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America's 1% Has Taken $50T From the Bottom 90%

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Re: America's 1% Has Taken $50T From the Bottom 90%

#431

Post by chordalkeyboard »

Apocryphon wrote: post #421
chordalkeyboard wrote: post #412

Earlier quoted context omitted.

> No, it's moral to provide people with food and shelter Then it must be immoral to take food and shelter from people. How do you then justify taxation? > funded by surplus wealth generated by a society, in a manner deemed agreeable by societal consensus, so as to create a stable social order. And in order to maintain consensus, and order, anyone who doesn’t agree is subject to violence. No, thats not moral. > But by…

> How do you then justify taxation? Presumably society comes with concepts of fairness, and that it is more fair to take someone's surplus means to share with those who are running a deficit. This need not be coercive either, as there are always incentives such as tax credits and deductions so forth to spur voluntary giving. I'm sure there are moral philosophers better suited to explain it than me. > And in order to…

> Presumably society comes with concepts of fairness, and that it is more fair to take someone's surplus means to share with those who are running a deficit.

So your concept of fairness involves a person who has the power to assign and remove property from other people according to his judgments.

> This need not be coercive either, as there are always incentives such as tax credits and deductions so forth to spur voluntary giving.

Taxation is coercive, so offering relief from coercion as an incentive is coercion.

> I'm sure there are moral philosophers better suited to explain it than me.

There are moral philosophers in favor and opposed. You must take responsibility for your own moral judgments.

> We live in a society, as they say.

And marriage means that its not possible for a husband to rape his wife.

> But pattern recognition is a form of optimization, and labels are but filters created from reoccurring ideological patterns.

Its a lossy form of optimization and the labels have connotations that may not be justified.

Re: America's 1% Has Taken $50T From the Bottom 90%

#432

Post by jaycroft »

NortySpock wrote: post #410
jaycroft wrote: post #352

Earlier quoted context omitted.

I'm starting to think that it's time to let the unproductive businesses that have blossomed over the last 12 years go bankrupt and be removed from the system. Unfortunately a lot of productive businesses that are temporarily unproductive had been using their cash for stock buybacks and using easy corp debt to run operations, and so with the pandemic, those wold get washed out too. Maybe the laws banning stock buyback…

Save the people (using unemployment) and ditch the hollow husks of marginal companies that have rotted from within? Dumb idea: maybe if you had a published interest rate schedule that planned out 10 years, 15 years, whatever. So everyone knew what the bond/loan base interest rates would look like for the next 15 years. years 0 - 7: base interest rate ramps up from 3% now to 10% years 8 - 15: base interest rate ramps…

This seems sort of like what the Fed intends to do now, only with maybe lower rates overall - 0 for a few years, ramping to a target of 2 or 3, but I guess no real guidance after that. Unfortunately the Fed has pretty blunt tools, even after their upgrade back in March 2020. Using some of the surplus wealth from the asset holding class (top half of the K) to implement UBI, healthcare education, for the class that has most of it's wealth tied up in future wages (bottom half of the K). This would take congress though, and I'm not confident that we'll see anything recurring after the next round of stimulus.

There is risk here though - bottom up stimulus comes with it's own moral hazard issues, but then again I don't know what the net drag / benefit is compared to zombie companies getting infinite credit moral hazard we have now. I suspect UBI for individuals leads to fewer systemic risk sorts of issues, but I really don't know, it's very hard to envision what actually ends up happening due to lack of having ever experienced anything like that in my lifetime.

It would be nice if we could try it out - but there's probably a momentum term hidden in there somewhere - give an inch take a mile sort of thinking. Is UBI like corporate debt backstopping? Once you get a taste you can never go back?

I really don't see any good answers here other than "try to be on the top half of the K, and also try not to get eaten".

Re: America's 1% Has Taken $50T From the Bottom 90%

#433

Post by jandrese »

Railsify wrote: post #53
Pfhreak wrote: post #23

This is almost a natural law of wealth. When you have significant capital, you can do things like loan it out with interest, leverage it into getting loans to build more capital, etc. If one assumes that the wealthy are using their money to buy commodities and selling those commodities with the expectation of getting their initial money back plus some delta, then it becomes fairly trivial to demonstrate that the more…

The return on capital is always greater than the return on labor. Piketty does a great data driven analysis on this in his book Capital in the 21st century. This phenomenon was occurring long before the US was even a glimmer.

I've never understood why the capital gains tax is lower than the labor tax. The labor tax is theoretically adding value to the economy while capital gains is basically money you made because you had money. It seems to me it should be the opposite if you want a productive economy, encourage more people to put their money to work instead of playing games in the market.

Re: America's 1% Has Taken $50T From the Bottom 90%

#434

Post by Retric »

tylerhou wrote: post #391
Retric wrote: post #388

Earlier quoted context omitted.

1) No. Stock prices only directly impact companies when they actually sell stock. So, propping up the market has zero long term impact as the value of future cash flows is unchanged. It’s simple a handoff of money from the government to people selling stocks over a short period. It’s popular because it keeps highly leveraged investments viable.

And conveniently for my point, 2020 saw the largest stock and bond issuances of all time.

They get the same amount of money from issuing bonds independent of the interest rates they pay. Injecting money into the bond market reduces their costs, but doesn’t directly hand them more money any more than a home loan at a lower interest rate does.

In terms of stock issuances that’s surprisingly nuanced. Delta Airlines for example has 2.7% fewer outstanding shares in Dec 31 2020 vs Dec 31 2019.

