211–220 of 284 posts
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> I had no choice in this and he used everything from back-room deals to flat out lies to achieve this. And a couple of well documented crimes.
I'm likely to believe that, but can you provide sources?
As capitalism matures, it's clear to anyone with a thread of financial literacy that most wealth is created through capital gains rather than salary. We're approaching a state (at least in developed countries) where productivity is so high, that you can literally park your money in 500 of the biggest businesses and you're almost guaranteed a 7% annual return (if you hold stocks for the long term). Using the commonly…
In the U.S., your $120,000 of capital gains/dividends isn't taxed at a high rate to you, but is taxed at a high rate. First the company has to earn a profit, and out of that profit pay state and federal income taxes (35% + state). Then it pays whats left to you, where you pay your 15-20%, making the total tax rate usually over 50%. Given that taxes on corporate income is a direct tax in investment, it's counterproduc…
I've seen this stated in a few prior debates I've had on this topic, but I'd ask the rebuttal: Why can't you make that EXACT statement but s/corporate income/personal income/? I never understood why capital investment was more a focus than consumer demand, especially given well understood properties of both marginal spend for low vs high worth individuals (low income salary workers will spend more by % on goods and services than wealthy investors) and the assertion that we are "swimming in investor money" right now. (I see the long bull market, P/E ratios, VCs over the last decade/ICOs/wealth gap as datapoints)
I'm 100% sure someone in the finance world has already thought this through but I don't know the words to search for, and my own intuition suggests that supporting demand-side consumption is going to be a far better driver for true efficient allocations of funds and market growth to support a virtuous cycle of consumerism and employment than investor money will.
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From 2001 to 2007 (just 6 years), the proportion of US households that left their income quintile were (starting at the lowest quintile) 44%, 61%, 58%, 55%, and 34%. Even by global standards that's quite high income mobility.
The choices of year bounds are interesting to say the least.
One of the best studies on intergenerational mobility in the US, using all IRS records (not sure how hard they had to work to get those) shows that mobility in the US has been fairly constant for 50+ years.
[1] http://www.equality-of-opportunity.org/assets/documents/mobi...
As capitalism matures, it's clear to anyone with a thread of financial literacy that most wealth is created through capital gains rather than salary. We're approaching a state (at least in developed countries) where productivity is so high, that you can literally park your money in 500 of the biggest businesses and you're almost guaranteed a 7% annual return (if you hold stocks for the long term). Using the commonly…
I agree with much of what you said, yet I just don't see it as all that bad of a situation. I still think there is a lot of upward mobility even in that scenario -- the smarter people I know earn good salaries and have nice lifestyles. Nicer than their parents, in most cases, mainly because consumer technology constantly gets better and cheaper. And there is still opportunity for risk takers to start their own compan…
A lot of smart, hard-working, college-educated people I know live in studio apartments or with roommates in their 30s, because otherwise they can't make ends meet. Many work in STEM jobs, but not at one of the high-profile web/advertising companies that are currently printing cash. Their parents at the same age owned homes, often while working in blue collar jobs with one parent staying home to raise the kids.
Regardless of whether we, as individuals, can afford an iPhone or a TV, upwards mobility on a whole is declining. Income inequality is increasing. And the political system is under the thumb of lobbyists and billionaires who frequently act out of pure self interest. The United States government has spent $250 million a day for the past 16 years on wars that most people don't want but are powerless to stop. These are trends that are upsetting to many people, despite the momentary gratification provided by of our iPhones and TVs.
