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The problem is what the rich do with their money: namely asset purchases. Todays rich don't invest in production only asset accumulation. All those years of ZIR
by tharmas 1y ago
The problem is what the rich do with their money: namely asset purchases. Todays rich don't invest in production only asset accumulation. All those years of ZIRP has just resulted in the rich buying up property, hence the high house prices.
Tax the rent-seeking-asset-accumulation rich. Don't tax the rich that invest in production. And tax the banks heavily for loans for asset buying. Encourage the banks to loan for investment in production.
- IAmBroom 1y agoMy best teacher - my freshman HS History teacher - taught us the definition of "capital"... and then proceeded to illustrate his assertion that "The only capital is land, people! Factories can burn down; ships sink; only land stays." That is why the rich seek out asset purchases, which is partly a proxy for: land.
- tharmas 1y agoWhich is why, when the rich buy up assets (ie land), its inflationary. They are not adding to the pool of assets (supply), they are consuming them. Sure, I understand, land can be "developed" so that it can become useful (eg draining a swamp, building a high-rise instead of single storey) so in effect that is adding to the supply. But as your History teacher pointed out land is still effectively a fixed supply. It would be nice if govt policy could help create the conditions such that a return on investments in production where more attractive (ie profitable) than buying up a fixed supply of assets. But instead govt policy did effectively the opposite. Henry George and his LVT (Land Value Tax) comes to mind.