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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%

#191

Post by Andrew_Quentin »

econgeeker wrote: post #134
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…

There are many places an american can go. Unlike the USA, most countries don't tax your worldwide income. So, for instance, you could become a citizen of any of the EU countries that don't tax worldwide income, and earn your income outside that country tax free (and live outside it as well.) I know of several countries within the EU where you can be a citizen and pay essentially no taxes, or extremely low taxes. Thes…

"I know of several countries within the EU where you can be a citizen and pay essentially no taxes, or extremely low taxes."

If so, then why have the rich not moved already? Indeed, why have you not gone to these places? I mean, no tax, whether on capital gain or income, is better than any tax is it not?

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

#192

Post by po »

tomelders wrote: post #190
po wrote: post #142

Earlier quoted context omitted.

That said, around 1,245 of the top 0.01% should statistically be sociopaths, which is a concern. Assuming an even distribution… which is unlikely.

the distribution is skewed towards the top 0.1%. According to "This American Life", the percentage of psychopaths* is higher amongst the wealthy and successful than the rest of society. Not sure what the definition of wealthy and successful is though. *I wrote sociopaths by accident, although there's some debate as to wether there's a difference between the two. Also, what's with the down votes? What did I say..?

Right that was my point... that the top 0.1% would probably have more. How did you arrive at the ~1k number you did? By extrapolating from general population incidence of sociopaths? That only works with even distribution.

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

#193

Post by econgeeker »

Andrew_Quentin wrote: post #191
econgeeker wrote: post #134

Earlier quoted context omitted.

There are many places an american can go. Unlike the USA, most countries don't tax your worldwide income. So, for instance, you could become a citizen of any of the EU countries that don't tax worldwide income, and earn your income outside that country tax free (and live outside it as well.) I know of several countries within the EU where you can be a citizen and pay essentially no taxes, or extremely low taxes. Thes…

"I know of several countries within the EU where you can be a citizen and pay essentially no taxes, or extremely low taxes." If so, then why have the rich not moved already? Indeed, why have you not gone to these places? I mean, no tax, whether on capital gain or income, is better than any tax is it not?

The rich are moving, and there's quite an exodus going on. I'm part of it.

Of course it is harder for the super-rich. The US government is not going to let you leave the country with a $5B fortune.

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

#194

Post by econgeeker »

ww520 wrote: post #102
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…

The wealthy can renounce U.S. citizenship and lose the protection of U.S. system on their properties. Just don't cry when some thugs in their new home island state rob them of their wealth. The U.S. system provides the scalability for these people to make vast wealth. Shouldn't they pay it back to keep it up? The system is expensive to upkeep. There ain't no free lunch.

You think property rights don't exist elsewhere? The only "free lunch" is the one paid for with stolen money, e.g.: taxes.

The rich are leaving and renouncing. There are a lot of countries out there, and many of them provide a more hospitable climate for wealth.

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

#195

Post by marcamillion »

shalinmangar wrote: post #126
marcamillion wrote: post #106

Earlier quoted context omitted.

At this point now, based on your replies, I can only assume you are trolling so I will ignore the first 2 responses and reply the to third and fourth. >Nope. It very much is because bankers wanted to get rich. The Federal Reserve was designed by bankers. Other central banks are designed by bankers. Governments go along with it because they get to benefit from the inflation just like the bankers. Are you a techie? Do…

>If that's the case, why has inflation been so low in the US in the last two years, when the Fed undertook the largest expansion of it's balance sheet in modern history? i.e. it has printed more money recently, than at any other time in it's mandate - but inflation AND inflation expectations are still low. That is because all that inflation has been exported to other countries. There are economies who have bet their…

There is some truth to this...but that doesn't explain exorbitantly low inflation domestically.

High inflation is exported with loose monetary policies regardless of domestic inflation.

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

#196

Post by Astrohacker »

swampthing wrote: post #66
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…

... except unlike with counterfeiting, when all is said and done (all debts paid and all bank balances withdrawn), the total amount of US dollars in this closed system you describe will still be $100. You are ignoring the balance sheet of the second person (the one the bank lent $80 to) and only looking at that of the bank and the initial depositor. Edit: Wow really, someone downvoted this?

