
The Benefits of Economic Expansions Are Increasingly Going to the Richest - joeyespo
https://www.nytimes.com/2014/09/27/upshot/the-benefits-of-economic-expansions-are-increasingly-going-to-the-richest-americans.html
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paulus_magnus2
Beyond a certain point more wealth has zero marginal utility (pure greed). I
don't envy the rich nor am a communist so let them be as rich as they want as
long as we don't compete for the same resources. Yes. Houses (actually Land).
Let them bid up Mona Lisa, Diamonds, old Ferraris til infinity if they want.
But don't park your money in land inflating house prices beyond what local
wages can support making me pay 30% of my salary in rent for 10 years waiting
for a house price "correction". Wealth should be chased out of non productive
pure rent seeking "investments".

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aalleavitch
At some point wealth moves past material goods and into the realm of your
ability to influence society. If only everyone with money had noble goals when
it came to this influence...

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username223
If only we could separate the power to reshape society for personal benefit
from the ability to score "mine is bigger than yours" points. Zuck, Gates, the
Kochs, and others probably have "buy a President" money, and could probably
also develop personal nuclear arsenals. Let them play that video game and
compete for new high scores.

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xtiansimon
Net Neutrality

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ericjang
The analysis in this article was based on data from Thomas Piketty and
collaborators, who have also compiled an extremely detailed and comprehensive
analysis of the subject of capital & wealth & inequality. I highly recommend
Piketty's book, "Capital in the 21st Century" (see Goodreads comments for
abridged summaries and reviews by readers). Not only is it totally convincing
(and depressing), but it also provides a very clear understanding of the
course of modern history since the 19th century. It's amazing to see how clear
economic policy (whether Marxist or Capitalist or anything in between) becomes
when viewed through the lens of society grappling with the problem of
capital/income/inequality.

[https://www.goodreads.com/book/show/18736925-capital-in-
the-...](https://www.goodreads.com/book/show/18736925-capital-in-the-twenty-
first-century)

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hux_
There are few known ecosystems, without a small bunch of apex predators.

If nature hasn't figured out how to do it any different, given the time she
has had, neither are we.

If you are not powerful, make yourself useful to the powerful. And that
doesn't mean working for a douchebag.

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Karrot_Kream
> If nature hasn't figured out how to do it any different, given the time she
> has had, neither are we.

Not following the logic here at all. What does an economy have to do with an
ecosystem? What is "nature"? Are there Apex predator bacteria? How does an
Apex preditor map to an economic actor?

This is as lazy naturalist fallacy as it gets.

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hux_
Nature doesn't have any great goal just like economies don't. They are just
chaotic systems we pretend to understand to claim control. The temporary
periods such systems achieve some temporary stablity is when heirarchies form.
Talk to an ecologist, if you want more plankton in a fixed amount of ocean you
have to kill whales. If you want more whales you have produce more plankton as
in you need a bigger ocean. Same story with the economy whether you pick
Genghis Khan or Mark Zuckerberg you can't produce them without millions of
plebs.

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dnautics
Is that surprising? Economic expansions are largely driven by monetary
(stimulus, QE<N>) and fiscal policy (bailout, contracting), as a part of
deliberate politics ("we _need_ to create jobs", e.g.). As these events are
derived from centralized, hierarchical organizations (Fed, us gov't, ECB, EC),
the benefits will disproportionately flow to those that have access; part of
the reason why the richest are the richest is because they have had success in
the past obtaining exactly that access.

It's rather ironic that the keynesian perspective in the article is that the
policies "aren't targeted" but in reality they couldn't be anything but.

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Daishiman
Well they _could_ increase the amount of public spending and increase the tax
rates for the top brackets and it has been historically in periods where rates
of income inequality have gone down.

But no, for some ridiculous reason those ideas seem to be unacceptable with
the Overton Window defined by mass-media (conglomerate-owned, of course) and
economists who propose small-state solutions.

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andrenth
If inequality goes down because the rich become less rich, is that a win?

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conanbatt
The people that answer yes to you might not even realize they are actually
part of the richest group, particularly since software engineers are in the
top 10% of income in the US.

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Daishiman
The very top of the bracket (0.1%) is the one paying proportionally far less
than the rest of the upper class, given their access to all sorts of
accounting tricks and exemptions that you have when you are making money from
capital gains or when you have tons of active assets to shuffle money around.

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refurb
Do you have data to back that up? From what I've seen, the top 0.1% pay a far
larger share of taxes than the rest.

Based on federal gov't data on total taxes paid, the top 0.01% (even higher
income than you 0.1%) pay over 20% of all taxes with an average rate of over
49%.[1]

[1][https://news.ycombinator.com/item?id=15573269](https://news.ycombinator.com/item?id=15573269)

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TosLink2
The effects of globalism... Upper management stays employed and gets richer,
everyone below (the middle class previously) are out of a job. Child labor and
inhumane working conditions overseas and mass pollution of our entire planet.
How is it that progressives actually think this is a good thing? (this is an
honest question).

