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Personally I believe it's a consequence of the increasing financial-ization of society. I know lawyers who've securitized preschool curricula for private equity

Personally I believe it's a consequence of the increasing financial-ization of society. I know lawyers who've securitized preschool curricula for private equity firms to purchase and trade, which to me just seems bass-akward. When literally every aspect of society is serving double duty as both the original thing, but also a financial asset for capital holders to trade and profit off, eventually value is going to be extracted from the quality of service provided. Everywhere you look people are basically paying (what I see as) a hidden tax across all goods and services, so that capital-holders can see (increasing) returns.

alephnerd 2y ago
That financialization is due to pension funds as well. The largest LPs in every single fund is always a Pension Fund. State+Local Pension funds in the US have $6 Trillion AUM (it would be the 3rd largest economy in the world on its own). Federal Pension funds is around $1 Trillion AUM (it would be the 20rd largest economy in the world on its own). And all the 401k funds combined would be $7.4 Trillion (it would be the 3rd largest economy in the world on its own). This is just the US.
- tech_ken 2y ago
  Yeah I saw your other comment and was curious. If it was purely pensioners seeking higher returns wouldn't those be getting circulated back into the economy, driving costs down? It seems counterintuitive to me that there's a big cohort of older US-ians who are profiting more from every sector, but simultaneously not creating massive competitive pressure and driving down prices/up quality. Not doubting that ex. PE acquisitions are driven by pensions, but just curious how the whole dynamic plays out on a macro scale.
  - alephnerd 2y ago
    > getting circulated back into the economy They are, into your Blackrocks and KKRs and other funds who will invest it in the economy to help drive further returns. Some of that money goes into VC which has funded most of our employers on this forum, and some of that has gone into consolidation like mentioned in the article, and others into helping IPOs or currently listed companies. > driving costs down No, because more people are growing old and entering retirement age, so funds need to higher returns to remain solvent. And it's not like you or I want our retirement's living standards to be at poverty level - we'll most likely target to median American living standards. If you target 5-8% YoY returns, A LOT of financial engineering needs to be done.
    - tech_ken 2y ago
      > They are, into your Blackrocks and KKRs and other funds to help drive further returns Gotcha, so point is that people just aren't really spending their retirement savings? And simultaneously the population of money-hoarders is growing as more people enter retirement age?
      - lotsofpulp 2y ago
        Your premise of > If it was purely pensioners seeking higher returns wouldn't those be getting circulated back into the economy, driving costs down? is incorrect in my opinion. Pensioners increase demand for labor, and without a commensure increase in supply of labor (or automation), the prices increase. They are going to spend their money on expensive healthcare, and maybe vacations. And without sufficient automation or labor, society has to take productivity from other sectors and redirect it to healthcare or other things old people buy.
        tech_ken 2y ago
        I guess my thinking was that this had always been the case somewhat, that there was a natural age split between producers and consumers to some extent. Most retired people have at least 1:1 replaced themselves in the workforce, so on a long-time scale I would expect their increased labor demand to be matched by the increased labor supply of subsequent generations
      - alephnerd 2y ago
        > aren't really spending their retirement savings No. They absolutely are! America has a very healthy consumption ratio as a percentage of GDP. > the population of money-hoarders is growing as more people enter retirement age This is the issue. No one wants to retire on $1500/mo in 2055. If you want to retire on $6000/mo in 2055 this means you will need very outsized returns. And there will be more retired people demanding $6000/mo in 2055 than there are retired people today demanding $1500/mo.
  - deleted 2y ago
    [deleted]
- blackeyeblitzar 2y ago
  I’m trying to understand the implication. Is your point that the thing we should be angry about is actually just all of us? Since it is our personal wealth in these funds?
  - alephnerd 2y ago
    > Is your point that the thing we should be angry about is actually just all of us Yep. Either drastically reduce expected returns on your 401k and SSA, or live with the current changes in the world.

alephnerd 2y ago

That financialization is due to pension funds as well. The largest LPs in every single fund is always a Pension Fund. State+Local Pension funds in the US have $6 Trillion AUM (it would be the 3rd largest economy in the world on its own). Federal Pension funds is around $1 Trillion AUM (it would be the 20rd largest economy in the world on its own). And all the 401k funds combined would be $7.4 Trillion (it would be the 3rd largest economy in the world on its own). This is just the US.

tech_ken 2y ago
Yeah I saw your other comment and was curious. If it was purely pensioners seeking higher returns wouldn't those be getting circulated back into the economy, driving costs down? It seems counterintuitive to me that there's a big cohort of older US-ians who are profiting more from every sector, but simultaneously not creating massive competitive pressure and driving down prices/up quality. Not doubting that ex. PE acquisitions are driven by pensions, but just curious how the whole dynamic plays out on a macro scale.
- alephnerd 2y ago
  > getting circulated back into the economy They are, into your Blackrocks and KKRs and other funds who will invest it in the economy to help drive further returns. Some of that money goes into VC which has funded most of our employers on this forum, and some of that has gone into consolidation like mentioned in the article, and others into helping IPOs or currently listed companies. > driving costs down No, because more people are growing old and entering retirement age, so funds need to higher returns to remain solvent. And it's not like you or I want our retirement's living standards to be at poverty level - we'll most likely target to median American living standards. If you target 5-8% YoY returns, A LOT of financial engineering needs to be done.
  - tech_ken 2y ago
    > They are, into your Blackrocks and KKRs and other funds to help drive further returns Gotcha, so point is that people just aren't really spending their retirement savings? And simultaneously the population of money-hoarders is growing as more people enter retirement age?
    - lotsofpulp 2y ago
      Your premise of > If it was purely pensioners seeking higher returns wouldn't those be getting circulated back into the economy, driving costs down? is incorrect in my opinion. Pensioners increase demand for labor, and without a commensure increase in supply of labor (or automation), the prices increase. They are going to spend their money on expensive healthcare, and maybe vacations. And without sufficient automation or labor, society has to take productivity from other sectors and redirect it to healthcare or other things old people buy.
      - tech_ken 2y ago
        I guess my thinking was that this had always been the case somewhat, that there was a natural age split between producers and consumers to some extent. Most retired people have at least 1:1 replaced themselves in the workforce, so on a long-time scale I would expect their increased labor demand to be matched by the increased labor supply of subsequent generations
    - alephnerd 2y ago
      > aren't really spending their retirement savings No. They absolutely are! America has a very healthy consumption ratio as a percentage of GDP. > the population of money-hoarders is growing as more people enter retirement age This is the issue. No one wants to retire on $1500/mo in 2055. If you want to retire on $6000/mo in 2055 this means you will need very outsized returns. And there will be more retired people demanding $6000/mo in 2055 than there are retired people today demanding $1500/mo.
- deleted 2y ago
  [deleted]
blackeyeblitzar 2y ago
I’m trying to understand the implication. Is your point that the thing we should be angry about is actually just all of us? Since it is our personal wealth in these funds?
- alephnerd 2y ago
  > Is your point that the thing we should be angry about is actually just all of us Yep. Either drastically reduce expected returns on your 401k and SSA, or live with the current changes in the world.