13 ms·

Richest 1% amassed almost two-thirds of new wealth created since 2020

69 points by DocFeind 4y ago

calr 4y ago
Perhaps this is philosophical, but how much actual “wealth” was created by humans in the past two years? Yes, assets values went up, but how much if any of the that growth was “real” vs inflationary? Did businesses get that much more efficient, did we invent new technologies to improve our standard of life? If the wealth captured isn’t real, meaning it can’t be realized in any normal sense (outside of big numbers on a screen) does it matter?
- adam_arthur 4y ago
  Real GDP per capita is a better indicator of "economic wealth" than valuation. Asset values swing most wildly on the basis of the risk free rate, which is where most of the new "wealth" created since 2020 has come from (ZIRP, QE etc). It is somewhat illusory in that low rates must be sustainable to support elevated valuations. Obviously we're seeing the other side of that with rates having risen due to inflationary pressures. e.g. look at how much "wealth" Japan had in the 1980's before their economy imploded. The imperial palace was perceived to be worth more than all of California, something like that. https://en.wikipedia.org/wiki/Japanese_asset_price_bubble https://en.wikipedia.org/wiki/Japanese_asset_price_bubble
- Shared404 4y ago
  > If the wealth captured isn’t real, meaning it can’t be realized in any normal sense (outside of big numbers on a screen) does it matter? I would argue yes. Not because there's more wealth, but because it means that a greater percentage of the existing wealth is going to the largest 1%.
  - calr 4y ago
    I think I see what your saying. Wealth creation is dilutive on a relative basis, meaning in 2019 the lower/middle class had X% of the total wealth. By “creating” a bunch of new wealth the denominator grows and on a relative basis the middle/lower class becomes less wealthy.
    - Shared404 4y ago
      That is both what I meant, and a better method of phrasing it. Thanks!
- rgbrenner 4y ago
  Yes, because those "numbers on a screen" are called dollars.. and we price everything using those numbers. So if the numbers get bigger, people will want more of them when you buy things, including things you need to live like food and shelter.
  - Jensson 4y ago
    > Musk, for example, has pulled $40b out through Tesla stock sales in the past couple of years. Those are real assets. Then your future salaries are also real assets, and should be counted for your net worth. The same argument applies, you can take out loans against your future earnings and spend it, so it is a part of your current net worth, right? You say that maybe you get into an accident so you can't work? Same logic applies to stocks, something might happen and nobody wants to pay for them anymore rendering them useless. So to make the comparison fair you have to be consistent. Either future earnings are assets, or they aren't, otherwise the comparison isn't meaningful.
    - sokoloff 4y ago
      You’d have to decrement by projected future expenses and discount for uncertainty (just as we value stocks on future free cash flows [not revenues], and discount for uncertainty).
- tshaddox 4y ago
  I’m not sure how much that matters when we’re talking about wealth distribution, since the dollars are fungible regardless of how “real” they are. It’s not like the middle class people’s new wealth is somehow any more real than the wealth of the richest 1%.
  - rish1_2 4y ago
    This sounds about right
- anm89 4y ago
  Basically the number you are looking for is global real GDP growth. This also misses the mark in many ways but it's the closest easy proxy for what you want. So just take global real gdp growth and figure out the ratio that went to the 1% . Note, life could become worse for almost everyone, while real wealth is created. I would argue that's pretty much what is happening. It doesn't mean real resources weren't created or extracted and someone owns those things. The idea of altering these figures to account for happiness or quality of life is a fallacy in my opinion. GDP should be measured the way it is. Decmocracies need to figure out their own definitions of "happiness" or whatever you want to call it and optimize for those parameters. But there is no combined measure that covers both.
- klyrs 4y ago
  Regardless of how "real" the wealth is, my property value went up, and with it, my tax bill. In the same time period, household total income went down. Property values rise because the richest among us can make money flipping houses. I'm getting poorer because the roof over my head is a financial plaything. Technically, I could sell my house and profit, but I need a house and in terms of what I can afford, the entire market has moved too so my quality of life would diminish.
  - klipklop 4y ago
    Imagine how the folks feel that have been perma-priced out due to real estate speculation and near-zero interest rates raging on for years.
    - klyrs 4y ago
      No need to imagine; I thought I was going to spend the rest of my life renting illegal moldy basement apartments until about 4 years ago.
      - klipklop 4y ago
        Congrats for getting out of that trap. Now for the next one. Pay off the mortgage. In my opinion you are not "free" until some bank or landlord cant take your housing away from you.
        klyrs 4y ago
        Indeed. Those "near-zero" interest rates you mentioned? They don't last. We could only lock in a 5-year rate -- the rates that come after that loom large in our awareness.
        sokoloff 4y ago
        Property tax is forever. Your city/county will still take your paid-off house if you don’t pay property taxes for long enough.
  - 4y ago
mandeepj 4y ago
> Richest 1% amassed almost two-thirds of new wealth created since 2020 Is that claim still valid when the current #2 richest person lost $200B?
- anm89 4y ago
  200B is a drop in the bucket at these levels of figures. We are talking about total wealth amassed in a year. The number they cite is 42 trillion