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oppositelock
It's not globalism, per se, globalism is a symptom of monetary policy
implemented in tandem by most of the world's central banks.

The root cause is that every developed nation on earth runs an inflationary
monetary policy coupled with perpetual deficit spending. Money creation via
central banks and deficits is not uniform, it pours into economies via cheap
credit, subsidies, spending on boondoggles, and it's the people who have first
access to this newly created money who benefit the most, and these tend to be
the people with a lot of capital, political connections, etc. The average
person simply sees their limited buying power decreasing over time.

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quadrangle
Sure, but it's not strictly the inflationary / deficit issue right? It's
primarily (as you say) a matter of _who_ gets the increased currency, right?

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maoistinquisitr
The cheap credit perverts the entire economy away from productivity growth,
which is what produces real wealth that tends to be widely shared. It doesn't
matter how the cheap credit is distributed, the credit just redistributes
wealth and doesn't increase it.

There's that and then also the problem of the global monetary system. The
average American is getting crushed by the dollar reserve currency system.
America can't be globally competitive in labor intensive industries in
substantial part because of it. Triffin's Dilemma. But the ability to issue
endless USD denominated debt that the rest of the world eagerly gobbles up is
fantastic if you're closely attached to the DC cash spigot or NYC banking. So
there's this direct opposition of interest between the current elite who
derive enormous power and wealth from the system, and typical Americans who
just want a job.

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twoodfin
2014\. And the headline result from the last recession only captures 3 years
of the recovery, through 2012, when equity markets had climbed back
significantly, but always-lagging labor markets had not.

I’d be shocked if the numbers didn’t look very different if you looked at the
expansionary cycle to date.

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starchild_3001
Hey, this article isn't news! US median income has been stagnant since 70ies,
while mean income has grown steadily. The gains obviously accrued to highest
income earners. We should talk about it. But we shouldn't think of it like
something new.

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conanbatt
At this point Im fairly convinced that LVT is the way to go.

There is a tremendous confusion in separating wealth from producers to non-
producers.

Taxes very frequently end up going from the poor to the rich, because of how
benefits are given away (ex. prop 13, mortgage interest deductions, rent
control). Not only that, taxing the rich for producing would make less
production, which is fundamental for economic growth.

Why should a developer build a 40 apt building and pay 100x the taxes a month
single family home next to it pays? Didnt he just make everyone a lot richer
by his planning and exhertion?

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Qworg
2014, but still shocking.

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seventytwo
Because the balance between capitalism and the state is out of whack.
Capitalism has far too much power and influence. It needs to swing back a few
degrees so that the common man can get a bigger cut of pie (or a slice at all)

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pitaj
A better word for it is corporatism.

Ironic how the state (at least in the case of the US) is the largest it has
ever been.

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jswizzy
It's almost as if wealth doesn't follow a Gaussian distribution and the Pareto
power law applies to a few extreme cases.

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xandar11
Why are people obsessed with this topic lately?

Do you think fame inequality is a problem? There are people who have 100s of
millions of followers/fans and then there are people who are not famous (vast
majority).

Why is that not considered a problem?

Fame inequality:

1\. Undermines democracy. If you have a tiny group of famous people who have a
massive cultural influence, their ideas and opinions matter almost infinitely
more than ideas of those who are not famous. This by definition undermines the
idea that everyone's opinion/vote should have equal weight.

2\. Damages people's health. When people see someone famous it can make them
depressed because they are constantly being compared to cultural icons. This
can have serious impact on psychological health.

3\. Perpetuates itself. People can become famous and get a leg up in life just
because their parents are famous. Is that fair to all talented people who
don't have famous parents?

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sintaxi
People are obsessed with this topic because they are looking for justification
to steal from those wealthier than them. Its textbook Marxism.

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dang
Please don't take HN threads on generic ideological tangents. They lead to
flamewars and are reliably some of the most low-quality subthreads we see
here.

[https://news.ycombinator.com/newsguidelines.html](https://news.ycombinator.com/newsguidelines.html)

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baxtr
Well, I guess something similar like a "land reform" would be of help

[https://en.wikipedia.org/wiki/Land_reform](https://en.wikipedia.org/wiki/Land_reform)

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sintaxi
This would not help. Land in of itself is not that valuable. What has value is
what people develop/produce with the land. Or location to those who have
developed their land. Property rights are better thought of as extensions of
human rights. The reason why you build a factory is because property rights
will protect your ability to use and eventually sell the factory. The reason
why you plant crops is because property rights protect your exclusive right to
harvest them. If someone wants to acquire land it really isn't that difficult
or that expensive until you want land that people have invested in or around.

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jdblair
FYI, 2014.

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zerostar07
except cryptocurrencies

~~~
quadrangle
you think that the winners in wealth redistribution happening around
cryptocurrencies are mostly the not-so-rich? There may be a decent number of
non-rich folks who are now rich this way, but I doubt that cryptocurrencies
are effectively working in reverse of the wealth-inequity trends…

