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The wealthiest 10% of Americans own a record 89% of all U.S. stocks
- asow92 5y agoWhy does this article sound so misleading on its face?
- pessimizer 5y agoBecause it contradicts a previously held belief that you have, so you feel that it has to be wrong no matter what the facts say.
- asow92 5y agoIt does not in fact contradict my beliefs, although it seems like it aims to make my beliefs sound unattractive to others.
- pumaontheprowl 5y agoBecause they don't discuss the methodology used to arrive at these numbers nor do they link to any sort of full report explaining these stats. For all we know, these numbers are complete bunk. Furthermore, these sorts of wealth-inequality stats are typically used by disingenuous media outlets as a propaganda tool to support the political goals of their ownership. Reading such articles with a large dose of skepticism is a necessity.
- defaultprimate 5y agoThe overwhelming majority of adult Americans will spend at least a year in the top quintile. https://www.aei.org/carpe-diem/evidence-shows-significant-income-mobility-in-the-us-73-of-americans-were-in-the-top-20-for-at-least-a-year/ https://www.aei.org/carpe-diem/evidence-shows-significant-in...
- alexpetralia 5y agoIf the wealthiest 10% of Americans own 89% of all U.S. stocks, that means "everyone else" owns the other 11%. That may include other Americans, but what about foreign investors (sovereigns, institutions, etc.)? Surely they own a bunch of U.S. equity? Perhaps the article uses the denominator not of "all U.S. equity" but "all U.S. equity owned by American individuals and institutions".
- csours 5y agoHmm this doesn't entirely make sense. What kind(s) of ownership are they talking about? Direct stock ownership? Mutual Funds? Index Funds? Something to think about: the Fed has been POURING money into the stock market, to keep "the economy" stable. They don't have to use money in that way; they could also use money to actually help people (theoretically anyway)
- imtringued 5y ago>They don't have to use money in that way; they could also use money to actually help people (theoretically anyway) No, that would require fiscal policy. The president would have to come up with a way to use the money to create jobs or at least invest into something with a future benefit. cough infrastructure bill cough
- throw8383833jj 5y agoKeep in mind, that this statistic doesn't necessarily mean that the top 10% own a lot of wealth. if the bottom 89% owns a total of 10$ worth of wealth then the top 10% isn't doing any better. take all that wealth and calculate what it would be if it was divided by 300 million people and then divide that number by the number of years it takes to acquire that wealth and you'll find, it's not very much wealth at all.
- bfrog 5y agoI wonder what this looked like in the 20's right before it really hit the fan
- paulpauper 5y agoPeople have been predicting this shit hit the fan moment for the past decade
- lexapro 5y agoAnd we already had a massive crash last year caused by the pandemic.
- paulpauper 5y agofor 2 months and then new highs not long after as if nothing happened
- ClumsyPilot 5y agoDaily reminder that stock market is not the economy. During the pandemic, stock market has sky rocketed while production, productivity, life expectancy and quality of life all fell off a cliff. Every measurable metric.
- lexapro 5y agoWhy would life expectancy or quality of life have an impact on the stock market? Literally the only thing that matters is future cash flows of public companies.
- paulpauper 5y agoGDP made a V-shaped recovery. So did corporate profits, earnings, and unemployment rate. It is correlated. People are not just buying up stocks for no reason at all.
- lexapro 5y ago
- mtnGoat 5y agoso if the rest of us took a hit and just crashed the market we could even the playing field? asking for a friend who is into stonks. :) </s>
- tomschlick 5y ago> and just crashed the market we could even the playing field? Yeah and you'd crash the entire middle class's retirement accounts.
- bellyfullofbac 5y agoThe rest of us? If you earn more than $201K you're in the top 10%[1]. I wonder what percentage of HN earns more than that. The site also says 33% earn more than $100K. I guess the majority of the leftover 11% is owned by the people in the 10%-33% bracket. [1] https://dqydj.com/household-income-percentile-calculator/ https://dqydj.com/household-income-percentile-calculator/
- mtnGoat 5y agomy comment was sarcasm/rhetorical, 11% cant tank 89% of a market. however, to answer your question, i would guess the majority of US based HN readers are in that 100k+ bracket. the audience here skews very high income i would guess.
