Are super-rich people just better at making money?
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Re: Are super-rich people just better at making money?
#2Better at finding opportunities to make money. Better at eliminating competition see Bill Gates and Microsoft and the DOJ. Some are just born rich and learned how to invest.
Re: Are super-rich people just better at making money?
#3To solve all this, it's pretty simple, and the U.S. actually used to do it: heavily tax the super rich. Heavy taxation and then appropriate use of those funds for education, R&D funding, infrastructure, etc. is actual trickle-down economics. And mega corporations should be heavily taxed instead of holding the country economically hostage. They jumpstart their companies off of government funding and R&D and then act abused when asked to help give back.
Right now, the middle class is getting slammed with taxes. They make almost all their money through salary and get taxed heavily, while the super rich pay either no tax or a maximum of capital gains, so almost 40% or less than upper middle class in terms of percentage.
Corporations and the super rich have bought out democracy, and what is crazy is that they are supported by the very groups they intrinsically hate and hurt through their policies.
Re: Are super-rich people just better at making money?
#4The example that is used in this blog post is completely and absolutely wrong. He portrays wealth accumulation as a zero-sum game with people coin-flipping against each other. In reality, someone does not have to lose for wealth to be created.
Re: Are super-rich people just better at making money?
#5This yard-sale model isn't really how the economy works though, people don't continuously bet 20% of their net worth. It's something similar going on though, I think a lot of these variables would seem to be explained by considering the lognormal distribution for personal wealth.
In a normal distribution, the shape of the distribution comes from a "random walk" left and right from a large number of steps of varying size.
In a lognormal distribution, on the other hand, the random steps are not additive but multiplicative: e.g you multiply the previous figure by a (Gaussian) random variable many times.
This seems to reflect economic reality that people make decisions proportional to the scale of their current wealth. If I make 10k, it would take 2k extra to entice me to a different job. If I make (or lose) 10% on an investment, etc. It's all multiplicative.
The lognormal distribution also has a fatter "right tail" than a Gaussian, which is what we see IRL.
Re: Are super-rich people just better at making money?
#6To solve all this, it's pretty simple, and the U.S. actually used to do it: heavily tax the super rich. Heavy taxation and then appropriate use of those funds for education, R&D funding, infrastructure, etc. is actual trickle-down economics. And mega corporations should be heavily taxed instead of holding the country economically hostage. They jumpstart their companies off of government funding and R&D and then act a…
I know all of this but reading it again made me angry.
Re: Are super-rich people just better at making money?
#7I love explorables! Simple model but good to see.
I am not sure I believe the reasoning in the title but the effect they show is interesting. Money is power, even in a heads or tails game
Re: Are super-rich people just better at making money?
#8To solve all this, it's pretty simple, and the U.S. actually used to do it: heavily tax the super rich. Heavy taxation and then appropriate use of those funds for education, R&D funding, infrastructure, etc. is actual trickle-down economics. And mega corporations should be heavily taxed instead of holding the country economically hostage. They jumpstart their companies off of government funding and R&D and then act a…
> To solve all this, it's pretty simple, and the U.S. actually used to do it: heavily tax the super rich.
That never happened. https://mises.org/library/good-ol-days-when-tax-rates-were-9...
Re: Are super-rich people just better at making money?
#9Better at finding opportunities to make money. Better at eliminating competition see Bill Gates and Microsoft and the DOJ. Some are just born rich and learned how to invest.
I don't think they're better at anything. The power of money to make money and to buy opportunity, time, and mitigate risk is extreme. Being able to take risks and fall back on your family's wealth can enable huge gains when taking high risk chances. See basically every "entrepreneur" like Gates, Bezos, Musk, Zuckerberg, etc.
Re: Are super-rich people just better at making money?
#10The example that is used in this blog post is completely and absolutely wrong. He portrays wealth accumulation as a zero-sum game with people coin-flipping against each other. In reality, someone does not have to lose for wealth to be created.
Indeed- the more money a person has, the more adventurous they can get in producing value. It's not rocket science! (most of the time)