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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%

#351

Post by _qwfv »

chordalkeyboard wrote: post #301
_qwfv wrote: post #295

Earlier quoted context omitted.

Marx tended to focus on roles more than persons or transactions. Buyers and sellers, capitalists and workers, etc. Any individual might play any particular role at any given time. (For instance, I personally fill the role of worker with my day job and capitalist with my 401k.) The reason I mention that is because his thesis was that, in aggregate, the role of capitalist must expect a positive return on MCM transactio…

Thanks for the reply and that makes sense.

No problem! Again, I'm just some internet person who happened to listen to some lectures and did some reading, so my take might be a bit off. But I find this stuff fascinating. Doubly so for something like Marx who everyone has an opinion on, but I feel very few folks have actually spent much time diving into.

Re: America's 1% Has Taken $50T From the Bottom 90%

#352

Post by jaycroft »

NortySpock wrote: post #327
nostrademons wrote: post #285

Earlier quoted context omitted.

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 manufactu…

So, we need to see loan-forgiveness for businesses then? Trying to figure out how you unwind it slowly when apparently "slowing raising rates" still destroys many businesses with a lot of debt...

I'm starting to think that it's time to let the unproductive businesses that have blossomed over the last 12 years go bankrupt and be removed from the system. Unfortunately a lot of productive businesses that are temporarily unproductive had been using their cash for stock buybacks and using easy corp debt to run operations, and so with the pandemic, those wold get washed out too. Maybe the laws banning stock buybacks prior to Reagan weren't such a bad idea?

On the other hand how can the fed buy bonds from the "good" companies worth saving, and not from the "bad" companies that can freeride until "eventual" profitability?

I suppose you let the market decide - let the bonds float, and anything worth saving should be bought back up by the people enriched by the buybacks, right? Isn't that what efficient markets and capitalism are all about?

Re: America's 1% Has Taken $50T From the Bottom 90%

#353

Post by exabrial »

syops wrote: post #235
exabrial wrote: post #203

Earlier quoted context omitted.

I think it's absurd to defend the violent nature in which these funds are acquired, regardless of the outcome. The end does not justify the means.

It’s absurd, in my opinion, to think that the society that created the opportunities you have to earn money ought to be enjoyed by you at no cost. We can’t all be free loaders and leeches. Acting as if taxes are immoral is nonsensical.

It came at such a great cost in fact. The vast majority of your taxes are simply wasted. If the US Government were on Charity Navigator they would have a 0-star rating.

It'a absurd to defend such a position, especially one rooted in a traditional of violence via arguments that were used to justify the enslavement of entire races.

Re: America's 1% Has Taken $50T From the Bottom 90%

#354

Post by thelean12 »

chris11 wrote: post #184
randomdata wrote: post #126

Earlier quoted context omitted.

> actual rich people make most of their money not as income, but as unrealized capital gains. Technically, they make most of their wealth as as unrealized capital gains. It doesn't become money until they realize the gains, at which point it is taxable income.

What's the average effective tax rate for high-net-worth+ individuals if unrealized capital gains are included as income? It seems like people get an increasing level of control over their taxes as their networth increases. Choosing when to exercise options means you have some control over AMT. If you invest in indices, it looks like direct indexing has a lot of tax benefits over an index fund. You can get variable a…

> What's the average effective tax rate for high-net-worth+ individuals if unrealized capital gains are included as income?

That's a completely pointless question. If I own 50% of GameStop, my net worth will have gone from $650 million to $12.2 billion to $1.8 billion in like 45 days. Sure, this is an extreme example, but it happens over longer stretches of time to a ton of the richest people.

How exactly do you expect to tax that movement of those unrealized gains?

> You can get variable and fixed rate loans against your investment accounts.

That you eventually have to pay off. The money you pay it off with will be taxed.

Re: America's 1% Has Taken $50T From the Bottom 90%

#355

Post by anchpop »

InitialLastName wrote: post #336
afarrell wrote: post #312

Earlier quoted context omitted.

Agreed. The problem is that the Fed only has the power to inject dollars at the top of the economy, yet sales taxes and the IRS drain dollars from a broad base of the economy. I think an MMO designer would suggest two options: A. Nerf the Fed, which would have the problems you note. B. A balancing mechanic -- Some more universally-accessable way to inject income at the base of the economy.

> B. A balancing mechanic -- Some more universally-accessable way to inject income at the base of the economy. Something like, for example, giving $1000 to every adult?

