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Yep. I'm not an economist but my social democratic common sense would tell me to look at the bottom 10% income bracket and see how they're doing. Incidentally
by samiv 3mo ago
Yep. I'm not an economist but my social democratic common sense would tell me to look at the bottom 10% income bracket and see how they're doing.
Incidentally these people are the best economic citizens because if you give them money they'll spend every cent of it because they need to buy food and energy, use health care and pay rent.
In other words if a rich person gets a million they (if they're sane) spend a fraction of it and put the rest in assets, stock market, property, etc. If you give 1000 poor people each 1000e every cent will go into local economy immediately.
- onraglanroad 3mo agoThe capitalist response to that would be that the investment in companies is better because it makes everyone richer in the long term by increasing overall wealth. I'm not sure I buy it but it's an effect to consider.
- kubb 3mo agoThat does sometimes happen - investment does cause development. The mistake is to assume that's always what happens, and that everybody can benefit from the development.
- onraglanroad 3mo agoOh I agree with you. I suspect it happens less than is the conventional wisdom, but I might be wrong.
- card_zero 3mo agoThe benefit is uncertain whenever anybody spends money on anything beyond survival. If you go around asking investors "are you using that money properly and beneficially", for consistency you also have to nag the poor with the same question. Should you put a bet on a horse? Is it really necessary that you visit anybody far away? What's the benefit in dyeing your hair? In both cases, you'd be enforcing arbitrary wisdom instead of acknowledging your fallibility.
- kubb 3mo agoNot quite. In some cases we’re certain there’s no benefit.
- padjo 3mo agoCapitalism has spent the last 10 years burning billions on the metaverse and crypto with apparently no repercussions for those involved so I think their credibility as custodians of wealth is questionable.
- FeloniousHam 3mo agoCapitalism also spent the last 10 years burning billions to create affordable electric cars, reliable regular spaceflight, efficient delivery of everything everywhere, and the (well, probably) greatest technological invention in human history. This is not a complete list. But yeah. Ugh, capitalism.
- padjo 3mo agoYou mean the EVs and spaceflights that were funded by government subsidies?
- tau255 3mo agoThis sounds a lot like trickle down economy. It did not really help anyone other than capital owners.
- IshKebab 3mo agoBottom 10% are outliers though. Bottom 50% is much more reasonable.
- bryanlarsen 3mo agoTreatment of bottom 10% and treatment of bottom 50% are both interesting metrics, but for very different reasons, and they are often contradictory. The "bottom 50%" is a measure of how well you make it possible for everybody to succeed without extraordinary help. The "bottom 10%" is a measure of extraordinary help.
- ajmurmann 3mo ago[flagged]
- paulryanrogers 3mo agoThen why is so much money going into real estate and greater-fool crypto?
- ajmurmann 3mo agoBTC market cap is $1.2T. S&P 500 market cap is about $66T. Why would we not want for money to flow into real estate? It's an area with massive demand and money flowing in to create supply is exactly what we need and is productive. What is not productive is the NIMBY scum that's preventing supply from being met.
- kubb 3mo agoYou're conflating compounding market value with economic growth. One counterexample is when inflation raises prices, but not economic output. Asset prices grow but there's no growth.
- ajmurmann 3mo agoWhat do you think happens with the money that goes into stock? It doesn't simply vanish. It ultimately gets invested in salaries, construction of data centers and factories.
- kubb 3mo agoThat's most certainly not what happens! The money that goes into buying a stock is being transferred to the people who sold you the stock (which, outside of the IPO are almost always market players). A company with a high stock price can "save money" by paying employees in stock, borrowing money cheaper, but it's NOT a primary way of funding the company.
- 3mo ago