Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

time.com

Post reply on HN
Print view View original

901–910 of 961 posts

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

#901

Post by jokethrowaway »

parasubvert wrote: post #853
unishark wrote: post #776

Earlier quoted context omitted.

That's rather extreme. If he always predicts gloom and doom sometimes he will be right. Especially within the last 15 years. Wasn't he predicting the last financial crash for a couple years before it happened?

The boy who cried wolf was eventually correct too. A broken clock is right twice a day. Etc. Peter Schiff currently believes Bitcoin is going to collapse, that anyone who buys it is a fool and charlatan, that hyperinflation is around the corner, and the only solution is a return to the gold standard. Do you agree with this? I don’t like Bitcoin (too many grifters) but even I can admit it has value as a hedge asset ag…

I don't see that at all. He's basically saying that the way our governments and banking systems interact with the economy is fundamentally flawed and causes issues.

Getting the timing right is not easy, sure. He was right about 2008.

You may choose to believe that 2008 was an isolated event or it was just another systematic failure. I think we'll see another one soon, following the way governments treated covid.

I wish Bitcoin would succeed and bring us a step closer to anarchy - but Bitcoin doesn't have any backing and it's not a physical asset which can be used, worst case scenario, as jewellery. Its technology can be replicated entirely by a different coin (and it has, already). Its intrinsic value is null.

The reason the price is so high is because people hope to speculate on it and make money (which they have!) and because people expect the market and currencies to do badly, given the high point they reached. Also, governments' stimuli brought a lot of money in the hands of rich people; this money needs to go somewhere given the risk of inflation, so rich people are investing in growth stocks (eg. tech) and cryptocurrencies.

I'll be honest, I was expecting governments to destroy cryptocurrencies by now, but even without government intervention, I don't see Bitcoin ever holding any value or being stable, without backing. Maybe stable-coins will solve this.

I agree that going back to the gold standard would be an improvement, even better, I'd prefer if private companies could just print and back their own currencies. Instead of backing currencies with gold, you could back them with different commodities (eg: wood, iron, oil, etc). The machinery of freedom has an interesting chapter about how such a system may work.

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

#902

Post by wernercd »

newacct583 wrote: post #887
wernercd wrote: post #882

Earlier quoted context omitted.

> Are you citing absolute numbers? https://medium.com/the-radical-center/the-triumph-of-the-mid... Plenty of info out there that wealth is getting distributed globally. The absolute poor are decreasing and the middle class globally is increasing - absolute numbers and by the %'ages. > inevitably get accused If you use the ideas and thoughts of it... then of course you're going to get accused of it. And your "why you…

Those numbers are global. I don't see how they're relevant to the subject at hand. "America" is literally in the title of the linked article, and the discussion is primarily about US tax and entitlement policy. > what other options are there? How about a "democrat"?

Not sure how "democrat" is an option... it's an American political party.

Unless you mean DS: "democratic socialism" - which is still socialism. Look at the Green New Deal where DS wants to go - control of industry "for the people" by massive expansion of government into various industries.

While you may have a point about the article being American focused, the fact remains that the middle class is expanding and the lower/peasant class is shrinking globally - all boats are rising due to "evil capitalism" and that horrible capitalism, despite being the worst idea ever... is still better than the alternatives that have presented. It's global success compared to the global failure of other "better" ideas is self evident at this point.

Socialism is the perfect theory... until it meets reality... and other setups are in the same boat: Better than capitalism until you look at real world results.

Need to fight cronyism? corporatism? Monopolies with reasonable government controls? Sure... I'm not a PURE capitalism person - My thoughts are based on reality where restrictions keep things reasonable (like restrictions on free speech and owning guns).

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

#903

Post by pjmorris »

jb775 wrote: post #787
pjmorris wrote: post #527

Earlier quoted context omitted.

My own personal favorite notion of a hedge for this is wages. Boost wages to match the money supply, and most of those wages will get spent across the economy as well as providing for the wage earners. Of course, this is what many more economically-educated people than I warn against.

