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Please note that although we respect frugality over lavishness. Frugality among rich people is one of the primary reasons behind wealth inequality. Sitting on t

Please note that although we respect frugality over lavishness. Frugality among rich people is one of the primary reasons behind wealth inequality. Sitting on top of an perverse amount of wealth and not doing anything with it is bad for the economy. Wealth needs to be redeployed back into the economy and it must be done in following a method that doesn't grow the wealth in an unnatural compounding way.

DanAndersen 11y ago
In cases like those in the article, these savings aren't stowed away in gold bars under rich people's mattresses, they're mainly in investments that continue to yield dividends. Those investments are going to various companies that are actually doing something with that money, so it's still circulating through the economy. Is there something I'm missing? I admit I'm not as well-versed in economics as I'd like to be.
- crimsonalucard 11y ago
  Unless it's an ipo an "investment" or exchange of stocks for money on a stock market is simply just a trade among shareholders that generates zero GDP. It does go back into the economy and thus circulates. Dividends is wealth generated by laborers and taken by shareholder owners. Sitting on stocks and eating up dividends while contributing no work of your own does not cause money to circulate through the economy in a good way. What it does is it causes your own wealth to grow unfairly, further increasing wealth inequality.
  - walshemj 11y ago
    mm tried to run a business with out access to capital. Your being very naïve.
    - crimsonalucard 11y ago
      Good for you. How does you running a business without access to capital make me naive? Doesn't that make you niave?
      - walshemj 11y ago
        I have had to chair share holder meetings to discus difficult financing decisions. I have also been made redundant the hard way when a company went bust ie they hand been paying the social security so I could claim unemployment. Are you still a student as your attitudes certainly indicate you might not have had to deal with the real world.
        crimsonalucard 11y ago
        No I'm not a student, but you publically, immaturely and insultingly stating that my behavior marks me as someone who has not dealt with the real world does not bode well with your claim that you chaired shareholder meetings. I certainly wouldn't want such a person making difficult financial decisions. You realize what would happen if you called someone niave in the real world? Surely you would know that such a statement doesn't facilitate open discussion even if the person in question was actually niave. Of course, I'm being redundant since your extensive experience with the real world should make you abundantly aware of this. You still haven't answered how YOU running a company without access to capital makes ME niave.
        walshemj 11y ago
        Learn to read English. I was inviting you to explain how you would run a company without access to capital. Also look at how your comments on this thread have been treated.
        crimsonalucard 11y ago
        People can vote me down if they think I'm wrong or if they they don't like what they see. What I haven't seen happen is an outright personal attack where I'm called naive and accused of being someone who hasn't "dealt" with the real world. Your english used the past tense "tried" indicating that it was something you did in the past. I think instead of me learning how to read english you should learn how to write it. As for forming a company without capital. It's never been done, and I never suggested it was possible. Maybe you're the one who should learn how to read.
  - reagency 11y ago
    Repeat after me: Money is not wealth. Money is not wealth. What you spend your money on is wealth. Sitting on a number in a computer file does not cause inequality.
    - crimsonalucard 11y ago
      hey buddy. Repeat after me. Money is wealth. Money is wealth. When you spend your money on wealth, you are doing a trade or an exchange. Wealth for wealth. If money isn't wealth, why the hell would anyone give it away in exchange for empty paper? They don't. Because money is wealth. That's why when people have lots of it, we call them "wealthy"
fsloth 11y ago
What are you exactly saying? Isn't 'redeploying money back to economy' basically investing? I think what you first would want is an increase to minimum pay if you want to increase the flow of money in the areas where I think you want.
- crimsonalucard 11y ago
  You can invest, or you can spend in a way that generates GDP. If you "invest" or put your money into the stock market, you are not deploying your money in a way that generates GDP. Unless the stock is an IPO, you are essentially trading paper when you buy a stock. No GDP is generated on that transaction. In a sense you could be redeploying if the seller of the stock takes the money from the trade and redeploys it in a meaningful way. I agree that rich people paying their workers more money is a meaningful way to redeploy their wealth.
  - reagency 11y ago
    And what if a nonnrich person needs access to capital in order to pay workers? Who would buy an IPO if they knew everyone else took your advice and would never let the IPO buyer exit? Trading stock is dealing in liquidity. Liquidity is where all the wealth in the market is made available to humans.
    - crimsonalucard 11y ago
