Wealth! How much is enough?

[Birdjaguar]

But my point dealt with inflation and a wealth cap coterminously - at least in the hypothetical the point is made. Separating the two concepts inherently distorts any response made upon that premise, and doesn't quite answer the question.

This makes no sense whatsoever. Please try again for us stupid folks.

This is what you posted above. You talk about rapid and uncontrolled inflation blah blah blah. I just asked when we had this rapid and uncontrolled inflation that is devaluing wealth. If you are just spouting theory that has no actual basis in reality, then just say so, so I can end the conversation.

I think rapid and uncontrolled inflation and the flimsy and fickle fiat value of modern currency with no solid base is a big part of the problem, too. It's very difficult to say that one wants a cap on wealth when the money itself rapidly loses it's value and purchasing power in a downward spiral.

Since there has not been any such inflation for 40 years, your post is meaningless.

 

[Patine]

This makes no sense whatsoever. Please try again for us stupid folks.

This is what you posted above. You talk about rapid and uncontrolled inflation blah blah blah. I just asked when we had this rapid and uncontrolled inflation that is devaluing wealth. If you are just spouting theory that has no actual basis in reality, then just say so, so I can end the conversation.

Since there has not been any such inflation for 40 years, your post is meaningless.

You know, saying "because something has not happened in 40 years means it's meaningless as a consideration," is the exact type of pronouncement (with subject and time frame varying widely) that has made a fool of many throughout history.

 

[Birdjaguar]

You know, saying "because something has not happened in 40 years means it's meaningless as a consideration," is the exact type of pronouncement (with subject and time frame varying widely) that has made a fool of many throughout history.

You are the one who introduced inflation into the conversation and tried to connect it to wealth caps. Your attempt to connect rapid inflation to this conversation is fundamentally in error. I know reality can be a terrible thing and it often gets in the way pushing nonsense theory.

 

[Patine]

You are the one who introduced inflation into the conversation and tried to connect it to wealth caps. Your attempt to connect rapid inflation to this conversation is fundamentally in error. I know reality can be a terrible thing and it often gets in the way pushing nonsense theory.

Let me explain. If there is a wealth cap imposed and enforced, inflation - EVEN at the small amount one sees today, not even a catastrophe (which, as I said above, is NOT the impossibility to be casually dismissed in the future you seem to claim it is), makes such a cap more and more counter-productive as inflation (even at small rate) erodes the value of money, but the hard cap remains. Over time, it has an overall detrimental effect for everyone, though certainly immediately. $30 million dollars today could be effectively $15-20 million in a couple decades - but the cap is still there, as the scenario in the OP states, because legislation that states actual monetary numbers do not account for this (like minimum wage laws, as well). In 50-70 years, middle-class professionals will likely come close to hitting upon the cap. Does THAT clear it up?

 

[Birdjaguar]

Let me explain. If there is a wealth cap imposed and enforced, inflation - EVEN at the small amount one sees today, not even a catastrophe (which, as I said above, is NOT the impossibility to be casually dismissed in the future you seem to claim it is), makes such a cap more and more counter-productive as inflation (even at small rate) erodes the value of money, but the hard cap remains. Over time, it has an overall detrimental effect for everyone, though certainly immediately. $30 million dollars today could be effectively $15-20 million in a couple decades - but the cap is still there, as the scenario in the OP states, because legislation that states actual monetary numbers do not account for this (like minimum wage laws, as well). In 50-70 years, middle-class professionals will likely come close to hitting upon the cap. Does THAT clear it up?

Inflation creep is a known problem and one that has been handled different ways at different times. Any hard cap on assets could be indexed to inflation. But if one looks at investment returns over time (not in short term windows) one will find that as a rule growth will out perform inflation most of the time. This tells us that in the long run thoughtful investments will approach any cap. The inflation issue is only one that will affect those at the maximum.

