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American Equity

blog.samaltman.com

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Re: American Equity

#261

Post by blizkreeg »

gist wrote: post #194
blizkreeg wrote: post #114

I have a better (may be slightly insane) idea. Open up startup investing (VC rounds especially) to a wider audience through some kind of index fund. Retirement and pension funds, endowments etc are too roundabout a way of actually benefitting from the windfall in the now. While this is obviously risky, in the 2/10 chance where the startup IPOs or gets acquired, everyone stands to benefit a big deal. I recently heard…

> Open up startup investing (VC rounds especially) VC wins are done with primarily other people's money with bets spread in multiple areas and advantages accruing to people who get a larger portion of any potential gains. So maybe please stop thinking (as I think Sam probably does) that startups are the answer to everything and that in the end everyone wins if they can be a part of that. Keep in mind also that money…

I'm not saying startups are a panacea. I'm just saying that perhaps there's one more way for others to benefit from the wealth that startups are generating. This is just one among many possible ways and means.

Re: American Equity

#262

Post by wu-ikkyu »

gozur88 wrote: post #251
wu-ikkyu wrote: post #245

Earlier quoted context omitted.

Money is not a panacea for valuation. If it were, then ending climate change would be much more profitable.

It's true there's nothing perfect under the sun. But I think the financial judgement of MSFT vs some guy's hobby project is pretty sound, and in general price signals work pretty well as a message to producers.

I agree. However, fatal errors within the money system (i.e. climate change, cyclical poverty) must be addressed, which is what this whole thread is about.

Re: American Equity

#263

Post by toomuchtodo »

cperciva wrote: post #260
toomuchtodo wrote: post #108

Earlier quoted context omitted.

> In the long run, every dollar of wealth gets spent. Not necessarily. "Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), Cisco Systems (CSCO) and Oracle (ORCL) are sitting on $504 billion, or 30%, of the $1.7 trillion in cash and cash equivalents held by U.S. non-financial companies in 2015, according to an analysis released Friday by ratings agency Moody's Investors Service. That's even more cash concentration than…

Those dollars are going to get spent eventually; you just haven't waited long enough. But the foreign assets issue is a peculiarly US problem, resulting from the US being almost unique in the world in the extent to which it imposes taxes on income earned in other countries. (The other such country is Eritrea, and the US voted in favour of a UN security council resolution condemning the Eritrean tax regime.)

> Those dollars are going to get spent eventually; you just haven't waited long enough.

I'm unwilling to wait until the end of civilization while citizens of the richest country in the world go hungry [1], go without shelter [2], and die due to not being able to put $50 together for their insulin [3].

[1] https://www.worldhunger.org/hunger-in-america-2016-united-st...

[2] https://en.wikipedia.org/wiki/Homelessness_in_the_United_Sta...

[3] https://tonic.vice.com/en_us/article/ezwwze/the-high-price-o...

Re: American Equity

#264

Post by losteric »

derefr wrote: post #176
koolba wrote: post #20

Earlier quoted context omitted.

> Bill Gates' (to name a random American citizen) has a far larger share in the GDP than most other Americans. If you want to solve that raise your taxes on the rich and lift up those that are at the lowest end of the scale. That will have a lot more effect than some fiction where you get to do a bunch of make-believe bookkeeping. Or go a step further do what nobody has the balls to do: tax wealth That's what all the…

From the perspective of trying to get the budget balanced, taxing wealth is probably the single most efficient way to do it. From the perspective of the tax code as an incentive system , taxing wealth is a strange thing—it makes people feel less interest in becoming wealthy, and thereby causes fewer GDP-building things to happen! (This is also, for a similar reason, why economists don't like corporate taxes or trade…

> From the perspective of the tax code as an incentive system, taxing wealth is a strange thing—it makes people feel less interest in becoming wealthy, and thereby causes fewer GDP-building things to happen!

I think this is false in practice, especially with a progressive wealth tax.

