17 ms·

People really should look at the work of Gary Stevenson here: https://youtu.be/TflnQb9E6lw https://youtu.be/TflnQb9E6lw The truth is economic growth hasn’t bee

People really should look at the work of Gary Stevenson here: https://youtu.be/TflnQb9E6lw https://youtu.be/TflnQb9E6lw The truth is economic growth hasn’t been occurring in real terms for most people for a long time and the rich have been transferring money from the poor to themselves at a dramatic rate. I’m starting to think the entire system is corrupt and we are headed for a destroyed Europe and a civil war in the US. Maybe I’m very pessimistic but this moment in history feels like the end of the American empire, what comes after this is extremely uncertain but people only seem to demand a fair piece of the wealth after a world war.

mandmandam 2y ago
Dude Gary Stevenson is so good, great to see him shouted out on these conversations. I've long wondered why so many economists get inequality so incredibly wrong without any hint of self-awareness whatsoever, and the answer (in part 3 of that series) was mind-blowing. So, so well put together. I won't give the spoilers here, but do watch it. It's an experience.
lorenzowood 2y ago
+1 for @garyseconomics
simonbarker87 2y ago
Perhaps my friends and I are outliers, none of us inherited any wealth or were given trust funds or lump sums when hitting adulthood but all of us are better off than our parents at the same age and their parents are better off than their parents (with one exception). All either studied hard in school and went on to get a degree or left school at 18 and apprenticed in a trade or got specific qualifications. I read so much about declining wealth and how each generation is worse off that I have to assume I’m in a lucky bubble because it’s not the case for me. None of us are rich but the system appears to be working from a sample of say 30 people aged 25 to 45 from different parts and backgrounds in the UK.
- jibbit 2y ago
  did you buy a house? when?
  - simonbarker87 2y ago
    Yes, 2014 with a 95% mortgage
    - scarby2 2y ago
      is you're birth year 87? In which case you were able to save a deposit within 6 years of graduating? When i was at that stage my outgoings (rent, food, council tax, car, insurance) were probably 90% of my salary.
- pertymcpert 2y ago
  Where are you and how long did it take to save up for a downpayment?
  - simonbarker87 2y ago
    First house was in the North of England, took 4 years to save up enough.
    - thereticent 2y ago
      Are you in the black as a household overall? We aren't yet. Our projection is that we will be in 5-7 years. I'm turning forty soon. Just to give you an anchor point.
      - koolba 2y ago
        What does “in the black” mean at a household level? Total assets minus loan balances being positive?
        2y ago
clumsysmurf 2y ago
It's like AOC'c comments to NPR the other day "Everything feels increasingly like a scam," she said. "Not only are grocery prices going up, but it's like everything has a fee and a surcharge. And I think that anger is put out at government."
- rufus_foreman 2y ago
  AOC needs to read "The Jungle" by Upton Sinclair. There is nothing new under the sun.
  - georgemcbay 2y ago
    Is your argument really that because things were really bad in 1905 we shouldn't complain that after many decades of progress* that we are now rapidly sliding back to things being extremely shitty again? Because that's a really strange way to look at it. (* driven largely by increased regulation, unionization, etc... all the dirty words for modern conservatives)
    - rufus_foreman 2y ago
      >> Is your argument really that because things were really bad in 1905 we shouldn't complain... No that is not my argument really.
      - kubb 2y ago
        You're not really making an argument.
        rufus_foreman 2y ago
        OK. If I'm not making an argument then we both agree that my argument is not that because things were really bad in 1905 we shouldn't complain that after many decades of progress. Thanks for agreeing with me, kubb.
toolz 2y ago
people don't demand wealth equality after a war, they just create massive inflation during the war and solve it by taking everyone's savings after the war...half the countries in europe post ww2 did something akin to replacing the national currency at exchanges rates of like 10:1 in some cases like germany...and germanys post-war inflation solution is hailed as an 'economic miracle' by many history books. Somethings tells me I wouldn't feel too jazzed about taking 90% of my savings, but I would also be resigned to do whatever because war is worse. I get really worried when I see people glamorize equality post-war...post-war times are not good times for the middle class. The most equal wealth humanity has ever had is during caveman times, but that is not the goal. war does not make things better folks, I hope that's not what OP was trying to say, but just in case let's be very very clear about how awful war is for progress and humanity.
- scarby2 2y ago
  post-war reconstruction fervor can inspire wealth creation. This is largely because there are no NIMBYs and eco-warriros sat around saying that the returning troops cant have a place to live and we cant have new infrastructure. If we can get that reconstruction fervor without a war it would solve a lot of our problems.
  - toolz 2y ago
    I just don't believe this, not because I have hard data, but it just doesn't make any sense. Sure, the central banks will do everything they can to ignite the economy and everyone will be generally working their hardest to recover from hard times, but how can an economy that gets completely halted to go full bore in war efforts ever hope to generate the wealth of an economy that isn't halted and has been making incremental improvements, uninterrupted?
    - imtringued 2y ago
      There are two reasons. War destroys existing structures and gives them a chance to evolve again. The economy is growth dependent and can only perform its basic functions under growth, even if that growth is fake. By basic functions I also include all functions that do not depend on growth.
Cornbilly 2y ago
>The truth is economic growth hasn’t been occurring in real terms for most people for a long time and the rich have been transferring money from the poor to themselves at a dramatic rate. The US is setting up to make this worse by cutting services for the average person (like the CFPB and OSHA) and continuing to give tax breaks to the wealthy...again. This is after the same group of people set off sky-rocketing inflation by injection almost a trillion dollars of new money into the economy by way of the PPP program, of course hurting the average person more than their wealthy financial backers.
- matthewdgreen 2y ago
  Medicaid cuts are going to be the real nightmare fuel. People think Medicaid is for the poor (which some Americans are always happy to screw over) but Medicaid is what makes it possible for many working folks’ parents to afford geriatric care. God knows what happens when the GOP succeeds in slashing it.
  - Cornbilly 2y ago
    My guess is that all of this moronic fiscal policy causes a significant recession by the next presidential election.
    - thrance 2y ago
      At this point I've fully converted to accelerationism. I can only hope this recession happens soon and rid us of this circus quickly.
  - rezonant 2y ago
    Medicaid is indeed for persons under the poverty line. Medicare is for people 65 and older. Not that I think they'll stop at Medicaid.
    - matthewdgreen 2y ago
      A huge percentage of Medicaid goes to nursing homes. Medicare does not fully cover the service. You either pay out of pocket or if you’re destitute (as many elderly people are) you get Medicaid to cover the difference.
zusammen 2y ago
You’re probably right. The historical norm is that there are owners and there are workers. We seem to be regressing to that. The difference is that medieval peasants knew their manorial lords had bigger houses and ate more meat, but the visible local differences were small and religion could operate (for worse or better) as a stabilizing force. People tolerated a caste system because they were information poor. There’s no reason today, though, for people to put up with the kind of inequality that is not only extreme and senseless but constantly being shoved in their faces via social media. The only way the rich stay out of the guillotines is by creating new, weird cultural spectacles like litter boxes in schools (not even a real thing) for “furry kids.”
- munificent 2y ago
  They were uninformed then, but people are misinformed now. I think the latter is worse, because it means those in power now have an information lever they can use to manipulate the masses. When there were no broadcast or network media sources, those levers didn't exist and the powerful had fewer tools to control people.
- rixed 2y ago
  Or diverting nascent discontentment toward a manufactured enemy (that does the same in his own fiefdom), 1984's style.
- mandmandam 2y ago
  > The historical norm By which you mean the most recent 1% or so of human history. Before that societies were a lot more egalitarian [0]. 0 - https://medium.com/inside-of-elle-beau/yes-our-ancient-ancestors-were-egalitarian-b32df87bed57 https://medium.com/inside-of-elle-beau/yes-our-ancient-ances...
- api 2y ago
  The new way to sell the lower and middle classes on persistent inequality and a caste system is the culture war. You scare them about culture war bogey men: trans people, immigrants, gays, etc. The deal is "let us rule over you and tax you and charge you rent, and we will marginalize people whose existence disturbs you." A closely related variation is the appeal the current oligarch class is making to men all over the world: let us rule over you and tax you and we will keep women in their place and set things up so you have most of the power in relationships. Men get to rule over women, and in exchange the oligarchs get to rule over men and take most of their productivity in rent and taxes. You're poor, but your wife can't leave.
adverbly 2y ago
> rich have been transferring money from the poor to themselves at a dramatic rate Anyone not familiar with it needs to look up Georgism. This transfer happens primarily via housing costs and rent payments. The stratification of the rich happens via investment opportunities, but the core underlying mechanism for the majority of the population is via housing costs and Ricardo's law of rent.
- hnthrow90348765 2y ago
  Yeah, you can't have an realistic economy that will eventually inflate small, entry-level houses to $1mm+ and college costs to the $100k's but still have jobs paying $10-20/hr (or less). Any kid who does the math will realize how hopeless that economy is. Even if you scrape by, one emergency turns you into a debt slave. Housing needs to stop increasing in price for a number of generations. Surely the rich can find someplace else for their money.
  - jarsin 2y ago
    And then there's Australia.
  - btilly 2y ago
    For housing to stop increasing in price, a lot of it has to be built. The YIMBY movement is pushing in the right direction, but doesn't have the political power that they need. Particularly in California. And, as long as they don't, those with houses will continue to win against those who don't.
    - adverbly 2y ago
