Are people really so irrational?

Citigroup declared a loss of $18.3 billion after it paid a tax of $3 billion on its earnings held abroad and wrote down deferred tax credits, it has accumulated since the crisis of 2008, under the new tax law passed by Donald Trump. Over the longer term its net profits will rise as its tax rate will come down to 25% from 30%, at present. With corporate tax falling to 21% from 35% there is debate about whether companies will use the extra profits for new investments, which will lead to increase growth of the economy and new jobs, or will spend the money in paying extra dividends on their stocks and rewarding shareholders through share buyback. Some large companies, like Comcast, Boeing and AT&T, have already declared salary increases and bonuses for their workers. Even Walmart announced it is raising minimum wage to $11 per hour and paying a bonus of $1,000 to some employees. No big deal, wrote J Johnson. Walmart was forced to raise minimum wage because it has been compelled by laws in some states and the bonus is only for workers who have managed to last in the company for over 20 years. Very few. CEO of Blackrock, which manages $6 trillion in investments, Larry Fink has written to CEOs of companies to help society. "Society is demanding that companies, both public and private, serve a social purpose," and not concentrate solely on making money. Warren Buffet has donated $27.54 billion of his assets to charities over 10 years. All this would tend to suggest that there is a definite support for greater redistribution of wealth in the US. The tax bill is unpopular even among people who will see a reduction in their tax bill, with more money in their hands. This is due to a feeling of "relative deprivation", wherein people feel cheated because they see the rich getting a lot more benefit. However, once they actually get the extra money they will be reluctant to lose it because of the human need for "loss aversion". Dislike for loss overwhelms the pleasure from a potential gain of similar magnitude. A study among 2,000 young people found that 45% would prefer a socialist state and 7% would like to live in a communist one. Trump has solid support among workers and unions, which used to support the Democratic Party earlier, wrote Prof D Gupta. 62% of his supporters still believe that he has done nothing wrong. Even the liberal Washington Post believes that he will win reelection because his core support is solid. Support for Trump is because the white working class votes for him to maintain class superiority over blacks, wrote J Zeitz. So angry are the liberals that they are contemplating impeaching Trump by using the 25th amendment. Whatever happens it is certainly fun to watch.