      >And what if a nonnrich person needs access to capital in order to pay workers? The most natural/good way of doing this is running a legitimate working business and paying workers with revenue money generated by the business itself. Other ways include borrowing money, getting money from angels/venture capitalists, or money from an IPO or reissuing of shares. >Who would buy an IPO if they knew everyone else took your advice and would never let the IPO buyer exit? Trading stock is dealing in liquidity. Liquidity is where all the wealth in the market is made available to humans. There are many IPOs that don't let the buyer officially exit yet people still buy it: Google, facebook, microsoft. In fact almost all IPOs are like this. When you buy stock from these companies you can't officially redeem your shares for the value it's worth. You can only sell it to another person. Believe it or not the stock market is a market of people trying to outthink each other in buying paper for a low price and selling it for a higher price. No GDP is generated in these exchanges. Magically, the prices for these pieces of paper follows the intrinsic value of the company they "represent." People simply being told that the paper represents a percentage of the company is enough to make people behave as if it actually does even though the owner of the "paper" can't use the paper to redeem a portion of the corporate value. You can only do one thing of monetary value once you own a stock share: Sell it to the next idiot. It's funny how it all works out. You could say that the entire stock market is a bubble of empty dreams. The only time you can officially redeem a stock share is when a company liquidates. But that almost never happens, and people buy stocks expecting it not to happen.
deleted 11y ago
[deleted]
jsonjson 11y ago
Unless they've sacked their money away under their mattress, it has been deployed back into the economy. It is either invested or in a bank where the majority of it has grown the pie of total dollars through loans (this is often not well understood). If I have ten dollars that I place in a bank, they will only hold the required reserve. Assuming this is 30%, then seven will get distributed in loans. The effective size of the money is now 17 dollars.
- deleted 11y ago
  [deleted]
- crimsonalucard 11y ago
  Yes. This is true. I mean wealth in terms of wealth ownership. Compounding interest from loans, dividends, or stock investments causes the amount of wealth "owned" by rich people to grow unnaturally.
  - adventured 11y ago
    There's nothing unnatural about yielding a return on an investment. The greatest contributor to wealth inequality in the last 40 years is the Federal Reserve debasing the currency that the middle class depends on (and since ~1970, they've been doing it at a very rapid clip). If your wages go up 2% per year, and inflation averages 3% per year, over 30 years your standard of living is going to get nuked. The super rich can manage inflation by shifting assets, everyone else cannot.
    - crimsonalucard 11y ago
      In the natural state of things, one does work and in doing work one gains roughly equal wealth in exchange for an equal amount of work. Yielding compounding returns on investments with little risk is gaining wealth for no work. That is unnatural. What is more unnatural is when an obscenely rich person earns a million a year as a return on investments. A million dollars in wealth in one year is usually not equivalent to the output of one man. Multiple people must work together to generate that amount of GDP. So how does a rich man procure the wealth equivalent to the work of multitudes of people without contributing any work himself? He must do so in a way that is unnatural.
SlipperySlope 11y ago
The dynamics of capitalism put wealth into the control of its wisest custodians - frugality being defined as among the wise virtues in this context. For those who argue that democratic government is the wisest custodian, e.g. there is estate taxation and government redistribution and investment.
- crimsonalucard 11y ago
  Are you saying rich people are wiser than poor people therefore they deserve to be rich? Capitalism made Justin Bieber rich. This makes him a wise custodian of wealth. Not only is my previous statement wrong, but so is yours.
  - SlipperySlope 11y ago
    Capitalism does not entail that the wealthy deserve what they have, only that if they are not wise with respect to their wealth they will lose it. With regard to Mr. Bieber, or celebrities/sports stars in general - there are many foolish ways for them to lose their wealth and only a degree of frugality, i.e. living within their means, will preserve it.
    - crimsonalucard 11y ago
      Sure and I agree with your first sentence and second sentence, but I don't think you're understanding what I'm trying to communicate. The loaded term "wise custodians" as if rich people are benevolent caretakers of the world's wealth due to their infinite wisdom is what I'm attacking here. It just simply isn't true. Justin Bieber is full proof of that. The guy is not wise, he's not a benevolent custodian either. Wealth is not magically redirected towards smart caring people. You are not a "wise custodian" because you are rich. You will always have stupid people who are rich and smart people who are not rich.
  - dylanjermiah 11y ago
    People who have earned great amounts of wealth do not get it by stealing it, they provide a product or service in which others choose to purchase. The more people which the product or service provides value to the more wealth the person will make. Like him or not, Justin Bieber has proved valuable to quite a large sub set of the population.
crimsonalucard 11y ago
I'm getting voted down. But if you got time please watch (or read the transcript) this: http://www.ted.com/talks/nick_hanauer_beware_fellow_plutocrats_the_pitchforks_are_coming?language=en http://www.ted.com/talks/nick_hanauer_beware_fellow_plutocra... This person elucidates my views completely and in a way that may be easier to understand.

