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This is a different problem. Gates, Zuckerburg, Musk and Thiel are not Kleptocrats. Frankly, neither are the Walmart children. There are soft parrallels and

This is a different problem. Gates, Zuckerburg, Musk and Thiel are not Kleptocrats. Frankly, neither are the Walmart children. There are soft parrallels and kleptocracy does exist. But this issue is about power asymmetry and markets etc. It's a systematic problem. The 'big problem' is that a lot of small fish in the market might be in the top 20% are making 'some money' from stocks, and will push back against rectifications, all the while not realizing that though they are 'getting a better deal than the bottom 80%' ... those above them, i.e. the 5%, 1% and 0.1% are getting gigantically better deals. The 0.1% is screwing over the 1% as bad as the 1% is screwing over the 10% as bad as the 10% is screwing over the middle class as bad as the middle class is screwing over the working class. I feel that this is true, and the 'natural result' of a system in which everyone believes they are 'doing much better than those below them' - but have no insight or information into the layers above to grasp how bad they are being screwed. Middle class don't quite understand Doctor/Dentist pay, who don't understand Executive/Banker pay, who don't quite understand mega wealth income. In Monaco, you can tell what 'class' people were by looking at them, and even if you wore a $2K suit, and were a high paid banker, you 'had a job' meaning you were still 'working class' to the 'true elite' there. And by the way, the other greatest source of inequality is housing. Everything I just said about housing is even more true: the first time owners think they are making bank, without realize the middle class is making more, and those with $3M homes even more. When everyone is making more from their property investments, which are not productive, then the people paying the price are those with the least leverage, i.e. working class. But politics is what it is, and you can basically never attack the middle class - while they are sympathetic to the 'working class', they're not going to actually really want to give up massive benefits - and - working class people are less likely to vote. This is a huge systematic problem in Canada right now, with the government pandering hard to 'middle class' who are effectively leveraging themselves over working people with money-printing that is being plowed into homes. It's not productive, it's just rearranging deck-chairs, with 1 more chair going up the stack every time they are rearranged.

onlyrealcuzzo 5y ago
Once your Return is greater than your Income - you're in a different class of people. This is true for everyone retired. It's true for a lot of people >55. And it's true for almost everyone in the top 1% by wealth (by definition you have >$10.5M - which even with average returns would net you $787,500 in capital gains per year - which is greater than the cut off for the top 1% in earned income). Outside of that dynamic, I don't think there's as big of a difference between the top 20%, 10%, and 5%. It's all relative to wealth - and the curve doesn't get ridiculously steep until you get into the >2% (of wealth).
- jollybean 5y ago
  A 'top 20%' earner can put money in equities and gain some leverage but that's it. A top 5% can have access to some special opportunities, be an insider at a company or have stock options. A top 0.5% will be CEOs, Bankers, and connected individuals (through family/school networks). Top 0.1% gets access to giant deals via government, international industrial or political relationships, access to major financing (i.e. SPACs). As you can see in the charts from the article the 'jump' from each of the tranches is oddly about the same.
- adverbly 5y ago
  Investment income relative to wealth is the best classifier for wealth class. When one person's net annual income is another's net wealth, they're in different classes. This puts most people in the .middle class with about 100k income through work or investment. That bracket ends at about 2m net worth as they make about 100k off their investments. Then you hit 40m where the 40m net worth person is making 2m a year. Then 800m at 40m per year. Then 16bn at 800m per year. At the end of the day, everyone past tier 1 doesn't have to work, but there is a lot going on between each of those layers.
jl2718 5y ago
What is your proposal to ‘fix’ this ‘problem’? This is where the actual issue is I think. The usual solutions proposed are to increase taxes on the 10%, and increase spending much more than that, and inflate the money supply. A lot of people see all of this as the exact mechanism which transfers wealth to the 0.01% at the expense of everybody else. Has there ever been a centrally-planned economic policy implementation that actually reversed concentration of wealth and power?
- lazulicurio 5y ago
  Deflation would make debt more expensive and affect the relative incomes for labor/capital, but it's a dirty word among economists.
Cyril_HN 5y ago
> The 'big problem' is that a lot of small fish in the market might be in the top 20% are making 'some money' from stocks, and will push back against rectifications, all the while not realizing that though they are 'getting a better deal than the bottom 80%' ... those above them, i.e. the 5%, 1% and 0.1% are getting gigantically better deals. > The 0.1% is screwing over the 1% as bad as the 1% is screwing over the 10% as bad as the 10% is screwing over the middle class as bad as the middle class is screwing over the working class. I don't want to sound flippant when I say, I think that GME and a lot of the Reddit hype has helped to alleviate this among that successful 20%. I think many of that group are seeing that, while the structure of the system does allow them to succeed more than the other 80%, the system isn't built with them in mind. So, when the system is threatened, it will hurt them happily. Furthermore, I think they have started to not just know, but genuinely understand, that the top of the top is further away from them than they realise and far, far more advantaged than they realised too. That, of course, is just one recent and notable example of these realisations.
- sudosysgen 5y ago
  The big thing is that there is a tectonic shift when you go from the top 20% to being wealthy enough that employment is no longer a meaningful part of your income. I think this is the big realization that puts things in place. But of course even amongst the 0.1% for which employment is genuinely counterproductive financially, there is the stratification stated above.
alisonkisk 5y ago
> The 0.1% is screwing over the 1% as bad as the 1% is screwing over the 10% as bad as the 10% is screwing over the middle class as bad as the middle class is screwing over the working class. This is nonsense.
- jollybean 5y ago
  It's right in the charts. The financial leverage along each step is similar. The mechanisms of that leverage are identifiable.

