The New York Times is a communist newspaper. It admitted as such last week when it celebrated Karl Marx’s 200th birthday and declared that he was right all along.
Well, the inane behavior at the left-leaning publication doesn’t end there.
According to the newspaper, it is time that the government institutes price floors for ride-sharing apps like Uber and Lyft because they work too well.
The Editorial Board does admit that apps are making traveling across the city a lot easier and have filled a void left by inadequate government transit. At the same time, the paper suggests, Uber has destroyed the livelihoods of taxi drivers and transformed cities into parking lots.
So, what’s the solution? A price floor on rides, which is essentially a minimum guaranteed fare for drivers.
From the fine folks at the nation’s paper of record:
“It makes little sense for the city to regulate the old and new guard of for-hire cars differently when many New Yorkers use them interchangeably — as do some drivers, who have been known to switch between traditional cabs and app-based services. While it would be impractical for the city to get rid of its existing regulations in one fell swoop, it could phase in new regulations. A more thoughtful regime would ensure that all drivers make a living wage by establishing a minimum fare for riders, and a standardized share of that fare for drivers, regardless of what kind of car they drive. Or as Brad Lander, a City Council member from Brooklyn, has proposed, the city could require companies like Uber to pay drivers a minimum wage.”
The board also demands municipal governments establish more regulations:
“Further, the city ought to standardize regulations like those requiring that a certain number of cars be accessible to people with disabilities.”
Hey, New York Times, the 1930s called and they want their economic policies back.
Marx was an important figure in economics. Obviously, his calls for a dictatorship of the proletariat had horrendous results. However, his economic analysis employed the “labor theory of value” that was considered the standard paradigm since the time of Adam Smith. Marx forced economists to replace he “labor theory of value” with the Marshallian synthesis of supply and demand now used today. Marx also correctly described the business cycles that we now experience. See below.
“..Depressions occur after investment bubbles burst. In free-market capitalism, capital generates income for the owners of the capital which in turn is used to create additional capital. This is very good. Sometimes, it can be actually too good. As capital continues to accumulate, its owners find it more and more difficult to deploy it efficiently. The business sector generally must interact with the household sector by selling goods and services or lending to them. When capital accumulates too rapidly, the productive capacity of the business sector can outpace the ability of the household sector to absorb the increasing production.
The capitalists, or if you prefer, job creators use their increasing wealth and income to reinvest, thus increasing the productive capacity of the business they own. They also lend their accumulated wealth to other business as well as other entities after they have exhausted opportunities within business they own. As they seek to deploy ever more capital, excess factories, housing and shopping centers are built and more and more dubious loans are made. This is overinvestment. As one banker described the events leading up to 2008 – First the banks lent all they could to those who could pay them back and then they started to lend to those could not pay them back. As cash poured into banks in ever increasing amounts, caution was thrown to the wind. For a while consumers can use credit to buy more goods and services than their incomes can sustain. Ultimately, the overinvestment results in a financial crisis that causes unemployment, reductions in factory utilization and bankruptcies all of which reduce the value of investments.
If the economy was suffering from accumulated chronic underinvestment, shifting income from the non-rich to the rich would make sense. Underinvestment would mean there was a shortage of shopping centers, hotels, housing and factories were operating at 100% of capacity but still not able to produce as many cars and other goods as people needed. It might not seem fair, but the quickest way to build up capital is to take income away from the middle class who have a high propensity to consume and give to the rich who have a propensity to save (and invest). Except for periods in the 1950s and 1960s and possibly the 1990’s when tax rates on the rich just happened to be high enough to prevent overinvestment, the economy has generally suffered from periodic overinvestment cycles.
It is not just a coincidence that tax cuts for the rich have preceded both the 1929 and 2007 depressions. The Revenue acts of 1926 and 1928 worked exactly as the Republican Congresses that pushed them through promised. The dramatic reductions in taxes on the upper income brackets and estates of the wealthy did indeed result in increases in savings and investment. However, overinvestment (by 1929 there were over 600 automobile manufacturing companies in the USA) caused the depression that made the rich, and most everyone else, ultimately much poorer.
Since 1969 there has been a tremendous shift in the tax burdens away from the rich on onto the middle class. Corporate income tax receipts, whose incidence falls entirely on the owners of corporations, were 4% of GDP then and are now less than 1%. During that same period, payroll tax rates as percent of GDP have increased dramatically. The overinvestment problem caused by the reduction in taxes on the wealthy is exacerbated by the increased tax burden on the middle class. While overinvestment creates more factories, housing and shopping centers; higher payroll taxes reduces the purchasing power of middle-class consumers. …”
seekingalpha article/1543642
http://seekingalpha.com/article/1543642
Lance, I agree with most of what you have said, but the issue of easy credit for governments, business and individuals is a major problem. With income of only $20,000 per year, I have been able to get credit cards (unsecured debt) with interest rates from 16 to 24 percent, totaling $38,000 in credit lines, over the last 12 years. This has not been a problem until this year and if not for my Social Security benefits starting in March of 2018, I would of had no choice but, to file bankruptcy. I wonder how many other people and companies are close to bankruptcy, because of the easy credit policies of the FED and many banks in general.
I am for low tax rates on business, because they pass their tax bills on to the consumers of their products and services, in higher prices. Anything that keeps prices lower is a good thing.
I remember paying higher tax rates in 1980, 17 percent vs 10 percent today, but no one is paying their fair share and the government is having to borrow more and more each year.
Also, with 10,000 Baby Boomers retiring every day the government will have to borrow even more money to pay Social Security benefits, because the payroll tax on current workers is not enough to pay all promised benefits. I will have everything that was paid in SS tax back in 4 years, where is the government going to get the money to pay my benefits for the next 20 years? When will the politicians stop wasting tax dollars on stupid stuff? A million here a million there adds up to billions over time, that is a major problem that is not going away anytime soon.