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And headline inflation is just one part of the story. Broad money growth has averaged around 7% for decades for USD, similar for other ‘stable’ currencies, and

And headline inflation is just one part of the story. Broad money growth has averaged around 7% for decades for USD, similar for other ‘stable’ currencies, and much worse for the ‘not so stable’ currencies. If you’re rich enough, you won’t keep your value in cash, but rather will buy some assets using it (equity, property, whatever). If you’re rich enough and smart enough you’ll have realized that you can take loans to finance asset purchases in effect shorting the currency. However, if you’re not rich enough, depend on your wage, and can’t short the currency by buying up assets, you get the short end of the stick. Some say this is by design. I recently read an article in the Economist arguing how income inequality has actually gotten better in the rich world. They argued that the wage gap between blue collar and white collar workers has been shrinking. I expect that to accelerate with the advent of AI. But the wage gap says less and less about income inequality when the society gets divided into owner and wage bound classes.

faeriechangling 3y ago
The wage gap was always nonsense meant to get people angry at the working class over inequality not caused by the working class. Notice how governments never spread propaganda about the WEALTH gap or insist wealthy people redistribute their assets to various minority groups. When governments focus on the evils of wages and ignore wealth, just understand they're trying to stoke hatred and prejudice between poor members of various identity groups to distract people from the fact that the wealthy are fucking everybody.
- globular-toast 3y ago
  Bingo. I'm not sure where you're from but it's especially bad somewhere like the UK where income tax rapidly approaches 50% once you get above median income. There is simply no way for people who start with nothing to leave the rental class. When you look at rich people, they inherited it. Doesn't matter how well they did in school or how hard they work. Another major pain point is how much more tax effective it is for everyone to work as opposed to families having a single income. Basically you only get to take advantage of both partners' tax allowance if both work, meaning people who have to work (renters) have to work even more and probably live off copious shite food like microwave meals or eating out which costs even more and have to pay for someone to look after any children and even walk their dog! The 99% movement had it right. What they didn't have was any actionable solutions to this problem, unfortunately. Now that's all been forgotten and people are more interested in issues like men vs women which tell us all men are screwing all women as opposed to the truth which is a few wealthy (mostly men) are screwing everybody.
  - dvfjsdhgfv 3y ago
    Solving this problem with law wouldn't be easy, though. The taxation laws would need to be made extremely complex. They would have to take into consideration the situation of the whole family, for example. Would that be fair? Also, would it make sense to consider potential inheritance? The potential for abuse is enormous. Probably higher property tax for high-value properties could help a bit, bit it's just a drop in the ocean.
    - krageon 3y ago
      You would tax based on family income instead of individual income. I don't see what's complicated about this.
      - gedy 3y ago
        Agreed, this is what US has with married/family taxes.
        dvfjsdhgfv 3y ago
        The point is, this would basically concern parents with children. What about their grandparents who own a large property? They are treated separately when they are alive because they are a different household. But once they die, they pass their real estate to their offspring. Should those expecting inheritance be treated differently?
        krageon 3y ago
        This was about income tax. Not inheritance tax.
    - valval 3y ago
      Flat tax.
    - globular-toast 3y ago
