Any story about income equality that neglects the distribution of income and wealth within the top 1%, isn't providing the whole picture. If you segment that group by ~.1%, you'll see a graph that reveals more about the fundamentals of the problem.
America's 1% Has Taken $50T From the Bottom 90%
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Re: America's 1% Has Taken $50T From the Bottom 90%
#282Ah yes, the famous cabal of 1 percenters sitting around and committing grand larceny as they raid the bank accounts of poor people. At least that's what this headline would have you believe. The reality is much more boring. Thanks to "math," they've determined that if the ratio of incomes from 1945-1974 held steady , the bottom 90% would have "more" than they do now. Of course the bottom 90% itself is a fantasy and y…
It's of little consolation having the price of your phone decline when the price of education, healthcare and a roof over your head have skyrocketed. Even if that were not the case, it's abundantly clear that geometrically increasing consolidated economic power is being translated into consolidated raw political power (which is zero sum). The events of the last few months and history in general have proved that this…
Exactly this. As a college student looking at the outside world, I'm truly seeing how fortunate I am to have a family with the means to support me through my education. Pre-scholarship, my tuition bill comes out to > $10k per year (and that's not counting things like housing, and freshmen need to live in the dorms with a dining plan... that's another $10k that doesn't include the summer or winter breaks). The total estimated cost for an on-campus student is $25,000 per year.
Looking at the value of my family's house, it's increased almost 40% in three years which seems like it's an insane amount of growth for any asset. Education and houses just seem like they're unreasonably expensive at this point and I honestly don't know how you're expected to break into this market without already owning a house or something along those lines.
Re: America's 1% Has Taken $50T From the Bottom 90%
#283Earlier quoted context omitted.
Except this wasn't the federal bailouts. Those are an entirely different beast. It's talking strictly about income stagnation. The study shows that if wages kept up with productivity (as was the case in the immediate post-WW2 era) the bottom 90% would earn $2.5 trillion per year more. > We document the cumulative effect of four decades of income growth below the growth of per capita gross national income and estimate…
Some nice graphs to go along; https://wtfhappenedin1971.com/
A bunch of these graphs are misleading, especially the ones from the EPI. /r/badecon can explain better than I can: https://www.reddit.com/r/badeconomics/comments/6rtoh4/produc...
TL;DR:
1. The pay line is for the bottom ~80% of workers, while the productivity line is for all workers. If you graph all workers wages vs all workers productivity, then the gap shrinks quite a bit. (Of course, maybe we should redistribute wealth from top workers to all workers, but that's another discussion.)
2. Average hourly wages doesn't take into account workers' increase in benefits.
3. The lines aren't adjusted for inflation in the same way, which makes the gap look worse.
Re: America's 1% Has Taken $50T From the Bottom 90%
#284I'm definitely not 1%, and sympathize with/understand somewhat some of these claims. Bail-outs and unchecked government spending or borrowing from future generations worry me. However I'm also pretty aggressive at investing. I feel like in general my retirement and taxable investing has benefitted me financially, though I'm solidly middle class. I feel (with data to back me up) like I'm upwardly mobile, though still…
Your freedom is pretty narrow in scope though. Amazon has so much market power, and regulators are so weakened that instead of the government setting the boundaries, billionaires and PE are with financial weapons. Yeah, you can go pop a Shopify store open whenever you want, but if you want to succeed you are going to see a lot of Bezos-built barriers to climb.
Further, do we have "greater access to markets" and is that desirable, when those markets are largely selling the same things, and what variety exists usually also comes with questionable reliability/quality? How does that greater market access affect the ability of average Americans to start and successfully operate a small business when products are so easily copied and drop shipped from Asia?
The best chance at a reliable retirement and an equal or better life for your kids goes through a stable, broadly wealthy country. Inequality and corruption have toppled more ancient regimes than the US Republic, and all of your money exists in the form of "the full faith and credit" of the Republic. Your interests are aligned with the article.
Re: America's 1% Has Taken $50T From the Bottom 90%
#285Earlier quoted context omitted.
The Fed is stabilizing the price of the USD because of the coronavirus pandemic. If it were not printing money, then there would likely be a deflationary spiral that would cause a depression. That's one of the reasons why the Great Depression was so bad: the US was on the gold standard at the beginning. The US can't create gold out of thin air, so the USD started deflating, people stopped spending, and capital stoppe…
> When the pandemic is over, it will sell back these bonds the banks it bought them from. This remains to be seen, the market had an absolute fit when they said QE was tapering in 2013, and also had an absolute fit when Powell was raising rates in 2018, particularly in December. The Fed may have painted themselves into a corner here, nothing is certain with regards to unwinding QE or raising rates.
