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Challenging the myth that the rich are specially-talented wealth creators

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Re: Challenging the myth that the rich are specially-talented wealth creators

#71

Post by jonathankoren »

ommunist wrote: post #64
jonathankoren wrote: post #51

Earlier quoted context omitted.

The scale of their power is what makes them special. Tell me, when was the last time you made a decision than tanked an entire regional economy, or perhaps ruined the finances of a thousand families while lining your pockets? When was the last time you decided to simply ignore the law and then had the government come to you shaking how to change it to make you legal again? When was the last time you had law changed f…

Exactly. I saw such things with my own eyes.

We all have.

Re: Challenging the myth that the rich are specially-talented wealth creators

#72

Post by themartorana »

ParrotyError wrote: post #59
ams6110 wrote: post #50

Earlier quoted context omitted.

The answer to this is build more housing. Who or what is preventing that?

All kinds of things. Large organisations (supermarket chains like Tesco) holding onto vast "land banks," new property being bought up and left vacant by foreign investors as fast as it can been build (a big problem in London and Cambridge), construction companies and their investors who want to restrict the supply to keep prices high, a lack of suitable places to build new housing (lack of infrastructure, protected c…

Foreign "investments" in property are almost universally bad. I give you Vancouver, London, SF, and NYC as just a few examples. The very rich in other economies buy large amounts of "investment" property and do nothing other than drive up prices against - and out of step with - the local economy. This drives out the locals, and causes many actual residents to wonder how someone, even on a good salary, could afford a local property.

A lot of these foreign investments come from China. I don't know a solution - if I had buckets of money I'd love to have property abroad (although more for living, less as investment). I don't know what restricting local investments in property would do economically, but I know the current lack of restrictions cause terrible hurt to locals.

Re: Challenging the myth that the rich are specially-talented wealth creators

#73

Post by physicalist »

ommunist wrote: post #19
philippnagel wrote: post #8

Earlier quoted context omitted.

Perhaps wealth re-distribution?

Does not work, will create just another layer of very rich. Look at Russia after 1992.

I don't see how russia proves anything. to me, what didn't work wasn't wealth redistribution, but planned economy. And planned economy has become mire viable since then, thanks to computers.

Re: Challenging the myth that the rich are specially-talented wealth creators

#74

Post by marincounty »

adwhit wrote: post #35

HN tends to be extremely reactionary to posts like this. Perhaps because the tech/startup scene is all about getting rich quick, or perhaps because HN has come to partially reflect the personal views of PG. There will be a reckoning. The world is 'unsustainably unequal' at the moment. There are huge problems on the horizon - superbugs, climate change, resource depletion, environmental degradation, overpopulation. The…

If I was in the wealthy club, my biggest fear for myself, and my family would be one thing.

"I hope we don't turn into Mexico, where if you have a few assets; you literally run the risk of kidnapping for ransom, etc."

You couldn't give my enough money to worry about sitting in the park, or concerned if my kids are safe.

Plus, what fun is it going on vacation, a function, a party, a nice dinner, when the rest of society is struggling?

Another big drawback to wealth, you will never know if he/she loves you for you? You might think you know, but goodluck.

And don't get me started on rich kids! It's like giving them a loaded gun?

What's the point of all this wealth, if you need security, complex prenuptials, phoney friends, canieving family mebmers(middle, low class can be ruthless, immoral too.)

I live near a few 1 percenter's and they don't have better emotional lives. They don't need to worry about money, but they have some retched worries; I would never want.

(This op is falling a bit too quick? I just wonder sometimes? Censoring it will not make the sentiments go away?)

Re: Challenging the myth that the rich are specially-talented wealth creators

#75

Post by hectormalot »

ParrotyError wrote: post #37
11thEarlOfMar wrote: post #17

Part of the reasoning here is that rentiers are not contributing to wealth creation and therefore their earnings on the rent are parasitic, therefore 'unjust and dysfuctional': "Since it’s a payment for nothing that didn’t already exist, it’s a deadweight cost, and so not only unjust but also dysfunctional for the economy. " The practice of renting exists as an option to owning. By renting, renters can engage in an a…

"In the example of home rental, making homes available for rent enables families to live in accommodations that they would not be able to purchase. These accommodations are not without cost to the owner: Taxes, utilities, maintenance, security and administration are all associated costs that rent payments offset. What the rentier provides in most cases, is a better quality of life than the family could have if they w…

> the competition for rental property is so fierce now that in many places, monthly rent to the private landlord is higher than a monthly mortgage payment would be to buy a similar property.

