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Where can the left and right agree--Wealth inequality


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Now, let me first say that my views hardly represent mainstream views on the right. If anything, I align more with the left on this one topic. I absolutely agree there is a problem, but I'm sure I disagree with the left on the causes and the solutions. I think the major issue is not too much capitalism but too little capitalism.  Let's start with the federal reserve. It is simply not capitalism when you have 3% interest rates when the inflation rate is 10%.  Who benefits from low interest rates and the asset bubbles that it creates?  Well, the wealthy, of course. They have the most assets and also borrow most of the money.  The genius of this plan is that low interest rates are popular with everyone, even though most of the benefit goes to the ultra wealthy. Another way to look at it is that the federal reserve balance sheet of ten trillion dollars is basically a subsidy, 90% of which accrues to those who are already in the top 1% of asset ownership. This is the main reason that wealth inequality has exploded in the last 15 years.  Governments all over the world have acted in lockstep, so you can't just move your money to a currency that is based on more sound principles. The other side effect of this is that all you have to do to invest wisely is to know what the fed is going to do. Millions of Americans are sitting here watching their 401Ks dwindle, and wondering if interest rates have peaked or not.  Are bond funds and stocks safe to own again yet, or will the fed keep their word and continue to raise rates. Will they actually reduce their balance sheet as stated? (This would have a massive effect on rates). Well, you and I don't know the answer to these questions, but you can bet your bottom dollar that Blackrock and Goldman Sachs already know the answer.  It's a great time to be a member of the financial elite, isn't it?

 

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17 minutes ago, Cardin Drake said:

Now, let me first say that my views hardly represent mainstream views on the right. If anything, I align more with the left on this one topic. I absolutely agree there is a problem, but I'm sure I disagree with the left on the causes and the solutions. I think the major issue is not too much capitalism but too little capitalism.  Let's start with the federal reserve. It is simply not capitalism when you have 3% interest rates when the inflation rate is 10%.  Who benefits from low interest rates and the asset bubbles that it creates?  Well, the wealthy, of course. They have the most assets and also borrow most of the money.  The genius of this plan is that low interest rates are popular with everyone, even though most of the benefit goes to the ultra wealthy. Another way to look at it is that the federal reserve balance sheet of ten trillion dollars is basically a subsidy, 90% of which accrues to those who are already in the top 1% of asset ownership. This is the main reason that wealth inequality has exploded in the last 15 years.  Governments all over the world have acted in lockstep, so you can't just move your money to a currency that is based on more sound principles. The other side effect of this is that all you have to do to invest wisely is to know what the fed is going to do. Millions of Americans are sitting here watching their 401Ks dwindle, and wondering if interest rates have peaked or not.  Are bond funds and stocks safe to own again yet, or will the fed keep their word and continue to raise rates. Will they actually reduce their balance sheet as stated? (This would have a massive effect on rates). Well, you and I don't know the answer to these questions, but you can bet your bottom dollar that Blackrock and Goldman Sachs already know the answer.  It's a great time to be a member of the financial elite, isn't it?

 

This is one area where I can say I really am not an expert. Finances, investing, numbers, economics, interest rates, etc. I do know we need to do something about wealth inequality and I liked Sander’s marginal tax rates designed to tax the uber wealthy. I wondered how successful it would be, before law school, I thought it would work very well.
 

Afterwards, after discovering all the different ways the wealthy can hide their money… I’m not so sure. 
 

I’d love to hear some ideas from both sides. The whole bootstrap raising isn’t an option anymore. I think we need to end the I got mine mentality and figure out how to bring the impoverished into the 21st century. Ending poverty only improves society. 

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1 hour ago, Cardin Drake said:

I think the major issue is not too much capitalism but too little capitalism.

I wonder what you mean by that?  Are we even in capitalism?  In my mind, capitalism promotes: fair value exchange, relative equality, competition, innovation.  A capitalist economy would reflect economic market forces, not just will of finance (think about the history of Amazon).

Power is a relative concept.  I think the real imbalance is that labor no longer has any power.  The promise of capitalism is "all boats lifted on the rising tide".  That is no longer happening.  It has not been happening since the 70s.  This is the real inequality.

IMHO, for an economy to be successful, it cannot simply grow in size.  It must also become broad.  I use to applaud the low rates because they helped keep money flowing, they promoted the velocity of money but,,, as the economy has narrowed, that velocity has vectors, very limited vectors.  That means opportunity is also quite limited.

While I think Marx's conclusions about the solution to the inherent problem of capitalism (consolidation of wealth and power) is absurd, I do think he defined the problem correctly.  I think the economic climate of the late 1800s, early 1900's offers proof.  If a relative few people own all of the assets in a country, that country ceases to be truly capitaliistic and ultimately undemocratic.

