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Never understood why inequality is a problem. At least as long as people can move geographically and/or law enforcement does a good job. There is a problem of

Never understood why inequality is a problem. At least as long as people can move geographically and/or law enforcement does a good job. There is a problem of rich not spending enough, but it is a consequence of "fighting inequality" which results in them being shy of spending, and while it is indeed dangerous long-term, that is a purely social/psychological problem which can be solved without any "physical" economic changes.

gxyt6gfy5t 3y ago
The problem is the asset bubble and inflation eroding normal people’s savings and wages. Leading to wealth transfer. Inequality isn’t a problem in itself is zero sum thinking
- anovikov 3y ago
  Inequality decreases inflation because rich don't spend much of their earnings, unlike middle class and especially poor. See: decade of QE -> no inflation; some modest amounts of cash given to the poor as covid checks -> massive inflation. THAT is the only problem with inequality i can see: it reduces economic growth because it decreases spending in the economy. If we can somehow trick the rich into spending same proportion of their income as the middle class does (that is, simply explain them that there's nothing shameful about megayachts/private jets/private armies in the 3rd world/crazy longshot startups/islands full of hookers), things will get back in balance.
kevingadd 3y ago
Unless you live in a fortress you should be afraid of inequality worsening, no matter which side of it you're on. Rising inequality leads to societal tension and human misery.
sidlls 3y ago
I'm American. I've been in two economic classes: dirt poor (as in, more or less homeless, when I was a child, for a bit) and now on the low end of rich (net worth in the mid 7 figure range). I've seen both sides of this inequality, in America, personally. And new social circles that have opened up have given me something of a first-hand view of the "truly" rich as well. I can list numerous ways that it's a problem, if you like. Here's one to start: "as long as people can move geographically" isn't applicable to those on the lower end of the economic scale. Your comment represents something generalizable about the rich, too: they are completely oblivious to just how hard and draining (physically, mentally, and emotionally) it is to be impoverished. I shudder to think what it's like for the poor in poorer countries.
- mlrtime 3y ago
  > isn't applicable to those on the lower end of the economic scale. Why not? Immigrants come here with $0. My wife came to America with $50 and didn't speak any english. Most of America was founded on poor groups and families taking all their possessions with no jobs and creating a new life. Is it easy, hell no. But sure beats staying in the same place and complaining about other people. There are still cities in the US that will give you land and a house if you just stay and live there. Living in NYC and SF is not a right.
_visgean 3y ago
> Research has generally linked economic inequality to political and social instability, including revolution, democratic breakdown and civil conflict.[5][10][11][12] Research suggests that greater inequality hinders economic growth and macroeconomic stability, and that land and human capital inequality reduce growth more than inequality of income.[5][13] Inequality is at the center stage of economic policy debate across the globe, as government tax and spending policies have significant effects on income distribution.[5] In advanced economies, taxes and transfers decrease income inequality by one-third, with most of this being achieved via public social spending (such as pensions and family benefits).[5] While the "optimum" amount of economic inequality is widely debated, there is a near-universal belief that complete economic equality (Gini of zero) would be undesirable and unachieveable.[14]: 1 just from wikipedia: https://en.wikipedia.org/wiki/Economic_inequality https://en.wikipedia.org/wiki/Economic_inequality
- anovikov 3y ago
  Here is a simple yardstick to find out what optimal Gini index is: same as Gini index of tinder likes. Because that's an objective rating of how intrinsically unequal people really are. Income distribution in all developed countries is far cry from Tinder distribution. Interestingly, asset distribution is somewhere close. Maybe because it has less social impact and is thus subject to much less political manipulation.
TrackerFF 3y ago
Imagine a future where it is impossible for the poor classes to purchase a home, because some trillion dollar real-estate funds have captured the entire marked.
- anovikov 3y ago
  That's a problem of regulation/NIMBYsm right? Because if someone has 'captured' entire market, it means no one is living in those houses, they are just purchased and locked up. Meaning, they don't consume any resources, don't result in water, electricity networks etc. being strained, and don't result in extra congestion. Meaning, there's no problem to just build more. Unless regulations/zoning prevent it. So fight zoning, not "inequality".
  - TrackerFF 3y ago
    Purchase rental units, jack up the price, see what the pain threshold for your tenants is. It is expensive to relocate, especially if you're poor. Some of these real-estate investment companies own hundreds of thousands of rental units. They purchase swaths of blocks, all over the world, and do nothing but increase the price. Usually they just purchase parts, or entire portfolios off smaller companies. The goal is monopoly. And it has worked well of the past decades with low/zero interest rate policy.
  - emanuele232 3y ago
    nop, corpos acquire a lot of houses in the market and rent them. They can pay more for the houses since their scope of investment (years to break even) is longer than your average mens' lifespan. rent goes up. a smaller and smaller percentage of population can buy houses because there are fewer on the market. rent keeps everyone poor. This is happening now, in every major developed country
    - anovikov 3y ago
      But there's nothing preventing from building more and more houses if not zoning. Zoning is the problem enabling this.
impossiblefork 3y ago
For me, the problem is power. If somebody else has power over me-- whether it's because I'm dependent on some resource he owns or because he has political influence, it means I don't have power over myself, so his power must be destroyed. The only problem is how to do it cleanly and in a way that doesn't unnecessarily disturb the economy. The path I'm most interested in is by instituting mandatory savings in order to reduce competition among workers for goods.
mrkeen 3y ago
> Never understood why inequality is a problem. Current wealth is very influential on both current opportunities and future wealth. Not just for the person, but for their offspring too. Maybe you can't afford to live within 1-hour's commute of work. Maybe you can't afford a car. Maybe you can't afford private tuition if you fall behind in an important subject at school. Maybe investing in the stock market is an activity forever out of reach for you. Maybe you can't afford childcare, so you have to be a stay-at-home parent. Maybe you can't afford to leave your spouse. Maybe you need to stay employed, so you can't try to start your own business. Maybe you can't get a deposit for a mortgage, so you're forever paying off someone richer than you's mortgage, through rent. None of these things are luxury goods. Being poor is playing life on hard mode.