Sure, rapid and uncontrolled inflation could happen and likely will at some point. In the 80s we had high inflation from 1979-1981, three years. I remember it well. How is it relevant? Are you expecting Germany in post WW1 years?

 

[cardgame]

This makes no sense whatsoever. Please try again for us stupid folks.

This is what you posted above. You talk about rapid and uncontrolled inflation blah blah blah. I just asked when we had this rapid and uncontrolled inflation that is devaluing wealth. If you are just spouting theory that has no actual basis in reality, then just say so, so I can end the conversation.

Since there has not been any such inflation for 40 years, your post is meaningless.

I'm confused at the source of your confusion, inflation devalues wealth by definition. If you have $100m and the cap is $100m you have less money in real terms every single year that inflation continues. Not that it particularly matters at 2% but it is a real effect?

 

[hobbsyoyo]

Amazon hiring 10k workers at $25k/yr can still be a massive net loss if they have displaced 10k or more higher-wage earning workers at other companies. I believe that is what is happening to our economy writ large, and it's been going on since the 80s. Amazon did not start this trend but they have accelerated it.

Just scratching the surface level - how many delivery driver employees contractors does Amazon now employ that displace unionized, high-wage UPS drivers and the like?

The only reason we hail these crappy, Uber-type contractor jobs as good jobs is because we've let wages, benefits and working conditions lapse so hard that we now hail anything that is a slight step up from McDonald's line cook or Wal Mart stocker as a 'good job'.

And we all forget that line cooks and stockers used to make living wages before McDonald's and Wal Mart gutted labor.

We must also keep our eye on the future too because eventually Amazon and Uber want to eliminate all contractors and switch to AI. The looming tech revolution threatens to be far more disruptive than all that came before it and it can be especially bad if we go into it with record-low wages and record-high wealth concentration.

 

[hobbsyoyo]

And something else Amazon related - some people don't realize that many Amazon contractors have to rent or lease their delivery vans, often by the day and frequently from Amazon itself. Imagine if Wal Mart forced their stockers to pay a "uniform service charge" each day for the privilege of wearing a blue shirt and khakis to the tune of an hour or two of wages.

The California legislature passed a law which curtailed the worst abuses by Uber et al earlier this year. Unfortunately, Uber and the rest launched a massive ad campaign to convince voters to roll back these protections via a popular-vote constitutional amendment which did pass in November. It's quite sad

 

[Patine]

And something else Amazon related - some people don't realize that many Amazon contractors have to rent or lease their delivery vans, often by the day and frequently from Amazon itself. Imagine if Wal Mart forced their stockers to pay a "uniform service charge" each day for the privilege of wearing a blue shirt and khakis to the tune of an hour or two of wages.

The California legislature passed a law which curtailed the worst abuses by Uber et al earlier this year. Unfortunately, Uber and the rest launched a massive ad campaign to convince voters to roll back these protections via a popular-vote constitutional amendment which did pass in November. It's quite sad

Amazon hiring 10k workers at $25k/yr can still be a massive net loss if they have displaced 10k or more higher-wage earning workers at other companies. I believe that is what is happening to our economy writ large, and it's been going on since the 80s. Amazon did not start this trend but they have accelerated it.

Just scratching the surface level - how many delivery driver employees contractors does Amazon now employ that displace unionized, high-wage UPS drivers and the like?

The only reason we hail these crappy, Uber-type contractor jobs as good jobs is because we've let wages, benefits and working conditions lapse so hard that we now hail anything that is a slight step up from McDonald's line cook or Wal Mart stocker as a 'good job'.

And we all forget that line cooks and stockers used to make living wages before McDonald's and Wal Mart gutted labor.

We must also keep our eye on the future too because eventually Amazon and Uber want to eliminate all contractors and switch to AI. The looming tech revolution threatens to be far more disruptive than all that came before it and it can be especially bad if we go into it with record-low wages and record-high wealth concentration.