I propose that,,, we have no capitalism as,,, the capital class owns the political class.  What we have is fundamental corruption of capitalism and democracy.  Politics really isn't about liberal versus conservative.  Politics is civil class warfare.  The only good politics is the effort to balance these interests, not promoting the domination of either.

Think about the economy as three piles of money.  There is the pile that represents most of society (labor), the pile that represents the government (Huge liability that essentially taxes society) and, the pile that represents the capital class.  Only one pile is growing.  No one can really challenge capital.  They even own the government.  They privatize the functions and give back, not in taxes but in patronage to the political class, utterly corrupt.

One party imperfectly attempts to restore some balance.  The other almost perfectly attempts to further the imbalance. 

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12 minutes ago, icanthearyou said:

I wonder what you mean by that?  Are we even in capitalism?  In my mind, capitalism promotes: fair value exchange, relative equality, competition, innovation.  A capitalist economy would reflect economic market forces, not just will of finance (think about the history of Amazon).

Power is a relative concept.  I think the real imbalance is that labor no longer has any power.  The promise of capitalism is "all boats lifted on the rising tide".  That is no longer happening.  It has not been happening since the 70s.  This is the real inequality.

IMHO, for an economy to be successful, it cannot simply grow in size.  It must also become broad.  I use to applaud the low rates because they helped keep money flowing, they promoted the velocity of money but,,, as the economy has narrowed, that velocity has vectors, very limited vectors.  That means opportunity is also quite limited.

While I think Marx's conclusions about the solution to the inherent problem of capitalism (consolidation of wealth and power) is absurd, I do think he defined the problem correctly.  I think the economic climate of the late 1800s, early 1900's offers proof.  If a relative few people own all of the assets in a country, that country ceases to be truly capitaliistic and ultimately undemocratic.

I propose that,,, we have no capitalism as,,, the capital class owns the political class.  What we have is fundamental corruption of capitalism and democracy.  Politics really isn't about liberal versus conservative.  Politics is civil class warfare.  The only good politics is the effort to balance these interests, not promoting the domination of either.

Think about the economy as three piles of money.  There is the pile that represents most of society (labor), the pile that represents the government (Huge liability that essentially taxes society) and, the pile that represents the capital class.  Only one pile is growing.  No one can really challenge capital.  They even own the government.  They privatize the functions and give back, not in taxes but in patronage to the political class, utterly corrupt.

One party imperfectly attempts to restore some balance.  The other almost perfectly attempts to further the imbalance. 

What would it take for labor to have any “power”?

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2 minutes ago, SaltyTiger said:

What would it take for labor to have any “power”?

You either have to limit money in politics, lobbying, campaign finance, PACs or,,, you would have to restore labor enough in order to bring back the money they put into politics that offset the interests of the capital class.

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Posted (edited)

ICHY,  I believe it would have been better phrased if I would have said the problem is too little free-market capitalism. I believe in the free market. It solves most problems by itself. What we have today with the Fed and interest rates in no way resembles a free market.  I would agree on the capital class owning the political class, but I would describe it as more of a merger, and the tool is regulation. 

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Just now, Cardin Drake said:

ICHY,  I believe it would have been better phrased if I would have said the problem is too little free-market capitalism. I believe in the free market. It solves most problems by itself. What we have today in interest rates in no way resembles a free market.  I would agree on the capital class owning the political class, but I would describe it as more of a merger, and the tool is regulation. 

Now you get into the confusion of the Ayn Rand, Austrian Economics thinking.  I find their conclusion just as absurd as Marx.  Yeah, the big players complain about regulations in public but laugh behind the scenes.  The very lobbyist who complain today, helped write many of those regulations as barriers to entry into a market yesterday.

If you look at our history, unrestrained capitalism leads to total domination by the capitalists (they are the very enemies of capitalism).  The greatest economic expansion in our history, late 40s, 50s, early 60s are defined by strong labor, government intervention, social programs dedicated to promoting opportunity.  Balance leads to breadth, breadth leads to equality, equality leads to a more prosperous, peaceful society.

The capitalist must be restrained.  They are a different breed.  There is never, ever enough for them.  They aren't purely bad, they just need to be constrained.

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6 minutes ago, icanthearyou said:

Now you get into the confusion of the Ayn Rand, Austrian Economics thinking.  I find their conclusion just as absurd as Marx.  Yeah, the big players complain about regulations in public but laugh behind the scenes.  The very lobbyist who complain today, helped write many of those regulations as barriers to entry into a market yesterday.

If you look at our history, unrestrained capitalism leads to total domination by the capitalists (they are the very enemies of capitalism).  The greatest economic expansion in our history, late 40s, 50s, early 60s are defined by strong labor, government intervention, social programs dedicated to promoting opportunity.  Balance leads to breadth, breadth leads to equality, equality leads to a more prosperous, peaceful society.

