Earlier quoted context omitted.
Because I am fairly pro market but read enough mainstream economics to know that government paper retaining value more than private assets is much more of a distortion than said paper gradually losing value towards its intrinsic value of nothing. The thing is, stable money that predictably loses value is a great thing to have for the economy as it allows people to negotiate contracts and conduct business in a predict…
Great comment! Def made me think alot. Seems you can replace your entire argument with crypto. Money printer goes brrr, money gets locked in crypto, does nothing for the economy, leading to massive inequality. Crypto can be though of as "Savings" in your analogy. BTC might cause a economic meltdown if $10T gets locked in'Savings'.
America's 1% Has Taken $50T From the Bottom 90%
701–710 of 961 posts
Re: America's 1% Has Taken $50T From the Bottom 90%
#702Basically, because health insurance costs have exploded and it costs the same to insure a cashier as it does a corporate Vice President, health insurance cost increases has eaten away a lot more income gains at the low end than the high end. In numbers let’s say a cashier cost a total of $10k in 1970 with costs of $8k in pay and $2k in health care and a VP cost $50k with $48k in pay and $2k in health insurance. Now let’s say GDP per capita grows 3x but healthcare costs grew 6x between 1970 and 2020. Now the cashiers health care is $12k and base pay is $18k. The VP is $12k in healthcare and $138k in pay.
Now the cost of both employees rose proportionally, but the income portion of the cashier only grew by 2.25x while the vps income grew by 2.85x.
These aren't real numbers (I couldn't quickly find the paper I first saw with this analysis) but it is illustrative.
Fixing the health care cost issue and dissocating it from employment ties directly to fixing income inequality (although it is not the only issue.)
Re: America's 1% Has Taken $50T From the Bottom 90%
#703Earlier quoted context omitted.
> buy their own stock with debt? why not? What's wrong with altering a company's capital structure to be more efficient? Stocks have a cost (aka, cost of equity), just like debt. Sometimes, cost of equity is higher than cost of debt (aka, the interest rate). Sometimes, the cost of debt is higher than cost of equity. This is determined by the general market conditions and economic environment. A company may find itsel…
If the firm instead took out loans to pay out dividends would you feel differently? Now what if they did it every year at a increasing pace to the point where it's expected that firms take on debt to support ever larger dividends? That bubble pops eventually and is what I see happening with buybacks.
This, no shareholder controlled board would ever authorize taking out debt to pay dividends, unless there's some special circumstances for which this makes sense (i can't think of any atm).
The difference with buybacks using debt is that buybacks changes the capital structure. I suppose if the debt is artificially cheap (say, the gov't is forcing interest rates down to lower than what the market rate _would_ be), then it makes sense from a financial perspective, to borrow money, and pay (to the shareholders) the difference between the "real" market rate and the artificial rate. But this predicates that the real rate is much higher (transactional costs, and other overheads might easily dwarf this difference in rate).
Re: America's 1% Has Taken $50T From the Bottom 90%
#704Earlier quoted context omitted.
I agree with your assessment of our education system. I would go further and say we intentionally do not teach money management skills as it makes people harder to fleece. We have indoctrinated a whole country that debt is good, rampant consumerism is good, all of which leads to really bad money management. I am of the opinion that these habits and the ideology that supports it is the biggest reason people who are in…
>intentionally do not teach money management skills as it makes people harder to fleece. Yeah, this is a perfect example of "don't attribute to malice what is equally explainable by incompetence." I'm not talking about the incompetence of teachers. I'm talking about the incompetence of the system, and it's inflexibility towards change. This is not caused by malice. It's caused by is being completely unable to effecti…
As predicted in 1970:
'the accelerated rate of technological and social change leaves people disconnected and suffering from "shattering stress and disorientation"—future shocked.'
Re: America's 1% Has Taken $50T From the Bottom 90%
#705One of the things that ruffles my feathers about this genre of made-for-mass-consumption clap-trap is this sort of proclamation: > Other nations are suffering less from COVID-19 because they made better choices Which other nations? As someone who regularly reads francophone european news, I can assure you it isn't any nation in Europe. OP goes on to cite minimum wage, overtime pay, state-funded healthcare/childcare/e…
Canada is probably the most apt comparison here. They have about 4x less coronavirus cases per capita [source]( https://ourworldindata.org/coronavirus-data-explorer?zoomToS... ) IMO, a lot of this had to do with the federal response and cohesive messaging they provided. It wasn't perfect, but they at least took action with things like CERB payments, enforced travel quarantines, etc. On the other hand, the US is way a…
Oh come on... Canada is less populated than California with 25x more land...