And a lot of Biden supporters were so happy at the marginalization of Social Democrats in the party (notably Sanders) with Biden's nomination without requiring mandatory concessions to that camp. Sanders and other Social Democrats are the big force to protect labour and restrict corporate abuses. Biden, as well as others like Obama, Schumer, Kerry, and the Clintons, are in big corporate and moneyed lobby group pockets as much as many Republicans. That, too, is quite sad.

 

[Birdjaguar]

I'm confused at the source of your confusion, inflation devalues wealth by definition. If you have $100m and the cap is $100m you have less money in real terms every single year that inflation continues. Not that it particularly matters at 2% but it is a real effect?

Patine was claiming that rapid and uncontrolled inflation was a real factor in devaluing assets. I asked him when we we had actually seen such activity. He replied that a small creep happened. I agreed and and said the fix is to index any cap to inflation. Inflation works in more than one way. It reduces ones buying power as it raises the value of one's assets (like home values). For investors the key is to have an annual return that is greater than the inflation rate. If inflation is 2%, then if your investments return 4% you are not getting behind. If your investments generate ~8% (long term annual average for Stocks), then you are way ahead. Also remember that the higher the asset cap, the fewer people that are actually affected.

Millionaires in US in 2019:

A record 6.71% (or 8,386,508 out of 125,018,808 total U.S. households) can now claim millionaire status. That's up from 6.21% in 2018 and just 5.81% in 2017. Note well that to be considered a millionaire by the standards of wealth research, a household must have investable assets of $1 million or more, excluding the value of real estate, employer-sponsored retirement plans and business partnerships, among other select assets.

https://www.kiplinger.com/slideshow...aires-america-all-50-states-ranked/index.html

In 2020 the 90th percentile for net worth in the US is about $1.2 million
The 95th percentile is at $2.5 million
The 98th percentile is at $6.5 million
If one has $11 million or more in net worth then you are in the 99th percentile. These are threshold values that trigger placement into the group.

https://dqydj.com/average-median-top-net-worth-percentiles/

So what all this means is that if one places an asset cap at $11 million or higher, the impact only affects very very few people/households. IIRC there are about 125,000 households in the US. 1% of those is not a very big number. I am not worried about them becoming homeless.

 

[El_Machinae]

It's quite hard to answer this question, because all of the factors are on a sliding scale. Would real returns on capital compounded faster than economic growth, if there was a wealth cap? My answer is that real returns would be similar to what they are now, but that's a heck of an assumption. Would asset inflation be so powerful if there was a wealth cap? Well, probably not. We'd still want some inflation, so the wealth cap itself would need a sliding scale if we were interested in maintaining the value of the wealth cap.

Amazon is an interesting case study. We see the inequity created due to job displacement, but job displacement must always occur with innovation. The damage from Amazon is more because the savings from the job displacement weren't very distributed in society, but were concentrated upwards. Yeah, part of the Amazon innovation increased our ability to consume, but the majority of the savings generated were put into owning, not consuming. And 'owning' is a problem if it's concentrating wealth upwards.

 

[Birdjaguar]

Amazon hiring 10k workers at $25k/yr can still be a massive net loss if they have displaced 10k or more higher-wage earning workers at other companies. I believe that is what is happening to our economy writ large, and it's been going on since the 80s. Amazon did not start this trend but they have accelerated it.

Just scratching the surface level - how many delivery driver employees contractors does Amazon now employ that displace unionized, high-wage UPS drivers and the like?

The only reason we hail these crappy, Uber-type contractor jobs as good jobs is because we've let wages, benefits and working conditions lapse so hard that we now hail anything that is a slight step up from McDonald's line cook or Wal Mart stocker as a 'good job'.

And we all forget that line cooks and stockers used to make living wages before McDonald's and Wal Mart gutted labor.