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Middle class people can take advantage of those investment returns as well. A more interesting question to me is “Why aren’t they?”. A typical middle class person can still achieve significant upward mobility for their children, and yet they often choose not to. Is part of the problem with student debt not just that many parents of the last generation or two wasted their money rather than saving it to put their child…
> Middle class people can take advantage of those investment returns as well. By definition of the classes in a capitalist society, those who can fully take advantage of investment (capital) returns are the capitalist class. The petit bourgeoisie, or middle class, makes some return from capital, but that's limited (in the traditional definition, they are the ones who apply their own labor to their capital, though tho…
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The indication you're searching for is called wealth inequality. It is a measure of how much more money the richest people have compared to the rest of the population, and it has increased significantly over the years: http://fortune.com/2014/10/31/inequality-wealth-income-us/ There is an economist called Thomas Piketty who has made his name by studying and measuring inequality over the years. Read his book and you w…
Can you explain why wealth inequality is bad? If me and the rest the million other people in my city have $100,000, some billionaire in a city somewhere else making another 100 million doesn't really have any impact on me directly. Yet it increases this inequality metric and I'm supposed to be outraged. If the billionaire was using this position to corner the real estate market I'm trying to buy a house in, then I mi…
According to this article, though, there has been an increase of consumption inequality from 1980 to 2005 in the US according to various papers: https://web.stanford.edu/~pista/JEP.pdf. But the consumption inequality is far less outrageous than income inequality and can be estimated to have been in decline in the world at large through data from the World Bank's DataBank.
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Middle class people can take advantage of those investment returns as well. A more interesting question to me is “Why aren’t they?”. A typical middle class person can still achieve significant upward mobility for their children, and yet they often choose not to. Is part of the problem with student debt not just that many parents of the last generation or two wasted their money rather than saving it to put their child…
> Middle class people can take advantage of those investment returns as well. How exactly do you define "middle class"? Because by the popular definition of middle class, these folks can not take any meaningful advantage of any sort of investment returns. Generally speaking, middle class people barely have enough money to house and educate themselves (they must take out large barely-sustainable loans to cover either/…
Although this is in the midwest, the cost of living is much lower here. It's quite possible that you just can't do this on your typical "middle class" income in other places.
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I suspect a lot of these comparisons are not apples to apples. Declining wages are real, but populations are declining in the affordable but undesirable towns where property is cheap that my parents and grandparents bought into. My mother's parents bought their first home in Minot, North Dakota and saved up for a tiny home in St. Paul, Minnesota. He was an engineer who put himself through school while living in a box…
The problem is not that the growth is not there. But the sharing the growth corresponding to people's contribution. Do the super rich really should enjoy the wealth? Are those really justified? Do their employees has done proportionally smaller amount of contribution to only entitle to that much less wealth in salary?
Nothing is stopping you from venturing out into the world and setting up a business, and making your way into the 1%.
Most work is commodity work. And in a lot of cases, you have a significant amount of people who can solve a problem. This results in a race to the bottom in terms of compensation.
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> How does someone having wealth stop anyone else from acquiring theirs? The wealthy person (a) does not need a 9-5 job to subsist and can devote all their time to a launching a business, (b) has a lower tax burden via capital gains, (c) can afford to fail multiple times, (d) can buy their way into a top school if they don't get in on merit, (e) tends to have better family connections, (f) etc. Then the question is t…
Sure, as I said you may start out with less and have to work harder, but nothing you mentioned is stopping you from doing anything.
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It's way simpler. As population grows, the 500 richest people (whoever they are) are expected to get richer even if the wealth distribution does not change. And as the society gets richer, they are expected to get richer too. So, if there is any indication that wealth has been accumulating faster, it is not on the article. And as such, the article is valueless and a complete loss of time.
The indication you're searching for is called wealth inequality. It is a measure of how much more money the richest people have compared to the rest of the population, and it has increased significantly over the years: http://fortune.com/2014/10/31/inequality-wealth-income-us/ There is an economist called Thomas Piketty who has made his name by studying and measuring inequality over the years. Read his book and you w…
See “Measuring inequality: A three-headed hydra”[1] in The Economist and “Economics is all about consumption” by Scott Sumner.[2]
[1]: https://www.economist.com/blogs/freeexchange/2014/07/measuri...
[2]: http://econlog.econlib.org/archives/2014/07/economics_is_al....