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Who Rules America: An Investment Manager's View on the Top 1%

sociology.ucsc.edu

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Re: Who Rules America: An Investment Manager's View on the Top 1%

#81

Post by rayiner »

eternal_skeptic wrote: post #69
Astrohacker wrote: post #60

Earlier quoted context omitted.

Here's how banks counterfeit money. You deposit $100. The bank loans out $80 of your money to someone else. They put that money back in the bank. The bank now has $100 - all your money. But your checking account says $100, and the loanee's checking account says $80, for a total of $180. The bank has now effectively created--that is, counterfeited--$80 in new money. They gave this new money to themselves, and then loa…

So you're calling fractional reserve banking "counterfeiting". I assume you oppose it. Let's analyze your argument. Fractional lending doesn't particularly benefit the rich. A lot (IIRC, the vast majority) of the current millionaires in the US are 1st generation. They got their money in their lifetime. The vast majority therefore required a loan at some point, to fund their money-making venture. Even the evil financi…

The fact that current millionaires are first generation is kind of inapposite. We haven't really been on a fractional reserve system for long enough to really create generations of financial dynasties.

Re: Who Rules America: An Investment Manager's View on the Top 1%

#82

Post by eurohacker »

eternal_skeptic wrote: post #55
Astrohacker wrote: post #43

It makes perfect sense that most people in the top 0.1% are associated with the financial and banking industries if you know how banks work. Banks, and the Federal Reserve, create new money. They give this money to themselves, and then loan it out. This is as bad as, and effectively equivalent to, counterfeiting. Creating new money, i.e. counterfeiting, i.e. inflation, does not create new wealth. It merely changes th…

You say "Banks, and the Federal Reserve, create new money". That is factually untrue: only the Federal Reserve can legally create new money in the US. Since you mentioned it by name, you are definitely talking about the US, but the same state holds in virtually all developed countries as well: one designated "central bank" entity creates money, the others don't. Per your main point, yes, the central bank creates mone…

In the United States - Federal Reserve is a private organisation and its owners are hardly known to anyone, its like a commercial bank with special rights to print money

while in other countries in the world central bank is a government institution - state organisation

Re: Who Rules America: An Investment Manager's View on the Top 1%

#83

Post by rayiner »

lefstathiou wrote: post #48
potatolicious wrote: post #42

Earlier quoted context omitted.

Echoing what rayiner said - where are the rich going to go? Europe is less friendly to the rich - extremely so in the most pleasant of places. China? India? Neither are very pleasant places, and even with truckloads of cash has a hard time competing with the quality of life enjoyed in the US even under onerous taxation. I think you're not giving enough credit to the American quality of life - it's why my family immig…

That's not true. How about Hong Kong or Singapore where you certainly get a western style life with extra benefits: safer, cleaner, live-in maid service, better access to healthcare and a 15-20% all in tax rate. Have you been to Thailand or Indonesia? Sounds ridiculous but this is happening right now. I'm in banking and I hear my clients talk about it all the time. They're doing it as we speak (slowly migrating their…

I was born in Thailand and go back to Bangkok regularly. Unless you want to live in isolation (maybe with your banker buddies), there is no comparison between living in the US and living in Thailand.

Re: Who Rules America: An Investment Manager's View on the Top 1%

#84

Post by Astrohacker »

webXL wrote: post #68
Astrohacker wrote: post #43

It makes perfect sense that most people in the top 0.1% are associated with the financial and banking industries if you know how banks work. Banks, and the Federal Reserve, create new money. They give this money to themselves, and then loan it out. This is as bad as, and effectively equivalent to, counterfeiting. Creating new money, i.e. counterfeiting, i.e. inflation, does not create new wealth. It merely changes th…

As much as I favor low taxation and hate class warfare attacks on the wealthy, I think we ought to tax "freshly printed money" at a much higher rate, or figure out a more equitable way to create money... if we have to create money . Our financial system (the one created and regulated by the U.S. Federal Government) is so corrupt, as evident by TARP and the lack of lending and recovery. The only way its gonna change i…

There's no reason to create new money[1]. As I argued in my post, all inflation can do is change the distribution of the purchasing power of the money... not create new wealth. But the market already handles the distribution or purchasing power just fine through normal market forces. Good businesses get more purchasing power and grow. Bad businesses lose purchasing power until they collapse. The only reason to inflate the money supply is to scam everyone because you get all the new money.