This is not a malfunction of the market. Economically renting is always expected to cost more than buying. Renting has advantages over buying:

* No need to have a significant amount of cash to deposit

* Flexibility to move out into a larger or smaller house that better fits your needs

* No exposure to the risk of changing housing prices (which don't always go up, and can be hugely impacted by policy)

* Less headaches over maintenance, etc. This is (typically) your landlords responsibility.

So, just like a flexible airfare is more expensive than a 'no changes allowed' fare, it makes perfect sense that a rental house on average is more expensive than owning a house. Also, if rental prices are lower than the mortgage cost, the owner should probably do something different with that house.

TL;DR: rental prices are expected to be higher than owning, because renters are willing to pay a premium, and because landlords otherwise have no incentive to let out a property in the first place.

Parent's comment still stands, but you have to take the regulation into account: * people can live in a bigger house than they could otherwise afford, e.g. if they can't make the deposit * people can live in a bigger house than they could have the mortgage for. (e.g. Dutch regulation you can mortgage 4.5x your yearly salary. If you make 40.000 Eur that is 180k, which perhaps buys you a small studio in Amsterdam). Renting you could probably live in a 250k valued house, because those restrictions don't apply.

Re: Challenging the myth that the rich are specially-talented wealth creators

#76

Post by Mu37 »

adwhit wrote: post #35

HN tends to be extremely reactionary to posts like this. Perhaps because the tech/startup scene is all about getting rich quick, or perhaps because HN has come to partially reflect the personal views of PG. There will be a reckoning. The world is 'unsustainably unequal' at the moment. There are huge problems on the horizon - superbugs, climate change, resource depletion, environmental degradation, overpopulation. The…

Western society/governments will start looking more and more like the Chinese I feel, cause western society hasn't found any serious alternate way of reigning in the 1%. It will most likely happen after the "something bad" stuff does.

Re: Challenging the myth that the rich are specially-talented wealth creators

#77

Post by [deleted] »

hueving wrote: post #27
11thEarlOfMar wrote: post #17

Part of the reasoning here is that rentiers are not contributing to wealth creation and therefore their earnings on the rent are parasitic, therefore 'unjust and dysfuctional': "Since it’s a payment for nothing that didn’t already exist, it’s a deadweight cost, and so not only unjust but also dysfunctional for the economy. " The practice of renting exists as an option to owning. By renting, renters can engage in an a…

Unless subsidized or losing money, the rent is more than a mortgage payment would be. If we had low enough transaction costs it would be better if everyone just owned their homes via mortgage for even short time frames.

[deleted]

Re: Challenging the myth that the rich are specially-talented wealth creators

#78

Post by tokenadult »

The important point to notice here (I have seen comments previously posted that talk about the "1 percent") is that a middle-class American and people in other countries with similar levels of prosperity is very close to the world 1 percent level of income and of wealth. The simple fact of the matter is that today's "average" people in developed countries are staggeringly rich compared to most of human experience for most of history.

https://www.gapminder.org/videos/dont-panic-end-poverty/

Re: Challenging the myth that the rich are specially-talented wealth creators

#79

Post by whamlastxmas »

hectormalot wrote: post #75
ParrotyError wrote: post #37

Earlier quoted context omitted.

"In the example of home rental, making homes available for rent enables families to live in accommodations that they would not be able to purchase. These accommodations are not without cost to the owner: Taxes, utilities, maintenance, security and administration are all associated costs that rent payments offset. What the rentier provides in most cases, is a better quality of life than the family could have if they w…

> the competition for rental property is so fierce now that in many places, monthly rent to the private landlord is higher than a monthly mortgage payment would be to buy a similar property. This is not a malfunction of the market. Economically renting is always expected to cost more than buying. Renting has advantages over buying: * No need to have a significant amount of cash to deposit * Flexibility to move out in…

>No exposure to the risk of changing housing prices

Except when your 12 month lease expires and they jack up your rate 20%. If anything renters are at greater exposure to changing housing prices. Renters don't benefit from drops in pricing, and they only have detriment from increases. At least home owners benefit from one side.

Re: Challenging the myth that the rich are specially-talented wealth creators

#80

Post by picklesman »

physicalist wrote: post #67
mtrn wrote: post #55

From a developer perspective many aspects of the current system (with respect to resource usage and allocation) look like technical debt. Governments may try to make ends meet with limited budgets and come up with sometimes nonsensical or just not really thought out solutions to problems. Meanwhile the world learns about the Panama papers and related things, getting the impression, that not everybody is happy with co…

...but in the world of software, everyone wants programs that work better. The very rich have no short term interest in a system that's hard to game. Therefore they're going to use their considerable influence to prevent just that.

Well, I've seen some cases of developers keeping things complex for their own self-interest, e.g. "Job Security".

You could make a similar analogy here...

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