The capitalist must be restrained.  They are a different breed.  There is never, ever enough for them.  They aren't purely bad, they just need to be constrained.

I might add that we could have really helped address equality if civil rights did not take so long to happen. This expansion in the 40's, 50's and early 60's only widened the gap. Sadly, this was probably by design.

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1 hour ago, icanthearyou said:

You either have to limit money in politics, lobbying, campaign finance, PACs or,,, you would have to restore labor enough in order to bring back the money they put into politics that offset the interests of the capital class.

Think we could all agree on “pay to play limits”. Not sure that we can ever see labor to the power it once held.

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4 minutes ago, wdefromtx said:

I might add that we could have really helped address equality if civil rights did not take so long to happen. This expansion in the 40's, 50's and early 60's only widened the gap. Sadly, this was probably by design.

I would say that is in some part what ended the idea of relative equality.  Some people wanted equality for those like themselves but, not for others.

The civil rights movement, the feminist movement, the Vietnam War created a political shift. 

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The fed has lost control.  It doesn't matter how Larry Fink wants to dress up an tech index fund.  De-globalization will wipe debt-levered western finance out starting with Europe, starting with energy.  The world will stockpile commodities in the future, not dollars.  Build this inevitability into your investing/retirement thesis.  The dollar is done.

Inequality rewards.  It rewards those who take risks, learn a skill and apply with discipline.  It's the managerial class that is in trouble.  If you don't have skills, you need to get some.  If you do, you need to teach them.  Time is running out on the petrodollar entitlement program.  The knowledge gap is way bigger than the wealth gap.  Future wealth will seek those who have diligently accumulated skills and knowledge.

Resist envy.  Envy destroys souls.  Resist vain amusements.  Amusements destroy your time, and you have little to work with.  Go get it!

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41 minutes ago, maxwere said:

The fed has lost control.  It doesn't matter how Larry Fink wants to dress up an tech index fund.  De-globalization will wipe debt-levered western finance out starting with Europe, starting with energy.  The world will stockpile commodities in the future, not dollars.  Build this inevitability into your investing/retirement thesis.  The dollar is done.

Inequality rewards.  It rewards those who take risks, learn a skill and apply with discipline.  It's the managerial class that is in trouble.  If you don't have skills, you need to get some.  If you do, you need to teach them.  Time is running out on the petrodollar entitlement program.  The knowledge gap is way bigger than the wealth gap.  Future wealth will seek those who have diligently accumulated skills and knowledge.

Resist envy.  Envy destroys souls.  Resist vain amusements.  Amusements destroy your time, and you have little to work with.  Go get it!

the-dude-abide.gif.b1cf58b115ee9553a5f5f0a03bc0bafb.gif

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9 hours ago, icanthearyou said:

You either have to limit money in politics, lobbying, campaign finance, PACs or,,, you would have to restore labor enough in order to bring back the money they put into politics that offset the interests of the capital class.

In other words grow the middle class. 

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9 hours ago, icanthearyou said:

Now you get into the confusion of the Ayn Rand, Austrian Economics thinking.  I find their conclusion just as absurd as Marx.  Yeah, the big players complain about regulations in public but laugh behind the scenes.  The very lobbyist who complain today, helped write many of those regulations as barriers to entry into a market yesterday.

If you look at our history, unrestrained capitalism leads to total domination by the capitalists (they are the very enemies of capitalism).  The greatest economic expansion in our history, late 40s, 50s, early 60s are defined by strong labor, government intervention, social programs dedicated to promoting opportunity.  Balance leads to breadth, breadth leads to equality, equality leads to a more prosperous, peaceful society.

The capitalist must be restrained.  They are a different breed.  There is never, ever enough for them.  They aren't purely bad, they just need to be constrained.

Ironically the 40’s, 50’s and 60’s weren’t all the peaceful. 

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11 hours ago, autigeremt said:

Ironically the 40’s, 50’s and 60’s weren’t all the peaceful. 

Ironically, they weren’t peaceful because of many reasons, mostly because the country was divided upon ethnic lines. Italians, Jews, Irish, African-Americans, all were persecuted during that time period. 

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12 hours ago, autigeremt said:

Ironically the 40’s, 50’s and 60’s weren’t all the peaceful. 

Pretty peaceful until the one party wanted to spread equality to ALL.  How dare they.

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2 hours ago, icanthearyou said:

Pretty peaceful until the one party wanted to spread equality to ALL.  How dare they.

If you really think about it, it wasn't as peaceful even before that.  Whole lotta lynchings happening in the south.

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10 hours ago, icanthearyou said:

Pretty peaceful until the one party wanted to spread equality to ALL.  How dare they.

I guess you left out the wars? 

