America's 1% Has Taken $50T From the Bottom 90% • Hacker News Board

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

#561

Post by jkhdigital » Fri, Feb 12, 2021, 1:02 AM UTC

pembrook wrote: post #556

natenthe wrote: post #502

Earlier quoted context omitted.

The article that this thread is based off of is literally the opposite take from my original post. The article claims that America's 1% is responsible for the wealth inequality. That is why I posted my comment. My opinion, and the "majority" opinion according to you, is that wealth inequality is because of Fed policies, not the 1% boogey-man. The people protesting are not protesting the Fed. No institution (i.e. medi…

I have nothing against you personally. I'm just refuting your idea that Fed actions from the 2010s are responsible for wealth inequality that has been rising since the 1970s. So how do you explain everything that happened on the wealth inequality front from the 1970s up to the financial crisis of 2009? I don't agree with everything in the original article either, but many of the points it made are correct.

The 2010s were especially crazy, but I’m pretty sure this criticism of Fed policy extends back to at least the 1990s.

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

#562

Post by seppin » Fri, Feb 12, 2021, 1:02 AM UTC

TearsInTheRain wrote: post #264

seppin wrote: post #157

Earlier quoted context omitted.

All they do is regulate the flow of new money, they aren't responsible for tax codes that ensure a widening gap of wealth via the return on capital vs the return on labor. https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Ce...

They affect the inflation rate and inflation should be thought of as a tax. And its a tax that primarily affects middle class people that keep their wealth in cash rather than assets. They also implicitly affect asset prices which is probably one of the primary causes of wealth inequality.

It's a hidden tax for sure, but it's marginal compared to the returns seen on capital vs labor, and the taxes collected of both forms of income.

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

#563

Post by lallysingh » Fri, Feb 12, 2021, 1:02 AM UTC

jb775 wrote: post #487

tchalla wrote: post #467

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. 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 supp…

What's a good hedge against the Cantillon Effect?

I think the best option is to stop the injection and let the natural price inflation (from raises in population and efficiency) catch up.

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

#564

Post by seppin » Fri, Feb 12, 2021, 1:02 AM UTC

randomdata wrote: post #126

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…

> 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.

> at which point it is taxable income.

Taxable at a rate of a fraction of what people that have labor as their primacy source of income. That's the problem.

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

#565

Post by adam_arthur » Fri, Feb 12, 2021, 1:04 AM UTC

23iofj wrote: post #551

rbultje wrote: post #523

Earlier quoted context omitted.

The official inflation numbers do not appear to reflect people's significant worries that rent prices or health care cost (etc.) keep going up.

In particular: education, insurance, and housing really is accurately reflected in the CPI, but the true price of non-shit consumer goods are consistently under-estimated in the CPI.

Housing is not included in CPI, only "rents". If home prices go up 10% this year, but interest rates drop such that the carrying cost is the same, the effect on CPI is net 0% inflation.

Obviously the purchase price matters, because the higher prices are, the more money you need to even get in the door with homeownership.

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

#566

Post by f38zf5vdt » Fri, Feb 12, 2021, 1:04 AM UTC

pembrook wrote: post #556

natenthe wrote: post #502

Earlier quoted context omitted.

The article that this thread is based off of is literally the opposite take from my original post. The article claims that America's 1% is responsible for the wealth inequality. That is why I posted my comment. My opinion, and the "majority" opinion according to you, is that wealth inequality is because of Fed policies, not the 1% boogey-man. The people protesting are not protesting the Fed. No institution (i.e. medi…

I have nothing against you personally. I'm just refuting your idea that Fed actions from the 2010s are responsible for wealth inequality that has been rising since the 1970s. So how do you explain everything that happened on the wealth inequality front from the 1970s up to the financial crisis of 2009? I don't agree with everything in the original article either, but many of the points it made are correct.

So this all started when the US went off the gold standard then?

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

#567

Post by SpicyLemonZest » Fri, Feb 12, 2021, 1:05 AM UTC

rbultje wrote: post #523

lallysingh wrote: post #506

Earlier quoted context omitted.

1.4%? https://www.kiplinger.com/economic-forecasts/inflation

The official inflation numbers do not appear to reflect people's significant worries that rent prices or health care cost (etc.) keep going up.

They're meant to reflect the monetary phenomenon of inflation, not all worries about all prices. We need to address the rise of rent and healthcare prices, but dragging the prices down through monetary policy won't work if monetary policy isn't what's causing the problem.

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

#568

Post by jkhdigital » Fri, Feb 12, 2021, 1:05 AM UTC

pembrook wrote: post #549

asdffdsa wrote: post #518

Earlier quoted context omitted.

Please read the article. It clearly mentions income as a reason for income inequality and not asset value inflation which is due to the fed policy.

I was replying to OP's claims that the Federal Reserve is the "evil puppet master" behind wealth inequality. This is patently false. Inequality has been expanding since the 1970s, long before the "evil bank bailouts" and accommodative monetary policy of the 2010s Federal Reserve.

That’s the point. The Fed essentially gained complete control over the value of the dollar once Nixon severed it from gold in the early 70s. Easy monetary policy has been the norm since the 1990s.

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

#569

Post by decasteve » Fri, Feb 12, 2021, 1:05 AM UTC

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 printing money isn't the engine, it's the throttle. The engine is powered by a treadmill that requires everyone to run, i.e. being consummate consumers. Throttling up requires running faster, thereby increasingly consuming more.

I hope we don't exhaust ourselves to keep up.

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

#570

Post by frEdmbx » Fri, Feb 12, 2021, 1:07 AM UTC

Look into the first closed congressional meetings where everyone involved was highly disturbed, and the reconsider the Bush/Obama "bailouts". How do you think the transition from the current world reserve system to the next was funded?