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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%

#911

Earlier quoted context omitted.

The boy who cried wolf was eventually correct too. A broken clock is right twice a day. Etc. Peter Schiff currently believes Bitcoin is going to collapse, that anyone who buys it is a fool and charlatan, that hyperinflation is around the corner, and the only solution is a return to the gold standard. Do you agree with this? I don’t like Bitcoin (too many grifters) but even I can admit it has value as a hedge asset ag…

I don't see that at all. He's basically saying that the way our governments and banking systems interact with the economy is fundamentally flawed and causes issues. Getting the timing right is not easy, sure. He was right about 2008. You may choose to believe that 2008 was an isolated event or it was just another systematic failure. I think we'll see another one soon, following the way governments treated covid. I wi…

He was not right about 2008. Saying that “US stocks will crash because of [WRONG REASON]” doesn’t make you right. Anyone that listened to Schiff or invested with him wound up losing a LOT of money.

Schiff on Bitcoin:

https://www.foxbusiness.com/markets/bitcoin-is-a-fools-gold-...

Going back to the gold standard would not be an improvement. I highly recommend reading Karl Polanyi’s The Great Transformation for an analysis of the problems of the gold standard.

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

#912
post #848

Earlier quoted context omitted.

Bitcoin is inherently deflationary...if the entire world moves to bitcoin, and somehow we prevented the extension of credit based on bitcoin collateral by financial intermediaries... Which is already happening. Financial institutions are already extending credit (aka 'printing money') based on bitcoin and other cryptocoin collateral. Bitcoin is not necessarily deflationary.

I'm sorry but you seemingly contradict yourself: >we prevented the extension of credit based on bitcoin collateral... >Which is already happening. Is in direct contradiction to: >Financial institutions are already extending credit... Regardless, the amount of bitcoin is set to be capped and finite - therefore unless this changes it is inherently deflationary. Aside from mining out the remaining unmined bitcoin, no in…

That's my point.

You can't make more bitcoin, but if you extend credit to someone based on the bitcoin they have, that's CREATING NEW MONEY.

In that sense, bitcoin is like gold.

In the gold standard, the supply of gold was fixes, but the supply of dollars was not. Because bank's create money when they allow you to borrow.

For bitcoin to be truly deflationary, you would have to prevent all financial institutions from extending credit

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

#913

Earlier quoted context omitted.

Some nice graphs to go along; https://wtfhappenedin1971.com/

A bunch of these graphs are misleading, especially the ones from the EPI. /r/badecon can explain better than I can: https://www.reddit.com/r/badeconomics/comments/6rtoh4/produc... TL;DR: 1. The pay line is for the bottom ~80% of workers, while the productivity line is for all workers. If you graph all workers wages vs all workers productivity, then the gap shrinks quite a bit. (Of course, maybe we should redistribute…

The top 3 graphs are all you need:

"Growth in productivity and hourly compensation since 1948"

"Real GDP, Real Wages and Trade Policies in the U.S. (1947-2014)"

"Real family income between 1947 and 2016, as a percentage of 1973 level"

As for the remaining graphs, for a number of them;

>The lines aren't adjusted for inflation in the same way, which makes the gap look worse.

In spite of this discrepancy, the outlooks experienced over these decades are still even worse than they look.

Nixon was quite bent on the effort to remove the potential for building middle-class wealth any more for unionized workers. His people didn't like the way it had already occurred to a good extent before he got there. The objective was to not only stop but reverse the trend.

And unionized workers were paid much more than average plus had some excellent benefits which were so essential to an upward class move that non-union companies had to mostly have similar benefits even while lower average wages prevailed.

So it took them and all average-paid-or-lower workers down by removing cash buying power directly from their earned income & savings. Not just a notch like levying income taxes & instituting the Fed to remove gold from circulation as legal tender, then prohibit its possesion, and the subsequent currency devaluations had done much earlier in the century. Instead was the most devastating thing they could come up with at the time since income tax and central bank had already been done, and they had all the gold in the US under their control. Generations after the safety net of silver had been a lost memory after the Founding Fathers' wise reliance on both silver & gold as the standards when designing US currency to begin with had been compromised leaving only gold.

By 1976 average people had lost half their wealth and with hindsight much more than half their wealth potential, just like it seemed was going to happen back in 1971. While the truly wealthy mostly lost half their dollar-denominated wealth too, but they were still rich and their outlook has done nothing but improve in spite of the devaluation of the dollar.

Everyone else was set back decades and here we are.

Never did it seem like there was any objective other than inequality being preferred over prosperity, even for the top Wall Streeters who numerically lost more millions than any working person to the market crash [0], and inflation which had to be accepted as never-ending at the time, from that point forward until a major reckoning.

Still overdue but the wealth removal from the general population needed to continue without more inflation after a certain point or the graphs would have gotten really revealing much too early for those who had yet to cash out.