DanAndersen 11y ago

In cases like those in the article, these savings aren't stowed away in gold bars under rich people's mattresses, they're mainly in investments that continue to yield dividends. Those investments are going to various companies that are actually doing something with that money, so it's still circulating through the economy. Is there something I'm missing? I admit I'm not as well-versed in economics as I'd like to be.

crimsonalucard 11y ago
Unless it's an ipo an "investment" or exchange of stocks for money on a stock market is simply just a trade among shareholders that generates zero GDP. It does go back into the economy and thus circulates. Dividends is wealth generated by laborers and taken by shareholder owners. Sitting on stocks and eating up dividends while contributing no work of your own does not cause money to circulate through the economy in a good way. What it does is it causes your own wealth to grow unfairly, further increasing wealth inequality.
- walshemj 11y ago
  mm tried to run a business with out access to capital. Your being very naïve.
  - crimsonalucard 11y ago
    Good for you. How does you running a business without access to capital make me naive? Doesn't that make you niave?
    - walshemj 11y ago
      I have had to chair share holder meetings to discus difficult financing decisions. I have also been made redundant the hard way when a company went bust ie they hand been paying the social security so I could claim unemployment. Are you still a student as your attitudes certainly indicate you might not have had to deal with the real world.
      - crimsonalucard 11y ago
        No I'm not a student, but you publically, immaturely and insultingly stating that my behavior marks me as someone who has not dealt with the real world does not bode well with your claim that you chaired shareholder meetings. I certainly wouldn't want such a person making difficult financial decisions. You realize what would happen if you called someone niave in the real world? Surely you would know that such a statement doesn't facilitate open discussion even if the person in question was actually niave. Of course, I'm being redundant since your extensive experience with the real world should make you abundantly aware of this. You still haven't answered how YOU running a company without access to capital makes ME niave.
        walshemj 11y ago
        Learn to read English. I was inviting you to explain how you would run a company without access to capital. Also look at how your comments on this thread have been treated.
        crimsonalucard 11y ago
        People can vote me down if they think I'm wrong or if they they don't like what they see. What I haven't seen happen is an outright personal attack where I'm called naive and accused of being someone who hasn't "dealt" with the real world. Your english used the past tense "tried" indicating that it was something you did in the past. I think instead of me learning how to read english you should learn how to write it. As for forming a company without capital. It's never been done, and I never suggested it was possible. Maybe you're the one who should learn how to read.
- reagency 11y ago
  Repeat after me: Money is not wealth. Money is not wealth. What you spend your money on is wealth. Sitting on a number in a computer file does not cause inequality.
  - crimsonalucard 11y ago
    hey buddy. Repeat after me. Money is wealth. Money is wealth. When you spend your money on wealth, you are doing a trade or an exchange. Wealth for wealth. If money isn't wealth, why the hell would anyone give it away in exchange for empty paper? They don't. Because money is wealth. That's why when people have lots of it, we call them "wealthy"

fsloth 11y ago

What are you exactly saying? Isn't 'redeploying money back to economy' basically investing? I think what you first would want is an increase to minimum pay if you want to increase the flow of money in the areas where I think you want.

crimsonalucard 11y ago
You can invest, or you can spend in a way that generates GDP. If you "invest" or put your money into the stock market, you are not deploying your money in a way that generates GDP. Unless the stock is an IPO, you are essentially trading paper when you buy a stock. No GDP is generated on that transaction. In a sense you could be redeploying if the seller of the stock takes the money from the trade and redeploys it in a meaningful way. I agree that rich people paying their workers more money is a meaningful way to redeploy their wealth.
- reagency 11y ago
  And what if a nonnrich person needs access to capital in order to pay workers? Who would buy an IPO if they knew everyone else took your advice and would never let the IPO buyer exit? Trading stock is dealing in liquidity. Liquidity is where all the wealth in the market is made available to humans.
  - crimsonalucard 11y ago
    >And what if a nonnrich person needs access to capital in order to pay workers? The most natural/good way of doing this is running a legitimate working business and paying workers with revenue money generated by the business itself. Other ways include borrowing money, getting money from angels/venture capitalists, or money from an IPO or reissuing of shares. >Who would buy an IPO if they knew everyone else took your advice and would never let the IPO buyer exit? Trading stock is dealing in liquidity. Liquidity is where all the wealth in the market is made available to humans. There are many IPOs that don't let the buyer officially exit yet people still buy it: Google, facebook, microsoft. In fact almost all IPOs are like this. When you buy stock from these companies you can't officially redeem your shares for the value it's worth. You can only sell it to another person. Believe it or not the stock market is a market of people trying to outthink each other in buying paper for a low price and selling it for a higher price. No GDP is generated in these exchanges. Magically, the prices for these pieces of paper follows the intrinsic value of the company they "represent." People simply being told that the paper represents a percentage of the company is enough to make people behave as if it actually does even though the owner of the "paper" can't use the paper to redeem a portion of the corporate value. You can only do one thing of monetary value once you own a stock share: Sell it to the next idiot. It's funny how it all works out. You could say that the entire stock market is a bubble of empty dreams. The only time you can officially redeem a stock share is when a company liquidates. But that almost never happens, and people buy stocks expecting it not to happen.