As for replacing the dollar, bitcoin is the only reasonable alternative that presently exists. Fiat currencies almost certainly will never work, because the temptation to inflate them is too great. Gold can't work because you can't send it over the internet. But bitcoins both can't be inflated and can be sent over the internet. No government will decide to switch from dollars/Euros/whatever to bitcoins. Rather, it will be the market that chooses them if they are appropriate.

[1] If you actually halted inflation of the dollar, then as technology continues to increase the supply of everything, eventually the dollar would be so valuable that a cup of coffee would cost less than a penny. You would need to make new monetary units worth less than a penny so that cheap things like coffee can be purchased with them. You would do this by taking your pennies to a bank and getting, say, 100 penny pennies with each penny, and then a cup of coffee could cost 78 penny pennies.

Re: Who Rules America: An Investment Manager's View on the Top 1%

#85

Post by rayiner »

dantheman wrote: post #56
arjunnarayan wrote: post #4

There's a pretty simple solution: Abolish the capital gains tax, and tax all capital gains at the income tax rate. There is no more "capital gain". Only income. Whether your income was earned through labor or rents on capital that you own seems rather irrelevant to me.

Rents on capital have the possibility of loss, whereas income does not.

And?

Re: Who Rules America: An Investment Manager's View on the Top 1%

#86

Post by keeptrying »

potatolicious wrote: post #42
lionhearted wrote: post #35

Earlier quoted context omitted.

Let's think about secondary effects. What percent of very wealthy Americans do you think would renounce their citizenship based on this? How much less investment capital would there be in the USA based on that? Note: Not asking for a value judgment ("good riddance if they do!" - not productive). Just your estimate as to what percent of wealthy Americans would give up their citizenship and how much less investment cap…

Echoing what rayiner said - where are the rich going to go? Europe is less friendly to the rich - extremely so in the most pleasant of places. China? India? Neither are very pleasant places, and even with truckloads of cash has a hard time competing with the quality of life enjoyed in the US even under onerous taxation. I think you're not giving enough credit to the American quality of life - it's why my family immig…

I dont think your right. I've been in Bangalore for 2 months and its hard to decide where I have a better quality of life. Here I can rent a brand new 3 bedroom with gym and swimming pool for $400. Driver for $200 a month. Hospitals are cheaper and about as well equipped. You get all channels including HBO for $5 a month. Savings rate in a CD is 10%.

With the rampant unemployment in the US - I cant see why you would consider the US to be the higher quality of life right now.

Re: Who Rules America: An Investment Manager's View on the Top 1%

#87

Post by nazgulnarsil »

eternal_skeptic wrote: post #55
Astrohacker wrote: post #43

It makes perfect sense that most people in the top 0.1% are associated with the financial and banking industries if you know how banks work. Banks, and the Federal Reserve, create new money. They give this money to themselves, and then loan it out. This is as bad as, and effectively equivalent to, counterfeiting. Creating new money, i.e. counterfeiting, i.e. inflation, does not create new wealth. It merely changes th…

You say "Banks, and the Federal Reserve, create new money". That is factually untrue: only the Federal Reserve can legally create new money in the US. Since you mentioned it by name, you are definitely talking about the US, but the same state holds in virtually all developed countries as well: one designated "central bank" entity creates money, the others don't. Per your main point, yes, the central bank creates mone…

FRB is fine in a free banking system. Competition would create an ideal level of reserves by means of some banks dying and some thriving. We do not have that. Large banks are shielded from their fuckups. This creates perverse incentives for them to make high risk/high reward investments with other people's money.

Re: Who Rules America: An Investment Manager's View on the Top 1%

#88

Post by pg »

rdl wrote: post #79

Why the fuck does he consider CEOs and others who sell their companies to be "directly connected to the finance industry?" To that extent, a cashier at wal-mart is directly connected to the finance industry because she helps a traded corporation make revenue.

As far as I can tell he equates making money from the sale of stock rather than from salary with being part of the finance industry. I stopped reading when I realized that.

Re: Who Rules America: An Investment Manager's View on the Top 1%

#89

Post by aodin »

mkramlich wrote: post #53

This started off sounding like it was going to be a Repub/TeaParty/Koch-style political propaganda piece, but the further I went into it the more pleasantly surprised I became. Makes some good points about the distinction between different groups and tiers at the top of the American income ladders. It's true that the concerns and goals and challenges of upper income "working class" folks like small business entrepren…

To those curious about this claim, I would recommend Nomi Prin's "It takes a Pillage". She, a former manager at Goldman Sachs, makes a strong argument for the bailouts being criminal.
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