- bgentry 5y agoYou're conflating income and wealth; the latter is what this article is about. If anybody finds a reliable recent source for this wealth data, please share. I'm not seeing anything particularly trustworthy with a quick search.
- bellyfullofbac 5y agohttps://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/chart/#quarter:127;series:Assets;demographic:networth;population:1,3,5,7;units:shares https://www.federalreserve.gov/releases/z1/dataviz/dfa/distr... Hopefully the Fed is trustworthy enough... 90% to 99% own 35.8% of all assets, and, the remaining 1% own 29.2%. So the top 10% own 65% of all assets.
- Findeton 5y agoGood for them. I'm not envious.
- brightstep 5y agoWhat this effectively means is, that ten percent exercises majority control over huge portions of the US economy. That ten percent is the group making decisions on how to direct huge amounts of resources created by our economy. Such a healthy democracy.
- anovikov 5y agoAnd we should understand that majority of top 10% are still poor, irrelevant, working class people.
- vkou 5y agoWorking class, maybe ~half of them. Poor, no.
- tantalor 5y ago> poor The 90%ile is $129,000/yr individual income. https://dqydj.com/income-percentile-calculator/ https://dqydj.com/income-percentile-calculator/
- tut-urut-utut 5y agoPoor? No. But wealth and income (from work) don't have anything in common. You may earn those 100k year after year, but it would still take quite a while until you land into the wealthiest 10%, if ever.
- tantalor 5y agoThe 90%ile of Household Net Worth in US is $1.2 million. Is that poor? https://dqydj.com/average-median-top-net-worth-percentiles/ https://dqydj.com/average-median-top-net-worth-percentiles/
- kelsierFe 5y agoFrom that same site, 90% net worth is ~1.25m. https://dqydj.com/net-worth-percentile-calculator-united-states/ https://dqydj.com/net-worth-percentile-calculator-united-sta... If you contribute 2k a month at 7% interest that would take you 23 years. A long time yes, but certainly achievable on a 100k salary. Of course I know the interest rate might not be that going forward, but the point still stands.
- pwned1 5y agoRelated: 61% of Americans paid no federal income taxes in 2020 https://www.cnbc.com/2021/08/18/61percent-of-americans-paid-no-federal-income-taxes-in-2020-tax-policy-center-says.html https://www.cnbc.com/2021/08/18/61percent-of-americans-paid-...
- m_ke 5y agoMight have something to do with this: https://christiankull.files.wordpress.com/2020/06/economist-graph-jpg.jpg https://christiankull.files.wordpress.com/2020/06/economist-...
- bagels 5y agoWondering what that looks like after taxes.
- m_ke 5y agoTaxes on the rich went down during that time https://www.nytimes.com/interactive/2019/10/06/opinion/income-tax-rate-wealthy.html https://www.nytimes.com/interactive/2019/10/06/opinion/incom... https://static01.nyt.com/images/2019/10/04/us/tax-trump-wealth-promo-1570228395029/tax-trump-wealth-promo-1570228395029-superJumbo.png https://static01.nyt.com/images/2019/10/04/us/tax-trump-weal...
- bagels 5y agoSpecifically how Europe compared after taxes.
- learc83 5y agoI don't pay any federal income tax on the first x dollars of income I earn either. This is nothing but a recognition that money has diminishing marginal utility. The issue is that there are too many people earning less than x.
- vkou 5y agoAnd if we do the accounting, we'll find that most states paid no net federal taxes in 2020, and are wholly dependent on states that did. Is there a particular point you are trying to make, here?
- Grustaf 5y agoAnd yet curiously all political discussions focus on the inequality between the lower middle class and the upper middle class.
- newacct583 5y agoThe top 10% demographic is made up mostly by people who consider themselves middle class. The 10th percentile income is like $180k/year, or a little more than an entry level FAANG job. The 1% borderline is a little over half a million dollars, and while obviously very comfortable is not a lifestyle something people would consider genuinely "rich". So, yeah. It's stocks owned by these folks -- people with normal houses and normal cars and normal jobs, but with a ton of disposable income to stuff into Robinhood accounts -- that seem the most unfairly distributed.
- paulpauper 5y agoCompared to the Forbes 50, it feels like everyone is middle class. it's hard to fathom having as much money as Musk even if you are rich
- pgeorgi 5y ago"wealthiest 10%" != "10th percentile income" You can be part of the wealthiest 10% while having no income at all (not forever, but...)