[0] was watching it live on a Quotron: https://en.wikipedia.org/wiki/Quotron

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

#914

Earlier quoted context omitted.

A bunch of these graphs are misleading, especially the ones from the EPI. /r/badecon can explain better than I can: https://www.reddit.com/r/badeconomics/comments/6rtoh4/produc... TL;DR: 1. The pay line is for the bottom ~80% of workers, while the productivity line is for all workers. If you graph all workers wages vs all workers productivity, then the gap shrinks quite a bit. (Of course, maybe we should redistribute…

> Average hourly wages doesn't take into account workers' increase in benefits. There is a pretty good reason for that. Most of the increase in benefits has been in the form of increased healthcare costs, which only somewhat reflect increased value, as much of that value is unrealized due to high deductibles incentivizing people to not use medical services if they can avoid doing so (which preserves an odd form of ho…

Exactly, workers have much less benefits now.

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

#915

Earlier quoted context omitted.

A home isn’t an investment, at best it’s a low interest savings account. That people consider it to be one is part of the reason house prices continue to outpace inflation. Buy a home to live in it, but don’t expect that you’ll make money from it.

Depends how you look at it. If you manage to attain mortgage free home ownership, you'll be free from rent or mortgage expenses.

If you're in a neighborhood where this is common, property tax increases will rise to compensate.

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

#916
post #68

Earlier quoted context omitted.

The bailouts are tragic as it undermines the natural garbage collection in democracy - bankruptcy. Bankruptcy is an incredible positive because it allows for the safe and sane dismantling of bad organizations. The question is - how do we apply a mechanism like bankruptcy to government organizations?

Exactly. Bankruptcy and insolvency is an immune response to financial illness in markets. However, instead of removing cancerous growths, we bail them out and thus they metastasize and become much larger and more lethal. This inevitably leads to the death of the host.

The host is already beyond recovery for the US dollar to ever again function as designed.

Thos. Jefferson's quote continues:

> I believe that banking institutions are more dangerous to our liberties than standing armies... The issuing power should be taken from the banks and restored to the people to whom it properly belongs.”

Remember the purpose of the US Mint was to convert the silver & gold of any citizen into legal tender for a reasonable fee and return it to them as coins. Printing of bank notes was not on the agenda until politicians having a more predatory agenda got their way.

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

#917
post #148

Earlier quoted context omitted.

Except this wasn't the federal bailouts. Those are an entirely different beast. It's talking strictly about income stagnation. The study shows that if wages kept up with productivity (as was the case in the immediate post-WW2 era) the bottom 90% would earn $2.5 trillion per year more. > We document the cumulative effect of four decades of income growth below the growth of per capita gross national income and estimate…

>Except this wasn't the federal bailouts. Those are an entirely different beast. It's talking strictly about income stagnation. Which rests on the fundamentally incorrect assumption that a dollar a rich person gets means that a poor person is a dollar poorer.

did not downvote, but

More accurate to calculate how it still regularly costs a million poor people a dollar each to make one person a new millionaire.

But we all know a $Million doesn't buy what it was supposed to any more, so all million-and-one of them are screwed anyway.

And poor people actually used to be able to afford this kind of spending.

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

#918
post #68

Earlier quoted context omitted.

The bailouts are tragic as it undermines the natural garbage collection in democracy - bankruptcy. Bankruptcy is an incredible positive because it allows for the safe and sane dismantling of bad organizations. The question is - how do we apply a mechanism like bankruptcy to government organizations?

>> The question is - how do we apply a mechanism like bankruptcy to government organizations? Not sure if this is an answer for every government org, but hundreds of municipalities and possibly even states are going to go bankrupt due to obscene pension liabilities. The very difficult "solution" is to let them to bankrupt, and allow them to re-negotiate liabilities. Unfortunately many municipalities have promised the…

>obscene pension liabilities

What seems that way to you has turned out to not even be as much prosperity as it should have been for those having the most effective inflation-calibrated plans.

There was no other way to even come close to what employers had intended for their people when they granted these benefits in lieu of full market pay. That's how destructive inflation was.

And of course for the vast majority of retirees it has always fallen far short of what could have been since inflation has been calibrated over the years to continually bring the buying power of gains downward the more that accrue regardless.

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

#919
post #678

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…

I've begun to wonder whether short-term economic depression in '08 and maybe '20 would have been preferable to the slow march to endemic corruption and aristocracy that the US is on. If the trend continues one would eventually expect long-term disruption to the US's ability to maintain cohesion.

I would hope for a Constitutional Convention rather than continuing the trend with no end in sight.

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

#920

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…

Correction: The 1% have manipulated the government to have obviously unfair political policies. They control advertising, media, and the government. I do blaim the rich, and it's from first principles. The only thing that ever puts a dent in it is grass roots efforts like BLM, unions, etc. We tried the gold standard, it is also a failure.

At what time did you and who else try the gold standard anyway, and how did it fail?
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