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I am not sure it's just about jobs. Wealth in general is evaporating from the lower/middle class rapidly. There was a time when middle-class wages were kept in-

I am not sure it's just about jobs. Wealth in general is evaporating from the lower/middle class rapidly. There was a time when middle-class wages were kept in-line with inflation, this doesn't happen any more. The wealth is being syphoned away from the economy at large into the coffers of huge corporations/individuals who just warehouse the wealth. There is very much a sense of resources being scarce and it's due to those resources and wealth being taken out of the economy.

Domenic_S 8y ago
warehouse the wealth? that's not how it works at all!
- mo1ok 8y ago
  Not sure if this is a joke or not, but that's actually what's happening right now - many large firms are literally just stowing cash: https://www.marketwatch.com/story/these-are-the-5-us-companies-with-the-biggest-overseas-cash-piles-2017-04-26 https://www.marketwatch.com/story/these-are-the-5-us-compani...
  - isostatic 8y ago
    I suspect the argument is that when $BIGCORP puts $1t in the bank, the bank gives out $900b as new loans
    - mo1ok 8y ago
      Ah, I see. Good point.
    - eli_gottlieb 8y ago
      I think investment is actually a measured variable.
    - madhadron 8y ago
      But that's not how money works. Banks don't loan money they have on deposit. They loan money they create from thin air, and are required to have a certain amount of deposits to potentially cover that if their exchanges with another bank become too imbalanced. That's what's called "leverage."
      - rspeele 8y ago
        I don't see how what you said conflicts with what isostatic said at all.
      - Domenic_S 8y ago
        Then either corporations can hoard all the money, leaving less for the rest of us, or banks can create money from thin air, in which case there's no practical limit and hoarding doesn't matter.
- gldalmaso 8y ago
  There is only so much the super rich spend, what's left is either sitting somewhere collecting interest or being exchanged between other super rich and never trickles down again as tax or paychecks. Money is a zero sum game and the super rich are hoarding it, which widens the social gap.
  - ed312 8y ago
    Money is absolutely not a zero sum game. More is created e.g. by loans all the time. Wealthy people provide a lot of stability by either 1) putting money in banks, which provides capital for loans and 2) investing in long-term ventures (which create "jobs").
    - DATACOMMANDER 8y ago
      Value isn’t a zero-sum game. Disregarding inflation, money is. Fractional-reserve banking can only increase the money supply by a finite amount. I’m also puzzled by the notion that loans create new money.
      - fwip 8y ago
        Agreed. I guess you can argue that loans put money back into circulation, but the obvious corollary is that rich people hoarding money effectively destroys it.
        monkeynotes 8y ago
        Loans just put debt into the economy, while the rich monopolize the credit.
      - imtringued 8y ago
        There is no limit in how many loans a central bank can give to regular banks because the central bank doesn't have to be backed by deposits, gold or any other scarce resource.
- yourapostasy 8y ago
  We simply don't have the metrics to show it one way or the other. We have M2V for example in the US, but it isn't broken out by household income percentiles or even quintiles. We could have great velocity from lots of capital movement from equities for example, but very sluggish velocity in retail sectors that serve the low and middle socioeconomic classes. I think the general weakness in retail (not entirely attributable to e-commerce, as e-tailing is still around 10-15% of overall retail) is likely explainable by low velocity of money in the low to middle classes. The wage stagnation over the past few decades while overall corporate revenue and profits continue to grow certainly suggest some kind of low velocity or siphoning effect. There's a certain survivorship bias in that comparison since corporations that stagnate to much eventually are put out of business, while developed nation citizens can stagnate until they pass away, so it isn't a perfect comparison to hypothesize about. But again, we simply aren't measuring for any of this nuance at this time. If we did start measuring for it somehow, then someone would have to figure out how to measure the unit of money moving between income bands and from household to/from "big corporations" (say, any of the publicly-traded companies in the CRSP US Total Market Index and privately-held companies with the same amount of revenue as the lowest revenue element in the CRSP). Damned if I know how that would be captured, though.