- fakedang 4y ago
  Yes because the collective 99% lost a lot more to other factors such as inflation and wage stagnation.
  - SideQuark 4y ago
    Inflation and wage stagnation is not loss of wealth. Wealth is an amount. Income is a flow. These have different units. Most people have debt - inflation transfers value from lenders to borrowers, so tons of people with car loans and college loans and mortgages are better off as inflation lowers the effective amount they owe. Wages have increased significantly as inflation rose. And no matter how you slice it real incomes have increased vastly over the past 40 years, e.g., https://fred.stlouisfed.org/series/MEHOINUSA672N https://fred.stlouisfed.org/series/MEHOINUSA672N
    - hgsgm 4y ago
      Household income is not wages per person. Getting married doubles average household income for those people. Getting a job and hiring a nanny, maid, and gardener creates fictional household income, because homemaking is assigned $0 value by the Fed.
      - SideQuark 4y ago
        >Household income is not wages per person. True. But it increased because personal income increased: https://fred.stlouisfed.org/series/MEPAINUSA672N https://fred.stlouisfed.org/series/MEPAINUSA672N Furthermore, two income households have decreased as less people get married, so the personal income is even greater than that graph. >Getting a job and hiring a nanny, maid, and gardener creates fictional household income, because homemaking is assigned $0 value by the Fed. That's just nonsense. First, very few households have any of those, and certainly not the median house. And, as the graph above shows, median personal income has vastly increased over the same time. If you want to make stuff up, try looking up the data before making false claims.
fdgsdfogijq 4y ago
Society is a complex mix of different genetic pools that mix like water and oil. Small pools end up with all the money because they operate on an abstraction layer higher than the rest. Life for them is like walking around picking up 100 dollar bills. The rest of us scrounge for nickels.
- klipklop 4y ago
  This didn't happen as part of some organic process. They use force to keep the system rigged in their favor.
  - fdgsdfogijq 4y ago
    It absolutely has. People like mark zuckerberg and the google founders became wildly wealthy from raw intellect and business cunning. Over long time spans, these types of people will collect in the upper crust of society. Everyone just wants to believe the game is rigged, on a long enough time frame genetic winners are at the top
    - specialist 4y ago
      "Behind every great fortune lies a great crime." -- Honoré de Balzac
      - Pr0ject217 4y ago
        A nihilist's viewpoint. It's false if one person on the planet made a fortune honestly and ethically. A weak argument and unhelpful perspective.
        NewJazz 4y ago
        A nihilist's viewpoint What, would you prefer that of a national socialist? It's false if one person on the planet made a fortune honestly and ethically Yeah, that is the whole point of the statement. No fortune is honest or ethical. The concepts are incompatible. A weak argument and unhelpful perspective It is only unhelpful if you want to perpetuate the crime of wealth hoarding.
missedthecue 4y ago
1. This is top 1% of the world. In other words, everyone with a net worth more than $850k, or in terms of income, around $80k 2. This is conveniently timed from a low stock market point. If they had timed it from Jan 2022 when the market most recently peaked, I bet the top x% have lost more than the bottom x%. The takeaway is that people worth $850k were more likely to own stocks between 2020 and 2022 than Sudanese cattle herders.
- giraffe_lady 4y ago
  Framing it in the most gee-whiz dismissive way possible doesn't make it less bad! What do you get from doing that?
  - social_quotient 4y ago
    the headline might have an inadvertent effect of making readers think of someone like Bezos, rather than themselves. The $80,000 threshold puts many Americans in the global 1%, despite not considering themselves wealthy. I think their comment was to encourage readers to engage with the article rather than dismissing it based on the title and feeling resentful towards the “rich”.
    - lcnPylGDnU4H9OF 4y ago
      Unfortunately, I suspect engaging with the article is likely to engender the same feelings (emphasis mine): > A total of $42 trillion in new wealth has been created since 2020, with $26 trillion, or 63%, of that being amassed by the top 1% of the ultra-rich, according to the report. Regardless, it is refreshing to see OP's explanation in these comments.
    - eurticket 4y ago
      When I read the article it says richest 1% and I assumed it was America's ultra-rich, 1%. Think it could be good spin in the future for Americas ultra-rich. "Don't worry 80k/yr, you're part of the global 1%!" - Daddy Warbucks
    - 4y ago
kutenai 4y ago
You know, "tax the rich" only puts more money in the hands of the government and the government bureaucrats. Those people are as corrupt as they (people) come. They are certainly no better than these 1% of the rich they want to villify. I'm not saying that this "information" makes me happy -- I'm nowhere near any 1% -- but I'm saying that taking the money from the 1% and giving it to the government won't solve anything. Try again
- hgsgm 4y ago
  The government does more for me than Elon Musk.
- lapcat 4y ago
  > You know, "tax the rich" only puts more money in the hands of the government and the government bureaucrats. Not necessarily. You could tax the rich more and tax the non-rich less, leaving the same amount of money for the government.
tonfreed 4y ago
I mean, yeah, what do expect to happen when you drive mom and pop out of business with lockdowns while allowing your cronies to keep their big box and online stores open?
- hgsgm 4y ago
  Citation desperately needed.
hgsgm 4y ago
Untrustworthy report that uses "1%" and "billionaire" interchangeably. There are not 80million billionaires.