deleted 11y ago

[deleted]

jsonjson 11y ago

Unless they've sacked their money away under their mattress, it has been deployed back into the economy. It is either invested or in a bank where the majority of it has grown the pie of total dollars through loans (this is often not well understood). If I have ten dollars that I place in a bank, they will only hold the required reserve. Assuming this is 30%, then seven will get distributed in loans. The effective size of the money is now 17 dollars.

deleted 11y ago
[deleted]
crimsonalucard 11y ago
Yes. This is true. I mean wealth in terms of wealth ownership. Compounding interest from loans, dividends, or stock investments causes the amount of wealth "owned" by rich people to grow unnaturally.
- adventured 11y ago
  There's nothing unnatural about yielding a return on an investment. The greatest contributor to wealth inequality in the last 40 years is the Federal Reserve debasing the currency that the middle class depends on (and since ~1970, they've been doing it at a very rapid clip). If your wages go up 2% per year, and inflation averages 3% per year, over 30 years your standard of living is going to get nuked. The super rich can manage inflation by shifting assets, everyone else cannot.
  - crimsonalucard 11y ago
    In the natural state of things, one does work and in doing work one gains roughly equal wealth in exchange for an equal amount of work. Yielding compounding returns on investments with little risk is gaining wealth for no work. That is unnatural. What is more unnatural is when an obscenely rich person earns a million a year as a return on investments. A million dollars in wealth in one year is usually not equivalent to the output of one man. Multiple people must work together to generate that amount of GDP. So how does a rich man procure the wealth equivalent to the work of multitudes of people without contributing any work himself? He must do so in a way that is unnatural.

SlipperySlope 11y ago

The dynamics of capitalism put wealth into the control of its wisest custodians - frugality being defined as among the wise virtues in this context. For those who argue that democratic government is the wisest custodian, e.g. there is estate taxation and government redistribution and investment.

crimsonalucard 11y ago
Are you saying rich people are wiser than poor people therefore they deserve to be rich? Capitalism made Justin Bieber rich. This makes him a wise custodian of wealth. Not only is my previous statement wrong, but so is yours.
- SlipperySlope 11y ago
  Capitalism does not entail that the wealthy deserve what they have, only that if they are not wise with respect to their wealth they will lose it. With regard to Mr. Bieber, or celebrities/sports stars in general - there are many foolish ways for them to lose their wealth and only a degree of frugality, i.e. living within their means, will preserve it.
  - crimsonalucard 11y ago
    Sure and I agree with your first sentence and second sentence, but I don't think you're understanding what I'm trying to communicate. The loaded term "wise custodians" as if rich people are benevolent caretakers of the world's wealth due to their infinite wisdom is what I'm attacking here. It just simply isn't true. Justin Bieber is full proof of that. The guy is not wise, he's not a benevolent custodian either. Wealth is not magically redirected towards smart caring people. You are not a "wise custodian" because you are rich. You will always have stupid people who are rich and smart people who are not rich.
- dylanjermiah 11y ago
  People who have earned great amounts of wealth do not get it by stealing it, they provide a product or service in which others choose to purchase. The more people which the product or service provides value to the more wealth the person will make. Like him or not, Justin Bieber has proved valuable to quite a large sub set of the population.

crimsonalucard 11y ago

I'm getting voted down. But if you got time please watch (or read the transcript) this: http://www.ted.com/talks/nick_hanauer_beware_fellow_plutocrats_the_pitchforks_are_coming?language=en http://www.ted.com/talks/nick_hanauer_beware_fellow_plutocra... This person elucidates my views completely and in a way that may be easier to understand.