  - Domenic_S 8y ago
    Retail is a bunch of individual stories. BBBY killed it over the holidays; Macy's did not. Better to take retail company by company at this point.
- monkeynotes 8y ago
  Please explain your perspective.
dantheman 8y ago
Is it though? It seems spending on health, education, and housing are all through the roof. Everything else is better and cheaper -- why are these 3 growing at outrageous rates?
- rchaud 8y ago
  Education costs (college and up) are increasing because institutions have no incentive to manage tuition costs if the default assumption is that people will take out loans to pay them anyway.
  - DATACOMMANDER 8y ago
    That’s undoubtedly part of it, but I think that the real price of an education would be higher now than it was 40 or 50 years ago even in an ideal free market. Society is much more complex now than it was two generations ago, and it makes sense for the value of higher education to increase with an increase in societal complexity.
  - kardos 8y ago
    And people keep taking out loans because the (anticipated) ROI is still positive, eg, there is consumer surplus available to be captured
    - jimbokun 8y ago
      But the ROI keeps going down, and may be negative soon for many degrees.
      - ishjoh 8y ago
        I suspect it's already negative for a number of degrees but there isn't enough data to prove that yet.
      - kardos 8y ago
        Well that's the (anticipated) bit...
gldalmaso 8y ago
As a parent this is my sentiment. When I compare my parents middle class lifestyle to my own now, there is a lot I would not have been able to accomplish without direct financial support from them. Now I dread that I will hardly be able to do the same for my kids or even prepare for retirement.
- sjg007 8y ago
  I've always viewed the SAT prep classes as a differentiator in outcomes. The College Board always said no until recently. Even though colleges say the SAT is not important I would argue it still is. It could be the difference between attending Stanford vs not. https://www.washingtonpost.com/news/answer-sheet/wp/2017/05/09/can-coaching-truly-boost-sat-scores-for-years-the-college-board-said-no-now-it-says-yes/?utm_term=.586d7052bfc4 https://www.washingtonpost.com/news/answer-sheet/wp/2017/05/...
  - jimbokun 8y ago
    "Even though colleges say the SAT is not important I would argue it still is."\ If it wasn't important, they wouldn't include it in applications.
deleted 8y ago
[deleted]
refurb 8y ago
Wealth in general is evaporating from the lower/middle class rapidly. Is it? The middle class has been growing in size over the past few decades.
- NeoBasilisk 8y ago
  I haven't seen much reporting of it growing. http://www.pewsocialtrends.org/2015/12/09/the-american-middle-class-is-losing-ground/ http://www.pewsocialtrends.org/2015/12/09/the-american-middl... http://www.pewresearch.org/fact-tank/2018/09/06/the-american-middle-class-is-stable-in-size-but-losing-ground-financially-to-upper-income-families/ http://www.pewresearch.org/fact-tank/2018/09/06/the-american...
- monkeynotes 8y ago
  Where is your evidence for that? A quick search and what I see is mostly negative news for the middle-class https://www.weforum.org/agenda/2017/01/5-charts-which-show-what-is-happening-to-the-middle-class-around-the-world/ https://www.weforum.org/agenda/2017/01/5-charts-which-show-w... http://www.pewsocialtrends.org/2015/12/09/the-american-middle-class-is-losing-ground/ http://www.pewsocialtrends.org/2015/12/09/the-american-middl... http://www.aei.org/publication/yes-the-us-middle-class-is-shrinking-but-its-because-americans-are-moving-up-and-no-americans-are-not-struggling-to-afford-a-home/ http://www.aei.org/publication/yes-the-us-middle-class-is-sh... https://money.cnn.com/2018/04/12/news/economy/middle-class/index.html https://money.cnn.com/2018/04/12/news/economy/middle-class/i...
ryandrake 8y ago
Yea this is what scares me. I don’t know what career advice to eventually give my 6 year old. More and more careers are being automated away, and that value is being captured by fewer and fewer people. It is pretty obvious that my child’s standard of living as an adult will be much worse than mine (just as mine is worse than my parents’), and that is heartbreaking. It’s getting to the point where “hang out with rich people and try to marry up” is the most rational plan for those left in the middle class.