This is risky, because if the fed accidentally injects too much money by buying back too many bonds, they can always un-inject it by selling the bonds back (and banks are compelled to buy). This lets the fed be more aggressive because it knows that if it goes too far and starts seeing more inflation than it intended, it can always walk back its decision. But there's no realistic way to do that after having given $1000 to every adult.

Re: America's 1% Has Taken $50T From the Bottom 90%

#356

Post by brobdingnagians »

NortySpock wrote: post #327
nostrademons wrote: post #285

Earlier quoted context omitted.

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 manufactu…

So, we need to see loan-forgiveness for businesses then? Trying to figure out how you unwind it slowly when apparently "slowing raising rates" still destroys many businesses with a lot of debt...

The issue with loan forgiveness is that it is a massive wealth transfer from creditors to debtors. People who made bad bets by getting deeply in debt are rewarded, while people who saved and loaned money get shafted. That unbalances the economy and misallocates resources. Which could do even more damage. There isn't really a clean way out. If businesses started preparing & managed their money better while paying off their debts, that would probably be the safest way out.

Re: America's 1% Has Taken $50T From the Bottom 90%

#357

Post by tylerhou »

ItsMonkk wrote: post #348
tylerhou wrote: post #227

Earlier 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…

This is an inaccurate narrative. The more wealth inequality there is in a nation, the less that increases in the money supply effect the economy. This is why we have no inflation with trillions injected. The rich simply store the money in assets like stocks and houses and it never touches consumption. The only thing that needed to happen to keep the economy afloat was the Congress passing their bills.

> The rich simply store the money in assets like stocks and houses and it never touches consumption.

But these do affect consumption.

1) Stonks going up means that companies have more capital (through stock issuances and equity raises). Companies use this capital to buy things and pay workers, so the dollars end up recirculating through the economy just like if a regular person spent it.

2) Buying houses is consumption. And increases in housing prices causes more building of houses. Which leads to people getting paid for building houses and creating materials which leads to money circulating.

Wealth inequality is bad, and Congress should have done more to help the American people. But the populist "rich people hoard money in stonks and houses so it doesn't recirculate" is also a complete misunderstanding.

Re: America's 1% Has Taken $50T From the Bottom 90%

#358

Post by ISL »

ItsMonkk wrote: post #348
tylerhou wrote: post #227

Earlier 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…

This is an inaccurate narrative. The more wealth inequality there is in a nation, the less that increases in the money supply effect the economy. This is why we have no inflation with trillions injected. The rich simply store the money in assets like stocks and houses and it never touches consumption. The only thing that needed to happen to keep the economy afloat was the Congress passing their bills.

Or adequately addressing the pandemic; the gravest error of our time.

Re: America's 1% Has Taken $50T From the Bottom 90%

#359

Post by Aunche »

chris11 wrote: post #199
zepto wrote: post #186

Earlier quoted context omitted.

Bezos wealth isn’t cash he paid himself that he could have been distributing to the workers. It’s a number based on the value of his ownership stake of the business itself.

If significantly raising the pay of Amazon's low-paid workers would negatively impact it's value then part of Bezo's wealth comes from keeping Amazon's cost of labor low.

Significantly raising the pay of Amazon workers would hurt Bezos because it translates to less reinvestment to the company. This would also hurt the million new employees that Amazon hired last year as well as the consumers who increasingly relied on Amazon for goods during quarantine.

Re: America's 1% Has Taken $50T From the Bottom 90%

#360

Post by anchpop »

tylerhou wrote: post #335
matwood wrote: post #313

Earlier quoted context omitted.

> The Fed is stabilizing the price of the USD because of the coronavirus pandemic. The pandemic is a case of exactly when the gov. should step in. Unfortunately the gov. is slow and takes so much time to do anything. > That's a distributional issue, and the main solution is tax policy. Exactly. I think a better argument could have been made by looking at the tax cuts a couple of years ago. Companies didn't go on hiri…

CEO bonuses, not always a good thing. Buybacks are not always good (because stock-compensated corporate managers sometimes abuse them to increase the stock price), but for airlines, buying stock was the right choice. You can read Matt Levine's argument, but basically: If airlines didn't spend money on buying back stock, they could have: 1. Invested it in growth. But if they had invested it in all the normal things an…

Can you link to Matt Levine's argument? (I googled a little but didn't see what you were talking about)
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