69 points by DocFeind 4y ago

calr 4y ago

Perhaps this is philosophical, but how much actual “wealth” was created by humans in the past two years? Yes, assets values went up, but how much if any of the that growth was “real” vs inflationary? Did businesses get that much more efficient, did we invent new technologies to improve our standard of life? If the wealth captured isn’t real, meaning it can’t be realized in any normal sense (outside of big numbers on a screen) does it matter?

adam_arthur 4y ago
Real GDP per capita is a better indicator of "economic wealth" than valuation. Asset values swing most wildly on the basis of the risk free rate, which is where most of the new "wealth" created since 2020 has come from (ZIRP, QE etc). It is somewhat illusory in that low rates must be sustainable to support elevated valuations. Obviously we're seeing the other side of that with rates having risen due to inflationary pressures. e.g. look at how much "wealth" Japan had in the 1980's before their economy imploded. The imperial palace was perceived to be worth more than all of California, something like that. https://en.wikipedia.org/wiki/Japanese_asset_price_bubble https://en.wikipedia.org/wiki/Japanese_asset_price_bubble
Shared404 4y ago
> If the wealth captured isn’t real, meaning it can’t be realized in any normal sense (outside of big numbers on a screen) does it matter? I would argue yes. Not because there's more wealth, but because it means that a greater percentage of the existing wealth is going to the largest 1%.
- calr 4y ago
  I think I see what your saying. Wealth creation is dilutive on a relative basis, meaning in 2019 the lower/middle class had X% of the total wealth. By “creating” a bunch of new wealth the denominator grows and on a relative basis the middle/lower class becomes less wealthy.
  - Shared404 4y ago
    That is both what I meant, and a better method of phrasing it. Thanks!
rgbrenner 4y ago
Yes, because those "numbers on a screen" are called dollars.. and we price everything using those numbers. So if the numbers get bigger, people will want more of them when you buy things, including things you need to live like food and shelter.
- Jensson 4y ago
  > Musk, for example, has pulled $40b out through Tesla stock sales in the past couple of years. Those are real assets. Then your future salaries are also real assets, and should be counted for your net worth. The same argument applies, you can take out loans against your future earnings and spend it, so it is a part of your current net worth, right? You say that maybe you get into an accident so you can't work? Same logic applies to stocks, something might happen and nobody wants to pay for them anymore rendering them useless. So to make the comparison fair you have to be consistent. Either future earnings are assets, or they aren't, otherwise the comparison isn't meaningful.
  - sokoloff 4y ago
    You’d have to decrement by projected future expenses and discount for uncertainty (just as we value stocks on future free cash flows [not revenues], and discount for uncertainty).
tshaddox 4y ago
I’m not sure how much that matters when we’re talking about wealth distribution, since the dollars are fungible regardless of how “real” they are. It’s not like the middle class people’s new wealth is somehow any more real than the wealth of the richest 1%.
- rish1_2 4y ago
  This sounds about right
anm89 4y ago
Basically the number you are looking for is global real GDP growth. This also misses the mark in many ways but it's the closest easy proxy for what you want. So just take global real gdp growth and figure out the ratio that went to the 1% . Note, life could become worse for almost everyone, while real wealth is created. I would argue that's pretty much what is happening. It doesn't mean real resources weren't created or extracted and someone owns those things. The idea of altering these figures to account for happiness or quality of life is a fallacy in my opinion. GDP should be measured the way it is. Decmocracies need to figure out their own definitions of "happiness" or whatever you want to call it and optimize for those parameters. But there is no combined measure that covers both.