      > For housing to stop increasing in price, a lot of it has to be built. False. You can depress the land-based monopolistic component of housing via a land value tax. If speculating on land values stops being a good investment strategy, the price will drop. Many economists/nobel prize winners have been quietly pointing this out for over a century at this point. Here is a pretty good primer: https://www.youtube.com/watch?v=smi_iIoKybg https://www.youtube.com/watch?v=smi_iIoKybg
DarkNova6 2y ago
Money is power, and power needs to be in checks. "Billionare" is not a word which should exist.
- tmn 2y ago
  We are not far off from trillionaires. Saying billionaires shouldn’t exist at this point sounds pretty radical to spin in positively
- cscurmudgeon 2y ago
  An easier solution would be money not being power.
munificent 2y ago
> people only seem to demand a fair piece of the wealth after a world war. I think it's more that war has a tendency to literally destroy capital which is effectively a tax on the rich. When factories get bombed, factory owners lose out more than people who don't own factories. War is horrible but it historically has at least been somewhat of an economic equalizer. One of the real tragedies of the pandemic was that it turned that upside down. The virus didn't touch capital but destroyed humans, and the humans hit the worst were those in "essential" but low-paying jobs who couldn't socially isolate. The effect was that the pandemic increased economic inequality.
- ianferrel 2y ago
  Are you sure it's true that the pandemic increased economic inequality? The humans worst hit were by far the elderly, and the elderly tend to have more assets than the young in industrialized countries. Among working-age people, lower-paid "essential" workers were exposed to more risk, but by a significant margin, old people are the ones who died more.
  - sockbot 2y ago
    Individual old people may have died more, but we are talking about economic inequality. They had huge gains in their wealth due to asset inflation. Working people were by far the worst hit by the devaluation of their labour.
  - Vegenoid 2y ago
    > Are you sure it's true that the pandemic increased economic inequality? Yes, the wide majority of economic data suggests this.
jgord 2y ago
Thomas Piketty lays it all out in "Capital in the 21st Century" Basically he compares two kinds of growth rates : the growth rate of the 'real' economy and the growth rate of wealth itself. You need the wealth rate to be low enough that rich people want to invest some of it in the real world, not leave it in the bank. If you do tax the rich, they do very well and you also have money to pay for things like education, roads, affordable housing, medical services, scientific research .. which benefit all and lubricate the general economic market. If you dont tax the rich, you end up with a gilded age of emperors and kings or a few robber barrons, a small rich coterie around them and the gawping masses of poor eeking it out. Postwar 70s and 80s were a unusual period of relative lower-inequality, in which we had money in the real economy to develop things. Garys Economics made an interesting point that inequality _itself_ is a problem - because the actual real value of the world remaining the same [ goods, energy available, land, workers, housing, technology ], when there is higher inequality, then the poor are losing a proportion of that real wealth to the rich. Extreme inequality itself starves almost all the population of a share of real wealth, for them to use their skills effectively - renovate a house, invest in stocks, get a masters degree, do a garage project, travel, have kids, install solar panels etc.
- mrjin 2y ago
  Even if you try to tax the riches, they have billions of ways to evade it. The tax laws are so complicated for a reason. Here in Australia, there were cases that some individuals that earned just about A$1M pa., and they paid ~A$980K to companies registered in Virgin Islands etc. for managing tax affairs. Such arrangement knocked down their taxable income to ~A$19K, and thus they paid probably a couple of dollars taxes if not not even a dime. Eye-opening, right? But those were not those super rich ones. You can just imagine what those super rich people can do. So the burden of the tax would be on mid-income people. I would expect the same in US.
  - idle_zealot 2y ago
    If there were political will to tax the rich then you'd have to, in addition to changing tax law (obviously), fund IRS investigations to ensure the taxes are actually collected. Throwing up your arms and saying "well we can't tax the rich, they're too powerful and wily, and will easily commit tax fraud to evade those taxes, and in actuality you'll bring in less money" is exactly the weak attitude that stalls efforts to fund vital services. If you think people will commit tax evasion, then put more resources into investigating tax evasion. Historically, money spent recovering taxes has yielded more than the cost of said investigations.
mrjin 2y ago
Nothing lasts forever. The rich get most of the economic growth is inevitable. It's the Matthew effect. In general, the more assets you have, the more passive income you have, which in turn frees people up from worries about making breads for the family, and thus can spend more time on think and do things more important in the long run. Again, that would reinforce their financial status. In the meantime, the poor would have to worry about next meal, and mostly don't have the reserve for investments. Thus, they will most likely struggle to save something, and even if they do manage to save some, an unexpected event can easily wipe it out before it reaches the threshold. If the riches were conscious enough, they would return a fair share to the poor and the eventual crash will be deferred much longer. But you know, everyone wants more money, no exception for the riches. It looks the only thing we learn from the history is that we learn nothing from history. So here we are: the same drama of empires' rise and fall, the only differences are the locations and the actors.
- thrance 2y ago
  Yes, historically the rich lose their heads when they forget that their taxes are used to buy social peace...
  - mollerhoj 2y ago
    Not always, kings and queens still exist. Powerless perhaps, but rich
abeppu 2y ago
> we are headed for a destroyed Europe and a civil war in the US "Capital in the 21st Century" by Piketty does a good job arguing that the historical normal condition is for wealth to concentrate bc the returns on capital are greater than overall economic growth. It's depressing, but creating the kind of world that a lot of us and our parents enjoyed takes special conditions (and political will?) ... but the flip side of this view is that intense inequality can endure for long periods of time and doesn't necessarily lead to political instability.
lr4444lr 2y ago
A Civil War in the USA? Where would the battle lines even be drawn? There is no consensus, and there are hardly even blue or red states anymore beyond 60/40 splits. Even racially we are seeing a lot less polarization.
- piperswe 2y ago
  I think it would be a lot more like the Troubles than the original American Civil War.
- chasd00 2y ago
  I live in Texas and back when the idea of succession was being thrown around I asked my friends if they’d go toe to toe with the US Marines while bombers and drones loitered above their heads. They got very quiet. I don’t think a civil war in the us is possible but I think advertisers taking advantage of the divisiveness to see chaos is likely (and already happening). Edit: I meant “adversaries” instead of “advertisers” but I think advertisers works equally well so left it in.
- chaostheory 2y ago
  If it were to happen, it would also be very skewed towards one side, since only the right believes in arming themselves.
  - alexilliamson 2y ago
    Most likely is that the side with the army and guns turns the blue areas into an occupied police state, and sells it to the constituency as a "civil war", despite it being completely one-sided.
- deleted 2y ago
  [deleted]
- dragonwriter 2y ago
  > A Civil War in the USA? Where would the battle lines even be drawn? Clear, obvious initial battle lines are not a prereauisite for a civil war. The American Civil War, where the conflict was largely motivated by an issue which had a geographical split among subordinate polities was kimd of a special case.
imgabe 2y ago
By definition, the poor don't have money. How are you transferring wealth away from people who don't have any?
- calmworm 2y ago
  Is this a serious reply? The poor may not have much, but every dime they do have is spent on necessities… rent, food, healthcare. So where does that money go? Who are the actual recipients of those dimes?
  - imgabe 2y ago
    [flagged]
    - calmworm 2y ago
      I didn’t attempt to define the rich. Are you attempting to make a “they provide jobs” argument? Because they wouldn’t if they didn’t have to. Jobs are an unwanted byproduct of a successful business.
      - imgabe 2y ago
        Seems like you should just start a successful business then. The business owner provides no value and just gets tons of money for free. Sounds like an amazing deal. Why don’t you take it?
        kubb 2y ago
        I think you would agree that success often depends on access to resources and support system - not everyone starts at the same point. Many who are celebrated as self-made often benefit from inherited advantages, which complicates the meritocracy narrative.
        imgabe 2y ago
        Lots of people have access to resources. Very few of them start successful businesses. Zuckerberg’s parents were dentists. They were well off, sure, but there are hundreds of thousands of dentists in the US, if not millions. Why don’t all of their kids start companies like Facebook?
jltsiren 2y ago
I don't think it's that simple. Things that can be produced with machines rather than labor have become more affordable over time. Electronics, travel, clothes, and even food are cheaper than they used to be relative to wages. Then there are fields like education, childcare, and construction, which have not seen substantial productivity gains. The prices of their outputs can be expected to rise at the same rate as wages. (And then there is healthcare, which is complicated.) But what has actually happened that increased housing costs have eaten the productivity gains for many people. Largely because of deliberate policy. Desirable areas often discourage new construction. When new construction is allowed, they prioritize single-family homes. And if really pressed, rental complexes. As a rule of thumb, if you can afford to rent, you can afford to buy. If you expect to stay longer than a couple of years, you should buy. But in many places, if you can't afford a large home, you have to rent a small apartment. Because there is a shortage of small condos to buy. If the units available for purchase grow larger while the price per square foot grows at the same rate as wages, housing becomes less affordable.
- mjevans 2y ago
  In many of the denser population areas of the US _generations_ 30, 50, maybe more YEARS worth of insufficient building has left a completely broken situation of stagnation relative to population.
cscurmudgeon 2y ago
The same Gary Stevenson whose memoir claims Financial Times debunked? https://archive.is/DguLm https://archive.is/DguLm
- cmcaleer 2y ago
  His whole narrative he crafted was really unbelievable. I watched a video of him explaining his story, expecting to hear some story of finding consistent signals that stayed alive for a long time or finding crafty wording in bond contracts, but the whole story was that he took a punt on the GFC being worse than the market expected, and he made low 8 figures. And somehow, because of this, by some measure, he was the best trader in the world. I too was the best trader in the world when I got some skittles from my friend in the playground for free and sold them to another kid for a dollar making an infinity percent profit, but I didn’t feel the need to make a YouTube career out of it.