gxyt6gfy5t 3y ago

The problem is the asset bubble and inflation eroding normal people’s savings and wages. Leading to wealth transfer. Inequality isn’t a problem in itself is zero sum thinking

anovikov 3y ago
Inequality decreases inflation because rich don't spend much of their earnings, unlike middle class and especially poor. See: decade of QE -> no inflation; some modest amounts of cash given to the poor as covid checks -> massive inflation. THAT is the only problem with inequality i can see: it reduces economic growth because it decreases spending in the economy. If we can somehow trick the rich into spending same proportion of their income as the middle class does (that is, simply explain them that there's nothing shameful about megayachts/private jets/private armies in the 3rd world/crazy longshot startups/islands full of hookers), things will get back in balance.

kevingadd 3y ago

Unless you live in a fortress you should be afraid of inequality worsening, no matter which side of it you're on. Rising inequality leads to societal tension and human misery.

sidlls 3y ago

I'm American. I've been in two economic classes: dirt poor (as in, more or less homeless, when I was a child, for a bit) and now on the low end of rich (net worth in the mid 7 figure range). I've seen both sides of this inequality, in America, personally. And new social circles that have opened up have given me something of a first-hand view of the "truly" rich as well. I can list numerous ways that it's a problem, if you like. Here's one to start: "as long as people can move geographically" isn't applicable to those on the lower end of the economic scale. Your comment represents something generalizable about the rich, too: they are completely oblivious to just how hard and draining (physically, mentally, and emotionally) it is to be impoverished. I shudder to think what it's like for the poor in poorer countries.

mlrtime 3y ago
> isn't applicable to those on the lower end of the economic scale. Why not? Immigrants come here with $0. My wife came to America with $50 and didn't speak any english. Most of America was founded on poor groups and families taking all their possessions with no jobs and creating a new life. Is it easy, hell no. But sure beats staying in the same place and complaining about other people. There are still cities in the US that will give you land and a house if you just stay and live there. Living in NYC and SF is not a right.