No. Suppose the $80 are immediately paid back. The bank just moves the $80 from the loanee's checking account into the bank's own checking account. Total amount of money is now $180. $80 have been created, and is now owned by the bank.

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

#197

Post by tomelders »

po wrote: post #192
tomelders wrote: post #190

Earlier quoted context omitted.

the distribution is skewed towards the top 0.1%. According to "This American Life", the percentage of psychopaths* is higher amongst the wealthy and successful than the rest of society. Not sure what the definition of wealthy and successful is though. *I wrote sociopaths by accident, although there's some debate as to wether there's a difference between the two. Also, what's with the down votes? What did I say..?

Right that was my point... that the top 0.1% would probably have more. How did you arrive at the ~1k number you did? By extrapolating from general population incidence of sociopaths? That only works with even distribution.

I wasn't being totally serious, but I calculated the top 0.1% of total US population, and then 4% of that, which is apparently the percentage of sociopaths/psychopaths for that section of society. The average across the entire US population is about 1%.

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

#198

Post by kds »

goblgobl wrote: post #184
kds wrote: post #166

Earlier quoted context omitted.

The retail bank in no way makes Joe Average far richer than he already is by his own efforts. And I don't think those Russian billionaires invested in Facebook just because they were yawning at the thought of depositing the money in a bank and the boring routine of such a transaction. They all expect huge capital gains and the pump-and-dump institutional machinery of Wall Street is the instrumental system for this.

My point was the author's claim that the top of the top 1% is "involved in the financial services industry" is meaningless because of how he defines it. The only people who don't fit his description would be salaried employees. To address your points - you're ignoring the difference in financial goals and economies of scale. Joe is an employee. So his goal is to preserve the capital he earns, which is a service the r…

To add a second million to the first 1M is hard exhausting labor (lower rich achievers according to the article, in some real business sector), but to gain another 5-10M on any 100M already available is inevitable for the Top 0.01 on Wall Street.

I guess I understand this. (You express the idea as economies of scale, higher quality investment vehicles, and their professional management).

If this is true and OK to be as a situation, than in some pure math sense - relative velocity of financial growth compared to efforts to gain it - it seems that a tiny historically established minority of a super-rich guys and families (mostly in the banking and investment) will always be far, far ahead in money wealth.

And maybe even gaining momentum. There are many economical studies and observations that a certain wealth spread between the Top Richest and the rest is increasing, at a macroeconomic level. Is this good or bad?

A quote from the article: "... the American dream of striking it rich is merely a well-marketed fantasy that keeps the bottom 99.5% hoping for better and prevents social and political instability."

If so - are the CEOs/founders/owners of Apple, Google, Facebook, Microsoft, Virgin Group, (you name it, any other huge real business success story), merely some outlying points WITHIN the TOP 0.01? How big is the amassed wealth of such iconic entrepreneurs compared to those that in a clan-wise manner are into banking/investment/real estate/government contracts (and the related politics)? And to what extent the financial wealth as evaluation of the former depends on the latter?

I don't have answers to the questions I've raised - perhaps it would be interesting for somebody to research and see the whole picture.

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

#199

Post by silverbax88 »

billybob wrote: post #188
mmatants wrote: post #175

Earlier quoted context omitted.

You described the requirements for a medium of exchange, and they make sense. But I don't think that that means "value" necessarily. Value is bread when I am hungry. Or gold when I need to make microchip contacts - but that usage is nowhere near justifying the price that gold actually trades at. This is just a nitpick with the use of term "intrinsic value" - gold's characteristics make it a good form of money, but it…

I don't see how it could really work otherwise. There is no such thing as a good that everyone would value equally. Intrinsic value varies depending on the needs of the traders.

See, that's exactly the problem. The intrinsic value of anything - in this case, gold - relies on agreement of the scarcity. Truthfully, we don't know the scarcity of gold, or the amount that exists. We have only educated guesses.

Controlling the monetary supply with "paper" currency (which is an inaccurate term, "digital" currency is the reality) is much more stable and controllable. The US Government says they have $50,000,000,000,000, and the global economic capital markets either agree or don't agree.

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