klyrs 4y ago
Regardless of how "real" the wealth is, my property value went up, and with it, my tax bill. In the same time period, household total income went down. Property values rise because the richest among us can make money flipping houses. I'm getting poorer because the roof over my head is a financial plaything. Technically, I could sell my house and profit, but I need a house and in terms of what I can afford, the entire market has moved too so my quality of life would diminish.
- klipklop 4y ago
  Imagine how the folks feel that have been perma-priced out due to real estate speculation and near-zero interest rates raging on for years.
  - klyrs 4y ago
    No need to imagine; I thought I was going to spend the rest of my life renting illegal moldy basement apartments until about 4 years ago.
    - klipklop 4y ago
      Congrats for getting out of that trap. Now for the next one. Pay off the mortgage. In my opinion you are not "free" until some bank or landlord cant take your housing away from you.
      - klyrs 4y ago
        Indeed. Those "near-zero" interest rates you mentioned? They don't last. We could only lock in a 5-year rate -- the rates that come after that loom large in our awareness.
      - sokoloff 4y ago
        Property tax is forever. Your city/county will still take your paid-off house if you don’t pay property taxes for long enough.
- 4y ago

mandeepj 4y ago

> Richest 1% amassed almost two-thirds of new wealth created since 2020 Is that claim still valid when the current #2 richest person lost $200B?

anm89 4y ago
200B is a drop in the bucket at these levels of figures. We are talking about total wealth amassed in a year. The number they cite is 42 trillion
fakedang 4y ago
Yes because the collective 99% lost a lot more to other factors such as inflation and wage stagnation.
- SideQuark 4y ago
  Inflation and wage stagnation is not loss of wealth. Wealth is an amount. Income is a flow. These have different units. Most people have debt - inflation transfers value from lenders to borrowers, so tons of people with car loans and college loans and mortgages are better off as inflation lowers the effective amount they owe. Wages have increased significantly as inflation rose. And no matter how you slice it real incomes have increased vastly over the past 40 years, e.g., https://fred.stlouisfed.org/series/MEHOINUSA672N https://fred.stlouisfed.org/series/MEHOINUSA672N
  - hgsgm 4y ago
    Household income is not wages per person. Getting married doubles average household income for those people. Getting a job and hiring a nanny, maid, and gardener creates fictional household income, because homemaking is assigned $0 value by the Fed.
    - SideQuark 4y ago
      >Household income is not wages per person. True. But it increased because personal income increased: https://fred.stlouisfed.org/series/MEPAINUSA672N https://fred.stlouisfed.org/series/MEPAINUSA672N Furthermore, two income households have decreased as less people get married, so the personal income is even greater than that graph. >Getting a job and hiring a nanny, maid, and gardener creates fictional household income, because homemaking is assigned $0 value by the Fed. That's just nonsense. First, very few households have any of those, and certainly not the median house. And, as the graph above shows, median personal income has vastly increased over the same time. If you want to make stuff up, try looking up the data before making false claims.

