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> "Capital income amounts for two percent of income for the bottom 99 percent of households." (page 7 of the pdf) so 98% of capital income accrues to the 1% wh

> "Capital income amounts for two percent of income for the bottom 99 percent of households." (page 7 of the pdf) so 98% of capital income accrues to the 1% who have no monopoly on how best to allocate capital--see irrational capital flight into tech stocks and real estate, and a lack of real innovation, rather than iteration, in the past 50 years. blind faith in market efficiencies in a profoundly unfair and corrupt marketplace only worsens our economy overall. this must be kept in mind in any discussion of the captured regulatory environment and tax policy. we're losing economic dynamism to the whims of the rich, and to the detriment of all.

jstanley 6y ago
> > "Capital income amounts for two percent of income for the bottom 99 percent of households." (page 7 of the pdf) > so 98% of capital income accrues to the 1% No. It's not saying that 2% of capital income goes to the bottom 99%. It's saying that 2% of the income of the bottom 99% is capital income.
- clairity 6y ago
  then that means its even more disproportionate, not less.
  - jstanley 6y ago
    There is not enough data provided in that sentence to tell either way.
    - clairity 6y ago
      it's commonly known that the income and wealth distributions are heavily skewed, which is all the extra information you need.
deleted 6y ago
[deleted]
lotsofpulp 6y ago
I don’t see the flow of money to tech and (select) real estate as irrational. Tech has a proven business model of earning the most net income, extremely high margins, extremely low marginal costs, high barriers to entry, and extremely high ability to price discriminate and get paid. Real estate offers natural monopolies, enforced by the existing political order. Biggest risk to real estate is climate change and economic conditions, but it typically doesn’t become worthless, and it continues to exist without any work on your behalf.
- clairity 6y ago
  there's fundamental value, and then there's "no where else to park money i don't need and don't know what to do with". as for real estate, rents should on average roughly track inflation-adjusted gdp. outsized rents should be a very temporary reward for meeting localized demand, not structural extractions of wealth for the already wealthy in a captured regulatory environment.
  - lotsofpulp 6y ago
    > there's fundamental value, and then there's "no where else to park money i don't need and don't know what to do with". But what is irrational with parking it in equity of the highest growth and highest net income companies that can and do obviate entire business lines? What else are you supposed to do with money? And what real estate should or shouldn’t be is unrelated to what the rational course of action is. It’s one of the essential pieces to diversify one’s personal wealth to ensure one’s security.
    - clairity 6y ago
      certainly teasing out the most rational in all cases requires many more words than i can possibly write, but i think we're also looking at it from different perspectives. what's seemingly rational for the investor in the short-term may not be rational in the long-term or for the resilience and longevity of the economy. the marginal utility of the next dollar tends to zero as an investor's wealth increases (assumed to be someone above the median in wealth/income), both to the individual and to the economy, but the economy has no signal to indicate that. it's assumed that more is better, greed is good, but that's clearly not the case from the many other, sometimes indirect, socioeconomic signals we have around us. those low-utility dollars tend to be less well-invested than higher utility dollars, even if the returns are net positive. for an economy, especially one predicated on the idea of being highly efficient at allocating investment, that's problematic. further, washing otherwise fundamentally sound businesses (including tech and real estate) in too much money distorts their ability to discern the next best, positive-NPV (and sometimes counterintuitive) investment. in fact, studies show that managers will time and again allocate capital to negative-NPV investments if it provides personal gain (both economic and non-economic) at the expense of others.
dasudasu 6y ago
Free markets tend to become positive feedback loops for those with skills or access to capital. Calling this feedback loop "unfair and corrupt" really does not necessarily follow from this fact alone. At the very least, it is not the best choice of words.
- bhupy 6y ago
  One of my favorite professors in college was my economics professor, who forbade us from using the word “fair” during lecture seminars. Even referred to it as the “F-word”. The idea was that “fairness” is subjective and ill-defined.
  - pydry 6y ago
    Could be relevant: https://evonomics.com/more-evidence-that-learning-economics-makes-you-selfish/ https://evonomics.com/more-evidence-that-learning-economics-...
    - bhupy 6y ago
      “In a study of over 28,000 students in Switzerland, 62% of economics students gave money at least once to help students in need, compared with 69% of non-economics students. These differences were already present before the students took a single economics course: students with lower giving rates were drawn to economics. As freshmen, before their first lectures, 71% of the students who chose economics contributed, compared with 75% of non-economists.” That’s...not a significant finding by any means. Secondly, I would take these psychological studies with truckloads of salt. In what is possibly the most damning indictment of the social sciences: they have among the lowest replication rate of any of the sciences, and even after retraction (due to replication failure), the vast majority of positive citations continue after retraction, specifically in the social sciences: https://fantasticanachronism.com/2020/09/11/whats-wrong-with-social-science-and-how-to-fix-it/ https://fantasticanachronism.com/2020/09/11/whats-wrong-with...
- odshoifsdhfs 6y ago
  You had a bunch of founders just last year being ousted and nothing more than snakeoil salesmen, and you still believe this? There is a freaking post about some company that got 170M in investment where the founder was committing fraud ffs

jstanley 6y ago

> > "Capital income amounts for two percent of income for the bottom 99 percent of households." (page 7 of the pdf) > so 98% of capital income accrues to the 1% No. It's not saying that 2% of capital income goes to the bottom 99%. It's saying that 2% of the income of the bottom 99% is capital income.