  - blitzar 2y ago
    Grifters gunna grift. He is just another lippy barrow boy that claims to be the "best trader in the world" - actually surprisingly common in London bank dealing rooms. The oddity is that it has taken so long for them to find YouTube.
  - wnolens 2y ago
    I too was intrigued to find him but it took 10mins of watching a few videos to be left feeling duped. Felt like he's working out his problems on YouTube rather than therapy (after first trying to in a trading career). I really dislike his (and most progressive's) narrative that others are distinctly out to get you. It shrouds the real complex machinery, and papers it over with intent. Which impedes meaningful progress i think.
    - evidencetamper 2y ago
      I find it surprising that someone who worked inside a banking corporation, and has seen first hand that nothing ever goes according to plan, is able to believe that somehow the machinery is perfectly orchestrating a privilege loop.
_factor 2y ago
I think we’re seeing his spilt economic system coming into play with computer hardware. Less and less B2C sales over time. It’s just not as profitable to sell to poor people.
- UltraSane 2y ago
  In 1995 my parents, both factory workers, bought me a $2500 Packard Bell PC with 100MHz Pentium, 8MB of RAM, and a 1GB hard drive. Adjusted for inflation that would be a $5,283.95 computer today.
  - chasd00 2y ago
    I remember that exact model. Computers use to be very expensive. You can pick up a brand new powerful laptop to build a career on for $300 at Target. (I’m in the US I know many commenters here are not)
sdsd 2y ago
Before the election, everyone on HN was telling me that we live in the best economy ever and we're in a "vibes recession" where ignorant Americans can't understand how impossibly good things are. Now that it's less politically salient, everyone can just say true things. I wish every subject were like this all the time.
heresie-dabord 2y ago
> the entire system is corrupt The universal dismay of humanity is that we actually built and held onto Democracy for a time. Not perfectly, but better than suffering any dictatorship by "royalty" and oligarchs. The transnational petroleum business was never going to go quietly into energy decline. Its component interests are flexing their influence.
jgalt212 2y ago
> The truth is economic growth hasn’t been occurring in real terms for most people for a long time and the rich have been transferring money from the poor to themselves at a dramatic rate. It blows my mind why pension funds continue to invest any money at all in PE and Hedge Funds. It's a straight up wealth transfer from the working class to the investor class. States should pass max fee laws for their own pension fund allocations.
- rayrey 2y ago
  Darn pensioners are living too long driving the search for alpha
westurner 2y ago
From https://news.ycombinator.com/item?id=43140675 https://news.ycombinator.com/item?id=43140675 : > Gini Index: https://en.wikipedia.org/wiki/Gini_coefficient https://en.wikipedia.org/wiki/Gini_coefficient Find 1980 on this chart of wealth inequality in the US: > GINI Index for the United States: https://fred.stlouisfed.org/series/SIPOVGINIUSA https://fred.stlouisfed.org/series/SIPOVGINIUSA Are there additional measures of wealth inequality?
- westurner 2y ago
  Income distribution: https://en.wikipedia.org/wiki/Income_distribution https://en.wikipedia.org/wiki/Income_distribution World Inequality Database: https://en.wikipedia.org/wiki/World_Inequality_Database https://en.wikipedia.org/wiki/World_Inequality_Database USA!: https://wid.world/country/usa/ https://wid.world/country/usa/ Economic inequality: https://en.wikipedia.org/wiki/Economic_inequality https://en.wikipedia.org/wiki/Economic_inequality : > Economic inequality is an umbrella term for a) income inequality or distribution of income (how the total sum of money paid to people is distributed among them), b) wealth inequality or distribution of wealth (how the total sum of wealth owned by people is distributed among the owners), and c) consumption inequality (how the total sum of money spent by people is distributed among the spenders).
gchamonlive 2y ago
We need a way to both have the benefits of modern social organization without supressing the means to fall back to simpler but more resilient and decentralised societies which would come together to maintain the form of nations in times of crisis, which inevitably come again and again. What we have is a social crisis that billionaire class used to exploit the nation for classist gains, with the collateral effect of damaging the nations memory, identity and values.
wslh 2y ago
While we cannot predict the future, I found the movie Civil War (2024) really great and original.
onlyrealcuzzo 2y ago
> the rich have been transferring money from the poor to themselves at a dramatic rate. By definition, the poor have almost no money to transfer. Wouldn't you have to transfer from the middle class - which is shrinking in relative terms? The poor have never had anything and still largely have nothing. It is literally in the definition. I don't see how it's possible to enrich yourself (when the amount you need to grow by even small percentages is enormous) from a class with nothing to take.
- atomicnumber3 2y ago
  The poor have no money individually, but in aggregate they have some. $1 from a million poor people makes one millionaire. IMO the main thing they extract from the working poor is time - what they're stealing is the excess value between their labor and the value is creates, and technology has made it easy to do this at a massive scale. So it's less $1 from each person, it's 8 hours per day from a million people makes 1 person a billionaire.
  - onlyrealcuzzo 2y ago
    You don't get $400B by stealing pennies from poor people. For one, there aren't 100m poor people in the US. Not even close.
    - Supermancho 2y ago
      Somewhere around 45m in poverty in the US (2023), already counting around 1m homeless.
      - onlyrealcuzzo 2y ago
        First - "poverty" is up to $14k per year. Many of those people are "poor" - but probably not the majority, and definitely not even close to all. Second, billionaires have almost $7T in wealth - the top .1% are at about ~$20T. They didn't get any meaningful percentage of that by taking pennies off of 45M. You'd need to take thousands. And they just don't have it. That's almost $450k per "poor" person. That's more than the median HH wealth in the US. If you look at the "actual poor" - you're likely looking >$1M per person. You simply cannot "steal" that from the "poor" (who have almost nothing to steal, by definition). Even if you amortize that over decades - it is just not how it happened.
discodonkey 2y ago
>economic growth hasn’t been occurring in real terms for most people for a long time This is just not true. At least in the U.S., people of all income tiers have seen their incomes grow[0] while their working hours shrunk[1]. Inequality is a problem in itself, but equating unequal gains with "transferring money from the poor" seems like bad faith. [0] - https://www.pewresearch.org/race-and-ethnicity/2024/05/31/the-state-of-the-american-middle-class/re_2024-05-31_american-middle-class_0-02/ https://www.pewresearch.org/race-and-ethnicity/2024/05/31/th... [1] - https://ourworldindata.org/grapher/annual-working-hours-per-worker https://ourworldindata.org/grapher/annual-working-hours-per-...
- dleeftink 2y ago
  Two things can be true at once; growing income per working hour has not resulted in less income inequality.[0] [0]: https://ourworldindata.org/explorers/inequality?tab=chart&Data=World+Inequality+Database+%28Incomes+before+tax%29&Indicator=Gini+coefficient https://ourworldindata.org/explorers/inequality?tab=chart&Da...
  - discodonkey 2y ago
    True. Income inequality increased. The person I responded to suggested that only the rich saw income growth, and that they were achieving this by taking from the poor, which is wrong.
    - PaulDavisThe1st 2y ago
      This was true until quite recently (within the last 5-6 years). Income growth in real dollars had been stagnant since the late 1970s for most deciles.
  - renewiltord 2y ago
    There's no recipe for happiness that primarily involves looking in the other guy's bowl. Even if you have everything to eat, you will still need unhappy if he has more. No wonder you guys constantly post about unhappiness. You are obsessed with keeping up with the Joneses. Much more joy if you instead care only about absolute living standards. My life has improved a lot and if Jeff Bezos appears before me and will make me 10x as wealthy if he is 100x I will gladly choose that. We live as long as kings, with greater variety of food and drink, greater variety of entertainment, and big comfortable houses. I'd take this trade 10/10 times.
deleted 2y ago
[deleted]
collingreen 2y ago
We've had terrible times without completely failing before but I agree with some of your sentiment. That isn't much solace at all but maybe it won't be the end of the entire experiment? The extreme wealth gap and corruption paired with the loss of virtue (integrity seems to hold very little social value these days) seems like a bad mix to me if you like stability, let alone shared prosperity. Moreover, the response to the United healthcare assassination showed us that a bunch of folks don't think there is justice left in the system. The reactions to covid were a stark example of how a huge swath of people not only won't lift a finger to help their fellow citizens but will actively oppose it and be offended by the suggestion itself. This year the purges of non-straights or non-whites from all positions (and even from some records!) began and we don't yet know where that will end. Politically we've spent this year alienating our allies and generally acting like bullies. I'm worried we'll be in a war in 3.5 years (real or manufactured) and "need" to delay the next election for a while, "in the name of national security".
pmarreck 2y ago
> a fair piece Who defines what is “fair”? If it’s people, people are imperfect AF and centralized planning economies tend to fail spectacularly. I would agree that a system can be unfair, but what changes to the system are sustainable while still incentivizing risk-taking and achievement?
- eddd-ddde 2y ago
  Raise taxes to 80% after making more than a million a year? That's more than enough of a ceiling to keep incentives for 99% of the population. And any taxed income comes back to the masses anyway. Of course this depends on having good government programs so that the money is not wasted or stolen.
- arp242 2y ago
  No one mentioned centralised planning until you brought it up yourself. This is just boring red-baiting.
  - pmarreck 2y ago
    No. If you bring up what is “fair” in a given economic system, there are only 2 options: Prices set by the system/economy, or prices set by people. Why should I leave out the latter? I’m not trying to red-bait anyone since even in the US capitalist system, prices are sometimes set by humans (see: helium!)
WalterBright 2y ago
> the rich have been transferring money from the poor to themselves at a dramatic rate. 1. The poor don't have money to be transferred to the rich 2. The top 1% pay 40% of the Federal income taxes 3. Medicare, Medicaid, Education and Social Security are wealth transfers to the poor The wealthy businessmen created their wealth, it was not transferred to them.