fdgsdfogijq 4y ago

Society is a complex mix of different genetic pools that mix like water and oil. Small pools end up with all the money because they operate on an abstraction layer higher than the rest. Life for them is like walking around picking up 100 dollar bills. The rest of us scrounge for nickels.

klipklop 4y ago
This didn't happen as part of some organic process. They use force to keep the system rigged in their favor.
- fdgsdfogijq 4y ago
  It absolutely has. People like mark zuckerberg and the google founders became wildly wealthy from raw intellect and business cunning. Over long time spans, these types of people will collect in the upper crust of society. Everyone just wants to believe the game is rigged, on a long enough time frame genetic winners are at the top
  - specialist 4y ago
    "Behind every great fortune lies a great crime." -- Honoré de Balzac
    - Pr0ject217 4y ago
      A nihilist's viewpoint. It's false if one person on the planet made a fortune honestly and ethically. A weak argument and unhelpful perspective.
      - NewJazz 4y ago
        A nihilist's viewpoint What, would you prefer that of a national socialist? It's false if one person on the planet made a fortune honestly and ethically Yeah, that is the whole point of the statement. No fortune is honest or ethical. The concepts are incompatible. A weak argument and unhelpful perspective It is only unhelpful if you want to perpetuate the crime of wealth hoarding.

missedthecue 4y ago

1. This is top 1% of the world. In other words, everyone with a net worth more than $850k, or in terms of income, around $80k 2. This is conveniently timed from a low stock market point. If they had timed it from Jan 2022 when the market most recently peaked, I bet the top x% have lost more than the bottom x%. The takeaway is that people worth $850k were more likely to own stocks between 2020 and 2022 than Sudanese cattle herders.

giraffe_lady 4y ago
Framing it in the most gee-whiz dismissive way possible doesn't make it less bad! What do you get from doing that?
- social_quotient 4y ago
  the headline might have an inadvertent effect of making readers think of someone like Bezos, rather than themselves. The $80,000 threshold puts many Americans in the global 1%, despite not considering themselves wealthy. I think their comment was to encourage readers to engage with the article rather than dismissing it based on the title and feeling resentful towards the “rich”.
  - lcnPylGDnU4H9OF 4y ago
    Unfortunately, I suspect engaging with the article is likely to engender the same feelings (emphasis mine): > A total of $42 trillion in new wealth has been created since 2020, with $26 trillion, or 63%, of that being amassed by the top 1% of the ultra-rich, according to the report. Regardless, it is refreshing to see OP's explanation in these comments.
  - eurticket 4y ago
    When I read the article it says richest 1% and I assumed it was America's ultra-rich, 1%. Think it could be good spin in the future for Americas ultra-rich. "Don't worry 80k/yr, you're part of the global 1%!" - Daddy Warbucks
  - 4y ago

kutenai 4y ago

You know, "tax the rich" only puts more money in the hands of the government and the government bureaucrats. Those people are as corrupt as they (people) come. They are certainly no better than these 1% of the rich they want to villify. I'm not saying that this "information" makes me happy -- I'm nowhere near any 1% -- but I'm saying that taking the money from the 1% and giving it to the government won't solve anything. Try again

hgsgm 4y ago
The government does more for me than Elon Musk.
lapcat 4y ago
> You know, "tax the rich" only puts more money in the hands of the government and the government bureaucrats. Not necessarily. You could tax the rich more and tax the non-rich less, leaving the same amount of money for the government.

tonfreed 4y ago

I mean, yeah, what do expect to happen when you drive mom and pop out of business with lockdowns while allowing your cronies to keep their big box and online stores open?

hgsgm 4y ago
Citation desperately needed.

hgsgm 4y ago

Untrustworthy report that uses "1%" and "billionaire" interchangeably. There are not 80million billionaires.