- lexapro 5y agoIt's very difficult to be part of the wealthiest 10% and not have any income. Stocks, real estate and other assets will result in income.
- pessimizer 5y agoThe top 1% consider themselves middle-class half the time. That's no reason to pretend like they are - unless you're British and the usage of "middle-class" means rich but without a title.
- 5y ago
- yalogin 5y agoI don’t know what to make of this statistic. Wealth begets wealth so this is not surprising. Stocks are not a limited scarce resource so it’s not like the top are hoarding them. A more interesting stat would be to see if the bottom 90% increased their stock holdings or not. It would be a shame if that reduced for some population bracket.
- worrycue 5y ago> Stocks are not a limited scarce resource so it’s not like the top are hoarding them. How are stocks not a limited resource? I know companies occasionally issue new stock to rise capital for new business ventures but that doesn’t happen that often no?
- itake 5y agoEmployees are paid in stock. New stock is issued regularly for them.
- lexapro 5y agoIt is still limited.
- alistairSH 5y agoThat's a very SV view. 1% of US-based companies are publicly traded. And publicly trader companies only make up about 1/3 of national employment.
- jldugger 5y ago> 1% of US-based companies are publicly traded. Well, let's broaden the scope a bit then. Beyond simply issuing new shares, you can found a new company. This happens a lot, outside the bay, you just don't hear or think about it unless it's a VC backed firm hoping to make it huge. When it's a sole proprietorship, crickets. Perhaps this is fine, but there are different modes of ownership across the country.
- 5y ago
- jleyank 5y agoI assume this is through mutual funds and ETF's? I would think it riskier to actually own the stock directly unless this headline is biased by the founders of the key NASDAQ stocks owning 80% of the 89% (by value) by dint of being founders... It would be more interesting to see the breakdown of what's held in retirement and pension accounts vs. post-tax accounts.
- haolez 5y agoThere is another perspective: these 10% are more vulnerable to a stocks pricing crisis. They are taking most of the risk to themselves.
- lexapro 5y agoI'd rather have a big portfolio that could go to zero than nothing at all.
- jakelazaroff 5y agoAre they? If you can't afford to own stock, you're probably much more vulnerable to the secondary impacts of a stock market crisis (losing one's job, etc).
- noahtallen 5y agoIf it was that risky, they wouldn’t have these assets. People have investments because they understand cash alone won’t grow. Someone like Jeff Bezos has most of his wealth in Amazon stock partly because he perceives Amazon stock as better than cash. (Which is a very good analysis. Even a huge crash in stock value would still outperform cash by a huge margin over time.) If these assets were very risky or likely to cause a portfolio to never grow, the rich would absolutely not be utilizing them as much.
- lexapro 5y agoYes, in the long term cash is much riskier than stocks.
- crate_barre 5y agoIt’s also just a simple strategy to avoid the tax burden until necessary.
- paulpauper 5y agowhen the market falls it always recovers fast, so not a concern.
- dkirill 5y ago
- CGamesPlay 5y agoIf the wealthiest 10% of Americans owned 89% of all U.S. mega yachts, what would that imply about the rest of the Americans?
- GuB-42 5y agoI expected an even more unequal distribution. Owning stocks is risky, and stock portfolios are mostly bought with money people don't need to live on a day to day basis. The poor simply can't afford stocks, and I expect the middle class to make different kinds of investment. Like property (buy a house), and low risk saving accounts that may be backed by stocks but the owner of the account is not the owner of the stocks. There may be a small part of gamblers who play the stock market like they are in Vegas, but I expect most stocks to be owned by very rich individuals or institutions, who can mitigate the risks by having lots of stocks, and also have some amount of control on the companies they invested into, rather than a millionth of a vote for small investors. Among the institutions are the ones that provide financial services to the middle class.
- karma_daemon 5y agoI'm not sure you need to be very rich, or an institution to diversify. In fact, it's never been easier to own hundreds, or thousands, of stocks as an individual. All you need to do is buy etfs.
- lexapro 5y agoThe middle class owns stocks through pension accounts.
- SavantIdiot 5y agoWhere does one get a job with pension today? I've heard of them, but thought they vanished when the boomers left the workforce.
- germinalphrase 5y agoTraditionally unionized employers may still offer pensions (teachers, law enforcement, steelworkers, etc).
