar went up. With Trillion Dollar deficits, we have to raise taxes to fix the country's debt issue. The people who can most afford to pay should pay up.

The truth is that these guys are all pounding the table screaming because they like having lots of money. We all know that taxing them won't affect their lives in the slightest because they'll still have more money than God. They know it too. They don't have an argument. If they did they'd be in the streets they'd be arguing it. They know that they'll lose the argument because they can't justify their low tax rates logically, so they pound on the table and yell and scream.

This whole argument that it is punishing success is bullshit. Punishment would be taking all their money for being successful. The 100th richest billionaire will still be the 100th richest billionaire when they sell their assets for cash. If you're worth 1 Billion dollars and your effective tax rate goes from 20% on further gains to 27%, I don't really care. Reason being that while you're complaining about paying a few million more we have systems in place so that everyone else has a fair shot at getting to where they are. We use the money for schools, public works projects, the social safety net, people with disabilities, elderly on fixed incomes, the national defense, the GI bill, medicaid. Because of Johnson's Great Society programs, the Poverty rate in the United States fell from 1 in 4 to roughly 1 in 9. We are very priviledged people on this forum; I can't imagine what my life would be like to be one of these poor people. I wouldn't have 1/100th the opportunities that I've had in my life if I had been born in the bottom quintile family income, or in the middle of Appalachia with no money. Federal dollars make sure that Hospitals in rural areas provide employment in red rural states, and don't go broke. States that didn't do the Medicaid expansion under the ACA and PP act are far more likely to have rural hospital closures and healthcare treatment outages.

Taxing the wealthy is a Utilitarian idea that I support, and you should too. As much as I would like to be a Billionaire and work hard to be one (or get close), it is inordinately difficult. It requires being the smartest person in the room, it requires the right idea at the right time (timing is the lucky part of it), wits, the ability to work with other people and get the best out of them, regulatory hurdles, etc. Paying for social programs using a bigger sliver of the richest's wealth chests has brought prosperity to tens of millions of Americans who would otherwise have little to no opportunity to make a better life for themselves because of circumstantial conditions that were not of their own making. We shouldn't prevent people from having opportunities that the rest of us who are fortunate have, simply because of the families they were born to.

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