- ProllyInfamous 2y ago
  Where is all this productivity [0] going, then, if not to wages? Is it just "disappearing" [unlikely, IMHO]? [0] researchgate.net/figure/US-Productivity-and-Hourly-Compensation-Source-Bureau-of-Labor-Statistics_fig1_270640833
  - WalterBright 2y ago
    It goes to the government. The government consumes something like 24% of the GDP.
    - Straw 2y ago
      That's federal only!
    - consteval 2y ago
      … and then 40% of the GDP comes from the public sector. Centralized systems are more efficient by definition, it’s why the public sector can seemingly magically multiply money where the private sector cannot.
  - Straw 2y ago
    Wages don't count benefits, total compensation has risen faster than wages.
- deleted 2y ago
  [deleted]
deadbabe 2y ago
I think there’s another possibility: people eventually accept inequality and lower their expectations and ambitions for life. A lot of energy is wasted on trying to make everyone equal when the scales have become too tipped. At some point they’re simply isn’t enough activation energy left to right the ship. In the past (centuries ago), it seems like people simply accepted other classes were better and they could never be their equals. That’s how you end up with royal families, etc. So in the future, people will simply work to the bone, find whatever pleasures they can when possible, and maybe just not wake up ever again on some morning before their shift starts. They will live in small simple residential units mostly for sleep, eating, bathing and watching some content on a screen. The rich will segregate themselves away to enjoy a finer life somewhere that they can be shielded from the plight of the poor.
theGnuMe 2y ago
Or we could idk tax billionaires.
stego-tech 2y ago
Cassandra here. This is what I've been struggling to articulate more succinctly since my college days, when I started really getting into macro-level systems analysis and long-term planning. Much of the Western world ceded pieces of its sovereignty to external entities without regard to the long-term consequences of said actions. Stuff like outsourcing domestic labor abroad, to countries like China (refining, manufacturing) or India (knowledge work) means those countries now have an outsized influence on domestic affairs that aren't easily clawed back. Ceding sovereignty of infrastructure (be it data centers, roads, hospitals, schools, etc) to private enterprise means those entities have dictatorial say over how those pieces of infrastructure are operated, maintained, and replaced. In essence, the limited sovereignty the West retained was broadly centered around consumption and wealth, opposing ends of a larger economic system that are now grossly out of balance. It's at the point where there is no singular "silver bullet" to fix it, either. Taxing the wealthy will help, but absent meaningful reshoring of industry and jobs domestically, it won't actually right the economic ship. It's also not merely an American problem, but one largely affecting the neoliberal West that spent decades outsourcing, offshoring, contracting-out, and generally doing everything possible to min-max cost vs returns, quarter after quarter. I think the only country not substantially affected might be Germany, but there's still talk of automakers shuttering factories there in favor of using Chinese labor and shipping the vehicles back to save on costs. We have created a global economy but without global regulation, which in turn has resulted in artificially depressed consumption prices (relative to actual local costs) and artificially increased wealth extraction through rampant exploitation. Absent a singular global currency and standard of living (which, let's be real is centuries away at the earliest), the only practical solution is a domestic rebuild of labor markets, supply chains, and industries, with a goal of refocusing national exports on what a country uniquely excels at rather than simply offshoring to whichever country has the optimal labor pool and exchange rate relative to your specific industry. It's a hot mess to be sure, but not unsolvable. Reshoring industry gives us an opportunity to re-evaluate supply chains and resource management with a focus on closed-loops and renewables. Reshoring work will boost wages and living standards, which in turn will boost birth rates and economic growth. Diversifying the economy back into regions and localities will promote specialization and innovation, rather than the fad-copying of today. There's a lot of good to be had in facing the problem head-on rather than giving into fascist ideology and demagogues promoting "one easy trick" to fixing things, but all of it involves hard, honest work, which some folks will naturally be hostile toward. Either way, we'll all find out together, I guess.
nickpsecurity 2y ago
Corrupt and fair are key points. I believe it comes from a change in worldview. The fundamentals used to be closer to the Bible's. They shifted to subjectivity, nationalism, authoritarianism (unchecked), and capitalism. Then, new groups around 1900 shifted to more subjectivity and atheism. Add pleasure-driven culture from the sequel revolution onward. Then, evolution, intersectionality, and feelings over facts. As I look at these, I see a dangerous combo of not seeing individuals with inherent worth, thinking people are like animals, believe/do whatever without long term consequences, and do what maximizes selfish gain, money or pleasure. Our problems are inevitable under that mindset. Let's look at specific examples in your post. The rich should take more wealth for themselves since that's maximizing selfish gain. The poor (or scheming) should also try to take their wealth by theft or welfare. If people get hurt, it's an unavoidable problem in a workd of conflict where the fittest survive. No objective morals even exist. Fortunately, we're seeing a growing rejection of those values leading to life transformations. That's a huge part of Trump getting elected since his policies are appealing to such people. The Spirit of Christ is also causing revivals across the country with thousands to tens of thousands gathered trying to change at the core. Inner change leads to outward effects. Right now, our college students are taught conflict theory, favoring specific geoups, subjectivism, work against our natural design no matter the losses, and pleasure/money/intellect are god. What will happen when college students instead are taught objective truth, doing what's right above all, building on our natural design, loving others with sacrifices made, helping those in need onto their feet, unity despite our differences, and building companies that are profitable within those virtues? I think the results will be beautiful. I've already seen places like that on a small scale. For big ones, Chic-fil-A and Hobby Lobby are pretty close. Part of God's design is some people will be rich and eventually generous. So, that won't change in most places.
TheSpiceIsLife 2y ago
> the rich have been transferring money from the poor to themselves at a dramatic rate. How does this work? Where do the poor get wealth, on a continual basis, for the rich to take? If the poor have so little, and have had their fraction of the wealth taken by the rich for three decades, assuming things have got worse for the poor since the end of the eighties, where’s all this wealth coming from? I’m not singling out here, this is a question for the general audience.
m3kw9 2y ago
Is not that they are seeking a transfer, but the incentives and system work is that it eventually converges to “poor get poorer and the money is transferred to the rich” as the most efficient way big biz makes money. What I like about NFL, NBA, MLB etc is that they will tweek the rules to make things competitive so the rich don’t get too rich and win it all too much. We should have a “DOGE” system for rule tweeting to even things out once in a while
rhynlee 2y ago
Seconding the Gary Stevenson rec, he frames in a very digestible way the flow of income from people working day to day being spent on modern day lifestyle (and necessities) to the people who own the assets modern lifestyles are dependent on and how this formulation of an economy may end up becoming increasingly unsustainable.
gunian 2y ago
it's always hilarious to see people in the west wake up to the oligarchy no amount of graffiti and stickers will change what the numbers have always said since the days of theocracy and the deluge luigi sadly is not a revolutionary but a substitute for the car crash in Oklahoma :)
squigz 2y ago
Why is the only outcome 'a destroyed Europe and civil war in the US'? This sort of doomer thinking is more like to bring us to that point than anything else, it seems to me. Maybe an alternative is we'll figure out how to change and fix these corrupt systems as more and more people wake up to how bad they really are.
dostick 2y ago
Isn’t Marx, when he documented Capitalism, predicted its collapse? Capitalism has been tried in 100 countries over the past 100 years. Not a single country has reported a harmonious society without suffering and inequality. Failure over and over. But no alternative is being seriously researched. I’m not talking about socialism/communism. A new system designed according to current knowledge in sociology, anthropology, and human biology. Capitalism wasn’t scientifically researched nor updated according to science. In humans, it amplifies greed and materialism. And democracy that we use now wasn’t seriously reviewed and updated according to modern science. The democracy we use now is the system the ancient Greeks came up with to replace feudalism. And all they knew back then was feudalism, so they replaced kings with electable kings. And we use that primitive cavemen level system now! It’s so bad you wouldn’t even use it in your Civilisation type game unless you expand it with 100s of in-game regulations, which we are unable to do upon real world.
Projectiboga 2y ago
A simple way to view this is to look at each economic quintile's "income multiplier", the lower ones spend their money quickly and often locally. Whereas the wealthy spend slowly and often within their own class on possessions or much later overseas. Adam Smith and John Stewart Mill both advocated for a steeply progressive income tax and strict controls on Banks and Corporations. The wealthy can wait to spend while many others can't. I learned about this during my Economics Major. Estimating the Marginal Propensity to Consume Using the Distributions of Income, Consumption and Wealth Jonathan Fisher, David Johnson, Timothy Smeeding, and Jeffrey Thompson From https://www.bostonfed.org/-/media/Documents/Workingpapers/PDF/2019/wp1904.pdf https://www.bostonfed.org/-/media/Documents/Workingpapers/PD... Recent studies of economic inequality almost always separately examine income, consumption, and wealth inequality and, hence, miss the important synergy among the three measures explicit in the life-cycle budget constraint. Using Panel Study of Income Dynamics data from 1999 through 2013, we examine whether these changes are more dramatic at higher or lower levels of wealth and find that the marginal propensity to consume is lower at higher wealth quintiles. This suggests that low-wealth households cannot smooth consumption as much as other households do, which further implies that increasing wealth inequality likely reduces aggregate consumption and limits economic growth.

