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> $10,000 Isn't this related to the actual growing wealth inequality? As the people in the top have more and the people at the bottom less, will it in a time to

by kartan 11y ago

> $10,000 Isn't this related to the actual growing wealth inequality? As the people in the top have more and the people at the bottom less, will it in a time to come make sense to create products only for the rich? 1,000,000 people paying $1 is the same amount of money than 100 paying $10,000.

iaw 11y ago
I think business focus on profit growth is actually the predominant reason for growing wealth inequality (in the USA). We're coming off of an unprecedented history of market growth and prosperity in this country with consistent exponential returns. Lower yields are unacceptable to businesses, even if they are part of a normal healthy economy, so they tighten wages for their workers and raise prices for their products (after running out of alternatives). This is a "double squeeze" on the working class. Not only do they have less money to spend, because they're paid less, but their cost of living goes up because every company is raising prices. Couple that with speculative investors (new yuppies and Chinese nationals hiding money) targeting real estate as long-term rentals pushing potential buyers out of the market. They then renovate this housing into "luxury" and push the affordable housing out. It doesn't matter if these rentals sit empty for a while because the speculative investors are banking on continued property appreciation external of all rational reasons. So, to sum: - People are getting less money (relative to inflation) - Prices are still rising (inflation keeps going) - Speculation in the housing market is also increasing cost of living For those people that spend >$10,000 a year, with a few rare exceptions, my expectation is that they live with an absurd debt load and eventually go bankrupt. I don't think this is a root cause but it definitely doesn't help people accrue assets.

by kartan 11y ago

iaw 11y ago

I think business focus on profit growth is actually the predominant reason for growing wealth inequality (in the USA). We're coming off of an unprecedented history of market growth and prosperity in this country with consistent exponential returns. Lower yields are unacceptable to businesses, even if they are part of a normal healthy economy, so they tighten wages for their workers and raise prices for their products (after running out of alternatives). This is a "double squeeze" on the working class. Not only do they have less money to spend, because they're paid less, but their cost of living goes up because every company is raising prices. Couple that with speculative investors (new yuppies and Chinese nationals hiding money) targeting real estate as long-term rentals pushing potential buyers out of the market. They then renovate this housing into "luxury" and push the affordable housing out. It doesn't matter if these rentals sit empty for a while because the speculative investors are banking on continued property appreciation external of all rational reasons. So, to sum: - People are getting less money (relative to inflation) - Prices are still rising (inflation keeps going) - Speculation in the housing market is also increasing cost of living For those people that spend >$10,000 a year, with a few rare exceptions, my expectation is that they live with an absurd debt load and eventually go bankrupt. I don't think this is a root cause but it definitely doesn't help people accrue assets.