- RNCTX 5y agoI invite you to google "Gary, Indiana." And I assure you the casino doesn't pay pensions.
- mg 5y agoWith the advent of AI, wealth inequality is probably going to widen. Manual work is getting less and less valuable while ownership of the machines that do the work is getting more and more valuable. I wonder if the wealth inequality is growing via transfer - aka "The rich get richer and the poor get poorer" - or if everybody is getting richer and the rich just get richer faster? A good way to look at this might be some measure of the living standard / quality of life. Over the last 10 years for example - did it go up for everyone? Or did it go up for some and down for some?
- sidlls 5y ago"A good way to look at this might be some measure of the living standard / quality of life." We have a lower percentage of the populace that is poor--but they still live with little or no access to health care, in poor housing with problems (pests, access to clean resources, food supply, rampant violent criminal activity, etc.) and in other conditions such that they may as well be in corrugated metal shanties with dirty water and little/no access to electricity and other "amenities". The living standard and quality of life for poor americans is marginally better than for poor people in third-world countries. We put a better spin on it and (ab)use statistics to paint a better picture.
- ClumsyPilot 5y ago"The living standard and quality of life for poor americans is marginally better than for poor people in third-world countries" I have no experience of third world countries, but if I am destined to be poor, I would rather live in ex-soviet block countries like Czech Republic. They gave half-decent public services, healthcare, etc.
- lotsofpulp 5y agoThe difficult portion of quality of life to quantify and even describe is volatility and possibility to move up the ladder.
- sudosysgen 5y ago
- thih9 5y agoHow many percent of all Americans own any U.S. stocks? What is the wealth spread of the Americans who do own stocks?
- robotresearcher 5y agoAbout 1/3 of US adults have a 401(k), with the money invested in stocks, etc. So that's a lower bound.
- stinkytaco 5y agoPerhaps this is a foolish question, but how do retirement accounts fit into this? I assume many of us have retirement accounts that own parts of mutual funds or ETFs, are those counted, or are the banks that managed those considered the "owner" and we're just getting a share?
- alistairSH 5y agoThey're included, which makes the headline (and article itself) mostly meaningless. Yeah, I have >$1million in the market, but it's almost all via funds in my 401k. I'm not actively voting on any of the companies and I largely don't even know which companies I hold. It would be more interesting to know what % of the market the top-1% hold.
- lexapro 5y agoWhy does it make the headline meaningless? It doesn't really matter whether you vote or know what you own, what matters is the wealth concentration.
- alistairSH 5y agoFair enough. My point is the 10th percentile household (~$200k income) has more in common with the median (~$70k) income household than they do with the top 1% household (~$530k). Or even the top 0.1%... https://review.chicagobooth.edu/economics/2017/article/never-mind-1-percent-lets-talk-about-001-percent https://review.chicagobooth.edu/economics/2017/article/never...
- kapp_in_life 5y agoReally? I doubt that the median income household goes on international vacations every year, whereas that is a luxury both the 10th and 1th percentile can afford to enjoy. Sure the 10th percentile might have to pick 2 of the 5 luxuries enjoyed by the 1%, but thats more than someone at the median could enjoy. Things get messier if you include assets, but speaking just to income percentiles...
- pessimizer 5y agoAnd that's an inflated number because of 401k accounts, which were largely a PR exercise to convince the population that market swings affect Americans in general rather than just the wealthy (although mainly a pretense to cut national labor costs by eliminating pensions.)
- yathern 5y agoKeep in mind that most people are their wealthiest at retirement age. People near retirement tend to have a lot invested. People under 30 make up 50% of the population - but will not be their wealthiest for another 30 years. But in 30 years, those same people will also have significant amounts of savings (ideally). Not at all saying that there are no issues with wealth distribution, or stock-ownership-distribution. But the top 10% aren't necessarily the "elites". They could also just be your parents.
- julienchastang 5y agoAnother related question is how many Americans will be part of the top 10% sometime during their lives?
- xikrib 5y agoThis makes a lot more sense when you consider that the vast, vast majority of accumulated wealth over the last 100 years is corporate wealth. To depoliticize ... I would interpret this statistic as an indication of the correlation between wealth and corporate stock ownership, which is almost tautological. If you own or help run a public company you are probably very rich. And even in the hypothetical case where more of the "90%" are benefiting from stock ownership than ever, this statistic will always simply highlight the reality that running or owning a business makes you money.