mandmandam 2y ago

Dude Gary Stevenson is so good, great to see him shouted out on these conversations. I've long wondered why so many economists get inequality so incredibly wrong without any hint of self-awareness whatsoever, and the answer (in part 3 of that series) was mind-blowing. So, so well put together. I won't give the spoilers here, but do watch it. It's an experience.

lorenzowood 2y ago

+1 for @garyseconomics

simonbarker87 2y ago

Perhaps my friends and I are outliers, none of us inherited any wealth or were given trust funds or lump sums when hitting adulthood but all of us are better off than our parents at the same age and their parents are better off than their parents (with one exception). All either studied hard in school and went on to get a degree or left school at 18 and apprenticed in a trade or got specific qualifications. I read so much about declining wealth and how each generation is worse off that I have to assume I’m in a lucky bubble because it’s not the case for me. None of us are rich but the system appears to be working from a sample of say 30 people aged 25 to 45 from different parts and backgrounds in the UK.

jibbit 2y ago
did you buy a house? when?
- simonbarker87 2y ago
  Yes, 2014 with a 95% mortgage
  - scarby2 2y ago
    is you're birth year 87? In which case you were able to save a deposit within 6 years of graduating? When i was at that stage my outgoings (rent, food, council tax, car, insurance) were probably 90% of my salary.
pertymcpert 2y ago
Where are you and how long did it take to save up for a downpayment?
- simonbarker87 2y ago
  First house was in the North of England, took 4 years to save up enough.
  - thereticent 2y ago
    Are you in the black as a household overall? We aren't yet. Our projection is that we will be in 5-7 years. I'm turning forty soon. Just to give you an anchor point.
    - koolba 2y ago
      What does “in the black” mean at a household level? Total assets minus loan balances being positive?
      - 2y ago

clumsysmurf 2y ago

It's like AOC'c comments to NPR the other day "Everything feels increasingly like a scam," she said. "Not only are grocery prices going up, but it's like everything has a fee and a surcharge. And I think that anger is put out at government."

rufus_foreman 2y ago
AOC needs to read "The Jungle" by Upton Sinclair. There is nothing new under the sun.
- georgemcbay 2y ago
  Is your argument really that because things were really bad in 1905 we shouldn't complain that after many decades of progress* that we are now rapidly sliding back to things being extremely shitty again? Because that's a really strange way to look at it. (* driven largely by increased regulation, unionization, etc... all the dirty words for modern conservatives)
  - rufus_foreman 2y ago
    >> Is your argument really that because things were really bad in 1905 we shouldn't complain... No that is not my argument really.
    - kubb 2y ago
      You're not really making an argument.
      - rufus_foreman 2y ago
        OK. If I'm not making an argument then we both agree that my argument is not that because things were really bad in 1905 we shouldn't complain that after many decades of progress. Thanks for agreeing with me, kubb.

toolz 2y ago

people don't demand wealth equality after a war, they just create massive inflation during the war and solve it by taking everyone's savings after the war...half the countries in europe post ww2 did something akin to replacing the national currency at exchanges rates of like 10:1 in some cases like germany...and germanys post-war inflation solution is hailed as an 'economic miracle' by many history books. Somethings tells me I wouldn't feel too jazzed about taking 90% of my savings, but I would also be resigned to do whatever because war is worse. I get really worried when I see people glamorize equality post-war...post-war times are not good times for the middle class. The most equal wealth humanity has ever had is during caveman times, but that is not the goal. war does not make things better folks, I hope that's not what OP was trying to say, but just in case let's be very very clear about how awful war is for progress and humanity.

scarby2 2y ago
post-war reconstruction fervor can inspire wealth creation. This is largely because there are no NIMBYs and eco-warriros sat around saying that the returning troops cant have a place to live and we cant have new infrastructure. If we can get that reconstruction fervor without a war it would solve a lot of our problems.
- toolz 2y ago
  I just don't believe this, not because I have hard data, but it just doesn't make any sense. Sure, the central banks will do everything they can to ignite the economy and everyone will be generally working their hardest to recover from hard times, but how can an economy that gets completely halted to go full bore in war efforts ever hope to generate the wealth of an economy that isn't halted and has been making incremental improvements, uninterrupted?
  - imtringued 2y ago
    There are two reasons. War destroys existing structures and gives them a chance to evolve again. The economy is growth dependent and can only perform its basic functions under growth, even if that growth is fake. By basic functions I also include all functions that do not depend on growth.

Cornbilly 2y ago

>The truth is economic growth hasn’t been occurring in real terms for most people for a long time and the rich have been transferring money from the poor to themselves at a dramatic rate. The US is setting up to make this worse by cutting services for the average person (like the CFPB and OSHA) and continuing to give tax breaks to the wealthy...again. This is after the same group of people set off sky-rocketing inflation by injection almost a trillion dollars of new money into the economy by way of the PPP program, of course hurting the average person more than their wealthy financial backers.

matthewdgreen 2y ago
Medicaid cuts are going to be the real nightmare fuel. People think Medicaid is for the poor (which some Americans are always happy to screw over) but Medicaid is what makes it possible for many working folks’ parents to afford geriatric care. God knows what happens when the GOP succeeds in slashing it.
- Cornbilly 2y ago
  My guess is that all of this moronic fiscal policy causes a significant recession by the next presidential election.
  - thrance 2y ago
    At this point I've fully converted to accelerationism. I can only hope this recession happens soon and rid us of this circus quickly.
- rezonant 2y ago
  Medicaid is indeed for persons under the poverty line. Medicare is for people 65 and older. Not that I think they'll stop at Medicaid.
  - matthewdgreen 2y ago
    A huge percentage of Medicaid goes to nursing homes. Medicare does not fully cover the service. You either pay out of pocket or if you’re destitute (as many elderly people are) you get Medicaid to cover the difference.

zusammen 2y ago

You’re probably right. The historical norm is that there are owners and there are workers. We seem to be regressing to that. The difference is that medieval peasants knew their manorial lords had bigger houses and ate more meat, but the visible local differences were small and religion could operate (for worse or better) as a stabilizing force. People tolerated a caste system because they were information poor. There’s no reason today, though, for people to put up with the kind of inequality that is not only extreme and senseless but constantly being shoved in their faces via social media. The only way the rich stay out of the guillotines is by creating new, weird cultural spectacles like litter boxes in schools (not even a real thing) for “furry kids.”

munificent 2y ago
They were uninformed then, but people are misinformed now. I think the latter is worse, because it means those in power now have an information lever they can use to manipulate the masses. When there were no broadcast or network media sources, those levers didn't exist and the powerful had fewer tools to control people.
rixed 2y ago
Or diverting nascent discontentment toward a manufactured enemy (that does the same in his own fiefdom), 1984's style.
mandmandam 2y ago
> The historical norm By which you mean the most recent 1% or so of human history. Before that societies were a lot more egalitarian [0]. 0 - https://medium.com/inside-of-elle-beau/yes-our-ancient-ancestors-were-egalitarian-b32df87bed57 https://medium.com/inside-of-elle-beau/yes-our-ancient-ances...
api 2y ago
The new way to sell the lower and middle classes on persistent inequality and a caste system is the culture war. You scare them about culture war bogey men: trans people, immigrants, gays, etc. The deal is "let us rule over you and tax you and charge you rent, and we will marginalize people whose existence disturbs you." A closely related variation is the appeal the current oligarch class is making to men all over the world: let us rule over you and tax you and we will keep women in their place and set things up so you have most of the power in relationships. Men get to rule over women, and in exchange the oligarchs get to rule over men and take most of their productivity in rent and taxes. You're poor, but your wife can't leave.

adverbly 2y ago

> rich have been transferring money from the poor to themselves at a dramatic rate Anyone not familiar with it needs to look up Georgism. This transfer happens primarily via housing costs and rent payments. The stratification of the rich happens via investment opportunities, but the core underlying mechanism for the majority of the population is via housing costs and Ricardo's law of rent.

hnthrow90348765 2y ago
Yeah, you can't have an realistic economy that will eventually inflate small, entry-level houses to $1mm+ and college costs to the $100k's but still have jobs paying $10-20/hr (or less). Any kid who does the math will realize how hopeless that economy is. Even if you scrape by, one emergency turns you into a debt slave. Housing needs to stop increasing in price for a number of generations. Surely the rich can find someplace else for their money.
- jarsin 2y ago
  And then there's Australia.
- btilly 2y ago
  For housing to stop increasing in price, a lot of it has to be built. The YIMBY movement is pushing in the right direction, but doesn't have the political power that they need. Particularly in California. And, as long as they don't, those with houses will continue to win against those who don't.
  - adverbly 2y ago
    > For housing to stop increasing in price, a lot of it has to be built. False. You can depress the land-based monopolistic component of housing via a land value tax. If speculating on land values stops being a good investment strategy, the price will drop. Many economists/nobel prize winners have been quietly pointing this out for over a century at this point. Here is a pretty good primer: https://www.youtube.com/watch?v=smi_iIoKybg https://www.youtube.com/watch?v=smi_iIoKybg