Re: America's 1% Has Taken $50T From the Bottom 90%

#435

Post by shireboy »

mafuyu wrote: post #263
shireboy wrote: post #127

I'm definitely not 1%, and sympathize with/understand somewhat some of these claims. Bail-outs and unchecked government spending or borrowing from future generations worry me. However I'm also pretty aggressive at investing. I feel like in general my retirement and taxable investing has benefitted me financially, though I'm solidly middle class. I feel (with data to back me up) like I'm upwardly mobile, though still…

I'm more or less in the same situation as you, although relatively early in my career. I would urge you to try and look a little broader at what situations people even just below "middle class" are facing nowadays. From a personal finance perspective, I'm aligned with you. I shovel my money into my 401k and index funds, and still have plenty left over to survive and buy things I want and need. By doing so, I can part…

Thanks - I do think that's coherent and not combative at all, and appreciate hearing a similar, but different experience. I think the crux of where I would disagree is on how hard it is to start a business and/or invest. Growing up, I saw my dad go from lower middle class house painter to upper middle class IT work by taking night classes and self-teaching, so that informs my experience. I could see less fortunate middle class stories having a less optimistic view. I see that's subjective somewhat. But I think I'm on solid ground to say it's never been easier or cheaper, especially for a definition of "business" that includes 10-50k/year side projects to supplement a day job.

Similar with investing. Robinhood, et al have huge issues for sure (as we recently learned), but anybody can dollar-cost-average into some index funds and do better on average than sticking cash in the bank.

It's not so much that I don't _care_ about others less fortunate (I really do, and put my money where my mouth is on that). But I also genuinely think that one big way to help people is to help them have successful small businesses and invest, and encourage a mentality of self-education. I have definitely had that conversation with less financially stable peers. I don't push it on them, but if they are interested, we do brainstorm business ideas and talk about next steps, investing philosophy, interesting books and sites, etc.

Re: America's 1% Has Taken $50T From the Bottom 90%

#436

Post by brobdingnagians »

pmiller2 wrote: post #142
natenthe wrote: post #57

Correction: The Fed's policies have taken $50T of wealth from the Bottom 90%. When you bail out irresponsibly over-leveraged and nearly bankrupted banks and corporations, and pay for those bailouts with tax-payer money, you steal from the poor and give to the rich. Most importantly, when the Fed decides to print money ad nauseam, they create massive asset inflation, which steals from the poor and gives to the rich. T…

Potato, potatoe. Who do you think controls "the Fed?" Cui bono ? Your comment would also imply that before there was such a thing as a Federal Reserve, income and wealth inequality didn't exist. This is false.

The Romans literally debased their currency into lead as they hit hyper inflation-- then instituted price controls which led to a booming black market. The particular tricks have changed a little over time, it is just more efficient with digital money now. Ruling classes had the basics figured out millenia ago. And it never works.

Re: America's 1% Has Taken $50T From the Bottom 90%

#437

Post by jandrese »

fiftyfifty wrote: post #325
pydry wrote: post #11

Earlier quoted context omitted.

It's of little consolation having the price of your phone decline when the price of education, healthcare and a roof over your head have skyrocketed. Even if that were not the case, it's abundantly clear that geometrically increasing consolidated economic power is being translated into consolidated raw political power (which is zero sum). The events of the last few months and history in general have proved that this…

It's interesting that the 3 things you give as an example have sky rocketed in cost not because of the 1%, but mostly due to government interference in the free market. Government backed loans have driven up the cost of education and housing. Local governments limiting housing construction have further driven up the cost in many areas. Government created monopolies like the AMA have driven up the cost of healthcare.

> Government backed loans have driven up the cost of education and housing

Yes, housing would be cheaper if 40% of the population were living on the street because they couldn't afford a mortgage. Lots more supply to go around.

Blaming the AMA for healthcare costs is a unique take. While I can't say they are completely innocent, they are absolutely not a major factor in your insurance quote.

Re: America's 1% Has Taken $50T From the Bottom 90%

#438

Post by Aunche »

CyberDildonics wrote: post #399
InitialLastName wrote: post #336

Earlier quoted context omitted.

> B. A balancing mechanic -- Some more universally-accessable way to inject income at the base of the economy. Something like, for example, giving $1000 to every adult?

Possibly, though printing off $40,000 for every tax payer then cutting them a few thousand is probably not going to be the best approach. https://fred.stlouisfed.org/series/M1REAL

Where did you get $40,000 from?

Re: America's 1% Has Taken $50T From the Bottom 90%

#439

Post by adamcstephens »

adam_arthur wrote: post #332
adamcstephens wrote: post #314

Earlier quoted context omitted.

Because it’s impossible to tell who lost their job this year even though they made six figures in 2019. If we don’t like accidentally giving people who don’t need it money, claw it back at tax time. edit: the stock market is on fire while small businesses collapse. The market isn’t attached to reality.

Exactly, send the money out today, claw it back from those who earned too much in 2020. Small businesses collapse, but government efforts haven't been towards helping them, largely more towards sending out helicopter money to the people. Handing money to people will help all businesses of course, but I'd venture to guess it helped large corporations and brokerages the most. The loan forgiveness program for small busi…

The small business assistance was a pittance compared to what was sent to big business. It was mostly administered by large banks that have "economies of scale" yet were unable to get the money out to small companies. There were also lots of hoops and requirements for the PPP loans, while large corporations got free money without strings.

https://twitter.com/matthewstoller/status/899305677457416193

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