      If you want to truly even out the playing field, just ban inheritance. You would think this would be a primary goal of pro-equality types but, oddly, even the poorer people in society are against this for various reasons. We can't ban genetic inheritance, but we compound its effects by allowing wealth inheritance too. I get that there's sentimentality and people would be against the family home being taken by the state upon death of a parent, but we could give family first dibs on buying the house. The difference being they actually have to buy it, they don't just get it. But I also think it's important to focus on the thing that really matters which is happiness, not wealth. It seems to me that above a certain level of wealth people can be happy, and that level is way lower than even the median level of wealth in many Western countries. Unhappiness at high levels of wealth comes from the Hedonic treadmill which is driven by inequality. Basically people see others with "more" than them and it makes them unhappy. If they never saw that, they could be happy. So I would study what goods have this effect and massively tax them. Luxury/big cars are a good example. Any action should not be just to even out wealth for the sake of it, it should be about achieving a happier society (and note I didn't say more productive society etc. that is also something that should only be pursued if it leads to more happiness).
ssss11 3y ago
Yes if I understand your point, I agree with it, it feels like regular folks are all getting closer in pay gap. But the gap to the wealthy is accelerating. It certainly feels like it is by design. However with more wealth you have more flexibility, more time, more resources (e.g. smart accountants). I can’t help but feel that it’s just inevitable.. when the economy is bad the wealthy win, and when the economy is good the wealthy also win. Over time the gap gets large. Surely this has been the case as long as civilised societies have existed, I wonder if there’s much research on this.
- mdiesel 3y ago
  Yes, a very interesting one that analysed house sizes over time in ancient civilisations to show the smallest houses got slightly bigger as civilisation develops but the big houses become mansions and then palaces. This isn't the study I was thinking of but is a similar idea and explanation of the method: https://phys.org/news/2021-03-ancient-maya-houses-wealth-inequality.html https://phys.org/news/2021-03-ancient-maya-houses-wealth-ine...
- jgilias 3y ago
  It has always existed only in part. As in, wealth begets wealth. So, like you say once you’re wealthy you have more opportunities for more wealth. However, it’s even worse than that now. The system where continuous debasement of currencies has been normalized is less than a century old. In the old days a King would debase the currency and hope nobody notices. Today it’s common knowledge, yet people keep acting as if a dollar/euro today is the same thing as one tomorrow. In general, it’s not that things are getting more expensive, or one’s investments are paying off. It’s mostly just that the currencies we use as units of account are continuously losing value.
- valval 3y ago
  What exactly is "the wealthy"? Business owners? Entrepreneurs? Politicians?
  - c22 3y ago
    People with a lot of assets.
varispeed 3y ago
> I recently read an article in the Economist arguing how income inequality has actually gotten better in the rich world. They argued that the wage gap between blue collar and white collar workers has been shrinking. This is misleading. It's just the white collar workers are taxed even more and they earn less money than they used to. This has several negative effects. For instance why would you invest in your education and become an engineer or something if you won't make substantially more money than say warehouse worker who does not need to spend years on specialist education? The wealth gap is widening, but between the rich and everyone else. Some call it asset stripping. People dip into their savings to make ends meet, sell their assets. Until they run out of money completely. Then they will own nothing.