DarkNova6 2y ago

Money is power, and power needs to be in checks. "Billionare" is not a word which should exist.

tmn 2y ago
We are not far off from trillionaires. Saying billionaires shouldn’t exist at this point sounds pretty radical to spin in positively
cscurmudgeon 2y ago
An easier solution would be money not being power.

munificent 2y ago

> people only seem to demand a fair piece of the wealth after a world war. I think it's more that war has a tendency to literally destroy capital which is effectively a tax on the rich. When factories get bombed, factory owners lose out more than people who don't own factories. War is horrible but it historically has at least been somewhat of an economic equalizer. One of the real tragedies of the pandemic was that it turned that upside down. The virus didn't touch capital but destroyed humans, and the humans hit the worst were those in "essential" but low-paying jobs who couldn't socially isolate. The effect was that the pandemic increased economic inequality.

ianferrel 2y ago
Are you sure it's true that the pandemic increased economic inequality? The humans worst hit were by far the elderly, and the elderly tend to have more assets than the young in industrialized countries. Among working-age people, lower-paid "essential" workers were exposed to more risk, but by a significant margin, old people are the ones who died more.
- sockbot 2y ago
  Individual old people may have died more, but we are talking about economic inequality. They had huge gains in their wealth due to asset inflation. Working people were by far the worst hit by the devaluation of their labour.
- Vegenoid 2y ago
  > Are you sure it's true that the pandemic increased economic inequality? Yes, the wide majority of economic data suggests this.

jgord 2y ago

Thomas Piketty lays it all out in "Capital in the 21st Century" Basically he compares two kinds of growth rates : the growth rate of the 'real' economy and the growth rate of wealth itself. You need the wealth rate to be low enough that rich people want to invest some of it in the real world, not leave it in the bank. If you do tax the rich, they do very well and you also have money to pay for things like education, roads, affordable housing, medical services, scientific research .. which benefit all and lubricate the general economic market. If you dont tax the rich, you end up with a gilded age of emperors and kings or a few robber barrons, a small rich coterie around them and the gawping masses of poor eeking it out. Postwar 70s and 80s were a unusual period of relative lower-inequality, in which we had money in the real economy to develop things. Garys Economics made an interesting point that inequality _itself_ is a problem - because the actual real value of the world remaining the same [ goods, energy available, land, workers, housing, technology ], when there is higher inequality, then the poor are losing a proportion of that real wealth to the rich. Extreme inequality itself starves almost all the population of a share of real wealth, for them to use their skills effectively - renovate a house, invest in stocks, get a masters degree, do a garage project, travel, have kids, install solar panels etc.

mrjin 2y ago
Even if you try to tax the riches, they have billions of ways to evade it. The tax laws are so complicated for a reason. Here in Australia, there were cases that some individuals that earned just about A$1M pa., and they paid ~A$980K to companies registered in Virgin Islands etc. for managing tax affairs. Such arrangement knocked down their taxable income to ~A$19K, and thus they paid probably a couple of dollars taxes if not not even a dime. Eye-opening, right? But those were not those super rich ones. You can just imagine what those super rich people can do. So the burden of the tax would be on mid-income people. I would expect the same in US.
- idle_zealot 2y ago
  If there were political will to tax the rich then you'd have to, in addition to changing tax law (obviously), fund IRS investigations to ensure the taxes are actually collected. Throwing up your arms and saying "well we can't tax the rich, they're too powerful and wily, and will easily commit tax fraud to evade those taxes, and in actuality you'll bring in less money" is exactly the weak attitude that stalls efforts to fund vital services. If you think people will commit tax evasion, then put more resources into investigating tax evasion. Historically, money spent recovering taxes has yielded more than the cost of said investigations.

mrjin 2y ago

Nothing lasts forever. The rich get most of the economic growth is inevitable. It's the Matthew effect. In general, the more assets you have, the more passive income you have, which in turn frees people up from worries about making breads for the family, and thus can spend more time on think and do things more important in the long run. Again, that would reinforce their financial status. In the meantime, the poor would have to worry about next meal, and mostly don't have the reserve for investments. Thus, they will most likely struggle to save something, and even if they do manage to save some, an unexpected event can easily wipe it out before it reaches the threshold. If the riches were conscious enough, they would return a fair share to the poor and the eventual crash will be deferred much longer. But you know, everyone wants more money, no exception for the riches. It looks the only thing we learn from the history is that we learn nothing from history. So here we are: the same drama of empires' rise and fall, the only differences are the locations and the actors.

thrance 2y ago
Yes, historically the rich lose their heads when they forget that their taxes are used to buy social peace...
- mollerhoj 2y ago
  Not always, kings and queens still exist. Powerless perhaps, but rich

abeppu 2y ago

> we are headed for a destroyed Europe and a civil war in the US "Capital in the 21st Century" by Piketty does a good job arguing that the historical normal condition is for wealth to concentrate bc the returns on capital are greater than overall economic growth. It's depressing, but creating the kind of world that a lot of us and our parents enjoyed takes special conditions (and political will?) ... but the flip side of this view is that intense inequality can endure for long periods of time and doesn't necessarily lead to political instability.

lr4444lr 2y ago

A Civil War in the USA? Where would the battle lines even be drawn? There is no consensus, and there are hardly even blue or red states anymore beyond 60/40 splits. Even racially we are seeing a lot less polarization.

piperswe 2y ago
I think it would be a lot more like the Troubles than the original American Civil War.
chasd00 2y ago
I live in Texas and back when the idea of succession was being thrown around I asked my friends if they’d go toe to toe with the US Marines while bombers and drones loitered above their heads. They got very quiet. I don’t think a civil war in the us is possible but I think advertisers taking advantage of the divisiveness to see chaos is likely (and already happening). Edit: I meant “adversaries” instead of “advertisers” but I think advertisers works equally well so left it in.
chaostheory 2y ago
If it were to happen, it would also be very skewed towards one side, since only the right believes in arming themselves.
- alexilliamson 2y ago
  Most likely is that the side with the army and guns turns the blue areas into an occupied police state, and sells it to the constituency as a "civil war", despite it being completely one-sided.
deleted 2y ago
[deleted]
dragonwriter 2y ago
> A Civil War in the USA? Where would the battle lines even be drawn? Clear, obvious initial battle lines are not a prereauisite for a civil war. The American Civil War, where the conflict was largely motivated by an issue which had a geographical split among subordinate polities was kimd of a special case.

imgabe 2y ago

By definition, the poor don't have money. How are you transferring wealth away from people who don't have any?

calmworm 2y ago
Is this a serious reply? The poor may not have much, but every dime they do have is spent on necessities… rent, food, healthcare. So where does that money go? Who are the actual recipients of those dimes?
- imgabe 2y ago
  [flagged]
  - calmworm 2y ago
    I didn’t attempt to define the rich. Are you attempting to make a “they provide jobs” argument? Because they wouldn’t if they didn’t have to. Jobs are an unwanted byproduct of a successful business.
    - imgabe 2y ago
      Seems like you should just start a successful business then. The business owner provides no value and just gets tons of money for free. Sounds like an amazing deal. Why don’t you take it?
      - kubb 2y ago
        I think you would agree that success often depends on access to resources and support system - not everyone starts at the same point. Many who are celebrated as self-made often benefit from inherited advantages, which complicates the meritocracy narrative.
        imgabe 2y ago
        Lots of people have access to resources. Very few of them start successful businesses. Zuckerberg’s parents were dentists. They were well off, sure, but there are hundreds of thousands of dentists in the US, if not millions. Why don’t all of their kids start companies like Facebook?

jltsiren 2y ago

I don't think it's that simple. Things that can be produced with machines rather than labor have become more affordable over time. Electronics, travel, clothes, and even food are cheaper than they used to be relative to wages. Then there are fields like education, childcare, and construction, which have not seen substantial productivity gains. The prices of their outputs can be expected to rise at the same rate as wages. (And then there is healthcare, which is complicated.) But what has actually happened that increased housing costs have eaten the productivity gains for many people. Largely because of deliberate policy. Desirable areas often discourage new construction. When new construction is allowed, they prioritize single-family homes. And if really pressed, rental complexes. As a rule of thumb, if you can afford to rent, you can afford to buy. If you expect to stay longer than a couple of years, you should buy. But in many places, if you can't afford a large home, you have to rent a small apartment. Because there is a shortage of small condos to buy. If the units available for purchase grow larger while the price per square foot grows at the same rate as wages, housing becomes less affordable.

mjevans 2y ago
In many of the denser population areas of the US _generations_ 30, 50, maybe more YEARS worth of insufficient building has left a completely broken situation of stagnation relative to population.

cscurmudgeon 2y ago

The same Gary Stevenson whose memoir claims Financial Times debunked? https://archive.is/DguLm https://archive.is/DguLm

cmcaleer 2y ago
His whole narrative he crafted was really unbelievable. I watched a video of him explaining his story, expecting to hear some story of finding consistent signals that stayed alive for a long time or finding crafty wording in bond contracts, but the whole story was that he took a punt on the GFC being worse than the market expected, and he made low 8 figures. And somehow, because of this, by some measure, he was the best trader in the world. I too was the best trader in the world when I got some skittles from my friend in the playground for free and sold them to another kid for a dollar making an infinity percent profit, but I didn’t feel the need to make a YouTube career out of it.
- blitzar 2y ago
  Grifters gunna grift. He is just another lippy barrow boy that claims to be the "best trader in the world" - actually surprisingly common in London bank dealing rooms. The oddity is that it has taken so long for them to find YouTube.
- wnolens 2y ago
  I too was intrigued to find him but it took 10mins of watching a few videos to be left feeling duped. Felt like he's working out his problems on YouTube rather than therapy (after first trying to in a trading career). I really dislike his (and most progressive's) narrative that others are distinctly out to get you. It shrouds the real complex machinery, and papers it over with intent. Which impedes meaningful progress i think.
  - evidencetamper 2y ago
    I find it surprising that someone who worked inside a banking corporation, and has seen first hand that nothing ever goes according to plan, is able to believe that somehow the machinery is perfectly orchestrating a privilege loop.