- ggregoire 5y agoHow is it that the article says 100% of _all_ the U.S. stocks are owned by Americans? Aren’t foreigners able to own U.S. stocks? Investopedia says they can. https://www.investopedia.com/ask/answers/05/foreignownershipusstocks.asp https://www.investopedia.com/ask/answers/05/foreignownership...
- ipnon 5y agoOne example: Chinese stocks oftentimes can't be owned by foreigners. The workaround is to start an offshore company that pegs its share price to the price of the onshore asset. Many Chinese stocks on Robinhood use this model, like Alibaba.
- amin 5y agoCan confirm. I'm not American but most my stock holdings are.
- tim333 5y agoThey must mean of stocks owned by Americans. I'm guessing they are only talking stocks owned directly and not the ones held by your pension fund?
- dsizzle 5y agoBased on one of the links within that article https://www.cnbc.com/2021/10/01/stocks-are-at-a-70-year-high-as-a-share-of-household-financial-wealth.html https://www.cnbc.com/2021/10/01/stocks-are-at-a-70-year-high... I think that by "U.S. stocks" they mean "stocks held by U.S. households", but I'm not 100% sure and I agree that's confusingly worded.
- sschueller 5y agoThe Swiss National Bank also holds a very large amount of US stocks [1] "The Swiss National Bank owned U.S. equities worth a record $162 billion as of end June, reaping the benefits of a rallying market. Data published on Friday showed the SNB held shares in 2,642 companies, including a $6 billion stake in Amazon Inc. and one worth $1.1 billion in Exxon Mobil Corp." [1] https://www.swissinfo.ch/eng/swiss-central-bank-owns-record--162-billion-of-u-s--stocks/46851242 https://www.swissinfo.ch/eng/swiss-central-bank-owns-record-...
- dsizzle 5y agoPretty sure the percentages are not of "U.S. stocks" per se, but rather of stocks owned by U.S. households (the percentages by income add to 100% and obviously foreigners own some U.S. stocks).
- YetAnotherNick 5y agoIf average family size is 4 and one of the member has stock, even then the stat will be 25% of people hold 100% stock.
- chmod600 5y agoWhenever I see stats like this that don't account for age, I ignore them. They are worthless. It compares a recent Stanford grad from a wealthy family to a 55-year-old who was scraping through the first 35-40 years of life, but now makes $190k/yr as a successful tradesman during boom time. The former will count as "poor" and the latter will count as "top 10%". In other words, no, it's not comparing Americans of different classes. It's comparing Americans at different stages of life. Or just the ebb and flow of income over and individual's life (selling a house even in a modest area can easily put you into the top 10% for a year). You need to follow individuals over their lives to get a better picture of who is struggling and who is thriving.
- darth_avocado 5y agoAm I the only one seeing a lot of headlines pitting top 10% against the rest? It’s disingenuous to make up headlines like this without mentioning too 10% consists of, you guessed it, top 1% which owns more than 50% of all the stocks.
- dominotw 5y agooh yea i saw this recently too. here is one from last week that was making the rounds. "The problem with America’s semi-rich" https://www.vox.com/the-goods/22673605/upper-middle-class-meritocracy-matthew-stewart https://www.vox.com/the-goods/22673605/upper-middle-class-me...
- thinkloop 5y agoTop 1%? How disingenuous can you be, that's made up of the top 0.01% who own 30% of the top 1%'s wealth alone [1] [1] https://review.chicagobooth.edu/economics/2017/article/never-mind-1-percent-lets-talk-about-001-percent https://review.chicagobooth.edu/economics/2017/article/never...
- darth_avocado 5y agoI agree. I just didn't have the stats to back me up when I wrote that. You are talking about wealth and not stocks, but you make the same point that I'm trying to make, which is that, top x% can be very misleading and clickbaity if you ignore the extreme inequality at the very top and can push the narrative in a direction that's not helpful. Thank you for bringing that up. I'd not be surprised it like 100 people in the country own 20% of all the stocks.