Employees can't control their own wage increases though..but it explains why job hopping is prevalent and understandable nowadays as the only realistic way to keep up. Increasing minimum wage would definitely increase money spent throughout the economy, but I think business owners would offset that cost by creatively reducing/stagnating pay and benefits for middle-class type roles. And the resulting extra demand (wit…

My personal favorite way for boosting wages would be a job guarantee. Hand-wavy explanation: Having the government hire people who can't find work elsewhere puts a floor on both unemployment and on the minimum that other entities have to provide in a job. More detail in this interview [0] of Pavlina Tcherneva, author of 'The Case for a Job Guarantee' by Mark Blyth (the most entertaining political economist, IMO.)

[0] https://soundcloud.com/rhodescenter/is-now-the-time-for-a-fe...

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

#904

Post by chordalkeyboard »

onethought wrote: post #900
chordalkeyboard wrote: post #896

Earlier quoted context omitted.

Wise capital allocation.

So they didn’t generate that money... whatever they allocated it to did.

They generated the money by allocating it to a process that was productive.

> whatever they allocated it to did.

Machines are inanimate.

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

#905

Post by ItsMonkk »

jaycroft wrote: post #763
ItsMonkk wrote: post #558

Earlier quoted context omitted.

The 30 year rate has been dropping at 2% every decade for the last 5 decades at a steady rate[0]. If the fed attempts to taper inflation by increasing the interest rate above the 30 year, we will hit a yield curve inversion and trigger another recession, just like every previous recession in the past 50 years. So no, we can't go back to 2 or 3. And by 2030, we can't even stay at 0. The big problem with bottom up is t…

Yeah, that's sort of the conclusion I keep coming to. If I understand correctly, I'm assuming that when you say that bottom up triggers inflation, you're referring to price inflation / core CPI / any of the other 20 measures of inflation in physical consumable goods required for survival. Whereas top down (as we have been doing because fed and treasury can't seem to work together) tends to keep price levels for core…

You don't just have to watch out for CPI inflation to be outpaced by productivity. The money supply needs to also outpace productivity if you want the same status quo.

I've built up an intuition that the money supply should match changes in productivity, and that if it doesn't it will eventually lead to problems. But it's also notable that the trend is extremely important. If you do match, everything should be fine and this can last forever. If the money supply rises faster than productivity, you see what we've seen these past 50 years since we've been off the gold standard, a huge surge in asset prices. And if productivity rises faster than the money supply, people flee assets and into money. This is called a Deflationary Spiral. But the opposite state is basically an Inflationary Spiral, with people unwilling to spend their assets.

Dalio in his "Explaining the Economic Machine" video talks about a "Beautiful Deleveraging". My thought currently is that such a thing isn't possible. If you wait for the debt to get so bad that you have to do something, you can't match productivity anymore. Therefore the only thing you are left to do is grow the money supply less than productivity. And that changes everything. Suddenly the trend is to money. And once the money managers work that out, they all rush out of assets and into cash. This triggers a crash. So it's the trend that dominates, and there is no way to balance the deleveraging.

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

#906

Post by lasagnaphil »

Dma54rhs wrote: post #824
lasagnaphil wrote: post #733

Earlier quoted context omitted.

From what I’ve seen over various parts of the Internet, BLM’s pretty complicated. I’ve come to the conclusion that it’s a combination of actual people fed up with their neighborhood’s policing and wrecking shit up, along with some progressives who wanted the protest to be peaceful and instead hoped for policy-wide changes (through electorialism) from this, along with neoliberal shills (corporations and mainstream pol…

I'm on mobile right now but when you open the Mueller investigations pdf control+F finds it easy.

Yeah, Ctrl+F shows that there were some investigations of IRA creating activist accounts among the left/rights spectrum, although the details are still censored. But my point is, the Russians are just the cherry on top of the cake for this event, and aren't nearly as substantial as the internal politics going on in the US.

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

#907

Post by onethought »

chordalkeyboard wrote: post #904
onethought wrote: post #900

Earlier quoted context omitted.

So they didn’t generate that money... whatever they allocated it to did.

They generated the money by allocating it to a process that was productive. > whatever they allocated it to did. Machines are inanimate.

I’m talking about workers. Machines even if they were used are also managed by workers.

The actual value generation occurred there. Not at the capital allocation point.

Church of capitalism might have convinced to otherwise. But if I pay you to carry 10kgs up a mountain I can’t then say: “I carried 10kg up a mountain” ...

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

#908

Post by fuzzfactor »

pas wrote: post #834
nostrademons wrote: post #368

Earlier quoted context omitted.

