• HubertManne@kbin.social
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    1 year ago

    The precedence for not having adequate taxes for high wealth has been devastating for our busineesses. You use to have to be good to make money back then as opposed to simply having large amounts of money allowing to easily grow it. Earning an additional dollar in investment was harder and harder the more your company made which forced it to run efficently or several smaller ones could eat your lunch.

    • OddrunAsmundr@lemm.ee
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      1 year ago

      Can you elaborate or reference books or economic terms on this? Genuinely interested, never heard this before.

      • Serinus@lemmy.ml
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        1 year ago

        Honestly the biggest difference with the 90% marginal rate is that the reputation of your company used to be more valuable than cash.

        Back then to avoid the top bracket, you’d reinvest into your company and make sure it paid you and your family out for the next hundred years.

        Now you don’t have to deal with all that. Just sell out or cash out asap, and you don’t really need to deal with making sure the company is well run or maintains a reputation.

        In fact, a reputation since the 1980s has increasingly just been an untapped source of cash. Buy the company, cut every corner, and it’ll take years for the reputation to catch up to how shit the product has become.

        This has been the biggest driver of enshittification over the past fifty years.

        The current added push to enshittification is venture capital drying up. Consider Uber, a company whose entire business model was to skim money off of drivers who provided all of their own equipment. Once you’ve scaled enough to dwarf the relatively fixed cost of building the app, nearly everything they bring in should be pure profit. But they ran at a huge loss every year. Why? Because the way to make money in the 2010s wasn’t to build a better mousetrap and sell it for profit. The way to make money in the 2010s was to attract venture capital and cash out. The more you could spend, the more attractive you’d look to hedge funds and investors.

        Now with relatively easy 6% investments lying around left and right, the desperate search for investment dumps is gone. All these places that were structured for big numbers to get a higher valuation suddenly need to just be profitable off their mousetraps.

        Does that make sense?

    • PatFusty@lemm.ee
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      1 year ago

      Last time I checked, Bill Clinton repealed glass steagall not Reagan. I feel like there is a bigger argument that this action has more impact than all the trickle down economics theory Reagan brought.

      • HubertManne@kbin.social
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        1 year ago

        much of that was defanged in the 80’s and clinton signed it when it was passed by the two majority republican legislatures. Its not like he was a big proponent he just decided not to fight that battle.

        • PatFusty@lemm.ee
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          1 year ago

          I have actually never heard this argument.

          The way I understand it is glass steagalls main role was to limit bank investments. I have read that Clinton repealled because it allowed for global markets to start. Then we started getting banks overspeculating and the eventual bubble of 2008. This then prompted the fangless Dodd Frank act to go through but it didnt stop banks from acting as their own insurance anyway when silicon valley thing happened this year.

          Thats how I know it. If you have sources otherwise my infant brain would love to know.

            • PatFusty@lemm.ee
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              1 year ago

              What you have shows that they found a supposed “loophole” but there is some problems with that. It was basically not applicable to most banks until the repeal of glass steagall. Frank-Dodd even tried to save pieces as a result of the 2008 crisis. Below are sections within glass steagall that were repealled.

              Section 16 -

              This section sets out the permissible securities activities of national banks (12 U.S.C. § 24 (Seventh)). No bank covered by Section 16’s prohibitions could buy, sell, underwrite, or distribute any security except as specifically permitted by Section 16. It prohibits banks from being a “market maker” or otherwise “dealing” in non-government (i.e., “bank-ineligible”) securities.

              Section 20-

              This section prohibited member banks from affiliating with firms engaged principally in securities activities (formerly codified at 12 U.S.C § 377). Section 20 only prohibited a bank from affiliating with a firm “engaged principally” in underwriting, distributing, or dealing in securities.

              Section 32-

              This section prohibited officer, director, and employee interlocks between member banks and securities firms (formerly codified at 12 U.S.C § 78). Under Section 32, a bank could not share employees or directors with a company “primarily engaged” in underwriting, distributing, or dealing in securities.

              The Gramm-Leach-Bliley Act of 1999 (GLBA) repealed Sections 20 and 32. Sections 16 and 21 remained in effect until Clinton signed the repeal 8 days after GLBA took effect. Since its repeal, these sections have been tried to be reinstated in an attempt to seperate commercial banking from investment banking.

              The Dodd-Frank Act had the Volcker rule (§ 619), which was an attempt to reinstate only a part of glass steagall (section 20). This rule essentially limited proprietary trading by banks and their affiliates to stop speculative trading. This is all we have now and apponents to the glass steagall sections also say we should have had something planned as a replacement… but we didnt. If you think we were toothless back then, you can assume we are 100% toothless now.

              Too lazy to link sources.

              • HubertManne@kbin.social
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                1 year ago

                This would make sense as globilization while going on since ww2 ended accelerated in the 80’s. Once the provisions there were eliminated it would effectively allow banks to offshore the activity anyway which made just eliminating it in the 90’s to make more sense. Since they were effectively doing it anyway.

                • PatFusty@lemm.ee
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                  1 year ago

                  My problem is that now we dont have the provisions which allows things like the citadel/robinhood fiasco, FTX crypto speculation or the 2008 crash. Saying that it would had happened because of Reagan is just not true.

                  • HubertManne@kbin.social
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                    1 year ago

                    but deregulation and anti regulation as a pattern. As a driving force of the right. That came from him. It certainly would not have happened if regulation was considered an important part of capitalism that while it may need to be tweaked sometimes should never be removed and new regulation should follow for new things. The whole way of doing things started under reagan and the attitude to not follow the correct path very much starts there.