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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%

#461

Post by clairity »

nostrademons wrote: post #285
quickthrowman wrote: post #238

Earlier quoted context omitted.

> 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 manufactu…

large institutions going bankrupt doesn't mean millions of americans will be thrown out of work. that's a boogeyman used by economists to short-circuit that line of thinking because it threatens moneyed interests. the value of those businesses remains and they'll be quickly bought up and revitalized by excess capital looking for returns (part of the problem is concentrated wealth that doesn’t know what to do with itself). let that excess capital be unleashed rather than sitting sidelined. we need more bankruptcies at the unproductive top-heavy end of the economy.

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

#462

Post by wilsocr88 »

natenthe wrote: post #57

Correction: 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…

Addendum: "The Fed" that you rightly mention and the headline's "America's 1%" are, for all intents and purposes, identical.

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

#463

Post by refurb »

Weebs wrote: post #405
andrewljohnson wrote: post #266

The top 1% changes a lot. Most people don't stay in the top 1% for many years in a row. Many people below the 90th percentile benefit from the growth of the top levels when they have their brief time in the top 1%.

1% is a colloquial way of saying "those who own capital for a living, instead of working for a living". The high income of athletes and highly trained professionals has little to do with our situation. However, most capital and expenditure is controlled by a small group of people that have asymmetric power in employment agreements and political process, and that is concerning

Top of 1% of income for a household was $421k in 2018. So $210k if a two person household with each working.

There are plenty of Silicon Valley low level engineers who are in the top 1%. Doctors and top lawyers are in the top 1%.

I would fathom most in the top 1% are wage earners and not owning so much capital they can live off of it.

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

#464

Post by jandrewrogers »

socialist_coder wrote: post #350
hedora wrote: post #260

Earlier quoted context omitted.

There's a hole in your argument: It takes $500 to build a well-diversified portfolio with a roboadvisor, and that portfolio will behave comparably to a larger one (it'll be a bit worse, but also taxed at a lower rate). So, if everyone invested their savings rationally, then when the Fed propped up stock prices, it wouldn't change the distribution of savings across the population. The real issue is that a larger perce…

Most Americans don't have disposable income to invest in the stock market.... there is no amount of investing that will turn their "barely making ends meet" wages into a living wage.

The median US household has ~$1000/month in investable cash left over after all ordinary expenses. Per the Bureau of Labor and Statistics (BLS) which tracks in detail how much people actually spend on myriad things in each income decile.

Americans are notoriously poor at actually saving or investing that money compared to their counterparts in other developed countries, but $12,000/year is quite a lot to invest in the stock market. If you saved even half of that you'd have a comfortable retirement.

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

#465

Post by refurb »

ska wrote: post #168
readams wrote: post #85

Earlier quoted context omitted.

It's mostly a myth that there was a 90% marginal tax rate. It's technically true, but when the top tax rate was removed they also removed all the loopholes and deductions that were being used to reduce the effect tax rate on top earners to below 45%. All the while the proportion of tax receipts as a percentage of GDP has remained constant. Meanwhile, the proportion of taxes paid by the top quintile earners has increa…

I wouldn't call it a myth. High income earners both then and now have a lot of ways to avoid paying tax, so they don't pay nearly as much as the top marginal rate. It's also true that the top marginal rate used to be much higher. > Meanwhile, the proportion of taxes paid by the top quintile earners has increased from 55% in 1980 to 70% by 2013. Isn't this exactly what you would expect with growing income & wealth ine…

But the percentage of total tax revenue paid by the top income earners has only grown over time, not decreased.

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

#466

Post by refurb »

supercanuck wrote: post #162
Pfhreak wrote: post #74

Earlier quoted context omitted.

I'm halfway through reading Piketty right now, amusingly.

Watch the Netflix documentary. Basically cuts to the chase.

Please don’t watch entertainment (Netflix documentary) as a substitute for a book and think they are equivalent.

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

#467

Post by tchalla »

tylerhou wrote: post #227
tobmlt wrote: post #150

Earlier quoted context omitted.

Yep. The fed is an engine, whose purpose is to move wealth silently from the masses to the powerful monied few, via time-asymmetric inflation. (Mostly Inflation of assets presently) The resulting data looks like corporations have used their power to directly disenfranchise/disempower workers, and so the mass clamber for protective laws. More laws will be enacted by those in power. The time is certainly right for it.…

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…

> 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.

And by doing that, we have the Cantillon Effect [0].

> The Cantillon Effect refers to the change in relative prices resulting from a change in money supply. The change in relative prices occurs because the change in money supply has a specific injection point and therefore a specific flow path through the economy. *The first recipient of the new supply of money is in the convenient position of being able to spend extra dollars before prices have increased. But whoever is last in line receives his share of new dollars after prices have increased*. This is why when the Treasury’s deficit is monetized, inflation is referred to as a non-legislated tax. In these cases, the government has seized purchasing power (rather than physical bills) from its citizens without congressional approval.

[0] https://www.aier.org/article/cantillon-effects-and-money-neu...

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

#468

Post by scollet »

raiyu wrote: post #54
ryanmercer wrote: post #32

Around the same time this was shared to HN I Tweeted/FB/LinkedIn variations of the following >If I earned $10,000 a day it would take me 273.97 years to have earned 1 billion dollars. Meanwhile, Elon was worth about 20 billion a year ago, last month he was worth an estimated $185bn. Oof. In reality, I make a little over $17 an hour His net worth increased an estimated 4.66 million times my annual gross income in the…

By the same token, Elon Musk is someone who succeeded, while thousands upon thousands of entrepreneurs fail, end up with debt, and don't have much to show for their work. So using survivorship bias to compare yourself to Elon Musk which is an atypical result when it comes to business formation doesn't make sense. You should probably compare yourself to the average business creator and see how you fare compared to the…

I also doubt GP's parents benefited from apartheid.

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

#469

Post by tylerhou »

webmaven wrote: post #415
tylerhou wrote: post #335

Earlier quoted context omitted.

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…

What about paying dividends to stockholders or (heaven forfend) raising wages? As for "rainy day" uses, giving the company pension fund a windfall would probably qualify.

Paying dividends to shareholders accomplishes the same thing as buying back stocks: both return capital to investors.

Increasing the company pension would not have saved them from their current woes: they would still need to issue debt or equity.

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

#470

Post by Der_Einzige »

LanceH wrote: post #130
AlexandrB wrote: post #93

Earlier quoted context omitted.

If you want to get into the nitty gritty, the 1% rich generally don't sell products or services. They own companies who employ workers who do these tasks. Some surplus portion of the value generated by those workers is then captured by the organization (and its owners) as profit. Whether you want to call that "taking" or not is a question of ideology, not of fact. Arguably, omitting the word "taken" from the headline…

The use of "taken" panders to the view of wealth being a zero sum game, which is decidedly false.

Not decidedly false at all. This is the one part of the LVT that I actually agree with. Wealth is a zero sum game. The only ultimate source of real value in the world is from labor applied to material of the world. Time spent laboring towards one thing trades off with time spent laboring for another. Seems zero-sum to me given that financial capital does nothing to increase real value or real wealth.
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