onlyrealcuzzo 5y ago

Once your Return is greater than your Income - you're in a different class of people. This is true for everyone retired. It's true for a lot of people >55. And it's true for almost everyone in the top 1% by wealth (by definition you have >$10.5M - which even with average returns would net you $787,500 in capital gains per year - which is greater than the cut off for the top 1% in earned income). Outside of that dynamic, I don't think there's as big of a difference between the top 20%, 10%, and 5%. It's all relative to wealth - and the curve doesn't get ridiculously steep until you get into the >2% (of wealth).

jollybean 5y ago
A 'top 20%' earner can put money in equities and gain some leverage but that's it. A top 5% can have access to some special opportunities, be an insider at a company or have stock options. A top 0.5% will be CEOs, Bankers, and connected individuals (through family/school networks). Top 0.1% gets access to giant deals via government, international industrial or political relationships, access to major financing (i.e. SPACs). As you can see in the charts from the article the 'jump' from each of the tranches is oddly about the same.
adverbly 5y ago
Investment income relative to wealth is the best classifier for wealth class. When one person's net annual income is another's net wealth, they're in different classes. This puts most people in the .middle class with about 100k income through work or investment. That bracket ends at about 2m net worth as they make about 100k off their investments. Then you hit 40m where the 40m net worth person is making 2m a year. Then 800m at 40m per year. Then 16bn at 800m per year. At the end of the day, everyone past tier 1 doesn't have to work, but there is a lot going on between each of those layers.

jl2718 5y ago

What is your proposal to ‘fix’ this ‘problem’? This is where the actual issue is I think. The usual solutions proposed are to increase taxes on the 10%, and increase spending much more than that, and inflate the money supply. A lot of people see all of this as the exact mechanism which transfers wealth to the 0.01% at the expense of everybody else. Has there ever been a centrally-planned economic policy implementation that actually reversed concentration of wealth and power?

lazulicurio 5y ago
Deflation would make debt more expensive and affect the relative incomes for labor/capital, but it's a dirty word among economists.

Cyril_HN 5y ago

> The 'big problem' is that a lot of small fish in the market might be in the top 20% are making 'some money' from stocks, and will push back against rectifications, all the while not realizing that though they are 'getting a better deal than the bottom 80%' ... those above them, i.e. the 5%, 1% and 0.1% are getting gigantically better deals. > The 0.1% is screwing over the 1% as bad as the 1% is screwing over the 10% as bad as the 10% is screwing over the middle class as bad as the middle class is screwing over the working class. I don't want to sound flippant when I say, I think that GME and a lot of the Reddit hype has helped to alleviate this among that successful 20%. I think many of that group are seeing that, while the structure of the system does allow them to succeed more than the other 80%, the system isn't built with them in mind. So, when the system is threatened, it will hurt them happily. Furthermore, I think they have started to not just know, but genuinely understand, that the top of the top is further away from them than they realise and far, far more advantaged than they realised too. That, of course, is just one recent and notable example of these realisations.

sudosysgen 5y ago
The big thing is that there is a tectonic shift when you go from the top 20% to being wealthy enough that employment is no longer a meaningful part of your income. I think this is the big realization that puts things in place. But of course even amongst the 0.1% for which employment is genuinely counterproductive financially, there is the stratification stated above.

alisonkisk 5y ago

> The 0.1% is screwing over the 1% as bad as the 1% is screwing over the 10% as bad as the 10% is screwing over the middle class as bad as the middle class is screwing over the working class. This is nonsense.

jollybean 5y ago
It's right in the charts. The financial leverage along each step is similar. The mechanisms of that leverage are identifiable.