- ghufran_syed 5y agoIsn’t this logically equivalent to “The most successful 10% of athletes have won 90% of olympic gold medals”? We’re using their wealth (which naturally includes a lot of stock because it can be held in tax-deferred retirement accounts and has the greatest growth expectation historically) to identify the top decile, then we find that they, err, own a lot of stock. How surprising.
- xboxnolifes 5y agoIf there was anything interesting with the comparison, it would be to look at the difference between total wealth inequality and stock ownership inequality and see if there was anything that is unexpected. We may expect A group owning 90% of wealth to own 90% of stocks. If this isn't the case, is this surprising? (I don't remember the wealth inequality statistics, so I'm just theorizing here).
- yathern 5y agoYou're right, it's similar. It's sort of tautological to say that the 10% wealthiest own more of the wealth. But we're talking specifically about distribution here. The top 10% could own anywhere between 10% of the wealth, and 100%. If the top 10% own 15% of the wealth, that means everyone's basically in the same boat. If they own 100% - that means 90% of people have nothing, and 10% have everything - sort of like a fiefdom. That doesn't seem great. What's the best for society? Some might think it's when 10% owns 10%, period - as evenly distributed as possible. Maybe - but I don't think I agree. Though it's not likely the 100%/0% hard line. Anyway - this article is saying that we're getting closer to the 100%/0% direction than ever before. At least in terms of stock ownership. Whether this is a good or bad thing is up to your own interpretation.
- tzs 5y agoI've found pretty much every article about wealth inequity useless because they never say anything about what the right level of wealth inequity should be. Without that I have no idea if what the article is reporting is something I should be concerned about, and if it is whether I should be concerned because it is too high or because it is too low. In any distribution other than one where everyone has equal wealth there must be inequity--that is mathematically unescapable. If there are at least two people who do not have the same wealth, then necessarily the top N% will control M% of the wealth for all M, N with M > N.
- svachalek 5y agoCurrent levels are basically a fact, subject to gaming like all statistics. But the "right" or ideal level of inequity is a matter of opinion. Personally I think there should be enough inequity to give people an incentive to work harder and take some risks -- but in my experience that doesn't take much at all. If you let the top people have 2X the bottom people, there would still be LOTS of people fighting to be at the top. The other argument for inequity is "fairness", perhaps the people at the top have earned the right to have 10X, 1000X, 1000000X what everyone else has. That's up to you to decide what you think is fair.
- GaryTang 5y agoLove me some top 0.1% propaganda to pin the lower classes against each other. The top 10% have more in common with the median individual than this article makes out. It’s the top 0.1% that are out of control and need to be reigned in. https://review.chicagobooth.edu/economics/2017/article/never-mind-1-percent-lets-talk-about-001-percent https://review.chicagobooth.edu/economics/2017/article/never...
- yepguy 5y agoYes, CNBC obviously seized on the number 10% to make it sound like a small number of people, but the top 10% of Americans includes over 25 million people. If we can't address inequality without inflaming envy then we're better off not addressing it at all. We'll just end up creating more tyranny in the pursuit of ending tyranny.
- stevev 5y agoWere they wealthy before owning that much or became wealthy as a result of owning it?
- chmod600 5y agoMaybe 10% of americans are close to retirement age, and have been saving all their life in something called a 401k, which happens to be stock. That would be ... not very outragous. Sure, you can say 89% of stocks is too much and there must be other factors at work. But I refuse to be outraged until we control for the non-outragous factors, and see what remains.
- Thrymr 5y agoThe median 55-64 year old has <70k balance in their 401k, and that is of people who even have a 401k (many don't). Source: https://www.personalcapital.com/blog/retirement-planning/average-401k-balance-age/ https://www.personalcapital.com/blog/retirement-planning/ave...
- chmod600 5y agoThank you for providing numbers. But it takes a bit more effort to combine this number with what the article offers into a coherent point. If the top 10% has a lot of older workers-and-savers in it, then it's not very outragous. Your numbers don't answer that very clearly. Are those people who have worked for 40 years? Does it include spouses who may have worked for less time? And how does the median (50th percentile) translate into the 10th percentile, and what's the wealth cutoff for the 10th percentile?
- 2Xheadpalm 5y agoNothing to see here, it's working as intended.