Yes, mostly. I'd say that high inflation, declining union membership, and growth of the financial system are all consequences of the U.S. dollar's status as a fiat reserve currency. The causality for the decline in union membership runs [collapse of Bretton Woods system] -> [U.S. dollar becomes global reserve currency] -> [U.S. manufacturing becomes uncompetitive abroad] -> [American manufacturing firms go bankrupt,…

It'd be really good to get an explanation for why someone disagrees with this to learn a bit about this.

There is no mathematically sound explanation for that.

It was plain to see Nixon's purpose was to destroy unions at the time.

And it had to be an overwhelming salvo, or there could be no guarantee it would outlast his crooked regime.

Turns out it has lasted longer than anyone would have wanted, so you get nothing but finger-pointing after a few decades, mainly by people who were not even there or into financial math at the time.

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

#909

Post by fuzzfactor »

clarkmoody wrote: post #647
nostrademons wrote: post #228

Earlier quoted context omitted.

Why do you think wages haven't kept up with productivity? The decoupling of wages from productivity started around 1971-1973, which is suspiciously close to the Nixon Shock and beginning of the 1970s inflation. In periods of inflation, firms with high bargaining power (notably monopolistic corporations, corporate executives, and right now, software engineers & quants) can extract the excess money floating around. Fir…

We also fully unlinked the money from gold in 1971 https://wtfhappenedin1971.com/

Since which time this has been fully forseen.

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

#910

Post by parasubvert »

unishark wrote: post #869
parasubvert wrote: post #853

Earlier quoted context omitted.

The boy who cried wolf was eventually correct too. A broken clock is right twice a day. Etc. Peter Schiff currently believes Bitcoin is going to collapse, that anyone who buys it is a fool and charlatan, that hyperinflation is around the corner, and the only solution is a return to the gold standard. Do you agree with this? I don’t like Bitcoin (too many grifters) but even I can admit it has value as a hedge asset ag…

> The boy who cried wolf was eventually correct too. A broken clock is right twice a day. Etc. Yes. That's what I said. You said he was consistently wrong for 15 years. I don't know who to believe regarding gold and bitcoin, but it doesn't help me trust your opinion when you go overboard in your criticism of Schiff.

He has been consistently wrong for 15 years, if he was right, it was a half truth by accident. Let’s look harder at his theses since 2007 or so:

1. US Equity Markets Crash.

Okay, that happened in 2008. But, did it he get the reason why?

He claims it is all about Debt and easy money. That interest rates should be up and ultimately we should be tethered to hard currency. That’s a really, really simplistic and ahistorical take. It’s like saying, let’s cause issues with the financial economy to completely wipe out the real economy because it is “healthier that way”. Seems to be a big price to pay for a very nebulous benefit. Thoughts like that led to World War 1. (I highly suggest “Lords of Finance” from Liaquat Ahmad and “The Great Transformation” by Polanyi).

As opposed to what we ARE doing loosening the liquidity strings to allow the real economy to continue to function, albeit damaged by the lack of regulations + greed in the financial economy causing it to make terrible risk exposure decisions.

Yes there was plenty of bad behaviour in the housing market and in the whole Lon trading and mortgage trading market (which I was a part of in the past, as a wall st software dev). The interaction of mortgage backed securities and collatorized debt obligations propped up too many balance sheets and weren’t properly valued for systemic risk, and amassing credit default swaps as a hedge quickly unravelled the institutional insurers like AIG .... requiring a massive liquidity injection by the Fed and Congress so that everyone from Wall St to Main St didn’t wind up completely broke. Ultimately it was the only practical solution available given the political will.

2. US Dollar will crash (Hyperinflation)

Completely false and made him and his investors lose their shirts

3. Decoupling of foreign economies from the US slowdown

Also false, the US rebounded far quicker due to a variety of Obama era policies, the world still is not really decoupled as Eurozone troubles and Trump’s trade wars showed.

4. Foreign equities and commodities (gold) will grow and are where you should invest.

Except foreign equities crashed worse than US equities back in 2008! And austerity policies prolonged their suffering.

My criticism isn’t “overboard”, this is public record. If you are an investor and listened to Peter Schiff, you’ve lost a lot of money.

Post reply on HN