I've heard (from finance professionals) that big elephant in the room is corporate debt. Corporations need to roll over their debt when it comes due, and a fair amount of it is short-term paper. If interest rates rise, that debt will become a lot more expensive, which will make many of the more marginal companies insolvent. Not software companies, which are sitting on hoards of cash, but all of the ordinary manufacturing/retail/service/financial companies that employ millions of Americans. If they go bankrupt we'll see unemployment worse than the COVID lockdown, but moving up the income ladder into what's left of the middle class. This was why the Fed flinched in 2018.
To me (and this is a minority viewpoint - my finance industry friends disagreed), the way this plays out is both obvious and terrible. The Fed knows that if they raise interest rates, very large American institutions are going to go bankrupt and millions of Americans will be thrown out of work. The Fed's primary mandate is full employment (adjusted last year from a dual mandate of "full employment and low inflation"). Therefore, the Fed is not going to raise interest rates. We'll see this first as a massive asset bubble during the early 2020s, and then as rising inflation in the later 2020s, and then finally as hyperinflation. When it gets to the hyperinflation stage the Fed will take notice and raise rates, but it's too late by then. Hyperinflation is characterized as a sharp increase in the velocity of money, which makes traditional monetary policy tools ineffective for curbing it. You have to ditch the currency and start over with a new one.
Re: America's 1% Has Taken $50T From the Bottom 90%
#286The 1% allocate capital that are best at allocating capital. If they aren’t good at it, they rapidly lose capital
Is that why farms need subsidies to survive? Because the farm owners are really good at allocating capital?
Re: America's 1% Has Taken $50T From the Bottom 90%
#287The 1% allocate capital that are best at allocating capital. If they aren’t good at it, they rapidly lose capital
Only because the government has provided poor alternatives. Is Uber a better allocation of capital than infrastructure projects?
The Government doesn't build the economy, it constrains it (ideally in helpful ways and not harmful ways). You can't lego yourself an economy - or at least nobody has successfully done so yet.
Re: America's 1% Has Taken $50T From the Bottom 90%
#288Correction: The Fed's policies have taken $50T of wealth from the Bottom 90%. When you bail out irresponsibly over-leveraged and nearly bankrupted banks and corporations, and pay for those bailouts with tax-payer money, you steal from the poor and give to the rich. Most importantly, when the Fed decides to print money ad nauseam, they create massive asset inflation, which steals from the poor and gives to the rich. T…
Correction: The 1% have manipulated the government to have obviously unfair political policies. They control advertising, media, and the government. I do blaim the rich, and it's from first principles. The only thing that ever puts a dent in it is grass roots efforts like BLM, unions, etc. We tried the gold standard, it is also a failure.
Re: America's 1% Has Taken $50T From the Bottom 90%
#289Correction: The Fed's policies have taken $50T of wealth from the Bottom 90%. When you bail out irresponsibly over-leveraged and nearly bankrupted banks and corporations, and pay for those bailouts with tax-payer money, you steal from the poor and give to the rich. Most importantly, when the Fed decides to print money ad nauseam, they create massive asset inflation, which steals from the poor and gives to the rich. T…
Potato, potatoe. Who do you think controls "the Fed?" Cui bono ? Your comment would also imply that before there was such a thing as a Federal Reserve, income and wealth inequality didn't exist. This is false.
I wish more people noticed this. A lot of the what both the left and right are asking for is really identical.
Re: America's 1% Has Taken $50T From the Bottom 90%
#290Earlier quoted context omitted.
> Billionaires buying up "stores of wealth" housing in the city I live in has driven up the price of property inordinately and almost priced me out. What you are saying here is not "they don't matter" but "I don't matter". Are you sure they are billionaires and not just millionaires? There are millions of people in USA with millions of wealth, they are what matters, and they can each buy up a large chunk of real esta…
It's a ripple effect. Billionaires end up pricing out hundred-millionaires, who price out millionaires and so on. All of the above also buy up rental property. And wealthy foreign criminals andtax evaders get in on the act by buying up property sight unseen as a foreign bolthole. This is how we end up with cleaners and baristas having to share a room and commute 1 hour each wayway and property prices that are, like,…
> It's weird how so many people are apparently in denial about this.
It's worrying how many people think it's the way things should be.