Domenic_S 8y ago

warehouse the wealth? that's not how it works at all!

mo1ok 8y ago
Not sure if this is a joke or not, but that's actually what's happening right now - many large firms are literally just stowing cash: https://www.marketwatch.com/story/these-are-the-5-us-companies-with-the-biggest-overseas-cash-piles-2017-04-26 https://www.marketwatch.com/story/these-are-the-5-us-compani...
- isostatic 8y ago
  I suspect the argument is that when $BIGCORP puts $1t in the bank, the bank gives out $900b as new loans
  - mo1ok 8y ago
    Ah, I see. Good point.
  - eli_gottlieb 8y ago
    I think investment is actually a measured variable.
  - madhadron 8y ago
    But that's not how money works. Banks don't loan money they have on deposit. They loan money they create from thin air, and are required to have a certain amount of deposits to potentially cover that if their exchanges with another bank become too imbalanced. That's what's called "leverage."
    - rspeele 8y ago
      I don't see how what you said conflicts with what isostatic said at all.
    - Domenic_S 8y ago
      Then either corporations can hoard all the money, leaving less for the rest of us, or banks can create money from thin air, in which case there's no practical limit and hoarding doesn't matter.
gldalmaso 8y ago
There is only so much the super rich spend, what's left is either sitting somewhere collecting interest or being exchanged between other super rich and never trickles down again as tax or paychecks. Money is a zero sum game and the super rich are hoarding it, which widens the social gap.
- ed312 8y ago
  Money is absolutely not a zero sum game. More is created e.g. by loans all the time. Wealthy people provide a lot of stability by either 1) putting money in banks, which provides capital for loans and 2) investing in long-term ventures (which create "jobs").
  - DATACOMMANDER 8y ago
    Value isn’t a zero-sum game. Disregarding inflation, money is. Fractional-reserve banking can only increase the money supply by a finite amount. I’m also puzzled by the notion that loans create new money.
    - fwip 8y ago
      Agreed. I guess you can argue that loans put money back into circulation, but the obvious corollary is that rich people hoarding money effectively destroys it.
      - monkeynotes 8y ago
        Loans just put debt into the economy, while the rich monopolize the credit.
    - imtringued 8y ago
      There is no limit in how many loans a central bank can give to regular banks because the central bank doesn't have to be backed by deposits, gold or any other scarce resource.
yourapostasy 8y ago
We simply don't have the metrics to show it one way or the other. We have M2V for example in the US, but it isn't broken out by household income percentiles or even quintiles. We could have great velocity from lots of capital movement from equities for example, but very sluggish velocity in retail sectors that serve the low and middle socioeconomic classes. I think the general weakness in retail (not entirely attributable to e-commerce, as e-tailing is still around 10-15% of overall retail) is likely explainable by low velocity of money in the low to middle classes. The wage stagnation over the past few decades while overall corporate revenue and profits continue to grow certainly suggest some kind of low velocity or siphoning effect. There's a certain survivorship bias in that comparison since corporations that stagnate to much eventually are put out of business, while developed nation citizens can stagnate until they pass away, so it isn't a perfect comparison to hypothesize about. But again, we simply aren't measuring for any of this nuance at this time. If we did start measuring for it somehow, then someone would have to figure out how to measure the unit of money moving between income bands and from household to/from "big corporations" (say, any of the publicly-traded companies in the CRSP US Total Market Index and privately-held companies with the same amount of revenue as the lowest revenue element in the CRSP). Damned if I know how that would be captured, though.
- Domenic_S 8y ago
  Retail is a bunch of individual stories. BBBY killed it over the holidays; Macy's did not. Better to take retail company by company at this point.
monkeynotes 8y ago
Please explain your perspective.