faeriechangling 3y ago

The wage gap was always nonsense meant to get people angry at the working class over inequality not caused by the working class. Notice how governments never spread propaganda about the WEALTH gap or insist wealthy people redistribute their assets to various minority groups. When governments focus on the evils of wages and ignore wealth, just understand they're trying to stoke hatred and prejudice between poor members of various identity groups to distract people from the fact that the wealthy are fucking everybody.

globular-toast 3y ago
Bingo. I'm not sure where you're from but it's especially bad somewhere like the UK where income tax rapidly approaches 50% once you get above median income. There is simply no way for people who start with nothing to leave the rental class. When you look at rich people, they inherited it. Doesn't matter how well they did in school or how hard they work. Another major pain point is how much more tax effective it is for everyone to work as opposed to families having a single income. Basically you only get to take advantage of both partners' tax allowance if both work, meaning people who have to work (renters) have to work even more and probably live off copious shite food like microwave meals or eating out which costs even more and have to pay for someone to look after any children and even walk their dog! The 99% movement had it right. What they didn't have was any actionable solutions to this problem, unfortunately. Now that's all been forgotten and people are more interested in issues like men vs women which tell us all men are screwing all women as opposed to the truth which is a few wealthy (mostly men) are screwing everybody.
- dvfjsdhgfv 3y ago
  Solving this problem with law wouldn't be easy, though. The taxation laws would need to be made extremely complex. They would have to take into consideration the situation of the whole family, for example. Would that be fair? Also, would it make sense to consider potential inheritance? The potential for abuse is enormous. Probably higher property tax for high-value properties could help a bit, bit it's just a drop in the ocean.
  - krageon 3y ago
    You would tax based on family income instead of individual income. I don't see what's complicated about this.
    - gedy 3y ago
      Agreed, this is what US has with married/family taxes.
      - dvfjsdhgfv 3y ago
        The point is, this would basically concern parents with children. What about their grandparents who own a large property? They are treated separately when they are alive because they are a different household. But once they die, they pass their real estate to their offspring. Should those expecting inheritance be treated differently?
        krageon 3y ago
        This was about income tax. Not inheritance tax.
  - valval 3y ago
    Flat tax.
  - globular-toast 3y ago
    If you want to truly even out the playing field, just ban inheritance. You would think this would be a primary goal of pro-equality types but, oddly, even the poorer people in society are against this for various reasons. We can't ban genetic inheritance, but we compound its effects by allowing wealth inheritance too. I get that there's sentimentality and people would be against the family home being taken by the state upon death of a parent, but we could give family first dibs on buying the house. The difference being they actually have to buy it, they don't just get it. But I also think it's important to focus on the thing that really matters which is happiness, not wealth. It seems to me that above a certain level of wealth people can be happy, and that level is way lower than even the median level of wealth in many Western countries. Unhappiness at high levels of wealth comes from the Hedonic treadmill which is driven by inequality. Basically people see others with "more" than them and it makes them unhappy. If they never saw that, they could be happy. So I would study what goods have this effect and massively tax them. Luxury/big cars are a good example. Any action should not be just to even out wealth for the sake of it, it should be about achieving a happier society (and note I didn't say more productive society etc. that is also something that should only be pursued if it leads to more happiness).

ssss11 3y ago

Yes if I understand your point, I agree with it, it feels like regular folks are all getting closer in pay gap. But the gap to the wealthy is accelerating. It certainly feels like it is by design. However with more wealth you have more flexibility, more time, more resources (e.g. smart accountants). I can’t help but feel that it’s just inevitable.. when the economy is bad the wealthy win, and when the economy is good the wealthy also win. Over time the gap gets large. Surely this has been the case as long as civilised societies have existed, I wonder if there’s much research on this.

mdiesel 3y ago
Yes, a very interesting one that analysed house sizes over time in ancient civilisations to show the smallest houses got slightly bigger as civilisation develops but the big houses become mansions and then palaces. This isn't the study I was thinking of but is a similar idea and explanation of the method: https://phys.org/news/2021-03-ancient-maya-houses-wealth-inequality.html https://phys.org/news/2021-03-ancient-maya-houses-wealth-ine...
jgilias 3y ago
It has always existed only in part. As in, wealth begets wealth. So, like you say once you’re wealthy you have more opportunities for more wealth. However, it’s even worse than that now. The system where continuous debasement of currencies has been normalized is less than a century old. In the old days a King would debase the currency and hope nobody notices. Today it’s common knowledge, yet people keep acting as if a dollar/euro today is the same thing as one tomorrow. In general, it’s not that things are getting more expensive, or one’s investments are paying off. It’s mostly just that the currencies we use as units of account are continuously losing value.
valval 3y ago
What exactly is "the wealthy"? Business owners? Entrepreneurs? Politicians?
- c22 3y ago
  People with a lot of assets.

varispeed 3y ago

> I recently read an article in the Economist arguing how income inequality has actually gotten better in the rich world. They argued that the wage gap between blue collar and white collar workers has been shrinking. This is misleading. It's just the white collar workers are taxed even more and they earn less money than they used to. This has several negative effects. For instance why would you invest in your education and become an engineer or something if you won't make substantially more money than say warehouse worker who does not need to spend years on specialist education? The wealth gap is widening, but between the rich and everyone else. Some call it asset stripping. People dip into their savings to make ends meet, sell their assets. Until they run out of money completely. Then they will own nothing.