We must also keep our eye on the future too because eventually Amazon and Uber want to eliminate all contractors and switch to AI. The looming tech revolution threatens to be far more disruptive than all that came before it and it can be especially bad if we go into it with record-low wages and record-high wealth concentration.

There are a lot of assumptions in your post:

• $25k annual wage (I used that number up thread and said it was just a guess). Do we know the actual number?
• Do we know that 10k higher wage jobs at other companies were displaced? No we don't.
• How many unionized drivers have been replaced? Don't know, but we do know that UPS has been hiring up to 100,000 workers for the holidays.
• Having been both a short order cook and stocker in the preReagan years, I can say that neither provided more than subsistence wages.
• Also we don't know what will happen this spring and to what extent shopping will revert to local brick and mortar businesses.

And yes change is coming and those who want to earn a good living had best be prepared. There isn't a way to stop the technology that will increasingly replace workers of every sort, but mostly starting at the bottom. The pandemic has only accelerated that change.

 

[Birdjaguar]

MacKenzie Scott, the Amazon billionaire, gave away $4 billion to charity

https://www.vox.com/recode/2020/12/...py-speed-four-billion?utm_source=morning_brew

 

[El_Machinae]

It sounds like she's hired a team to figure out the better investments, which is something I approve of. The best we can do is our best, but 'making the effort' goes a long way. The Effective Altruism movement is rearing its head quite often on the impact it's having on people's choices.

This example, and Warren Buffet's, leads to an interesting conundrum. If you want to give, figuring out when to give isn't easy. Savings can compound at 7%, so if you're giving something with no compounding benefit then holding off will generate more good later. OTOH, if you find an opportunity to give that will generate more than 7% in returns, then giving now is the better option.

I'm pretty sure the world is full of opportunities that yield greater than 7%, which means that I implicitly disagree with Warren Buffet.

 

[Birdjaguar]

It sounds like she's hired a team to figure out the better investments, which is something I approve of. The best we can do is our best, but 'making the effort' goes a long way. The Effective Altruism movement is rearing its head quite often on the impact it's having on people's choices.

This example, and Warren Buffet's, leads to an interesting conundrum. If you want to give, figuring out when to give isn't easy. Savings can compound at 7%, so if you're giving something with no compounding benefit then holding off will generate more good later. OTOH, if you find an opportunity to give that will generate more than 7% in returns, then giving now is the better option.

I'm pretty sure the world is full of opportunities that yield greater than 7%, which means that I implicitly disagree with Warren Buffet.

Yes, but giving significantly now provides benefits now and eases troubles now. Giving a charity $1 million now enables them to take that money and either use it or add to their own endowment to draw additional income. When the amounts are significant, giving now is better and it give the recipient more power over their work. If I give $100 to a local food bank, it is good, but not significant. If MacKenzie Scott gives them $1 million now, they can drive meaningful changes to what they do for years. Waiting ten years to give them $1.5 million ignores the immediate needs of the thousands the food banks serves now.

 

[El_Machinae]

Absolutely, that's why I was discussing compounding returns. A foodbank feeds people today, but they'll still need to feed people in ten years.

But a person who tries to track the compounding benefits of a donation can then try to estimate if now vs later is better.

Warren Buffett is waiting til he's dead, since he thinks he can compound wealth more effectively. It's implicit disagreement with Ms. Scott.

 

[Patine]

MacKenzie Scott, the Amazon billionaire, gave away $4 billion to charity

https://www.vox.com/recode/2020/12/...py-speed-four-billion?utm_source=morning_brew

Much easier for her to do, and so casually, than for you or I.

 

[Birdjaguar]

Much easier for her to do, and so casually, than for you or I.

Exactly and it should be made easy for the top 1% ers.

 

[cardgame]

Yes, it should be very easy, like via a mandate or something.

 

[Lexicus]

Yes, it should be very easy, like via a mandate or something.

As Samuel L Jackson said to the one kid in Coach Carter: "leave my gym, before I help you leave."