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On 8/16/2022 at 11:08 PM, autigeremt said:

In other words grow the middle class. 

But how?  I would argue that would be by removing the over class.   

The extremely wealthy will inherently have more influence.  IMHO, that class should be defined by millions and millions of individuals.  At present, that class is overshadowed by approximately 400 families who own far too much, they are the over class.

There was sound reasoning for huge marginal tax rates.  There isn't always but, most of the time it does promote capitalism and democracy.  We need to stop pretending that the same policies/ideologies are correct for every situation.

 

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5 hours ago, icanthearyou said:

But how?  I would argue that would be by removing the over class.   

The extremely wealthy will inherently have more influence.  IMHO, that class should be defined by millions and millions of individuals.  At present, that class is overshadowed by approximately 400 families who own far too much, they are the over class.

There was sound reasoning for huge marginal tax rates.  There isn't always but, most of the time it does promote capitalism and democracy.  We need to stop pretending that the same policies/ideologies are correct for every situation.

 

Well stealing from those four hundred families isn't going to work....so bring back some of the industrial/technical base we used to own here in the US. 

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1 hour ago, autigeremt said:

Well stealing from those four hundred families isn't going to work....so bring back some of the industrial/technical base we used to own here in the US. 

No one is suggesting,,,, oh nevermind,,, your mind has closed.

For anyone else, higher marginal rates didn't "steal" the money of the wealthy.  It did change the way they used it.

Edited by icanthearyou
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On 8/18/2022 at 4:54 PM, icanthearyou said:

No one is suggesting,,,, oh nevermind,,, your mind has closed.

For anyone else, higher marginal rates didn't "steal" the money of the wealthy.  It did change the way they used it.

Your party will just screw it away like they always do. The US Government wastes such much money this tax increase will do nothing. It’s a push at best with the spend drunk politicians and utopian bastions of Stalin. 😂

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On 8/16/2022 at 1:20 PM, icanthearyou said:

I wonder what you mean by that?  Are we even in capitalism?  In my mind, capitalism promotes: fair value exchange, relative equality, competition, innovation.  A capitalist economy would reflect economic market forces, not just will of finance (think about the history of Amazon).

Power is a relative concept.  I think the real imbalance is that labor no longer has any power.  The promise of capitalism is "all boats lifted on the rising tide".  That is no longer happening.  It has not been happening since the 70s.  This is the real inequality.

IMHO, for an economy to be successful, it cannot simply grow in size.  It must also become broad.  I use to applaud the low rates because they helped keep money flowing, they promoted the velocity of money but,,, as the economy has narrowed, that velocity has vectors, very limited vectors.  That means opportunity is also quite limited.

While I think Marx's conclusions about the solution to the inherent problem of capitalism (consolidation of wealth and power) is absurd, I do think he defined the problem correctly.  I think the economic climate of the late 1800s, early 1900's offers proof.  If a relative few people own all of the assets in a country, that country ceases to be truly capitaliistic and ultimately undemocratic.

I propose that,,, we have no capitalism as,,, the capital class owns the political class.  What we have is fundamental corruption of capitalism and democracy.  Politics really isn't about liberal versus conservative.  Politics is civil class warfare.  The only good politics is the effort to balance these interests, not promoting the domination of either.

Think about the economy as three piles of money.  There is the pile that represents most of society (labor), the pile that represents the government (Huge liability that essentially taxes society) and, the pile that represents the capital class.  Only one pile is growing.  No one can really challenge capital.  They even own the government.  They privatize the functions and give back, not in taxes but in patronage to the political class, utterly corrupt.

One party imperfectly attempts to restore some balance.  The other almost perfectly attempts to further the imbalance. 

I actually agree with this, almost 100%. We are so far down the wrong path and the Reps in the US refuse to see it. Their followers are absolutely brainwashed on this topic. Been sharing this for years here. I get almost zero support when I do share this.

 

Edited by DKW 86
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3 hours ago, DKW 86 said:

I actually agree with this, almost 100%. We are so far down the wrong path and the Reps in the US refuse to see it. Their followers are absolutely brainwashed on this topic. Been sharing this for years here. I get almost zero support when I do share this.

 

Pareto principle implies top 4% produce 64% of the stuff.  This is the way its been for a while.  While this argument may surprise the masses, I don't see any unexpected disparity.  The fact is, people don't naturally process skewness very well.  This requires that you see something beyond your existential sense of reality... abstract, creative thinking.

The problem this presentation is assumptions.  What is wealth?  (the narrator uses cash... that's not begging the question)  Is wealth fixed?  Is there a fundamentally different conversation in income inequality?  What about corporate inequality (ie 5 banks do 99% of the banking transactions)?  Many educated higher income (technocratic) people literally have no idea how wealth is generated anymore, what difference between wealth and income is and so on. 

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