- cryptica 5y agoThe part that concerns me the most is the fact that inequality is the result of a global money-printing ponzi scheme. As most people learn what has happened, the level of bitterness and division is going to be intolerable. What we're seeing now is nothing because most people still don't know what has happened. Even 90% of people on HN don't realize what has happened. Also, now the system will be forced into hyper-drive. Those who have benefited from the scheme so far will benefit even more; the crony system will need to incentivize its proponents into an increasingly deep trance as the fraudulent nature of the scheme becomes increasingly difficult to ignore. Those who have been harmed by the system will be harmed even more. There will be a tiny percentage of the population living a blissful life of ignorance while resentment grows within the majority of the population. The narratives around everything; politics, the economy and society are going to fall apart. We might actually end up with some kind of anarchy.
- kazen44 5y agoalso, the inaction on climate change is a catalyst as well. people have been pushed to more extreme political views, because cooperating and sharing the wealth is not in the interest of the wealthy minority.
- aerosmile 5y agoHow does this metric compare to other countries? Certain European countries I am familiar with don't have a strong emphasis on stocks as a wealth builder (as wrong as I personally think that is), and instead overindex on real estate.
- zacherates 5y agoIsn't that because normal people are heavily encouraged to put all their money into buying a house? Culturally ("rent is just throwing money away" / "the stock market is a casino"), with financial incentives (mortgage interest deduction, SALT deduction, Fannie/Freddy insured 30 year mortgages), and quality of life (school districting/social services or lack thereof), we get people to put every dollar they can into buying a house. Or more than one (apparently everyone aspires to be an amateur landlord). Consequently, you need to have a lot of money before you've bought enough house to move onto buying stocks. If renting and investing were more normalized and encouraged, I'd expect a different ratio of real estate : financial asset ownership.
- gandalfian 5y agoSo 40% of US stocks are owned by foreigners. 30% by pensions funds? And now 89% owned by the top 10% of Americans making 159% ??? I would guess the correct headline is something like "of the shares held directly by private American individuals the brokerage accounts of the top 10% hold 89% of those shares". Which sounds perfectly plausible. Does the article writer understand this or are they confused as to the meaning? Is this artical and discussion just gibberish all the way down or is it me whose not understanding?
- nathias 5y agothis is how a stale meta looks like
- betwixthewires 5y agoWho says inflation hurts the rich more than the poor? I've been seeing that narrative lately. But the rich have access to hedges, and the poor have politicians who raise the minimum wage only when they have to.
- imtringued 5y agoInflation encourages people to spend their money on consumption and investments. At 0% inflation the rich just get to keep their money in bank accounts and do nothing with it which helps nobody. Consumer spending and investment creates the need for labor which creates jobs which creates incomes which can then be spent again. The poor already spend most of their money so they barely lose out but they benefit from the employment opportunities that inflation gives them. Inflation raises the price level for basically everything including wages. This means you need to keep changing jobs frequently but this is mostly because nobody is joining unions to bargain collectively. If the rich buy stocks and it turns out those companies did a good job at providing goods and services then you didn't lose out at all as a poor person while the rich merely did their job of supporting companies with their money. This is because inflation increases the value of future income streams and good companies tend to have reliable future income streams. If the companies are overvalued and their valuation grew much faster than inflation that just means that there will be a correction and the value of the stock will vanish with that correction. I don't see anything unfair about this. The real problem is that extracting economic rents distorts economies and drives inequality because the other party cannot refuse. Real estate is a common example. People speculate on the value of the land and sometimes even keep it vacant because they know they get to rip off a future buyer because that buyer needs to live where the jobs are.
- betwixthewires 5y agoSo one thing to keep in mind, the pressure to spend due to an inflationary monetary system influences people's behavior; perhaps the poor spend all their money because of inflation. When rent goes up every year and consumer prices increase, of course people who are just making ends meet never get to save. Perhaps in a disinflationary environment more poor people would save money and there would be more upward mobility. Of course, rich people would use hedges to make more money rather than just hedge against inflation, so that investment wouldn't go away. People that hoard currency lose out in all but a deflationary environment. Either way the idea that a class of people who take their dollars and put them in deflationary or disinflationary hedge investments lose while a class who keep cash in their mattress (if they're lucky enough to have savings after prices rise) win in an inflationary environment is missing a lot of economic behavior and dynamic and IMO is oversimplified and wrong.
- jpn 5y agoThe rich get richer because their wealth grows exponentially.
- michaelterryio 5y agoThe seems very reasonable?