_factor 2y ago

I think we’re seeing his spilt economic system coming into play with computer hardware. Less and less B2C sales over time. It’s just not as profitable to sell to poor people.

UltraSane 2y ago
In 1995 my parents, both factory workers, bought me a $2500 Packard Bell PC with 100MHz Pentium, 8MB of RAM, and a 1GB hard drive. Adjusted for inflation that would be a $5,283.95 computer today.
- chasd00 2y ago
  I remember that exact model. Computers use to be very expensive. You can pick up a brand new powerful laptop to build a career on for $300 at Target. (I’m in the US I know many commenters here are not)

sdsd 2y ago

Before the election, everyone on HN was telling me that we live in the best economy ever and we're in a "vibes recession" where ignorant Americans can't understand how impossibly good things are. Now that it's less politically salient, everyone can just say true things. I wish every subject were like this all the time.

heresie-dabord 2y ago

> the entire system is corrupt The universal dismay of humanity is that we actually built and held onto Democracy for a time. Not perfectly, but better than suffering any dictatorship by "royalty" and oligarchs. The transnational petroleum business was never going to go quietly into energy decline. Its component interests are flexing their influence.

jgalt212 2y ago

> The truth is economic growth hasn’t been occurring in real terms for most people for a long time and the rich have been transferring money from the poor to themselves at a dramatic rate. It blows my mind why pension funds continue to invest any money at all in PE and Hedge Funds. It's a straight up wealth transfer from the working class to the investor class. States should pass max fee laws for their own pension fund allocations.

rayrey 2y ago
Darn pensioners are living too long driving the search for alpha

westurner 2y ago

From https://news.ycombinator.com/item?id=43140675 https://news.ycombinator.com/item?id=43140675 : > Gini Index: https://en.wikipedia.org/wiki/Gini_coefficient https://en.wikipedia.org/wiki/Gini_coefficient Find 1980 on this chart of wealth inequality in the US: > GINI Index for the United States: https://fred.stlouisfed.org/series/SIPOVGINIUSA https://fred.stlouisfed.org/series/SIPOVGINIUSA Are there additional measures of wealth inequality?

westurner 2y ago
Income distribution: https://en.wikipedia.org/wiki/Income_distribution https://en.wikipedia.org/wiki/Income_distribution World Inequality Database: https://en.wikipedia.org/wiki/World_Inequality_Database https://en.wikipedia.org/wiki/World_Inequality_Database USA!: https://wid.world/country/usa/ https://wid.world/country/usa/ Economic inequality: https://en.wikipedia.org/wiki/Economic_inequality https://en.wikipedia.org/wiki/Economic_inequality : > Economic inequality is an umbrella term for a) income inequality or distribution of income (how the total sum of money paid to people is distributed among them), b) wealth inequality or distribution of wealth (how the total sum of wealth owned by people is distributed among the owners), and c) consumption inequality (how the total sum of money spent by people is distributed among the spenders).

gchamonlive 2y ago

We need a way to both have the benefits of modern social organization without supressing the means to fall back to simpler but more resilient and decentralised societies which would come together to maintain the form of nations in times of crisis, which inevitably come again and again. What we have is a social crisis that billionaire class used to exploit the nation for classist gains, with the collateral effect of damaging the nations memory, identity and values.

wslh 2y ago

While we cannot predict the future, I found the movie Civil War (2024) really great and original.

onlyrealcuzzo 2y ago

> the rich have been transferring money from the poor to themselves at a dramatic rate. By definition, the poor have almost no money to transfer. Wouldn't you have to transfer from the middle class - which is shrinking in relative terms? The poor have never had anything and still largely have nothing. It is literally in the definition. I don't see how it's possible to enrich yourself (when the amount you need to grow by even small percentages is enormous) from a class with nothing to take.

atomicnumber3 2y ago
The poor have no money individually, but in aggregate they have some. $1 from a million poor people makes one millionaire. IMO the main thing they extract from the working poor is time - what they're stealing is the excess value between their labor and the value is creates, and technology has made it easy to do this at a massive scale. So it's less $1 from each person, it's 8 hours per day from a million people makes 1 person a billionaire.
- onlyrealcuzzo 2y ago
  You don't get $400B by stealing pennies from poor people. For one, there aren't 100m poor people in the US. Not even close.
  - Supermancho 2y ago
    Somewhere around 45m in poverty in the US (2023), already counting around 1m homeless.
    - onlyrealcuzzo 2y ago
      First - "poverty" is up to $14k per year. Many of those people are "poor" - but probably not the majority, and definitely not even close to all. Second, billionaires have almost $7T in wealth - the top .1% are at about ~$20T. They didn't get any meaningful percentage of that by taking pennies off of 45M. You'd need to take thousands. And they just don't have it. That's almost $450k per "poor" person. That's more than the median HH wealth in the US. If you look at the "actual poor" - you're likely looking >$1M per person. You simply cannot "steal" that from the "poor" (who have almost nothing to steal, by definition). Even if you amortize that over decades - it is just not how it happened.

discodonkey 2y ago

>economic growth hasn’t been occurring in real terms for most people for a long time This is just not true. At least in the U.S., people of all income tiers have seen their incomes grow[0] while their working hours shrunk[1]. Inequality is a problem in itself, but equating unequal gains with "transferring money from the poor" seems like bad faith. [0] - https://www.pewresearch.org/race-and-ethnicity/2024/05/31/the-state-of-the-american-middle-class/re_2024-05-31_american-middle-class_0-02/ https://www.pewresearch.org/race-and-ethnicity/2024/05/31/th... [1] - https://ourworldindata.org/grapher/annual-working-hours-per-worker https://ourworldindata.org/grapher/annual-working-hours-per-...

dleeftink 2y ago
Two things can be true at once; growing income per working hour has not resulted in less income inequality.[0] [0]: https://ourworldindata.org/explorers/inequality?tab=chart&Data=World+Inequality+Database+%28Incomes+before+tax%29&Indicator=Gini+coefficient https://ourworldindata.org/explorers/inequality?tab=chart&Da...
- discodonkey 2y ago
  True. Income inequality increased. The person I responded to suggested that only the rich saw income growth, and that they were achieving this by taking from the poor, which is wrong.
  - PaulDavisThe1st 2y ago
    This was true until quite recently (within the last 5-6 years). Income growth in real dollars had been stagnant since the late 1970s for most deciles.
- renewiltord 2y ago
  There's no recipe for happiness that primarily involves looking in the other guy's bowl. Even if you have everything to eat, you will still need unhappy if he has more. No wonder you guys constantly post about unhappiness. You are obsessed with keeping up with the Joneses. Much more joy if you instead care only about absolute living standards. My life has improved a lot and if Jeff Bezos appears before me and will make me 10x as wealthy if he is 100x I will gladly choose that. We live as long as kings, with greater variety of food and drink, greater variety of entertainment, and big comfortable houses. I'd take this trade 10/10 times.

deleted 2y ago

[deleted]

collingreen 2y ago

We've had terrible times without completely failing before but I agree with some of your sentiment. That isn't much solace at all but maybe it won't be the end of the entire experiment? The extreme wealth gap and corruption paired with the loss of virtue (integrity seems to hold very little social value these days) seems like a bad mix to me if you like stability, let alone shared prosperity. Moreover, the response to the United healthcare assassination showed us that a bunch of folks don't think there is justice left in the system. The reactions to covid were a stark example of how a huge swath of people not only won't lift a finger to help their fellow citizens but will actively oppose it and be offended by the suggestion itself. This year the purges of non-straights or non-whites from all positions (and even from some records!) began and we don't yet know where that will end. Politically we've spent this year alienating our allies and generally acting like bullies. I'm worried we'll be in a war in 3.5 years (real or manufactured) and "need" to delay the next election for a while, "in the name of national security".

pmarreck 2y ago

> a fair piece Who defines what is “fair”? If it’s people, people are imperfect AF and centralized planning economies tend to fail spectacularly. I would agree that a system can be unfair, but what changes to the system are sustainable while still incentivizing risk-taking and achievement?

eddd-ddde 2y ago
Raise taxes to 80% after making more than a million a year? That's more than enough of a ceiling to keep incentives for 99% of the population. And any taxed income comes back to the masses anyway. Of course this depends on having good government programs so that the money is not wasted or stolen.
arp242 2y ago
No one mentioned centralised planning until you brought it up yourself. This is just boring red-baiting.
- pmarreck 2y ago
  No. If you bring up what is “fair” in a given economic system, there are only 2 options: Prices set by the system/economy, or prices set by people. Why should I leave out the latter? I’m not trying to red-bait anyone since even in the US capitalist system, prices are sometimes set by humans (see: helium!)