dantheman 8y ago

Is it though? It seems spending on health, education, and housing are all through the roof. Everything else is better and cheaper -- why are these 3 growing at outrageous rates?

rchaud 8y ago
Education costs (college and up) are increasing because institutions have no incentive to manage tuition costs if the default assumption is that people will take out loans to pay them anyway.
- DATACOMMANDER 8y ago
  That’s undoubtedly part of it, but I think that the real price of an education would be higher now than it was 40 or 50 years ago even in an ideal free market. Society is much more complex now than it was two generations ago, and it makes sense for the value of higher education to increase with an increase in societal complexity.
- kardos 8y ago
  And people keep taking out loans because the (anticipated) ROI is still positive, eg, there is consumer surplus available to be captured
  - jimbokun 8y ago
    But the ROI keeps going down, and may be negative soon for many degrees.
    - ishjoh 8y ago
      I suspect it's already negative for a number of degrees but there isn't enough data to prove that yet.
    - kardos 8y ago
      Well that's the (anticipated) bit...

gldalmaso 8y ago

As a parent this is my sentiment. When I compare my parents middle class lifestyle to my own now, there is a lot I would not have been able to accomplish without direct financial support from them. Now I dread that I will hardly be able to do the same for my kids or even prepare for retirement.

sjg007 8y ago
I've always viewed the SAT prep classes as a differentiator in outcomes. The College Board always said no until recently. Even though colleges say the SAT is not important I would argue it still is. It could be the difference between attending Stanford vs not. https://www.washingtonpost.com/news/answer-sheet/wp/2017/05/09/can-coaching-truly-boost-sat-scores-for-years-the-college-board-said-no-now-it-says-yes/?utm_term=.586d7052bfc4 https://www.washingtonpost.com/news/answer-sheet/wp/2017/05/...
- jimbokun 8y ago
  "Even though colleges say the SAT is not important I would argue it still is."\ If it wasn't important, they wouldn't include it in applications.

deleted 8y ago

[deleted]

refurb 8y ago

Wealth in general is evaporating from the lower/middle class rapidly. Is it? The middle class has been growing in size over the past few decades.

NeoBasilisk 8y ago
I haven't seen much reporting of it growing. http://www.pewsocialtrends.org/2015/12/09/the-american-middle-class-is-losing-ground/ http://www.pewsocialtrends.org/2015/12/09/the-american-middl... http://www.pewresearch.org/fact-tank/2018/09/06/the-american-middle-class-is-stable-in-size-but-losing-ground-financially-to-upper-income-families/ http://www.pewresearch.org/fact-tank/2018/09/06/the-american...
monkeynotes 8y ago
Where is your evidence for that? A quick search and what I see is mostly negative news for the middle-class https://www.weforum.org/agenda/2017/01/5-charts-which-show-what-is-happening-to-the-middle-class-around-the-world/ https://www.weforum.org/agenda/2017/01/5-charts-which-show-w... http://www.pewsocialtrends.org/2015/12/09/the-american-middle-class-is-losing-ground/ http://www.pewsocialtrends.org/2015/12/09/the-american-middl... http://www.aei.org/publication/yes-the-us-middle-class-is-shrinking-but-its-because-americans-are-moving-up-and-no-americans-are-not-struggling-to-afford-a-home/ http://www.aei.org/publication/yes-the-us-middle-class-is-sh... https://money.cnn.com/2018/04/12/news/economy/middle-class/index.html https://money.cnn.com/2018/04/12/news/economy/middle-class/i...

ryandrake 8y ago

Yea this is what scares me. I don’t know what career advice to eventually give my 6 year old. More and more careers are being automated away, and that value is being captured by fewer and fewer people. It is pretty obvious that my child’s standard of living as an adult will be much worse than mine (just as mine is worse than my parents’), and that is heartbreaking. It’s getting to the point where “hang out with rich people and try to marry up” is the most rational plan for those left in the middle class.