Re: America's 1% Has Taken $50T From the Bottom 90%
#706Earlier quoted context omitted.
> The March crash was the event that was going to normalize asset prices, but really just became a blip due to the pump. The main reason it was a blip, is because earnings have returned almost to pre-COVID levels for large public companies. Just as everyone expected. Did fiscal and monetary policy help smooth things out? Sure. But again, earnings are normalizing, like we knew they would. Markets discount the entire f…
> So you're saying "this time is different." Let's see how that plays out. Main difference from the past recessions is that today the main way to store money is index funds. In recessions people pump money into savings, ie into index funds, ie into the stock market making stocks value increase rather than fall. As long as people believe that index funds are a more stable currency than the dollar this will continue to…
Re: America's 1% Has Taken $50T From the Bottom 90%
#707Earlier quoted context omitted.
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.
BLM was far from grassroots, Mueller investigation revealed us how it was propped up by Russian trolls. Heck they ran their biggest social media pages.
[0] https://www.nytimes.com/interactive/2020/07/03/us/george-flo...
[1] https://www.axios.com/hillary-clinton-2016-election-votes-su...
Re: America's 1% Has Taken $50T From the Bottom 90%
#708Earlier 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.
https://www.visualcapitalist.com/all-of-the-worlds-money-and...
https://www.ted.com/talks/maneesh_sethi_money_the_greatest_s...
Re: America's 1% Has Taken $50T From the Bottom 90%
#709Earlier quoted context omitted.
> Not according to you, as you view taxes as inherently illegitimate. Though if you have a Patreon or GoFundMe to validate your claim then by all means. I’m responding to taxes the way you responded to my request for some of your surplus. You’re asserting you already paid taxes, you don’t get to decide how much tax you pay. > If you don't wear clothes, you'd be arrested for public indecency. I concede that laws requi…
> You’re asserting you already paid taxes, you don’t get to decide how much tax you pay. Neither do you, let's get this proposal to the legislature. > I concede that laws requiring clothing are akin to taxation in that one group of people imposes their values on another group without their consent. Perhaps the same can be said of all laws. > I disagree with you that taxation is necessary for society. It's voluntaryis…
I’m representing the interests of society to you, the same as the legislature. You’re no more entitled to say “no” to me as either of us is to say “no” to them.
> Perhaps the same can be said of all laws.
Perhaps this idea of consent and aggression could lead us to a way of making laws that do not impose values on people without their consent.
> The onus is on you to advance an alternative model and light a candle, rather than just calling taxation theft and cursing the darkness.
I’m identifying the same model as we used when we abolished slavery and marital rape. The model is already here, awaiting critical feedback. So far the only criticism is that people aren’t going to be able to avail themselves of other people’s property.
> As with taxes.
The problem is that people impose taxes on people who have not consented. That is to say that crime exists, independent of the understanding that it is crime. Right now I’m working to show you that it is in fact crime, so that you can stop enabling the criminals.
> Not so with Proudhon, the originator of the phrase. His take was that those who owned those properties had no right to the wealth generated by those properties if the labor was undertaken by others. That is, rentier wealth via property was theft.
Unfortunately thats an occasion of Proudhon dictating to others what they may and may not do with their property. In essence, Proudhon wishes to exert property rights over other people’s property by forbidding certain relations. Clearly this is self-contradictory and not a basis upon which to reject rents on capital.
> when "property" is defined as ownership by people who do not work yet become wealthier than the people from whom rent is collected.
Thats not how property is defined; and its not surprising that people who collect rent on capital often accumulate more than people who sell their labor. Its fine for someone to think thats immoral, they are free to explain why they think it is immoral, and likwewise they are free to educate themselves and realize that restricting rent on capital because of its superior productivity impoverishes society by preventing society from accessing means of superior productivity. Capital collects higher rents than laborers receive as wages: then let laborers own capital and collect their own rents. Quite naturally the market has already commodified the ownership of capital and made it available to the meanest of laborers.
Re: America's 1% Has Taken $50T From the Bottom 90%
#710> It amazes me why most people do not grasp this. I think it is lack of education. Huh? Literally everybody grasps this. This is the most widely parroted mainstream narrative about the economy right now on the internet. Hell, you can't throw a rock at the Wall Street Journal (conservative) or the New York Times (liberal) without hitting a sentence that mentions wealth inequality brought on by fed policy. For further…