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The top 10% owns 87% of the stocks

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Re: The top 10% owns 87% of the stocks

#231

Post by Epa095 »

baobabKoodaa wrote: post #120
weatherlite wrote: post #4

So a stock market and/or real estate crash can actually be good to reduce inequality . In fact I think its about the only way to dramatically reduce inequality. Think about young people trying to buy their 1st home now, its becoming impossible.

> Think about young people trying to buy their 1st home now, its becoming impossible. At least in Finland today it's much easier for young people to buy their 1st home now compared to 15 years ago. Interest rates are roughly where they were 15 years ago, but house prices in real terms have gone way down. There's also huge market asymmetry with large amount of vacant properties that nobody wants to buy, and relatively…

How did you manage that!?! It was my impression that increasing housing prices is a problem all over, and that it partially stems from the mega trend of people moving to cities. Most countries have a lot of room to build houses, just not where people want to live!

So why is it different in Finland? Is there a lot of free space around then cities? Or doesn't everyone want to live in Helsinki?

Re: The top 10% owns 87% of the stocks

#232

Post by marcyb5st »

thomasingalls wrote: post #166
newbie578 wrote: post #119

As a person born in the middle class, I am quite sad to see it's extinction in realtime. Not sure what is the solution to this.

We could tax the wealthy

As long as there are countries that allow for tax avoidance it's not gonna work. If my income is in the 10s of millions I am better off paying a few millions to some firm to handle every single thing for me to hyper optimize my life. They make you change residence on paper and buy fictitious tickets to prove you have been in country x at least y days during the fiscal year, and much more. You still end up saving way more than paying 20/30% of taxes on those 10s of millions.

There should be a global minimum tax, but trying to make every single ruling party in the world agree to that is a fool's errand. I think that what the little that got leaked by the Panama's papers few years ago is just the tip of the iceberg.

Re: The top 10% owns 87% of the stocks

#233

Post by angusturner »

fxwin wrote: post #175

In any kind of non-uniform distribution of any good, the top x % will always own a disproportionate (wrt to headcount) amount of it (In economic systems, this mathematical fact is further amplified by other factors such as financial literacy and leverage). What's always missing to me in these types of discussions is what this value should be at, and what the distribution should look like qualitatively (i.e. what shou…

I personally think we should resist the temptation to separate out values from the discussion. Like, even if it was the case that some extremely high-level of inequality turned out to be "optimal" in some GDP-maximizing way, the question still ought to hinge on some notion of fairness or justice (in my view).

(Although, I guess if your metric is "citizen satisfaction" maybe that's not as terrible).

In any case, there are lots of case studies showing what happens at the extreme inequality end of the spectrum. As I mentioned in another comment, my favorites come from Piketty "Capital in the 21st Century" and Acemoglu & Robinson "Why Nations Fail".

In the latter, the case study on the rise and fall of Venice is particularly fascinating - huge economic growth due to inclusive economic institutions that promoted social mobility, followed by a downturn once the aristocracy moved to entrench their own interests at society's expense. This seems to be the central thesis of the book, although I'm only a few chapters in.

The parallels with modern US politics are pretty hard to ignore though.

Re: The top 10% owns 87% of the stocks

#234

Post by sitkack »

angusturner wrote: post #202

When I was at uni I read Thomas Piketty's "Capital in the 21st Century", and parts of his newer "Capital and Ideology" (although I never quite got through that one). The big takeaway for me was that wealth inequality never improves without some major catastrophe (war, revolution, plague etc). The proposed model is really intuitive and compelling (tldr; return on capital has historically always been higher than real g…

Beware, fellow plutocrats, the pitchforks are coming | Nick Hanauer https://www.youtube.com/watch?v=q2gO4DKVpa8

Re: The top 10% owns 87% of the stocks

#235

Post by mirekrusin »

ookblah wrote: post #31

I think about this from time to time and I suppose everything is cyclical in the end. Most of us would have been some peasant in the feudal age and when it gets really bad it always ends in a revolution of some sort. It's just on a global scale and timeframe now. As more of the population feels the effects of inequality they won't appeased by just fancy toys and shiny things, they will want change by force. My only s…

We are living in feudal system at the moment. Amazon, cloud providers and everything seems to be subscription based nowadays - as Yanis Varoufakis calls it "techno-feudalism". We have system which funnels unimaginable amounts of money to few overlords, it'll keep reinforcing itself creating more and more contrast with time. Open source everything seems to be the only answer if you ask me.

Re: The top 10% owns 87% of the stocks

#237

Post by carlob »

colechristensen wrote: post #137
carlob wrote: post #86

Earlier quoted context omitted.

I'm pretty sure wealth doesn't follow an exponential distribution. Power law, log normal or stretched exponential or maybe some sort of generalized Zipf.

This, for the sake of argument, is not an important distinction.

I disagree, if anything we need to know what the distribution is before we make such sweeping claims. While pretty much every country has an income tax, which means that we knows fairly well who makes what, there is no equivalent for wealth. Most wealth distributions are estimates which get progressively worse as we near the top percentiles, because really big wealth is very mobile and international.

So yeah before we say: "it always looks like this, it's just about what the parameters are", we need to measure it and have a clearer idea of what it looks like in different societies otherwise we won't be able to decide what the desirable parameters are like.

Re: The top 10% owns 87% of the stocks

#239

Post by Pooge »

qnleigh wrote: post #222
kvgr wrote: post #171

Well, i don't see what is wrong with it. Apart that common people don't invest even a bit. This is what happens always with everything. Some people find joy in accumulating stock and others in drinking beer every evening.

Poverty exists because people choose to drink beer instead of investing their wealth in the stock market? That's really the only explanation you can think of? If only all those people living paycheck to paycheck works just have the sense to put their money in the S&P 500! #endworldhunger

> That's really the only explanation you can think of?

Another is the fact that many choose to own luxury items or buy drugs (tobacco, alcohol are included) instead of... you know... saving. And then self-proclaim to live "paycheck to paycheck"⋆.

Middle class gets poorer and the rich get richer because inflation is literally eating away the former's life savings while the other has doubled his net worth in just 10 years.

⋆I am not discrediting those that are truly living paycheck to paycheck. But a lot of people blaming the system and getting poorer are usually spending a shitton of money on useless things. Financially literate people prefer to save and invest this money because they understand the cost of opportunity.

Re: The top 10% owns 87% of the stocks

#240

Post by atoav »

weatherlite wrote: post #4

So a stock market and/or real estate crash can actually be good to reduce inequality . In fact I think its about the only way to dramatically reduce inequality. Think about young people trying to buy their 1st home now, its becoming impossible.

Nope. In a crash the poor get thrown out of their houses, have to sell their land, etc. The rich can endure more, buy that stuff and after the crisis it is even worse.
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