I have a feeling that the problem for a lot of middle-class people isn't wealth inequality but lifestyle. It became normal that one has $500/month car payment for life (which cost you around $3,000,000 over 40 years), or a 2500 sqft house for a family of 2 or 3, or credit card debt of $30,000 on a $60,000/year income.
Just Be Rich
441–450 of 1001 posts
Re: Just Be Rich
#442Earlier quoted context omitted.
The problem is all down to the basic human need of a home. In the 70s and 80s even 90s someone on a teacher's salary could own their own home in a major world city - say London. Now, literally zero chance. Because homes have become an asset class and the rich can outbid regular people so they are pushed out. That's the problem. I couldn't care less how many billionaires there are if regular people can afford a decent…
Homes in the US today are much larger than they were in the 1970s. About 2x as large! Per square foot, the average home is actually cheaper today than it was then, inflation adjusted, and this isn't even factoring in the modern 2.2% mortgage rates vs the 13% mortgage rates of those days.
Looks like the housing problem comes from the fact that average incomes have not been adjusted for inflation... which means the income of the rich have been over adjusted.
Re: Just Be Rich
#443Earlier quoted context omitted.
And a lot of people who are as smart and motivated will start their own company but will not get rich because they are not as lucky. Luck play a big part in success
In startups you have to be right only once.
In startups you get to be wrong only once.
Re: Just Be Rich
#444Earlier quoted context omitted.
> There isn't a finite amount of "wealth" in the world. You can go out and make wealth every single day. The rich obtaining more of it doesn't mean there's less left over for you and I. There is an essence of truth to that, but it certainly does not tell the whole story. Consider what happens with Amazon. When they put a family-owned store out of business, those people need to work somewhere. They then turn to the on…
> In some cases the "creating wealth" argument holds up, but in reality what is mostly happening in the age of globalism is wealth consolidation, not wealth creation. Amazon is not creating new wealth, they are simply taking all of the customers and wealth away from all of the smaller businesses and consolidating it into a single huge entity. I get where you're going with this... and I'm not in favor of monopolies an…
Amazon has no doubt created wealth as well. However, they have also consolidated wealth and put many small companies out of business. The extent to which they have created new wealth and the extent to which they have taken existing wealth can be argued over, but they have certainly done both. This is not exclusive to Amazon either. The same is done by all huge multinationals, and this has been happening for decades.
It is important to realize the effects that this consolidation has in terms of wage stagnation [1]. This is a very real effect that is felt by a very large percentage of the workforce. By consolidating wealth (and power) in the hands of few large companies those companies are able to pay a lot lower salaries to their employees. If your options are (1) work for Walmart for a low wage, (2) work for Amazon for a low wage, or (3) starve, you will accept whatever wage Amazon or Walmart will offer you.
In other words, as a direct consequence of these multinationals and their mode of operation, millions of people are getting lower salaries today than they would have gotten 50 years ago (adjusted for inflation) whereas overall productivity has gone up significantly. The difference is pocketed by executives and wealthy shareholders of these companies. As a result of those lower salaries, those people are now having trouble paying for core necessities (health care, education, housing).
This is the rising wealth inequality that people are talking about, and the rising wealth inequality that people want to fix.
[1] https://insight.kellogg.northwestern.edu/article/wage-stagna...
Re: Just Be Rich
#445Wage theft should be eradicated.
But what is disingenuous in the article is fact that it compares "wealth" I don't care about how wealthy someone is. If I can afford house and food having a better car is just a bonus.
Graphs going down for middle income does not mean that "rich people" are taking homes of middle income people and throwing them to the streets to die.
What Paul Graham is writing about, is that Economic Mobility has improved with internet and computers. Rich got a lot more rich but loads of people are out of poverty.
We all should focus on educating people and getting them out of poverty not about taking down ultra-rich.
Re: Just Be Rich
#446A lot of people who are just as smart and motived as Elon Musk or Steve Jobs will never be able to start their own companies and get rich. Because they have family obligations that take priority. Because they live outside high-income countries. Because they have no access to support network, so when they fail, they fall all the way to bottom. Because they may have made a crippling mistake in their pasts that now prev…
On HN I see the sentiment that you expressed a lot of times. I live in a country which will be categorized by western countries as a developing country. There is no social support system in my country, you are pretty much on your own. Nobody is coming to help you. And I have made serious mistakes when I was in school which resulted in not being able to go to a good college which makes things in my country ten times m…
congratulations. that truly sounds awful, and i'm glad you've got this far so we can even have this discussion.
without attempting to belittle your story, i'd place a large bet that for every one of you, there are tens - if not hundreds - of people with a better start/more luck in life, that have worked harder than you, and have less than you do.
Re: Just Be Rich
#447Earlier quoted context omitted.
> Are you sure? From what I see around me, people who have money are a constant target of other people who want to drop their beaks into it, so to say. I'd say that's largely a new-rich problem. People born in rich families generally have the wealth management groomed in. I'm far from being rich, but that's something I'll teach my kids, as I believe one major driving factor in poor families staying poor is lack of ed…
Now that is a good reply. Where I live (Czechia), pretty much everyone rich is new-rich, the tradition of old money was interrupted in 1948. That is a possible explanation for why I see this pattern fairly frequently, while other commenters seem to disagree.
I've seen the stereotypical difference between new and old-rich many times: the first ones tend to show off and overstate their wealth, the latter do the very opposite.
Re: Just Be Rich
#448Inequality by itself is not a bad thing. Let's start from there. If 90% of the population had a (sustainable) lifestyle of current dollar millionaires, and the remaining 10% had a (sustainable) lifestyle of dollar billionaires, there would be lots of inequality, but it wouldn't be problematic. Inequality is only bad if you're in a zero-sum game. The rich do have the power to extract rents and "rig the system" to ceme…
Economy is closer to a zero-sum game, after all theres limited resources in a period of time. We cannot be all rich because we cannot all own the capital, if we did, who does the work? To invest you need workers, to produce you need consumers, to rent you need renter, etc. Then the rich class exist because theres a poor class, a zero-sum game.
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Re: Just Be Rich
#449Earlier quoted context omitted.
Do you have any examples of countries where progressive taxation would be a hindrance for escaping poverty? This frankly sounds like a made-up argument against taxation.
Good example is UK. As a specialist you would be in area of 40% effective tax rate, but going over 50% is not uncommon (after IR35 changes some workers have to pay employer's NI) plus there are other taxes like council tax or high VAT.
I would think a specialist paying 40% in taxes has already escaped poverty? That's my confusion here, poverty suggests such a low income that progressive taxation shouldn't really affect yet.
Re: Just Be Rich
#450Earlier quoted context omitted.
Do you have any examples of countries where progressive taxation would be a hindrance for escaping poverty? This frankly sounds like a made-up argument against taxation.
Spain. There are levels of taxation that provokes the following: your small company (1 to 10 employees) is doing really well so you try to increase the number of employees and business. And what happens is that when passing some threshold you will have to pay the next level of taxes and end up earning less after taxes than when you were smaller. So we have a lot of small companies that cannot or don't want to take th…
I think the parent was talking about personal taxes and how that affects escaping poverty.