Most people don't want money, they want the things money can buy... long, healthy, and generally happier lives. People that keep striving past that point are people that seek to change the world, folks like Gates or Musk. A progressive wealth tax starting at $10M wouldn't really change the incentives at play.

Re: American Equity

#265

Post by leifaffles »

dzonga wrote: post #256

this is not Communist or Left wing propaganda. But once you understand the dynamics of how economies work, you can appreciate that Capitalism is fundamentally broken. For the US to work, they would've to break Capitalism as we know it. And bring forth a hybrid system. You can't have a functioning system when half the citizens can't afford healthcare.

Why does basically every economist disagree that "capitalism is fundamentally broken"?

Is that because they don't "understand the dynamics of how economies work"?

Re: American Equity

#266

Post by balozi »

thaumaturgy wrote: post #165

Corporations have been operating under the mistaken belief that they are legally obligated to maximize shareholder returns for a couple of decades now, to the detriment in general of labor and the overall quality of goods and services provided. I would expect something similar to happen to here: this would incentive massive changes in attitude towards national infrastructure and services. Take NASA for example: it's…

I would really like to know which school produced the idea that maximizing shareholder returns IS NOT the primary imperative of any commercial enterprise.

Note the vast majority of corporations are not public and their only shareholders are the individual owners. So, maximizing return on their capital and labor is not based on some "mistaken belief", it is a basic existential requirement. Show me someone that doesn't understand that and I'll show you someone that has never run a business.

Re: American Equity

#267

Post by wu-ikkyu »

theptip wrote: post #180

Matt Levine has been musing on some issues adjacent to this one over the last year, e.g. https://www.bloomberg.com/view/articles/2016-08-24/are-index... https://www.bloomberg.com/view/articles/2017-10-26/maybe-ind... The basic observation being that if we can get the benefits of capitalism when most equity is owned by a passive investment fund like an index tracker, then what's the problem with the state owning all t…

>what's the problem with the state owning all the equity in that tracker, and redistributing the proceeds to the population?

Hierarchical, centralized corruption of the state is the problem, as evidenced by failed communist implementations. If a more distributed model could be devized, perhaps it could avoid such problems.

Re: American Equity

#268

Post by 24gttghh »

touchofevil wrote: post #206
frgtpsswrdlame wrote: post #191

Earlier quoted context omitted.

>For example, abolish the Senate, end the electoral college, end gerrymandering, and reform campaign financing. I can get behind a lot of those but the Senate? What's your problem with it? Seems like the founders had very good reason to create it.

The Senate doesn't reflect majority rule based on population. California has 38.3 million residents, Wyoming has 600K residents [1] but both states have 2 senate votes. Due to this, Wyoming residents have much greater voting power in the Senate than residents of CA. Edit: And since bills must be passed by both the House and the Senate, Wyoming residents have much more power over what becomes law than CA residents do.…

You are ignoring the fact that Wyoming only has 1 representative in the house, which is where the balancing piece comes in.

Re: American Equity

#269

Post by leifaffles »

touchofevil wrote: post #172

I completely support this idea. Additionally, I think the USA needs to move away from anything that doesn't reflect majority rule. For example, abolish the Senate, end the electoral college, end gerrymandering, and reform campaign financing. The USA could be a lot more democratic than it is at present and until that is fixed, you will keep seeing a minority of the population control policies that affect the whole nat…

Why is pure democracy a good thing in and of itself?

Re: American Equity

#270

Post by Retric »

kgwgk wrote: post #249
Retric wrote: post #240

Earlier quoted context omitted.

No, you can still make a loan by buying a bond etc. I simply feel banks have conflicting goals as they need to be 'good at' customer service and making loans. This creates a lot of poor incentives and economic distortions.

Yes, it will be very convenient for people to issue bonds when they need a loan to buy a house or start a business...

Credit Cards are an example of non bank loans.

The difference is people fronting money for loans would need to take on real risks without FDIC protection or have safe deposits but need to pay for bank services.

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