WalterBright 2y ago

> the rich have been transferring money from the poor to themselves at a dramatic rate. 1. The poor don't have money to be transferred to the rich 2. The top 1% pay 40% of the Federal income taxes 3. Medicare, Medicaid, Education and Social Security are wealth transfers to the poor The wealthy businessmen created their wealth, it was not transferred to them.

ProllyInfamous 2y ago
Where is all this productivity [0] going, then, if not to wages? Is it just "disappearing" [unlikely, IMHO]? [0] researchgate.net/figure/US-Productivity-and-Hourly-Compensation-Source-Bureau-of-Labor-Statistics_fig1_270640833
- WalterBright 2y ago
  It goes to the government. The government consumes something like 24% of the GDP.
  - Straw 2y ago
    That's federal only!
  - consteval 2y ago
    … and then 40% of the GDP comes from the public sector. Centralized systems are more efficient by definition, it’s why the public sector can seemingly magically multiply money where the private sector cannot.
- Straw 2y ago
  Wages don't count benefits, total compensation has risen faster than wages.
deleted 2y ago
[deleted]

deadbabe 2y ago

I think there’s another possibility: people eventually accept inequality and lower their expectations and ambitions for life. A lot of energy is wasted on trying to make everyone equal when the scales have become too tipped. At some point they’re simply isn’t enough activation energy left to right the ship. In the past (centuries ago), it seems like people simply accepted other classes were better and they could never be their equals. That’s how you end up with royal families, etc. So in the future, people will simply work to the bone, find whatever pleasures they can when possible, and maybe just not wake up ever again on some morning before their shift starts. They will live in small simple residential units mostly for sleep, eating, bathing and watching some content on a screen. The rich will segregate themselves away to enjoy a finer life somewhere that they can be shielded from the plight of the poor.

theGnuMe 2y ago

Or we could idk tax billionaires.

stego-tech 2y ago

Cassandra here. This is what I've been struggling to articulate more succinctly since my college days, when I started really getting into macro-level systems analysis and long-term planning. Much of the Western world ceded pieces of its sovereignty to external entities without regard to the long-term consequences of said actions. Stuff like outsourcing domestic labor abroad, to countries like China (refining, manufacturing) or India (knowledge work) means those countries now have an outsized influence on domestic affairs that aren't easily clawed back. Ceding sovereignty of infrastructure (be it data centers, roads, hospitals, schools, etc) to private enterprise means those entities have dictatorial say over how those pieces of infrastructure are operated, maintained, and replaced. In essence, the limited sovereignty the West retained was broadly centered around consumption and wealth, opposing ends of a larger economic system that are now grossly out of balance. It's at the point where there is no singular "silver bullet" to fix it, either. Taxing the wealthy will help, but absent meaningful reshoring of industry and jobs domestically, it won't actually right the economic ship. It's also not merely an American problem, but one largely affecting the neoliberal West that spent decades outsourcing, offshoring, contracting-out, and generally doing everything possible to min-max cost vs returns, quarter after quarter. I think the only country not substantially affected might be Germany, but there's still talk of automakers shuttering factories there in favor of using Chinese labor and shipping the vehicles back to save on costs. We have created a global economy but without global regulation, which in turn has resulted in artificially depressed consumption prices (relative to actual local costs) and artificially increased wealth extraction through rampant exploitation. Absent a singular global currency and standard of living (which, let's be real is centuries away at the earliest), the only practical solution is a domestic rebuild of labor markets, supply chains, and industries, with a goal of refocusing national exports on what a country uniquely excels at rather than simply offshoring to whichever country has the optimal labor pool and exchange rate relative to your specific industry. It's a hot mess to be sure, but not unsolvable. Reshoring industry gives us an opportunity to re-evaluate supply chains and resource management with a focus on closed-loops and renewables. Reshoring work will boost wages and living standards, which in turn will boost birth rates and economic growth. Diversifying the economy back into regions and localities will promote specialization and innovation, rather than the fad-copying of today. There's a lot of good to be had in facing the problem head-on rather than giving into fascist ideology and demagogues promoting "one easy trick" to fixing things, but all of it involves hard, honest work, which some folks will naturally be hostile toward. Either way, we'll all find out together, I guess.

nickpsecurity 2y ago

Corrupt and fair are key points. I believe it comes from a change in worldview. The fundamentals used to be closer to the Bible's. They shifted to subjectivity, nationalism, authoritarianism (unchecked), and capitalism. Then, new groups around 1900 shifted to more subjectivity and atheism. Add pleasure-driven culture from the sequel revolution onward. Then, evolution, intersectionality, and feelings over facts. As I look at these, I see a dangerous combo of not seeing individuals with inherent worth, thinking people are like animals, believe/do whatever without long term consequences, and do what maximizes selfish gain, money or pleasure. Our problems are inevitable under that mindset. Let's look at specific examples in your post. The rich should take more wealth for themselves since that's maximizing selfish gain. The poor (or scheming) should also try to take their wealth by theft or welfare. If people get hurt, it's an unavoidable problem in a workd of conflict where the fittest survive. No objective morals even exist. Fortunately, we're seeing a growing rejection of those values leading to life transformations. That's a huge part of Trump getting elected since his policies are appealing to such people. The Spirit of Christ is also causing revivals across the country with thousands to tens of thousands gathered trying to change at the core. Inner change leads to outward effects. Right now, our college students are taught conflict theory, favoring specific geoups, subjectivism, work against our natural design no matter the losses, and pleasure/money/intellect are god. What will happen when college students instead are taught objective truth, doing what's right above all, building on our natural design, loving others with sacrifices made, helping those in need onto their feet, unity despite our differences, and building companies that are profitable within those virtues? I think the results will be beautiful. I've already seen places like that on a small scale. For big ones, Chic-fil-A and Hobby Lobby are pretty close. Part of God's design is some people will be rich and eventually generous. So, that won't change in most places.

TheSpiceIsLife 2y ago

> the rich have been transferring money from the poor to themselves at a dramatic rate. How does this work? Where do the poor get wealth, on a continual basis, for the rich to take? If the poor have so little, and have had their fraction of the wealth taken by the rich for three decades, assuming things have got worse for the poor since the end of the eighties, where’s all this wealth coming from? I’m not singling out here, this is a question for the general audience.

m3kw9 2y ago

Is not that they are seeking a transfer, but the incentives and system work is that it eventually converges to “poor get poorer and the money is transferred to the rich” as the most efficient way big biz makes money. What I like about NFL, NBA, MLB etc is that they will tweek the rules to make things competitive so the rich don’t get too rich and win it all too much. We should have a “DOGE” system for rule tweeting to even things out once in a while

rhynlee 2y ago

Seconding the Gary Stevenson rec, he frames in a very digestible way the flow of income from people working day to day being spent on modern day lifestyle (and necessities) to the people who own the assets modern lifestyles are dependent on and how this formulation of an economy may end up becoming increasingly unsustainable.

gunian 2y ago

it's always hilarious to see people in the west wake up to the oligarchy no amount of graffiti and stickers will change what the numbers have always said since the days of theocracy and the deluge luigi sadly is not a revolutionary but a substitute for the car crash in Oklahoma :)

squigz 2y ago

Why is the only outcome 'a destroyed Europe and civil war in the US'? This sort of doomer thinking is more like to bring us to that point than anything else, it seems to me. Maybe an alternative is we'll figure out how to change and fix these corrupt systems as more and more people wake up to how bad they really are.

dostick 2y ago

Isn’t Marx, when he documented Capitalism, predicted its collapse? Capitalism has been tried in 100 countries over the past 100 years. Not a single country has reported a harmonious society without suffering and inequality. Failure over and over. But no alternative is being seriously researched. I’m not talking about socialism/communism. A new system designed according to current knowledge in sociology, anthropology, and human biology. Capitalism wasn’t scientifically researched nor updated according to science. In humans, it amplifies greed and materialism. And democracy that we use now wasn’t seriously reviewed and updated according to modern science. The democracy we use now is the system the ancient Greeks came up with to replace feudalism. And all they knew back then was feudalism, so they replaced kings with electable kings. And we use that primitive cavemen level system now! It’s so bad you wouldn’t even use it in your Civilisation type game unless you expand it with 100s of in-game regulations, which we are unable to do upon real world.

Projectiboga 2y ago

A simple way to view this is to look at each economic quintile's "income multiplier", the lower ones spend their money quickly and often locally. Whereas the wealthy spend slowly and often within their own class on possessions or much later overseas. Adam Smith and John Stewart Mill both advocated for a steeply progressive income tax and strict controls on Banks and Corporations. The wealthy can wait to spend while many others can't. I learned about this during my Economics Major. Estimating the Marginal Propensity to Consume Using the Distributions of Income, Consumption and Wealth Jonathan Fisher, David Johnson, Timothy Smeeding, and Jeffrey Thompson From https://www.bostonfed.org/-/media/Documents/Workingpapers/PDF/2019/wp1904.pdf https://www.bostonfed.org/-/media/Documents/Workingpapers/PD... Recent studies of economic inequality almost always separately examine income, consumption, and wealth inequality and, hence, miss the important synergy among the three measures explicit in the life-cycle budget constraint. Using Panel Study of Income Dynamics data from 1999 through 2013, we examine whether these changes are more dramatic at higher or lower levels of wealth and find that the marginal propensity to consume is lower at higher wealth quintiles. This suggests that low-wealth households cannot smooth consumption as much as other households do, which further implies that increasing wealth inequality likely reduces aggregate consumption and limits economic growth.