_visgean 3y ago

> Research has generally linked economic inequality to political and social instability, including revolution, democratic breakdown and civil conflict.[5][10][11][12] Research suggests that greater inequality hinders economic growth and macroeconomic stability, and that land and human capital inequality reduce growth more than inequality of income.[5][13] Inequality is at the center stage of economic policy debate across the globe, as government tax and spending policies have significant effects on income distribution.[5] In advanced economies, taxes and transfers decrease income inequality by one-third, with most of this being achieved via public social spending (such as pensions and family benefits).[5] While the "optimum" amount of economic inequality is widely debated, there is a near-universal belief that complete economic equality (Gini of zero) would be undesirable and unachieveable.[14]: 1 just from wikipedia: https://en.wikipedia.org/wiki/Economic_inequality https://en.wikipedia.org/wiki/Economic_inequality

anovikov 3y ago
Here is a simple yardstick to find out what optimal Gini index is: same as Gini index of tinder likes. Because that's an objective rating of how intrinsically unequal people really are. Income distribution in all developed countries is far cry from Tinder distribution. Interestingly, asset distribution is somewhere close. Maybe because it has less social impact and is thus subject to much less political manipulation.

TrackerFF 3y ago

Imagine a future where it is impossible for the poor classes to purchase a home, because some trillion dollar real-estate funds have captured the entire marked.

anovikov 3y ago
That's a problem of regulation/NIMBYsm right? Because if someone has 'captured' entire market, it means no one is living in those houses, they are just purchased and locked up. Meaning, they don't consume any resources, don't result in water, electricity networks etc. being strained, and don't result in extra congestion. Meaning, there's no problem to just build more. Unless regulations/zoning prevent it. So fight zoning, not "inequality".
- TrackerFF 3y ago
  Purchase rental units, jack up the price, see what the pain threshold for your tenants is. It is expensive to relocate, especially if you're poor. Some of these real-estate investment companies own hundreds of thousands of rental units. They purchase swaths of blocks, all over the world, and do nothing but increase the price. Usually they just purchase parts, or entire portfolios off smaller companies. The goal is monopoly. And it has worked well of the past decades with low/zero interest rate policy.
- emanuele232 3y ago
  nop, corpos acquire a lot of houses in the market and rent them. They can pay more for the houses since their scope of investment (years to break even) is longer than your average mens' lifespan. rent goes up. a smaller and smaller percentage of population can buy houses because there are fewer on the market. rent keeps everyone poor. This is happening now, in every major developed country
  - anovikov 3y ago
    But there's nothing preventing from building more and more houses if not zoning. Zoning is the problem enabling this.

impossiblefork 3y ago

For me, the problem is power. If somebody else has power over me-- whether it's because I'm dependent on some resource he owns or because he has political influence, it means I don't have power over myself, so his power must be destroyed. The only problem is how to do it cleanly and in a way that doesn't unnecessarily disturb the economy. The path I'm most interested in is by instituting mandatory savings in order to reduce competition among workers for goods.

mrkeen 3y ago

> Never understood why inequality is a problem. Current wealth is very influential on both current opportunities and future wealth. Not just for the person, but for their offspring too. Maybe you can't afford to live within 1-hour's commute of work. Maybe you can't afford a car. Maybe you can't afford private tuition if you fall behind in an important subject at school. Maybe investing in the stock market is an activity forever out of reach for you. Maybe you can't afford childcare, so you have to be a stay-at-home parent. Maybe you can't afford to leave your spouse. Maybe you need to stay employed, so you can't try to start your own business. Maybe you can't get a deposit for a mortgage, so you're forever paying off someone richer than you's mortgage, through rent. None of these things are luxury goods. Being poor is playing life on hard mode.