clairity 6y ago
then that means its even more disproportionate, not less.
- jstanley 6y ago
  There is not enough data provided in that sentence to tell either way.
  - clairity 6y ago
    it's commonly known that the income and wealth distributions are heavily skewed, which is all the extra information you need.

deleted 6y ago

[deleted]

lotsofpulp 6y ago

I don’t see the flow of money to tech and (select) real estate as irrational. Tech has a proven business model of earning the most net income, extremely high margins, extremely low marginal costs, high barriers to entry, and extremely high ability to price discriminate and get paid. Real estate offers natural monopolies, enforced by the existing political order. Biggest risk to real estate is climate change and economic conditions, but it typically doesn’t become worthless, and it continues to exist without any work on your behalf.

clairity 6y ago
there's fundamental value, and then there's "no where else to park money i don't need and don't know what to do with". as for real estate, rents should on average roughly track inflation-adjusted gdp. outsized rents should be a very temporary reward for meeting localized demand, not structural extractions of wealth for the already wealthy in a captured regulatory environment.
- lotsofpulp 6y ago
  > there's fundamental value, and then there's "no where else to park money i don't need and don't know what to do with". But what is irrational with parking it in equity of the highest growth and highest net income companies that can and do obviate entire business lines? What else are you supposed to do with money? And what real estate should or shouldn’t be is unrelated to what the rational course of action is. It’s one of the essential pieces to diversify one’s personal wealth to ensure one’s security.
  - clairity 6y ago
    certainly teasing out the most rational in all cases requires many more words than i can possibly write, but i think we're also looking at it from different perspectives. what's seemingly rational for the investor in the short-term may not be rational in the long-term or for the resilience and longevity of the economy. the marginal utility of the next dollar tends to zero as an investor's wealth increases (assumed to be someone above the median in wealth/income), both to the individual and to the economy, but the economy has no signal to indicate that. it's assumed that more is better, greed is good, but that's clearly not the case from the many other, sometimes indirect, socioeconomic signals we have around us. those low-utility dollars tend to be less well-invested than higher utility dollars, even if the returns are net positive. for an economy, especially one predicated on the idea of being highly efficient at allocating investment, that's problematic. further, washing otherwise fundamentally sound businesses (including tech and real estate) in too much money distorts their ability to discern the next best, positive-NPV (and sometimes counterintuitive) investment. in fact, studies show that managers will time and again allocate capital to negative-NPV investments if it provides personal gain (both economic and non-economic) at the expense of others.

dasudasu 6y ago

Free markets tend to become positive feedback loops for those with skills or access to capital. Calling this feedback loop "unfair and corrupt" really does not necessarily follow from this fact alone. At the very least, it is not the best choice of words.

bhupy 6y ago
One of my favorite professors in college was my economics professor, who forbade us from using the word “fair” during lecture seminars. Even referred to it as the “F-word”. The idea was that “fairness” is subjective and ill-defined.
- pydry 6y ago
  Could be relevant: https://evonomics.com/more-evidence-that-learning-economics-makes-you-selfish/ https://evonomics.com/more-evidence-that-learning-economics-...
  - bhupy 6y ago
    “In a study of over 28,000 students in Switzerland, 62% of economics students gave money at least once to help students in need, compared with 69% of non-economics students. These differences were already present before the students took a single economics course: students with lower giving rates were drawn to economics. As freshmen, before their first lectures, 71% of the students who chose economics contributed, compared with 75% of non-economists.” That’s...not a significant finding by any means. Secondly, I would take these psychological studies with truckloads of salt. In what is possibly the most damning indictment of the social sciences: they have among the lowest replication rate of any of the sciences, and even after retraction (due to replication failure), the vast majority of positive citations continue after retraction, specifically in the social sciences: https://fantasticanachronism.com/2020/09/11/whats-wrong-with-social-science-and-how-to-fix-it/ https://fantasticanachronism.com/2020/09/11/whats-wrong-with...
odshoifsdhfs 6y ago
You had a bunch of founders just last year being ousted and nothing more than snakeoil salesmen, and you still believe this? There is a freaking post about some company that got 170M in investment where the founder was committing fraud ffs