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> The bigger factory generates more wealth for them while not being taxed because it isn't directly owned by them. A yacht only costs them money. Everything yo
by gruez 2y ago
> The bigger factory generates more wealth for them while not being taxed because it isn't directly owned by them. A yacht only costs them money.
Everything you said is true regardless of how taxes are structured, so I don't see how that's supposed to support your claim that "taxing the rich based on their wealth/property/ and income then you are in fact incentivizing them to buy bigger factories rather than yachts".
> Businesses are being ran not based on whether or not the goods are being sold or valuable, but rather whether or not the speculators in the market think it's good or valuable.
I don't see what the issue is. We don't have a crystal ball that tells us "whether or not the goods are being sold or valuable", so the latter is the best we have. How else are we going to allocate capital? A central economic planning committee?
>The entire point of stock isn't bigger factories, it's to enable bigger yachts.
If you want to be reductive, sure. If you want to be even more reductive, you might as well go with "Everything in the world is about sex, except sex. Sex is about power".
>Right, but as you point out, that's not what the rich are doing. They are instead buying paper that does not feed back into the economy.
The people who invest in VCs, PE, and private credit are most definitely not "buying paper that does not feed back into the economy". VCs and PEs directly fund startups and other businesses, and private credit funds infrastructure projects and other corporate spending. Moreover, even if spending $100 to buy shares in Tesla doesn't directly cause $100 being spent on battery gigafactories or whatever, doesn't mean it "does not feed back into the economy". You're paying off a chain of investors, all the way back to the investor who participated in Tesla's IPO, who did directly fund Tesla's factories. Claiming otherwise makes as much sense as "buying an apple from the grocery store doesn't feed back into apple farmers, because you're only paying the grocery store".
>We have inflation above target because businesses have merged and consolidated to the point where they can aggressively raise prices not because they need to but because they have the general population over a barrel. Collusion and speculation is a big factor in a lot of the inflation.
Source?
>That's not universally true, after all egg price inflation has been due to herd culling for bird flu. It is however fairly true and something that businesses are bragging about during their quarterly shareholder meetings.
Executives bragging about how greedy they are is basically the equivalent of rappers bragging about all the crimes they've committed in their albums. In both cases their audiences like them to sound as greedy/criminal as possible, so they oblige. Securities law makes the former can't straight up lie about stuff, but the incentive structure is the same.
- cogman10 2y ago> You're paying off a chain of investors, all the way back to the investor who participated in Tesla's IPO, who did directly fund Tesla's factories. Claiming otherwise makes as much sense as "buying an apple from the grocery store doesn't feed back into apple farmers, because you're only paying the grocery store". The more you distance and dilute from the original share, the less relation there is to the original investor. Eventually, there is simply no relation to the two. Similar to how buying a used copy of Frankenstein today has no benefit to Mary Shelley or her estate. I should also point out that apples and other consumables have finite lifespans. The apple you buy from the grocery store has a near direct line to the farmer that sold it. Purchases of apples drive demand because they are almost immediately consumed. Stock is more closely related to something like iron. Sure, someone had to refine it at one point and there is demand for new iron on occasion. However, generally speaking the recycling and reuse of iron has little direct impact or benefit to the original miner. Unlike iron or apples, stock never goes through a value add transformation. A share is a share. It provides no extra work or good. > Source? https://www.npr.org/2024/09/09/nx-s1-5103935/grocery-prices-inflation-corporate-greedflation https://www.npr.org/2024/09/09/nx-s1-5103935/grocery-prices-...
- gruez 2y ago>The more you distance and dilute from the original share, the less relation there is to the original investor. Eventually, there is simply no relation to the two. Similar to how buying a used copy of Frankenstein today has no benefit to Mary Shelley or her estate. No, because capital markets are far more liquid than the market for copies of Frankenstein. Every dollar that gets "invested" goes into the global pool of capital stock, some of which is used for new investments like factories or whatever. Spending a dollar on existing shares makes them ever more expensive, and therefore a poorer investment than new investments. That causes more money to be funneled into new investments. There isn't a surfeit of piled into existing shares, because the existence of such a surfeit would imply there's money for someone (institutional investors, hedge funds) to sell their existing shares to fund new investments. >https://www.npr.org/2024/09/09/nx-s1-5103935/grocery-prices- https://www.npr.org/2024/09/09/nx-s1-5103935/grocery-prices-... The original claim was "Collusion and speculation is a big factor in a lot of the inflation.". Your article says: >Gross profit margins of big-name stores and brands stayed mostly steady and >"Even though profit margins for grocery stores have gone up," he wrote in a July report, "the increase appears to be only a small contributor to the rise in food prices relative to the increase in their operating costs." But grocery stores' margins are single digits, so at best this explains a few percent (note, not the same as percentage points) of inflation. Hardly "a big factor".